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Seeing red The Netflix script Gillian Tett

Australia’s climbing ban on sacred Can the king of binge keep its rich The repo rate panic shows global
Uluru is overdue — NOTEBOOK, PAGE 8 rivals at bay? — BIG READ, PAGE 7 financial machine is misfiring — PAGE 9

Saudi Arabia ‘bullies’ wealthy Briefing

i Fed skirts round difficult decisions

families to pump cash into oil IPO

The Federal Reserve has revealed deep divisions
within the central bank over whether the US
economy needs more monetary easing and whether
it needs to expand its balance sheet.— PAGE 3

i Airbnb set to go public next year

The rental platform, valued at $31bn in its most
3 Magnates targeted were locked up in Ritz 3 Pressure to hit Crown Prince’s $2tn valuation recent funding round, has ended speculation about
when it would float on the stock exchange by
announcing it plans to go public next year.— PAGE 11
i OECD warns of trade tension impact
Leading economies must ease trade tensions and
Saudi Arabia is pressuring wealthy fam- act decisively to avoid a low-growth trap that would
ilies to buy in to the initial public offer- be difficult to escape from, the Paris-based
ing of its state oil group, as part of a plan organisation has warned.— PAGE 3
to achieve the $2tn valuation coveted by
Crown Prince Mohammed bin Salman. i Gantz spurns coalition offer in Israel
Eight people familiar with the talks Benny Gantz, right, has
said they were part of a plan to build rejected a request to form a
confidence in the Saudi Aramco deal, Benjamin Netanyahu-led
which has been rocked by last week- coalition, making another
end’s attacks on Saudi Arabia’s oil infra- election appear likely.— PAGE 2;
structure. Four people said the aim was EDITORIAL COMMENT, PAGE 8
to “strong arm”, “coerce” or “bully”
some of the wealthiest families in the i US car-seat maker faces tariffs dilemma
kingdom to become cornerstone inves- Britax, the car-seat manufacturer, has said it might
tors in what has been billed as the have to shut its domestic operations and possibly
world’s biggest IPO. move them to China as a result of the tariffs war
Many of the families targeted had between Washington and Beijing.— PAGE 4
members previously imprisoned in Riy-
adh’s Ritz Carlton hotel in 2017 and i UK Supreme Court case highlights strain
2018, in what the government billed as a Former Conservative prime minister John Major
crackdown on corruption. Some of the has told the UK’s Supreme Court that premier Boris
detainees said they were tortured. Most Johnson was motivated to suspend parliament by
were later freed after they reached his desire to stifle debate on Brexit.— PAGE 3
financial settlements with the state.
Those pressured over Saudi Aramco i Ryanair investors object to bonus pay
include Alwaleed bin Talal, the once Shareholders have registered a big protest vote
flamboyant billionaire who was held in against pay after the airline’s chief Michael O’Leary
the Ritz-Carlton for more than three was granted a bonus worth up to €99m. Nearly half
months. Many of his assets remain fro- Saudi Arabia’s government. “He is now being encour- on wealthy families in the kingdom, into Saudi Aramco stock. “And why failed to back a remuneration report.— PAGE 11
zen in Saudi Arabia, and people familiar Crown Prince aged to do his patriotic duty for the king- which one person familiar with the mat- not?” one banker said. “[They] can’t
with the talks said it has been suggested Mohammed dom,” the adviser said. “But there is a ter said originated with Saudi Arabia’s access those funds in any case.”
he should use them to buy into the IPO. bin Salman limit on how patriotic he wants to be.” government rather than the company. The plan is to list up to 3 per cent of Datawatch
Prince Alwaleed’s investment vehicle welcomes The pressure on local families shows The $2tn valuation placed on Aramco Aramco in Riyadh, including the por-
Kingdom Holdings did not respond to a Pakistan’s prime the lengths the kingdom is going to in an by Prince Mohammed is said to have tion allocated to cornerstone investors
request for comment. minister Imran effort to launch the IPO, three years slowed down the listing process last year such as the wealthy families, which Gimme shelter The population
Dozens of the wealthiest Saudi fami- Khan in Jeddah, after it was first announced. It also because of fears it would embarrass the would raise $60bn for the kingdom. Estimates of people experiencing of homeless
lies have been approached, said a Saudi Saudi Arabia, shines an uncomfortable spotlight on royal — who is the de facto ruler of the Big investors in the region, including homelessness in the US (’000) people in the US
financier, who maintained that the pres- yesterday western bankers who have flocked to country — if it could not be achieved. Abu Dhabi and Kuwait, were also tar- Unsheltered Sheltered increased slightly
sure was not overt. “It’s a big bunch Saudi Royal Court/Reuters
Riyadh to win roles advising Saudi Ara- Some banks with roles on the IPO this geted, said two people briefed on the 600 for the second
500 year in a row in
from among the top 50,” he said. mco or leading the placement. month told Saudi Arabian officials they IPO process. One person suggested that
400 2018 to 552,830.
As part of the campaign, one Saudi Saudi Aramco declined to comment. could hit a $2tn valuation, according to wealthy families in Egypt and Lebanon
300 The rise
Arabian business magnate has been The government did not respond to a multiple people familiar with the proc- with ties to the Saudi royals would also is attributed
tapped for as much as $100m, according request for comment. ess. Many analysts think a valuation of be approached. “Some will find it more directly to an
to one of his advisers. The businessman, JPMorgan, Goldman Sachs, Morgan $1tn-$1.5tn is more realistic. difficult to say no than others,” he said, increase in the
who was detained in the Ritz, had earlier Stanley and Credit Suisse are among One Saudi family approached by their describing Riyadh’s approach as a mix of 2007 09 11 13 15 18
number of
settled with the authorities, handing western banks set to promote the IPO to relationship manager at a Saudi lender “cajoling and bullying”. Source: US Department of Housing and
over assets and paying a monthly instal- investors in coming weeks. It is not clear was told its assets frozen during the Additional reporting by Arash Massoudi Urban Development individuals.
ment to repay his alleged debt to the if they are aware of the pressure placed Ritz-Carlton affair could be transferred Lex page 10

UK police chiefs train elite Hong Kong

officers as trust crumbles in city force
HELEN WARRELL — LONDON group of academics and former chief Police commissioner, and Mark Rowley,
officers to Hong Kong for a week of former national counterterror chief.
British police chiefs are training an teaching in December but is considering The course is based on policing theory
elite cadre of Hong Kong officers to whether it is safe to make the trip. There rather than practical techniques, and is
boost professionalism in their ranks, as are also questions over whether stu- rooted in the British culture of policing
German budget faces the Asian financial hub’s force faces dents will be released from duties to by consent. This includes conceptual
€40bn green challenge fierce criticism for its handling of pro- attend training if the protests continue. discussions of issues such as public
democracy protests in the city. The course is a branch of the Cam- order and managing peaceful protest.
Report i PAGE 2 bridge Institute of Criminology’s Police “A core part of what we’re trying to
The University of Cambridge course has Executive Programme, which is open to teach is police legitimacy,” said Law-
been running for two years but has mid-ranking officers from all over the rence Sherman, who runs the pro-
Austria €3.80 North Macedonia Den220
Bahrain Din1.8 Malta €3.60 acquired new significance following world. However, under a 2016 agree- gramme. “What’s going on now in Hong
anger at Hong Kong police tactics in ment with the Hong Kong police train- Kong is a strong demonstration of how
Croatia Kn29 Norway NKr35 managing clashes with demonstrators. ing college, the university opened a pro- police risk being put in a position where
Cyprus €3.60 Oman OR1.60
Czech Rep Kc105 Pakistan Rupee350 Three months after the protests gramme for its officers, which involves they can’t remain neutral.”
Zl 20
began, officers are using water cannon, two weeks of training in the Asian city as Trust in the Hong Kong police force
Finland €4.50 Qatar QR15 tear gas and rubber bullets against civil- well as a summer school in the UK. The has tumbled in the wake of the protests.
France €3.80 Romania Ron17
Germany €3.80 Russia €5.00 ians, some of whom have hurled petrol first cohort from Hong Kong began A survey by the Chinese University of
Slovak Rep
bombs. Protesters have also been training more than two years ago. Hong Kong this month found 48 per
Hungary Ft1200 Slovenia €3.50 beaten by police, with videos of the con- During the summer school, students cent of people gave the force 0 out of 10,
India Rup220 Spain €3.60
Italy €3.60 Sweden SKr39 flict going viral on social media. attend lectures by high-ranking officers or a rating of “no trust at all”, compared
The university was planning to send a such as Ian Blair, former Metropolitan with 6.5 per cent before the protests.
Lithuania €4.30 Turkey TL19
Luxembourg €3.80 UAE Dh17.00

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2 ★ FINANCIAL TIMES Friday 20 September 2019


Israeli election Corruption

Gantz rejects Netanyahu-led coalition plea Romania’s

ousted fraud
Rebuff hardens political It was the first salvo in the months- refuses my call to meet,” Mr Netanyahu election, a sentiment echoed by his A hearing on October 3 on whether investigator
stalemate that threatens
to force a third poll
long process of public posturing and
back-room negotiations that follows
each Israeli election, as parties cobble
wrote on Twitter. “Gantz, my offer that
the two of us meet stands. It’s what the
public expects of us.”
rightwing, pro-settlements allies but
did not address the elephant in the room
— Mr Gantz has said repeatedly he pre-
Mr Netanyahu should be indicted on
corruption charges provides both lever-
age and breathing space for Mr Gantz.
to be top EU
together unwieldy coalitions in a frac-
tured electoral landscape.
Mr Netanyahu had spent the entire
election campaign warning that only a
fers a unity government, but only if Mr
Netanyahu steps down.
His public pledge to run a clean govern-
ment was backed by a vow not to sup- prosecutor
Earlier yesterday Mr Netanyahu said Despite lagging behind Blue and port Mr Netanyahu for prime minister if
Benny Gantz, whose centre-right coali- the election result made clear Israel had White, Mr Netanyahu has appeared in he is under indictment. Mr Netanyahu
tion narrowly topped the polls in Israel’s no choice but to accept a unity govern-
Gantz has repeatedly said charge of coalition talks by getting a has denied all the charges against him. MICHAEL PEEL — BRUSSELS
elections, has rejected a request from ment, publicly acknowledging for the he prefers a unity signed pledge from all the rightwing The rightwing bloc also includes two VALERIE HOPKINS — BUDAPEST
Prime Minister Benjamin Netanyahu to first time that he would be unable to parties that they remain united in a 55- parties that loathe one of Mr Gantz’s
consider joining a coalition that would form the rightwing coalition he pledged
government, but only if seat bloc, and by continuing to demon- partners, Yair Lapid, who runs the more
EU ambassadors have backed Laura
Kovesi of Romania to head a prosecu-
return the four-time premier to office. to his voter base. Mr Netanyahu steps down ise the successful Joint List of Arab par- middle-class, secular wing of the Blue tor’s office in what supporters see as a
Yesterday’s rebuff to Mr Netanyahu With 97 per cent of the vote from ties, which won 13 seats, as dangerous and White party. It is unlikely the two big step in the fight against creeping
from the leader of the seven-month-old Tuesday’s elections counted, Mr Netan- rightwing government could defend partners for his rivals. groups could resolve their differences to authoritarianism in several central and
Blue and White party has deepened a yahu’s Likud fell behind the centre-right Israel, but with only 55 seats won collec- Reuven Rivlin, Israel’s president, has sit in a unity government, having spent eastern European states.
political crisis that threatens to force Blue and White party by two seats in the tively by the traditional rightwing bloc, yet to make a decision on who he will years demonising each other as threats
Israel into a third election this year. 120-member Knesset, the second time he is now attempting to ensure he officially appoint to lead coalition nego- to Israeli democracy. Envoys from all but five of the 22 voting
Mr Gantz, a former head of Israel’s this year Israeli voters have delivered secures a record fifth premiership, even tiations, a process that can take more But with no clear path for his party to member states endorsed Ms Kovesi in
military, said he would not consider a an unclear mandate. if in alliance with a party he has derided than a month. Mr Netanyahu failed to claim the premiership, Mr Gantz must an indicative poll yesterday, opening the
so-called unity government unless Mr “I was surprised and disappointed by as weak and unpatriotic. clinch a majority during coalition talks consider ways to avoid a third election. way for her formal endorsement for the
Netanyahu stepped aside. the fact that, as of now, Benny Gantz still He dismissed the possibility of a third in April, and parliament was dissolved. Editorial Comment page 8 high-profile European job after the gov-
ernment in Bucharest last year ousted
her as national anti-corruption head.
Her candidacy to become the EU’s
first chief public prosecutor stalled this
Brexit. Constitutional dispute year, when she won the backing of the
European Parliament but was opposed

Johnson awaits by a plurality of EU countries, including

her own, in favour of a French candi-
date. Paris relented in July and agreed to

key ruling on
leave a clear run for Ms Kovesi, who
needs the backing of member states and
the newly elected parliament.
Ms Kovesi won plaudits at home and

prorogation in other European capitals for her

five-year tenure leading Romania’s anti-
corruption directorate, which secured
convictions against ministers, MPs and
mayors. Liviu Dragnea, the head of the
decision-making process unlawful and ruling Social Democrat party when Ms
Supreme Court is deciding order ministers to start again. Kovesi was forced from office, was jailed
whether PM acted unlawfully In Downing Street the mood was ini- in May for three and a half years in a
tially confident that the 11 justices corruption case.
in suspending Commons would not venture into the political The decision to back Ms Kovesi was a
quagmire of Brexit. But now there are “great boost to the social activism and
growing fears that the Supreme Court the anti-corruption, anti-government
LONDON will give an unwelcome verdict in the movement and to the justice system
prorogation case. Mr Johnson, who is itself, which has been under constant
UK premier Boris Johnson will find out planning to attend the UN General attack” from Bucharest, said Oana
early next week if the UK’s Supreme Assembly in New York next week, is Popescu, a former Romanian state sec-
Court believes the extraordinary claim braced for a bumpy foreign trip. retary for European affairs and director
that he lied to the Queen and unlawfully “I think we are going to lose,” said one of the GlobalFocus Center think-tank.
suspended parliament for five weeks to minister. As for whether Mr Johnson Ms Kovesi will become one of the
allow him to push through a hard “no lied to the Queen, the minister joked: highest-profile EU officials from eastern
deal” Brexit. “There’s probably some 16th-century Europe in the next commission.
It is a sign of how Britain’s departure law about what happens if you give bad “In a field that is really of paramount
from the EU has distorted its ram- advice to the monarch.” importance to the EU, which is rule of
shackle unwritten constitution and Britain’s highest court has been hear- law, it gives a strong signal that where
political norms that the principal wit- ing appeals on two contradictory rulings there is merit, where there is good work
ness taking on the prime minister in this by courts in England and Scotland over being done in central and eastern
unprecedented case was John Major, a whether Mr Johnson acted lawfully in Europe, that we can get a position,” said
Conservative former prime minister. suspending parliament for five weeks Ms Popescu.
In a written statement to the court, Sir until October 14. The London High During the nomination process, Ms
John told the 11 Supreme Court judges Court ruled that it did not have the Kovesi faced a number of obstacles from
that the Mr Johnson’s decision to sus- authority to review such a case, while Bucharest. After her ousting as chief
pend — or prorogue — parliament for Scotland’s highest court not only prosecutor in July 2018, she was twice
five weeks was “substantially moti- decided that it could pass judgment but put under investigation in a move her
vated” by his desire to stifle debate on that Mr Johnson had acted unlawfully. supporters said was politically moti-
Brexit. The prime minister told the monarch vated. In March, she was summoned for
The case has put the spotlight on the that he wanted to suspend parliament hours of questioning on the day the
fragile and uncodified triangular bal- so that he could prepare a new legisla- The Supreme resorting to the courts, but added that ‘There’s convention to agree to Mr Johnson’s European Parliament was to vote on her
ance of power in Britain between the tive programme. This package of draft Court is part of this was not possible if Mr Johnson had request to suspend parliament, she will candidacy.
executive — in the shape of 10 Downing bills, contained in the Queen’s Speech, the UK’s closed down the House of Commons. probably not be amused if the court rules that she Starting in 2017, Romania’s Social
Street — parliament, and the judiciary. will be announced by the sovereign in triangular Mr Johnson, using prerogative powers some 16th wasaskedtodosounderfalsepretences. Democrat-led government passed a
“A lot of how the constitution has the House of Lords on October 14. balance of inherited from medieval monarchs, Mr Johnson’s allies believe that apart number of reforms decriminalising cor-
developed over time has been a series of But few at Westminster believed that power between argues he is within his rights to suspend century law from a victory, the best outcome would ruption, which prompted the largest
fudges,” said Edward Garnier, Sir John’s Mr Johnson’s unusually long “proroga- the executive, parliament. about what see the court rule that the prorogation of demonstrations since the fall of com-
barrister. More prosaically, it consists of tion”wasanythingotherthananattempt parliament and But Brexit has also emboldened par- parliament was justiciable, or within the munism in 1989 and contributed
a series of laws and non-legal conven- by the prime minister to stop MPs debat- the judiciary liament to flex its muscles. John Bercow, happens if judges’ right to review, but that Mr John- to clashes with Brussels.
tions built up over centuries. ingtheUK’sexitatacrucialtimeaheadof Simon Dawson/Bloomberg
the Commons Speaker, has bent the you give son had taken the decision lawfully. Some elements of the reforms have
The rules have generally worked over “BrexitDay”onOctober31. rules to allow MPs to take over the par- But there are fears the Supreme Court been annulled, but Ms Popescu said not
time, largely due to a sense of fair play The prime minister, who refused to liamentary order paper to pass laws to bad advice could go further and rule not only was enough had been done and that the
and restraint on all sides, but Brexit has provide a witness statement to back up tell Mr Johnson how to handle Brexit. to the the suspension justiciable, but Mr John- DNA, the anti-corruption body Ms
changed the game. his claim he was behaving with com- With both sides stretching constitu- son’s decision was legally defective. Kovesi once led, would step up its inves-
The UK Supreme Court has more lim- plete propriety, effectively stands tional convention to breaking point, it monarch’ The worst outcome would be if the tigation of high-level officials.
ited powers than its US counterpart, accused of lying to the monarch about was inevitable that before long the judi- court sides with the Scottish justices and “Since Ms Kovesi left, the DNA
which is the guardian of the US constitu- the real reason for the unusually long ciary would be asked to act as referee, concludes it did not believe the explana- haven’t really had any high-profile cases
tion and can strike down primary legis- prorogation. dragging the judges into politics. tion of Mr Johnson’s actions. or prosecuted any visible people in the
lation. By contrast, in the UK, parlia- Lord Garnier noted the government’s And if that was not enough, Queen “Johnson lied to Queen” headlines current or past government . . . the vote
ment is supreme, but the Supreme argument that MPs were perfectly capa- Elizabeth II has also been pulled into the would be guaranteed to appear in every in her favour is a victory for the anti-cor-
Court can declare a government ble of defending their rights without fray. Although she was bound by newspaper. ruption energy,” she added.

Climate cost
Subscribe to the FT today at Green reforms challenge Germany’s will to stay in the black
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00
GUY CHAZAN — BERLIN private “climate foundation” that would at all. For months, economists have their charging points, and a reduction in
Trump vs the Valley A Five Star plan? Dear Don...
make interest-free loans to companies been arguing it is too restrictive, and VAT on train tickets.
Tech titans need to minimise
political risk — GILLIAN TETT, PAGE 13
Italy’s populists are trying to woo
the poor — BIG READ, PAGE 11
May’s first stab at the break-up
For years, a commitment to balanced
HMRC warns Lloyd’s of Brussels Insurance market and households to help reduce their should be loosened to allow the huge Olaf Scholz, finance minister, has
budgets has lain at the heart of German
UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80 SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017
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

emissions. Endowed with €5bn in state investment needed to modernise crum- insisted the entire package, which could
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the

being swamped
economic policy.
i Report outlines longer NHS waiting times
A report on how the health service can survive CHANGING AN
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

funds and a yearly government grant of bling infrastructure. cost €8bn to €10bn a year until 2023,
i Emerging nations in record debt sales Warning: this article may be

Developing countries have sold record levels of

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

3 Confidence in IT plans ‘has collapsed’

Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
But Berlin’s obsession with the schwarze €1bn, it would also finance itself “The problem with the debt brake is it will be paid for without additional bor-
A survey has revealed that a
3 Fivefold rise in declarations expected
JAMES BLITZ — WHITEHALL EDITOR 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
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

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

bumping up against an even more press- teed return of 2 per cent. would come from the existing energy
Setting up a digital customs system CDS, indicating it would be delivered on
has been at the heart of Whitehall’s time. But last month, it wrote to the i HSBC woos transgender customers
Brexit planning because of the fivefold committee saying the programme had TheRALPH
bank hasATKINSunveiled
— ZURICHa range of gender-neutral it followed “a strategy offull client tax
increase in declarations expected at been relegated to “amber/red,” which DUNCAN
titles such asROBINSON — BRUSSELS
“Mx”, in addition to Mr, Mrs, Misscompliance”
or but was still trying to
British ports when the UK leaves the EU. means there are “major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

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

(Deposito Legal) M-32596-1995;

ing imperative — the generational chal- Some have questioned the wisdom of and climate funds, special pots of
Theresa May announced in January that international trade once the UK leaves its image as a tax haven. and certain ofits employees”. The UK
Brexit would include departure from the EU . . . Internal ratings are designed The Swiss bank said yesterday it was tax authority added: “The international
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
to make sure that each project gets the
focus and resource it requires for suc-
Terror attacks inwith
co-operating western Europe after
offices in London, Paris and Amsterdam
Recent reach
notably the message
— of this investigation sends a clear
that there is no hiding place for
The lure of the exotic
customs union, the number is expected 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
to hit 300m. HMRC’s letters to the select commit- of foreign flora — HOUSE & HOME

Bracken House, 1 Friday Street,

The revelations about the system,
called Customs Declaration Service, are
tee, which will be published today, pro-
vide no explanation for the rating Lloyd’s of London chose Brus- insurers to follow. Most of the EU, with Dublin and Luxem-
parts in Germany wereBrussels
Publishing Director, Lionel Barber;
Norway, the
Dutch authorities said their counter- action, said they seized jewellery, paint-
attacks in Paris
also involved, ings and gold ingots as part of their

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

lenge of climate change. such a scheme when investors are will- money earmarked for green schemes
whether Whitehall can implement a caused by Mrs May’s unexpected deci- cities in its decision to set up an will be reinsured back to the homes for the industry. But Paris bombings — have
host of regulatory regimes — in areas sion to leave the EU customs union. EU base to help deal with the syndicates at its City of London Mr Nelson said the city won on The inquiries threaten to undermine thousand” bank accounts opened in
bucked the trend
efforts by the country’s banking sector Switzerland and not declared to French

London EC4M 9BT.

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

registered office as above. Local Representative office;

The probes risk sparking an interna- demanded a written explanation from
tional dispute after the Swiss attorney- Dutch authorities.
put the final cost
City watchdog sends a clear message as
Today, Angela Merkel’s government ing to pay for the privilege of lending to which have built up reserves of €7bn.
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
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
C/ Infanta Maria Teresa 4, bajo 2, 28016, Madrid. ISSN of meeting
Credit Suisse, whose shares fell 1.2 per Additional reporting by Laura Noonan in

Subscriptions & Customer service cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
subject ofinvestigations in the Nether-
lands, France and the UK. The bank said in Paris
Houlder in London, and Michael Stothard
Austen’s descendants insist the Rice portrait depicts her as a girl — see magazine Bridgeman Art Library
a pension headache — FT MONEY

will adopt sweeping measures designed Germany: government bonds maturing They also noted that some proposals
LAURA NOONAN — DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to

Tel: +44 207 775 6000,,

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-
Brussels takes tough stance on Brexit
Germany’s 2030
with Spain handed veto over Gibraltar
regulators cracking down on commu- 390_Cover_PRESS.indd 1 19/01/2017 13:57

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

chat app. to his employer voluntarily.
The FCA said Mr Niehaus had shared
Information shared by Mr Niehaus
UAE: Al Nisr Publishing LLC, P.O.Box 6519. Dubai. Editor
to ensure Germany meets its 2030 car- in 10 years now yield minus 0.5 per cent. — higher taxes on domestic flights and
avert a US government shutdown after The fine by the Financial Conduct confidential information on the messag- included the identity and details of a
April 28 have resisted Donald Trump’s Authority highlights the increasing ing system “on a number of occasions” client and information about a rival of

carbon reduction
ALEX BARKER — BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
attempt to tack funds to pay for a wall problem new media pose for companies last year to “impress” people. Jefferies. In one instance the banker GEORGE PARKER — LONDON Gibraltar yesterday hit back at the status within the single market after
on the US-Mexico border on to that need to monitor and archive their Several banks have banned the use of boasted how he might be able to pay off STEFAN WAGSTYL — BERLIN clause, saying the territory had “shame- Brexit, the guidelines state it would

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
in Chief: Lionel Barber.
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”

Qatar: Dar Al Sharq, PO Box 3488, Doha-Qatar. Tel: +97 bon reduction goals. Some estimates Germany’s finance ministry has given goals at €40bn road tolls for trucks — would generate
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,

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 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
“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
Nato summit in Brussels that Mrs May
had not intended to “threaten” the EU
when she linked security co-operation

have put the final price tag at €40bn. the idea of the civic bonds short shrift. revenue for the treasury and cut the bill. 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.
Tel: 0800 298 4708 expected to cost councils’ care services Spain the right to veto any EU-UK trade insistence on a continuing role for the Reports & analysis page 3
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£360m in the coming financial year. deals covering Gibraltar could make the European Court of Justice in any transi- Jonathan Powell, Tim Harford &
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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

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Boetie, 75008 Paris, Tel. +33 (0)1 5376 8256; Fax: +33 (01)
But evidence is mounting of the con- But Philipp Steinberg, head of economic ways around it,” said Christian Oden- Money would also flow from emissions
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tortions the government will have to go policy at the economics ministry, dahl, chief economist at the Centre for trading and the auctioning of emissions
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Friday 20 September 2019 ★ FINANCIAL TIMES 3


Deeply divided Fed attempts to do no harm

Central bank puts off questions on stimulus and balance sheet expansion to stop further disruption in money markets
Jim Bullard of St Louis — wanted a larger talks. From the second-quarter report argument. Trade rhetoric has deterio- term loans that the Fed uses to drive and it certainly is now. Again, we’ll be
one. “The main tension the Fed faces is on gross domestic product, Mr Powell rated since the last meeting. But the down borrowing rates. The Fed had not looking carefully in the coming days.”
At their September meeting, Federal the economy has not really slowed,” said cited business investment numbers, committee made minimal changes to its used the facility in 10 years. But the committee and Mr Powell did
Reserve policymakers sent a message: Ashok Bhatia, a deputy chief invest- which contracted slightly. statement, and projections showed no The simplest explanation for the dis- not commit to asset purchases to
first do no harm. The Fed’s rate-setting ment officer at Neuberger Berman. The Asked about a paper by the Fed’s consensus on any more rate cuts ruptions is that when banks do not have increase reserves, or even to a more per-
committee on Wednesday cut interest unemployment rate remains at 40-year Board of Governors that found as much through to the end of 2020. “There is not enough reserves at the Fed that they can manent repo facility, as some analysts
rates 25 basis points, as expected. lows. Consumer spending remains as a whole percentage point of drag in enough of a consensus for [Mr Powell] use to easily lend each other money, had predicted. “I am disappointed,” said
Thereafter a deeply split central bank strong. People have jobs and are buying GDP growth by the end of 2020 from short-term borrowing costs can spike. Priya Misra, head of rates strategy at TD
pushed back decisions on whether the things, the two necessary conditions for trade uncertainty, Mr Powell praised the Mr Powell noted this week’s market Securities, “but think that the Fed just
US economy needed more monetary a thriving economy. research, and said other papers had
‘It’s a $22tn economy. disruptions, and said the Fed expected needs to do more work on this issue.”
easing to cope with trade tensions — and One group at the Fed wanted to be found similar results. But he said preci- To try to isolate the short-term interest rates to rise briefly, She believed the Fed would know
on whether it will need to expand its bal- pre-emptive, said Mr Bhatia. Another sion was still difficult. “There’s real but the jump had been “a stronger enough by its October meeting to com-
ance sheet to prevent further disruption group was arguing nothing had hap- uncertainty around these effects. It’s a
effects of certain things response than certainly we expected”. mit to buying more assets.
in the money markets. pened yet. “That tension is why we’ve $22tn economy. To try to isolate the is very challenging’ He conceded, in code, that bank For now, the committee has offered
“When the direction is relatively ended up at 25 basis points,” he said. The effects of certain things is very challeng- reserve levels might have been too low. small, technical fixes to give it a little
clear, it’s relatively easy to reach una- sticking point, he said, was trade. ing, but we do the best we can.” to commit to a clear path,” said Krishna Asked whether reserve levels were ade- more room to manage short-term inter-
nimity,” said Jay Powell, Fed chairman. In both his prepared remarks and his Mr Bullard has been openly worried Memani, vice-chairman of investments quate, he said: “We’ve always said the est rates. So until October, it will remain
“This is a time of difficult judgments, as answers to reporters, Mr Powell went about the effects of trade uncertainty. at Invesco. “Therefore he is trying to level is uncertain.” He even hinted at a a time of difficult judgments and the Fed
you can see, disparate perspectives.” into more detail on the real, observable He wanted a 50bp cut. There appears to thread a needle.” solution. When the Fed buys assets, it will wait and see. Andy Richman, direc-
By “disparate perspectives” he meant effects that drawn-out trade negotia- have been an argument in the commit- The Fed offered a similar response to credits banks with reserves. “It is cer- tor of fixed income at SunTrust Advi-
there had been three dissents at the tions have had on business investment. tee over whether the Fed can know the disruptions in the short-term fund- tainly possible that we will need to sory Services, called this “Powell’s
meeting. Two Fed presidents — Kansas The Fed had been hearing from busi- enough about the future effects of trade ing markets earlier in the week that had resume the organic growth of the bal- conundrum”: there are real, visible
City’s Esther George and Boston’s Eric ness owners that they had delayed uncertainty to act decisively on it now. prompted the New York Fed to dust off ance sheet earlier than we thought,” he risks. But everything looks fine now.
Rosengren wanted no cut at all. One — investments as they waited out trade Mr Bullard seems to have lost that its “repo” facility, a way of making short- said. “That’s always been a possibility Gillian Tett page 9

Trade tensions

OECD warns leading economies of low-growth trap and cuts forecasts

Rate moves How central banks compare
The world’s leading economies need to
ease trade tensions and act decisively UK
to prevent a descent into a low-growth
Bank of England left rates at 0.75 per
trap from which it would be difficult to
cent but held out the prospect of cuts
escape, the OECD has warned.
if Brexit uncertainty persisted in a
Labelling the economic outlook as weak global economy
“increasingly fragile and uncertain”, the HELD
Paris-based international organisation
forecast yesterday that Britain would
fall into recession if it left the EU with- Japan
out a deal and eurozone growth would Bank of Japan kept overnight interest
slow to close to zero. rates at minus 0.1 per cent but also
Evidence was accumulating that the hinted at action next month if global
effects of trade tensions were greater economic weakness persisted
than previously thought, the OECD said,
urging all countries to stop erecting tit-
for-tat trade barriers and to fight the
economic slowdown with a fiscal stimu-
lus, where public finances allowed. Norway
Central banks are responding to slow- Norges Bank, an outlier among central
ing economic growth by easing policy. banks, raised rates 25 basis points
After the Federal Reserve cut rates on to 1.5 per cent but said global
Wednesday, the Bank of England struck uncertainties “worries us”
a dovish tone — even as it held rates RAISED
steady — raising the prospect for the
first time that it might seek to cut rates if
Brexit uncertainties persisted in a weak
global economy. Switzerland
Indonesia’s central bank yesterday Swiss National Bank kept key rate at
cut rates while the Bank of Japan, minus 0.75 per cent but lowered
though holding its benchmark policy growth expectations and reduced
rate at minus 0.1 per cent, hinted at inflation forecast
potential action next month. HELD
Norway’s central bank swam against
the tide with a further rate rise but indi-
cated this could be its last amid the glo- Going down: Bruno Le Maire, French finance min- forecasts for almost all countries it impose tariffs on European car imports. ‘The danger courages businesses to invest,” the
bal shift towards easing. The Swiss the Fed’s ister, said yesterday in Paris “budgetary examined, cutting its global growth pro- “The speed that trade tensions are OECD said. It said companies would not
National Bank, meanwhile, held rates decision to cut a policy had to take over from the mone- jection for 2019 by 0.3 percentage points materialising is worrying,” she said, is that we want to invest in the uncertain climate.
steady even as it slashed its growth fore- quarter point tary policy of central banks which today to 2.9 per cent, the weakest perform- adding the effects “can be seen in how get into a Economists fear manufacturing woes
cast for the year. from rates is is approaching its limit”. ance since the 2008-09 financial crisis. trade [volume] growth has collapsed”. could soon spread to consumer spend-
The OECD praised central banks’ seen on the floor He made the comments as France and With little improvement foreseen in The forecasts suggest US economic vicious ing, bogging down the services sector
action in loosening monetary policy fur- of the New York Germany unveiled a common strategy 2020 and big forecast downgrades, growth will slow from 2.9 per cent in circle of and the global economy in a low-growth
ther to stimulate growth, while warning Stock Exchange to tackle slowing growth, leaning on OECD chief economist Laurence Boone 2018 to 2 per cent in 2020, Chinese rut. In Britain, Ms Boone said if the UK
Europe and Japan “have limited scope on Wednesday structural reforms, debt reduction and said: “The danger is that we get into a growth will decline from 6.6 per cent lower trade left the EU without a deal, “there was a
to ease monetary policy further but may Justin Lane/EPA- “strong public investment where possi- vicious circle of lower trade [and] to 5.7 per cent over the same period and [and] high probability we get into recession”.
face a renewed need to do so”. ble”. However, while the finance minis- investment and higher uncertainty.” the eurozone will see its growth rate The UK forecast for 2020 suggests
To make policy stimulus more effec- ters of the two countries attempted to She blamed multiple trade tensions, almost halve to 1 per cent. “Collective investment only 0.9 per cent growth even if the
tive, it called for governments to raise present a united front, Mr Le Maire said from the US and China’s battle over tar- effort is urgent to halt the build-up of and higher country secures a deal; if Britain crashes
public capital spending in countries that a debate remained about how quickly iffs to skirmishes between South Korea trade-distorting tariffs and subsidies out, the forecast is for a contraction of
had low deficits, low debt and an invest- the strategy would be implemented. and Japan on crucial goods for technol- and to restore a transparent and pre- uncertainty’ 1 per cent in that year alone.
ment backlog. The OECD downgraded the economic ogy supply chains and the US threats to dictable rules-based system that en- Additional reporting by David Keohane

Federal Reserve Eurozone

US money market pressure eased for third day Muted take-up by banks for ECB cheap loans
ADAM SAMSON — LONDON deliver as substantial a policy easing as “They should walk in on Monday and MARTIN ARNOLD — FRANKFURT council meeting — lowering the poten- a carry trade by earning 0.5 per cent on
some investors had anticipated. say they are doing a $100bn, 10-day The European Central Bank’s offer of tial interest rate to minus 0.5 per cent money borrowed at negative interest
The Federal Reserve intervened in US Several strategists at major banks that operation, then we aren’t going to be cheap money for eurozone banks has and extending the maturity from two to rates from the ECB and depositing the
money markets for the third day in a act as trading counterparties for the Fed talking about this after quarter end,” turned out to be a damp squib, after the three years. money back at the central bank for free.
row yesterday as calls grew for the cen- said the central bank should pump said one banker. region’s lenders took up only €3.4bn of That may have left banks without Marco Valli, chief European econo-
tral bank to open a more permanent more regular bursts of funding into the In particular, some bankers have the loans on offer — a fraction of the enough time to apply for the new loans, mist at UniCredit, said the low demand
facility to ease pressure on a pivotal system. This is particularly important highlighted the end of September, demand seen in previous auctions. some analysts said. for loans yesterday “should not be con-
part of the financial system. before the end of financial quarters and which is typically a more strained time Frederik Ducrozet, a strategist at sidered a signal that there is no demand
years, analysts said, because of the risk for the repo market as banks pull back Analysts said the unexpectedly low for these loans — we expect many more
The New York Fed injected $75bn in of further bouts of cash outflows spark- and reduce the size of their balance take-up in the first auction of the ECB’s banks will apply for them next time”.
overnight cash into the short-term lend- ing renewed market dislocations. sheets ahead of an important regulatory latest targeted longer-term refinancing
‘Most banks were likely Eurozone lenders are due to repay
ing market, and its auction was oversub- Bankers and investors have called for reporting date on the last day of the July operation (TLTRO) reflected last- to wait for the next €32bn of loans from the previous
scribed for the second straight day, with the Fed to launch a “term” repo facility to September quarter. minute changes to their terms and the TLTRO scheme next week.
banks demanding almost $84bn. through which it could lend cash for as Bankers and investors said earlier in tactical advantages that banks may see
operation in December’ “The result will be a net withdrawal of
It activated its repo operation on long as two weeks, to ensure players in the week that no one in the market was in waiting until the next round. Frederik Ducrozet, Pictet TLTRO liquidity on the date of settle-
Tuesday for the first time since 2008 the market have the money they need willing to lend cash until after the end of The TLTRO is the ECB’s third pro- ment,” said Mr Ducrozet. “We’re not
after technical factors sent a vital meas- until after the end of the quarter has the quarter. gramme of cheap funding to banks, Pictet Wealth Management, said the sure this was the plan.”
ure of overnight funding costs surging. passed. “Right now there is so much uncer- which aims to stimulate more lending. take-up was “shockingly weak”, but Some ECB officials believe the low
On Wednesday it ran the operation tainty,” said Scott Skyrm, a repo trader Lenders qualify for the loans at negative added “most banks were likely to wait take-up may also be because the bank-
again as markets remained strained. at Curvature Securities. “No one wants rates from the central bank if they meet for the next operation in December”. ing system is already flush with liquid-
The central bank’s policy rate to be the first one to buy something at certain overall lending targets. It was A delay in applying may suit some ity. After the last TLTRO auction, euro-
climbed above policymakers’ target on 2.5 per cent and then they could come in relaunched by the ECB as part of a wider banks because the ECB recently intro- zone banks held €761bn of cheap loans.
Tuesday and receded back to the very the next day and rates are at 5 per cent.” package of monetary easing announced duced a so-called tiering system that Jack Allen-Reynolds, senior Europe
upper end of the targeted range on Banks are also concerned about the last week, which included cutting the will exempt part of lenders’ excess res- economist at Capital Economics, esti-
Wednesday, according to figures pub- possibility that more cash could ebb central bank’s deposit rate further into erves from the negative interest charged mated that banks had capacity to add an
lished yesterday — a sign of how tense from the repo market over the coming negative territory and restarting its on deposits held at the central bank. extra €430bn of the cheap loans before
markets remain, even amid the Fed’s week as the US Treasury continues to bond-buying programme. Lenders with spare capacity to take hitting a cap of 30 per cent of their eligi-
interventions. build its own cash reserves. At the previous TLTRO auction in advantage of this exemption, many in ble lending book. He added that he
Yesterday’s third repo auction came a JPMorgan analysts warned this week March 2017, 474 banks bid for €233.5bn Italy and other southern European doubted there would be a big impact on
day after the Federal Open Market Com- the ructions of the past few days may be of loans. This time only 28 lenders bid countries, are likely to wait until the lending growth or borrowing costs and
mittee cut interest rates by 25 basis “a prequel to what could come at year- for €3.4bn of loans. tiering system is introduced at the end said they would not “significantly affect
points, in a move that some analysts The New York Fed injected $75bn end when US banks significantly reduce The ECB sweetened the terms of the of October, according to analysts. economic growth”.
dubbed a “hawkish cut” as it did not into the short-term lending market their footprint in the money markets”. new TLTRO at last week’s governing This would allow them to benefit from Editorial Comment page 8
4 ★ FINANCIAL TIMES Friday 20 September 2019


Trudeau apologises for racist make-up Edward

Political adversaries seize more than a month to go before the optimism and “doing politics differ- ‘I shouldn’t Mr Trudeau’s political brand has been
October 21 federal election. Polls yester- ently”. tarnished in the past year over allega-
on 2001 image during have done
close election campaign
day gave Mr Trudeau a narrow lead over
Andrew Scheer, his main rival, whom he
has accused repeatedly of allowing
Women filled half the posts in his cab-
inet, in which a wide range minorities
were also represented. In 2016 Mr Tru-
that. I
tions he and his top officials tried to
pressure Jody Wilson-Raybould, former
attorney-general, to allow SNC-Lavalin,
Trump’s strategy on
JASON KIRBY — TORONTO intolerance in his Conservative party.
Mr Trudeau also admitted he had per-
deau joked he had more Sikh members
than Narendra Modi, India’s prime min-
should have
the engineer, to avoid criminal charges.
After being found in breach of conflict
China means that
Canada’s prime minister has apologised
for wearing brownface make-up to an
Arabian Nights-themed gala when he
formed the Jamaican folk song Day-O
while wearing blackface make-up in a
high school talent show.
Mr Scheer said he was “extremely
shocked and disappointed”, adding that
better. And
of interest rules by the federal ethics
commissioner, Mr Trudeau said he took
“responsibility” for his actions but dis-
everyone’s a loser
was a teacher in 2001, admitting it was Asked if he had considered resigning wearing brownface was an “act of open
I’m sorry’ puted some conclusions.
racist behaviour. for the photo, Mr Trudeau said he took mockery and racism” and was “just as Justin Trudeau Mr Trudeau took “full responsibility”

Justin Trudeau, who is battling for re- “responsibility” for his actions but racist in 2001 as it is in 2019”. in 2017 after the ethics commissioner he phrase “new cold war” should never have
election, issued the apology aboard his would be “asking Canadians to forgive” Jagmeet Singh, leader of the New found him in breach of the same rules been coined. Nothing in the original stand-off
campaign plane after Time magazine him. Democratic party and Canada’s first when he failed to properly clear a Barba- between the Soviet Union and the US could
published the yearbook image. “It was something that I didn’t think non-white federal party chief, said the dos vacation with the Aga Khan, the bil- prepare the global economy for what Donald
“I dressed up in an Aladdin costume was racist at the time but now I recog- photo was “troubling” and “insulting”. lionaire religious leader. Trump is demanding of his country’s trading
and put make-up on,” said Mr Trudeau, nise it is something that is racist.” “What does that say about what he He came under further criticism partners. Moscow and Washington existed in separate
47, who attended the gala when he was Yesterday Global News in Canada thinks about people who, because of the more recently for what he said was orbits. Now the rest of the world is being asked to make a
29 and teaching at the private West published what it said was a third colour of their skin, face challenges and being “more enthusiastic about cos- choice between China and the US, two intimately entwined
Point Grey Academy in Vancouver. instance of Mr Trudeau appearing to barriers and obstacles?” he said. tumes than is sometimes appropriate”. economies. Nor does the label “trade war” begin to capture
“I shouldn’t have done that. I should wear racist make-up, in an undated There was a “pattern of behaviour” in This may have been a reference to a the dimensions of what this implies.
have known better. And I’m sorry,” said video reportedly shot in the 1990s. which Mr Trudeau in public “seems family trip to India last year when he The US’s partners are being pressured to eject Huawei,
the leader of the Liberal party. Mr Trudeau was elected in 2015 after really nice, really warm” but behind appeared in a series of local outfits that China’s leading telecoms equipment supplier, from their
The image came to light with a little a campaign that emphasised tolerance, closed doors it was a different story. were mocked by Indian commentators. 5G networks. But Mr Trump’s all-or-nothing ultimatum is
by no means confined to Huawei. Almost every Chinese
product is under suspicion of concealing the so-called
Manchurian chip — backdoor technology that can lie dor-
mant until activated. Israel, for example, is being asked to
Trade war. Manufacturing dump a Chinese construction group that is deepening the
port of Haifa. It is also under pressure to cut ties with

Car seat maker falls victim to US tariffs another Chinese contractor building a metro in Tel Aviv.
Barring commodities such as soyabean or pork, the
internet of things makes almost every product a potential
dual-use technology in a future US-China conflict. They
used to say ploughshares could be converted into swords,
and vice versa. How about refrigerators? Or children’s
White House anti-Beijing stance toys? Once you start down the road of excluding anything
with Chinese-embedded chips, it is hard to know where to
has hit Britax, which relies on stop. The line between legitimate national security con-
imports to remain competitive cerns and outright paranoia is perilously thin.
That line was obliterated at a conference in Paris this
JAMES POLITI — WASHINGTON week with the mislead-
ingly dull title “interna-
As Donald Trump launched his trade tional co-operation on
The line between
war with China in early 2018, Britax, artificial intelligence”. In legitimate security
one of America’s best-known child car reality, the gathering —
seat brands, stepped up production in co-hosted by the Wash-
concerns and
the US, convinced that the White House ington-based Atlantic outright paranoia
was committed to encouraging US man- Council — was the first
ufacturing. effort to stimulate talks
is perilously thin
Such confidence did not last. After between the US and
being battered by tariffs on some of the China on the future of AI, which covers pretty much the
imported parts for its US-assembled car future of everything, including warfare.
seats, the company is now pleading for a A White House official, whom I cannot name under the
reprieve and warning that as a last gathering’s “Chatham House rule”, opened by declaring
resort it might be forced to close its US that the US would not co-operate with China on AI while it
operations, possibly shifting them to remained authoritarian. Companies around the world had
China. to choose between two AI systems, said the official. One,
“We’re being significantly penalised,” led by the US, was based on trust and openness. The other,
said Robert McCutcheon, president of China, was closed and “malicious”. The latter exported
the Americas for Britax, whose US man- “authoritarian software” to every continent.
ufacturing hub is in Fort Mill, a fast- A Chinese official responded by saying that the US killed
growing town in South Carolina. innocent civilians in Iraq and Afghanistan. “Nobody is per-
“If you back up and think about it, our fect in human rights,” he said. The exchange almost ended
incentive now would be to move our the conference before it began. It offered a troubling fore-
production back overseas . . . and that’s taste of how much could go wrong between the world’s two
not something we want to do.” great powers. The French co-hosts could only make for-
Britax, and its roughly 300 jobs in lorn pleas for dialogue.
Fort Mill, near the border with North It is an open question whether Mr Trump will agree to a
Carolina, have fallen into a bizarre and Unseated: tive, for an exemption from the tariffs for tariff relief, but those deadlines have China would be a very real safety risk,” ceasefire with China in their trade war over the coming
ironic trap when it comes to Mr Trump’s import tariffs for the company in a letter on Septem- slipped as the US administration strug- Ms Trofe said. weeks. Worries about his re-election prospects in 2020
trade war with Beijing. Beginning in have affected ber 10. gles to keep up with the demand. Britax, which was founded in the UK suggest Mr Trump might go for some kind of truce. Such a
September 2018, the company faced a Britax’s If no long-term deal was reached with “We unfortunately don’t have any in the 1930s, established its US division deal could even include a brief reprieve for Huawei. Quite
10 per cent tariff on the textiles it uses to manufacturing Beijing, he said, exclusions would be real insight into how the USTR or the in the 1970s and is now owned by Nordic how he would sell that one to the increasingly hawkish
cover its car seats, which moved up to hub in Fort Mill, necessary to “prevent further harm”. current administration is making deci- Capital, a Swedish private equity firm. It bipartisan voices back home is another matter. Democrats
25 per cent after talks between the two South Carolina, The letter revealed the unease with sions on what should be excluded versus is awaiting with trepidation a decision would be sure to attack him for folding too cheaply. Mr
countries broke down in May. above. US trade which many in Mr Trump’s own party, not,” said Lisa Trofe, managing director on its tariff-exemption request, mirror- Trump’s short-term actions are unpredictable.
Starting this month, it was hit by representative even in deeply Republican regions, are of the Juvenile Products Manufacturers ing a broader trend of US manufacturers But his larger China strategy is unchanging. It is hard to
another layer of levies, worth 15 per Robert struggling to contain the fallout from Association, which represents child dependent on Chinese imports that are overstate its radicalism. Over the past 40 years, the US has
cent, on metal products such as har- Lighthizer, the trade war, even if they continue to safety companies in the US. grappling with huge uncertainty about taken a “win-win” approach to China. The more it could be
nesses and buckles, also used in Britax below — Logan Cyrus support the US president. For example, high chairs were exclu- their future. bound into the global economy, the freer its political sys-
car seats. In a business with relatively “The tariffs have affected just about ded from the tariffs, but cribs were not. “We’re just very cautious now about tem would become. Reality has belied that theory. China is
low profit margins, that was damaging every industry we talk to,” Mr Norman Mr Trump has repeatedly encouraged making further investments now considerably less free today than it was in 2001 when it
enough. But the pain for Britax was said. While many businesses agreed US companies to cut their ties with Chi- because we’re just trying to sort out joined the World Trade Organization. Its social credit sys-
compounded by the fact its main com- with the concept of confronting China’s nese suppliers to avoid tariffs, but that is where this is going to go,” Mr McCutch- tem, which ranks citizens based on their behaviour, offers
petitors have been importing finished unfair trade practices, “their ox is get- easier for some manufacturers than eon said. “It just changes on a weekly an Orwellian vision of how people can be controlled by
car seats directly from China, tariff- ting gored”. He added: “I feel strongly others. Britax has explored the idea, but basis.” authoritarian software. Yet its economy is about three
free, due to an exemption allowed by that when companies don’t have an it would be expensive and time- Disappointment with the policies and times larger than it was then.
the office of the US trade representative alternative to make the product — don’t consuming, lasting up to two years, decisions on trade coming out of Wash- Mr Trump is thus turning that strategy on its head. We
for some, but not all, safety products. have an alternate source — they ought to because of the extra certifications and ington is palpable. Mr McCutcheon said have moved from a “win-win” US vision of globalisation to
“This administration’s focus is to pro- get some relief.” crash-testing needed to change parts. it is “hard for us to believe” the “win-lose”. In fact, what Mr Trump is pursuing is closer to
tect American manufacturing jobs, but The USTR did not respond to a “It has taken decades to build the rela- “branches of government” want Britax “lose-lose” — everybody loses if globalisation goes into
Britax is a prime example of a company request for comment on the tionships, to build the level of trust, to to head towards the most “draconian reverse. Under Mr Trump’s plan, the US ultimately wins
being punished for doing the right Britax case and Mr Nor- ensure that all of the entities in China option” of shutting US production. because it would lose more slowly than China. The Paris AI
thing,” said Ralph Norman, a man’s letter. Mr Light- who are the supply-chain production Mr Norman said he is doing what he gathering was supposed to be about the implications of
Republican in the US House of hizer has until the partners really have what they are doing can to help, but realises there may not machine learning. A century after the first world war, what
Representatives from the area, middle of next week down to a science. We’re hearing all of be a quick fix. “I think the president’s it highlighted was the urgent need for human learning.
as he appealed to Robert Light- to respond to the our members say that trying to move doing the right thing, it’s just going to
hizer, the US Trade Representa- company’s petition manufacturing or production outside hurt for a while.”

Cross-border relations

North Korean defectors claim Seoul is silencing their criticism in push for rapprochement
EDWARD WHITE AND KANG BUSEONG weapons has also included efforts to flurry of summitry between Mr Moon and media executives to use the formal Reporters with two state-backed such as loudspeaker broadcasting and
silence critics and shift public focus and Mr Kim, he was “permanently title of “chairman” when talking pub- news organisations said there were no distributing leaflets along the border.
Joo Yang once hid in a bunker for stor- from problems such as human rights struck from the list” of guest contribu- licly about Mr Kim. For North Koreans editorial directives to reject critics of the Activists have floated balloons with
ing kimchi, Korean fermented cabbage, abuses in North Korea. tors with most state-backed media. who fled, the request is offensive. Kim regime or promote Mr Moon’s pol- leaflets and radios into North Korea for
to evade detection before fleeing across Seoul said South Korea “guaranteed “I used to be on [state-linked televi- “He’s a murderer. He’s not a ‘Mr Kim’,” icy of engagement. years. Ms Scholte said enforcement of
the North Korean border to China. press freedom” and officials had not sion news] almost every day, but sud- said Yeonmi Park, a defector and now a The complaints come as hopes rise the new policy was “very disturbing and
made any requests to media, universi- denly since March [2018], they stopped US author and human rights activist. that Donald Trump, US president, will continues to be a problem”.
Years later, as she built a life in Seoul, ties or other public institutions related calling me,” he said. “The [presidential] restart talks with Mr Kim, even though Another North Korean defector said
speaking about her experiences and to North Korean issues. Critics, how- Blue House might have put pressure on some experts warn that overtures to he worked with Seoul on radio broad-
helping other defectors share their sto- ever, dispute this. Suzanne Scholte, those broadcasters, or they became too him have yielded little. Human rights casts targeting North Korean soldiers
ries helped to support herself and shed chair of North Korea Freedom Coalition, loyal to the government.” groups say Mr Moon’s government has near the border area for three years but
light on life in the communist country. a US non-government organisation, said Ms Yang, who had run a consultancy also cracked down on groups trying to his role was discontinued in 2018. Los-
But multiple defectors and human the change in approach was “definitely helping other escapers find paid speak- counter Pyongyang’s propagandists by ing the work was galling, he adds, as he
rights activists have said that paid coming from the government”. ing work, is one of several defectors to sending factual information and cul- was inspired to defect in 2009 after lis-
speaking opportunities for North She added: “It is having a chilling allege that officials requested that North tural content into North Korea. tening to similar broadcasts for years.
Korean escapers have disappeared over effect, not only on our awareness and Koreans not speak publicly about South Korean officials said the gov- Thae Yong-ho, a former envoy to the
the past two years while President Moon understanding of North Korea, but it is human rights and focus on “good ernment had asked groups to stop dis- UK, who in 2016 became the highest-
Jae-in has sought rapprochement with also really painful and economically things” about their former home coun- tributing information but insisted that ranking North Korean diplomat to
dictator Kim Jong Un. devastating to the defectors.” try. Last December a contract with a the move was in accord with the 2018 defect, said disseminating information
The allegations raise questions over Ahn Chan-il, a Seoul-based defector state-linked organisation was cut short. Panmunjom Declaration. The pact, to younger North Koreans was “very
whether Mr Moon’s policy of engage- and commentator on North Korea, Several North Koreans and academics North Korea leader Kim Jong Un, signed by Mr Kim and Mr Moon, inc- important” in spurring people to reject
ment with Mr Kim to abandon nuclear believes that from early 2018, ahead of a say they have been directed by officials left, with South Korea’s Moon Jae-in luded a pledge to “stop all hostile acts” the state’s ideological control.
Friday 20 September 2019 FINANCIAL TIMES 5
6 ★ FINANCIAL TIMES Friday 20 September 2019


Cultural subtleties
with global appeal
Lulu Wang was told her Chinese-American family drama ‘The
Farewell’ would be ‘niche’ — now it’s a hit. Rebecca Liu meets her
‘I didn’t know a niche,” she recalls. But when nudged to

hen Lulu Wang’s father herself in six years earlier — even down whether to make changes that might help broaden
first read her script for to the sham marriage. She had emi- laugh or cry’: its appeal, such as softening characters
The Farewell, a film grated to Miami from Beijing with her Lulu Wang, to make them nicer, she held firm.
based on a real-life saga parents when she was six years old, and photographed For Wang, it was not about making
involving a sham wed- the experience felt like a clash between for the FT by the film with the broadest appeal but
ding in their family, he was uncertain. her American values and those of her Amara Eno. the one that was truest to her story. “If
“He was like, ‘Yeah, it’s really accurate,’” extended family. She remembers think- Above: somebody made a suggestion that was
Wang remembers. But that accuracy ing: “This is so crazy. This is a story I Awkwafina, not accurate to my experience or to my
created doubts: “You didn’t dramatise need to tell.” It was the ever-changing centre, in family, I could immediately identify it.”
it more. Why would anybody want to cocktail of conflicting emotions that ‘The Farewell’ The success of The Farewell has reaf-
see this?” made the experience feel exceptional: “I firmed her instincts. “It’s been really
I am speaking to Wang in a brightly lit didn’t know whether to laugh or to cry. I magical to see it resonate with so many
conference room in London on the first felt empathy for all the family members, people because it has enabled me to
day of her month-long European press but I also saw the absurdity of the situa- trust my gut,” she says. It has touched
tour. After wide releases in the US and tion.” Yet when it came time to revisit audiences in the Chinese diaspora, but
Australia, and contrary to her father’s this experience as a film-maker, Wang also many others with no Asian back-
fears, the film has attracted sizeable felt it was important not to approach it ground. People from all over the world
audiences. It is currently the highest have come to Wang with their own expe-
earning movie per theatre in North riences of immigration. “It makes you
America this year, surpassing Marvel’s
‘I like stories that wonder: what other myths are we inad-
Avengers: Endgame, and won the Audi- explore a question vertently believing in, and [how are
ence Award at Sundance London in they] shaping our culture?”
June. Though Wang, who is 36, has been rather than ones that Wang notes that specificity in story-
working as a writer and film-maker in
Los Angeles for more than a decade,
provide answers’ telling is something that is now discour-
aged, for fear of alienating audiences.
receiving acclaim for her debut feature Colleagues in the industry have been
Posthumous (2014) and short film Touch like a strict recreation of her life. The their choices. As a conduit between two explained to her,” Wang observes. “[It’s] cautioned by executives against being
(2015), The Farewell has catapulted her result is a mix of fiction and non-fiction. cultures who tries to do justice to both, an immersive experience.” On a meta- too specific about the race, sexual orien-
into the mainstream. The Farewell defies easy categorisa- Wang suggests, Billi could be a stand-in level, this also offers the audience a les- tation and political beliefs of their char-
The Farewell begins with Billi (actress tion. Much like Wang’s own swings for every immigrant caught between son on the relativity of their beliefs. acters. But The Farewell celebrates spe-
and rapper Awkwafina in her first lead- between sadness and laughter, the film two worlds. Someone might not explain things to cificity. It tests, rather than shies away
ing dramatic role), a down-on-her-luck delivers moving scenes of love and grief Hollywood films about non- you because they don’t see their lives as from, the audience’s ability to sit with
millennial writer in New York, discover- but is also dotted with light humour American cultures can sometimes feel worthy of explanation, Wang points out: different points of view, and empathise
ing that her beloved grandmother — Nai about the lengths people go for their more like sociological explainers of a “They don’t know what’s different.” with characters they may at first
Nai, in Mandarin — has been diagnosed loved ones. Rather than making any broad community rather than narrow The Farewell almost didn’t get made. find unrelatable.
with late-stage cancer and only has a judgment on whether her family’s deci- stories centred around specific charac- Early potential investors struggled to see I ask Wang whether she was con-
few months to live. Her parents are pre- sion was right or wrong, Wang is more ters. Cultural differences are explained the film’s appeal to either American or cerned that audiences would struggle to
paring to fly back to their hometown, interested in showing why they did what from the outset, and the audience is gen- Chinese audiences; Wang eventually move from confusion to compassion. “If
the Chinese city of Changchun, to say they did. “I like stories that explore a tly guided through anything that might found producers after sharing her story you write from a place of empathy,” she
their goodbyes. Billi wants to join them, question rather than ones that provide seem unfamiliar. The Farewell strays on NPR’s radio show This American Life in replies, “if you’re creating these charac-
but there’s a catch: no one plans to tell answers,” she says. from this approach. Local customs, such 2016. Did she ever feel the need to make ters with no distance, then the audience
Nai Nai about her terminal illness. In Wang’s films we are often invited to as drinking games and wedding celebra- the film more Hollywood-friendly? is actually not distanced from the char-
Instead, the family is arranging a fake see the different emotions and perspec- tions, are shown as they are, leaving “People told me throughout that to acters.” We learn, she adds, to love these
wedding between Billi’s cousin and his tives simultaneously circulating in a room for viewers to understand them make such a specific film — not about characters regardless of who we are, and
girlfriend that will double as a send-off scene. In The Farewell Billi goes from for themselves — or not. Asians, not about Americans, but specif- ultimately: “We see ourselves in them.”
for the beloved matriarch. finding the entire scheme ridiculous to “I wanted the audience to experience ically the Asian-American experience,
It is a situation that Wang found having compassion for her family and it the way that Billi does; things aren’t that it would be limiting and it would be ‘The Farewell’ is in UK cinemas from today

The power of ordinary, messy lives

looks set to be bought by a developer.
THEATRE A parallel narrative is that of Beth, who
is fighting for custody of her young
Sarah daughter. But mostly Zeldin, as previ-
ously, works through accumulation of
Hemming detail and through texture: we watch
characters stack chairs, queue for food,
put out biscuits.
Gradually you become invested in

tatistics can tell a story. But these characters and aware of what this
drama can get under the skin shabby place means to them. For Ber-
of that story. Alexander Zel- nard (Alan Williams), a chronically
din’s Faith, Hope and Charity lonely old man, it is company; for Beth
(at the National’s Dorfman and her 16-year-old son (brilliantly
Theatre) does precisely that. A quietly played by Susan Lynch and Bobby Stall-
devastating, gently funny and beauti- wood), it is a haven; for Mason, a well-
fully delivered piece of theatre, it shows meaning, awkward ex-offender (excel-
us what it means to be one of those sta- lent Nick Holder) who arrives to lead
tistics. It’s one of several new shows in the choir, it is a new start. Its loss will hit
London that build on the empathy cen- them hard. Empathy: Alan Williams in
tral to drama to lend a voice to those Some might object that the National ‘Faith, Hope and Charity’
who are rarely heard. Theatre staging such work amounts to a
The statistics behind Faith, Hope and sort of “poverty porn”: a chance for picture of a rapidly changing country.
Charity are stark. In 2018, the Joseph wealthy people to wring their hands. I’d We see ministers embracing a new ethos
Rowntree Foundation found that one- argue the contrary: one of the many of economic prosperity; we see medical
fifth of the UK population were living roles of the National is as a publicforum experts pressured into meeting targets;
in poverty. In the past five years the to highlight and discuss matters of we see poor farmers thrilled at a chance
use of food banks has risen by 73 per national import. And, crucially, these to buy the trappings of western life —
cent. Government cuts to welfare pay- characters have dignity: they are not trainers, blenders, karaoke machines —
ments and local councils have hit the just victims, but ordinary, messy people and we see a huge tragedy unfolding.
poorest hardest. pulling together a rough community of In the late 1980s, local governments
A columnist can describe the impact support. This is a deeply moving and established for-profit blood plasma col-
of that; a dramatist can show you. In compassionate play about basic human lection centres in rural China. Success
Faith, Hope and Charity, as in the two ear- kindness and the significance to us all of bred rapid growth — and with it unsafe
lier parts of his austerity trilogy (Beyond the fabric of society. AAAAE practices. Again, Ya-Chu Cowhig peers
Caring, about zero-hours contracts, and In Faith, Hope and Charity we never behind statistics to unpick the queasy
Love, about homelessness), Zeldin see the figures of authority making mix of pressure, fear and greed that led
invites you into the world of one small the decisions or those implementing to contaminated blood being traded and
group of people living within this them — we only see the people living the spread of HIV. At the heart of her
threadbare system. The result is often with those decisions. Frances Ya-Chu play is Yin Yin, based on the real-life
surprisingly funny — one of the hall- Cowhig, in The King of Hell’s Palace (at whistleblower Dr Wang Shuping (who
marks of Zeldin’s plays — but ultimately the Hampstead Theatre), takes a very now lives in the US), an expert in infec-
enraging and moving. different approach. tious diseases who tries to alert the
We are in a church-hall-become- In unpacking the true story of the authorities to the unfolding disaster.
community centre where volunteer spread of HIV in 1990s China, she cre- It’s great to see such an ambitious play
Hazel (a superb, understated perform- ates an epic drama and a panoramic opening Roxana Silbert’s inaugural sea-
ance from Cecilia Noble) cooks a free son as artistic director here. That very
weekly lunch from food bank dona- ambition, however, holds the play back
tions, followed by a choir session for to some extent. In covering so much
anyone willing to sing. The very fabric of ground, it often sketches in characters
Natasha Jenkins’ set tells its own story: and relies on chunks of exposition-
the utilitarian furniture; the tired decor; heavy dialogue to move the story along.
the abandoned instruments that speak A versatile cast double up impressively
of a bygone era. (neatly emphasising the fact that the
Zeldin embraces the audience in this separate worlds depicted are in fact
world, leaving the houselights on intertwined), but it’s hard for them to
throughout and sending characters to find any real subtlety in their charac-
sit alongside the spectators from time to ters. Even so, this is a gripping and
time. Former prime minister David sobering story, pinned down in Michael
Cameron famously said of austerity, Boyd’s fluid production by a perform-
“We’re all in this together”: a statement ance of quiet integrity from Celeste Den
that this show disproves while at the as Yin Yin. AAAEE
same time making it briefly the case.
There is a rough story arc: the hall’s ‘Faith, Hope and Charity’ to October 12
chequered life (itself a mini social his- ‘The King
tory) is about to take a new turn — with Ambitious: Tuyen Do in ‘The King of Hell’s Palace’ to October 12
the council unable to pay for repairs, it of Hell’s Palace’
Friday 20 September 2019 ★ FINANCIAL TIMES 7


Its content-driven subscriber model has served it well despite accumulating high levels of debt. But with
a string of wealthy rivals entering the market, the streaming service is beginning to look vulnerable.
By Anna Nicolaou and Fan Fei

n a sunny midsummer
weekend in Los Angeles,
Netflix turned the Santa
Monica pier — one of the
city’s busiest tourist desti-

How will the Netflix story end?

nations — into a three-dimensional
marketing blitz, transforming it into the
fictional 1980s Indiana town where its
hit show Stranger Things is set. The 110-
year-old structures were dressed up to
mimic the show’s location; the Ferris
wheel was flashing eerie red lights over
the Pacific Ocean. The night before,
there had been a full marching band for
a lavish premiere party.
The marketing push illustrated how
critical the show is to the subscription-
reliant digital streaming service. The
July 4 arrival of the third series of
Stranger Things was the “biggest content
drop” of 2019 for Netflix, says Bernstein
analyst Todd Juenger. “If any one piece
of content would make a difference on
[subscriber additions], that should be
the one,” he adds.
He was right. Global subscriber num-
bers spiked in the first two weeks of July.
Unfortunately for Netflix it was two
weeks too late.
In the quarter to the end of June the
company lost subscribers in the US —
126,000 of them — for the first time
since 2011. Equally worrying, outside
the US the company signed up only
2.8m subscribers — about half of what
Netflix had predicted. The market
wiped $17bn off Netflix’s stock value
overnight, emphasising the brutal cor-
relation between new subscribers and
stock market value.
The company is predicting 7m new
subscribers in the third quarter. But the
dramatic fall in the second quarter —
even before the arrival of greater com-
petition from the likes of Apple later this
year — has cast doubt over whether the
company that successfully took on the
Hollywood hierarchy is as invincible as
it previously seemed.
“The next best thing to success in Hol- Never-ending costs $13 a month. Apple will charge $5 a banker. “For the next year, Netflix was idiot in Economics 101 can tell you that’s Notice, a Dwayne Johnson action film. A
lywood is schadenfreude,” says a senior blockbuster? month and Disney $7 a month for their gobbling up everything . . .[it became] not a good proposition,” he says, adding few weeks later, it signed a $200m deal
executive at an independent film studio Netflix’s global services. ‘the only game in town’.” that there is “no real precedent for with the Game of Thrones creators for
who has worked with Netflix on TV subscriber Traditionally Netflix’s strategy has On occasions the streaming service this . . . it’s kind of weirdly new”. future productions.
projects. “There is no better sport. It numbers spiked been to outspend rivals, but it may have offered between 30 and 50 per cent Most of that growth in TV series has Interactive
might even eclipse your own success.” in the first two met its match in Apple, the second-rich- higher prices than competitors such as come from the streaming services, pre- What will Netflix Streaming faith
Wall Street is now seeking evidence as weeks of July est company in the world. Two years ago HBO, Showtime and Starz, according to dominantly Netflix. Some of Holly- be worth in Netflix thrived during a period of easy
coming years?
to whether this miss was a blip or a after the release Netflix was caught up in a bidding war people familiar with these deals. The wood’s most talented executives and Calculate it for money and a stock market rally. But
trend. The stock market has become of the latest with the iPhone maker for The Morning structure of them also stood out. While creatives have in recent years been yourself at: recessionary fears have roiled markets
“addicted” to Netflix’s subscriber series of Show, a comedy-drama television series traditional networks typically paid on lured by the company from other stu-
recently, and critics believe that a credit
growth, says Aswath Damodaran, a ‘Stranger with a star-studded cast led by Jennifer delivery of the show, Netflix preferred dios, with the promise of eye-popping valuingnetflix crunch would dent its debt-driven
finance professor at New York univer- Things’, above. Aniston and Reese Witherspoon. to stretch payments out over time, pay cheques. model. The company admitted as much
sity's Stern School of Business who But the service “The deal kept going back and forth which was accepted because it was pay- But at the start of this year, whispers in its annual statement, warning that
closely follows the company. faces intense between Netflix and Apple,” says one ing such a premium, according to peo- spread of budget cuts. Marketing spend- “our streaming obligations include large
“For a decade, [Netflix has] spent competition person involved in the talks. Ultimately ple familiar with the deals. ing was trimmed to make more space multiyear commitments”, and that “as a
more and more money on content to get from the likes of the producers decided to sell it to Apple This turned out to be an effective result we may be unable to react to any
users and increase market capitalisa- Apple TV, right for more than $300m, in part because liquidity strategy because Netflix’s debt downturn in the economy . . . by reduc-
tion, and it worked,” he says. “But the they felt the iPhone maker would give it and liabilities are spread out over years, ing our obligations in the near term”.
question is: how do you get off this a bigger marketing push. and much of it is not on the balance Analysts and investors still believe in
treadmill? At some point spending 75 “On Netflix it would be one of their sheet but rather listed as “contractual the Netflix model. More than 80 per cent
per cent of every dollar on content won’t many great shows. But on Apple it obligations”. In addition to its $10.4bn in of stock analysts rate the company as a
be sustainable. The next year is going to would be the first big marquee show on long-term debt, at the end of last year buy. Even after the loss of subscribers in
be the big challenge.” its new service,” says the person. Netflix also owed another $19bn in obli- the second quarter, Ben Swinburne,
Despite this, several former Netflix gations and an additional $2bn-$5bn in head of media research at Morgan
Screen revolutionaries employees say there is little concern “unknown” spending — money commit- Stanley, says Netflix is still on course for
Netflix spearheaded a streaming revo- internally about the looming competi- ted over the next five years to pay for a record year of subscriber additions.
lution that changed the way we watch tion. “There was never any fear that new shows, and to license the rights to Analysts, on average, project that
TV and films. As cable TV lost subscrib- we’re in trouble,” says one former mar- existing TV and movies over multiyear cash flow will break even in 2023 as sub-
ers, Netflix gained them, putting it in a keting executive, who left the company contracts. scribers and margins improve. “They’re
category with Facebook, Amazon and in the spring. “Every quarter felt like a In the meantime rival streaming serv- balancing growth versus investment
Google as one of the adored US tech year in which Disney and Fox weren’t in ices such as Hulu, Amazon and Apple and we understand that. It’s quite
stocks that led a historic bull market.
The company spends more than 70
‘We have the game. The feeling was that we are
leap years ahead. And it’s kind of true.”
have become more aggressive in acquir-
ing content, giving producers options for Netflix’s content budget. “You would
expensive to create so much content,”
says S&P analyst Jawad Hussain. How-
per cent of revenues on content. Ana- [doubled Wooing the producers
beyond Netflix. And bankers are begin- hear it a lot in conversations and in $10.4bn ever, he warns: “In 2020, if we don’t see a
lysts estimate that would give it a budget ning to question whether Netflix will meetings. Money needed to be shifted material improvement in cash flow defi-
of more than $15bn this year — more the number Netflix first invaded US living rooms need to change its funding model to con- into tent pole [blockbuster] films,” says
Netflix’s long-term
debt at the end of cit, that would be a worrying sign.”
than any other media company. Yet Net- of series] with its video streaming in 2007. But it tinue winning projects because Apple, one former executive who left this sum- 2018. It also owes
$19bn in ‘contractual
Mr Hussain expects Netflix to issue at
flix projects it will spend $3.5bn more would take another six years before it Amazon and Hulu pay on delivery. mer. Netflix has also sliced its budget for least $3bn in debt next year to comforta-
than it will generate in cash in 2019, from seven made a big splash with its own shows. The streaming wars have spawned a direct digital advertising of films.
obligations’ and has
$2bn-$5bn set aside bly cover its costs.
while promising that this mismatch will The company paid $100m for two sea- phenomenon known as “Peak TV”, with Netflix declined to comment, but It does have levers that it can pull.
narrow over time.
years ago, sons of the political thriller House of bankers saying there has not been as someone close to it says the company is
for new shows
More than 70 per cent of its long-term
This rate of cash burn means the com- and we Cards, which debuted in 2013 to wide- much capital in Hollywood since the experimenting with its promotional $400m debt is not due for at least five years,
pany has to repeatedly tap debt markets spread acclaim, putting Netflix on the mid-2000s, when private equity firms strategy and plans are likely to change which in theory would give it time to
to pay for its content and make other haven’t map with audiences and Hollywood. were jumping to finance feature films. with the imminent arrival of a new chief
In deals signed with
the producers of adjust its spending if there were to be a
debt repayments. It relies on the faith of grown the House of Cards was instructive for how But some observers believe this is not marketing officer, Jackie Lee-Joe, who Game of Thrones downturn. However, a pullback on con-
investors to fuel the machine, studi- Netflix would approach deals for years sustainable. “Five years from now, there joined from BBC Studios. and to make the film tent also runs the risk of losing subscrib-
ously raising more junk-rated debt audience at to come. The strategy was to spend big will not be as many TV series being When it comes to content, however, Red Action ers — Netflix blamed its second quarter
roughly every six months to help to outbid rivals, usually committing to made, I promise you,” says Jonathan there is little evidence that Netflix is numbers on a weak content slate.
finance its splurge on content. all. That’s full global rights for series without ask- Taplin, an Oscar-nominated film pro- tightening its purse strings. The week >80% Optimists point to the group’s global
Netflix has taken on the vast majority
of its $12bn in long-term debt in the past
not a good ing for a pilot. The deal “changed the
whole landscape for how TV was cre-
ducer. “We have [doubled the number
of series] from seven years ago, and we
before the announcement that it had
lost subscribers in the US, Netflix agreed
Stock analysts who
rate the company as
reach. It is betting its future on an
expansion outside the US, where it has
three years as it almost doubled its glo- proposition’ ated”, says one veteran Hollywood haven’t grown the audience at all. Any to spend about $200m to make Red a buy already attracted 60m subscribers. The
bal subscriber base to 150m. In an envi- company is investing heavily in content
ronment of historic low interest rates, Netflix spent big to outbid competitors, with debt quickly stacking up Investors are nervous after in places like India and Malaysia, with a
investors searching for yield have focus on local-language programming.
happily gobbled up Netflix bonds.
Liabilities ($bn) Stranger Friends contraction in US subscribers However, the economic prospects in
Many of the big legacy media compa- Selected Netflix commissions/purchases Things One-year renewal Change in paid US Netflix these territories are weaker. Netflix sub-
nies initially surrendered their cata- customers from previous share price scriptions in India start at the equiva-
2002 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 2018 quarter (m)
logues to Netflix in return for royalty lent of $3 a month, compared with its
payments. But the streaming service, DVD rental era Streaming video era Red Notice 400 cheapest plan in the US which is three
anticipating that its rivals would fight film ($200m) times that, resulting in thinner margins
back, began building its own catalogue 30 By 2006, Netflix had over 6m It would take six years before the
compared with its US business.
subscribers and made a small profit company pushed into original Sense8 The
before these shows disappeared from its Marco Crown Current liabilities 2.5 Netflix most recently raised debt in
on nearly $1bn in annual revenue content
platform. 25 Polo 300 April to a rapturous reception, selling
“People wondered why they were Non-current $2.2bn in 10-year notes in an auction
House of Cards liabilities 2.0
paying so much, but in hindsight it now 20 (first original content commission: that was three times oversubscribed.
looks smart,” says a senior film and tele- $100m for first two seasons) Based on its previous schedules, it
vision banker. “They were building a Long-term debt 1.5 200 would next be expected to tap investors
15 Orange is the New Black
following [ahead of] an arms race.” in October.
Marvel TV series
Today Netflix faces an onslaught of 1.0 For now the stock market appears to
competition in the market it invented. Includes debt 100 be siding with the critics. Netflix’s
After years of false starts, Apple is plan- for content that shares have sunk further since its July
ning to launch a streaming service in 5 Off-balance will air in years 0.5 First drop in subscribers in slide, touching an eight-month low that
sheet liabilities its core market since 2011
November, as is Disney — with AT&T’s to come values the company at $127bn.
WarnerMedia and Comcast’s NBCUni- 0 0 0 “They have to reframe the story,” says
Q4 17 Q2 18 Q4 18
versal to follow early next year. After 2002 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 2018 Q2 19 NYU’s Mr Damodaran. “If they have a
raising prices in the US earlier this year, Q3 17 Q1 18 Q3 18 Q1 19 couple more bad quarters, the market
Sources: CapitalIQ; FT research Sources: Bloomberg; Moffett Nathanson
a standard Netflix subscription now will tell the story for them.”
8 ★ FINANCIAL TIMES Friday 20 September 2019

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If you are not satisfied with the FT’s response to your complaint, you can appeal
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Stability is required for capitalism to thrive South Korea needs to

overcome its debt aversion
I view your editorial on South Korea
Everything Martin Wolf writes about climate change, demographic trends This stability has been lost. (September 19) as one of the fairer
rentier capitalism (The Big Read, and information technology that is Without it, the investment required assessments of its new fiscal policy.
“Saving capitalism from the rentiers”, disrupting the workplace, and conflicts to lift more boats is massively With this rather bold fiscal stimulus
September 18) looks to be on target, in places as different as Afghanistan, discouraged. So bankers and other package it is successfully avoiding the
but he misses one important factor Myanmar, Ukraine, Venezuela and financial wizards invest in short-term trap of doing “too little, too late” that
contributing to today’s suboptimal Yemen. activities with few broad social led, for example, to the “two lost
performance in the leading capitalist The post-second world war benefits. decades” in Japan. However, it cannot
FRIDAY 20 SEPTEMBER 2019 countries: uncertainty. political system produced a degree of Lex Rieffel pay enough heed to ensuring that the
The elites in these countries surely stability throughout the cold war era Non-resident Senior Fellow, money is spent timely for the right
bear some of the blame for this that was sufficient to provide Brookings Institution, people and in the right place for
uncertainty, but the bigger sources are confidence in long-term investment. Washington, DC, US maximum effect.
Fiscal policy can become even

Netanyahu’s winning Further pointers for

curbing the rentiers
The cattle industry cannot
keep us all carnivores
bolder, as and when deemed necessary.
It can also be supported by monetary
policy as the Bank of Korea still has a

streak may be over Martin Wolf’s excellent Big Read

(September 18) flags two factors
I refer to your article of September 17
regarding attempts by several US states
little room for a rate cut or two.
Strong public support is also crucial
for continuing confidently with a bold
fuelling rentier capitalism that merit to fence in the fast-growing alternative fiscal policy until a sure sign of
Israel needs government and leadership with a less divisive tone much greater concern — excessive meat industry (“US cattle states seek to recovery from slowdown is observed.
credit growth and the tax-deductibility rein in substitute meat labelling”). Koreans, however, believe that keeping
Israel’s second general election this of Palestinians embittered by dispos- of interest on debt when calculating What they are really doing is a fiscal debt low at or below 35 per cent
year has still to yield a conclusive session — a recipe former premiers corporate tax liabilities. promoting the alternative and of GDP is a golden rule and are thus
result. But it looks as though it may end Ehud Barak and Ehud Olmert have lik- Interest deductibility incentivises highlighting the growing redundancy of overly concerned that the stimulus
the winning streak of four-times prime ened to an apartheid state that would excessive leverage, which while their cattle and chicken industries. package will make the nation’s debt out
minister Benjamin Netanyahu, whose squander Israel’s legitimacy. boosting share prices that determine a The surest sign of a new product’s of control. Your editorial therefore
ever more desperate attempts to cling A Blue and White-led coalition, with substantial portion of executive substitutability for existing products is offers some peace of mind for Koreans
to power are poisoning public life in a Mr Gantz working towards what he compensation increases a company’s when incumbents try to have it who need to break free from the
deeply divided society. says is a “broad unity government”, is vulnerability to business downturns. banned, relabelled or heavily preoccupation that “debt is bad”.
Mr Netanyahu’s rightwing Likud likely not so much to change policy as Excessive leverage has been further regulated, or otherwise work hard to I hope Germany will duly consider
party is marginally trailing the centre- to lower the volume of this debate. It incentivised by central banks driving stymie its market entry. As with many your and my friendly advice because
right Blue and White coalition led by may prove less fissile and more stable interest rates to extremely low levels forms of attack, attempts to block new the negative spillovers to its neighbours
Benny Gantz, the former army chief. than the irredentist and religious right. across the entire yield curve. Negative ‘It’s all in Boris Johnson’s head’ competition are, on the surface, and around the world cannot be kept at
The prime minister and his far-right The far-right Yamina (Rightwards) rates make matters worse. displays of market strength but bay by its fiscal philosophy,
and ultraorthodox allies are well shy of party, for example, a Netanyahu ally To save capitalism from the rentiers, beneath the surface they can be nationalism, protectionism and
a majority in the Knesset, however. that won seven seats, split in three only policymakers must end tax-law percentage of GDP — and fiscal burden symptomatic of an underlying and unilateralism.
Israel’s president, Reuven Rivlin, may an hour after the polls closed. favouritism of debt over equity while are at all-time highs, with taxes rising perhaps fundamental weakness — ie Kyungjin Song
give Mr Gantz the first shot at assem- A broad coalition, particularly with central bankers must become more (from €39bn in 2015 to €44bn in 2018) inferior product. Seoul, South Korea
bling a government. That would put in the militantly secular Mr Lieberman as cognisant of the economic distortions faster than meagre salaries. Slovakians, Plant-based burgers taste just as
play the plan floated by Avigdor Lie- kingmaker instead of the influential caused by their interest rate Estonians and Lithuanians have higher good, are healthier for people and are A climate Comsat could
berman, former foreign and defence bloc vote of the religious right, would manipulations. purchasing power than the Portuguese much healthier for the planet. Over the
minister, for a grand coalition enfold- curb the religious fundamentalism and Bert Ely since 2018, according to Eurostat, long term, I expect the cattle industry serve the rest of us
ing Blue and White, a Likud somehow subsidised privileges of the ultraortho- Ely & Company Inc, while Portugal is dropping, to have about as much success keeping Bill Gates tells us to stop wasting our
shorn of Mr Netanyahu, and his own dox. The exclusion of the far-right Alexandria, VA, US approaching the EU’s lowest. Projected us all carnivores as the tobacco time eliminating fossil fuel stocks from
secular rightist Yisrael Beiteinu (Israel would also scupper plans to weaken the growth in 2019 gross domestic product industry has had keeping us all hooked our portfolios (September 18). We
Our Home) party. judiciary, an ambition of Yamina Portuguese deserve a clear is 1.7 per cent. In 2018 growth was half on cigarettes. should, instead, invest our money in
Mr Netanyahu will appear early next leader Ayelet Shaked, Mr Netanyahu’s that of some Balkans and Baltic Patrick Neill the disruptive technologies that will
month before Israel’s attorney-general, former justice minister. vision of country’s future nations. Portugal is Eurostat’s second Bahrain solve our problems.
who will decide whether to indict him Another significant outcome is the The possibility of a 0 per cent budget least appealing country to immigrants, All well and good for Bill Gates. He
on three charges of corruption. Not just performance of the unified Arab Joint deficit in Portugal shines so “bright” worse than Poland or Romania. High HKEX established Hong and his fellow billionaires have access
his political future but his immunity List, which came third in this election that it looks like “hope” for Europe, emigration masks unemployment. to all those private placements that
from prosecution is at stake. He has no — with Arab voters goaded to the polls such is the FT’s judgment on the Other than riding on the fading Kong as a financial centre finance disruptive technologies, and I
plans to go quietly. by the prime minister’s shrill demoni- “sound policies” of the present improvements, ECB debt, housing and Philip Bowring’s letter in the Financial suspect inventors go to them directly.
Continuing his campaign to vilify sation. The Arab bloc will almost cer- government in Lisbon (FT View, tourism temporarily diverted from Times on September 18 blaming recent Given the importance of climate
Israel’s Arab citizens, a fifth of the pop- tainly stay out of government, as it August 26). You should not be fooled north Africa, the government has unrest in Hong Kong on the failures of change, the need to get everyone on
ulation, as fifth columnists trying to always has, but could now win a stake twice. The FT once praised former neither the vision nor reforms to avoid Hong Kong Stock Exchanges and board and involved, and the huge
destroy the Jewish state, he now says — in governance — with the possibility prime minister José Sócrates in 2007, decline. Yet, some are tricked by the Clearing could not be further from the amount of money required, I would
without any evidence — that Arab vote- Ayman Odeh, the Joint List leader, with his then minister of internal possibility of a 0 per cent deficit, truth. suggest a different model: state-
fraud stole the election and may have might even become the first Arab administration António Costa, for the fuelled by a net negative 1.2 per cent of HKEX has played a pivotal role in sponsored climate funds in which
cost Likud two seats. This is dangerous leader of the opposition in the Knesset. low deficit, assuming “reforms” would GDP in public investment in 2016 (still shaping the region’s capital markets. It everyone, including small investors,
stuff. The last votes, however, are still be made. The reforms were eventually the EU’s worst) according to the IMF, has helped to bring prosperity to Hong could invest regularly. A climate
Mr Netanyahu has become a liability being counted in a very tight contest. implemented after the 2011 bailout by jeopardising long-term financing, the Kong and, underpinned by the rule of Comsat, maybe? I could buy the shares
to Israel and its democracy. As well as This is not a resounding defeat for Mr the European troika. safety of infrastructure and public law, it has made Hong Kong Asia’s for my grandchildren, and tell them
his Arab-baiting before the election, he Netanyahu. With the raucousness of Portuguese suffering was rewarded: health. We, the industrious Portuguese premier financial centre. that, like Bill Gates, I did my part.
pledged to annex all Jewish settlements the election over, the back room deal- economic indicators turned positive in people, demand accountability for As a former HKEX government- Leonard Hyman
and the Jordan Valley in the occupied ing and jostling for power is just start- 2015, vices seemed gone and reforms illusionist politicians squandering our appointed independent non-executive Sleepy Hollow, NY, US
West Bank. That would end any hope of ing. It may all hang on whether the sustainable. Then came Mr Costa who, country. director I was always extremely proud
an independent Palestinian state, and attorney-general decides to proceed despite losing elections to the Pedro Caetano of the way the company embraced Euro’s worth has not been
saddle future Israeli generations with with prosecuting Israel’s longest- government which oversaw reforms, Abingdon, Oxfordshire, UK integrity, neutrality and the highest
the permanent subjugation of millions serving leader, Benjamin Netanyahu. became prime minister by purging pro- standards of governance. At no time sold to German savers
reformists in his Socialist party. He Preparing for the during my tenure was my own While I agree with Philip Stephens’
brought to cabinet former colleagues of independence challenged, nor was it argument (Opinion, September 13)
Mr Sócrates, who is facing charges of intergalactic delegation possible during my service to discern that Germany is the biggest beneficiary
corruption but denies any wrongdoing, Anjana Ahuja states that contacting who on the board were government or of European integration and the euro, I
plus their spouses and children. Such extraterrestrial aliens would be a shareholder approved directors. suspect that German industry and its

Eurozone banks need to clan politics undermined reforms,

reverting to a business-as-usual
environment, with troika reforms
massive mistake (Opinion, September
17), claiming that “the history of
explorers pinpointing distant lands is
HKEX’s recent move to buy LSE
Group reflects Hong Kong’s continued
international ambitions and as
shareholders have benefited more
directly from membership of the euro
(and its more competitive exchange

be part of the solution requiring qualifications and scrutiny in

government appointments
undermined. The unskilled posed as
one of plunder and conquest”. We have
literally broadcast our existence by
radio and television to the nearby stars
geopolitics becomes evermore
challenging what we need is more
connectivity, more neutrality and less
rate compared to a hypothetical D-
Mark which would have risen on the
back of German exports) and know it,
“industrial managers”. Incompetence and planets. Let’s face it, any alien ill-informed hyperbole. whereas successive German
If the ECB is serious about stimulus, it must consider lenders’ profits shows; in 2017 the area burnt by forest civilisation in our vicinity with the John Harrison governments have added to Helmut
fires was higher than that of the rest of technological ability and political will Former Independent Non-Executive Kohl’s “original sin” by failing to
Mario Draghi’s swansong decision last tries with negative rates, the ECB is to Europe combined, and 114 people died. to travel here is already on its way, and Director, HKEX, explain persuasively to German
week to revive the European Central exempt a tier of deposits — six times The public debt — €252bn in May we should at least be ready for them. Independent Non-Executive Director, workers and savers the euro’s benefits.
Bank’s quantitative easing programme more than those held for reserve 2019, still the EU’s third worst despite Peter Slessenger Cathay Pacific Airways, Stephen C Capsaskis
and cut the interest paid to negative 0.5 requirements. They will earn zero tiny improvements if measured in Reading, Berkshire, UK Hong Kong Athens, Greece
per cent had been widely feared by the instead. Previously only the reserves
eurozone’s beleaguered banks. escaped the negative rate.
No wonder. Lenders hold about €2tn Bankers dispute how much benefit
of deposits at the ECB — and every 0.1
per cent move further into negative
this “tiering” will bring. In Deutsche’s
case an estimated one-third of its Indigenous I don’t have a head for heights, but
even if I did, I wouldn’t climb Uluru.
And in recent years, less than a fifth of
tourists have chosen to clamber up
expectancy 10 years lower and
unemployment rates three times
territory wipes €2bn off their income.
The 6.1 per cent return on equity of the
€100bn deposits will qualify for the
zero per cent dispensation. The rest are people assert The majestic, rust-coloured sandstone
rock, a symbol of Australia, is a sacred
Uluru, most instead opting to walk
around it or take an educational or
higher than the rest of the population.
Successive governments have failed
eurozone banks last year (less than half
the tally of US rivals) masks particular
weakness in the region’s largest econ-
subjected to the more penal negative
rate — and now with an open-ended
timeframe. The ECB previously pro-
their rights site for the Anangu — the local
Aboriginal people who have
advocated a climbing ban for decades.
storytelling tour.
But not all visitors are sensitive to
traditional owners’ concerns. A
to recognise Aboriginal people in the
constitution, a document that enables
states to discriminate against
omy, Germany, where banks made just
2.4 per cent. Only Greece was weaker.
jected that rates would turn positive in
2022. Morgan Stanley estimates a
over Uluru Ahead of a permanent climbing
ban coming into force next month,
French-born exotic dancer performed
a striptease on the rock in 2010, and
indigenous people on the basis of race.
And when indigenous leaders
About 95 per cent of the banks’ boost to average eurozone bank earn- there has been a jump in the Sam Newman, an Australian sports gathered at Uluru in May 2017 to
aggregate deposits with the ECB are ings of 2 per cent — hardly enough to number of people seeking an personality, hit a golf ball off the top propose modest reform proposals that
technically surplus to reserve require- revive fortunes. A targeted pile of new Instagram moment on the summit. in the same year. Tourists even relieve they had worked on for years, it took
ments — the amount they must keep cheap ECB funding for lending, the so- Recent photographs showing long themselves on Uluru, causing the Conservative government just
with the central bank for safety rea- called TLTRO3 programme, is helpful. lines of visitors snaking up the sides pollution and erosion. three months to reject them.
sons. When interest rates are low or But it does little for banks in big econo- of Uluru have raised unsettling Pauline Hanson, the former chip This is why many Aboriginal people
negative, it seems illogical to hold more mies with plentiful funding. questions about the cultural shop owner turned far-right politician, view the climbing ban as an important
than the bare minimum. Eurozone Understandably, banks are clamour- insensitivity of foreign tourists and visited Uluru last month to warn the act of self-determination — just as the
banks have little choice. A separate set ing for more mitigation. Raising the the failure of some white ban would cost jobs and likened the formal handing back of Uluru to the
of liquidity regulations — set by global six-times multiple of reserves that are Australians to respect the wishes of decision to closing Bondi beach. But Anganu in 1985 represented a high
rulemakers and overseen by the ECB’s accorded relief from negative rates is indigenous people. her efforts to stoke opposition flopped point for their struggle for land rights.
prudential arm — prescribe how much one idea. Switzerland has just raised its “It is an extremely important place, when she was filmed getting stuck There are better ways to experience
cash or other liquid funding a bank exemption from 20 to 25 times. In not a playground or theme park like while attempting to climb the rock. outback Australia and its indigenous
must hold on its balance sheet. Japan, 95 per cent of central bank Disneyland,” said Sammy Wilson, an Safety is another concern of the culture than climbing all over it. By
In the good old days of “normal” deposits are shielded. Banks are also Aboriginal elder, when the ban was Anangu. Since the 1950s, at least 36 far, the most interesting experiences
rates, a bank might have held a large
chunk of that in domestic government
lobbying to reduce the equity capital
they must attribute to certain kinds of Australia announced two years ago.
“If I travel to another country and
people have died on the rock, which
stands taller than the Eiffel Tower and
I’ve had in Australia have been while
learning about Aboriginal culture
bonds. In the inverted world of QE, it is
more economical for a French or Ger-
loans, particularly those granted to
small and medium-sized businesses. Notebook there is a sacred site, an area of
restricted access, I don’t enter or
is treacherous to climb due to the
extreme heat in Australia’s “Red
during visits to Kakadu National Park
or Sydney’s Yabun Festival. Foraging
man bank to prefer the ECB’s negative This is partly about self-interest, climb it, I respect it.” Centre”. for bush tucker with an Aboriginal
interest rate of 0.5 per cent to a minus which the ECB should not indulge. It by Jamie Smyth Uluru carries great spiritual and In a nation where the voices of guide, who can serve up a delicious
0.68 per cent yield on a two-year must weigh issues of safety and sound- cultural significance for the Anangu Aboriginal people are rarely heard, meal of green ants and barramundi
French Treasury or minus 0.73 per cent ness: capital requirements are risk- people, who are part of the world’s the decision by the Uluru-Kata Tjuta (Asian sea bass), is just one of the
on a Bund. The fact that BNP Paribas based for a reason. But there is a genu- oldest surviving civilisation, which National Park board to implement the highlights available to travellers.
and Deutsche Bank are by far the big- ine question of balance here. If the ECB dates back 60,000 years. It continues request of the traditional owners for a Climbing boots are not required to
gest depositors at the ECB (holding is serious about stimulating the econ- to be used for traditional ceremonies climbing ban is a symbolic moment. experience the wonders of Australia’s
€114bn and €100bn respectively, omy — the very reason it relaunched by Aboriginal people, even though it is A legacy of land dispossession and indigenous culture. An open mind and
according to analysts at Morgan QE — then accompanying that policy one of the nation’s most popular the forced removal of children from respect for the world’s oldest
Stanley) partly reflects their scale but with measures to get the banks work- tourist attractions. aboriginal families have taken a heavy civilisation is all that is required for
also how unappealing their domestic ing as part of the stimulus effort is logi- Signs at the rock ask tourists to toll on indigenous communities. the trip of a lifetime.
government debt now is. cal. For too long the eurozone’s banks respect the wishes of traditional Aboriginal people are among the most
There was a sop in Mr Draghi’s have been part of the problem, rather owners and not climb the structure. marginalised in society, with life
announcement. Emulating other coun- than part of the solution.
Friday 20 September 2019 ★ FINANCIAL TIMES 9

Repo markets mystery reminds us we are flying blind Something
is seriously
night borrowing rates in the repurchase
or repo market, where traders do short-
cided with Monday’s $54bn settlement
of Treasury coupons, creating more
machine mesh. That is partly because
“money markets have been and are now
presumed to be sufficient to absorb
unexpected market shocks.
awry in the
term deals to swap Treasuries for cash,
suddenly rose to 10 per cent, up from
their normal levels of 2-2.5 per cent.
demand for cash. The resulting squeeze
may have been exacerbated by an addi-
tional dash for funding among players
changing quickly in response to regula-
tory, technology and business model
incentives”, as Mr Potter put it.
This calculation was always a guess,
not scientific projection, since the Fed
has never before unleashed QE — or
world of work
Repo rates declined after the New hit by the unexpected surge in oil prices A decade of extraordinary monetary tried to unwind it. And, as Lorie Logan
York branch of the Fed pumped $75bn due to the drone strike in Saudi Arabia. policy experiments has left the system of the New York Fed said in 2017, you
into the markets for three days running. The other bit of good news is that Fed badly distorted. Thus the Fed is now like only truly know that a reserve buffer has EMPLOYMENT
But conditions remain jittery. After all, officials seem ready to offset these tem- a pilot flying a plane with an engine that run out when rates spike.

hat the heck happened? the last time we experienced this scale of porary problems by employing “flexi- has been stealthily remodelled. Neither The best guess now is that $300bn is
That is a question many gyrations in repo rates was the 2008 the passengers nor the pilot knows how not big enough. “The Fed is learning as it
market participants financial crisis. the engine’s shifting cogs might affect goes,” explains BMO Capital Markets. Coyle
are asking about events
this week at the US
So should investors worry? Yes — and
no. One piece of good news about this
The more QE reshapes the controls during a wave of turbu-
lence, because there is little historical
Although Fed officials will probably
introduce new tools to create additional
Federal Reserve. week’s events is that the movements global finance, the greater precedent. safety buffers, JPMorgan fears that “this
the risk that the machine

But the confusion is not due to the were not sparked by the same issues in Take the matter of bank reserves. sort of volatility will only persist” given he California Senate passed
issue that was supposed to grab head- the 2008 panic, namely a fear of finan- Quantitative easing earlier this decade all the structural changes under way. a law last week requiring
lines — namely Wednesday’s announce- cial collapse. Instead, the trigger unexpectedly misfires caused an explosion in the level of This is unnerving. But the bigger platforms such as Uber and
ment on interest rates. That storyline is appears to be due to “temporary mis- reserves that private banks place on point that investors need to understand Lyft to treat their drivers as
clear (ish): although the Fed cut its core matches in the demand for funding and bility when needed”, as Simon Potter, deposit with the Fed, hitting a peak of is this: the more that QE (and its partial employees. Efforts in legis-
policy rate by 25 basis points, officials availability of cash”, as JPMorgan then a senior official at the New York $2.9tn in 2014. Since the Fed started reversal) reshapes global finance, the latures and courts in other states and
also signalled their reluctance to cut explained to its clients in a note. Fed, noted last year. This nimble and rolling back QE a couple of years ago, greater the risk that the cogs in the countries are under way to achieve the
rates again too soon while growth is More specifically, American compa- creative approach is another contrast to those reserves have shrunk to $1.3tn as machine unexpectedly misfire. That is same result.
strong. That is sensible, predictable and nies typically need around $100bn of 2008 — and very welcome. of this summer. Until recently, Fed offi- no reason to panic. But central bank In the UK, a report by Robert Skidel-
readily understandable. cash to pay tax bills on September 15, But here is the bad news: the fact that cials thought that was enough cash to pilots — like investors — are learning on sky, commissioned by Labour’s shadow
Instead the development that is sow- which prompts big withdrawals from a “temporary” cash squeeze created so keep the system running smoothly. the job. Better hope they stay com- chancellor, John McDonnell, recom-
ing shock and confusion is related to the the money market funds that are an much drama shows that neither the Fed Although $1tn in reserves are tied up by pletely alert. mended a government job guarantee
normally arcane matter of financial increasingly crucial pillar of the repo nor investors completely understand regulatory and liquidity requirements, and a 35-hour week in the public sector
plumbing. At the start of the week, over- markets. This year, this outflow coin- how the cogs of the modern financial the remaining $300bn “buffer” was as a lever for improving conditions in
private sector employment.
It is widely recognised that something
is fundamentally awry with the world of
work. Some people are well-paid — too

Johnson’s lies
well-paid, even — and have intrinsically
rewarding work, yet have to work long
hours with never-off email. Others have
too-long hours in badly paid casualised
work, not just on digital platforms and
in their warehouses but also in shops

plunge Britain and fast food outlets, as cleaners and

minicab drivers, and in some “white col-
lar” sectors such as the media. Yet oth-
ers have too little work, or short-term
contracts. Then there is the looming

into a morass
insecurity posed by automation.
Technology, deregulation, the decline
of unions, and the profound reshaping
of business all lie behind this unsatisfac-
tory state of affairs. And it seems inevi-
table that policymakers will respond,
given that the provision of some mini-
mum economic security is at the core of
between mendacity and integrity. Such the modern state.
POLITICS is the dark morass into which Mr John- One challenge for policy is the
son’s government has fallen in pursuit of absence of the statistics that would paint
Philip his obsession to meet the Brexit dead-
line. When MPs were sent home from
Stephens Westminster for five weeks until mid-
October, the official story was that the
Technology, the decline of
government needed time to draw up a unions and the reshaping
new legislative programme. Three sen- of business all lie behind

hat will she be thinking ior Scottish judges concluded that this
when he next tips up was deliberate subterfuge: Mr Johnson’s this state of affairs
at Buckingham Palace? real objective was to frustrate the efforts
Queen Elizabeth II is of MPs to block his path to a no-deal Court to argue that the prorogation was mendacious, and borderline racist, Dry constitutional debates about the a detailed portrait of the modern labour
Britain’s longest reign- Brexit. The suspension, the court ruled, an abuse of power. Mr Cameron, who claim that just about the entire popula- respective authority of the government, market. In the UK, the number of peo-
ing monarch. As titular head of state, was therefore unlawful. bears much of the responsibility for the tion of Turkey would soon be heading parliament and the judiciary matter. ple on zero-hours contracts and the
she has granted regular weekly “audi- The High Court in London took a dif- present mess, due to his reckless deci- for Britain if it voted to remain in the EU. And the frantic back-stabbing among number describing themselves as
ences” to her prime ministers for 67 ferent tack. It declined to comment one sion to call the EU referendum in 2016, Mr Gove has since been given the job of senior Tories speaks volumes about the agency workers have both increased
years. There have been 14 in all — the way or the other on whether Mr Johnson has used the publication of his memoirs overseeing Brexit preparations. Con- truly sorry condition of British Conserv- substantially during the past decade,
first, Winston Churchill, the latest, Boris had told the truth. Instead, the English to launch a series of broadsides against temptuous in 2016 of the views of atism. Neither should obscure the big- although they amount together to about
Johnson. The Queen has not divulged a judges said they were being asked to Mr Johnson’s habitual lying. “experts” worried about the costs of ger picture of the damage being inflicted 6 per cent of the workforce in employ-
word from these private encounters. determine matters beyond their compe- The present prime minister and Brexit, he is as dismissive now of advice on the nation’s democracy. ment. Self-employment accounts for a
Now she hears that, just two months in tence. It was not for the court to decide his fellow Brexiter Michael Gove, Mr from his officials about the serious risks The lying reveals a profound disdain further 15 per cent of the total.
office, Mr Johnson has been lying to her. on a matter that they deemed to be Cameron charges, quite simply “left of a no-deal departure from the EU. for the traditions, institutions and laws However, it is not clear that all those
It is a fair guess that one or two others essentially political. the truth at home” during the 2016 At this point, some may be tempted to that sustain Britain’s parliamentary working via digital platforms or with
among the 14 may have occasionally It has been left to the UK Supreme referendum campaign. Back then the shrug. Put lying to the Queen to one side ecosystem. Whitehall officials say rules agencies would record themselves in the
shaded the truth. I wonder if Anthony Court to make a definitive ruling. The three politicians were pals. Mr Cameron and fear and loathing among politicians of proper behaviour are simply torn up. categories captured by the statistics.
Eden was entirely honest about the Suez prime minister’s desperate hope is that now says Mr Johnson never even in the same party is hardly new. As for “We can do as we please”, runs the Nor do we know how many people have
debacle? Mr Johnson, though, has put a majority of the 11 chief justices take believed in Brexit. He embraced the Mr Johnson’s lies, well, no one trusts pol- refrain in Downing Street. second jobs, or are working more or
himself in a class of his own. He stands the non-justiciable path set out by the Eurosceptic cause purely to advance his iticians. What matters is that the gov- Mr Johnson’s public refusal to say he fewer hours than they would like, or
charged by three senior judges with pre- English court. The damage has been consuming personal ambition by win- ernment gets on with Brexit, even if it will uphold the law in all circumstances how this affects younger people.
meditated deception in persuading the done. You will not find a soul in the long ning favour among Tory Brexiters. Mr means crashing out of the EU. underpins this contempt. If the govern- It is probably safe to say at least one-
Queen to suspend parliament so he can corridors of Whitehall who believes Gove, Mr Cameron adds, promoted the As for shutting down parliament, ment can cheat, it will; Mr Gove’s pref- quarter of the workforce is not in a tradi-
force through Britain’s departure from that the prime minister they are sworn well, MPs were obstructing what Brexit- erence for “listening to the people” over tional full-time and/or permanent job
the EU on October 31. to serve is telling the truth. ers have solemnly declared to be “the reasoned argument speaks to the same with an employer, and the proportion
This prime minister, of course, is no Two former Conservative prime min- There is not a soul in the will of the people”. This, of course, is tilt towards demagogy. Strip democracy could be higher among younger age
stranger to mendacity. But lying to Her isters — John Major and David Cameron just another falsehood. Of those who of trust, self-restraint and shared truths groups. The challenge is that so much
Majesty? Deceiving someone so widely — have joined those accusing Mr John- long corridors of Whitehall voted in the 2016 referendum, some and what remains is a majoritarianism government social policy — and so
respected around the world for her pro- son of seeking to suppress parliamen- who believes the prime 52 per cent backed Leave. Of those elig- of the mob. much collective organisation through
bity and commitment to public service? tary debate. Sir John is among those who ible to vote, the proportion was 37 per unions — is delivered through the tradi-
It is hard to think of a sharper collision made submissions to the Supreme minister is telling the truth cent — scarcely the will of the people. tional “job”. Although it has been clear
for more than 20 years that the social
means of giving people enough eco-
nomic security need to change, what we
have had instead is states and busi-

Reasons for moderate optimism about Greece nesses trying to pass the responsibility
to each other — with individual workers
caught in the middle.
Many governments have also been
increasing their reliance on conven-
highest level since 2000. Elections in party did not win a single seat in the July quality of Greek democracy depends on conditions are now improving. Domes- tional employment contracts for social
EUROPE July produced a comfortable parliamen- elections. So far from being an awkward more than regular free parliamentary tic private depositors, who withdrew policy delivery, such as limits on hours
tary majority for New Democracy, a partner for its EU and Nato allies, elections. No less important is the inde- their money in a panic when Syriza’s worked, health coverage, welfare bene-
Tony conservative party committed under Greece is rightly regarded as a pole of pendence of public institutions, such as early recklessness threatened to tip fits and so on. While unionisation has
Barber prime minister Kyriakos Mitsotakis to a
well-designed programme of economic
stability in the turbulent Balkans and
eastern Mediterranean.
the judiciary and central bank, which
came under pressure when Syriza held
Greece out of Europe’s currency union,
have returned some €12.3bn to the
declined in many countries, unions for
the most part have remained focused on
reform, fiscal responsibility and admin- It is important not to paint everything power. Likewise, Mr Mitsotakis must banks since the start of 2018. the status of the “job” in their campaign-
istrative modernisation. in rosy colours. Greece’s return to two- not relax in his efforts to overhaul the Mr Mitsotakis’s government has ing — hence the drive in California and
New Democracy’s victory repre- party politics is a positive development public sector, an area of concern to the made a promising start by announcing elsewhere to have non-standard jobs

en years ago Greece sented the delayed revenge of the Greek insofar as it avoids the kind of political foreign creditors and investors whose corporate tax cuts and other measures legally deemed to be standard jobs.
plunged into a debt crisis bourgeoisie against the Syriza party, support will be essential to drive for- aimed at improving the investment cli- Lord Skidelsky is right to argue that a
that threatened to sweep which came to power in January 2015 as ward Greece’s economic recovery. mate. These include going ahead with public sector job and conditions guaran-
away much of the political,
social and economic
the most radical leftist government seen
in a European democracy since the sec-
Victory for conservatives It is unfortunate that this recovery is
beginning just when the global economy
the long-delayed €8bn Hellinikon
project to redevelop the area around the
tee can shape private sector practice by
improving workers’ labour market
progress achieved after democracy ond world war. However, even critics of represents the delayed is running into headwinds. Even before former Athens international airport. options. However, the real need is for
replaced military dictatorship in 1974.
The economy shrank by a quarter,
Alexis Tsipras, Mr Mitsotakis’s prede-
cessor, ought to acknowledge that some
revenge of the bourgeoisie these clouds appeared on the horizon,
however, Greece was not rebounding
Provided that Mr Mitsotakis sticks to
his reform plans, Greece’s eurozone
some institutional innovation. This
could come from unions, seeking to
unemployment soared and Greece of the credit for Greece’s recovery goes against the radical left from the debt crisis with the vigour of creditors should offer a helping hand by enhance the bargaining power of gig
came close to crashing out of the euro- to the Syriza leader, who eventually other stricken eurozone economies lowering the targets for primary fiscal workers. It could involve new forms of
zone. The crisis tore at the fabric of soci- swallowed the medicine prescribed by fragmentation visible elsewhere in the such as Ireland, Portugal and Spain. One surpluses required of the government collective action, such as the sharing of
ety and demolished one of the two polit- Greece’s creditors. EU. However, Greece’s old two-party reason is that the Syriza government since the country left its third bailout salary information among Microsoft
ical parties that had alternated in power The most impressive aspect of system, which pitted New Democracy made too little progress in attracting programme last year. It is in everyone’s employees in a private Facebook group.
since the return of civilian rule. Greece’s return to stability is the resil- against the Pasok socialist party, was foreign direct investment and complet- interest that Greece should put itself on Change will come: the world of work is
Today, on the face of things, the emer- ience of its democracy. Many outsiders notorious for clientelism and corrup- ing the privatisation of state assets. a sustainable path of higher long-term not working for too many people. But it
gency is over and the outlook is bright. claimed, at the height of the crisis, that tion. It is vital that these deeper currents A second factor is the fragility of growth. A mutually reinforcing mix of will not take the shape of a return to the
The authorities have lifted capital con- Greece was at risk of succumbing to of Greek public life do not reproduce Greece’s banks. By the middle of this Greek reform and creditor assistance is past.
trols, imposed four years ago. Greece’s rightwing extremism and even becom- themselves in a system now dominated year, they were burdened with about the best way to get there.
10-year bond yield touched an all-time ing unmoored from the western alliance by New Democracy and Syriza. €85bn in non-performing loans. To The writer is Bennett Professor of Public
low in July. Consumer confidence is at its system. Yet the far-right Golden Dawn As in other European countries, the some extent, however, liquidity Policy at the University of Cambridge
10 ★ FINANCIAL TIMES Friday 20 September 2019

Brexit/City jobs: iffy on the Liffey

The number of London finance staff facing possible transfers to continental Europe has fallen since the UK’s
referendum on EU membership. Forecasts for job losses could prove over-pessimistic. But even small
reductions in the City could mean proportionately larger gains in rival finance hubs.

Twitter: @FTLex Jobs that could relocate from London to Europe Estimates of job losses
Number (’000)* Number (’000)

13 London Stock Exchange**

humbled tech giants WeWork, Uber EY**
Saudi Aramco IPO: and SoftBank. One way or another, the 12 Oliver Wyman upper bound Alibaba/Tencent:
squeeze wheeze same fate awaits Saudi Aramco. FT research information insurrection
Sometimes it is better to admit that 11 Oliver Wyman lower bound
Markets have a reputation for you were wrong than to compound 0 20 40 60 80 100 “Mustn’t pry” is not a phrase much
encouraging inequality. But the price your error. 10 Relocation destinations uttered by Chinese officials. They want
discovery mechanism is a great to add credit histories to their data on
leveller, in its way. Take Saudi Aramco, 9 Universal/investment banks/brokerages Private equity Chinese citizens. The real surprise is
the world’s largest oil company. The Wealth and asset managers Retail banks the refusal of Tencent and Alibaba to
Saudi government wants to list the
RingCentral: 8 Insurers and insurance brokerages FinTechs help. For investors, it is just another
group at a valuation of $2tn. Many hot lines Dublin
political complication to a previously
pundits — including Lex — have said 7 clean proposition: two enterprising
that is too high. A scheme to prove Strange jeopardy imperils the business Luxembourg tech companies exploiting the fast
them wrong looks doomed to failure. researched by a journalist using its 6 Frankfurt growth of the world’s largest nation.
Obstreperous foreign investors are product. Lex deployed RingCentral’s 2017 18 19 Paris The People’s Bank of China launched
unlikely to buy into a float at $2tn. internet phone service in an effort to * EY survey of announcements by companies moving or considering moving jobs
credit scoring agency Baihang last year
Saudi Aramco hopes wealthy local call this hot Californian start-up. to mainland Europe ** Euro clearing shift
Other with grand plans to overtake Tencent’s
families will be more accommodating. Following a recorded message, the line FT graphic Sources: EY Financial Services Brexit Tracker; FT research 0 10 20 30 40 and Alibaba’s platforms. Its aim was to
If these cornerstone investors bought went dead. Automation has its draw- rank 460m Chinese who lack formal
and held a small proportion of shares — backs. Countervailing advantages, Predicting Brexit is for mugs. The total that “could” relocate was still nears. Pessimistic projections of job credit histories. The two have declined
which would be listed but illiquid on including low costs, mean RingCentral London’s financial traders prefer only 7,000, according to its survey of losses could prove pertinent. Oliver to share loans data.
the Riyadh stock market — Saudi is thriving, even as some users fume. binary outcomes with ascribable 222 large financial services firms. That Wyman says its worst case could take The rebellious response is out of
leaders could claim their overcooked The group swaps computer-enabled probabilities. Prime minister Boris was even lower than the 12,500 years to transpire, and depends on character. Alibaba is helping build an
estimate was right all along. headsets for landlines. This is a Johnson says the UK will leave the EU foreseen six months after the 2016 political,regulatoryand tax decisions. Orwellian social credit system. This
Wealthy Saudis might consider it sensible switch — if calls get through. on October 31 “do or die”. But with or referendum, when hopes were high of a Staff may just be cut, not relocated. uses data to rank how obedient citizens
wise to participate — some spent an Many workers are mobile these days. without a deal? On good relations or super-soft Brexit in which cross-border Banks have awaited events before are. The government has Tencent on
enforced stay in a luxury hotel during a For $19.99 per employee per month, bad? Ipso facto, City job loss activities would scarcely be affected. committing. Bank of America Merrill the choke chain as represented by
tax shakedown in 2017. But the ploy is RingCentral offers voice, video and projections are equally perilous. What’s wrong with Frankfurt, Paris Lynch has been among the most Beijing’s approvals system for
a flawed one, for a couple of reasons. messaging services that can be routed Except maybe they will be less or Dublin? The city on the Liffey has engaged, adding 400 jobs in Paris. computer games. The resistance of
First, it would not raise much money, via smartphones or PCs. The cloud- dramatic than feared. been the top destination for banks For now EU clients can still choose to Tencent and Alibaba reflects heavy
at least by the gargantuan standards of based service is cheaper than on-site Back in 2016, consultants Oliver movingoperations,EY says. Frankfurt’s trade through London or Paris. The investment in credit scoring systems.
the Saudi oil industry. The kingdom hardware required for traditional Wyman suggested up to 75,000 job pocket-sized [river] “Main-hattan” former’s deeper financial market The PBoC shut these down by revoking
originally hoped to list 5 per cent of private branch exchange systems. losses in a worst-case scenario. Mark skyline has attracted investment liquidity makes for better pricing. their licences last year.
Saudi Aramco, totting up to $100bn, These can cost $1,000 per person. Carney, Bank of England governor, bankers. London’s scale means a small The latter is better for under- US data barons dream wistfully of
four times the size of a world-record Created by Vlad Shmunis, who is has quoted similar figures. loss of market share there can mean employed staff on long lunch breaks. the irresistible sales pitches they could
fundraising from Alibaba five years chief executive and chairman, Yesterday, however, consultants at proportionately bigger gains elsewhere. Relocating staff is costly. Reversals make if they could trawl freely through
ago. Placing about 3 per cent on the RingCentral’s real aim is to take on EY reported that only about 1,000 But a trickle of jobs leaving London would be costlier still, especially if customers’ credit scores, transaction
Riyadh market with local tycoons and $210bn telecoms company Cisco. His invest-ment bank jobs have been could turn into an exodus. Brexit un- bankers’ desire to live in Frankfurt records, social media posts and
institutional investors leading the premise is people hate their old desk relocated to other parts of Europe. certainty has risen as the leaving date has been underestimated. browsing histories. That prize is within
charge would require investors to pony phones and will swap them for voice- the grasp of Alibaba and Tencent in
up $60bn. Demanding any more from over-internet protocol technology China. The WeChat app even gives
wealthy families after the confiscation withoutthe hardware.Threebull points Tencent facial recognition data.
of more than $100bn of their assets support RingCentral’s investment case. performance of video conferencing country’s next-generation 5G network the state-owned carriers is weak. First- The battle with the PBoC is not one
sounds like a stretch. Never mind that First, its subscription model yields company Zoom, which has more than with rival China Unicom to reduce half revenues fell as new subscriber Alibaba and Tencent can win. Building
the Saudi exchange is tiny, with a total recurring revenues. Second, VoIP is doubled since listing in April. costs. Investors have pushed up growth slowed and Beijing pushed for a $1tn AI industry is a key front in
market cap of less than $500m. expected to grow from a $20bn market RingCentral will remain a hot stock, shares. China Unicom has gained price cuts. China Mobile, a third China’s tech war with the west.
The second difficulty is that the float, to a $55bn industry by 2025, according particularly if it can swap hot lines for 12 per cent since rumours first telecoms group, has revised down its The value of data is multiplied by
much-delayed as Saudi Arabia seeks a to Global Markets Insights. Third, sporadic failed connections. surfaced in mid-August. 5G spending forecast for this year by aggregation. The more of it Alibaba
friendly venue, is supposed to reduce companies are spending more on cloud Gains for the telcos will be at the 38 per cent in the span of two months. and Tencent surrender to the state,
the nation’s dependence on oil, whose services. The total will exceed $1tn this expense of 5G equipment makers. The Network sharing would drastically the less justification foreign investors
value is slowly being eroded by climate year, according to International Data. biggest loss would be for Huawei, the cut overall spending. China Unicom have for regarding them as
change. That would require foreign RingCentral’s share price has Huawei/5G: world’s largest telecoms gear maker, expects to save more than $38bn. independent businesses.
investors to participate more outshone the broader market. After which the US sees as a security threat. For Huawei, this translates to about This poses two problems. First, the
meaningfully than anticipated. As soon listing in 2013 at $13, the stock trades pincer punishment Becoming one of the first 5G-enabled half of the expected orders for its prospects of the companies outside
as they did, the “down round” would at $131, up more than 60 per cent over countries is a priority for China. The equipment business. This brings in China will be damaged if the US classes
slash the value of Saudi Aramco. one year. The group has a habit of Huawei’s new phone, the Mate 30, is new network would speed up the about 40 per cent of total sales. Foreign them as a security threat. Second,
Saudi ruler Mohammed bin Salman outperforming its own forecasts. billed as its smartest yet. The handset internet for 713m smartphone users, boycotts mean its home market has owning the shares — directly, or via
has gilded himself into a corner. A Revenue growth is strong as it signs compensates for a lack of Google apps giving China an edge in hot sectors become critical. intermediaries such as SoftBank,
quasi-private deal in Saudi Aramco up ever larger clients. The company with 5G capability. But the new such as artificial intelligence and Huawei has sustained little damage Prosus or Naspers — may raise ethical
would prove nothing, except that he expects revenue to top $877m this year standard is proving less of a fillip for self-driving cars. from sanctions, if published numbers objections. The volatile shares trade at
has been obdurate and badly advised. — 30 per cent growth on the previous Huawei’s business selling network But telcos baulked at the projected are true. Collaboration between big over 25 times forward earnings. They
The market, which is indifferent to year. The enterprise-tech industry is equipment at home in China. costs of 5G, which rose as high as Chinese customers may now hurt the are well below all-time highs. They are
the pride of powerful men, has already on the rise. See the spectacular China Telecom plans to build the $120bn over three years. Cash flow of business more than US hostility could. becoming riskily politicised.

CROSSWORD C stands for the same word

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3 French novelist’s C, initially seen
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getting lost for a short time in
Friday 20 September 2019 ★ 11

Quick returns China Inc’s global Reality bites Silicon Valley can no longer
spending spree goes into reverse — PAGE 13 play by its own rules — RICHARD WATERS, PAGE 12

Airbnb says it will go public in 2020 Tail

3 Accommodation platform valued at $31bn 3 Rocky debuts put investor appetite in doubt
bnb Inc announced today that it expects chief executive Brian Chesky said that tory setbacks. WeWork has postponed
to become a publicly traded company the company would “be ready” for an
Airbnb its IPO after negative investor reaction. Stafford
Airbnb ended uncertainty over its during 2020.” IPO in 2019 but added that it was not ‘expects to There is risk in Airbnb waiting to
future by saying it planned to go public The company said yesterday it had definite. “We have investors who are become a 2020, however, if economic growth
next year, making the announcement a “nothing more to add” on the timing or really patient and I want to make sure slows. Despite stock downturns for Uber It is not only money markets dealing with the fallout of
day after it reported more than $1bn in whether it had already filed confidential it’s a benefit [to them] when we do.” publicly and Lyft, the US IPOX Index — a meas- whipsawing prices this week.
quarterly revenue. documents to the US Securities and The company has not confirmed traded ure of recent IPO and spin-off perform- The New York Federal Reserve offered a huge injection
The 11-year-old accommodation plat- Exchange Commission in preparation whether it will go public via a direct list- ance — has been “soaring over the US of cash for a third day in a row yesterday, to try to steady
form has a chance to be among the big- for a listing. ing, in which no new shares would be company benchmark indices”, said Sean Darby, a the repurchase or “repo” market. But the moves are not
gest listings in 2020, having been valued Airbnb said on Wednesday that it had offered but existing investors could sell, during Jefferies analyst. just relevant for short-term deals to swap Treasuries for
at $31bn in its most recent funding made “substantially more” than $1bn in or a more traditional IPO. Michael Underhill, chief investment cash; they have implications for the big, global effort to
round. But a series of rocky debuts for revenue in the second quarter of 2019 Airbnb will join a host of Silicon Val- 2020’ officer for Capital Innovations, said Air- move off the Libor lending rate by the end of 2021.
other so-called unicorns has raised and that Airbnb hosts — who rent out ley peers that made their stock market bnb was “trying to be more systematic Regulators including the New York Fed feel that the old
questions about the durability of inves- rooms or homes on the platform — have debuts to mixed reviews. Highly antici- statement with their IPO and have an approach on Libor benchmark has outlived its usefulness because it
tor demand for new offerings. made more than $80bn since it was cre- pated listings from Uber and Lyft have corporate governance that is more represents markets that barely trade. The new bench-
The San Francisco-based group ated in 2008. performed poorly due to mounting con- thoughtful after seeing what happened marks will instead be based on real-world transactions.
issued a short statement saying: “Air- At a conference in May 2018, Airbnb’s cerns over their profitability and regula- with WeWork”. The US’s proposed alternative, known as Sofr, is based in
part on repo rates. And as repo rates shot higher this week,
so did Sofr, from 2.43 per cent to 5.25 per cent.
So was it wise to base an alternative Libor on a market
that can behave as capriciously as this?
Late on Wednesday, the committee in charge of Sofr cir-
Bigger apple culated a memo to banks, insurers and asset managers,
New York supplants pointing out that the new
benchmark uses an average
London as top hub of overnight rates that is
Was it wise
smoothed out over time. The to base an
committee noted that a
London has slipped further behind New three-month average of Sofr
alternative Libor
York in a ranking of the world’s financial rose just two basis points on a market that
centres amid extended uncertainty over over rates last week. The
the UK’s relationship with the EU. committee understands that
can behave so
New York claimed the top spot from daily rates are volatile, it capriciously?
London last year, ending the city’s said; indeed Sofr had
five-year stint as the premier financial dropped back to 2.55 per cent on Wednesday.
capital, according to an index compiled Bankers may understand the mechanics but that might
by consultancy Z/Yen. Although there not hold for customers, who may be wary of explanations
has not been the exodus of finance jobs of how charts containing sudden spikes are not a problem.
predicted after the Brexit vote, groups Moreover, this week’s move is not a one-off. In December
have been reluctant to invest while they the repo rate suddenly rocketed in its single biggest per-
lack clarity on how to do business. centage rise in 20 years. And not all money market rates
That has been a boon to other moved at the same time — Libor, for example, was flat.
European cities, including Frankfurt, This suggests that repo has a liquidity problem. The
Amsterdam and Paris, which have market is an interface between broker dealers, the borrow-
attracted groups that need to set up EU ers and various institutions — banks, clearing houses,
headquarters in anticipation of Britain hedge funds and others.
leaving the EU. Paris and China’s But there are blockages that prevent money moving
financial centres are on track to overtake around efficiently. For example, a regional bank may have
London in the next two years. Paris has an account with the Fed but it cannot directly access the
jumped more than 10 places in the latest repo market, which may offer more competitive rates,
index, making it the fourth-highest because it does not have the requisite connections to desig-
ranked European city after London, nated broker-dealers.
Zurich and Frankfurt. Banks also face limits on the extent to which they can
Miles Celic, chief executive of support their own broker-dealer businesses by moving
TheCityUK lobby group, said the index cash around. If liquidity is trapped when it is most needed,
“sends a warning signal to Europe about it is likely there will continue to be more irregular spikes.
the growing global dominance of Asian Finally, the Fed’s first intervention in a decade raises
and North American financial centres.” another question: is the repo rate a true market rate, if it
Cat Rutter Pooley can be managed at a central bank’s discretion?
Political news pages 2&3 Global regulators’ target to have most of the financial
Lex page 10 system weaned off Libor soon was already looking tough.
This week’s events have only added to the problems.

Ryanair shareholders protest against

potential bonus of €99m for O’Leary
ARTHUR BEESLEY The vote was non-binding but repre- One top 20 investor told the Financial
sented the most significant protest yet Times it had voted against the remuner-
LONDON against pay at Ryanair, which has a his- ation report because of “transparency
tory of investor discontent on the issue. issues”, adding there was “no compel-
Ryanair investors have registered a big Mr O’Leary said: “We’re disappointed ling justification” for the options.
protest vote against the pay of long- that the vote wasn’t higher. But I think Another shareholder, Jocelyn Brown,
serving chief executive Michael we have to take on board shareholder senior investment manager at the UK
Prospect of tech cold war O’Leary after he was granted a bonus concerns in the next 12 months and railways pension scheme, said the share
that could be worth nearly €100m. you’ll see that happen.” options plan “raises a red flag for us”.
dismissed by Cisco chief Almost half of the airline’s investors yes- The chief executive nonetheless “We appreciate Mr O’Leary’s role in
Digital supply chains would not terday failed to back the company’s defended the share options by arguing the success of Ryanair but a potential
break down despite Washington’s remuneration plans, which received that they aligned his interests with payout of over €100m is hard to sup-
pressure to cut China ties, the boss support from only 50.5 per cent. shareholders. “I don’t think there’s any port,” she said.
of the telecoms equipment company The protest at Ryanair’s shareholder investor in that room . . . that would The vote comes at a difficult time for
said. The two governments knew the meeting was sparked by a February begrudge a large number of share Ryanair, which is facing staff strikes
value of not ‘Balkanising digital decision to grant Mr O’Leary options for options if I doubled their investment in almost two years after it agreed to
infrastructure’, said Chuck Robbins. 10m shares, which would pay out €99m the next five years,” he said. recognise unions following a rostering
Analysis iPAGE 15 if profits hit €2bn or its share price rose “If I don’t do it over the next five years, failure that led to thousands of flight
above €21 in the next five years. you don’t pay me anything at all.” cancellations.

Companies / Sectors / People

Companies CME................................................................20 Hikvision.......................................................15 Next................................................................20 Toll Brothers..............................................19 Oil & Gas.......................................................12
AT&T...........................................................7,19 CaixaBank...................................................20 Hong Kong Exchanges........................14 Nokian Tyres............................................20 Tradeweb ...................................................14 Property........................................................13
Abertis............................................................15 China Vanke...............................................13 Hopu Investment Management......13 Outokumpu................................................20 UBI Banca...................................................20 Retail........................................................19,20
Accenture.....................................................12 Cisco................................................................15 Huawei.......................................................4,15 Patientslikeme...........................................13 Uber.......................................................9,10,12 Support Services................................12,15
Airbnb.............................................................11 Comcast...........................................................7 IAG..................................................................20 Philip Morris International.................14 Unilever.........................................................12 Technology............................7,12,14,15,20
Alibaba....................................................10,14 DE Shaw........................................................12 iCarbonX.......................................................13 Plus500........................................................20 United States Steel...............................20 Telecoms..........................................15,19,20
Altria...............................................................14 DZ Bank .......................................................12 iFlytek.............................................................15 RWE.................................................................19 Vale..................................................................19 Tobacco........................................................14
Amazon......................................................7,12 Dahua.............................................................15 IG Group......................................................20 Refinitiv.........................................................14 Verizon..........................................................19 Transport......................................................15
Amundi..........................................................19 Dalian Wanda.............................................13 ITC....................................................................14 Restaurant Brands Int’l........................19 Vodafone.....................................................20 Travel & Leisure......................................12
Apple...........................................................7,14 Darden Restaurants..............................20 Jagex...............................................................13 RingCentral.................................................10 WPP.................................................................12
ArcelorMittal.............................................20 Disney...............................................................7 Juul Labs......................................................14 WarnerMedia................................................7 Bezos, Jeff....................................................12
Russell Investments...............................19 WeWork...................................................10,12
Aspect Capital...........................................19 DoorDash......................................................12 Kantar.............................................................12 Castellucci, Giovanni..............................15
Atlantia..........................................................15 Eni.....................................................................12 London Stock Exchange.....................14 Sectors Celic, Miles....................................................11
Autostrade per l’Italia...........................15 Erajaya Swasembada............................14 Lyft...............................................................9,12 Aerospace & Defence...........................12 Descalzi, Claudio......................................12
SPEA Engineering...................................15
Baihang.........................................................10 FXall................................................................14 Lynx Asset Management...................19 Salzgitter.....................................................20 Airlines..........................................................20 Hirano, Nobuyuki....................................15
Bain Capital.................................................12 Facebook.............................................7,12,13 MUFG..............................................................15 Samsung.......................................................14 Automobiles..............................................20 Li, Charles....................................................14
Bank of China............................................13 GLP..................................................................13 Man Group..................................................19 Sasol................................................................19 Banks..................................................12,14,20 McCutcheon, Robert...............................4
Bankia............................................................20 Godfrey Phillips India...........................14 Megvii.............................................................15 Saudi Aramco............................................10 Construction.........................................15,19 O’Leary, Michael.......................................11
Beijing Kunlun...........................................13 Golden Tobacco.......................................14 Meiya Pico...................................................15 Shandong Hongda..................................13 Energy......................................................13,19 Quarta, Roberto........................................12
BlackRock.....................................................19 Goldman Sachs.........................................14 Microsoft................................................12,20 Showtime........................................................7 Financial Services..............................12,14 Robbins, Chuck.........................................15
Blackstone....................................................13 Google.........................................................7,12 Mirae Asset.................................................13 SoftBank.......................................................10 Financials..............................13,14,15,19,20 Schwimmer, David..................................14
Britax................................................................4 Graham Capital.........................................19 Mitsubishi UFJ...........................................12 Starz..................................................................7 Industrials...................................................20 Shmunis, Vlad...........................................10
CEFC................................................................13 Grindr..............................................................13 Natixis...........................................................20 State Street Global Advisors...........19 Media.....................................................7,12,13 Sorrell, Martin............................................12
CMC Markets............................................20 HBO...................................................................7 Netflix...............................................................7 Tencent...................................................10,14 Mining............................................................19 Weed, Keith.................................................12

© The Financial Times Limited 2019 Week 38

12 ★ FINANCIAL TIMES Friday 20 September 2019

Oil & gas

Eni chief warns on rising Gulf tensions Richard

Descalzi urges countries Iran for the strikes on Abqaiq, the “Even if a hub is so well protected, ‘It’s not just broader regional tensions triggered by
world’s largest oil processing facility, everybody can be a target,” he said. the stand-off between the Trump admin-
to avoid ‘big conflict’ after
Saudi oil facilities attack
and the Khurais oilfield, which knocked
out half of Saudi Arabia’s production
and sent crude prices spiralling as much
“What happened is changing some-
thing . . . more tension will require
more attention, more security, more
a question
of energy
Mike Pompeo, the US secretary of
state, described the attacks as an “act of
Real world grows
as 20 per cent on Monday.
Eni is investing heavily in the region
controls. If all of our institutions world-
wide are wise they will also do the diplo-
security, it’s
a question
war” as he flew into Jeddah to hold talks
with Saudi Crown Prince Mohammed
deaf to Big Tech’s
The chief executive of Eni called for
world leaders to defuse rising tensions
to diversify its operations away from
areas deemed even riskier, including
parts of Africa. The company expects
matic work.”
The Italian group is also pursuing
broader investments in refining and
of human
bin Salman, the kingdom’s de facto
Saudi Arabia is Washington’s closest
special pleading
in the Gulf as Italy’s largest oil and gas to spend $2.5bn on exploration and chemicals in the region, primarily
lives. If our Arab ally and has been a staunch sup-
company embarks on a big expansion in production across the United Arab through a partnership with the Abu institutions porter of President Donald Trump’s

the Middle East. Emirates, Oman and Bahrain between Dhabi National Oil Company. are wise “maximum pressure” strategy against ech exceptionalism — the idea that technology
“We cannot risk a war,” said Claudio 2019 and 2022 in an effort to deliver an Iran-aligned Houthi rebels, who are Iran. groups operate in their own rarefied universe,
Descalzi, following attacks last weekend additional 400,000 barrels a day of pro- fighting a Saudi-led coalition in a four- they will Colonel Turki al-Malki, a Saudi beyond the constraints faced by normal busi-
on Saudi Arabia’s Abqaiq crude process- duction. year war in Yemen, claimed responsibil- also do the defence ministry spokesman, said on nesses — was good while it lasted. It helped
ing facility and a large oilfield. “We can- Speaking to reporters and analysts in ity for the weekend attacks. Saudi offi- Wednesday that the strikes were many of today’s tech leaders keep regulators
not risk a big conflict that can involve Abu Dhabi, Mr Descalzi said a new set of cials say the attack did not emanate diplomatic launched from the north and involved at bay. Why should they be subject to rules designed for
more countries. It’s not just a question of geopolitical risks were emerging, target- from Yemen, adding the Houthis were work’ 18 Iranian drones and seven cruise mis- more prosaic businesses founded in less enlightened
energy security, it’s a question of human ing hydrocarbon-rich countries that are “covering up” for Iran. siles. He said investigators were still times? It supported higher valuations. Who would not
lives.” home to some of the world’s most Iran has denied any involvement. But Claudio working to determine the exact launch want the halo effect that comes from being associated with
Washington and Riyadh have blamed important energy infrastructure. the assault is being viewed as part of the Descalzi, ENI point. a fast-growing sector where stock is often sold at a multiple
of a company’s revenue, rather than earnings?
But when this self-image collides with the real world, the
results can be jarring.
Financials Technology The proponents of exceptionalism have been taking a
beating. Exhibit A has been California’s law tightening

DE Shaw rules that determine when companies can treat workers as

independent contractors. As with the state’s privacy legis-
lation, this could make California the trendsetter for rules
retains staff that spread across the US. It makes tech groups shudder.
The law’s biggest impact is likely to be on groups of

after imposing workers who usually spend less time in the spotlight than
Uber drivers. Many cleaners, janitors and construction
workers may find themselves reclassified as employees,
non-competes with benefits that come with that (such as minimum pay
guarantees and the right to unionise). It poses a challenge
to the gig economy, which has prided itself on creating a
flexible style of working that places it outside old rules.
LINDSAY FORTADO — NEW YORK It is not a foregone conclusion that drivers summoned
by ride-hailing apps, along with other gig economy work-
The hedge fund DE Shaw has avoided
ers, will end up on the corporate payroll. Uber argues that,
an exodus of investment staff after
even with California’s stricter test, it will be able to treat its
making staff sign new non-compete
drivers as independent contractors.
employment contracts under threat of
What it comes down to is whether Uber is a tech group or
being fired, but a number of more jun-
another operator of a taxi-like service. According to Cali-
ior staff will be leaving, according to an
fornia’s law, companies can only treat workers as contrac-
internal memo seen by the Financial
tors if the work they do falls outside the organisation’s
usual business. If Uber is a service for supplying rides, the
One of the most senior employees who work of driving would seem to be closely tied to its core
declined to sign the non-compete was mission. But if it is a tech group, operating at one remove
Matthew Karchmer, a member of the from the service — one that runs an online platform, sell-
firm’s long-short equity group, accord- ing tech services to drivers and riders in a two-sided mar-
ing to a person familiar with the matter. ket — then driving may not
Several quantitative investment spe- be as central. This is likely to
cialists also departed, the person said. be a hard case for Uber to
Rules were felt
Mr Karchmer did not respond to a make. It is so closely associ- to be designed
message on LinkedIn. ated with its core service that
In a firmwide email, DE Shaw’s execu- its name has even become a
for more prosaic,
tive committee said 98 per cent of the verb for taking a ride. less enlightened
hundreds of staff members asked had It points to a bigger issue.
signed. “As a result, the firm is now in a The collision of tech excep-
legacy businesses
stronger position competitively,” the tionalism with the real world
committee wrote. has become more evident as “tech” groups intrude deeper
The demand for employees to sign the into the provision of services beyond the digital universe.
agreements came in the wake of the Students take part in a climate protest in Sydney. Further action is expected today as the activism moves into workplaces — Mick Tsikas/AAP/dpa Can they hold themselves to a different standard or expect
messy departure of one of its former investors to give them the benefit of the doubt?
senior partners, Daniel Michalow, who WeWork, poster child for much that is wrong with tech,
left 18 months ago after making an
insensitive comment. He was subject to
a non-solicitation agreement which
Staff climate protests spur green promises is caught up in this. The valuation it once hoped to get
when selling its shares on Wall Street reflects its self-image
as a tech group. But seen as a real estate concern, that
ended on September 15, leaving him becomes harder to justify. Any tech lustre WeWork man-
free to hire DE Shaw employees if he aged to attract to its brand has well and truly faded.
decides to launch his own firm, though CAMILLA HODGSON — LONDON who want to take the day off to join dem- Amazon Bezos’sannouncement was a “huge win” Similar questions face other “tech” groups as they move
he has not taken any steps to do so. onstrations. Tech companies in particu- but also “not enough”, in a statement on beyond the virtual world. What is the difference between a
The fact that the deadline for signing
lar have faced a rising tide of climate said it Twitter. “Today, we celebrate. Tomor- tech group that enables a physical service and a more tra-
non-competes coincided with that date Companies are racing to burnish their activism, with Google, Microsoft, Face- would be row, we’ll be in the streets,” they said. ditional concern that has geared up its tech capabilities to
did not go unnoticed by employees at green credentials ahead of widespread book and Amazon all expecting Google also announced yesterday it compete with the digital competition? A clear dividing line
DE Shaw, though the hedge fund said employee walkouts today, as a youth- employee protests today. fuelled by had made the “biggest corporate pur- based on business model has been one test. But as that line
they were not linked. led global climate protest movement Mr Bezos praised the intent of the pro- 100% chase of renewable energy in history”, is challenged by regulations such as California’s employ-
The non-compete terms ranged from spills over into the workplace. testers but refused to sign up to more which would lift its renewable energy ment law, the distinction becomes harder to sustain.
three to 12 months in the US, and up to specific demands by Amazon’s employ- renewable portfolio by more than 40 per cent. For ride-hailing, delivery and other gig economy groups,
nine months in London and Hong Kong, Jeff Bezos, Amazon chief executive, fac- ees, who have called for the company to energy by The organisers of employee walkouts this is far from the end of the story. California governor
during which time a person leaving the ing the prospect of a large protest out- cut its carbon emissions to zero by 2030, are demanding businesses ramp up Gavin Newsom has said he wants to find a compromise.
firm will be unable to work for a com- side the company’s Seattle headquar- to stop working with oil and gas busi- 2030 efforts to counter global warming, and Uber supports a form of worker classification that stops
petitor. Staff were told that those who ters, announced new climate targets nesses on fossil fuel extraction, and to make commitments such as ceasing any short of full employee status but offers things such as mini-
did not sign the agreements would have yesterday, saying the company would stop donating to groups and individuals funding of climate-denying lobbyists mum pay — for the time workers are actively engaged in
their contracts terminated but be aim for net zero emissions by 2040, and who deny man-made climate change. and politicians. handling Uber rides — and the right to join a union.
allowed to keep the deferred compensa- be fuelled by 100 per cent renewable Mr Bezos defended in particular At next week’s UN summit in New Along with Lyft and DoorDash, it has threatened to put
tion they would normally forfeit. energy by 2030. Amazon’s work with oil and gas compa- York, more than 60 global leaders are the issue directly to California voters. And though workers
All of the firm’s managing directors, Other companies have gone further, nies, saying: “We’re going to work hard expected to outline new climate pledges. might welcome the benefits that come with employee sta-
the most senior level of investment staff with brands including Patagonia and for energy companies . . . To ask oil and As part of the Paris climate agreement, tus, many will not find it so attractive if it locks them into
outside of the executive committee, Ben & Jerry’s planning to shut all of their energy companies to do this transition signatories committed to limiting global working set shifts or limits other freedoms.
signed the agreements, but four senior stores today, so that employees could with bad tools is not a good idea.” warming to “well below” 2 degrees Cel- It leaves room for further debate and rule-setting. Gig
vice-presidents, the level just below MD, attend the climate protest. But he praised those who are planning sius — a promise that was made to avoid economy companies have a case in pushing for employ-
did not, according to another person. The protests, in which thousands of to go on strike tomorrow over climate the most extreme effects of climate ment rules that are better suited to the new types of mar-
The committee said that taking into employees around the world will take to change. “I think it’s totally understanda- changebutwhichwillrequiresubstantial ketplace they enable.
account other departures, attrition this the streets alongside millions of youth ble,” he said. “People are passionate changesfromcountriesworldwide. But it should not obscure the fact that the world has
year is at its historical average. protesters ahead of next week’s UN cli- about this issue, and by the way, they More than 100 advertising agencies, changed: their ability to operate in tech’s version of alter-
DE Shaw employs 1,300 people, hun- mate change summit, create a dilemma should be passionate about this issue.” including Saatchi and Saatchi and native reality is coming to an end.
dreds of whom were the subject of the for companies, which must decide The group of Amazon employees Ogilvy, have also told employees they
mid-September non-compete deadline. whether or not to grant leave to workers organising the protests said that Mr are free to strike.

Media Financials

WPP recruits ex-Unilever marketing chief MUFG to slash Asia investment banking jobs
PATRICIA NILSSON — LONDON Consumer goods groups such as Uni- tisers’ potential customers. Consultan- STEPHEN MORRIS — LONDON markets team will lose a few members, graphic changes that are shrinking cus-
lever used to be the bread and butter of cies such as Accenture have also been but will remain largely intact. tomer numbers.
WPP has hired Unilever’s former mar- Japan’s largest lender, Mitsubishi UFJ
WPP but the ad group has been forced to moving into turf that WPP and its peers Cuts to MUFG’s 2,000-strong banking “We constantly review our business in
keting chief as a non-executive direc- Financial Group, is preparing to cut
restructure and shrink in size as many used to have to themselves. and brokerage operation in London are all markets in which we have a presence
tor, strengthening its board as it battles half its Asian investment banking
big brands, Unilever included, slash In an attempt to adapt, WPP has also being discussed, but the scale has to ensure we remain competitive and
to adapt to an era of digital advertising. workforce outside its home country as
marketing budgets in the face of eco- disposed of more than 40 of its busi- not been finalised. In June, 500 direc- relevant to clients,” the bank said. “And
it struggles with dwindling profits and
Keith Weed, who will join WPP in No- nomic uncertainty. nesses for about £3.6bn since its tors and managing directors were as a general point, we don’t comment on
a falling share price.
vember, oversaw campaigns for brands Marketing executives also face founder Martin Sorrell left in April offered voluntary redundancy, with the speculation or rumour.”
such as Dove soap, Knorr condiments increasing options on where to direct 2018, including the $3.1bn sale of major- Top executives in Tokyo have decided to intention of ultimately losing about 50. Net operating profit in the global mar-
and Lipton tea until May this year, when their budgets. ity stake in market research business make redundant as many as 90 of the Big drops in profit at the bank’s inter- kets division plunged 26 per cent to
he retired after 35 years at the Anglo- Google and Facebook are attracting a Kantar to US private equity group Bain 180 MUFG Securities staff in Hong Kong national trading businesses amid vola- ¥251bn ($2.3bn) last year, largely
Dutch consumer goods group. growing portion of advertising spend Capital. and Singapore, with employees to be tile markets and slowing growth in because of a big fall in Europe, and the
“Keith is one of the world’s most influ- and can offer deep knowledge of adver- Mr Weed said he was delighted to join notified next month, according to peo- Europe and China prompted the top- bank said it “struggled in customer busi-
ential and successful marketers,” said WPP at “such an important and ple familiar with the decision. level debate about MUFG’s staff num- ness due to sluggish markets.”
Roberto Quarta, WPP chairman. “He dynamic time for the industry”. All investment banking divisions will bers, the people said. Still, MUFG is expanding in some
has a deep understanding of our busi- Keith Weed retired “I have worked with WPP for many be affected, with trading operations to MUFG’s shares have fallen 20 per cent other countries and products to offset
from Unilever in
ness, the ways in which technology is May this year after years [and] I look forward to contribut- be closed almost entirely and sales and in the past year, largely on dwindling its problems in Japan, completing a
transforming marketing, the sectors in a 35-year career at ing to WPP’s future, leveraging my back-office staff heavily cut and their hopes of an upturn in Japan’s banking $6.3bn acquisition of the aviation
which we operate and our fast-moving the consumer understanding of building brands in a responsibilities transferred to London, industry, which is under pressure from finance business of Germany’s DZ Bank
consumer goods clients in particular.” goods company rapidly changing world,” he said. the people said. The Asian debt capital ultra-low interest rates and demo- in March.
Friday 20 September 2019 ★ FINANCIAL TIMES 13


Exit the dragon as China Inc curbs ambitions

Beijing’s clampdown on risk has combined with tighter credit conditions to fuel a record global assets sell-off
DON WEINLAND — HONG KONG end-date to the ongoing US-China trade
Turning tail dispute,” Mr Cutler added.
When lossmaking Chinese iron ore In the largest Chinese sale of the year,
miner Shandong Hongda scooped up a a group of private equity investors led
UK game developer in 2016, it also had by property developer China Vanke and
grand plans to diversify into energy and Hopu Investment Management, sold
healthcare businesses around the globe the US assets of Singaporean warehouse
and move away from its low-growth business GLP to Blackstone for $18.7bn.
mining past. The sale included government inves-
In the end, it held on to Jagex, the cre- tors such as Bank of China Group Invest-
ator of the world’s largest online role- ment and was regarded by some bank-
playing game for just short of two years ers as a state-sanctioned deal and not
and its other plans have since fallen one driven by the squeeze on liquidity.
away too. But the government also wants to
The trajectory of Shandong Hongda, clean up a number of investments that
with its brief stint as a game developer went wrong and this is expected to con-
and ambitions to expand elsewhere, has tinue into next year.
been followed by a number of Chinese In the second-largest Chinese sale of
companies, which have attempted to the year, Anbang Insurance, which was
make debt-fuelled leaps into countries taken over by the government in 2017,
and industries far from their areas of sold a US hotel portfolio to Korea’s Mirae
expertise. Asset. Anbang, which has since changed
But as credit conditions have tight- its name to Dajia Insurance, required a
ened and authorities have taken a much $10bn state bailout in 2018, reflecting
more active interest in how much debt the company’s liquidity strains.
companies hold and the risks they are In some cases, state groups have
taking, businesses have drawn in their
Since the start of the year, there has
‘The government is still
been a record sell-off of global assets by guiding many of these
Chinese companies totalling about
$40bn, according to data from Dealogic.
transactions and cleaning
At the same time, the pace of acquisi- up some of the mess made’
tions has slowed to just $35bn, as busi-
nesses worry about being labelled spec- FT Montage

ulative buyers. It is the first time in a Chinese global acquisitions fall while divestments are rising swooped in with global assets moved
decade that Chinese companies are net from one Chinese owner to another.
Deal value ($bn) Divestments by value ($bn)
sellers of global assets. Chinese energy group CEFC, which
“There is definitely an ongoing focus 2015 16 17 18 19* 40 attempted but failed to buy a $9bn stake
to de-lever,” said Colin Banfield, joint Rest of total in Rosneft in 2017, bought a stake in
head of global cross-border M&A at Citi. US Czech airlines group Travel Services in
“But we haven’t seen this [affecting] 15.88 30 2015. Following the detention of its
corporations that have financed their 10.21 Total divestments 39.98 chairman, some of CEFC’s assets were
deals responsibly and where those divided up among state-owned compa-
deals have been strategic in nature and Total acquisitions 35.35 20 nies, including Travel Services, which
101.68 217.39 was bought by state conglomerate Citic.
An investment banker who has
‘Companies that expanded 10
worked directly with some of the com-
and acquired aggressively panies now selling off assets said: “The
government is still guiding many of
have found liquidity much 2015 16 17 18 19*
these transactions and cleaning up
more difficult to get’ * Year to date
Source: Dealogic
some of the mess that’s been made over
the past few years.”

in their areas of core competence.”

The story of China’s global buying “This comes back to the liquidity ing is coming from both sides. Since late
spree, followed by its sell-off, is closely story and how speculative deals have 2018, the US government has increased
linked to domestic economic policies become much more difficult to do these its scrutiny of Chinese inbound acquisi-
and the government’s efforts to stimu- days,” said Benjamin Crawford, Beijing- tions, especially in sensitive markets
late growth. based counsel at law firm Allen & Overy. such as technology, but the pushback
China loosened monetary policy in However, he added that there was still a has also come to include any business
2015 to combat slowing growth while “relatively strong pipeline of strategic that collects personal data.
also allowing for the central bank’s sur- transactions”. Earlier this year, the US government
prise currency devaluation. Private Cindy Huang, director of corporate committee that vets inbound invest-
investors such as Shandong Hongda ratings at S&P Global, said the liquidity ments for security threats told gaming
took this as a signal to expand overseas, profile of the entire Chinese market has company Beijing Kunlun and Chinese
taking advantage of cheap debt to buy shifted over the past year-and-a-half: biotech group iCarbonX to divest from
US dollar-denominated assets before “From 2018 onward it has been much companies they had previously pur-
the renminbi fell further. tighter. The companies that expanded chased — dating app Grindr and health
By the end of 2016, China’s foreign and acquired aggressively have found research app Patientslikeme, respec-
exchange regulator had clamped down liquidity much more difficult to get this tively — because of concerns about the
on a number of speculative deals, and year.” Chinese government accessing cus-
over the next two years some of the The US has been at the centre of the tomer data, people familiar with the sit-
most prolific buyers — Dalian Wanda, Chinese sell-off this year, which has uation have said.
HNA and Anbang — reversed their played out against the backdrop of a At the same time, the Chinese govern-
binge, selling tens of billions of dollars of trade dispute between the two nations. ment is putting pressure on domestic
assets in the process. Chinese companies have sold $26bn businesses to divest US assets in retalia-
But liquidity conditions have hardly in US assets in 2019, up from just $8bn tion for the trade dispute, according to
loosened since then. Speculative inves- last year. At the same time, they pur- Aaron Cutler, a partner at law firm
tors have found bank backing hard to chased $7.3bn in US assets, down from a Hogan Lovells in Washington.
come by and highly indebted companies peak of $64.3bn in 2016. “I do expect this to continue for the
are under increased stress. The pressure on China’s US dealmak- next several months until there is a clear


Singapore warns on Facebook coin

STEFANIA PALMA — SINGAPORE from 26 central banks, including the Private issuers of money were incen-
Federal Reserve and the Bank of Eng- tivised to debase currencies and “com-
The head of Singapore’s central bank
land, in Basel on Monday in the first mercial and private considerations”
warned that Facebook’s Libra digital
major encounter between the group and could stand in the way of the stability
currency raised risks that must be
policymakers since it unveiled plans to and trust that protect a currency’s value
addressed by regulators, joining a
upend payments. and keep inflation low. “That’s why cen-
growing list of watchdogs to call for a
Mr Menon, who has been in talks with tral banking was born . . . to safeguard
co-ordinated approach.
Facebook, said there was not enough the value of the currency.”
“The global regulatory community is information for Singapore to judge Mr Menon said that considering Face-
coming round to the view that we need a whether it would ban the coin. He did book’s size and pervasiveness, there was
broadly consistent approach,” Ravi not “dogmatically” think private money a possibility Libra might jeopardise
Menon, Monetary Authority of Singa- was doomed but there were “hurdles macro stability.
pore managing director, said. and inherent impediments. The history He questioned how Libra, which
“Some of the macro financial risks [it of private money over the last 3,000 would be pegged to a basket of curren-
poses] are actually global in nature. It’s years has not been a good one”. cies, would affect currency movements
not as if one regulator can act on its and capital flows, taking into account
own.” The introduction of Libra would Facebook would need to maintain a
raise “existential questions”. reserve of the pegged coin if the volume
Singapore is one of the most tech- of transactions swelled.
friendly financial centres, and Mr While Facebook had told regulators it
Menon’s warning comes after both Paris would maintain Libra’s stability, the
and Donald Trump have spoken against question of whether the company would
Facebook’s digital currency. do so as an independent, publicly
Earlier this month, Bruno Le Maire, accountable entity, as central banks
France’s finance minister, said Libra aspire to be, remained unanswered.
could not operate in Europe under cur- “We need to understand better how
rent conditions, citing systemic risks, they will do that and how it interacts
sovereignty issues and the potential for with their other objectives as a commer-
abuse of market dominance. cial entity,” Mr Menon said.
Mr Trump launched a stinging attack Singapore was keen to ensure it did
on cryptocurrencies, including Libra,
‘Private money’s history not miss out on any potential Libra ben-
and warned that the social media net- over the past 3,000 years efits. “The great promise they put out is
work might be subject to full banking cross-border payments. But can we do
regulation if it were to launch the
has not been a good one’ that without excessively building up
project. Ravi Menon, central bank chief other kinds of risks?”
Representatives of Libra met officials See Inside Business
14 ★ FINANCIAL TIMES Friday 20 September 2019


Financial services Technology

LSE chief rallies support for Refinitiv deal Alibaba and

Schwimmer highlights a £32bn takeover bid for the LSE, David
Schwimmer said Refinitiv, best known
holders, was informed by his own “20
years or so working with market infra-
deal, arguing that the benefits of its pro-
posal “significantly outweigh those of
prepared to sweeten its offer, which is
largely made up of HKEX shares and
refuse to give
data group’s ‘strong fit’
in face of HKEX offer
for the Eikon terminals that deliver data
and news to traders’ desktops, was “a
structure, trying to anticipate where it
was going”, Mr Schwimmer told a con-
the proposed acquisition of Refinitiv”.
Charles Li, HKEX’s chief executive,
values each LSE share at £83.61.
However, winning round LSE share-
loans data
very strong fit” and a deal he “felt very
good about”.
Mr Schwimmer, a former Goldman
ference in London yesterday.
He pointed to the rising importance to
exchanges of monetising market data
has instead said that combining HKEX
and the LSE would allow the group to
benefit from the growing ties between
holders is not the only challenge. Ana-
lysts have said that any deal is likely to
face political resistance in the UK and
to Beijing
The chief executive of the London Stock Sachs banker who has led the LSE for alongside the need to expand beyond western markets and China. scrutiny from regulators in the UK,
Exchange Group has launched a robust more than a year, last month orches- equities trading into other asset classes. Mr Schwimmer said yesterday that Europe and the US. YUAN YANG AND NIAN LIU — BEIJING
defence of its $27bn acquisition of data trated the acquisition of Refinitiv. The HKEX, whose largest shareholder is Refinitiv had a substantial presence Mr Schwimmer said he expected the
China’s technology groups Tencent and
and trading group Refinitiv, which deal hands the group a platform to sell the Hong Kong government, has said in China. EU temporarily to extend a permit that
Alibaba are refusing to co-operate with
Hong Kong Exchanges and Clearing is data to investors, a stake in the bond- it will launch a charm offensive to HKEX is keen to win ownership of would let investors and banks based in
a government-backed credit scoring
trying to gatecrash with its bid for the trading venue Tradeweb and ownership appeal directly to the UK company’s LCH, the largest clearing house for mar- the other 27 member countries access
programme by withholding access to
UK bourse. of currency trading platform FXall. shareholders following the LSE’s rejec- kets such as interest rate swaps and UK clearing houses such as LCH in the
their customer loans data, according to
In his first public comments since The Refinitiv acquisition, which has tion of the bid. whose role has grown in importance. event of a no-deal Brexit.
two people familiar with the project.
HKEX stunned investors last week with been broadly welcomed by LSE share- HKEX has taken aim at the Refinitiv The group has signalled it would be See Letters
The People’s Bank of China launched
Baihang, a private credit scoring com-
pany, in March 2018 to create a national
system that would cover the 460m Chi-
Tobacco. Vaping nese who have no formal credit histories
but who may be relying on the vast fin-

E-cigarette makers feel the heat in Asia tech sector for loans.
But despite operating for a year and a
half and being the only company
licensed in China to provide personal
credit scores, Baihang’s coverage of
users has been patchy.
Ban by New Delhi stubs out The lack of co-operation highlights
hopes for lucrative market as the struggle between the state and
China’s big tech companies over control
western health fears go global of user data.
Tencent’s Tencent Credit and Ali-
baba’s Sesame Credit, part of its Ant
Financial payments affiliate, were
Vaping companies are facing darkening forced to abandon their own attempts at
prospects in Asia as countries ban building credit-scoring schemes after
e-cigarettes, cutting off an important the PBoC revoked their permissions to
growth market for manufacturers as a
backlash grows.
There are more than 300m smokers
‘If it had been the [PBoC]
in China, who make up a third of asking for data, rather than
the total, while India has more than
266m tobacco users. Both countries
this lower-level body,
represent potentially fertile soil for maybe they’d have given it’
e-cigarette profits.
But on Wednesday, India’s cabinet do so in February last year. Instead, the
was the latest to announce a ban, as well PBoC set up Baihang and made the fin-
as up to three years in jail for those who tech groups shareholders in the new
manufacture, import or sell the prod- company to try to break their oligopoly
ucts, citing an alarming rise of vaping on credit data. However, the new share-
among young people. holding scheme has not smoothed the
New Delhi’s action comes in the same path to co-operation.
week that China, the largest producer In particular, since Tencent and Ses-
and consumer of tobacco, halted online ame hold the most customer data of any
sales of vaping products made by US of their peers, they have the least to gain
vape maker Juul Labs. from pooling such data with Baihang.
Juul, in which Altria owns a 35 per “We’d like to get personal information
cent stake, is also facing a regulatory and credit data from Tencent and Ali-
crackdown in its domestic market. baba,” said one Baihang employee, who
The moves follow the recommenda- asked to stay anonymous.
tion this month from the US Centers for “Names, ID and phone numbers, his-
Disease Control and Prevention that tories of borrowings and paybacks.”
consumers should avoid using e-ciga- A former employee of Tencent, who
rettes following a spike in unexplained was familiar with the talks between
lung illnesses among users. Baihang and its member companies,
“This decision is taken keeping in ‘This rette manufacturers are, is planning to As smokers quit traditional ciga- A saleswoman jaya Swasembada, a distributor of Apple also confirmed that Tencent and Ali-
mind the impact that e-cigarettes ban the use of e-cigarettes in public rettes, Big Tobacco has invested in alter- exhales as she and Samsung smartphones. Vaping is baba were not sharing their loan trans-
are having on the youth of today,” decision is from October. natives. Philip Morris International has chats to a catching on in the capital Jakarta, with action data.
said Nirmala Sitharaman, India’s taken Several other Chinese cities have launched IQOS, a device that heats a customer at a so-called vaping bars mushrooming in “If it had been the [PBoC] itself asking
finance minister. expanded their bans on smoking in pub- tobacco plug instead of vaporising it. It Beijing vape urban areas that often lack public for data, rather than this arm’s length
“The data that we have largely is keeping in lic to include e-cigarettes. No data were is popular in Japan, where the liquid nic- shop. China is spaces for entertainment. lower-level body, then perhaps they
of course derived from the US’s mind the available on e-cigarette usage. otine used in e-cigarettes cannot be sold among Asian However, last year the Indonesian would have given it,” the former
experience.” While India’s vaping market is still over the counter. countries government imposed a 57 per cent employee added.
Beijing was already gearing up to reg- impact on small, e-cigarette companies were look- Some Asian countries have banned regulating the import duty on e-cigarettes and Sesame Credit declined to comment.
ulate the sector, fearing that e-cigarettes the youth ing to it and the rest of Asia as a lucrative e-cigarettes. Cambodia and Thailand products as it vaping liquids. Baihang and Tencent did not respond to
would create a new generation of nico- alternative to the US, where the nascent outlawed the use and import of also tries to India’s e-cigarette ban sparked requests for comment.
tine addicts at a time when the govern- of today’ industry is under pressure after the out- e-cigarettes in 2014. Vaping is not reduce the immediate criticism. Tencent Credit and Sesame Credit are
ment was trying to cut the proportion of break of a lung illness linked to vaping. illegal in Vietnam or the Philippines, yet number of “The winner will be combustible among eight fintech companies, includ-
the population older than 15 who
Nirmala Shares of Godfrey Phillips India, one the latter country is pushing through tobacco smokers cigarettes. From a public health point ing Ping An Bank’s Qianhai Credit and
smoke, from more than 26.6 per cent to India’s finance of India’s top tobacco companies, rose legislation that would increase taxes on from 300m of view this is not good news,” said Kaola Credit, that each own an 8 per
20 per cent by 2030. minister 9 per cent following the announcement, the product. Thomas Peter/Reuters
Derek Yach, president of the Founda- cent share of Baihang. The National Int-
“The National Health Commission is while Golden Tobacco and ITC also Other countries, including South tion for a Smoke-Free World, a non- ernet Finance Association, an industry
planning to legislate to regulate e-ciga- recorded gains. Korea and chain-smoking Indonesia, profit organisation. body, holds the remaining 36 per cent.
rettes,” said health official Mao Qunan E-cigarettes heat a liquid — which can where 65 per cent of men smoke, could “For India it’s a relative distraction By April this year, more than 700
at a July briefing. contain nicotine and comes in a variety prove promising markets as smokers from the bigger problem of those who financial institutions and companies,
China, which has a domestic e-ciga- of flavours — that creates vapour and is switch to vaping. use tobacco products.” mostly online microlenders, had con-
rette industry, banned the sale of e-ciga- inhaled. They have been promoted as a Juul products started selling in Indo- Additional reporting by Xinning Liu in Bei- nected to Baihang’s credit database,
rettes to under-18s in August last year. safer alternative to smoking in coun- nesia in July, after the company part- jing, John Reed in Bangkok, Stefania Palma according to state media.
Shenzhen, where 85 per cent of e-ciga- tries such as the UK. nered with a subsidiary of retailer Era- in Singapore and Leo Lewis in Tokyo See Lex

Legal Notices

Contracts & Tenders

Friday 20 September 2019 ★ FINANCIAL TIMES 15


Technology. Cross-border trade

Cisco chief rejects fears of digital cold war

joint interview with Nobuyuki Hirano, clarified there was no formal executive
Robbins is hopeful that US the chief executive of MUFG, the Japa- order to cut Chinese supply chains. Nev-
and China will bow to reality nese bank, at the US Chamber of Com- ertheless, technology executives say
merce as it presided over a gathering of they have intensified their planning for
of tightly linked supply chains US and Japanese executives. Both were what might happen if there was.
optimistic about the prospects for an Thishasledexpertstowarnofanincip-
easing of trade tensions between the US ient “technology cold war” between the
WASHINGTON and Japan, with an agreement possibly countries, which could lead to the world
ready to be announced next week at the being split between two completely dif-
Chuck Robbins, the chief executive of UN General Assembly. ferent digital communication systems.
Cisco, has dismissed fears of a break- The proposed pact would allow more Mr Robbins’ comments reflect an
down in the technology sector’s global US farm goods to be exported to Japan, acknowledgment that technology sup-
supply chains, despite pressure from in exchange for a reduction of some ply chains are already so integrated it is
the Trump administration on US com- industrial tariffs on the US side. It would difficult to break them apart.
panies to cut ties with China. also include a separate agreement on Earlier this year, Cisco announced it
Speaking to the Financial Times, the the digital economy, but would fall short was cutting back how much manufac-
telecoms equipment company boss said of a comprehensive deal covering other turing it does in China in response to
that the technology of the future would sectors, which the US has said would be escalating tariffs. But since then, its
be built by American, European and accomplished in a second stage. head of supply chain has said the coun-
Chinese providers — rejecting the idea With US and Japanese officials still try would remain an important manu-
of a separation between the western and haggling over final details, Mr Hirano facturing base for years to come.
Chinese digital economies. He was also warned that the US would have to pro- “Our supply chain spans 13 countries,”
optimistic about the prospects for an vide reassurances that Japanese cars Mr Robbins told the FT. “Our teams are
agreement between Washington and and car parts would not be hit by new constantly adapting that based on eco-
Beijing to ease trade tensions. tariffs on national security grounds later nomics, risk, components, trade laws.”
“I actually think that both of our gov- this year. He also had a warning for countries
ernments understand the economic Mr Robbins’ confidence that the US suchastheUK,whichisplanningtoallow
value of getting something done, and I and China can avoid a confrontation on Huawei to build parts of its 5G broad-
think they also understand the future technology comes despite the Trump band infrastructure, despite claims
economic value of not Balkanising dig- administration’s growing suspicion of from Washington that its equipment
ital infrastructure,” Mr Robbins said. US companies doing business with Chi- could be used by Beijing for spying.
His remarks came as deputy-level nese partners. Washington has banned The UK government has said it was
Chinese negotiators were preparing to US companies from selling their prod- planning to inspect Huawei’s products
meet their US counterparts in Washing- ucts to Huawei, a Chinese telecoms before allowing them to be installed in
ton yesterday to lay the groundwork for equipment maker, expanded export British networks, but Mr Robbins,
crucial high-level talks in early October. controls for US companies selling to whose company competes with Huawei
Mr Robbins said he supported the idea China and heightened scrutiny of Chi- in selling some 5G equipment, said this
of an interim deal in which China would nese investment into the US. would be almost impossible to achieve.
increase its purchases of farm goods in Last month, President Donald Trump “This technology that we all build has
exchange for the freezing of US tariffs, stepped up his rhetoric, tweeting: “Our millions and millions of lines of code. It
or possibly the rollback of some, even if great American companies are hereby would be in my view impossible for any-
a comprehensive agreement remained ordered to immediately start looking one to believe that you can inspect code
elusive. “In any negotiation or disagree- for an alternative to China, including and then have a level of comfort.”
ment, making small progress can some- bringing your companies HOME and He added: “I’m not suggesting that the
times lead to bigger progress,” he said. making your products in the USA.” UK can’t have experts who can do it. I
The executive made the remarks in a Members of the administration later Cisco’s Chuck Robbins supports the idea of an interim trade deal to help the US and China mend relations — Thor Swift just think it’s a tall order.”


Atlantia chief’s €30m parting package

DONATO PAOLO MANCINI — LONDON per cent of his base pay, which was about would be entitled to the Abertis-related
€1.3m in 2018, according to the remu- option because he left as a “good leaver”
Giovanni Castellucci, the Atlantia neration report. and this formed part of his contract with
chief executive who stepped down If the company’s share price the company.
this week in the wake of the climbs to €22.45 after October 2021 and It noted: “The €30m amount
Genoa bridge disaster, could leave sustains that price, Mr Castellucci calculated by the FT doesn’t correspond
the company with a package worth is entitled to €7.8m in options, but it to the current state of affairs. Today,
more than €30m, according to a could rise to about €16m, where it the [scheme] is out of money, or worth
Financial Times analysis of company would be capped, according to FT zero, based on current stock values. The
documents. calculations. FT’s calculations seem to refer to the
At the current share price of max cap.”
Atlantia, which operated the bridge Mr Castellucci has overseen Atlantia’s
through its subsidiary Autostrade per expansion into one of the most impor-
l’Italia, said on Tuesday that Mr Castel-
The Genoa bridge collapse tant infrastructure participants.
lucci would receive at least €13m in last year with the loss of 43 But the Genoa bridge collapse
severance pay. in August last year, which cost the
But he could eventually end up with
lives greatly increased the lives of 43 people, greatly increased the
more than double that. pressure on Castellucci pressure on him.
This is because of a bonus tied He announced his resignation on
to the company’s purchase of Spanish €21.51 at yesterday’s close, the plan, Tuesday amid the emergence of fresh
infrastructure group Abertis, which which has an exercise period of three evidence of misconduct at two Atlantia
closed last year. This bonus could rise to years with some limitations, would not subsidiaries, Autostrade and SPEA
€16m, according to FT calculations pay out anything. Engineering, in the wake of the August
based on the group’s latest remunera- Mr Castellucci has other benefits on 14 disaster.
tion report. top of the announced €13m in sever- The Five Star Movement, still part
On top of this, Mr Castellucci leaves ance, which include insurance, housing, of the governing coalition, has repeat-
with €7m worth of shares. He also has a car and legal assistance. edly called for his resignation and for
other benefits. Atlantia declined to say how much the revocation of the multibillion
The bonus scheme linked to the Aber- the accessory elements of Mr Castel- licences subsidiary Autostrade has for
tis deal entitles the former chief execu-
tive to an equivalent in options of 600
lucci’s severance package were worth,
but confirmed that Mr Castellucci
running half of Italy’s 6,000km-long toll
road network.
For Sale

US bill bars federal purchases of China drones

KIRAN STACEY — WASHINGTON Earlier this year, the Trump adminis- possible sanctions, including Hikvision,
tration banned US companies from which makes surveillance equipment.
A bipartisan group of US senators has
selling their products to the China Officials are reportedly looking at tak-
launched a bill that would stop the fed-
telecoms equipment maker Huawei, ing action against Dahua, Megvii, iFly-
eral government buying drones from
and has been urging foreign allies not tek and Meiya Pico.
China, a move that could cause prob-
to let the company help build their A ban on drones would be problem-
lems for large parts of the US govern-
5G networks. atic for some agencies, as well as
Other China groups are bracing for for emergency services, which would
If passed, the legislation would stop the be barred from using federal money
purchase of drones made or assembled to buy China drones under the proposed
in China, while phasing out the use of legislation.
ones that have been purchased. Mark Bathrick, director of the Office
The move has implications for parts of Aviation Services at the interior
of the federal government, such as the department, said such a move could kill
Department of the Interior, which uses off its drone programme.
hundreds of China-made drones for “We have 674 drones, and they are
mapping and land management. all either made in China or contain
Rick Scott, a Republican from Florida Chinese components. This would result
who is one of the bill’s chief sponsors, in our entire fleet being banned,” Mr
said in a statement: “For far too long, we Bathrick said.
have turned a blind eye to China and Officials say others in the administra-
allowed their technology into some of tion are more sympathetic to the
the most critical operations of the US senators’ cause, however, with national
government. This has to stop.” security chiefs warning that the data
The bill’s co-sponsors include Repub- from drones could be secretly sent back
licans Marco Rubio of Florida, Tom to Beijing.
Cotton from Arkansas and Josh
‘We have allowed their Earlier this year, the Department of
Hawley of Missouri, as well as Demo- technology into some of Homeland Security said it had “strong Business for Sale, Business Opportunities,
Business Services,
crats Chris Murphy and Richard concerns about any technology product
Blumenthal of Connecticut.
the most critical operations that takes US data into the territory of
Business Wanted, Franchises
Runs Daily
It is the latest attempt by politicians in of the government’ an authoritarian state that permits its .............................................................................................................................
Classified Business Advertising
Washington to limit the access of China intelligence services to have unfettered
technology companies to the US market
Rick Scott, Republican senator access to that data or otherwise abuses
UK: +44 20 7873 4000 | Email:
on national security grounds. that access”.
16 ★ FINANCIAL TIMES Friday 20 September 2019



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 $

-1.07% -0.166% -0.113%

No change
0.39% 0.48% 0.34% 0.58% 0.64% 0.38% 0.20% 0.080% 2.22% 0.09%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
Aug 20 - - Index All World Aug 20 - Sep 19 Index All World Aug 20 - Sep 19 Index All World Aug 20 - Sep 19 Index All World Aug 20 - Sep 19 Index All World Aug 20 - Sep 19 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
3,018.53 16,880.66 12,457.70 22,044.45
7,356.42 2,080.35

2,900.51 16,213.31 11,802.85 20,677.22 1,964.65

Day 0.39% Month 4.49% Year 3.93% Day 0.48% Month 3.55% Year 4.54% Day 0.58% Month 2.40% Year 0.85% Day 0.55% Month 6.34% Year 1.95% Day 0.38% Month 7.96% Year -5.88% Day 0.46% Month 7.95% Year -9.90%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
43,097.20 1,539.38
8,216.81 9,136.00
26,270.04 26,468.95 3,158.80
7,948.56 1,478.69 3,122.57
39,700.05 8,701.50
Day 0.48% Month 4.08% Year 3.29% Day 0.06% Month 8.98% Year -13.07% Day 0.64% Month 4.59% Year 3.60% Day NaN% Month NaN% Year NaN% Day -1.07% Month 2.93% Year -2.20% Day -0.25% Month 1.51% Year 0.73%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
27,240.28 5,659.08 22,128.24 2,999.28
101,201.90 20,847.07 37,402.49
25,962.44 5,344.64 36,093.47
Day 0.34% Month 5.24% Year 3.79% Day 0.56% Month 5.81% Year 34.65% Day 0.68% Month 6.76% Year 5.51% Day 0.82% Month 8.97% Year 4.32% Day 0.46% Month 6.21% Year 11.09% Day -1.29% Month -3.26% Year -3.21%

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 30030.73 30071.10 Cyprus
CSE M&P Gen 68.46 68.68 Italy FTSE Italia All-Share 24089.12 23899.57 Philippines Manila Comp 7911.32 7915.29 Taiwan Weighted Pr 10894.70 10929.45 Cross-Border DJ Global Titans ($) 337.39 335.63
Australia All Ordinaries 6825.20 6791.20 Czech Republic
PX 1053.36 1050.02 FTSE Italia Mid Cap 37965.61 37743.55 Poland Wig 58053.03 58297.28 Thailand Bangkok SET 1640.66 1654.14 Euro Stoxx 50 (Eur) 3552.65 3528.04
S&P/ASX 200 6717.50 6681.60 OMXC Copenahgen 20
Denmark 1036.41 1031.74 FTSE MIB 22128.24 21947.70 Portugal PSI 20 5039.92 4991.74 Turkey BIST 100 116840.94 116315.98 Euronext 100 ID 1094.16 1088.56
S&P/ASX 200 Res 4777.30 4795.00 Egypt
EGX 30 14742.07 14745.10 Japan 2nd Section 6508.72 6491.04 PSI General 3234.45 3210.35 UAE Abu Dhabi General Index 5124.72 5156.06 FTSE 4Good Global ($) 7263.71 7242.38
Austria ATX 3069.00 3039.89 Estonia
OMX Tallinn 1232.17 1233.77 Nikkei 225 22044.45 21960.71 Romania BET Index 9358.82 9313.44 UK FT 30 3060.20 3041.90 FTSE All World ($) 347.85 347.15
Belgium BEL 20 3705.62 3680.08 Finland
OMX Helsinki General 9465.58 9415.41 S&P Topix 150 1340.96 1335.71 Russia Micex Index 2794.77 2818.60 FTSE 100 7356.42 7314.05 FTSE E300 1539.38 1529.66
BEL Mid 8043.27 8019.02 France
CAC 40 5659.08 5620.64 Topix 1615.66 1606.62 RTX 1378.06 1382.16 FTSE 4Good UK 6757.24 6717.82 FTSE Eurotop 100 2993.67 2973.24
Brazil Bovespa 105117.33 104531.93 SBF 120 4464.70 4434.36 Jordan Amman SE 1817.11 1816.13 Saudi-Arabia TADAWUL All Share Index 7926.82 7821.23 FTSE All Share 4044.88 4024.85 FTSE Global 100 ($) 1847.10 1840.43
Canada S&P/TSX 60 1010.58 1005.77 Germany M-DAX 26092.42 25947.86 Kenya NSE 20 2431.64 2431.36 Singapore FTSE Straits Times 3158.80 3166.84 FTSE techMARK 100 5398.71 5380.98 FTSE Gold Min ($) 1824.74 1839.04
S&P/TSX Comp 16880.66 16800.29 TecDAX 2893.96 2895.31 Kuwait KSX Market Index 6633.44 6603.51 Slovakia SAX 336.52 336.05 USA DJ Composite 9027.46 9009.24 FTSE Latibex Top (Eur) 4440.00 4432.20
S&P/TSX Div Met & Min 694.31 723.46 XETRA Dax 12457.70 12389.62 Latvia OMX Riga 1027.68 1034.52 Slovenia SBI TOP 861.90 859.42 DJ Industrial 27240.28 27147.08 FTSE Multinationals ($) 2065.90 2065.59
Chile S&P/CLX IGPA Gen 25502.12 25479.55 Greece Athens Gen 873.93 872.58 Lithuania OMX Vilnius 689.12 691.57 South Africa FTSE/JSE All Share 56123.83 56220.41 DJ Transport 10555.48 10576.34 FTSE World ($) 619.90 618.39
China FTSE A200 10495.12 10466.55 FTSE/ASE 20 2167.71 2160.23 Luxembourg LuxX 1340.00 1341.00 FTSE/JSE Res 20 43758.63 43812.74 DJ Utilities 858.84 856.20 FTSEurofirst 100 (Eur) 4242.08 4212.39
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 26468.95 26754.12 Malaysia FTSE Bursa KLCI 1596.28 1599.49 FTSE/JSE Top 40 50077.78 50134.23 Nasdaq 100 7928.00 7888.56 FTSEurofirst 80 (Eur) 4886.84 4855.85
Shanghai A 3142.12 3127.84 HS China Enterprise 10385.35 10478.50 Mexico IPC 43097.20 43070.34 South Korea Kospi 2080.35 2070.73 Nasdaq Cmp 8216.81 8177.39 MSCI ACWI Fr ($) 526.31 526.32
Shanghai B 272.39 271.63 HSCC Red Chip 4263.82 4308.58 Morocco MASI 11553.51 11602.27 Kospi 200 274.92 273.06 NYSE Comp 13168.82 13119.31 MSCI All World ($) 2201.02 2201.77
Shanghai Comp 2999.28 2985.66 Hungary Bux 40922.30 40930.24 Netherlands AEX 579.08 576.68 Spain IBEX 35 9136.00 9031.70 S&P 500 3018.53 3006.73 MSCI Europe (Eur) 1606.10 1605.27
Shenzhen A 1749.60 1731.77 India BSE Sensex 36093.47 36563.88 AEX All Share 841.19 837.41 Sri Lanka CSE All Share 5811.04 5807.51 Wilshire 5000 30879.40 30762.58 MSCI Pacific ($) 2700.16 2712.20
Shenzhen B 946.56 944.03 Nifty 500 8766.45 8877.70 New Zealand NZX 50 10801.05 10774.85 Sweden OMX Stockholm 30 1664.64 1655.11 Venezuela IBC 50330.50 53618.39 S&P Euro (Eur) 1617.20 1607.26
Colombia COLCAP 1597.36 1597.94 Indonesia Jakarta Comp 6244.47 6276.63 Nigeria SE All Share 27681.61 27407.04 OMX Stockholm AS 630.41 627.73 Vietnam VNI 997.10 995.15 S&P Europe 350 (Eur) 1582.23 1571.88
Croatia CROBEX 1897.16 1893.77 Ireland ISEQ Overall 6105.33 6071.86 Norway Oslo All Share 1005.28 1004.96 Switzerland SMI Index 10064.46 10018.84 S&P Global 1200 ($) 2457.63 2446.72
Israel Tel Aviv 125 1522.94 1522.94 Pakistan KSE 100 32184.03 31555.47 Stoxx 50 (Eur) 3220.91 3197.11
(c) Closed. (u) Unavaliable. † Correction. ♥ Subject to official recalculation. For more index coverage please see A fuller version of this table is available on the research data archive.


AMERICA LONDON EURO MARKETS TOKYO Sep 19 %Chg %Chg Sep 19 %Chg %Chg Sep 19 %Chg %Chg Sep 19 %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
Microsoft 27.3 141.30 2.78 Bca Marketplace 168.5 235.40 -6.60 Total 265.5 48.16 0.15 Softbank . 607.8 4616.00 17.00 Sse 1236.00 6.0 15.6 Sanne 593.00 9.8 1.9 Charles Taylor 325.50 43.4 42.1 Electricity 7261.64 5.0 10.2
Apple 22.3 222.16 -0.61 Astrazeneca 161.5 7127.00 180.00 Eni 257.4 14.41 0.09 Recruit Hldgs Co Ltd 503.0 3422.00 103.00 Itv 126.45 5.2 1.2 Cairn Energy 202.60 9.0 32.6 Saga 52.80 18.3 -48.6 Index - Technology Hardware & Equipment 1585.33 3.5 69.8 18.7 1829.17 11.71 Hsbc Holdings 159.9 616.00 6.40 Intesa Sanpaolo 245.0 2.16 0.04 Fast Retailing Co., 438.5 65220.00 -40.00 Aveva 3778.00 5.2 57.5 Ig Holdings 638.00 7.8 10.8 Biffa 243.00 13.3 23.9 Fixed Line Telecommunication 2088.99 3.1 -
Total System Services 10.1 133.27 -1.29 Bp 157.9 516.90 1.80 Royal Dutch Shella 219.7 26.46 0.08 Toyota Motor 438.3 7364.00 -56.00 Royal Bank Of Scotland 208.00 5.1 -4.0 Britvic 965.00 7.3 19.4 Vitec (the) 1280.00 11.3 8.0 Software & Computer Services 1944.38 2.9 12.0
Facebook 9.8 190.32 2.18 Rio Tinto 150.1 4249.50 -14.00 Asml Holding 214.0 228.00 1.95 Sony 389.4 6375.00 -22.00 Micro Focus Int 1179.00 5.1 -14.5 Tullow Oil 232.80 6.9 27.0 Tyman 240.00 9.1 102.5 Oil & Gas Producers 8649.03 2.7 2.6
Netflix 9.6 285.72 -5.85 Glaxosmithkline 122.4 1657.80 10.80 Sap Se O.n. 206.4 109.10 0.60 Mitsubishi Ufj Fin,. 364.9 565.10 -0.90 Land Securities 840.00 4.2 5.1 Equiniti 223.40 6.9 5.6 Soco Int 67.00 8.9 -7.7 Oil Equipment & Services 9190.07 2.5 -
Advanced Micro Devices 6.1 30.68 0.26 Royal Dutch Shell 116.8 2343.00 5.50 Bnp Paribas Act.a 199.9 44.75 0.95 Tokyo Electron 216.4 20780.00 5.00 Lloyds Banking 54.06 4.1 6.0 Provident Fin 441.50 6.4 -24.3 Lsl Property Services 230.00 8.0 2.7 Automobiles & Parts 4766.51 2.3 -
Alphabet 5.9 1238.52 6.11 Diageo 110.2 3263.50 -6.00 Unicredit 194.9 11.15 0.25 Sumitomo Mitsui Fin,. 206.9 3786.00 5.00 Bt 177.32 3.8 -26.1 Quilter 142.90 6.1 20.8 Rdi Reit P.l.c. 115.80 6.2 -83.9 Real Estate Investment Trusts 2928.59 2.2 11.6
Adobe 5.1 280.98 1.26 Royal Dutch Shell 102.0 2347.50 8.50 Sanofi 189.1 81.42 1.20 Mizuho Fin,. 202.4 168.50 0.40 Nmc Health 2917.00 3.6 7.9 Woodford Patient Capital Trust 47.85 5.7 -43.1 Aa 64.25 6.2 -12.7 Gas Water & Multiutilities 4690.54 2.0 2.1
Costco Wholesale 5.0 286.87 -5.56 Unilever 95.4 4920.00 -9.00 Volkswagen Ag Vzo O.n. 184.2 158.92 2.98 Mitsubishi 183.2 2783.00 -9.50 Astrazeneca 7127.00 3.2 20.7 Telecom Plus 1224.00 5.5 -14.0 Petra Diamonds 8.51 6.0 -78.8 Pharmaceuticals & Biotech. 16690.78 1.6 16.2
British Land 558.40 2.9 5.4 St.modwen Properties 438.00 5.4 8.1 Enquest 20.14 6.0 -8.2 General Financial 12064.41 1.5 29.6
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
Royal Dutch Shell 2347.50 2.8 -0.7 Euromoney Institutional Investor 1486.00 5.2 24.2 Cmc Markets 105.80 5.8 -3.3 Real Estate & Investment Servic 2550.76 1.4 8.8
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Alexion Pharmaceuticals 105.99 3.01 2.92 Ig Holdings 638.00 59.40 10.27 B. Sabadell 0.89 0.04 4.21 Chugai Pharmaceutical Co., 8020.00 300.00 3.89 Evraz 490.70 -7.4 2.4 Sirius Minerals 4.42 -59.8 -79.2 Pollen Street Secured Lending 816.00 - - Industrial Metals 4561.67 -7.3 1.5
Cigna 164.60 4.16 2.59 Sanne 593.00 31.00 5.52 Caixabank 2.39 0.09 3.82 Sony Fin Holdings . 2388.00 78.00 3.38 Smurfit Kappa 2482.00 -5.9 17.2 Pets At Home 219.40 -8.4 88.5 Nostrum Oil & Gas 14.20 -23.2 -86.5 Chemicals 12981.64 -3.4 -0.7
Occidental Petroleum 45.67 1.05 2.34 Plus500 Ltd 766.20 36.20 4.96 Natixis 3.86 0.14 3.65 Kirin Holdings , 2281.00 71.00 3.21 Just Eat 665.00 -5.8 13.2 Funding Circle Holdings 98.30 -7.8 -69.7 Nanoco 10.80 -13.6 -71.6 Tobacco 33294.32 -3.0 10.9
Kroger Co (the) 25.81 0.59 2.32 Aston Martin Lagonda Global Holdings 579.60 23.60 4.24 Merck Kgaa O.n. 102.35 3.23 3.26 Recruit Hldgs Co Ltd 3422.00 103.00 3.10 Fresnillo 716.60 -4.4 -19.3 Ferrexpo 186.30 -7.3 -2.0 Alfa Fin Software Holdings 78.60 -12.5 -34.3 Beverages 25939.81 -2.9 16.6
Mckesson 146.84 3.12 2.17 Int Consolidated Airlines S.a. 466.90 16.90 3.76 Iliad 80.24 2.52 3.24 Toray Industries,. 837.70 23.40 2.87 British American Tobacco 2961.50 -3.6 19.5 Riverstone Energy 663.00 -6.8 -39.3 Thomas Cook 4.47 -12.4 -86.6 General Industrials 5926.13 -2.8 17.5
Diageo 3263.50 -3.5 18.2 Ted Baker 1000.00 -4.9 -36.3 Carpetright 10.80 -12.2 -41.6 Forestry & Paper 18276.55 -2.1 -0.6
Downs Downs Downs Downs
Kingfisher 194.90 -3.5 -6.8 Victrex 2138.00 -4.4 -4.1 Jtc 366.00 -9.0 -6.2 General Retailers 2128.71 -2.0 15.4
Seagate Technology 53.63 -3.12 -5.50 Sophos 405.80 -25.70 -5.96 Seadrill 2.51 -0.16 -5.97 Sumco 1435.00 -44.00 -2.97
Ocado 1295.00 -3.2 59.8 Elementis 150.50 -4.3 -17.8 Pendragon 9.61 -7.9 -57.1 Personal Goods 42028.77 -1.7 19.6
Darden Restaurants 122.44 -4.69 -3.69 Next 5820.00 -350.00 -5.67 Arcelormittal Sa 14.07 -0.71 -4.78 Dainippon Sumitomo Pharma Co., 1851.00 -56.00 -2.94
Next 5820.00 -3.0 39.3 Centamin 124.40 -4.3 8.4 Mcbride 49.50 -7.5 -61.1 Industrial Engineering 12341.73 -1.4 17.4
Noble Energy 23.50 -0.75 -3.07 Dechra Pharmaceuticals 2792.00 -150.00 -5.10 Lufthansa Ag Vna O.n. 14.00 -0.43 -2.98 Rakuten . 1016.00 -27.00 -2.59
Ferguson 6050.00 -2.7 21.1 Mediclinic Int 349.60 -4.0 10.7 Stobart Ld 123.00 -7.0 -20.0 Construction & Materials 6265.57 -1.1 26.3
Newell Brands 17.91 -0.51 -2.74 Dunelm 839.50 -36.50 -4.17 Yara Int 39.75 -0.70 -1.72 Showa Denko K.k. 2992.00 -78.00 -2.54
Smiths 1640.50 -2.6 18.7 Vivo Energy 125.40 -4.0 -3.5 Chesnara 273.00 -6.8 -21.4 Life Insurance 7089.53 -0.9 5.2
Gap (the) 17.49 -0.46 -2.54 Ocado 1295.00 -49.00 -3.65 Dsm Kon 107.40 -1.80 -1.65 Minebea Co., 1838.00 -42.00 -2.23
Anglo American 1883.40 -2.6 10.1 Drax 285.60 -4.0 -21.3 Spire Healthcare 115.00 -6.8 4.0 Mining 18521.68 -0.9 8.7
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.

Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Sep 19 Currency Mid Change Mid Change Mid Change Sep 19 Currency Mid Change Mid Change Mid Change Sep 19 Currency Mid Change Mid Change Mid Change Sep 19 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 56.6275 0.1050 62.6099 0.0988 70.7251 0.1655 Indonesia Indonesian Rupiah 14060.0000 - 15545.3785 -4.3027 17560.3109 8.5375 Poland Polish Zloty 3.9274 0.0022 4.3423 0.0012 4.9051 0.0051 ..Three Month 0.8011 -0.0004 0.8850 -0.0007 - -
Australia Australian Dollar 1.4705 0.0088 1.6258 0.0093 1.8366 0.0119 Israel Israeli Shekel 3.5128 -0.0159 3.8839 -0.0186 4.3873 -0.0177 Romania Romanian Leu 4.2947 0.0101 4.7485 0.0098 5.3639 0.0152 ..One Year 0.8021 -0.0004 0.8840 -0.0007 - -
Bahrain Bahrainin Dinar 0.3770 - 0.4168 -0.0001 0.4709 0.0002 Japan Japanese Yen 108.0450 -0.1800 119.4593 -0.2321 134.9432 -0.1590 Russia Russian Ruble 63.8688 -0.3063 70.6161 -0.3583 79.7691 -0.3435 United States United States Dollar - - 1.1056 -0.0003 1.2490 0.0006
Bolivia Bolivian Boliviano 6.9100 - 7.6400 -0.0021 8.6303 0.0042 ..One Month 108.0447 -0.1805 119.4593 -0.2321 134.9431 -0.1593 Saudi Arabia Saudi Riyal 3.7509 -0.0002 4.1472 -0.0014 4.6847 0.0020 ..One Month - - 1.1054 -0.1427 1.2491 0.0006
Brazil Brazilian Real 4.1390 0.0371 4.5762 0.0398 5.1694 0.0488 ..Three Month 108.0443 -0.1814 119.4594 -0.2320 134.9428 -0.1598 Singapore Singapore Dollar 1.3783 0.0042 1.5239 0.0042 1.7214 0.0061 ..Three Month - - 1.1049 -0.1427 1.2494 0.0006
Canada Canadian Dollar 1.3272 0.0007 1.4674 0.0003 1.6575 0.0016 ..One Year 108.0424 -0.1851 119.4594 -0.2318 134.9431 -0.1608 South Africa South African Rand 14.6825 0.0450 16.2336 0.0453 18.3378 0.0651 ..One Year - - 1.1028 -0.1427 1.2504 0.0006
Chile Chilean Peso 716.5750 -0.1400 792.2771 -0.3738 894.9693 0.2610 Kenya Kenyan Shilling 103.8500 -0.1500 114.8212 -0.1976 129.7039 -0.1241 South Korea South Korean Won 1193.5500 2.1500 1319.6418 2.0128 1490.6891 3.4096 Venezuela Venezuelan Bolivar Fuerte - - - - - -
China Chinese Yuan 7.0987 0.0108 7.8486 0.0098 8.8659 0.0178 Kuwait Kuwaiti Dinar 0.3038 -0.0002 0.3359 -0.0003 0.3794 -0.0001 Sweden Swedish Krona 9.6920 -0.0097 10.7158 -0.0136 12.1048 -0.0062 Vietnam Vietnamese Dong 23212.0000 0.5000 25664.2551 -6.5223 28990.8012 14.7847
Colombia Colombian Peso 3377.3100 -4.0500 3734.1048 -5.5116 4218.1065 -3.0019 Malaysia Malaysian Ringgit 4.1915 0.0075 4.6343 0.0070 5.2350 0.0119 Switzerland Swiss Franc 0.9928 -0.0026 1.0977 -0.0031 1.2400 -0.0026 European Union Euro 0.9045 0.0003 - - 1.1296 0.0009
Costa Rica Costa Rican Colon 578.4150 0.6650 639.5213 0.5586 722.4137 1.1818 Mexico Mexican Peso 19.3989 0.0373 21.4483 0.0353 24.2283 0.0583 Taiwan New Taiwan Dollar 30.9985 0.0190 34.2733 0.0115 38.7157 0.0426 ..One Month 0.9042 0.0003 - - 1.1295 0.0009
Czech Republic Czech Koruna 23.4179 -0.0014 25.8919 -0.0087 29.2479 0.0126 New Zealand New Zealand Dollar 1.5855 0.0059 1.7530 0.0060 1.9803 0.0083 Thailand Thai Baht 30.5275 -0.0050 33.7526 -0.0149 38.1274 0.0123 ..Three Month 0.9037 0.0002 - - 1.1293 0.0009
Denmark Danish Krone 6.7537 0.0015 7.4671 -0.0005 8.4350 0.0059 Nigeria Nigerian Naira 362.2500 - 400.5197 -0.1107 452.4336 0.2203 Tunisia Tunisian Dinar 2.8599 0.0010 3.1620 0.0002 3.5718 0.0030 ..One Year 0.9016 0.0002 - - 1.1284 0.0009
Egypt Egyptian Pound 16.3080 -0.0190 18.0308 -0.0260 20.3679 -0.0138 Norway Norwegian Krone 8.9671 0.0383 9.9145 0.0397 11.1996 0.0533 Turkey Turkish Lira 5.7040 0.0354 6.3066 0.0374 7.1240 0.0476
Hong Kong Hong Kong Dollar 7.8322 0.0040 8.6596 0.0020 9.7821 0.0098 Pakistan Pakistani Rupee 156.1000 -0.1500 172.5911 -0.2136 194.9617 -0.0923 United Arab Emirates UAE Dirham 3.6732 - 4.0612 -0.0011 4.5876 0.0022
Hungary Hungarian Forint 300.8909 -0.0675 332.6783 -0.1667 375.7989 0.0986 Peru Peruvian Nuevo Sol 3.3539 0.0116 3.7082 0.0118 4.1889 0.0165 United Kingdom Pound Sterling 0.8007 -0.0004 0.8853 -0.0007 - -
India Indian Rupee 71.3250 0.0831 78.8601 0.0701 89.0816 0.1471 Philippines Philippine Peso 52.1900 -0.0150 57.7036 -0.0325 65.1829 0.0130 ..One Month 0.8008 -0.0004 0.8852 -0.0007 - -
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
Produced in conjunction with the Institute and Faculty of Actuaries Sep 19 Sep 18 Sep 17 Sep 16 Sep 13 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 3060.20 3041.90 3045.70 3045.70 3062.90 0.00 3135.80 2704.70 Leisure Goods 45.03 Health Care 14.59 Life Insurance 8.94 FTSE 100 Price Change FTSE 100 Price Change
Sep 19 chge% Index Sep 18 Sep 17 ago yield% Cover ratio adj Return FT 30 Div Yield - - - - - 0.00 3.93 2.74 Tech Hardware & Eq 41.85 Consumer Goods 14.45 Financials 8.27 3I Group PLC 1121.5 8.00 Land Securities Group PLC 840.00 -1.00
FTSE 100 (100) 7356.42 0.58 6475.18 7314.05 7320.40 7367.32 4.47 1.47 15.16 266.69 6750.08 P/E Ratio net - - - - - 0.00 19.44 14.26 Financial Services 28.89 Food Producers 14.24 Mobile Telecomms 7.57 Admiral Group PLC 2145 16.00 Legal & General Group PLC 246.70 2.60
FTSE 250 (250) 20089.46 0.17 17682.92 20054.43 20040.54 20551.26 3.12 1.52 21.09 459.35 15538.27 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Construct & Material 27.77 Pharmace & Biotech 13.40 Electricity 6.56 Anglo American PLC 1883.4 -29.00 Lloyds Banking Group PLC 54.06 1.07
FTSE 250 ex Inv Co (191) 21186.40 0.15 18648.45 21154.85 21132.37 21952.67 3.30 1.42 21.27 512.86 16756.03 FT 30 hourly changes Electronic & Elec Eq 24.46 Equity Invest Instr 12.73 FTSE SmallCap Index 6.47 Antofagasta PLC 923.20 -10.20 London Stock Exchange Group PLC 7246 -10.00
FTSE 350 (350) 4102.00 0.51 3610.62 4081.11 4083.60 4122.49 4.25 1.48 15.91 139.58 7520.27 8 9 10 11 12 13 14 15 16 High Low Health Care Eq & Srv 23.62 Mining 11.97 Nonlife Insurance 5.72 Ashtead Group PLC 2297 32.00 Marks And Spencer Group PLC 198.85 -3.05
FTSE 350 ex Investment Trusts (290) 4052.48 0.52 3567.03 4031.57 4033.94 4078.30 4.33 1.46 15.83 140.63 3832.62 3041.9 3052.1 3049.3 2905.1 3050 3054.2 3054.9 3052.3 3056.8 3062 3031.2 Food & Drug Retailer 23.25 Household Goods & Ho 11.97 Real Est Invest & Se 4.61 Associated British Foods PLC 2286 -27.00 Melrose Industries PLC 207.60 3.30
FTSE 350 Higher Yield (109) 3560.02 0.53 3133.56 3541.28 3542.50 3710.28 6.09 1.33 12.37 165.47 7057.78 FT30 constituents and recent additions/deletions can be found at Industrials 21.36 Industrial Transport 11.78 Forestry & Paper 3.58 Astrazeneca PLC 7127 180.00 Micro Focus International PLC 1179 5.80
FTSE 350 Lower Yield (241) 4313.63 0.49 3796.89 4292.42 4296.20 4162.26 2.35 1.89 22.54 90.39 4994.71 Support Services 21.09 Tobacco 11.09 Chemicals 3.30 Auto Trader Group PLC 518.00 -6.20 Mondi PLC 1623.5 9.50
FTSE SmallCap (276) 5507.28 0.10 4847.55 5501.63 5505.70 5807.69 3.74 0.89 29.89 136.51 8465.53 Personal Goods 19.58 Technology 11.09 Utilities 1.41
FTSE SmallCap ex Inv Co (153) 4439.37 0.48 3907.58 4417.96 4434.12 4948.84 4.21 1.21 19.56 114.26 7183.38 FX: EFFECTIVE INDICES Aerospace & Defense 18.68 NON FINANCIALS Index 11.02 Banks 0.22
Aveva Group PLC 3778 54.00 Morrison (Wm) Supermarkets PLC 198.55 -1.55
Aviva PLC 388.60 0.60 National Grid PLC 851.20 4.60
FTSE All-Share (626) 4044.88 0.50 3560.34 4024.85 4027.31 4072.14 4.23 1.46 16.17 136.30 7492.19 Industrial Eng 18.66 Industrial Metals & 10.93 Gas Water & Multi -0.05
Sep 18 Sep 17 Mnth Ago Sep 19 Sep 18 Mnth Ago Bae Systems PLC 585.20 -3.00 Next PLC 5820 -350.00
FTSE All-Share ex Inv Co (443) 3968.33 0.52 3492.96 3947.89 3950.44 4002.01 4.32 1.46 15.89 137.00 3812.57 Media 17.29 Basic Materials 10.72 Oil & Gas Producers -0.19 Barclays PLC 150.48 2.48 Nmc Health PLC 2917 -4.00
FTSE All-Share ex Multinationals (558) 1171.76 0.45 854.84 1166.52 1168.13 1220.23 3.91 1.42 18.01 36.16 2277.04 Australia - - - Sweden - - - General Retailers 17.01 FTSE All{HY-}Share Index 10.29 Oil & Gas -0.43 Barratt Developments PLC 631.60 -0.60 Ocado Group PLC 1295 -49.00
FTSE Fledgling (102) 9264.85 -0.03 8155.00 9267.40 9257.07 11062.23 5.42 -0.34 -53.71 192.94 18445.06 Canada - - - Switzerland - - - Beverages 16.65 Software & Comp Serv 9.55 Telecommunications -3.44 Berkeley Group Holdings (The) PLC 4132 33.00 Pearson PLC 862.80 1.40
FTSE Fledgling ex Inv Co (46) 10706.38 0.36 9423.85 10668.39 10643.32 16483.38 14.64 -0.37 -18.40 265.02 20947.02 Denmark - - - UK 77.20 77.25 74.83 FTSE 250 Index 15.39 FTSE 100 Index 9.50 Oil Equipment & Serv -13.46 Bhp Group PLC 1792.6 -3.00 Persimmon PLC 2030 8.00
FTSE All-Small (378) 3819.53 0.10 3361.99 3815.91 3818.32 4053.40 3.84 0.79 32.86 93.81 7532.55 Japan - - - USA - - - Consumer Services 14.79 Real Est Invest & Tr 9.50 Fixed Line Telecomms -25.41 BP PLC 516.90 1.80 Phoenix Group Holdings PLC 689.10 2.00
FTSE All-Small ex Inv Co (199) 3309.70 0.48 2913.23 3293.87 3305.32 3733.05 4.52 1.06 20.85 85.04 6783.83 New Zealand - - - Euro - - - Travel & Leisure 9.47 Automobiles & Parts -29.65 British American Tobacco PLC 2961.5 0.50 Prudential PLC 1469.5 2.50
FTSE AIM All-Share (761) 885.76 0.14 779.66 884.50 884.49 1094.89 1.74 1.30 44.01 9.24 1004.07 Norway - - -
British Land Company PLC 558.40 -3.60 Reckitt Benckiser Group PLC 6301 14.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Bt Group PLC 177.32 3.48 Relx PLC 1900 20.00
Oil & Gas (13) 8957.76 0.31 7884.70 8930.20 8933.52 9743.36 5.87 1.35 12.64 398.08 9393.73 Index rebased 1/2/95. for further information about ERIs see Bunzl PLC 2099 - Rentokil Initial PLC 453.20 4.50
Oil & Gas Producers (9) 8678.05 0.31 7638.50 8651.50 8651.94 9356.61 5.87 1.35 12.58 384.09 9427.49 Burberry Group PLC 2132 12.00 Rightmove PLC 544.00 1.80
Oil Equipment Services & Distribution (4) 9527.04 0.42 8385.78 9487.58 9684.05 16159.45 5.70 0.98 17.95 532.50 8177.90 FTSE GLOBAL EQUITY INDEX SERIES Carnival PLC 3687 -7.00 Rio Tinto PLC 4249.5 -14.00
Basic Materials (25) 6177.67 -0.25 5437.64 6192.97 6200.52 6039.07 5.48 2.45 7.44 330.22 7096.06 Centrica PLC 73.58 0.80 Rolls-Royce Holdings PLC 809.80 6.80
Chemicals (8) 13839.33 0.96 12181.50 13708.18 13746.54 17533.32 2.43 2.38 17.32 291.81 13018.32 Sep 17 No of US $ Day Mth YTD Gr Div Sep 17
YTD Total No of US $ Day Mth YTD Total YTD Gr Div Coca-Cola Hbc AG 2681 10.00 Royal Bank Of Scotland Group PLC 208.00 3.50
Forestry & Paper (1) 19943.07 0.59 17554.06 19826.37 19961.50 26078.93 4.44 2.44 9.24 885.56 23554.27 Regions & countries stocks indices % % % Yield Sectors
% retn stocks indices % % % retn % Yield Compass Group PLC 2027 24.00 Royal Dutch Shell PLC 2347.5 8.50
Industrial Metals & Mining (2) 4913.65 -2.61 4325.04 5045.39 5014.92 5180.01 14.32 1.48 4.73 538.98 5784.13 FTSE Global All Cap 8881 592.61 0.1 4.6 15.4 889.27
17.6 2.4 Oil & Gas Producers 107 345.54 -0.9 -0.9 5.2 619.91 8.6 4.3 Crh PLC 2756 26.00 Royal Dutch Shell PLC 2343 5.50
Mining (14) 17670.69 -0.38 15553.89 17737.29 17753.26 16470.62 5.69 2.51 7.00 997.71 10696.57 FTSE Global Large Cap 1773 526.81 0.1 4.5 15.3 813.33
17.7 2.5 Oil Equipment & Services 34 256.93 -0.9 -0.9 15.3 406.27 19.4 4.7 Croda International PLC 4890 96.00 Rsa Insurance Group PLC 540.20 9.00
FTSE Global Mid Cap 2150 777.65 0.1 5.0 15.5 1100.41
17.5 2.2 Basic Materials 354 479.31 -0.3 -0.3 7.1 784.71 10.1 3.5 Dcc PLC 7108 46.00 Sage Group PLC 685.20 0.20
Industrials (105) 5658.63 0.43 4980.77 5634.23 5645.75 5719.79 2.51 1.00 39.75 99.66 6159.56
Construction & Materials (15) 6513.20 0.88 5732.98 6456.58 6456.56 6606.57 2.60 0.32 119.26 156.31 7352.24 FTSE Global Small Cap 4958 811.92 0.0 4.5 15.9 1106.93
17.6 2.0 Chemicals 163 710.86 -0.3 -0.3 7.5 1156.19 9.8 2.9 Diageo PLC 3263.5 -6.00 Sainsbury (J) PLC 214.90 0.70
Aerospace & Defense (10) 5383.38 0.06 4738.50 5380.41 5396.60 5752.63 2.53 -0.26 -153.07 85.56 6055.30 FTSE All-World 3923 347.14 0.1 4.6 15.3 551.02
17.6 2.5 Forestry & Paper 20 243.61 -1.6 -1.6 -1.7 446.80 1.7 4.2 Direct Line Insurance Group PLC 305.40 6.80 Schroders PLC 3122 11.00
General Industrials (6) 4771.95 -0.51 4200.31 4796.64 4823.34 5541.24 3.30 1.06 28.63 70.73 5772.81 FTSE World 2595 618.46 0.2 4.6 15.9 1317.59
18.2 2.5 Industrial Metals & Mining 94 345.65 -0.8 -0.8 -3.4 564.42 -1.0 4.7 Evraz PLC 490.70 -12.30 Scottish Mortgage Investment Trust PLC 520.50 5.00
Electronic & Electrical Equipment (10) 9364.98 0.00 8243.13 9364.59 9314.57 8186.22 1.52 2.02 32.54 89.36 8862.67 FTSE Global All Cap ex UNITED KINGDOM In 8570 620.17 0.1 4.5 15.9 914.41
18.0 2.3 Mining 77 671.30 0.1 0.1 14.7 1123.28 19.3 4.0 Experian PLC 2535 44.00 Segro PLC 783.20 3.80
Industrial Engineering (12) 13636.82 0.25 12003.25 13602.73 13731.48 14232.61 2.43 1.55 26.52 276.24 17497.36 FTSE Global All Cap ex USA 7064 481.94 0.0 5.2 10.0 784.92
12.8 3.1 Industrials 749 421.39 0.1 0.1 20.2 634.55 22.1 2.0 Ferguson PLC 6050 -16.00 Severn Trent PLC 2087 -15.00
Industrial Transportation (6) 3780.29 0.84 3327.44 3748.74 3794.92 5072.81 5.87 0.86 19.86 162.26 3780.54 FTSE Global All Cap ex JAPAN 7544 609.72 0.1 4.4 15.9 924.23
18.2 2.4 Construction & Materials 146 511.83 -0.1 -0.1 16.0 808.23 18.3 2.4 Flutter Entertainment PLC 7562 126.00 Smith & Nephew PLC 1912.5 2.50
Support Services (46) 8588.82 0.65 7559.96 8533.60 8540.35 8179.54 2.28 1.64 26.73 133.97 9382.58 FTSE Global All Cap ex Eurozone 8213 619.76 0.1 4.5 15.8 910.77
17.9 2.3 Aerospace & Defense 35 916.16 0.6 0.6 29.7 1362.90 31.7 1.8 Fresnillo PLC 716.60 -20.20 Smith (Ds) PLC 358.70 1.40
FTSE Developed 2173 564.34 0.2 4.6 16.3 853.77
18.6 2.4 General Industrials 65 209.32 0.0 0.0 10.5 343.17 12.6 2.3 Glaxosmithkline PLC 1657.8 10.80 Smiths Group PLC 1640.5 -13.00
Consumer Goods (42) 19880.08 0.05 17498.62 19870.34 19896.16 19722.37 4.16 1.64 14.66 582.71 16042.70
FTSE Developed All Cap 5691 591.09 0.2 4.6 16.4 882.13
18.5 2.4 Electronic & Electrical Equipment 133 453.69 -0.1 -0.1 20.9 621.55 22.7 1.8 Glencore PLC 254.30 1.30 Smurfit Kappa Group PLC 2482 -24.00
Automobiles & Parts (2) 4790.93 3.63 4217.02 4623.03 4563.75 10885.33 2.17 2.89 15.90 108.61 4897.96
FTSE Developed Large Cap 907 524.48 0.3 4.4 16.4 806.96
18.6 2.5 Industrial Engineering 151 755.09 -0.5 -0.5 14.4 1126.81 16.6 2.5 Halma PLC 2004 -15.00 Spirax-Sarco Engineering PLC 8145 80.00
Beverages (5) 25976.32 -0.10 22864.58 26003.22 26050.00 21343.66 2.13 1.73 27.26 534.17 19452.74
FTSE Developed Europe Large Cap 237 356.06 0.5 4.5 11.1 644.86
14.8 3.6 Industrial Transportation 129 724.78 -0.3 -0.3 17.7 1097.41 19.8 2.3 Hargreaves Lansdown PLC 2045 37.00 Sse PLC 1236 8.00
Food Producers (11) 7351.99 -0.72 6471.29 7405.40 7397.45 7172.16 2.47 1.95 20.80 109.88 6664.13
FTSE Developed Europe Mid Cap 347 574.25 0.1 6.5 10.7 917.32
13.7 3.1 Support Services 90 476.96 0.6 0.6 29.0 680.76 30.3 1.4 Hiscox LTD 1657 17.00 St. James's Place PLC 986.00 6.60
Household Goods & Home Construction (15)13774.60 0.13 12124.52 13757.30 13825.49 14565.64 4.46 1.89 11.84 518.80 10763.02
FTSE Dev Europe Small Cap 735 791.37 0.3 6.4 10.6 1218.41
13.4 3.0 Consumer Goods 549 486.50 0.4 0.4 14.9 762.21 17.2 2.7 HSBC Holdings PLC 616.00 6.40 Standard Chartered PLC 690.60 10.40
Leisure Goods (2) 13558.40 0.90 11934.22 13437.62 13164.91 11734.86 3.30 1.41 21.41 290.69 13715.01
FTSE North America Large Cap 267 646.30 0.3 4.0 19.9 920.97
21.7 2.0 Automobiles & Parts 136 357.88 -0.4 -0.4 5.7 546.91 8.4 3.4 Imperial Brands PLC 2184 28.00 Standard Life Aberdeen PLC 275.20 5.90
Personal Goods (5) 36553.54 -0.08 32174.74 36583.68 36775.64 32202.01 2.75 2.60 14.03 757.63 26413.91
FTSE North America Mid Cap 407 898.94 0.2 4.2 21.1 1183.76
22.6 1.7 Beverages 64 713.13 0.8 0.8 19.3 1128.21 21.4 2.3 Informa PLC 843.00 -4.00 Taylor Wimpey PLC 160.70 0.15
Tobacco (2) 33294.38 0.32 29306.00 33189.63 33053.81 39567.70 7.23 1.20 11.52 1331.31 24349.51
FTSE North America Small Cap 1348 911.05 0.0 4.1 20.7 1160.56
22.0 1.6 Food Producers 130 665.02 0.6 0.6 18.9 1065.44 21.3 2.2 Intercontinental Hotels Group PLC 5017 2.00 Tesco PLC 236.50 1.00
Health Care (18) 12191.45 1.39 10731.02 12024.16 11975.09 10385.45 3.50 0.88 32.35 354.27 10212.43
FTSE North America 674 427.39 0.3 4.0 20.0 622.54
21.8 2.0 Household Goods & Home Construction 60 481.06 0.8 0.8 20.1 750.24 22.8 2.6 International Consolidated Airlines Group S.A. 466.90 16.90 Tui AG 844.60 -8.40
Health Care Equipment & Services (9) 8718.90 0.24 7674.45 8697.75 8713.10 7691.82 1.57 2.48 25.67 99.76 7843.62
FTSE Developed ex North America 1499 253.74 0.2 5.5 10.2 445.01
13.1 3.3 Leisure Goods 44 222.46 -0.5 -0.5 20.2 301.65 21.3 1.2 Intertek Group PLC 5482 70.00 Unilever PLC 4920 -9.00
Pharmaceuticals & Biotechnology (9) 16567.99 1.56 14583.29 16314.19 16233.96 14085.91 3.77 0.79 33.58 522.53 12448.11
FTSE Japan Large Cap 189 375.82 0.0 6.9 2.4 Personal Goods
11.1 509.29
12.6 102 849.71 0.6 0.6 18.6 1241.94 20.2 1.8 Itv PLC 126.45 1.15 United Utilities Group PLC 800.20 -3.20
Consumer Services (88) 5346.35 0.15 4705.90 5338.48 5332.31 5243.35 2.93 1.78 19.16 125.26