TUESDAY 6 JUNE 2017
00
Spring in his step
How Jeremy Corbyn lifted the left
in Britains election BIG READ, PAGE 7
London attack
suspect was
known jihadi
A woman kneels by flowers left on Lon-
don Bridge in tribute to the seven people
killed and dozens injured in Saturdays
terrorist attack in the British capital.
Police yesterday named two of the
three assailants shot dead during the
attack as Khuram Butt, 27, and Rachid
Redouane, 30, both from Barking in east
London. Butt was a known member of
an extremist Islamist group, once
appearing in a TV documentary.
There were bitter exchanges ahead of
Thursdays election, with premier
Theresa May under fire from opposition
leader Jeremy Corbyn and London
mayor Sadiq Khan for cutting police
funds when she was interior minister.
News & analysis page 2
Janan Ganesh & Robert Hannigan page 9
Arab states cut ties to Qatar over
fears it fuels terror and extremism
3 Riyadh and three other capitals take action 3 Dohas openness to Iran adds to concerns
SIMEON KERR DUBAI
Saudi Arabia and three other Arab
nations have severed diplomatic ties
and cut off transport links with Qatar in
an unprecedented attempt to isolate the
Gulf state as they claim that its regional
policies fuel extremism and terrorism.
The move against Doha by the king-
dom together with Egypt, the United
Arab Emirates and Bahrain escalates
a dispute over Qatars support for politi-
cal Islamist groups and perceptions that
it is open to closer ties with Iran, Saudi
Arabias rival.
Citing an official source, the Saudi
news agency said Riyadh had cut ties for
the protection of national security
from the dangers of terrorism and
extremism.
Chinas LeEco revolution
rings hollow in the US
An ambitious Chinese entrepreneurs
attempt to create a historical moment
in tech and consumer culture has left
a trail of cancelled deals, disgruntled
workers and a vast, empty factory in
the Nevada desert. Billed as Apple,
Amazon, Netflix, Tesla and Disney
rolled into one, LeEco now has debts of
almost $2.7bn. Jia Yueting, labelled the
PowerPoint chief executive for his
rousing presentations, has been adept
at fundraising and seems undeterred.
Analysis i PAGE 15
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THE FINANCIAL TIMES LTD 2017
No: 39,491
Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Brussels, Milan, Madrid, New York,
Chicago, San Francisco, Washington DC, Orlando,
Tokyo, Hong Kong, Singapore, Seoul, Dubai, Doha
21st century GIDEON RACHMAN, PAGE 9
One trigger for the action appeared to
be the payment by Qatar of up to $1bn to
free members of its royal family kid-
napped on a falconry hunting trip to
Iraq. People involved in the April deal
told the Financial Times that Doha paid
the ransom to an al-Qaeda affiliate fight-
ing in Syria and Iranian security offi-
cials, infuriating Riyadh and its allies.
Qatars cabinet described its neigh-
bours move as unjustified, saying it
had been prefaced by an unprecedented
media campaign of defamation against
Doha. From the start, it was clear that
this media campaign was carried out to
exert pressure on the State of Qatar so
that it would surrender control of its
national decision-making, sovereignty
and politics, it said in a statement.
The four states severing ties said they
Trump pushes air traffic privatisation
to help meet $1tn infrastructure pledge
DEMETRI SEVASTOPULO, SAM FLEMING
AND BARNEY JOPSON WASHINGTON
President Donald Trump has proposed
privatising the US air traffic control
system as part of his attempt to unleash
the $1tn in public and private infra-
structure spending that he pledged
during his campaign.
Mr Trump said his administration
would push to modernise the anti-
quated system in an effort to reduce the
cost of airline travel and the amount of
time passengers lose because of delays.
Were proposing to take American
air travel into the future, finally,
Mr Trump said at the White House.
US presidents have a checkered his-
tory in tackling the air traffic control
system, with Ronald Reagan famously
sacking striking air traffic controllers in
1981, a move now seen as severely weak-
STOCK MARKETS
Jun 5 prev %chg
S&P 500 2437.80 2439.07
Nasdaq Composite 6298.85 6305.80
Dow Jones Ind 21210.41 21206.29
FTSEurofirst 300 1540.00 1542.05
Euro Stoxx 50 3580.19 3591.82
FTSE 100 7525.76 7547.63
FTSE All-Share 4114.40 4129.13
CAC 40 5307.89 5343.40
Xetra Dax 12822.94 12664.92
Nikkei 20170.82 20177.28
Hang Seng 25862.99 25924.05
FTSE All World $ 309.98 310.32
WORLD BUSINESS NEWSPAPER
China and India
The contest that will shape the
would close air and sea links with Qatar,
the worlds top exporter of liquefied nat-
ural gas and the host of an important US
military base. Qatar is a crucial supplier
of LNG to Asia and Europe, and a big
investor in the UK and Europe through
its sovereign wealth fund.
The Gulf states have also blocked
their nationals from travelling to Qatar
and given Qataris two weeks to leave.
The closure of Qatars only land
border with Saudi Arabia threatens food
supplies to the import-dependent state,
which is set to host the World Cup foot-
ball tournament in 2022.
Qatar admits support for some Islam-
ist movements, such as the Muslim
Brotherhood and Hamas, the Palestin-
ian group, but denies backing terrorism.
Its stock market dropped 5.5 per cent
ening US labour unions. Several presi-
dents have tried to overhaul the system
since, including Democrat Bill Clinton,
who failed in turning the system into a
public corporation under an initiative
led by his vice-president, Al Gore.
Under Mr Trumps proposal, air traf-
fic control systems would use global
positioning satellites instead of decades-
old radar and ground-based systems
commonly blamed for delays that have
become synonymous with US air travel.
At a time when every passenger has
GPS technology in their pockets, our air
traffic control system still runs on
radar, said Mr Trump, adding that doz-
ens of countries, including Canada, had
made similar changes with terrific
results.
The push marks the start of a week in
which Mr Trump hopes to focus on
infrastructure, particularly as his
World Markets
CURRENCIES
Jun 5 prev Jun 5
-0.05 $ per 1.125 1.128 per $ 0.889
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0.02 per 0.870 0.875 per 1.149 1.143 Ger Gov 10 yr
-0.13 per $ 110.445 110.450 per 124.278 124.532 Jpn Gov 10 yr
-0.32 per 142.832 142.287 index 77.365 77.722 US Gov 30 yr
-0.29 index 91.530 91.285 $ index 102.768 103.082 Ger Gov 2 yr
-0.36 SFr per 1.085 1.087 SFr per 1.247 1.242
-0.66 COMMODITIES
1.25 Jun 5 prev
-0.03 Oil WTI $ 47.28 47.66
-0.24 Oil Brent $ 49.43 49.95
-0.11 Gold $ 1279.95 1274.95
USA $2.50 Canada C$3.
Mascot mania
Tokyo turns to children to resolve
Olympic headache NOTEBOOK, PAGE 8
Briefing
i Blockchain job ads hint at talent bubble
The number of adverts on LinkedIn for jobs related
to blockchain has trebled in the past year, showing
how demand is booming for the skills to harness the
technology underpinning cryptocurrencies. PAGE 11
i Tusk raises alert over Russia gas pipeline
European Council president Donald Tusk has called
for strict regulation of a pipeline that will take more
Russian gas to Germany, warning that it will bolster
Moscow and leave Ukraine at its mercy. PAGE 2
i Yao courts success with investment fund
Ex-Houston Rockets basketball
star Yao Ming has joined a
growing league of actors,
athletes and pop stars to use
their celebrity to tap into
Chinas buyout boom. PAGE 12
i New Delhi hails satellite breakthrough
India has celebrated its first launch of a rocket
capable of carrying heavier satellites into space,
using new technology the country hopes will give it
Clodagh Kilcoyne/Reuters
a slice of a lucrative international market. PAGE 3
i Chinese graduates pay slides again
Monthly salaries have fallen 16 per cent to $590, the
second consecutive year of decline, as college
expansion fuels a glut of graduates. About 8m are
due to join the labour force this year. PAGE 3
i Mexico win boosts peso and Pea Nieto
The currency has rallied after results from a state
poll, seen as a key test ahead of presidential
elections next year, pointed to a win for President
Enrique Pea Nietos governing party. PAGE 3
i Indian raids spark free speech fears
Investigators have raided the home of the founder
of television channel NDTV in connection with a
bank loan, sparking accusations that police are
in response to the diplomatic rift. Brent trying to undermine free speech. PAGE 3
crude rose more than 1 per cent to
$50.46 a barrel on the news.
Analysts believe LNG exports from Datawatch
Qatar are unlikely to be affected as it
would require Saudi Arabia and its Gulf
Qatar is a crucial allies to blockade sea lanes to halt ship- US trade balance The US trade
supplier of LNG ments, a significant escalation that Total over previous 12 months ($bn) balance in April,
to Asia and would not be welcomed in Washington. measured on an
-500 annual basis, fell
Europe, and a The dispute comes after Saudi Arabia
to its lowest level
big investor in and its allies were emboldened by Don-
the UK and ald Trump, who chose Riyadh for his -600 since 2009 a
$760bn deficit
Europe through first trip as president. He met Arab lead- as Americans
its sovereign ers including Qatars emir and endorsed -700 continue to import
wealth fund Riyadhs campaign to challenge Iranian more goods than
influence with $110bn in arms sales. -800 they export
Qatari ransom page 3
2010 12 14 16 17
Editorial Comment page 8
Inside Business page 12 Source: Thomson Reuters Datastream
Markets page 19
healthcare and tax reform plans have
been stalled by divisions on Capitol Hill.
But his efforts may be overshadowed
by James Comey, the ousted FBI direc-
tor, who is expected on Thursday to tell
Congress that the president tried to
pressure him to halt an investigation
into his campaign aides ties to Russia.
The president faces a steep climb
overhauling air traffic control some-
thing Congress has talked about since
Mr Clintons efforts. Charles Schumer,
Senate Democratic leader, said privati-
sation sounds like a nice word but
when you scratch beneath the surface it
means much less construction and far
fewer jobs.
The plan would create an air traffic
body separate from the Federal Aviation
Administration. The US is one of the few
industrial nations to retain a govern-
ment agency to provide the service.
INTEREST RATES
prev price yield chg
0.887 US Gov 10 yr 101.77 2.18 0.02
0.776 UK Gov 10 yr 101.06 1.14 0.02
99.65 0.29 0.02
100.64 0.04 0.00
103.52 2.83 0.02
102.28 -0.70 0.00
price prev chg
Fed Funds Eff 0.91 0.82 0.09
%chg US 3m Bills 0.98 0.98 0.00
-0.80 Euro Libor 3m -0.37 -0.37 0.00
-1.04 UK 3m 0.29 0.29 0.00
0.39 Prices are latest for edition Data provided by Morningstar
2 FINANCIAL TIMES Tuesday 6 June 2017

INTERNATIONAL

Terrorism investigation Nord Stream 2

London attacker was well-known extremist Tusk joins call

for greater
Revelation raises queries figures from the banned al-Muhajiroun
network.
were acting as part of a wider network.
But the confirmation that one of them
Founded in the mid-1990s by extrem-
ist preachers Omar Bakri Mohammed
when he was jailed for five years for sup-
porting Isis.
Brussels say
about how potential
threats are monitored
The police identified a second man
involved in the attacks as Rachid Red-
was a part of one of the UKs most noto-
rious extremist networks suggests he
and Anjem Choudary, al-Muhajiroun
dates back to a time when Britain
Raffaello Pantucci, an expert on Brit-
ish jihadis at the Royal United Services
over Russian
FT REPORTERS LONDON
ouane, a 30-year-old who claimed both
Moroccan and Libyan heritage.
Mark Rowley, head of National Coun-
was known to the authorities.
Ministers have said in the wake of last
allowed jihadis to operate undisturbed,
provided they did not target their vio-
lence against their hosts.
Institute in London, estimates that what
he called the al-Muhajiroun communi-
ties comprise roughly 100-200 people
gas project
Khuram Butt, one of three men who car- ter Terror Policy at Londons Metropoli- But that accommodation broke down in the UK at any one time.
ried out a terror attack in London on tan Police, said the third man would be
There was no intelligence following the 9/11 attacks and the group If you go and look at terrorist plots in ROCHELLE TOPLENSKY BRUSSELS
Saturday, was a well-known member of identified later. He said while Butt was to suggest an attack gained infamy for lauding the hijackers. the UK back in the 90s, you almost
Donald Tusk, president of the Euro-
a British extremist Islamist group, a rev- known to the police and intelligence It ostensibly disbanded to avoid new always find a thread that goes back to
elation that raises questions about how services there was no intelligence to
was being planned anti-terror legislation. A string of suc- the al-Muhajiroun communities, Mr
pean Council, has weighed in against
the planned Nord Stream 2 pipeline to
the security services monitor potential suggest an attack was being planned. Mark Rowley, police chief cessor organisations sprang up and were Pantucci said. There are endless demos
bring more Russian gas to Germany,
threats. The three men killed seven people, banned. More recently, members of the and Dawah [preaching] stalls. Some of
urging strict regulation of a project he
Six of his neighbours in Barking, east left dozens more injured and thrust months Manchester suicide bombing network are believed to have travelled them have been radicals for 10 years.
fears will strengthen Moscow.
London, identified the 27-year-old Brit- Britains response to Islamist terrorism that security agencies are working on to Syria and Iraq to join Isiss caliphate. Then suddenly they do something.
ish citizen as a zealous Islamist who was to the centre of the campaign for Thurs- 500 counter-terrorism investigations. Bakri, who declared the Islamists Reporting by Tom Burgis, Naomi Rovnick, In a forthright letter to the European
filmed praying in front of a black Isis flag days general election. They thus have little choice but to prior- black flag would one day fly over Down- Helen Warrell, Leila Haddou, Cynthia Commission, seen by the Financial
in Regents Park, London, in 2015. It is not clear whether the men, who itise although they may now face scru- ing Street, fled the UK and was jailed in OMurchu, Peter Campbell and Robert Times, Mr Tusk expressed his negative
The footage, later broadcast in a TV drove a rental van into pedestrians on tiny about how someone with public ties Lebanon. Despite years of sermons that Wright view of the proposed pipeline under
documentary on British jihadis, shows London Bridge before launching a knife to the al-Muhajiroun network was able police said helped to inspire violence, Janan Ganesh and the Baltic Sea, saying it would not serve
the suspect in the company of leading rampage on nearby Borough Market, to execute his plot uninterrupted. Choudary remained at large until 2016, Robert Hannigan page 9 the best European interest and leave
Ukraine at Russias mercy.
Addressed to Jean-Claude Juncker,
European Commission president, the
letter shows the divisions in the EU over
UK election. Campaign clash Nord Stream 2, owned by Gazprom, the
Russian gas group. Brussels is struggling

May criticised over cuts to security funding to exert influence over the project,
which is backed by Germany but
strongly opposed by Poland and other
states that do not want to extend their
dependence on Russian gas.
Mr Tusk notes that allowing the pipe-
Capitals mayor puts prime line to be built would run opposite to
minister on defensive in wake EU and commission efforts to bolster
energy security in the wake of Russian
of weekend terrorist outrage aggression in Ukraine in 2014.
It will allow [Russia] to close the
transit route through Ukraine, leaving
GEORGE PARKER AND JIM PICKARD
LONDON our partners at Russias mercy, while its
aggression has not ended, he writes.
Saturdays terrorist attack in London It also contradicts the objective we
has sparked a political clash, with the have set for the energy union . . . it will
capitals mayor accusing Theresa May, make us more dependent on Russian
prime minister, just days before UK supplies and concentrate gas transit al-
national elections, of failing to provide ong the existing route. Also, it will stren-
enough security funding for the city. gthen Gazproms position as the EUs
The argument, which has pulled in dominant gas supplier. In short, it will
major UK political figures just 36 hours not serve the best European interest.
after seven people were killed by three The EU wants to keep Russian gas
assailants near London Bridge, has piled flowing through Ukraine after Kievs
pressure on Mrs May, who was on the contract with Gazprom expires in 2019.
defensive for her faltering campaign. The contract is worth billions of dollars
The prime minister attempted to use in annual transit fees for Ukraine.
her leadership during the terrorist However, Nord Stream 2 says its
attacks including last months bomb- project, which would run from St
ing in Manchester, which left 22 dead Petersburg to Germany, is a commercial
to reinforce the Conservatives strong enterprise outside the control of the
and stable campaign by arguing: bloc. Efforts to apply the EUs energy
There is not time for learning on the laws to the offshore pipeline were
job. rejected by German network regulators
But Sadiq Khan, Londons opposition and the commissions legal service this
Labour party mayor, claimed Mrs May year. Poland in particular suspects Mr
was planning total cuts of 1.7bn to the Juncker of yielding to German pressure
Metropolitan Police budget over a dec- to avoid disrupting the project.
ade, saying: We are not receiving the As a concession to countries opposed
sort of funding we need as a capital city. to the pipeline, Brussels is preparing to
While Mrs Mays six-year stint as Solemn visit: failures of London Bridge, Manchester, mayors response to the latest terrorist We do have she had prioritised counter-terrorism, seek a mandate allowing it to negotiate
home secretary, from 2010 to 2016, has mayor of Westminster Bridge. Should be resign- attack and made a thinly veiled criti- even as police spending was reduced. an agreement with Russia that would set
until now been seen as an electoral London Sadiq ing not seeking re-election. cism of US president Donald Trump, a problem, We have protected counter-terror- rules for Nord Stream 2. Mr Tusks letter
asset, her record in presiding over a Khan, centre, While Mrs May shrugged off the com- who accused the mayor of underplaying we should ism policing, she said. We have pro- shows that he wants this mandate to be
20,000 cut in the number of national talks to senior ments from the mercurial Mr Hilton the gravity of the incident, criticising Mr vided an uplift in armed policing. From as demanding as possible. He has encou-
police is being questioned. police officers in now a Fox News presenter the criti- Khans statement that Londoners had never have 2015 we have protected the police raged Mr Juncker to require that all our
Although Jeremy Corbyn, the Labour central London cism from Mr Khan could be damaging. no reason to be alarmed. cut the budget. If ever there was a time for a rules . . . as well as our political objec-
leader challenging Mrs May for the pre- yesterday Mr Khan said 600m had been cut Sadiq Khan is doing a good job and prime minister to be able to do the job tives are applied to this project in full.
miership, began criticising the prime Justin Tallis/AFP/Getty from the London police budget over the its wrong to say anything else, she said. police from day one, this is it. Theres no time Maros Sefcovic, commission vice-
minister on Sunday night, Mr Khan has past seven years and there were 400m Mr Trumps criticism mischaracter- numbers for learning on the job. president for energy union, has said he
in the past attempted to distance him- more cuts to come over the next four ised Mr Khans statement, which said At a hastily arranged press conference will seek simply to apply the principles
self from Mr Corbyn and his criticism is years. He said that a planned change in Londoners had no reason to be Jeremy Corbyn yesterday, Labour put forward five sen- of the blocs energy rules. This imprecise
likely to carry more weight, particularly the police funding formula could cost alarmed by heightened police presence ior trade union figures to argue that mandate has worried some critics, who
given his role managing London. the capital a further 700m, amounting on the streets not Islamist terrorism. Tory spending cuts had impaired Brit- fear it will be exploited by Germany and
Mr Corbyn yesterday further raised to a total cut of 1.7bn. Mr Trump refused to back down, ains emergency services. other supporters of the project.
the stakes, saying Mrs May should Cressida Dick, the Metropolitan tweeting that Mr Khan was attempting Mark Serwotka, general secretary of Nine EU members Croatia, the
resign. She is now saying that we have a Police commissioner, also made a to play down an error. Pathetic excuse the Public and Commercial Services Czech Republic, Estonia, Hungary,
problem, he said. Yes, we do have a muted call for additional funding. by London mayor Sadiq Khan who had union, said the number of police com- Latvia, Lithuania, Poland, Slovakia and
problem, we should never have cut the All of us need to look at the overall to think fast on his no reason to be munity support officers in London had Romania rely heavily on Russian gas.
police numbers. strategy, the tactics, the resourcing and alarmed statement, Mr Trump wrote, fallen from 4,607 to 1,487 since 2010. They wrote to Mr Juncker last year rais-
Steve Hilton, former policy chief to indeed what we are doing with in and adding the mainstream media was Figures from Unison and the Fire Bri- ing concerns the project would increase
former prime minister David Cameron, with our communities, she said. So working hard to sell it! gades Union highlighted a 20,000 cut in thisrelianceandcreategeopoliticalrisks.
also called for Mrs May to quit, tweeting: there is whole load of things to review. Mrs May, in a speech in central Lon- the number of police officers and 10,000 Nord Stream 2 said Mr Tusk had rej-
Theresa May responsible for security Mrs May had praised the London don yesterday, repeatedly insisted that in the number of fire officers since 2010. ected repeatedly an offer to discuss it.

Equality research
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription Pensions gap far wider than gender earnings disparity in EU
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK 2.70 Channel Islands 3.00; Republic of Ireland 3.00
SARAH GORDON LONDON Womens participation rate in the EU ing their gender diversity efforts by part-time or taking career breaks to
Trump vs the Valley A Five Star plan? Dear Don...
labour force was 10 per cent lower than implementing robust pay equity proc- assist with raising a family or caring for
Tech titans need to minimise
political risk GILLIAN TETT, PAGE 13
Italys populists are trying to woo
the poor BIG READ, PAGE 11
Mays first stab at the break-up
letter ROBERT SHRIMSLEY, PAGE 12
The gap between women and mens
HMRC warns Lloyds of Brussels Insurance market men, according to Mercer. They were esses, supporting all employees through older or disabled relatives.
pensions in the EU is more than twice
UK 3.80; Channel Islands 3.80; Republic of Ireland 3.80 SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017
Briefing
to tap new talent pool with EU base
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

under-represented at all levels of the and on return from maternity and Tax rules in many countries that
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE TECHNOLOGY IS
Atlantic. PAGE 15; CHINA CURBS HIT DEALS, PAGE 17

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

workforce, and progressively less repre- paternity leave, and more, Ms imposed annual limits on contributions
i Emerging nations in record debt sales Warning: this article may be
FT WEEKEND MAGAZINE
FEBRUARY 4 2017

Developing countries have sold record levels of

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

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

3 Confidence in IT plans has collapsed

3 Fivefold rise in declarations expected
JAMES BLITZ WHITEHALL EDITOR
A computer system acquired to collect
duties and clear imports into the UK
may not be able to handle the huge
surge in workload expected once Britain
Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
sented the higher the salary scale. Schreuder added. might also prevent employees who have
A survey has revealed that a
adjust its negotiation position with the
record 455 tall buildings are
planned or under construction
in London. Work began on
over disputed painting of Jane Austen
engulfed in
EU, a Whitehall official said. If running almost one tower a week
our own customs system is proving during 2016. PAGE 4
much harder than we anticipated, that
ought to have an impact on how we i Tillerson fails to ease Turkey tensions
press for certain options in Brussels. The US secretary of state has failed to reconcile

fresh tax probe

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

Setting up a digital customs system
has been at the heart of Whitehalls
Brexit planning because of the fivefold
increase in declarations expected at
British ports when the UK leaves the EU.
EU gender pension gap measured by recently proposed a directive on work- systems in the EU both social security on missed contributions afterwards.
CDS, indicating it would be delivered on
time. But last month, it wrote to the i HSBC woos transgender customers
committee saying the programme had The bank has unveiled a range of gender-neutral
RALPH ATKINS ZURICH it followed a strategy offull client tax
been relegated to amber/red, which DUNCAN
titles such asROBINSON BRUSSELS
Mx, in addition to Mr, Mrs, Misscompliance
or but was still trying to
means there are major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

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

Theresa May announced in January that
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
to hit 300m.
The revelations about the system,
annual pension received and based on life balance for parents and carers, and company plans tended to offer In the UK, where Mercer said the gen-
international trade once the UK leaves its image as a tax haven. and certain ofits employees. The UK
the EU . . . Internal ratings are designed
to make sure that each project gets the
focus and resource it requires for suc-
cessful delivery.
HMRCs letters to the select commit-
tee, which will be published today, pro- AFP
Terror attacks inwith
co-operating

were contacted
Highlighted
western

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

Published daily except Sundays, New Years Day,

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

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

whether Whitehall can implement a
host of regulatory regimes in areas
ranging from customs and immigration
to agriculture and fisheries by the
time Britain leaves the EU.
Problems with CDS and other projects
caused by Mrs Mays unexpected deci-
sion to leave the EU customs union.
Timetable & Great Repeal Bill page 2
Scheme to import EU laws page 3
Editorial Comment & Notebook page 12
Philip Stephens & Chris Giles page 13
cities in its decision to set up an
EU base to help deal with the
expected loss of passporting
rights after Brexit.
John Nelson, chairman of the
centuries-old insurance mar-
will be reinsured back to the
syndicates at its City of London
headquarters, pictured above.
The Belgian capital had not
been seen as the first choice for
Londons specialist insurance
homes for the industry. But
Mr Nelson said the city won on
its transport links, talent pool
and extremely good regula-
tory reputation.
Sources: Janes Terrorism and Insurgency Centre terror incidents in
Lex page 14
Paris
The inquiries threaten to undermine
efforts by the countrys banking sector
to overhaul business models and ensure
customers meet international tax
requirements following a US-led clamp-
Eurostat data was 40 per cent, com- including the introduction of leave for retirement benefits linked to income. der pension gap was 39.5 per cent, an
bombings have
thousand bank accounts opened in
bucked the trend
Switzerland and not declared to French
of generally low
tax authorities.
fatalities from
The Swiss attorney-generals office
western Europesaid it was astonished at the way this

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

Day, Martin Luther King Day, Thanksgiving,

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

City watchdog sends a clear message as

pared to a gender pay gap of 16 per cent. carers to look after dependent relatives. Since women earned less on average independent pensions review by John
generals office expressed astonish- In 2014, Credit Suisse pleaded guilty
ment that it had been left out of the in the US to an extensive and wide-
actions co-ordinated by Eurojust, the ranging conspiracy to help clients THE RISE
Escape OF
the taper ECO-GLAM
trap
banker loses job over WhatsApp boast
EUs judicial liaison body.
Credit Suisse, whose shares fell 1.2 per

Christmas Day and the day after Christmas Day.

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

There were wide variations between Mercer said employers had an impor- than men, this led to lower pensions for Cridland, former director-general of the
LAURA NOONAN DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to
JENNIFER THOMPSON LONDON

Subscriptions and Customer Service

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

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

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

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

avert a US government shutdown after
April 28 have resisted Donald Trumps
attempt to tack funds to pay for a wall
on the US-Mexico border on to
stopgap spending plans. They fear
that his planned $33bn increase in
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
staffs communication.
Several large investment banks have
confidential information on the messag-
ing system on a number of occasions
last year to impress people.
Several banks have banned the use of
new media from work-issued devices,
but the situation has become trickier as
countries, with the gap ranging from tant role to play. women, an effect compounded by the CBI, recently recommended the state
included the identity and details of a
client and information about a rival of ALEX BARKER BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
Jefferies. In one instance the banker GEORGE PARKER LONDON Gibraltar yesterday hit back at the status within the single market after
boasted how he might be able to pay off STEFAN WAGSTYL BERLIN clause, saying the territory had shame- Brexit, the guidelines state it would
his mortgage if a deal was successful. The EU yesterday took a tough opening fully been singled out for unfavourable require existing regulatory, budgetary,
Mr Niehaus was suspended from Jef- stance in Brexit negotiations, rejecting treatment by the council at the behest of supervisory and enforcement instru-

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

to accept the proposals. encryption system that cannot be
US budget Q&A and accessed without permission from the
Trump attack over health bill i PAGE 8 user. Deutsche Bank last year banned
WhatsApp from work-issued Black-
as iPhone-loving staff spurn their work-
issued BlackBerrys.
Bankers at two institutions said staff
are typically trained in how to use new
4 to 49 per cent. Half of the 28 EU mem- For businesses this means accelerat- greater likelihood of women working pension age should rise from 67 to 68 by
Facebook did not respond to a request Senior EU diplomats noted that has been made on Britains exit bill and
for comment. About 2.3m people will benefit from European Council president Donald Mr Tusks text left room for negotiators citizen rights, which Whitehall officials
Additional reporting by Chloe Cornish todays increase in the national living Tusks first draft of the guidelines, to work with in coming months. Prime believe means simultaneous talks are
Lombard page 20 wage to 7.50 per hour. But the rise which are an important milestone on minister Theresa Mays allies insisted possible if certain conditions are met.

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

bers had a gap of 30 per cent or more. 2039, seven years earlier than currently
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Xetra Dax
Nikkei
Hang Seng
FTSE All World $
5089.64 5069.04 0.41 COMMODITIES
12256.43 12203.00 0.44
19063.22 19217.48 -0.80 Oil WTI $
24301.09 24392.05 -0.37 Oil Brent $
297.99 297.73 0.09 Gold $
Mar 30
50.22
52.98
1248.80
prev
49.51
52.54
1251.10
Fed Funds Eff
%chg US 3m Bills
1.43 Euro Libor 3m
0.84 UK 3m
-0.18 Prices are latest for edition
0.66
0.78
-0.36
0.34
0.66
0.78
-0.36
0.34
0.00
0.00
0.00
0.00
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CURRENCIES

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5914.34 0.07 $ per
20689.64 20728.49 -0.19 per
Mar 31
1.070
1.251
0.855
prev
1.074 per $
1.249 per $
0.859 per
Mar 31
0.935
0.800
1.169
prev
INTEREST RATES

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

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

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Tuesday 6 June 2017
The $1bn hostage deal that
enraged Qatars Gulf rivals
Saudi Arabia, Egypt, UAE and Bahrain all cut ties with small gas-rich state
Men in the Iranian-backed Shia Muslim group Kataib Hizbollah, which kidnapped a Qatari hunting party in Iraq two years ago Thaier al-Sudani/Reuters
ERIKA SOLOMON BEIRUT
Qatar paid up to $1bn to release mem-
bers of its royal family kidnapped in
Iraq while on a hunting trip, according
to people involved in the hostage deal
one of the triggers behind yesterdays
dramatic decision by other Gulf states to
cut ties with Doha.
Commanders of militant groups and
government officials told the Financial
Times that Doha used the money in a
transaction to secure the release of 26
members of a Qatari falconry party in
southern Iraq and about 50 militants
captured by jihadis in Syria. By their
telling, in one swoop Qatar paid off two
of the most frequently blacklisted forces
of the Middle East: an al-Qaeda affiliate
fighting in Syria and Iranian security
officials.
The deal, concluded in April, height-
ened concerns among Qatars neigh-
bours about the small but rich states
role in a region plagued by conflict and
rivalries. Yesterday, Saudi Arabia,
Egypt, the United Arab Emirates and
Bahrain took the extraordinary step of
cutting diplomatic ties and transport
links to Qatar, alleging that it fuels
extremism and terrorism. The ransom
payments are the straw that broke the
camels back, said one Gulf observer.
Doha denies that it backs terrorist
groups and dismissed the blockade by
its neighbours as founded on allega-
tions that have no basis in fact. It said it
could not immediately comment on the
hostage deal but a person close to the
Qatari government acknowledged that
Peso jumps as Pea Nietos party claims poll victory
Leftwing rivals hint at
challenge after rapid results
suggest win for ruling PRI
JUDE WEBBER MEXICO CITY
ADAM SAMSON NEW YORK
The Mexican peso rallied after prelimi-
nary results from a key election in the
countrys most populous state pointed
to a narrow victory for the candidate
from President Enrique Pea Nietos
governing party.
The currency jumped 1.46 per cent to
18.41 pesos, its highest level on a New
York fix basis since the day of Donald
Trumps surprise US election victory.
With nearly 98 per cent of votes
counted in the race for governor of the
state of Mexico, Alfredo del Mazo of the
ruling Institutional Revolutionary party
(PRI) had won 33.7 per cent of the vote,
compared with 30.8 per cent for Delfina
Gmez, his leftwing rival.
The election in Mr Pea Nietos home
state, which has been in PRI hands since
the partys inception in 1929, is seen as a
key test of public opinion ahead of the
2018 presidential election and a referen-
dum on the countrys unpopular leader.
Mr del Mazos tally was about half the
payments were made. The person was
unaware of the amounts or where the
money went.
Qatar, a US ally that hosts an Ameri-
can military base, has long drawn the ire
of its neighbours who consider it an irri-
tating maverick. The worlds top
exporter of liquefied natural gas, it has
used its wealth to court London, Wash-
ington and Tokyo. Critics accuse it of
seeking to punch above its weight diplo-
matically, meddling in regional affairs.
Doha has a history of reaching out to
all kinds of controversial groups, from
rebels in Sudans Darfur to the Taliban
in Afghanistan and Hamas in Gaza.
Qatar touts itself as a neutral player that
can act as an intermediary. Its critics,
notably Saudi Arabia and the UAE, say it
uses such interventions to play both
sides and fund radical Islamist groups,
most recently in Libya and Syria.
To Dohas critics, the hostage deal was
further evidence of that role. If you
want to know how Qatar funds jihadis,
look no further than the hostage deal,
said a Syrian opposition figure. And
this isnt the first it is one of a series
since the beginning of the war.
The Financial Times spoke to people
involved on both sides of the hostage
swap, including two government offi-
cials, three Iraqi Shia militia leaders and
two Syrian opposition figures.
About $700m was paid both to Ira-
nian figures and the regional Shia mili-
tias they support, according to regional
officials. They added that $200m to
$300m went to Islamist groups in Syria,
most of that to Tahrir al-Sham, a group
Mexico. State election
65 per cent won by Eruviel vila, the
states outgoing PRI governor.
Both candidates have claimed victory.
A fight over the result would hark back
to the notorious refusal by Andrs
Manuel Lpez Obrador, the leftwing
opposition leader known as Amlo, to
accept defeat in the 2006 presidential
race, after which he staged an occupa-
tion for many months in central Mexico
City, bringing chaos to the capital.
Analysts had predicted a sharp sell-
off in the peso if Ms Gmez won, reflect-
ing jitters in the business community
that a win for Amlos party would bol-
ster his chances in next years vote.
The close result raises the prospect of
legal challenges. Mr Lpez Obrador,
who failed to unite the left behind his
Morena party for the election, called the
rapid vote count a big miscount true to
the PRI style.
However, he vowed to keep the peace.
We are going to act responsibly. We will
not be calling for confrontation. We are
right. La maestra Delfina won and well
prove it, Amlo said in a video on social
media. We wont accept any fraud.
Carlos Capistrn, Mexico economist
at Bank of America Merrill Lynch, said:
In our view, challenges to the results
are highly likely and there is a chance
FINANCIAL TIMES
INTERNATIONAL
with links to al-Qaeda. Those who spoke
to the FT said it highlights how Qatar
has allegedly used hostage payments to
bankroll jihadis in Syria. To its Gulf
neighbours, the biggest issue is likely to
be the fact that Doha could have paid off
Iran, its main regional rival, which they
accuse of fuelling conflicts in the Arab
world.
This particular stage began when an
Iranian-backed Iraqi Shia militia,
Kataib Hizbollah, kidnapped the
Qataris in December 2015. Three Iraqi
militia leaders say the hostages were
Doha says the blockade by
its neighbours is
founded on allegations
that have no basis in fact
held in Iran. Kataib Hizbollah is an Iraqi
group but is seen as having links with
Irans main regional proxy, Hizbollah,
the Lebanese militant group. The latter
is helping Iran back Syrian President
Bashar al-Assad in the six-year Syrian
conflict.
Two diplomats said they believed one
of the Iraqi groups motives for the kid-
napping was to provide Hizbollah and
Iran leverage to negotiate the release of
Shia fighters kidnapped by the radical
Sunni group Tahrir al-Sham in Syria,
which, in previous iterations, was an al-
Qaeda branch.
The hostage transaction was also
linked to a separate agreement to facili-
tate the evacuation of towns in Syria
that the election is annulled, although
that can take several months.
He noted that three state elections
had been annulled in the past in Mexico
and the PRI had subsequently won, and
that two other opposition parties had
said public resources had been used in
the State of Mexico in favour of the PRI.
Final results are due tomorrow.
Results of local elections indicate a
With nearly 98 per
cent of votes
counted, Alfredo
del Mazo, right,
had won 33.7 per
cent of the vote
tight presidential election next year,
which will keep uncertainty high, Mr
Capistrn added.
Mr Lpez Obrador, a former mayor of
Mexico City, is a love-him or loathe-him
figure who has twice stood for president,
both times claiming he was cheated out
of victory. An admirer of Fidel Castro, he
splits opinion between those who brand
him a dangerous populist and those who
hail him as a reformer.
Even before the fast count, Enrique
Ochoa, chairman of the PRI, claimed
victory for Mr del Mazo, who is the son
two surrounded by jihadis and two
besieged by Shia militias Syrian rebels
and diplomats say.
One western diplomat said: Iran and
Qatar had long been looking for a cover
to do this [hostage] deal, and they
finally found it.
According to two opposition figures,
Qatar used the evacuation arrangement
to pay $120-$140m to Tahrir al-Sham.
Another $80m, they said, went to the
Islamist group Ahrar al-Sham.
The Qataris pay anyone and every-
one, to what end? They have only
brought about our ruin, said a Syrian
rebel commander.
An Arab official said the total paid to
jihadi groups was closer to $300m. So,
if you add that up to the other $700m
they paid to Iran and its proxies, that
means Qatar actually spent about a bil-
lion dollars on this crazy deal, he said.
The Iraqi Shia militia commanders in
Iraq said that Iran had obtained about
$400m after giving them a payment.
They agreed to share details because
they were unhappy about their share.
Another confusing aspect of the deal
is that Iraqi prime minister Haidar al-
Abadi said in April his government
seized millions of dollars, which officials
said arrived on Qatari planes illegally.
It is unclear if this money is part of the
sums above, or an additional amount.
The money all came in suitcases, can
you imagine this? said one official.
Additional reporting by Simeon Kerr
in Dubai
Editorial Comment page 8
Inside Business page 12
and grandson of governors of the state of
Mexico and cousin of Mr Pea Nieto,
himself a former governor.
Together, we have halted the
advance of authoritarian populism in
the State of Mexico and together we will
do it again successfully in 2018, he told
supporters. Mexico does not deserve to
be Venezuela.
Ms Gmez had tweeted earlier:
Thank you . . . for your confidence. We
won the election . . . I wont let you
down. She reiterated her victory claim
at a news conference after the rapid
count results and promised to back it up
with evidence.
Horacio Duarte, chairman of Morena
for the State of Mexico, had told sup-
porters earlier that exit polls showed a
close race but predicted Ms Gmez
would win by 5 to 7 percentage points.
As results arrived from an election
markedbyvoterdisgustwithcorruption,
the national attorney-generals office
tweeted that Roberto Borge, former PRI
governor of the state of Quintana Roo,
had been arrested in Panama as he pre-
pared to board a plane for Paris. The lat-
est in a string of former governors to be
accused or detained, he faces accusations
of irregular purchases of state land
involvingmoneylaundering.
Media
Home of India TV chief raided
prompting free speech claims
KIRAN STACEY NEW DELHI
Investigators have raided the home of
the founder of a top Indian television
channel in connection with a loan from
ICICI Bank, sparking accusations from
NDTV that the countrys crime agency
is trying to undermine free speech.
New Delhis Central Bureau of Investiga-
tion searched four properties in the cap-
ital and Dehradun in northern India
yesterday, including the office and
homes of Prannoy Roy and his wife
Radhika, officials told local media.
NDTV confirmed the raids.
According to people familiar with the
case, the CBI is investigating what it says
are irregularities in a loan Mr Roy took
from the private sector bank in 2008.
Local reports said the money was not
repaid in full, quoting law enforcement
officials who promised to take action
against wilful defaulters.
Neither the CBI nor the bank resp-
onded to requests for comment. Mr Roy
could not be reached, but NDTV issued
a denial of the allegations. This morn-
ing, the CBI stepped up the concerted
harassment of NDTV and its promoters
based on the same endless false accusa-
tions, it said. NDTV and its promoters
will fight tirelessly against this witch-
hunt by multiple agencies.
The loan to Mr Roy had been repaid in
full, NDTV said, and added: The CBI
Labour market
Chinese graduate salaries fall
as universities expand rapidly
TOM HANCOCK SHANGHAI
Chinese graduates salaries have fallen
for the second year in a row, according
to a large-scale survey, as a glut of
degree holders grows thanks to a mas-
sive expansion of higher education.
A record 8m Chinese graduates are due
to join the labour force this year, just
under half of all workforce entrants and
up from about 4m a decade ago. China
has opened hundreds of new universi-
ties over the period, while a growing
number of parents expect their children
to study at university.
But as Chinas economy has slowed,
average monthly salaries for new gradu-
ates fell 16 per cent to Rmb4,014 ($590)
this year, the second consecutive year of
declines, according to a survey by
recruitment website Zhaopin.com.
With such a large graduating class
this year, new jobseekers still face a
daunting challenge, especially those
from less well-known universities out-
side the top tier, the survey said.
Xiaoyu Zhang, who will graduate in
accounting this year from the South-
western University of Finance and Eco-
nomics in Chengdu, said she had sub-
mitted 17 applications before securing
an accountancy job at a state-owned
technology company with a monthly
salary of Rmb4,500.
I feel unsatisfied with my salary, she
said, adding that she had been attracted
Space commerce
Rocket launch lifts New Delhi
satellite market hopes
ALIYA RAM NEW DELHI
India has celebrated its first launch of a
rocket capable of carrying heavier sat-
ellites into space, using new technology
the country hopes will give it a slice of a
lucrative international market.
The rocket, which was sent into orbit
yesterday after more than a decade of
planning and development, carried a
three-tonne satellite with television and
communications transponders, which
Indian companies have historically
leased from other countries or launched
at great expense on foreign soil.
The Indian Space Research Organisa-
tion will now hope to tap into a $5.4bn
launch industry that has mushroomed
in recent years as demand for connec-
tivity and communications increases.
The launch could also help curb criti-
cism from analysts and businesses that
the countrys space programme has
drummed up national pride over small
exploration advances in recent years,
while failing to finalise a launch vehicle
that can carry heavy satellites.
Congratulations to the dedicated sci-
entists of Isro for the mission, Narendra
Modi, prime minister, tweeted. The
mission takes India closer to the next
generation launch vehicle and satellite
capability. The nation is proud!.
Pranab Mukherjee, Indias president,
added: Heartiest congratulations to
3
raid is merely another attempt at silenc-
ing the media.
Mr Roy and his wife set up NDTV in
1988. Since then it has won a reputation
for political independence while
launching some of Indias most recog-
nised faces including Barkha Dutt and
Arnab Goswami in broadcast news.
But it has also been dogged by accusa-
tions of tax evasion and fraud, which its
supporters say are evidence of govern-
ment attempts to muzzle the channel.
For the past few years, Indias income
tax department has been investigating it
over the 2008 sale of $150m in shares to
General Electric of the US. The depart-
ment says this was a sham transaction
used for money laundering, charges
both companies have denied. Last year
the department fined NDTV Rs5.25bn
(about $82m) for tax evasion, a decision
overturned by a tribunal but reinstated
by Delhis high court in March. NDTV is
reportedly planning to appeal.
Late last year, NDTVs Hindi channel
was nearly taken off air for 24 hours
after ministers accused it of damaging
national security with live coverage of
an attack on an army base. The Editors
Guild of India said the proposed ban
which was abandoned was redolent of
the mid-1970s emergency, when then
prime minister Indira Gandhi sus-
pended some civil liberties, including
freedom of the press.
by added benefits such as subsidised
accommodation, common in Chinese
state-owned companies. I dont enjoy
accounting but I am not competitive in
any other area.
The prospect of a large cohort of uni-
versity-educated yet unemployed
young people worries Chinas Commu-
nist party, which fears the potential for
social unrest. In what has become an
annual mantra, China premier Li
Keqiang called last month for more
All smiles: a record
8m graduates are
due to join the
labour force but
may find salaries
disappointing
efforts in helping graduates to find jobs
or start businesses.
The government says 3.34m jobs were
created in the first quarter of this year,
and the Zhaopin data, culled from about
93,000 students who will graduate this
year, suggest the quantity of jobs is less
of a problem than their quality.
Concerns over the low quality of grad-
uate jobs have been highlighted in
recent years by the expanding ranks of
students enrolled in internship
schemes in the manufacturing and serv-
ice sectors, often involving low-paid and
menial work.
Additional reporting by Wang Xueqiao
Isro on the historic launch.
India has a 0.6 per cent share of the
global satellite launch industry and has
relied on France for heavier launches.
China has 3 per cent of the market,
according to the Satellite Industry Asso-
ciation, a trade body.
India has been unable to attract more
customers despite advances in space
exploration, in part due to the size con-
straints of its older polar satellite launch
vehicle. This year it marked a record for
sending the largest number of satellites
to outer space from a single rocket, but
most of the satellites were extremely
small, weighing less than 5kg.
India is already in the realm of the
commercial launch market, said Ajey
Lele at the India-based Institute for
Defence Studies and Analyses. The
major significance of this launch is that
India was not self-sufficient as far as
launching heavy satellites was con-
cerned . . . All communications and
meteorological satellites fall into the
four-tonne category.
Rajeswari Gopalan of the Observer
Research Foundation said that with its
lower costs, India could become a hub:
There is a shortage of viable options,
especially viable cheaper options. Now
the technology is there, there is a huge
potential for Isro to . . . attract compa-
nies from other countries.
Gideon Rachman page 9
4 FINANCIAL TIMES Tuesday 6 June 2017

INTERNATIONAL

Monetary policy

Fed weighs benign impact of rate rises on markets

Supportive conditions
offset soft data as officials
consider next move
SAM FLEMING WASHINGTON
ROBIN WIGGLESWORTH NEW YORK
Among the arguments likely to be
advanced in favour of an interest rate
rise by the Federal Reserve at next
weeks rate-setting meeting is a striking
fact about its recent increases: they have
left relatively little imprint on financial
markets.
A gauge of financial conditions from
Goldman Sachs shows that even after
the quarter-point rise in rates in March,
financial conditions are more support-
ive of the economy than they were
before, having since eased by 45 basis
points. The two biggest drivers as of Fri-
day were a fall in 10-year yields and a
weaker US dollar.
The benign backdrop in financial
markets may counterbalance signs of
soft economic growth and inflation
when policymakers enter their deliber-
ations on June 13 and 14, encouraging
those calling for a rate rise. The Fed has
sent a clear signal that it is ready to lift
rates for a fourth time since the crisis
started. But economic data have been
disappointing, with jobs growth under-
shooting analyst expectations and core
inflation hanging at 1.5 per cent well
below the 2 per cent target.
Michael Feroli, an economist at
JPMorgan Chase Bank, said the econ-
omys performance was not materially
different from 2016, when the Fed kept
rates on hold for most of the year, but
financial markets have been less jittery
than after the first rate rise. Financial
conditions are growth-supportive and
that is a big reason why they are contin-
uing to talk up more rate hikes, he said.
Financial conditions are tracked
closely by senior rate-setters including
Bill Dudley, the New York Fed president,
who constructed a gauge when chief
economist at Goldman Sachs. There are
numerous measures in use alongside
the Goldman variant, each tallying up
factors such as equity prices, the dollar,
and movements in yields to assess
whether the financial markets are sup-
porting growth or weighing against it.
The St Louis Feds Financial Stress
Index has, for example, sagged to a
three-year low, and at minus 1.54 points
it is not far off the all-time low of minus
1.63 touched in August 2014. Its gauge
consists of 18 factors, such as bond
yields and interest rates, and is designed
so that the average level where mar-
ket conditions are neither easy nor tight
should be zero.
Analysts increasingly
incorporate financial
conditions into their
assessment of the outlook
Mr Dudley has been open in arguing
that financial conditions should be
taken seriously by the Fed. I believe
that my longstanding focus on financial
conditions has, over time, helped me
become a better economic forecaster,
Mr Dudley said in a speech this spring.
And, I am pleased that economists and
analysts increasingly incorporate finan-
cial conditions into their assessments of
the economic outlook.
Other senior policymakers have also
cited movements in markets in support
of past changes in official rates. Before
the Feds March rise, for instance,
Stanley Fischer, the vice-chair of the
Feds board of governors, said one of the
factors weighing in favour of a tighten-
ing of policy was rising investor spirits
demonstrated by surging asset prices.
Ethan Harris, global economist at
Bank of America Merrill Lynch, said
part of the reason for the benign finan-
cial conditions was the markets view
that a fiscal stimulus from the Trump
administration was becoming less
likely; this has had an impact on the
bond market and the dollar, which has
softened. The fading stimulus prospects
are likely to weigh on some Fed policy-
makers deliberations, given around
half of them had plugged some support
from easier fiscal and regulatory policy
intotheiroutlooksbackinDecember.But
the flipside to that is a financial market
backdropthatshouldstimulategrowth.
While markets may be buoying the
economy, the Fed appears to be watch-
ing certain areas closely. The minutes to
the Feds May rate-setting meeting, for
instance, noted that commercial prop-
erty prices were strong in some sectors
and that a sharp decline could pose a
risk to financial stability.
Lael Brainard, one of the Feds gover-
nors, said last week that she was care-
fully watching high corporate debt lev-
els as well as lax automotive lending to
borrowers with weaker credit histories.
Editorial Comment page 8

Washington. Appointments Elections

Trump slow to fill
Treasury as debt
showdown looms
Department faces battle over
borrowing and reform hurdles
without senior team in place
SAM FLEMING WASHINGTON
ROBIN WIGGLESWORTH AND
JOE RENNISON NEW YORK
The US Treasury is heading into a debt
ceiling showdown this summer that will
test a department dealing with gaps in
senior decision-making ranks and a
packed policy agenda.
Steven Mnuchin, Treasury secretary,
presides over an organisation that is
ahead of most other Washington depart-
ments in terms of political nominees to
top jobs but behind compared with pre-
vious presidential administrations.
Investors say a full-blown debt ceiling
conflagration would challenge a depart-
ment that has enjoyed benign market
conditions since President Donald
Trumps election and is considering pos-
sible reforms to US debt issuance and
significant overhauls to tax and finan-
cial regulation. Amar Reganti, who
worked in the Treasurys debt manage-
ment division and is now at asset man-
ager GMO, said: You have the Fed bal-
ance sheet unwind, the debt ceiling and
plans to issue long bonds, which takes
up a lot of bandwidth . . . a lot of the
people needed to make decisions arent
in place.
The president must make 4,000 polit-
ical appointments a number of them
subject to Senate confirmation and
US administrations always take a long
time staffing up. But Mr Trump has
been extraordinarily slow.
By this stage, the past four adminis-
trations had at least five Senate-con-
firmed nominees in place at the Treas-
ury, according to the Partnership for
Public Service (PPS). This time, Mr
Mnuchin is the only one, although sev-
eral are awaiting Senate confirmation.
Like previous administrations, the sec-
retary is using counsellors who do not
need Senate confirmation to provide
advice, including Craig Phillips, a
former BlackRock executive.
Financial policing
In the debt arena, the administration
has not announced nominations for
undersecretary for domestic finance or
assistant secretary for financial mar-
kets, leaving senior civil servants to take
on the work.
The Treasury also needs to appoint a
deputy assistant secretary for federal
finance. Last month Jim Donovan, a
Goldman Sachs banker, dropped out of
the running for the critical role of dep-
uty Treasury secretary just days after
his nomination paperwork was submit-
ted to the Senate.
Treasury has made significant
progress building our team, and we have
nearly two-thirds of our senior political
appointees nominated or already in
place, the Treasury said. We are work-
ing confidently toward achieving the
economic goals set out by President
Trump and Secretary Mnuchin.
This is a high-stakes year for the
Treasurys work on public debt. Offi-
cials are examining whether to issue 50-
or 100-year bonds an idea the depart-
ment rejected under previous adminis-
trations and which is viewed with scep-
ticism in Wall Street and is facing the
likely unwinding of quantitative easing
by the Federal Reserve this year.
The Treasury is also preparing for a
battle over the debt ceiling, which must
be raised or suspended by Congress to
prevent a default that would send
shockwaves across global markets. This
will consume an increasing amount of
energy, potentially distracting from
other work, former officials said.
The Treasury is already using emer-
gency cash-conservation measures to
avoid breaching the limit and Mr
Mnuchin has called on Congress to deal
with the issue before its August recess.
The tempo picks up as you get closer to
the exhaustion of extraordinary meas-
ures and get deeper into the impasse,
said one former official.
Past crises involved dozens of staff
from across the department, including
public affairs, fiscal services, debt man-
agement and its general counsels office.
Political appointees play an important
role in managing the process.
Alongside Mr Phillips, the Treasury
Lone voice: secretary is relying on senior civil serv-
Steven Mnuchin ants including David Lebryk, Monique
during a Rollins and Fred Pietrangeli, director of
congressional its Office of Debt Management. The
hearing last good news is there are civil servants who
month. He is have been around when these issues
the only Senate- have been handled before, said another
confirmed former official.
nominee in But he added: Not having a fully
place at the fledged team in place affects their abil-
Treasury ity to manage this process effectively.
Drew Angerer/Getty Clashing statements over the debt
ceiling within the Trump administra-
tion are adding to the difficulties. Gary
Cohn, the National Economic Council
director, said on Friday that if spending
cuts or other conditions needed to be
attached to a package to increase the
A lot of the limit, they should be considered
aligning himself with Mick Mulvaney,
people the presidents budget director. But Mr
needed to Mnuchin has called for a clean bill
raising the limit without riders.
make These people should be on the same
decisions page, said Erik Weisman, a portfolio
manager at MFS Investment Manage-
arent in ment. It speaks to some of the dysfunc-
place tion in the administration.
Other departments were far more
Amar Reganti thinly staffed, said Max Stier, PPS presi-
dent. But the absence of a deputy Treas-
ury secretary was problematic given the
importance of the post, said Mr Stier,
adding: The big problem has been that
the Trump administration has not
moved with adequate dispatch.
Venezuela
sets date for
assembly vote
amid power
grab claims
GIDEON LONG
ANDEAN CORRESPONDENT
Venezuelans will get the chance to vote
on July 30 for candidates to fill Presi-
dent Nicols Maduros controversial
new assembly a body that will be
charged with rewriting the constitu-
tion and which has been dismissed by
the governments opponents as a sham.
On July 30 there will be national, gen-
eral, direct, secret and universal elec-
tions for the national constituent
assembly, Mr Maduro confirmed in his
weekly television address on Sunday. I
call on everyone to prepare themselves.
Mr Maduro sparked outrage when he
first announced the assembly in early
May. People who had already been on
the streets for a month calling for free
elections and the release of political
prisoners took up their call with
renewed vigour.
The protests have hardly stopped
since then. Around 60 people have been
killed most of them opposition activ-
ists hundreds have been jailed and
thousands injured.
Opponents of Mr Maduro say his plan
is nothing more than a blatant power
grab. The new assembly would have a
mandate to rewrite Venezuelas 1999
constitution and could in theory cement
the presidents grip on power.
Mr Maduro has yet to explain why the
The territorial system is
strongly biased in favour
of the government
Francisco Rodrguez
constitution needs amending. It was
written under the auspices of his men-
tor and former leader Hugo Chvez, and
for nearly two decades the Socialist gov-
ernment has lauded it as an example for
the rest of the continent.
Last week, Mr Maduro said any new
text that emerged from the assembly
would be put to a national referendum.
Ominously, he also said the role of the
assembly would be to transform the
state.
The presidents move puts the opposi-
tion in a tricky position: do they boycott
the July 30 vote as a farce and risk giving
Mr Maduro and his supporters a free

New-look SEC expected to reduce fines and enforcements after record caseload
DAVID J LYNCH WASHINGTON
The Securities and Exchange Commis-
sion is set to overhaul the policing of US
financial markets, with a team expec-
ted to preside over a decline in enforce-
ment actions and penalties.
Jay Clayton, the SECs new chairman, is
soon to name Steven Peikin, a colleague
from the New York law firm Sullivan &
Cromwell, co-chief of the enforcement
division along with Stephanie Avakian,
the units current acting director.
Mr Clayton, who is focused on compa-
nies access to capital markets, has only
hinted at his enforcement philosophy.
But a fall in enforcement actions and
penalties is anticipated after three
straight years of record SEC case totals.
The enforcement programme is
going to change substantially, said one
Republican who has spoken to Mr Clay-
ton, but its not going to change over-
night. You cant turn on a dime.
Mr Clayton may adopt a proposal dis-
cussed by President Donald Trumps
transition team to appoint a panel mod-
elled on the 1972 Wells Commission that
would evaluate SEC enforcement. He
also has been advised to increase incen-
tives for companies to co-operate with
SEC investigations and to clarify when
civil penalties will be levied against pub-
lic companies, the Republican added.
A decade after the financial crisis,
with a pro-business administration in
power, some securities lawyers say the
SEC rethink is overdue. Under the previ-
ous chair, Mary Jo White, the commis-
sion pursued a broken windows strat-
egy, seeking to deter wrongdoing by
punishing even minor violations.
Ms White and Andrew Ceresney, her
enforcement chief, touted record case
numbers as a measure of clean markets.
In fiscal 2016, the SEC brought 868 civil
cases, up more than 28 per cent on three
years earlier. Ms White also lodged a
series of first of their kind actions
against private equity advisers and pub-
lic finance officials, reflecting what she
termed an unrelenting agenda.
Many Republicans, however, saw the
escalating statistics as evidence that the
commission tackled too many marginal
complaints. Mr Clayton intends to zero
in on intentional wrongdoing rather voters, who are vulnerable to Ponzi
than unintentional regulatory viola- schemes or get-rich-quick scams.
tions, said those familiar with his plans. In written answers to questions after
Tom Gorman, a partner with Dorsey his confirmation hearing, Mr Clayton
and a former SEC official, said he told the Senate banking committee he
expected an emphasis on capital mar- favoured targeting fraudulent promot-
kets enforcement. Jay Clayton is going ers of local, non-transparent investm-
to focus on his home turf, referring to ent opportunities that have some of the
the chairmans legal work on mergers hallmarks of penny stock schemes.
and stock offerings. Mr Clayton has yet to say whether he
SEC officials may also intensify their will allow enforcement division staffers
pursuit of fraudsters who target small to issue subpoenas on their own author-
investors. Such a populist gambit could ity, as was the practice in recent years. In
benefit average Americans and Trump February, acting chairman Michael
Piwowar began requiring division direc-
tors to approve such requests.
The Wall Street pedigree shared by
Mr Clayton and Mr Peikin has stirred
unease among Democrats, who fear
they will go easy on financial miscon-
duct. As a white-collar attorney, Mr
Peikin, who spent eight years as a fed-
eral prosecutor in Manhattan, repre-
sented clients such as Goldman Sachs
and Barclays bank.
But Aitan Goelman, former enforce-
Jay Clayton: is focused on access ment director for the US Commodity
to capital markets by companies Futures Trading Commission under
Barack Obama, who worked with Mr
Peikin as a prosecutor, said Democrats
worries were misplaced.
Hes a staunch believer in vigorous
enforcement of securities laws. Id be
surprised if he turned into a light-touch
regulator or a captive of industry.
Still, the SEC under Mr Clayton is
likely to reshape the use of civil money
penalties against public companies.
Since 2002, when the SEC fined Xerox
$10m for accounting fraud, the commis-
sions appetite for outsized monetary
punishments has exploded. In 2010,
Goldman paid a record $550m fine.
In 2013, Ms White asked to levy even
harsher fines and said an earlier SEC
statement limiting large fines to cases in
which shareholders had benefited from
securities violations was not binding
policy. At his hearing, Mr Clayton sig-
nalled a change, stressing individual
accountability over corporate penal-
ties. Its unlikely therell be quite as opponents could win the July 30 vote if
much enthusiasm for large penalties,
said Dixie Johnson, a partner with King
& Spalding in Washington.
SEC enforcement blow page 12
hand in re-writing the constitution, or
do they take part and try to defeat him?
Key opposition leaders have yet to
state publicly what they will do.
Two-thirds (364) of the 545 assembly
delegates will be elected locally,
although the voting system gives extra
weight to rural areas where the govern-
ment is likely to perform relatively well.
The territorial system is strongly
biased in favour of the government as it
leads to a significant over-representa-
tion of voters in low-density districts,
where the government tends to get a
higher share of votes, Francisco
Rodrguez, chief economist at Torino
Capital in New York, said in a research
note last week.
The remaining third (181) of dele-
gates will be chosen by specific groups
including workers, students, pension-
ers, indigenous people and the disabled.
With Mr Maduro deeply unpopular,
the Venezuelan economy in tatters and
inflation in triple figures, some analysts
say that even with the voting system
stacked against them the presidents
they decide to take part.
But it is a high-risk strategy. If they
participate and lose, they risk legitimis-
ing the Maduro regime.
Tuesday 6 June 2017 FINANCIAL TIMES 5
6 FINANCIAL TIMES
New chapter for the presidential library
Barack Obamas idea for
his Chicago-based archive is
far more ambitious than
anything envisaged by his
predecessors, writes
Edwin Heathcote
T
he presidential library is
an American archetype.
Something between an
archive, a shrine and a pub-
lic museum, its a peculiar
hybrid that embodies the residual
respect for holders of the highest office
and the blurry boundary between the
public, the political and the personal.
Most presidential libraries have
tended to be situated on family estates,
ranches or exurban plots and, frankly,
they do not impinge much on the public
consciousness beyond the very local and
some school trips. With its Chicago loca-
tion, Barack Obamas will become one of
the most visible presidential libraries
and its design has provoked an intrigu-
ing conversation about what and who
these curious buildings are for.
The first presidential library was
Franklin Roosevelts in 1941, a rural,
farmstead-type structure on the family
estate in Hyde Park, New York. Harry
Trumans (Independence, Missouri,
1957) and Dwight D Eisenhowers
(Abilene, Kansas, 1962) were stripped,
modern reinterpretations of the classi-
cal, buildings of solid stone with sombre
porticos, their architecture situated
somewhere between Washington Fed-
eral and Italian fascist.
The big break came with the John F
Kennedy Presidential Library in Boston
(1979). This was a resolutely late-
modern building designed by IM Pei, an
austere composition of discreet abstract
forms. Pei turned 100 this year, as JFK
would have done, and he was the first
big name to design a library.
Lyndon B Johnsons library (Austin,
Texas, 1971) was designed by corporate
behemoths SOM, and is fierce and Bru-
talist-looking. Richard Nixon (Yorba
Linda, California, 1990) and Ronald
Reagan (Simi Valley, California, 1991)
took the low-lying ranchy route, while
Gerald Ford (Ann Arbor, Michigan,
1981) and Jimmy Carter (Atlanta, Geor-
gia, 1986) favoured a sterner modern-
ism. George HW Bushs library (College
Station, Texas, 1997) is a corporate/clas-
sical hybrid, Bill Clintons (Little Rock,
Arkansas, 2004) is a high-tech bridge
and George W Bushs (Dallas, Texas,
2013) looks like a rather elegant reinter-
pretation of Lenins mausoleum. None,
frankly, is an architectural masterpiece.
So could Obamas library (called the
Obama Presidential Center) move the
type forward? The process started with
promise. Obama, whose political roots
lie in Chicagos South Side, brought opti-
mism to the deprived, mostly African-
American streets when he announced
that he would bring his institution to
their side of the city.
After some to-ing and fro-ing, the site
selected is just south of the Museum of
Science and Industry in Jackson Park
and immediately there were objections
that the building would spoil this piece
ARTS
of parkland designed by Frederick Law
Olmsted, revered for his vision of New
Yorks Central Park.
The library has been designed by Tod
Williams and Billie Tsien, and has raised
a few eyebrows. The former president
asked for an unassuming structure, yet
apparently rejected the architects first
proposal as too modest. This second
iteration features a curious stone-clad
tower with a slightly swollen belly. The
renderings showing a building largely
buried in the park and almost over-
grown are perhaps a little misleading.
This is a huge complex, its costs esti-
mated at some $500m.
The language around the complex has
been folksy: a vision of locals setting up
barbecues (Obama good-humouredly
pointed out at a press conference where
the grills might go) and kids playing in
the park. Yet Obamas idea of what a
presidential library might do is also far
more ambitious than anything envis-
aged by his predecessors. This, he pro-
poses, should be a community library as
well as a presidential one. It will not be
an archive in any traditional sense:
records will be digital only, and it is
intended to function as a public
educational institution.
If thats the case, though, you might
wonder why the president didnt opt for
a more urban location. So much of Chi-
cagos South Side consists of a ragged
landscape, devastated by blight and
demolition. Could Obama not have
looked for inspiration to artist Theaster
Gates Stony Island Arts Bank, just up
the road from Jackson Park? A building
deeply embedded in whats left of the
physical and social fabric of the South
Side could have catalysed physical and
social regeneration.
Delight and distinction in triplicate
DA N C E
Frederick Ashton triple bill
Royal Opera House, London
aaaaa
Clement Crisp
An Ashton triple bill to end the present
Royal Ballet season, and an occasion for
the dancers to renew a relationship with
the fundamentals of their schooling and
style. Their musical sensibilities are
admirably on view in The Dream and
Symphonic Variations, and in the clarity
of their utterance the dance is clean
and well-nuanced, which was Ashtons
ideal. (The shadow of Anna Pavlova is
ever-present, as is Ashtons cry to his
dancers: Bend! Bend!)
The Dream, which is better lit than I
have seen it for years, is fine indeed,
with an excellent cast: Akane Takada
and Steven McRae as Titania and a daz-
zling Oberon, Valentino Zucchetti a
buoyant Puck, Bennet Gartside an
earthy, real Bottom, and a quartet of
splendid and splendidly confused lov-
ers: Itziar Mendizabal and Tomas Mock,
Claire Calvert and Matthew Ball.
Unalloyed delight. And the junior choir
singing well.
And then the serenities of Symphonic
Variations, that contemplation of
CLASSICAL MUSIC
Britten Sinfonia
Barbican, London
aaaee
Richard Fairman
The way a composer responds to the
music of the past can be very revealing.
Richard Strauss left us surprisingly clas-
sical recordings of Mozart and
Beethoven. Brittens performances of
Bach and Mozart strove for clarity of
sound. The enthusiasm of Boulez for
Schoenberg, or of John Adams for Ravel,
is a pointer to formative influences.
As both a pianist and a conductor,
Thomas Ads has already displayed his
appreciation of a wide range of music.
To embark on a cycle of the Beethoven
symphonies, though, is a special chal-
Above: an
artists
impression of
the proposed
Obama
Presidential
Center. Left:
the former
president with
the plans for his
complex
Scott Olson/Getty Images
Is the library of the most literate
recent president designed to be a subur-
ban shrine? Its stone tower certainly
has the odd feel of a memorial rather
than a living building, a kind of pre-
Columbian ruin. It has been suggested
that libraries reflect their presidents
character or mission. Trumans and
Bush Jrs look like mausoleums, JFKs
could be compared to a rocket launch
pad and Reagans to a California outlet
mall. Could a ruin in a park be a more
poignant metaphor for Obamas legacy
than we might imagine?
obamalibrary.gov
The 2017 Chicago Forum on Global Cities
runs June 7-9, digital.thechicagocouncil.org
emotional, physical and spiritual
selflessness, lustrously done by Yuhui
Choe and Yasmine Naghdi, James Hay
and Tristan Dyer, Marianela Nuez and
Vadim Muntagirov. Muntagirov is in my
view the finest interpreter because he
dances with a serene joy of the leading
male role, and I have been looking at this
ballet since its first performance. The
company is dancing this season with
notable distinction and integrity, as we
have seen with recent stunning Mayer-
ling showings, in Liam Scarletts new and
splendid Symphonic Dances, and in the
blaze of Forsythes The Vertiginous Thrill
of Exactitude.
lenge. What will be the scale of perform-
ance? Will the style be traditional or
period? In what context will the sym-
phonies be set?
Adss cycle with the Britten Sinfonia
will be spread over three years at Saf-
fron Hall in Essex and the Barbican.
More important, he has chosen to
place the symphonies alongside con-
temporary music and not his own,
but works by Gerald Barry, who will also
be featured in supporting chamber
music recitals, where Ads will double
as pianist.
The first concert opened, appropri-
ately enough, with Barrys Beethoven, a
setting from 2008 of Beethovens heart-
felt letter to his mysterious immortal
beloved. In the hands of some contem-
porary composers a tribute to a great
predecessor might be an earnest affair,
but Barry is not one of them. His scatty
irreverence comes across like a thumb
Tuesday 6 June 2017
T H E AT R E
Persuasion
Royal Exchange Theatre, Manchester
aaaee
Ian Shuttleworth
Be honest: if you made a list of stage
adaptations for which youd expect to
find a notice warning of strobe lighting
effects, Jane Austens Persuasion
wouldnt be among your top 500 likely
candidates. Nor would you expect
proceedings to open with a character
dancing madly to Robyns Call Your
Girlfriend before being interrupted
by another declaring, The music is
most disagreeable!
Most crucially, after reading that
much, you wouldnt expect to be told
that this isnt a gung-ho Regietheater
update of Austens last completed
novel (first published posthumously in
1817, although the marketing doesnt
seem to be pushing the bicentennial
angle). Director Jeff Jamess adaptation
(with James Yeatman) takes place,
broadly speaking, in modern dress,
includes lots of contemporary wacki-
ness and even drops an F-bomb in a soci-
ety soire in fashionable Bath; yet it is
seldom egregious, and on the few occa-
sions when it is, it is self-consciously so
and invites us to laugh at the treatment
rather than the material. What James
does is to distil the events and themes of
the novel, removing the tinctures of
period so that we can consider them in
our own context.
It still seems perfectly reasonable for
protagonist Anne Elliot to distance her-
self from a society seemingly only con-
cerned with who will marry whom, as if
that were the end of everything (as it
was in Austens own early novels). It
simply makes more sense for us to see
Lara Rossis Anne begin as a near-
depressive, prone on the floor and sepa-
rate from the other characters, whom
she dismisses from the stage by physi-
cally pushing them off the double-
decker rostrum of Alex Lowdes set
design. (Later the top layer revolves,
and the sea at Lyme Regis is portrayed
by a thick layer of suds, so that on press
night one actor body-surfed into the lap
of a surprised front-row punter.)
The examination of the power of per-
suasion towards making or refusing
such couplings is unabated by Jamess
cheeky treatment, and he gets solid per-
formances out of an ensemble including
Geraldine Alexander and Antony Bun-
see. The conclusion is that, while there
is much more to life than love, neither
should it be simply dismissed.
To June 24, royalexchange.co.uk
Dazzling:
Steven
McRae
and Akane
Takada in
The
Dream
Tristram Kenton
Marguerite and Armand, which ends
this programme, was a vehicle for Mar-
got Fonteyn and Rudolf Nureyev and
very clever too and it now allows
Zenaida Yanowsky (whose second act
of Swan Lake I revered) to deploy her
admirable gifts in, alas, a farewell
season. Otherwise, it is too predictable
for its own good. Yanowsky plays it to
the hilt, and brings a tear even to a
critics eye. Roberto Bolle, a guest
Armand, goes through the motions.
The stage is littered with male dancers
wearing gloves.
To June 10, roh.org.uk
to the nose. The music is jaunty and
allusive, culminating in a verse of O
come, all ye faithful. The soloist, here
the excellent Mark Stone, gets to warble
amusingly in falsetto. Is it fun? Yes, up to
a point. Once is definitely enough.
For the Beethoven, Ads announced
his personality from the outset. He likes
the swift speeds and bright, hard sounds
of the period brigade, but in other ways
these were conventional performances,
not just employing the traditional
instruments of the Britten Sinfonia, but
with the orchestra bolstered by extra
players. The Symphony No.1 was force-
ful, bracing, a touch charmless. The
Symphony No.2 dug deeper and bowled
along with tremendous impetus. Adss
Beethoven cycle looks set to power
through its three-year course with
unstoppable momentum.
barbican.org.uk
Tuesday 6 June 2017 FINANCIAL TIMES 7

FT BIG READ. BRITISH POLITICS

Despite expectations of a disaster at the start of the campaign, the Labour leader has turned the UK
election into a serious contest. However, the party will remain sharply divided, whatever the result.
By Jim Pickard

J
eremy Corbyn never really
wanted the job. His implausible
ascent to the Labour leadership
began in a committee room just
off Westminster Hall on a
warm day in May 2015. Ed Miliband had
stepped down as leader hours after lead-
ing the party into its worst general elec-
tion defeat for decades.
A small clique of the most leftwing
Labour MPs the Campaign Group
had called a meeting to discuss succes-
sion. They were going through the
motions of what had been a formality
for years: putting up a no-hope candi-
date for the party leadership.
Mr Corbyn, aged 66 at the time, was
asked only after several others had
declined. After some persuading, he
said he would step in to promote some
causes.
Even now, as he makes his bid for the
leadership of a G7 country, it is not clear
how much he craves the premiership of
the UK. When Jon Snow, presenter of
Channel 4 News, tried to get him to say I
want to be prime minister, he was una-
ble to repeat the phrase.
But, against the odds, Mr Corbyn is
turning the 2017 general election into a
serious contest.
Over the past month, Mr Corbyn has
confounded critics, winning supporters
with his informal, grandfatherly style
and a manifesto promising extra money
for almost everyone.
The idea that Mr Corbyn is even in

The unlikely rise

contention, just a few days from Brit-
ains general election, has astonished
media pundits, the Conservative party,
and even many of his own MPs. Only a
fortnight ago one Labour candidate told

For all the cynical

commentators, everywhere
I go the crowds just get
bigger. Something has
happened
the FT: Hes an unelectable, incompe-
tent extremist. This election could be
absolute carnage.
But Mr Corbyn, who had spent his
political life on the far left fringe of the
Labour party, railing against big busi-
ness and backing causes such as nuclear
disarmament, says only he has the
vision to transform a society he sees as
embittered by austerity.
of Jeremy Corbyn
Jeremy Corbyn
at a campaign
event in
rowed that gap, thanks to a combination
of Theresa Mays campaign wobbles and
a Labour manifesto dripping with
Nottingham on spending pledges. Mr Corbyn has prom-
Saturday. Below, ised to nationalise utility companies
Tony Benn and put billions into health, education
Christopher Furlong/Getty
Images
and social care. There are hand-outs for
almost everyone: parents, students,
pensioners andpeople on benefits.
Those enormous spending pledges
In the first, young voters turn up, giv-
ing a boost to Mr Corbyn. The second
scenario is that young voters do what
young voters always do, which is say
theyre voting and then dont, he says.
Among many older voters, Mr Corbyn
plays badly because of his woolly
demeanour, his old-school socialism
and his quasi-pacifist outlook for
example implying he would not order a
20
The number of
Even among traditional Labour vot-
ers there are many who cannot stomach
the party leader. Graham Morgan, a
percentage points retired engineer from Neath in Wales, is
Labour trailed by at refusing to vote in June despite sup-
the start of the
campaign porting the party all his life because
he believes the leader is a deluded Beating expectations Jeremy Corbyn
extremist. When we lose the election, and Labours poll ratings have
500k
Size of Labour party
we are going to get hammered, God help
us, because May will be able to do any-
improved during the campaign

For all the cynical commentators,
everywhere I go the crowds just get
bigger. Something has happened over
the last seven weeks, he told a recent
rally.
Mr Corbyns surprise showing hints at
the broader dilemma facing the centre-
left in much of the developed world. In
the US and western Europe, parties on
the left have struggled to win power and
in some cases have been decimated
amid the populist backlash against the
status quo.
However, they have also found that
stridently leftwing message can ener-
gise young disaffected voters, especially
when delivered by seemingly authentic,
plain-speaking figures such as Bernie
Sanders in the US, Jean-Luc Mlenchon
in France, and Mr Corbyn.
The question these parties are trying
to answer is whether a sharp turn to the
left will be a platform for renewal or
leave them shunned by the broader
electorate. For Labour, the issue is
whether an unreconstructed left-
winger, who has not changed his ada-
mantine views in 40 years, can win over
the agnostic voters of Middle Britain.
Passionate support
The grassroots enthusiasm was easily
visible last week among a crowd who
turned out to see Mr Corbyn in Swin-
don, a drab town 70 miles west of Lon-
don. Hundreds of activists, many with
banners saying No More Austerity,
gathered in front of a campaign bus.
Angel Grace, an unemployed support
worker, was dressed as a ghost to high-
light cuts to benefits under the Conserv-
atives. Hes going to stop the sanctions
and get the bloody elite rich to pay their
fair share, she said.
Martin Hawes stopped playing the
bongos to chat. Corbyn has done an
amazing campaign given the massive
dissing that he had from the media,
said the self-employed builder. At the
start he was seen as an absolute no-
hoper but things have changed.
Behind Mr Corbyn is a formidable
army of passionate believers, quick with
instant online rebukes for anyone who
questions him. Labours membership
has doubled to half a million since he
became leader as the party was in effect
taken over by a mix of old socialists and
young idealists.
With the party deeply divided and
fighting an often hostile media, Labour
began the election campaign more than
20 points behind in the opinion polls.
In just weeks, however, it has nar-
are fully costed, despite Conservative drone strike on Isis. thing she wants to, he says. Passionate support Mr Corbyn has an
membership, which
claims but only through eye-watering The recent terror attacks in Manches- has doubled under Despite polls moving in the right army of believers who rush to his
tax increases that fall almost entirely on ter and London have highlighted ques- Corbyn direction, Labour insiders still fear a defence wherever he is criticised
business and the highest earners. tions about Mr Corbyns stance on loss of seats across the Midlands and
It is impossible to imagine that mani- security. He voted 56 times against northern England, where many voters Splitting the party Even if Labour
festo appearing during the New Labour new anti-terror laws between 2001 and who voted Leave last year like Mrs does well on Thursday, sharp divisions
days: Tony Blair cosied up to big busi- 2010 and has previously described a Mays uncompromising message about among its MPs will remain
ness and eschewed what he called old- shoot-to-kill policy against terror leaving the EU with or without a deal.
style tax and spend. suspects as counterproductive and By contrast, Labours position on the
Yet the document has won friends, dangerous. Mr Corbyn, in turn, has EU has often appeared muddled. Its the public.
especially among public sector workers, accused the Conservatives of damaging stance acceptance of Brexit with cave- When people say to me that Jeremy
women and Londoners. In television cuts to police numbers. ats was designed to bridge the gap is a bit leftwing I say, it is not about left
debates Mr Corbyn has outperformed, People love our manifesto but they between young, Europhile voters in the and right, it is a matter of right or
albeit against low expectations, appear- are worried about whether Jeremy can big cities and Eurosceptics in the post- wrong, he says. Hes a real peoples
ing relaxed and principled. keep them safe, says one candidate. industrial heartlands. person, and so humble at the same time.
The lingering problem: his popularity Some Labour candidates have openly I have never met a leader with the com-
is strongest among young people, who
are the least likely to vote. YouGov has
People love our manifesto urged the electorate to vote for them as
individuals and ignore the party leader.
mon touch that Jeremy has.
At the outset of the campaign, when a
published the most favourable polls for but they are worried about One said: If I had 10 for every voter crushing Tory victory appeared on the
Labour, with one suggesting it could who said, I could vote for you but I cant cards, it seemed likely that Mr Corbyn
even make net gains against the Con- whether Jeremy [Corbyn] vote for Corbyn, Id be able to pay for my would resign after the election. There
servatives. But Marcus Roberts, head of can keep them safe, says whole campaign. What moderate MPs have been rumours that his family
international projects at the firm, said are telling the public is, Labour cant wants him to quit a job that as he
he could envisage two scenarios. one Labour candidate win, will you still vote for me. Of course admits has been hard on them.
it is a completely nuts message. But he knows that walking away
would jeopardise the only chance the
Leaders approval ratings UK general election 2017 poll of polls Deep divisions hard left has had of controlling a
% who approve Share of vote, by party (%) To understand the Labour leader you mainstream party.
Lines represent weighted averages of recent polls by unique pollsters have to go back to the schism in the He hates the job, everyone knows
50 EU referendum Election called Election Jun 8 party in 1983 when Mr Corbyn was first that, its just not his thing, said one ally.
50 elected. Neil Kinnock, who became He does feel the responsibility of it, but
Conservative
40 leader that year, led the party into he is definitely happier out campaign-
40 defeat in 1987 and 1992 but by throw- ing. You can see he has a spring in his
May Labour ing out many leftwing policies paved step now that the election has begun.
30
the way for Tony Blairs New Labour One plausible situation is that the
30 and the landslide 1997 election victory. party gets a higher share of the vote than
20
Corbyn Mr Corbyn, an acolyte of the fire- the 35 per cent in its 2005 victory but
20 10 Lib dem
brand Tony Benn, was firmly on the side still loses seats. That could see Mr Cor-
Ukip of the left-wingers. He was almost byns team trying to make the case for
SNP expelled from the party after voting one final push in 2022.
0 Green
10 against his own government more than A worse result with the Tories
Jul 2016 17 May May 2016 Sep 2016 Jan 2017 May 2017 500 times. Instead he was just indulged increasing their majority would
Sources: Opinium; FT research
as an eccentric outsider. almost certainly lead to the third leader-
His astonishing rise to the leaders ship contest in as many years.
office can be seen as a backlash against There will be no mercy this time,
Back to the 1980s to try to oust him. They failed. If Mr system of voting: Its Alliance the Blair years, which party members says one. If it goes badly, we will have to
Chaos, farce and civil war Corbyn outperforms expectations this with the Liberals picked up a pitiful disliked because of the partial privatisa- oust him. Another told the FT that the
week it poses an existential dilemma for 23 seats in 1983 on 25.4 per cent of the tion of public services and the invasion bar for success was making net gains: If
his enemies within his party. Will the national vote. of Iraq. They hated New Labours slick Jeremy fails to take us forward then its
centre left the remnants of New The SDP did not break the mould suits and policy compromises. just not good enough.
Labours journey further to the left Labour remain locked out of power for of British politics as its founders When Mr Corbyn appeared on the Old allies of Gordon Brown, the previ-
under Jeremy Corbyn has left most of years to come? Or will they walk away? hoped; those who stuck with Labour in leadership ballot in 2015 his views were ous Labour prime minister, look set to
its MPs uncomfortable, nauseous and Since Mr Corbyn won there has been the 1980s blame the Gang of Four for catnip for thousands of left-wingers mobilise behind Yvette Cooper, former
downright mutinous. talk of a split between moderates and splitting the left and keeping Margaret alienated by Mr Blair and by huge shadow home secretary. Chuka
The Corbyn team resented a left-wingers just as the SDP spun off Thatcher in power for a decade. numbers of young idealists. They loved Umunna has the support of some New
Parliamentary Labour party that never from Labour in the early 1980s. One alternative proposal is for his pacifist views he has been a lead- Labour figures.
seemed to accept his democratic Donors who gave Labour money in the Labour MPs to sit as backbenchers in ing light of the Stop the War Coalition But ultimately Labours future is in
mandate. MPs, meanwhile, accused Blair era are prepared to finance a a new collective of progressives who and the Campaign for Nuclear Disarma- the hands of a grassroots of more than
him of a lack of competence. breakaway party, but the politicians still could if big enough receive ment and his history of protest. They half a million, who retain a reservoir of
The result: two years of chaos, farce see this as a last roll of the dice. short money, a type of state funding. even liked his shabby appearance. goodwill for the bearded socialist.
and civil war. Last summer 172 MPs The lessons from the SDP split are The idea would be to wait for their Chris Williamson, an old friend who He still has a personal magnetism,
signed a motion of no confidence, ominous. The newly formed party party to shift back towards the centre is standing for election in Derby North, says one critic within the party. Even if
triggering a prolonged leadership race struggled against the first-past-the-post ground. It could be a very long wait. says Mr Corbyn is a gentle, principled you hate him you have to concede he has
man who has a natural affinity for something about him.
8 FINANCIAL TIMES
TUESDAY 6 JUNE 2017
Saudi Arabia moves
to tame upstart Qatar
All parties to the Gulf dispute would be wise to de-escalate tensions
It has long riled Saudi Arabia that the
geographical minnow on its eastern
flank refuses to accept a shadow role,
instead adopting a consistently maver-
ick foreign policy stance. So there is lit-
tle new about the tension that has built
up between Riyadh and Qatar, culmi-
nating in Mondays move by Saudi Ara-
bia and other Gulf and Arab states to
sever diplomatic ties. The same hap-
pened in 2014.
What is new is the scale of accompa-
nying measures designed to isolate the
emirate, including the closure of the
land border with Saudi Arabia and the
decision by other Gulf and Arab states
including the United Arab Emirates,
Bahrain and Egypt to follow suit by
shutting off air and sea routes. This is a
striking demonstration of frustration
with potentially far-reaching conse-
quences not least of which is Washing-
tons effort to unite Gulf allies against
Isis and Iran and rally them behind US
efforts to broker peace between Israel
and the Palestinians.
Qatar is dependent on its border with
Saudi Arabia for about 40 per cent of
non-oil imports including food. The
blockade will be punishing, even for a
country that has the highest per capita
income in the world (thanks to its gas
riches and tiny population). It looks no
less than a bid to force the emirate into
submission.
There appear to be several factors
behind the tension. Fellow Arab states
blame Qatars ostensible willingness to
harbour and support various Islamist
movements moderate and extremist
across the region. The last time ten-
sion flared was when the emirate
refused to go along with regional sup-
port for the military coup which
brought down the elected Muslim
Brotherhood government in Egypt.
Doha-based Al Jazeera has also long
infuriated regional autocrats by giving
airtime to their opponents. Third, is
Full US employment is
no longer full enough
The solution to low wage growth and participation rates is complex
America was once a simpler place. Not
long ago it was widely thought that the
US economy and others too could
be usefully described by referring to
just two inversely related parameters:
unemployment and inflation. When
the former went down the latter went
up, with the regularity of the baseball
season arriving in springtime.
Those times are gone, and like most
big changes in the social landscape, it is
not totally clear why. In May, unem-
ployment in the US hit 4.3 per cent, a
low not seen since 2001. The figure has
been falling since 2009. Inflation,
meanwhile, has remained below 2 per
cent throughout, and shows no signs of
perking up. The absence of growth in
wages is particularly dispiriting. How
can mostly everyone who wants a job
have one and employers not feel the
need to pay more to attract workers?
This is an offence to both economic
theory and common sense.
A third parameter is in play too: the
participation rate. Since the turn of the
millennium, there has been a big
decline in the proportion of working-
age Americans in the labour force. An
ageing population explains some of this
but hardly all. The folk-economic
explanation for the drop is seductive.
Globalisation and technological change
has eliminated a lot of low-skilled jobs,
and some higher-skilled ones. Heavy
industry has taken the biggest hit. The
result is that workers who left the
workforce during the two major eco-
nomic shocks of the past 20 have
looked to return, only to find the good
jobs gone. Given the option of climbing
down from factory foreman to flipping
burgers, many have chosen to stop
working.
For several reasons this straightfor-
ward picture cannot be quite right. At a
high level, the same forces of technol-
ogy and globalisation have washed over
other developed economies, such as
Qatars refusal to fall in line with Saudi
Arabias ratcheting up of pressure on
Iran.
A fourth factor is Donald Trump and
the apparent alignment of the US
administrations views of the Middle
East with those of Saudi Arabia, includ-
ing its willingness to adopt a more
openly partisan stance in the Sunni-
Shia conflict engulfing the Middle East.
It can be no coincidence that tensions
are boiling over so soon after Mr
Trumps visit, which sought to reinvig-
orate military ties with Riyadh, set
aside concerns over the human rights
record of Abdel Fattah el-Sisis regime
in Cairo and reset relations with the
Sunni minority royals in Bahrain. All
three states appear emboldened.
Qatar, also a vital US ally and host to a
US air base, is hardly innocent. Qatar
appears to treat the world like a rou-
lette table. Its outsize ambition, along
with its self-appointed role as interloc-
utor in conflicts from Sudan to Afghan-
istan, has enmeshed it in a web of dubi-
ous alliances. This is true in Syria,
where its financing of al-Qaeda linked
insurgents is playing with fire.
But its refusal to demonise and iso-
late Iran, while declining to bunch
more moderate Islamists with terrorist
groups, demonstrates an independ-
ence of mind. Moreover, proselytising
by Saudi Arabias Wahhabi clerics, and
Egypts suppression of all dissent,
including the Muslim Brotherhood,
have over time been greater contribu-
tors to instability and extremism.
Washington should tread carefully as
it wades into this dispute. Some finger
wagging between sheikhs is to be
expected in a region beset by rivalries.
But seeking to punish Qatar is a dispro-
portionate response. It comes at a pre-
carious moment when common
threats to Gulf states should outweigh
other concerns. All parties should calm
tempers and compromise.
that of the UK, which have not seen
their participation rates fall nearly as
much. Why would the US workforce
once renowned for its flexibility be
especially vulnerable to change? More
specifically, participation among
women has been falling almost as fast
as for men. This cuts against the image
of the hard-hatted iron worker leaving
the mill for the last time.
There are assorted possible explana-
tions for this American anomaly. Per-
haps state disability payments provide
an alternative to work. Scarce paid
maternity leave in the US likely plays
some role in keeping women at home.
Employers pay the high costs of
employer-sponsored healthcare on a
per worker rather than a per hour
basis, encouraging them to work cur-
rent staff harder rather than add new
ones. It cannot help that the US locks
up huge numbers of prime-aged men;
they are very hard to employ when
they go free. Finally, a terrible opioid
addiction crisis has taken a grip on the
country in recent years. If more than
30,000 Americans a year are killed by
their addictions, many times as that
must be made unfit for work.
The debate over how to make the US
economy work better for all Americans
tends to focus on broad stimulus: infra-
structure spending, tax cuts, monetary
policy. These things are important and
worth fighting over. More granular
responses to the full employment/low
wage growth dilemma may be as
important, though.
The to-do list: rethink maternity
policy; welcome older people into the
workplace; squeeze opioid supply and
treat more addicts; create alternatives
to jail for nonviolent offenders; make
incremental rather than generational
reform of healthcare possible; and
more. None of this is glamorous, but
the USs big employment problem may
ultimately consist of lots of little ones.
A historic opportunity for climate progress
Sir, President Donald Trumps
withdrawal from the Paris climate
agreement obscured another major
climate event last week but also offers
a historic opportunity for climate
progress.
Last Monday the renowned
economists Nicholas Stern and Joseph
Stiglitz published a World Bank-
sponsored report. In it they conclude
that ending the current, largely
unpriced state of carbon emissions is
indispensable to effectively and cost-
efficiently reducing emissions and
hence setting the world on a path to a
At long last we have a
world leader prepared to
be honest about the US
Sir, I usually agree with everything that
Gideon Rachman writes. Not so with
his column Merkel, Trump and the
end of the west (May 30). At long last
we have a world leader prepared to be
honest about the negative
consequences of the revisionist course
the Trump administration is pursuing.
Angela Merkel showed moral courage
in stating the reality that Europe can
no longer count on US leadership on
shared challenges. Sadly, the US is
retreating from its indispensable role of
world leader and leaving a vacuum for
others to fill. The demolition of the
transatlantic partnership and the
international rules-based system the
US and Europe built together for
decades (on a bipartisan basis) is
irresponsible. America is increasingly
isolated.
As the leader of the most influential
European country and a pillar of
European integration, Chancellor
Merkel had the obligation to signal that
this is a very rare opportunity for
Europe to become more unified.
Favourable economic tailwinds and the
French presidential election results
help. Mr Trump stands no chance of
Making America Great Again (MAGA);
he stands every chance of Making
Europe Great Again (MEGA). In order
to do so, Europe needs to rise to the
challenge of defending this rules-based
system, protecting the environment
and the cause of free trade, promoting
stability in the European region and
keeping alight the flame of tolerance
and democracy. Another America may
be back in four years.
Europe should be clear that while
burden-sharing is important in
defence, it should also apply on other
shared challenges, including climate
change and immigration. Mr Trump
cant pick and choose which burdens to
share.
Anthony Luzzatto Gardner
Florence, Italy
US Ambassador to the EU, 2014-17
A false comparison of
Venezuela with Libya
Sir, The very premise of Francisco
Rodriguezs beyondbrics article Dont
let Venezuela become the next Libya
(June 1) completely misunderstands
the problem of post-conflict transitions
in weak states and draws a false
comparison with Libya. He states:
Perhaps nowhere is their failure most
evident than in Libya, which
descended into full-fledged anarchy
after the collapse of its all-powerful
Olympic design
hurdles for
Japans mascot-
obsessed youth
Tokyo
Notebook
by Leo Lewis
Letters
climate that is once again stable. They
conclude that levels of US$40-$80 per
tonne are necessary by 2020 and $50-
$100 per tonne by 2030. While there
are individual success stories (for
example, Switzerland has set a carbon
price of SFr84 ($87) per tonne on
heating fuels and returns the proceeds
directly to households; the UK prices
electricity generators carbon
emissions at 18 per tonne), broad
measures at an effective price level are
lacking: for example, the EUs
Emissions Trading Scheme excludes
half of the EUs emissions (in particular
petrostate. Furthermore, he warns
about the return of authoritarianism to
Libya. This is not a realistic possibility.
Libya was never a real state. It lacked
institutions or centralisation under
President Muammer Gaddafi. Mr
Rodriguez counsels a negotiated
transition in Venezuela to preserve the
countrys supposedly functioning
institutions. This would not have
worked in Libya during the Arab
Spring as the country lacked non-
personalised institutions and they
could never have been preserved post-
Gaddafi.
I wonder if Mr Rodriguez has too
rosy a view about Venezuelas
institutions and needs to face the harsh
reality: that post-Chavez and post-
Maduro, Venezuela doesnt need to be
rebuilt but, just like Libya post-
Gaddafi, to be built entirely from
scratch.
Jason Pack
Executive Director,
US-Libya Business Association,
Washington, DC, US
Nothing has changed in
the Conservative agenda
Sir, Martin Wolf (Comment, May 24) is
correct in observing the change of
direction in the electoral pitch of the
forces of conservatism in the US and
the UK. He is also correct to have
dubbed Donald Trumps maverick
politics pluto-populism. However, his
distinction between President Trump
and Theresa May is much less
convincing, particularly in the analogy
between Harold Macmillans one-
nation Toryism and Mrs Mays election
manifesto, and the implication that we
are witnessing some kind of
Damascene moment and a return to
the Keynesian consensus of the 1950s.
This is arguably a misreading of the
more essential continuities in the
Conservative agenda, which remains
the promotion and defence of the
private ownership of productive and
non-productive assets and the right in
law to dispose of those assets.
The discourse around market forces
within Conservative ranks and in the
politics of the OECD countries has
been a colossal smokescreen, which
has obscured a remarkable
concentration of capital over the past
three decades, first through successive
waves of mergers and hostile
takeovers, second through the
privatisation of natural monopolies.
The consequences of both processes,
presided over by most OECD states
with the overwhelming support of
mainstream economists, has not been a
blossoming of competitive market
forces, nor a corresponding surge in
productive investment, but rather the
The National Stadium (after a design
debacle) is under construction. The
budget (after a round of resignations)
is under control. The cost-sharing deal
(after a blistering row) has been
settled. But now the Tokyo 2020
Olympic committee faces the
thorniest test of all: selecting a
mascot.
Anywhere in the world, this is a
nuanced undertaking. There is
nothing straightforward for a host city
about choosing an avatar that is both
blandly inoffensive and thrillingly
current; adorable and commercial
while also cultural and symbolic. But
for Japan, a country where regional
skewered meat dishes, dreary
branches of the civil service and
medium-sized volcanoes have their
own mascots, the challenge is
supercharged.
The perils facing Toshiro Muto,
chief executive of the organising
committee, and his team come in
three distinct flavours, the first being
reputational. The good name of Japan,
as the worlds pre-eminent stud farm
of thoroughbred cartoony characters,
is at stake. This is not like Wenlock
and Mandeville, the stalwart but
forgettable one-eyed mascots of
London 2012, or even Rio 2016s
faintly deranged Vinicius and Tom, a
duo comprising Brazils myriad flora
and fauna. If Tokyos offering does not
immediately embed itself in the
hearts of billions and stay there long
after the closing ceremony, it will be
viewed as an abject failure.
And the mascot, whatever its
transport and heating) and currently
prices even the emissions it covers at
only 5 per tonne.
The historic degree of unanimity
around the world in condemning the
USs withdrawal will mean little if it is
not followed by action. The most
meaningful action leaders can take is
to enact a Stiglitz/Stern-level carbon
price that finally sends a price signal to
the economy to steer away from
carbon. That is our historic
opportunity.
James Denman
Berlin, Germany
consolidation of market power in key
areas of the economy and the
generation of monopoly income
streams good for pension funds but
not for innovative investment; the UKs
investment ratio is currently the fifth
worst in the EU28.
Important in this context is that
there are no indications that Mrs Mays
Conservatives have any intention of
reversing these processes. The
ambition to shrink the state and to
reduce the rates of progressive income
tax remains central. The wholly
persuasive policies of both Labour and
the Green party to renationalise the
monopoly utilities are decried as
irresponsible and ultra-leftist. Mrs
Mays pledge to stop power companies
ripping off British householders, on
the other hand, is just another attempt
to obscure the regulatory farce
surrounding the monopolised delivery
of a monopolised good.
The May prospectus, threatened as it
clearly is by the economic madness of
Brexit, is no break from Thatchers
legacy, but more an attempt to
maintain business as usual under the
new circumstances of global crisis and
a growing, if confused, resentment of
the more vulnerable members of the
electorate. However, Mr Wolf is right in
his judgment that the signs for future
development are not good.
Jeremy Leaman
Mountsorrel, Leics, UK
None of the above
Sir, In my eighth decade, I am finding
the current UK election campaign the
first to cause serious consideration of a
new slogan: No prime minister is
better than a bad prime minister. Am I
alone?
David Hancox
Witney, Oxon, UK
charms, will be mercilessly held to the
standards of Japanese creations that
are now little short of national
treasures. Cuteness will be ranked
against Hello Kitty and Totoro, the
bearlike woodland creation of
animator Hayao Miyazaki; quirky
heroism must be cooler than that of
Super Mario or Pikachu the Pokmon;
comic value must beat that of Pac-
Man and emojis.
But, beneath these global cultural
titans, the new mascot will enter a
stratum of the promotional market so
crowded with mascots that, a couple
of years ago, politicians ordered a cull
of those too obscure even for Japan.
Even after that bloodletting,
thousands remain, peddling local
tourist spots, foodstuffs,
municipalities and buildings.
Annually, the mascots, or yuru-kyara,
are thrust into a popularity contest
that draws large audiences. The
winner takes its place among the
undisputed overlords of the genre: a
ruddy-cheeked bear called Kumamon
(a shill for the southern prefecture of
Kumamoto), a brown cabinet with
teeth called Domo-kun (representing
the broadcaster NHK) and a fast-
talking pear called Funassyi (from the
city of Funabashi in the north west).
None of these will be easy for the
Olympic mascot to usurp and, even
now, plans are afoot to stuff Japans
Games-related mascot pantheon with
yet more unofficial cheerleaders.
The third burden borne by Muto
much like when he was a deputy
central bank governor is the need to
Tuesday 6 June 2017
Email: letters.editor@ft.com
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com
How to make the polluters
including America
account for their actions
Sir, Donald Trumps mistaken decision
to pull the US out of the Paris climate
accord puts at risk the vast efforts
displayed to organise the first collective
action devoted to control the impact of
industrial emissions on global
warming. President Trumps argument
is self-evident: combating climate
change poses costs to polluting
countries. The more you pollute, the
more you will have to adapt to a more
sustainable approach and the higher
your adaptive costs will be.
Today, the US is the second-largest
polluter. For all of the 20th century, it
has been the major polluting country.
In terms of global warming, the US
economy cannot claim to bear no
responsibility. It is therefore irrelevant
to conclude, as Mr Trump has done,
that compliance costs to the US are too
large in terms of lost gross domestic
product and jobs. That is not the point.
It is a trivial observation whose
solution requires other measures, not
rejection of the Paris accord.
The real point is that there is a public
good climate whose sustainability
calls for complex collective action. If
the second-largest polluter disregards
this, it fatally weakens the whole
coalition that was so difficult to put
together. How should all of these
countries react to this irresponsible
behaviour?
First, by strengthening their
collaboration in order to minimise the
impact of US government policies on
the public good we are trying to save.
The forceful reaction of the leaders of
France, Germany, Italy, Canada and
Japan and many others is most
welcome. All signatory countries
should convene soon in order to ratify
and deepen their decision to move
forward with the agreements within
the Paris climate accord. Second,
countries should promote a buy
clean brand such that consumers
prefer, for their own personal
purchases, goods and services
produced in countries that remain in
the accord.
Finally, when there are negative
externalities arising from a given
economic activity, as it is the case here,
standard economic theory suggests
imposing a green tax on gas
emissions. But we should go beyond
this. The international community
should consider imposing a surcharge
of that tax on exports coming from
countries not complying with the Paris
climate accord. This levy should be
imposed on exports from Nicaragua
and Syria, which have not yet signed,
and now the US, which has just pulled
out.
Polluters should, by one means or
another, be held accountable for their
actions.
Guillermo Larrain
Dept of Economics,
University of Chile
Correction
c Cultured seawater pearls are
equivalent to 5 per cent of what China
produces in its freshwater by volume,
not value, as wrongly stated in a
Watches & Jewellery special report on
June 1. The surname of Gemological
Institute of America analyst Russell
Shor was also wrongly spelt. We
apologise for the error.
avoid catastrophe. The run-up to this
point has been a series of stumbles,
from the decision in 2015 to scrap the
design of the main stadium to
allegations, denied by the designer,
that the Tokyo logo plagiarised that of
a theatre in Belgium.
A mascot that inadvertently gives
offence, triggers an intellectual
property suit or (like Fukuppy, the
unfortunately named mascot of
Fukushima Industries) invites ridicule
will not find much forgiveness from a
gaffe-weary public. Nor will a design
as dreadful as those Japan came up
with for the 1998 winter Games: a
quartet of manic owls.
And yet, in a quite brilliant stroke of
legerdemain, Muto and his team
already appear to have solved their
impending mascot crisis or, at least,
found a way to escape blame.
The design process has been thrown
open to both domestic and
international competition, and
hundreds of thousands of primary
school pupils from across Japan will
vote on the shortlist, before a final
review by an adult panel.
Never has market research and
plausible deniability been so neatly
achieved. The Olympic committee not
only gets to boast that this is the first
time a task of such paramount
national importance has ever been
entrusted to the under-11s it also
gives itself a vast defensive wall of
children to blame if the design they go
for is, in fact, a bit rubbish.
leo.lewis@ft.com
Tuesday 6 June 2017
Silicon Valley is central to the fight against terror
OPINION
Robert
Hannigan
T
he political debate about
the role of the internet in
terrorism, following three
attacks in the UK, has
become confused. It is
driven by frustration on one side that
the ethics, values and legalities of the
real world are not simply applied online.
On the other, politicians of all parties do
not always understand the technology
or the economics of the internet and are
portrayed as asking for the impossible.
But it is in the interests of both sides
and all of us that the internet is not a
values-free zone. Technology is morally
neutral, but providers and consumers
are not. The digital and real worlds are
not separate, they are the same. If we are
to preserve the freedom of the internet,
A serious end to
this frivolous
election
POLITICS
Janan
Ganesh
I
n London: The Biography, Peter Ack-
royds take on perhaps the most
documented city since Rome, the
first three index entries under Lon-
don Bridge are burned,
destroyed by flood and destroyed by
Norsemen. Still there it stands, not
much to look at, shooing commuters
into the City and the odd Financial
Times employee to work. When Lon-
doners say they will not bow to terror, it
is not a cheap boast. They can draw on a
pedigree of defiance.
Politicians have to go beyond defi-
ance. The public reaction to terror fol-
lows a pattern: pledges of unity, gallows
humour and contempt for nativists who
exploit the event. Yes, Donald Trumps
tweets after the London attack
demeaned the US presidency. But he is
not the problem, and nor is a misjudged
headline in The New York Times that
imagined Britain reeling.
Anger at these ignorant insensitivities
is warranted until it spills into avoid-
ance of the issue. Even if the US had the
classiest leader in the world, it would
remain true that a small but meaningful
number of British citizens are potential
FOREIGN AFFAIRS
Gideon
Rachman
C
hina has spent the past dec-
ade notching up firsts
worlds largest manufac-
turer, worlds largest
exporter, worlds largest for-
eign reserves, worlds largest market for
vehicles. In 2014, the International
Monetary Fund even reported that,
ranked by purchasing power, China is
the worlds largest economy.
But there is one worlds largest title
that China may have lost. New demo-
graphic research suggests that India, not
China, could be the most populous
country in the world with unofficial
estimates of Chinas population revised
down to just under 1.3bn, compared
with Indias population of 1.33bn. That
news could feed the growing sense in
India, that while the rise of China has
been the global story of the past 30
years, the next 30 will be Indias time to
shine.
Population trends in India certainly
the greatest achievement of this age, we
need to meet this challenge. How to do
so is complex and needs untangling.
There are two separate complaints
about the internet: that it facilitates cov-
ert communication between terrorists
through encrypted messaging, and that
it enables the spread of radicalising
propaganda by hosting extremist
material.
The first is a technical issue: end-to-
end encryption where only the user
has the key and neither service provider
nor law enforcement can read the con-
tent is here to stay. It cannot be unin-
vented and those of us focused on cyber
security would not want encryption
weakened even if it were possible. But
there are things that can be done to
tackle the abuse of encryption by terror-
ists and criminals, through private co-
operation, under the law, between com-
panies and government agencies. That
co-operation has improved markedly,
even if it has further to go.
The hosting of extremist material is a
different issue and goes to the heart of
killers in a cause and that Europe is
menaced by ungoverned spaces to its
south-east.
If voters would rather not dwell on
such dark realities, there is no shame in
that. It is the unique burden of leader-
ship to resist this temptation and go to
the heart of the matter. Theresa May has
done it in recent days by suggesting new
measures against terror. In the process,
the prime minister was seen by some to
politicise the subject.
I am no longer sure this is a bad thing.
Counter-terror is inescapably political.
It is not like the setting of interest rates.
It makes a claim on public resources and
engages multiple branches of state. It
involves principles and trade-offs, such
as the immemorial one between free-
dom and order.
The Labour opposition is entitled to
ask whether tight budgets for the police
are conscionable at this time, even if
calls for the premiers resignation are
frivolous three days from a general elec-
tion. And Mrs May is entitled to explore
a harder line on non-violent extremism,
even if her predecessor, David Cameron,
might wonder where this will was when
she was home secretary.
Better to air these questions than to
go on with an eerie status quo in which
counter-terror is simultaneously the
most important work undertaken by
the state and among the least under-
stood. In the closed world of security
think-tanks, consultants and journal-
ists, there has been a rich discussion
China, India and the clash of two great civilisations
look more favourable for long-term eco-
nomic growth than those in China. It is
not just that Indias population may
have surpassed that of China and will
grow faster in future. More important,
the Indian population is significantly
younger than that of China, which
means that it will have a larger working-
age population than China, and fewer
retired people to support. The recent
history of Japan demonstrates that an
ageing and shrinking population has a
powerful negative effect on economic
growth.
These demographic forces may be
feeding through into growth rates. After
decades in which India had to put up
with jibes about the Hindu rate of
growth, India is growing faster than
China, with growth projected to exceed
7 per cent this year, compared with
Chinas official figure of 6.5 per cent.
But there are also some powerful
qualifications to the idea that India is
poised to catch up and then outstrip
China. First, the Chinese economy is
already five times larger, in real terms,
than that of India. That means that even
though India is currently growing
slightly faster than China in percentage
terms, the gap in the sizes of the two
economies is growing, not shrinking.
Second, while demography favours
FINANCIAL TIMES
Comment
the ideological struggle driving Islamist
terrorism. We should be clear about
what we are asking for. This is not about
suppressing freedom of speech. The
west did not win the ideological struggle
against totalitarian communism by
never discussing it. Islamism needs
exposing and countering.
But those trying to counter the ideas
of terrorist groups often feel they are
The internet is not a values-
free zone and the digital
and real worlds are not
separate but the same
fighting against a wave of material pro-
duced by well-funded organisations
that understand strategic communica-
tions better than the west. They feel that
the very openness of the internet, and
its economics, crudely based on the vol-
ume of clicks on sensational or gro-
tesque material, are used against them.
about the governments anti-extremism
strategy since it was led by Tony Blair.
Could even the best-informed voters
say in outline terms what that strategy
is?
In France, two intellectuals vie to
explain the source of terrorism, with
Gilles Kepel putting it down to extreme
religion and Olivier Roy to nihilist psy-
chology. It can be intemperate but Brit-
ain deserves a debate of equivalent
openness and sophistication. Instead,
we have an unevolved one in which min-
isters pledge to confront this ideology,
as if we know what that means, and any
Counter-terror is
inescapably political,
trading off freedom
against order
India, in other important respects,
China is better placed. Thirty per cent of
the Indian population is illiterate, com-
pared with under 5 per cent of the Chi-
nese population. Chinas infrastructure
is also far superior to that of India,
reflected in roads, railways and basic
sanitation. Half of Indians still lack
access to basic toilet facilities.
These kinds of comparisons are more
than a parlour game. They matter
because China and India are the two
These countries are
already engaged in a
low-key geopolitical and
ideological struggle
emerging superpowers of the 21st cen-
tury. They are already engaged in a
low-key geopolitical and ideological
struggle.
India has reacted with alarm to
Chinas ambitious plans to build infra-
structure links across Asia, fearing that
they will create a Chinese sphere of
influence that will encircle India. When
China hosted its Belt and Road forum
in Beijing last month to promote plans
to spend billions on infrastructure links
The glory of the internet is that it cre-
ates networks and communities of
interest; the downside is that it can rap-
idly validate extreme behaviour which
in the past would have been moderated
by real communities. We know from
convicted terrorists the effect of watch-
ing brutal videos of captives set on fire
or drowned, of children crucified in
front of their parents, or graphic images
glorifying atrocities in London or Paris.
While it is fashionable to blame technol-
ogy companies, these images are more
likely to be found on video hosting sites
that are not household names, on news
sites or even academic services.
There will of course always be dark
spaces and hidden sites where fanatics
will find this material. But that is why
we have law enforcement and intelli-
gence agencies.
The rest of us should focus on driving
material off the mainstream and seek to
make the open internet a civilised
space, reflecting the liberal democratic
values that led to its creation in the first
place. For the internet and the web
cheap-shot merchant can tell them to
cool ties with Saudi Arabia, as if that
were an uncomplicated business with
no security implications of its own. As
long as operational matters remain
secret, the public can bear more depth,
candour and disagreement on the ques-
tion of their own protection.
The attacks on Manchester and Lon-
don have forced a serious end to a frivo-
lous general election. If politics is to stay
serious, more is required of Mrs May. It
was not Labour that chose to call a sud-
den vote, test our patience with a seven-
week campaign and then say next to
nothing of consequence.
To assess a politician, look for early
behaviours that do not cost them at the
time but expose flaws that will resurface
to more devastating effect in the future.
In 2011, Mr Cameron vetoed the Euro-
pean fiscal pact, which went ahead
regardless. Voters cheered his gesture
across Eurasia, more than 100 countries
sent official delegations but India
stayed away. The Indians fear that China
is re-creating a tributary system in
which Asian economies are bound into
an economic system in which all roads
lead to Beijing.
The implications of these infrastruc-
ture developments are strategic and
economic. At a time when Chinas navy
is growing fast, Chinese-funded ports in
Sri Lanka and Pakistan are regarded
with particular suspicion in Delhi.
Growing ties between Pakistan and
China create anxiety in India, which has
fought four wars with Pakistan. Beijing
and Delhi have their own unresolved
territorial dispute, dating back to the
war they fought in 1962, and the Indians
worry that China is increasing pressure
over its claims on the Indian province of
Arunachal Pradesh.
Military budgets in China and India
have been rising sharply. China has
launched its second aircraft carrier and
is working on a third. And India has
become the worlds largest importer of
weaponry, after Saudi Arabia. The Indi-
ans have stepped up military exercises
with the US and Japan countries seen
as strategic adversaries by China.
Shashank Joshi of the Royal United
Services Institute in London argues
would not have been invented and could
not have flourished in Islamist or totali-
tarian regimes.
How do we achieve this? We need a
practical coalition, led and funded by
Silicon Valley, which has been making
progress but now needs to accelerate,
and by global online advertisers, which
have been too slow to look forensically
at what their ads are supporting. This
coalition should agree a code of what is
acceptable, working with democratic
governments and civil society. It should
apply technology and human beings to
the rapid removal of material and the
isolation of offending sites. It should not
be afraid to exercise judgment and it
should not wait for legislation, the
courts or proposed fines, which will
inevitably be slow and blunt.
Finally, it should do all this in order to
preserve the freedom of the internet, as
well as our safety.
The writer is a former director of GCHQ, a
UK government intelligence and security
organisation
but it showed an incomprehension of
European politics and a quickness to
cave to Conservative purists. Both traits
would combine to bring him down.
In the past few months, Mrs May has
implied that British co-operation with
the EU on security is conditional on
good exit terms and accused continental
leaders in all but name of subverting the
election. Next to this, her U-turn over
social care was just a run-of-the-mill
accident. It is an unseriousness abroad,
a failure to leave behind the Home
Office itch to land favourable tabloid
headlines, even when it comes to the
highest matters of state, that augurs
badly for her premiership.
The overall impression from the past
seven weeks is of a nation protected by
the best of its citizens, and governed by
merely the best available.
janan.ganesh@ft.com
that, as strategic tension rises, Indian-
Chinese relations are in their worst
state for over a decade.
One Chinese gripe is that the Tibetan
spiritual leader, the Dalai Lama, hated
by Beijing, continues to be based in
India. His presence points to the ideo-
logical element in the rivalry between
India and China. Chinese analysts have
often contrasted the success of their
development model with slower growth
produced by Indias chaotic democ-
racy. Indians like to respond that their
democratic system will ultimately
prove more stable than Chinas one-
party state. There is also a moral aspect
to this argument. Indians boast of free-
dom of speech and independent courts.
The Chinese say that the ordinary citi-
zen in China lives a more comfortable,
dignified life than the average Indian.
These arguments reflect the fact that
China and India represent not just rival
powers but rival political systems, ideol-
ogies, even civilisations. Western politi-
cal analysts are preoccupied by the
emerging power struggle between the
US and China. But as economic and
political power shifts to Asia, it is the
contest between China and India that
may ultimately shape the 21st century.
gideon.rachman@ft.com
9
Cities forge
global links to
bypass failing
national leaders
OPINION
Ivo
Daalder
T
he reaction to President
Donald Trumps decision to
withdraw from the Paris cli-
mate accord was swift.
Mayors, governors and
chief executives across the US declared
that whatever the federal government
might do, their cities, states and busi-
nesses would make sure the goals set out
in the Paris agreement would be met.
When the White House leaves the
Paris accord, Los Angeles mayor Eric
Garcetti promised, were going to adopt
it in Los Angeles. He added: Here in
Washington, while people are going
small, cities are going big. New Yorks
mayor, meanwhile, promised to take
matters into our own hands. He said:
Its a sad state of affairs when localities
have to do what the federal government
should be doing.
California governor Jerry Brown set
off for China the day after Mr Trumps
decision, promising to strengthen agree-
ments with Beijing on promoting clean
energy solutions. More than 30 mayors,
three governors and more than 100
business leaders are preparing a pact to
be submitted to the UN, committing
them to meet the US greenhouse gas
emission targets under the accord.
A decade ago these words and prom-
ises would have rung hollow. No longer.
Globalisation has removed the barriers
to worldwide communication and co-
ordination. The economic and civic
influence held by sub-national leaders
has increased especially for mayors
around the world. Both changes have
come at the expense of national govern-
ments having sole authority over cross-
border interactions.
It is a sad state of affairs
when localities have to
do what the federal
government should
The result is a shift in the worlds
political order: power is increasingly
shared between national and local gov-
ernments, especially when it comes to
forging real solutions to global chal-
lenges such as climate change, pandem-
ics, inequality and even terrorism. A
future dominated by cities is rapidly
becoming the present. More than half
the worlds population live in cities.
Nearly 200,000 people are moving into
cities every day. And by 2050, two-
thirds of humanity will be city dwellers.
Economic growth has followed foot
traffic. Today, large cities those with
more than 500,000 inhabitants pro-
duce about three-quarters of the worlds
economic output. Between now and
2030, these urban centres will generate
more than four-fifths of all global
growth. Politically and culturally, cities
remain the vanguards of openness and
the champions of globalisation.
But the political power of cities within
the traditional nation-state is not com-
mensurate with this growing economic
and cultural might. Washington and
other capitals have lagged behind in
helping their cities reach out and com-
pete worldwide. Once the global gate-
keepers, national governments are
increasingly seen by local leaders as
avenues too narrow and too obstacle-
strewn to reach the rest of the world.
In response, mayors and city leaders
are developing what can best be
described as their own foreign policies.
City-to-city diplomacy, once treated as
marginal, even quaint, is flourishing.
The C40 Cities Climate Leadership
Group that led the push for the Paris cli-
mate agreement is an example of new
formal global networks created among
cities. Today, according to research by
Michele Acuto of University College
London, there are more than 200 such
networks. From climate change and
health to inequality and governance,
cities are looking to each other for solu-
tions to global problems.
In the end, all politics is local. The
leaders of global cities are most inter-
ested in working with their counter-
parts to address local concerns and to
implement local solutions that meet the
global challenges that affect them all.
That much has not changed. What has
changed is that the counterparts with
the most relevant available experience
today just might be half a world away.
The writer is president of the Chicago
Council on Global Affairs, which is holding
the Chicago Forum on Global Cities on June
7-9 in partnership with the Financial Times
10 FINANCIAL TIMES Tuesday 6 June 2017

Polyus: stiffen up
Russian gold miner Polyus is planning to relist on the London market, having left less than two years ago. Its
flightiness aside, the company has one of the lowest costs of production combined with some of the highest
gold reserves in the industry

Polyus and global gold-mining stocks Global all-inclusive sustaining cost*

Twitter: @FTLex Email: lex@ft.com
Social media:
#wakeupsmellthecoffee
Completely irresponsible. Shameful.
Dreadful. Indefensible. Just some of the
adjectives British MPs used to describe
the conduct of social media companies
in relation to extremism, intolerance
and hate speech and that was before
the latest atrocities in Manchester and
London.
Theresa May, the prime minister, is
pushing for the likes of Google, Twitter
and Facebook to do more to remove
the safe space the internet affords
extremists. She is not alone.
Germanys government, concerned
about fake news, is proposing heavy
fines for companies that fail to deal
with content they know to be
inaccurate or offensive. It is tempting
to wonder how long the social media
giants can avoid regulatory oversight or
increased responsibility. Either would
bring increased costs.
Creation of content on social media
sites has long been outsourced to users.
So too is editing; all have so far relied
on users to alert them to potentially
problematic content. Contrast that to a
traditional media group employing
writers, photographers and editors,
which takes responsibility for
everything it produces. Staff costs at
Trinity Mirror, a UK publisher, were
36 per cent of sales in 2016. Assume a
third of those are editorial, and half of
those are editors as opposed to writers.
That suggests checking and
publishing content consumes 6 per
cent of revenues. By contrast,
Facebooks total expenses are about 12
per cent of sales. Assuming the same
proportion of editing costs as Trinity
Mirror would raise that total by half.
Of course, the comparison is inexact.
Traditional publishers costs are
inflated by the nature of their output
and the burden of their legacy
businesses. Social media sites would
combine human intervention and
artificial intelligence more efficient
than armies of moderators to
identify suspect content. They already
do, to detect copyright infringement.
Users and advertisers have so far
shown few signs of squeamishness.
Political frustration has yet to manifest
itself on the statute book. Even so,
social media companies should guard
against complacency. Network effects
protect them from competition. But a
growing perception that they are better
at paying lip service than paying taxes
could create safe space for
governments to transfer the costs of
policing cyber space on to those who
have profited most from it.
Ocado:
late delivery
Secretive deals invite suspicion. Online
grocer Ocado has finally made good on
its promise to sign an overseas agree-
ment for its technology, but is keeping
nearly every detail under wraps. Name,
size, predicted revenue all left blank.
Such reticence, even at the behest of
the buyer, suggests this is not the deal
to prove Ocado is a global technology
company. Nevertheless, shares jumped
close to a year high on the news quite
a leap considering it covers only
website software and is not expected to
affect cash flow for at least 18 months.
Then again, volatility is typical of
Ocado shares. The concentration of
stock in the hands of a few and plenty
of short positions spur market swings
that seem disproportionate to the
newsflow behind them.
Investors have their eye on a longer-
term prize. Ocados outperformance
against European grocers and its tech-
like valuation at 150 times forward
earnings are based on the expectation
that it can sell its logistics know-how to
other retailers. Wm Morrison, the
supermarket that helped Ocado book a
profit for the first time, trades at
20 times earnings, online retailer Asos
at 73 times. Even Amazon does not
trade at Ocados level.
The profit growth needed for
investors to make back their money
means many deals yet to transpire are
baked into the share price. Much is
made of the fact Ocado missed a self-
imposed deadline to find an overseas
deal by the end of 2015. More should be
made of the fact it has yet to sell its
robotics-driven distribution system.
At least Ocado has proved that
overseas interest does exist. Growth in
online grocery deliveries in the UK is
beginning to pall. Retail sales for the
company in the first quarter of the
current financial year were 13 per cent
above the same period last year but the
average value of orders dropped as
shoppers opted to spend less. With the
first overseas deal so limited in scale,
Rebased
World Gold Mining index
2015 16
FT graphic Sources: Thomson Reuters Datastream; companies
Gold is celebrated both for its value
and its malleability. One wonders
sometimes if mining tycoons see
minority investors in the latter light.
Take Polyus, which wishes to list its
global depositary receipts on the
London Stock Exchange this month
as part of a possible $700m share
sale. New shares would be part of this
package. There is one issue.
Russias Polyus only recently
delisted from the LSE. Whatever its
reasons for doing so, Polyus should
have made it clearer why the exit
occurred at the time. Its strong
fundamentals notwithstanding, the
U-turn by Polyus should inject some
iron into the resolve of sceptics.
Polyus has had a busy few years. It
gained an LSE listing via a reverse
the market should ask when Ocados
new system clients are going to step
fully out of the shadows.
Banco Popular:
strip poker
A big Spanish bank is convulsed by
crisis and peers shrug their shoulders.
Shares in Banco Popular have plumbed
record lows while the rest of the
Spanish bourse is flat. Italians must
dream of such indifference. Reports
that boss Emilio Saracho is due to meet
regulators augurs more volatility.
It is a tribute to the robustness of the
Spanish financial system that bank
shares barely budged even as the
market cap of its sixth largest bank by
$ per oz
Polyus Micex shares (in $ terms)
Polyus in 2016
($586 per oz)
200
180
0 20
160
Reserves
Proved and probable (ounces m)
140
0 20
Barrick
120 Polyus
Newmont
100 Newcrest
AngloGold
Gold Fields
80 Goldcorp
Kinross
17 Harmony
* Overheads plus any investment cost
takeover of KazakhGold in 2011. The
decision to quit the market in
November 2015 was reportedly
inspired by a wish to strengthen
Russian ownership. Following the
delisting, a Russian holding company
was put in charge of a business with a
full listing on the local Moscow
exchange. Former owner Suleiman
Kerimov, one of Russias richest men,
sold his holding to his son Abusaid via
his own investment company, Wandle
Holdings. A new board with
independent directors was appointed.
This restructuring did not alter the
fact that Polyus has costs of $586 per
ounce, among the lowest in the
industry. That puts it in the first decile
of all gold miners. Moreover, the group
has the second-largest reserves among
assets halved. Trading at just 0.2 times
book value, Popular will look like a
bargain to risk seekers.
What else could tempt potential
acquirers? While asset quality is
dubious, non-performing loan inflows
are falling. The lender has one of the
best SME banking franchises in Spain.
Profits before provisions increased by a
fifth quarter on quarter. It would rise
further if, like UniCredit in Italy,
Popular can hive off bad assets and
take advantage of improving credit
demand. Moreover, an accounting
sleight of hand known as negative
goodwill essentially the difference
between the book price of a target and
the purchase price could flatter the
income statement of any buyer.
Which should not obscure the scale
of potential costs ahead. The first is
1600
1400
1200
1000
800
600
40 60 80 100
Cumulative production (%)
40 60 80
its peers, 64m ounces. On paper
Polyus looks pretty solid.
Its assets include a stake in a new
east Siberian project, Sukhoi Log,
which could double reserves. That
might explain why Chinese
conglomerate Fosun International
decided last month to buy a tenth of
the miner, in a secondary
transaction, from Mr Kerimov. Fosun
has the option to buy another 5 per
cent in the next year. No matter
what, two holders, Wandle and
Fosun, could soon control up to
80 per cent of Polyus.
Given Polyuss potential, some
investors may not mind the risk of
being squashed by the great bulk of
its two majority investors. Those with
backbone should think twice.
legal liabilities over questionable
accounting. Butthemainconcern is
dud property loans that have helped
drag down core equity tier one ratio to
10 per cent. That could easily fall
further: even allowing for provisions,
net non-performing assets stand at
20.2bn, compared with core tier one
capital of just 6.1bn. To raise cash
coverage to thelevelsof, say,Santander,
would imply an extra 4bn is needed
from either disposals or shareholders.
The latter is out of the question.
Popular has raised 5.5bn since the
2009 crisis in three cash calls.
Shareholders have lost their shirts
(then trousers, now underwear)
following each one. Perversely, a
bargain-basement valuation may be its
best bet at salvation. It may not be
enough to attract investors.
Sinclair Broadcast:
national treasure
Think local? Perhaps not at Sinclair
Broadcast Group. The previously
obscure owner of local television
affiliates scattered across the US made
a splash in May when it announced it
would acquire rival Tribune Media,
owner of 42 stations, for $4bn.
Consolidation in the local sector is
nothing new.
But Sinclairs ambitions appear
broader. The Financial Times has
reported that the Maryland-based
company is considering hiring the
former head of Sony Television, who
was behind shows such as Breaking Bad.
Content creation and distribution
continues to become more fragmented
with the likes of Netflix, Amazon and
YouTube generating acclaimed
programming. Against that landscape,
Sinclair is taking a big leap.
Rather than build a fifth national
network, as some commentators
expected, Sinclair says it only wants to
create shows that fill the gaps the Big
Four networks do not provide for
during the day. The company has close
ties to conservative causes and Donald
Trump, leading to rumours it could
start a political network.
Such speculation ignores what
Sinclair already has nationally. Tribune
gives it coverage in three-quarters of
the country, almost doubling its
presence. Tribune also brings with it
national cable network WGN. Sinclair
already owns the cable network, Tennis
Channel. It has upstart networks called
Comet (sci-fi) and Charge (action). It is
chasing the holy grail of sports, via a
joint venture with various professional
leagues to screen game highlights.
Sinclair believes its new scale means
it can play in the $50bn market for
national television advertising. The
business should be able to command
better ad rates from marketers.
Sinclair shareholders, however, are
unenthusiastic about the companys
broad ambitions. Shares are down a
fifth so far this year. It is unclear how
expensive this adventure will be.
Staying close to home may not be an
option. But leaving it will not be cheap.
Lex on the web
For notes on todays breaking
stories go to www.ft.com/lex

CROSSWORD
No. 15,568 Set by CRUX
        ACROSS 29 I would take in a r-river briefly,
1 Show more excitement, as a getting soaked (8)
setter might (8) DOWN
 
5 Cryptic clue almost solved in a 1, 18 Old-fashioned, like Murdoch
month (6) is, proprietorially (6,3,5)
 9 Pi possibly used in 2 Springs average temperature
measurement of capacity (4-4) can be kind, hopefully (4-5)
  10, 16 Compact car and what makes 3 Moved quickly, and also spread
it even more so a big boot! evenly (5)
(6,7) 4 Make someone count, for
    12 Rover barking after devious example (7)
doctor (5) 6 Yellowish smoke made by
 13 Braques first maison he pastry cook (5,4)
  
converted for the Bloomsbury 7 A cult rarely admits its extremist
Group, say (9) element (5)
 14 Word of honour given by pleb 8 Exchange rate guaranteed to
about article (6) yield a fortune (8)
   16 See 10 11 With it a bird lacks perception
19 The object of a postwar (4)
internment (7) 15 Husband or wife has the rest of
  21 AA gun force captured by 9, maybe (5,4)
peasants (6) 17 Tough players on the teams
23 Make revolutionary move to books (9)
rescue from bankruptcy? (4,5) 18 See 1
 
25 Lie about ones dietary 20 He may sell tickets for
requirement (5) everything French (4)
26 Cricket isnt one but bat is (6) 21, 25 Strangely cambered roof
27 Uses white fluid (or red ink, required for this comedy (7,5)
JOTTER PAD traditionally) (8) 22 Let out, is glad to go topless (6)
28 Bodies of teachers found in the 24 Unusual airline is Latin-
Midlands (6) American (5)
25 See 21
Solution to Saturdays prize puzzle on Saturday June 17
Solution to yesterdays prize puzzle on Monday June 19
Winners names will be printed in Weekend FT
Tuesday 6 June 2017 11

Antofagasta Brent crude 2-yr Treasury Whitbread Copper (CME) Sterling/dollar Restaurant Euro / dollar
Qatar question Gulf state poses Group
a conundrum for Theresa May 3.54% 1.2% 1bp 2.6% 0.7% 0.3% 5.7% 0.3%
INSIDE BUSINESS, PAGE 12
776.5p $49.36 1.30% 41.16 $5,628 $1.292 345.2p $1.1251

Job ads surge for blockchain skills Short

View
3 LinkedIn reports tripling of postings in a year 3 Demand for expertise outstrips supply
havent even seen it yet, said Jerry than 1,000 blockchain-related job insurance industries for blockchain
Leo
MARTIN ARNOLD LONDON
Cuomo, IBMs vice-president of block- adverts on the site last week, more than It is a hot expertise, said Josh Graff, UK country Lewis
The number of job adverts on LinkedIn chain technologies. three times the level of a year ago. The market manager at LinkedIn.
for blockchain-related positions has The best blockchain engineers can number of blockchain ads is growing at Blockchain technology has attracted
more than tripled in the past year, show- command a salary above $250,000, more than 40 per cent each quarter. because the renewed interest in the past few weeks The recent surge of the Topix Japans main market index
ing that demand is booming for people Mr Cuomo said. It is on the high side of Almost 10,000 people on LinkedIn corporates thanks to virtual tokens being issued by beyond the 1,600 line to an 18-month high is like a baby
with the skills to harness the technology what a really talented consultant or soft- list blockchain as a skill, half of them in companies to raise money via an initial saying Gorgonzola as its first word: a startling display of
that underpins cryptocurrencies. ware engineer can earn, he added. It is the tech sector and a quarter in financial want to be coin offering as an alternative to selling progress, tempered by everyones disbelief.
Experts say that demand for block- up there with the cloud and artificial services. LinkedIn does not include able to say shares. It is a hot market at the Among the questions raised are why this has happened
chain expertise is far outstripping sup- intelligence as a really hot area. blockchain in its skills list but so many moment because most of the large cor- now, and how it has managed to do so without the swarm of
ply, making it one of the hottest areas for Blockchains are a decentralised set- people are citing it as a custom skill that they have a porates want to be able to say they have foreign investors traditionally seen as crucial to any real
technology recruitment. As thousands tlement technology that powers the the site is considering adding it. blockchain a blockchain team, said Michael breakthrough in Japanese stocks. Reflected euphoria from
of blockchain-based start-ups are being issuance of cryptocurrencies such as bit- Professionals in related areas such as Mainelli, who runs blockchain training bullish US and global markets lays a plausible background
created, established companies in many coin, the value of which soared to more cryptography and machine learning team courses at his consultancy Z/Yen. story to the rise, but only explains so much when set
sectors from financial services to retail than $2,500 last week, up almost five- may want to look at the roles available Most of the people listing blockchain against the fact that most US-based long-only global funds
are scrambling to get to grips with what fold in the past year. and the skills they need to develop, as as a skill on LinkedIn are based in the remain resolutely underweight Japan and have been net
the new systems can do. LinkedIn data requested by the there is certainly a growing demand US, followed by the UK, France, India, sellers of the Topix since its peak in mid-2015 (bar the
Is there a talent bubble? Yes. We Financial Times show there were more within the technology, finance and Germany and the Netherlands. occasional flurry of buying such as in mid-May).
The Topix rally reinforces the sense that foreign inves-
tors have missed a trick. In dollar terms, the Topix is up
12 per cent since the start of 2017, comfortably outper-
forming the 9 per cent of the S&P 500. But this bounce has
still not managed to entice the large global funds.
Sonys grip tightens Many investors protest that particular Japanese stocks
PS4 sales of 60m they want to buy are too expensive. But, as CLSA strategist
Nicholas Smith points out, where the US stock market is
keep rivals at bay trading on a price to tangible book ratio of 8.7 times, the
benchmark of Tokyo stocks is at a cheap 1.5 times. Perhaps
some of the sense of disbelief is linked to the advance of the
Sales of the Sony PlayStation 4 have Topix against the performance of the yen. When the index
reached almost 60m units since the was last at 1,600 in November 2015, the currency was at
games console launched three and a half 123/$; today the yen is in the 110 zone, making it much
years ago, with the Japanese company harder to argue as a tailwind for the Topix bull run.
maintaining its commanding lead over But the Topix has always been less tightly entwined with
Microsoft as its main rival prepares to the dollar-yen rate than many investors guess and since
release a more powerful Xbox console, January the estrangement has deepened. The standard
writes Tim Bradshaw. retort that the Topix is playing proxy for an improved
Andrew House, global chief executive view on global growth would be more satisfying if the
of Sony Interactive Entertainment, said recent run-up of the yen were not being explained as a
the PS4 had seen really solid haven play in unsettled times.
momentum, with April sales The Topixs 1,600-point Gorgonzola moment has passed
outperforming expectations. without much applause because conviction of its reality is
The latest figures suggest that the so low. Foreign investors do not seem to think they have
popularity of the Nintendo Switch, missed a miracle they are still convinced that they are
which launched in March and has been just hearing things.
in short supply ever since, has done little
to dent sales of the PS4, which has sold Topix index
nearly 10m consoles since early
December. 1800
The Switchs strong start has surprised 1600
many games industry observers given 1400
the poor performance of the Wii U,
Nintendos last console. 1200
A particularly strong reception for the 1000 The rapid rally in
Switch in Japan has coincided with 800 Japans Topix
Sonys gaming sales picking up in its index reinforces
home market, after a long period during 600 the sense that
which mobile games dominated. 2012 14 16 17 foreign investors
Source: Thomson Reuters Datastream
We all benefit if consoles end up have missed a
being part of the cultural conversation trick
again, Mr House said.
leo.lewis@ft.com
Kiyoshi Ota/Bloomberg

SocGen aims to raise up to 1.6bn by

floating stake in car-leasing arm ALD
PATRICK MCGEE FRANKFURT 5.7bn and 7bn. It will raise up to focuses on leasing to businesses, rather
PETER CAMPBELL LONDON
1.6bn by selling up to 80.8m shares, or than consumers, and is beginning to
Socit Gnrale plans to sell up to a 20 per cent stake. An overallotment shift towards offering mobility serv-
23 per cent of its car-leasing group ALD option on an additional 12m shares ices that allows customers to share vehi-
Automotive, valuing the group at as takes the stake on offer up to 23 per cles or use different modes of transport.
much as 7bn in one of the largest cent. Pricing is expected on June 15 and In April it launched a pilot project
flotations in Europe so far this year. the first day of trading on Euronext with carmaker Opel and carpooling app
Australia proves the Paris would be June 16. BlaBlaCar to give select customers
wrong fit for Topshop ALD, which manages a fleet of 1.4m The offering would be Frances biggest car-as-a-service deals based on zero-
vehicles across more than 40 countries, IPO since asset manager Amundi raised deposit finance and low monthly pay-
Topshop of the UK was part of a wave was the second-largest leasing provider 1.5bn in November 2015 the largest ments. This is a large theme in the wider
of foreign retailers aiming to make in Europe last year, just behind BNP Paris offering in a decade. industry, as carmakers forecast a
inroads in Australia. But its local Paribas-owned Arval, according to If SocGen, whose profits have been decline in individual car use and a shift
franchise partner has fallen into Leaseurope. The group was acquired by weighed down by low interest rates and towards shared ownership or short-
administration amid tough competition SocGen in 2001 from its previous owner, regulatory burdens, sold a 23 per cent term use.
and an economic slowdown that has Deutsche Bank. stake, it could boost its tier one capital ALD said the IPO would help it gain
hit high street sales. Frances second-biggest lender plans ratio by 20 basis points, the bank said. visibility and reputation in the mobility
Analysis i PAGE 14 to sell the shares for between 14.20 Last year ALD recorded a net profit of ecosystem while also raising more
and 17.40, valuing ALD between 512m, up 21 per cent year on year. ALD financing to invest in new areas.

Companies / Sectors / People

Companies
ALD Automotive.......................................11
Adidas............................................................15
Aldi...................................................................14
Amazon........................................10,12,14,15
Amundi...........................................................11
Antofagasta................................................19
Apple.........................................................12,15
Arcadia Group...........................................14
Arval.................................................................11
Asos.................................................................10
BAA..................................................................12
BNP Paribas................................................11
Banco Popular.....................................10,19
Bank of Portugal.....................................15
Barclays.........................................................12
Bilgin Enerji................................................14
BlaBlaCar.......................................................11
Blackstone....................................................12
CME Group..................................................18
CSX..................................................................14
Caesars Entertainment........................18
Canadian Pacific......................................14
Cefetra...........................................................18
Center Parcs...............................................18
China Vanke..........................................12,12
Clear Channel............................................18
ConvaTec.....................................................19
Daax Corporation....................................14
Deutsche Bank...........................................11
EasyJet..........................................................19
Etihad................................................................1
Facebook................................................10,15
Faraday Future.........................................15
Fosun..............................................................10
Foxconn.........................................................12
Gazprom..........................................................2
Genel Energy.............................................14
Goldman Sachs........................................20
Google......................................................10,15
H&M................................................................14
Herbalife.......................................................13
ICICI Bank.......................................................3
Ista....................................................................18
Kaz Minerals...............................................19
Kogan.com...................................................14
LeEco..............................................................15
Leshi................................................................15
LinkedIn.........................................................11
Lone Star......................................................15
Merlin..............................................................19
Microsoft..................................................11,15
Mylan..............................................................12
NDTV................................................................3
Netflix.............................................................10
Nintendo........................................................11
Noble..............................................................18
Novo Banco.................................................15
Ocado.............................................................10
Opel..................................................................11
PDVSA..........................................................20
Pimco..............................................................15
Polyus............................................................10
Qatar Airways..............................................1
Restaurant Group...................................19
Roche..............................................................12
Sage.................................................................19
Santander....................................................10
Sheffield Asset Management...........13
Sinclair Broadcast Group...................10
Socit Gnrale.......................................11
Sony..................................................................11
Sophos Capital..........................................13
Sponda...........................................................12
Steadfast Capital.....................................13
Sunac..............................................................15
TXU..................................................................18
Tencent..............................................12,15,18
Tiger Management.................................13
Toshiba..........................................................12
TransDigm...................................................13
Trinity Mirror.............................................10
Twitter...........................................................10
UniCredit......................................................10
Uniqlo.............................................................14
WPP.................................................................15
Wandle Holdings.....................................10
Wesfarmers.................................................14
Whitbread....................................................19
Wm Morrison.............................................10
Yao Capital..................................................12
Zara.................................................................14
Sectors
Aerospace & Defence...........................13
Automobiles................................................11
Banks........................................................10,15
Basic Resources...........................14,18,20
Chemicals....................................................20
Financial Services....................................12
Financials.................................................11,12
Industrial Goods......................................20
Industrials...................................................20
Media..........................................................3,10
Mining............................................................10
Oil & Gas...................................................2,14
Pharmaceuticals.......................................12
Property........................................................12
Rail...................................................................14
Retail.........................................................14,15
Retail & Consumer...........................10,14
Technology..................................9,12,15,18
Transport....................................................20
People
Ackman, Bill................................................13
Carruthers, Jim..........................................13
Daniel, Tom................................................14
Gou, Terry....................................................12
Goyder, Richard.......................................14
Green, Sir Philip.......................................14
Han, David...................................................12
Harrison, Hunter......................................14
Hayward, Tony.........................................14
House, Andrew..........................................11
Howley, Nick...............................................13
Icahn, Carl....................................................13
Jia, Yueting.................................................15
Kerimov, Suleiman..................................10
Kogan, Ruslan...........................................14
Lonegro, Frank.........................................14
Metherell, Julian.......................................14
Ozgul, Murat..............................................14
Robertson, Julian.....................................13
Roy, Prannoy................................................3
Saracho, Emilio.........................................10
Sun, Hongbin.............................................15
Vriens, Daan...............................................18
Wang, Shi.....................................................12
Whyte, Stephen........................................14
Yao, Ming.....................................................12

The Financial Times Limited 2017 Week 23

12 FINANCIAL TIMES Tuesday 6 June 2017

COMPANIES
INSIDE BUSINESS
Pharmaceuticals
FINANCE

Roche cancer drug cocktail disappoints Patrick

Jenkins
Trial shows only marginal but that the benefit was slight. SFr8.6bn ($8.9bn) in sales for Roche last 94.1% and may need to be treated in a hospital
After three years, 94.1 per cent of year. or clinic.
benefit from taking Patients taking the

combination treatment
patients taking the cocktail were disease
free, versus 93.2 per cent of those on
Herceptin alone, according to the data,
But the patents protecting Herceptin
have expired, and Mylan, a generic
drugs company, in March reached an
cocktail who were
disease-free, versus
93.2% of those on
However, Dr Hayes said he thought
some people might be good candidates
for the combination, and that more
Theresa May, Britain
DAVID CROW CHICAGO which were presented at the worlds
largest cancer meeting yesterday.
agreement with Roche that would allow
it to start selling a cut-price biosimilar
Herceptin alone

Roches hopes of protecting its $7bn
breast cancer franchise with a new drug
cocktail were dealt a blow after a large
trial showed the combination was only
Roche has already secured regulatory
approval for the combination in some
breast cancer sufferers, but oncologists
could decide to stick to the single drug
$8.9bn
studies needed to be done to work out
those most likely to benefit.
after Brexit and the
version of the medicine in large mar-
kets.
Analysts expect Roche to counter the
Amount generated
in sales for Roche
I hope well be thoughtful about how
we use Perjeta without causing unnec-
essary diarrhoea, and without breaking
Qatar conundrum
last year from
copycat threat by touting the benefits of the bank, he said.

marginally better than an older medi-
cine made by the company.
The Swiss pharmaceuticals group had
hoped to defend itself against the launch
of a copycat version of its blockbuster
breast cancer medicine, Herceptin, by
combining the drug with one of its
newer drugs, Perjeta.
The clinical trial showed the two
medicines were better than one at
stopping cancer returning after surgery,
Technology
for the majority of patients after seeing
the data.
The trial tells us the combo is better
than the single regimen, but that the dif-
ference is small, said Dr Daniel Hayes,
president of the American Society of
Clinical Oncology, which is organising
the conference in Chicago.
Herceptin and Perjeta each cost
about $70,000 for a year of treatment
and the drugs generated a combined
the newer cocktail therapy, which is sold
in a combination pack.
Dr Hayes said oncologists might
refrain from using the new combination
not just for cost reasons, but also
because Perjeta causes severe diarrhoea
in some patients.
In the clinical trial, roughly one in 10
patients experienced grade-three diar-
rhoea, which means a person can strug-
gle to control their bowel movements
B
Herceptin and
Perjeta Before the data were published yes-
terday, one large Roche investor said
there was a lot of nervousness among
shareholders over the outcome of the
trial.
The big question is whether the data
are enough to convince clinicians that
the standard of care in HER2 positive
breast cancer is now the Herceptin and
Perjeta combination, said analysts at
HSBC.
arely three months ago, when Theresa May
seemed more secure as Britains prime minister,
and attitudes to triggering EU secession felt that
much more bullish, there was a lot of bluster
about the continuing attractiveness of the UK as
an investment destination.
Qatar, a big investor in the UK, was wheeled out to trum-
pet the case for a post-Brexit boom. Two days before the
Article 50 Brexit button was pressed, the Qatari prime
minister said he expected to pump 5bn into the UK over
the next five years.
This small Gulf state has long been a core supplier of
energy to the UK it accounts for as much as 90 per cent of
Britains imports of liquefied natural gas. But, especially in

Foxconn says On the rebound China fund hopes for slam dunk the years since the 2008 financial crisis, it has also become
a disproportionately important financial investor.
Mainly via its sovereign wealth fund, the Qatar Invest-
ment Authority, the country has bought infrastructure
Apple and (including a chunk of Heathrow airport owner BAA),
property (the Shard skyscraper and a portion of the

Amazon back Canary Wharf financial district), trophy names (Harrods

Toshiba bid
KANA INAGAKI TOKYO
Foxconn founder Terry Gou has said he
has won the financial backing of Apple
and Amazon in his companys $20bn-
plus bid for Toshibas flash memory
business, as the Taiwanese group aims
to counter Japanese government oppo-
sition to the deal.
In an interview with the Nikkei business
daily, Mr Gou said the US tech groups
are joining with Foxconn, which is listed
as Hon Hai Precision Industry. Toshiba
is looking to clinch a deal on the sale of
its chip division this month as the Japa-
nese group grapples with losses arising
from its US nuclear business.
Of course Apple and Amazon are
offering money together, but I cannot
comment on how much funds each
company is putting on the table, Mr
Gou told the Nikkei.
Separately, Foxconn said it had sub-
mitted a bid for Toshibas chip business
with a number of strategic partners
but the company declined to provide
details. Amazon declined to comment
and Apple was not immediately availa-
ble for comment.
People involved in the sales process
said Foxconn, which acquired Japans
Sharp last year, has been studying a joint
bid with Apple, possibly using a $93bn
investment fund created by SoftBank,
the Japanese technology group.
Analysts say demand for NAND flash
memory chips, used for long-term data
storage for smartphones, is expected to
increase on the back of a boon in data
centres for technology companies in the
age of artificial intelligence and the
internet of things.
The Taiwanese group has indicated
that it would be willing to pay up to 3tn
($27bn) for the NAND memory chip
business, making it the lead contender
in terms of offer price.
The deal is politically fraught, how-
ever, and Toshiba may not secure the
highest price amid Tokyos concern
about the companys technology falling
into rival Asian hands even after the
tie-up with the Silicon Valley groups is
taken into account.
Japanese officials would prefer to see
Toshibas chip business under the con-
trol of the state-backed Innovation Net-
work Corporation of Japan fund, which
is said to be considering a joint bid either
with KKR, the US private equity fund, or
US chipmaker Western Digital.
Other contenders include US private
equity firm Bain Capital and US chip-
maker Broadcom.
Additional reporting by Louise Lucas in
Hong Kong
Yao Ming, Chinas 7ft 6in basketball
legend once famous for playing
over the heads of opponents, is
counting on his larger than life profile
to raise capital.
Mr Yao is among a growing cohort of
athletes, models, actors and pop acts
leveraging their celebrity to tap Chinas
lush investor base.
Chinese celebrities have raised
billions of renminbi in recent years as
domestic private equity has swollen to
more than Rmb12tn ($1.8tn).
Stardom has certainly helped the
investing career of Mr Yao, 36, who
played for nine seasons with the
Houston Rockets before retiring in
2011 with a foot injury.
His profile in the US contributed to
fame at home and he has become a
symbol of Chinas growing status on
the international stage. Mr Yao has
even been inducted in a national
political body that meets once a year in
Beijing.
Yao Capital, the fund he co-founded
Big profile: with Carlyle veteran David Han last
Yao Mings year, has attracted Rmb2bn and plans
fame on the to raise a US dollar fund this year.
basketball We call it Yao Capital for brand
court looks awareness, says Mr Han. Wherever
set to help his we go, in Europe or the US, people
fund raise know who Yao is.
more capital The fund focuses on athletics-
this year themed investments. Mr Han says Mr
Reuters/China Daily Yaos expertise in this area has given
several large Chinese investors
confidence in the fund.
Other funds in Chinas opaque and
largely unregulated market have also
used the names of big-name stars to
lure investors.
Deng Yaping, an Olympic gold
medallist ping-pong player, said last
year she had raised Rmb1bn to invest
in sports-themed assets.
Male gymnast Xing Aowei, who
helped China take gold at Sydney in
2000, joined a group of professional
investors in 2015 to launch a venture
capital fund.
Yang Ying, a model and actress
known as Angelababy, launched a
private equity group called AB Capital
with her film-star husband in 2015.
Ms Yang, who appeared in the
Hollywood film Independence Day:
Resurgence, has since invested in a
juice company.
New Hope Group, the large
agribusiness to financial services
company, meanwhile, has enlisted Lu
Han, a 26-year-old pop singer, to help
market investment products to the
generation of young Chinese born in
the 1990s.
The fact that celebrities raise
money says something about the
relationship-driven nature of China
and the excess liquidity in renminbi,
says Alberto Forchielli, managing
partner of Mandarin Capital Partners,
a China-focused investment group.
Celebrities open doors for
fundraising and may source deals
because people like to be associated
with them.
Between the end of 2015 and April
this year the number of private
equity funds registered with the
Asset Management Association of
China has more than doubled to
54,403, according to the association.
Over the same time period
subscriptions to funds have risen
from Rmb5tn to Rmb12.28bn.
Yao Capital has brought in
investments from some of Chinas
biggest business names, such as
Wang Shi, chairman of China Vanke,
the largest real-estate company;
Kai-fu Lee, a former Microsoft and
Google executive; and Tencent, the
largest Chinese internet portal.
Government-controlled investors
such as China Investment
Corporation and Qinghua University
investment fund have also backed
the fund.
Celebrity fundraising is not
unique to China, Mr Han points out.
Kobe Bryant, a US basketball star,
launched a $100m venture capital
fund last year. Even Michael Jordan
has become an investor, Mr Han
says, referring to the US basketball
stars investments in Revolution, the
private equity fund. Don Weinland
department store and London hotels including Claridges
and the Connaught). And at the height of the financial cri-
sis, it helped stem disaster by bailing out Barclays bank.
Qatar has about 40bn of
investments in the UK. The
glut of acquisitions has
Tension between
sometimes been controver- ethical concerns
sial there have been allega-
tions of improper processes
and Qatars
and cries of a great British usefulness
sellout. But now the tension
between ethical concerns
feels fraught
and Qatars financial useful-
ness feels particularly fraught. And for three reasons.
First, the flow of money from sovereign wealth funds
into post-Brexit Britain may decline just as it is most
needed. The fragility was highlighted yesterday by a
report signalling the funds concerns about the health and
attractiveness of the UK economy outside the EU. The sur-
vey, conducted by asset manager Invesco, asked sovereign
wealth funds to rank countries on a scale of 1 to 10. The
UKs rating fell from 7.6 in 2015 to 5.5 this year, while Ger-
manys appeal as a European hub grew, with its rating up
from 7 to 7.8. Invesco said the funds were worried about
uncertainty over taxes on imports and market access.
Second, UK criminal and regulatory inquiries into Bar-
clays dealings with Qatar continue. The probes by the
Serious Fraud Office and Financial Conduct Authority
centre on Barclays 2008 fundraising in which it tapped
Qatar and Abu Dhabi for 7.3bn to avoid UK government
aid. Barclays simultaneous side arrangements with Qatar,
worth 2.4bn, are of particular interest to authorities.
Mrs May has pledged to disband the SFO and fold it
into the National Crime Agency if she remains prime
minister after this weeks
general election. That could
undermine the pursuit of the
One of Mrs Mays
criminal case against Bar- strategies is to
clays. But the suspicion sur-
rounding the transaction is
deepen relations
likely to persist and could with the likes of
even backfire on Mrs May if
the SFOs dissolution is seen
the Qataris
as helpful to what could be
an increasingly controversial Qatar.
That controversy stems from fresh allegations of Qatars
associations with Islamist extremism and is the third and
most serious cloud hanging over the states future as an
investor in British business.
Its opening-up of relations with Iran and support of the
Muslim Brotherhood have been criticised before. But yes-
terday, Qatar was ostracised by Saudi Arabia, Egypt, the
United Arab Emirates and Bahrain, which cut diplomatic
ties and suspended air and sea travel to and from the state.
Regional rivalries and other factors may underlie the
rupture, in addition to genuine concern about Qatars con-
nections to extremists. But the timing could scarcely be
worse for the UK and Mrs May. She is days away from an
election, having led the country through three fatal Islam-
ist terrorist attacks in as many months. Dealing with the
human tragedy of those murders in London and Manches-
ter and devising the security strategies to guard against
future attacks will be her priorities.
At the same time, however, she must outline a bright
future for Britain outside the EU. One of her strategies is to
deepen relations with the likes of the Qataris, who can be
encouraged to step up investment in Britain when Euro-
pean ties loosen. But if the backlash against Qatar gains
momentum, it is hard to see a politically expedient let
alone moral way to make that happen.
patrick.jenkins@ft.com

Regulation Financials

SEC hit by time-limit ruling on ill-gotten gains Blackstone to buy Finnish real estate group
DAVID J LYNCH WASHINGTON
The US Supreme Court yesterday
placed strict time limits on the Securi-
ties and Exchange Commissions ability
to force companies to repay illegal
profits, dealing a serious blow to one of
its main enforcement tools.
The high court said that disgorgement
orders, which require those found to
have violated securities laws to surren-
der any ill-gotten gains, are subject to
the same five-year time limit as its
financial penalties.
The commission had argued that the
absence of a time limit would have
allowed the market watchdog to seek
payments for financial wrongdoing
years or even decades in the past.
The decision carries far-reaching
consequences for the SEC. Some investi-
gations more than five years old may
now be dropped.
Itll have a huge impact on the SECs
enforcement efforts, said Saskia
Zandieh, an attorney at Miller & Cheva-
lier in Washington.
Over the past five years, 80 per cent of
the $2 billion in SEC levies against pub-
lic companies were disgorgement
orders, rather than civil monetary pen-
alties, which were already subject to the
five-year time limit, Ms Zandieh said.
The ruling came in the case of Charles
Kokesh, an investment adviser found
liable in 2014 of violating securities
laws. A US District Court ordered him to
surrender nearly $35m in misappropri-
ated funds from four business develop-
ment companies and pay $18m in inter-
est and a $2.4 million civil fine.
But nearly $29.9m of the $35m in dis-
gorgement stemmed from violations
that occurred outside the statute of limi-
tations. The courts ruling erases that
portion of the assessment against him.
Were pleased with the decision,
said his lawyer, Adam Unikowsky of Jen-
ner & Block. We think it grants impor-
tant protections to defendants facing
enforcement proceedings.
JAVIER ESPINOZA and logistics, an enterprise value of
PRIVATE CAPITAL CORRESPONDENT
3.8bn.
Blackstone, the US buyout group, has Our proposed acquisition represents
agreed to buy Sponda, a Finnish real another step in Blackstones longstand-
estate company, for roughly 1.8bn in ing strategy of investing in high-quality
cash as it looks to expand its presence real estate assets and businesses across
in the Nordic region. the Nordic region, said James Seppala,
head of European real estate acquisi-
Sponda shareholders will be offered tions at the group.
5.19 per share in cash, which is a pre- The deal comes days after Blackstone
mium of 20.7 per cent to its closing price sold Logicor, a pan-European logistics
on Friday, Blackstone said yesterday. company, to China Investment Corpora-
The Finnish companys board has tion for 12.5bn. Since 2015, Blackstone
decided unanimously to recommend has acquired control of more than 4bn
the offer to its shareholders. The price of properties in the Nordic region
would give Sponda, which has assets in including 1bn of assets in Finland.
office and residential real estate, retail Industry experts had called for
Sponda to be sold or liquidated because
the value of its portfolio was materially
higher than its share price.
Spondas share has been persistently
below the value of its portfolio because
its management team is not highly
regarded, said Peter Papadakos, an
analyst with Green Street Advisors in
London. He said the deal was good value
for Blackstone. They are paying about
a euro less [per share] than what we
think the enterprise value is.
Blackstone is set to dispose of the
companys assets in Russia, a person
familiar with the strategy said.
The buyout group declined to com-
ment on its plans for Sponda.
Tuesday 6 June 2017
Aerospace & defence
Hedge funds go to war over US military contractor
TransDigm shares yo-yo
as traders take sides in
short selling campaign
LINDSAY FORTADO
HEDGE FUND CORRESPONDENT
It was mid-January when TransDigms
share price began its rollercoaster ride
with a vertiginous drop after the Ohio
aerospace parts company was slammed
in back-to-back reports on the internet.
A little-known news outlet in Wash-
ington called The Capitol Forum said
the company was courting political con-
troversy by hiking prices for defence
components. The short seller Andrew
Left, in a reference to the scandal-
ridden pharmaceuticals company,
dubbed it the Valeant of the aerospace
industry.
The reports triggered a battle among
some of the biggest names in the hedge
fund community over TransDigms
value and highlighted again how aggres-
sive traders can send a share price
yo-yoing regardless of any news coming
out of the company.
On one side are the protgs of hedge
fund royalty, Julian Robertson, whose
Tiger Management spawned a pack of
young managers known as tiger cubs;
on the other, a group of short sellers
including Sophos Capital, led by Jim
Carruthers, Sheffield Asset Manage-
ment of Chicago and Steadfast Capital of
New York.
In the middle of it all, the aerospace
companys shares have traced a violent
W pattern. Its a clear case of trying
to whack the share price with a head-
line, said a manager at one of the funds
invested in TransDigm. Another share-
holder called it a smash and grab job
by short sellers.
The battle is reminiscent of other
short selling campaigns such as that
over Herbalife, a nutrition supplements
company that Bill Ackman called a pyr-
amid scheme. Mr Ackmans arch-rival
Carl Icahn took the other side of the
trade and publicly berated Mr Ackman.
Some managers say that in the face of
relentlessly rising equity prices, short
sellers are becoming more aggressive in
FINANCIAL TIMES 13
TransDigm declined to comment for
this article, although chief executive
Nick Howley addressed the reports in
May. Direct sales to the government are
about 7 per cent of TransDigms reve-
nue, and the company has not received
any word from the DOD that it is open-
ing an investigation. If they do begin
any audit or investigation we will co-op-
erate fully, he said.
According to shareholders, the com-
panys executives have been stunned by
the attention. By February, the shares
had more than recovered but a second
round of reports in March led to another
share price drop.
Mr Left gained both notoriety and
plaudits with his reports condemning
the drug company Valeant Pharmaceu-
ticals over its accounting and sales prac-
tices in 2015. On Bloomberg TV in
March, he said TransDigm could fall
35, 40 per cent if the DOD began
investigating or President Donald
Trump tweeted about it.
The bearish reports have attracted
the attention of Ro Khanna, a junior
congressman from Silicon Valley, who
wrote to the DOD asking for an inquiry
into potential waste, fraud and abuse.
Another congressman, Tim Ryan of
Ohio, reportedly also complained.
Mr Howley said the two congressmen
had penned almost identical letters,
hinting that TransDigm may be the vic-
tim of an orchestrated campaign.
Crew members on the USS Eisenhower. Politicians want an inquiry into potential waste, fraud and abuse by aerospace group TransDigm Mark Wilson/Getty Images The shares have again rebounded
they are trading at about $271 but
their efforts to force share prices to dip. often the only supplier, giving it greater short sellers have not given up. They
TransDigm On the other hand, supporters who pricing power. After-market sales have had borrowed 15 per cent of the total
Share price ($) Sales ($bn) Net income ($bn) drive the share price higher can squeeze dipped recently, however. TransDigm shares outstanding this
the shorts out of their positions. The bearish reports alleged that the month, much higher than the 2.5 per
280 4 0.6 Two tiger cubs Chase Coleman of company was under investigation by cent average across the S&P 500,
Tiger Global and John Griffin of Blue the US Department of Defence and that according to data from IHS Markit.
260 3 0.5 Ridge Capital bought more stock after corporate customers were resisting The hedge fund battle seems likely to
the short selling campaign began. Tiger TransDigms prices. A DOD spokesman go on into the second half of this year,
Global increased its stake to 7.7 per cent, declined to comment. with neutral referees hard to find.
240 2 0.4 a near $1.1bn position, making it the Supporters retort that while it did Goldman Sachs analysts led by Noah
third-largest shareholder. Smaller increase some prices after acquiring Poponak said in a mid-May note that
220 1 0.3 funds Manor Road Capital and Cat Rock smaller manufacturers, the rises are in while we believe investors have con-
Capital have also increased their stakes. single-digit percentages and that the cern that TransDigm is raising prices
TransDigm, with a market cap of reports selected components that are with DOD well outside industry
200 0 0.2 $14bn, has made a series of acquisitions being phased out. Theyre trying to call norm, their analysis shows its average
Jan 2017 Jun 2012 13 14 15 16 since it went public in 2006. It manufac- fire in a crowded theatre, said one port- pricing is relatively in line with other
tures aeroplane parts including motors, folio manager invested in the company. suppliers in the industry. They rate
Sources: company; Thomson Reuters Datastream
ignition systems and batteries, and is Theyre putting out false information. TransDigm a buy.
14
Topshop fails
to wear well in
the retail heat
of Australia
Competition and economic slowdown
are hitting high street sales in country
JAMIE SMYTH SYDNEY
When Topshop opened its first store in
Australia in 2011, hundreds of custom-
ers queued overnight to snap up the
retailers Cool Britannia brand of fast
fashion. It was part of a wave of foreign
chains including Zara, Miss Selfridge
and Hollister aiming to cash in on a
market that had been relatively shel-
tered from foreign rivals and had
escaped the ravages of the global finan-
cial crisis.
But things have not gone to plan. Last
month Topshops local franchise part-
ner, Austradia Pty Ltd, slipped into
administration, with net losses of A$3m
in the six months to January 28 2017.
Retail tycoon Sir Philip Green, whose
Arcadia Group owns Topshop, is in talks
with administrator Ferrier Hodgson
about a rescue bid.
Topshop was very successful in its
first few years but there was an issue
with the franchise model, says James
Stewart at Ferrier Hodgson.
Rescuing Topshop is not going to be
easy in Australia, which is experiencing
an influx of foreign competitors and an
economic slowdown that is hitting high
street sales. Over the past year almost a
dozen big retailers, including Herring-
bone, Rhodes & Beckett, Marcs, David
Lawrence, Pumpkin Patch, Laura Ash-
ley and Payless Shoes, have gone into
administration in the country.
The competitive threat is about to
intensify, as Amazon prepares to launch
a full sales offering in Australia.
The move by the US group is expected
to hit the entire Australian retail sector
from clothing to grocery and elec-
tronic goods. It prompted US bank
JPMorgan to downgrade its profit fore-
casts for a host of retailers last month,
including department store Myer, elec-
tronics groups Harvey Norman and JB
-Hi-Fi and Super Retail group.
The outlook for the Australian con-
sumer is deteriorating, in our view,
while the pending entry of Amazon is a
negative for multiples and earnings per
share forecasts, says JPMorgan in its
report.
Already the Australian clothing trade
was suffering from weak retail condi-
tions, high wage and rent costs, and
fierce competition from emerging
online operators, according to Ibis-
world, a research group.
Weak consumer sentiment has
encouraged bargain hunting, leading to
price becoming an increasingly impor-
tant aspect of competition, says Lauren
Magner, analyst at Ibisworld.
Retail sales momentum has slowed
since late 2014 due to a soft economy
and wary households, which are strug-
Property Market
gling due to a debt to disposable income
ratio of 189 per cent one of the highest
in the developed world. Retail sales fell
0.1 per cent in March and 0.2 per cent in
February, prompting Citi to warn in a
note last month that the sector was
verging on recession. In April retail
sales bounced back 1 per cent, according
to figures released last week, providing
some hope of better times ahead.
Households are scrimping and sav-
ing a bit more while focusing on paying
down mortgage debt. Subdued wage
growth is also hitting consumption,
says Tapas Strickland, economist at
National Australia Bank.
Retailers are responding by dis-
counting so retail sales volumes arent
so bad but values are weak.
Some of the larger foreign clothing
retailers are faring better in Australia.
Spanish group Zara, which has 18
stores, increased sales by 15.5 per cent to
A$256.4m in the year to January 2017.
Households are scrimping
and saving a bit more
while focusing on paying
down mortgage debt
But operating margins at its Australian
operation fell 4.4 percentage points to
6.2 per cent, compared with the prior
year a result analysts at Macquarie
attributed to a weakening Australian
dollar and a trickier trading environ-
ment. At a group level Zara reported an
operating profit margin of 12.4 per cent.
The Australian arms of Swedish
retailer H&M, Japanese chain Uniqlo
and Zara generated combined sales of
A$684m in the last 12 month period
reported in their annual reports.
NAB expects Myer, which owns 20 per
cent of Topshop, to be hardest hit by
Amazons arrival and has slashed its
profits forecast for the group by 15 per
cent in 2018 and 30 per cent in 2019. The
department stores shares have fallen a
third since January 1.
Analysts say traditional retailers will
have to improve their own online offer-
ing to insulate themselves from Amazon
and other foreign online competitors.
Just 7.1 per cent of Australias total retail
sales are online, compared with 11.3 per
cent in the US, according to NAB data.
When Amazon arrives in a country it
drives more people towards online
retailing it is likely to change the
mindset of Australians, says Ruslan
Kogan, founder of Kogan.com, one of
the largest local online retailers listed
in Australia, which plans to sell its own
private label products on Amazons
marketplace.
FINANCIAL TIMES
COMPANIES
Topshop was part of a wave of foreign chains looking to cash in down under Christian Vierig/Getty Images
Food fight restricted and population growth is
Supermarkets feel bite of higher, says Craig Woolford, a Citi
analyst. But we are seeing that gap
increasing competition narrow as competition intensifies.
Mr Woolford says the launch of
Even Australias concentrated AmazonFresh may not prove too
supermarkets sector, where disruptive in the early years as it will
Wesfarmers Coles and Woolworths take time for the US group to build its
retain almost 70 per cent of the market, supplier base and logistics operation.
is feeling the impact of increasing Amazon will have more of an impact
competition. German discounter Aldi initially on the consumer
built its market share to 13 per cent in electronics sector, he says.
the year to March and speculation is Morgan Stanley estimated
mounting about the launch of in a note published last week
AmazonFresh, a grocery service from that Wesfarmers, the
the US online retailer. Pressure is Australian conglomerate that
building on Coles and Woolworths
profit margins, which were roughly
double those of the UKs Tesco in 2016, Richard Goyder:
according to research by Citi. grocers have to deal
Australian supermarkets enjoy with the tyranny
higher profit margins than their UK and of distance in
US peers as the market is more Australia
consolidated, planning laws are more
Rail
CSX agrees to spend $84m on
repaying chiefs lost income
GREGORY MEYER NEW YORK
Shareholders of CSX have agreed to
spend at least $84m to repay money
the freight railroads new chief for-
feited when he left his previous job.
Hunter Harrison, a celebrated rail man-
ager, had threatened to resign if he was
not reimbursed. At the companys
annual meeting yesterday, 93 per cent of
shareholders approved the payment.
In January, Mr Harrison quit his post
as chief of the Canadian Pacific railway,
walking away from about $90m in com-
pensation in return for relief from a
noncompete agreement. That allowed
him to team up with Mantle Ridge, an
ft.com/house&home activist hedge fund, to get installed at
CSX with promises of bettering per-
formance with his trademark precision
railroading approach.
Investors have driven CSX shares up
nearly 50 per cent since Mr Harrison
made his plans public.
Mantle Ridge agreed to front Mr Har-
rison most of his cost of leaving CP in the
FT PROPERTY hope that CSX would repay them $84m
............................................................................................... plus associated tax expenses. The CSX
Classified Property Advertising
UK: +44 20 7873 4907 board took no position on their reim-
US: +1 212 641 6500 bursement request ahead of the vote.
ASIA: +852 2905 5554
The case for reimbursement was
complicated by revelations that Mr Har-
owns Coles, Target, Bunnings and
Kmart, could lose about 4 per cent of
annual sales and A$400m in earnings
before interest and tax to Amazon by
2026.
However, Richard Goyder, managing
director of Wesfarmers, says the
conglomerate is in reasonable shape to
take on new entrants.
I think there has been an over-focus
on Amazons entry, he says.
There is the tyranny of
distance in Australia to
contend with and all the costs
that go with that. Wage rates
are high and there is a
different tax system. These
are factors we deal with now
so there are clearly more
challenges and costs to
contend with for
competitors.
Jamie
Smyth
rison, 72 years old, sometimes puffs on
oxygen to help him breathe. Before his
arrival he had refused the boards
request that an independent doctor
review his medical records.
CSX executives have said Mr Harrison
is a tireless leader of the largest railroad
in the eastern US. Ive gotten a dose of
leadership from him while he had sup-
plemental oxygen. Ive had a dose of
leadership from him when he hasnt had
supplemental oxygen. And they were
equally as blunt and equally as effec-
tive, Frank Lonegro, chief financial
officer, said in late May.
Institutional Shareholder Services, a
proxy advisory group, said the CSX
boards lack of involvement in the reim-
bursement agreement could create a
troubling governance precedent.
ISS nevertheless supported the pay-
ment, warning that failure to make the
reimbursement will probably lead to
Harrisons exit and the loss of the mar-
ket value that accompanied his arrival.
Mr Harrisons reputation rests on his
success turning round the Illinois Cen-
tral, Canadian National and CP lines
over a quarter of a century. Executives
say he has already begun to improve the
performance of CSX, with trains run-
ning faster and more punctually.
Tuesday 6 June 2017
Oil & gas
Genel breaks
ties with
past as Nat
Rothschild
joins exodus
NATHALIE THOMAS
AND NICHOLAS MEGAW
Nat Rothschild is stepping down
from the board of Genel Energy, the
Kurdistan-focused oil producer he
co-founded in 2011, in the latest man-
agement change at the lossmaking
company whose value has collapsed.
Tony Hayward, the former BP boss who
set up Genel with Mr Rothschild, indi-
cated in April that he would resign as
chairman. Finance director Ben Mona-
ghan, formerly of JPMorgan, will also
depart at the end of the month. Simon
Lockett, a board member since January
last year, has also resigned.
For Mr Rothschild, the decision,
announced by Genel yesterday, con-
cludes a painful investment made at the
height of the commodities boom. He
was also embroiled in a tussle over
Bumi, the Indonesian coal venture cre-
ated in 2010, which became known as
Asia Resource Minerals.
The oil producer has had a tumultu-
ous ride after it listed in London at 10 a
share in 2011. Since the shares peaked in
2014 at 11.44 valuing Genel at more
than 3bn they have fallen more than
90 per cent. Mr Rothschild retains a
near 8 per cent stake. The share price
fell 4 per cent to 94.75p yesterday.
Genel has twice significantly reduced
its estimate of how much oil is in Taq
Taq, its flagship oilfield in the Kurdistan
region of Iraq.
Two gasfields, from which it had
hoped to export gas to Turkey at the end
of last year, have been heavily delayed
and require outside investment. Murat
Ozgul, chief executive, said in March
that Genel was in talks with TEC, the
Turkish state-backed energy company.
Analysts speculated that the depar-
tures would allow Stephen Whyte,
incoming chairman, to set a new direc-
tion. Todays news suggests that more
substantial changes are afoot, said Al
Stanton at RBC Capital Markets.
However, that could include some
dilution of existing shareholders, per-
haps as a result of a deal, he added.
Daax Corporation, an Azeri conglom-
erate, and Bilgin Enerji, a Turkish com-
pany with renewable energy assets,
have increased their holdings in Genel
and now have stakes of 11.9 per cent and
around 15 per cent respectively.
Oil producers in the Kurdistan region
have struggled to secure payments for
exports from the regional government
in Erbil, which diverted resources to
fighting Isis, the militant group.
Genel has explored in Angola, Ivory
Coast and Malta, with little success.
Mr Rothschild was one of four inves-
tors also including Mr Hayward
who ploughed 100m into a cash vehi-
cle called Vallares. In 2011 Vallares
bought Genel and floated it in London.
The founders who also included
Tom Daniel and Julian Metherell
hoped to build a FTSE 100 oil major.
Mr Metherell left in 2015.
At the end of 2011, Mr Rothschild
owned 7.4m shares but the structure of
the takeover deal allowed founder
shares to be exchanged for ordinary
shares representing, collectively, a
6.67 per cent stake six months after
completion. Mr Rothschild ended up
with more than 22m shares. His holding
is worth just over 21m, down from
more than 253m on paper in 2014.
Mr Rothschild, who is executive
chairman of Volex, a UK-listed maker of
electrical products, did not immediately
respond to a request for comment.
He and Mr Hayward are due to stand
down at the annual shareholder meet-
ing today.
Legal Notices
Tuesday 6 June 2017 FINANCIAL TIMES 15

COMPANIES

Chinas LeEco hits roadblocks to US ambitions

Much-hyped electric car, internet and electronics group leaves trail of axed deals, unfinished facilities and disgruntled staff
FT REPORTERS
It was supposed to be Apple, Amazon,
Netflix, Tesla and Disney all rolled into
one, and its US debut last October was
billed as a historical moment in tech
and consumer culture comparable
with the day the iPhone maker or
Google went public.
This breathless publicity surrounding
Chinas LeEco group was matched only
by the ambitious claims of its founder
and chief executive, Jia Yueting, at its
San Francisco launch: We have blazed
a new path in the internet content
domain, he said.
Far from blazing a path, however,
LeEcos hype diverged substantially
from reality. Its US adventure has left a
trail of cancelled deals, disgruntled
employees and a vast and empty
would-be car plant in the Nevada
desert.
Analysts have expressed grave doubts
about its high spending on a sprawling
strategy to conquer the US consumer
electronics market by offering TVs and
phones at discount prices and develop-
ing a super bike, electric cars and vir-
tual reality headsets.
LeEco is among high-profile Chinese
companies founded by newly minted
tycoons who burst on to the business
scene with bombast and big ambitions
but saw the dream fade when the busi-
nesses ventured overseas.
Faraday Future, the electric vehicle
company backed by Mr Jia, was set up to
make electric vehicles in Nevada. But
last month, with the factory half-
finished, it laid off 325 employees
most of its US workforce and blamed
difficulties in raising capital.
LeEco went to the US just seven
months ago as part of its design to be a
global company, initially to sell smart-
phones and other hardware. Before
that, its businesses were mostly domes-
tic. Leshi Internet Information and
Technology, the Shenzhen-listed unit,
provides a range of internet services,
including advertising and ecommerce.
Back in China, the companys billion-
aire founder has had to scramble to find
additional financing for his increasingly
disparate tech empire. Two weeks ago,
Mr Jia said he would step down as chief
executive of Leshi while remaining
chairman of both it and LeEco, the
unlisted parent group. The chief finan-
cial officer also quit, citing personal
reasons.
LeEcos tale threatens to become one
of vaulting ambition that overleaped
itself and possibly its funding. The
company, whose name means happy
ecosystem in Chinese, has run up
almost Rmb19bn ($2.7bn) in debts.
Its plans began to unravel as early as
its US launch event the unveiling of its
self-driving car had to be abandoned
when the prototype crashed on the way.
Faraday Future, the US electric vehi-
cle maker, is a ghost factory. The old
Yahoo campus in Silicon Valley, bought
by LeEco for $250m last June, has been
put up for sale. LeEco gave up on its
$2bn bid for US TV maker Vizio, blam-
ing regulatory headwinds. Last
month, LeSports cancelled its live
streaming in China of a European
Deep dip
LeEco founder Champions League football match,
and chief sparking concerns over whether its
executive Jia broadcasting rights had been cut due to
Yueting, who unpaid bills, although the company
oversees a denied the interruption had anything to
sprawling do with debts. Last year, it was late pay-
commercial and ing its bills for rights to broadcast Eng-
tech empire that lish Premier League games in China.
includes LeEcos film arm Le Vision Pictures is
discounted also struggling. Bought out for $1.41bn,
mobile phones, four times its net asset value at the time
TV sales and it was already a partial owner Le
electric cars Vision backed the action blockbuster
Bloomberg; AP The Great Wall starring Matt Damon,
which underwhelmed at the box office.
Mr Jia has resorted to using his own
stock to plug debts at Leshi, popularly
known as the Netflix of China. He has
pledged to lenders as collateral almost
his entire 25.67 per cent stake in Leshi;
his older brother, Jia Yuemin, has simi-
larly put up the bulk of his shares and
affiliate Leshi Holdings, a related party
company wholly owned by Jia Yueting,
is also completely pledged.
But cash flow in the group remains a
problem, as shown by the lay-offs and
the unfinished electric vehicle factory in
Nevada. Last year Leshi lost Rmb337m
at the operating level, on revenues of
Rmb21.9bn. At its peak in May 2015,
Leshi was valued at $22.15bn. It is now
worth little more than a third of that,
and shares trade on a bubbly 106 times
trailing earnings.
LeEco is split into a massive number
of companies and moves money
between them, says one lawyer, adding
that not all pay their bills on time. The
LeEco empire, headed by unlisted
LeEco Holdings, counts at least 39 sub-
sidiaries in China that are at least 51 per
cent controlled by Leshi Holding.
Mr Jia himself has acknowledged
problems with the capital structure.
Weve been blindly charging ahead,
burning money to expand, he wrote in
a rare moment of candour last Novem-
ber. Our capital structure is irrational,
and the scale of external financing can-
not meet the rapid amplification of our
financial needs.
Mr Jia, who is worth $3.5bn according
to Forbes, began his career as a worker
in a sleepy provincial tax bureau before
heading to Beijing to make his fortune.
By 2015, he had supplemented his video
streaming and movie platforms with a
sporting and auto division.
Not everyone bought into his dreams.
An ex-employee of Le Vision Pictures in
Beijing says: LeEco only sugarcoats
some basic concepts and then promotes
and advertises itself heavily. But in
essence, theres no innovation at all.
There are suggestions of profligacy as
the important thing is [Mr Jia] has a
good strategy and vision especially his
strategy in the auto industry.
Leshi Many, including Nevadas state treas-
urer Dan Schwartz, would demur.
Sales Operating According to Mr Schwartz, lack of funds
($bn) profit ($m) halted construction of the $1bn car
plant in November. Faraday Future, the
US car start-up backed by LeEco, owed
20 40 tens of millions of dollars in missed
payments to its contractor, he added.
20 LeEco has denied both statements.
15 Nothing has happened at the Fara-
day Future site, Mr Schwartz told the
0
FT. Its embarrassing for the state of
10 Nevada that we effectively backed an
-20 airball. There is nothing there. Nevada
granted Faraday Future $200m in
5 promised tax incentives for locating its
-40
plant there, spread over 15 to 20 years,
depending on performance and local
0 -60 hiring conditions.
2008 09 10 11 12 13 14 15 16 Richard Windsor of independent
research consultancy Radio Free Mobile
Poor performance sees little chance of success in the field.
Share price and index (rebased) Building cars is quite difficult as Apple
20 has found out, so I dont see why LeEco
should do [it].
CSI 300 The question now is to what extent
10
LeEcos finances can be bolstered by
Sunacs cheque. The problem is not
0 that they have not got the money, its
that they cannot get it out of China, says
-10 Mr Windsor a reference to Chinas
capital controls designed to halt capital
-20 flight and bolster the renminbi.
With the Vizio deal scrapped and
Leshi -30
Yahoos old Silicon Valley site headquar-
ters up for sale, Sunacs $2.4bn which
otherwise could have bankrolled the
-40 two deals will instead help support the
balance sheet, he says.
-50 Axing the two deals does, however,
deal a blow to Mr Jias US ambitions.
Jun 2016 17 Jun And from what I know of the founder,
FT graphic that would be taken as a very bad thing
Source: Bloomberg
to remain as a Chinese company, says
Mr Windsor.
Weve been well. Describing Mr Jias modus oper- So far, Mr Jia seems undeterred, even
andi in streaming, one peer talks of if his goal of entering what he calls the
blindly coming across content deals signed up $100bn club and becoming the first
charging at hefty prices. Two years ago, they cre- Chinese company and the first A-share
ated such a bubble. I said: If they follow company to break through US$100bn in
ahead, through on every commitment theyve operating income is a distant prospect.
burning made [on content licensing], they As he said philosophically at the time
would go bankrupt. of the US launch: Some say that LeEco
money to Mr Jia has, however, proved adept at is the Chinese Netflix and some say that
expand raising funds so much so that he is it is Apple, Amazon, Netflix, Tesla and
known to many as the PPT CEO, or Disney all together. Others say LeEco is
Jia Yueting PowerPoint chief executive, for his rous- crazy to come to the back yard of these
ing investor presentations. At one such companies to get their piece of the
session in December, he convinced Chi- pie . . . The path is long and arduous
nese real estate developer Sunac to give but isnt the meaning of life perpetually
$2.4bn in return for shares. trying to explore the unknowns of the
Speaking to reporters afterwards, world?
Sunac chairman Sun Hongbin said: By Emily Feng and Sherry Fei Ju in Beijing,
After my conversation with Jia, I had Louise Lucas in Hong Kong and Tim Brad-
the impetuous urge to invest because shaw in San Francisco
Property Market

Technology Banks

Fearsome five tech groups Novo Banco bondholders

lead list of worlds top brands
TIM BRADSHAW SAN FRANCISCO
Silicon Valley groups already occupy
the top five spots among the worlds
most valuable companies. Tech stocks
also account for almost all of the S&P
500s gains so far this year. Now, a new
ranking of the worlds most valuable
brands is the latest listing to be domi-
nated by Google, Apple, Microsoft,
Amazon and Facebook.
The US tech groups occupy the first five
positions in BrandZs latest list of the top
100 brands, while Chinas Tencent
parent of the hugely popular Weixin, or
WeChat, app entered the top 10 for
the first time.
The annual BrandZ ranking, which is
compiled by WPP consultancy Kantar
Millward Brown, is based on a combina-
tion of millions of consumer interviews
and each companys financial perform-
ance. With a combined brand value of
$892bn, the groups BrandZ calls techs
fearsome five account for a quarter of
the total value of the top 100 companies.
Dubbed The frightful five by some,
the tech giants that head the rankings
are more like the fearsome five to their
competitors, given their huge brand
power and a seemingly unassailable
market position, said David Roth of
The Store, WPPs retail marketing prac-
tice.
Amazon, whose share price topped
$1,000 for the first time last week, saw
the single biggest rise in brand value
among the 100 companies listed. The
ecommerce groups rating was up 41 per
cent to $139bn as its Alexa-powered
smart speaker Echo provided a halo
effect for its online store.
Other tech-related newcomers to the
top 100 include YouTube, Salesforce,
Netflix and Snapchat. Tencent, whose
27 per cent rise in brand value saw it
jump from 11 to eight in the rankings,
also recently joined the worlds top 10
companies by market capitalisation,
just behind energy group ExxonMobil,
with its shares rising more than 40 per
cent this year. Weixin, known as WeChat
outside China, has more than 800m
monthly active users, while the Tencent
empire also encompasses video games,
music and mobile payments.
The single fastest riser this year is
sportswear group Adidas, up 58 per cent
to a brand value of $8.3bn.
challenge sale to Lone Star
MARTIN ARNOLD LONDON
PETER WISE LISBON
The tussle between bondholders of
Novo Banco, the Portuguese lender,
and the Iberian countrys central bank
has intensified after the debt investors
challenged a deal to sell the bank to
Lone Star, a US private equity firm.
A consortium of senior bondholders
including Pimco has written to the
Portuguese central bank to criticise the
planned sale, which would inflict more
losses on them, and offer to buy the
bank themselves, according to a person
who has seen the letter.
Novo Banco was the good bank cre-
ated in 2014 out of a 4.9bn bailout
aimed at saving the healthy assets of
Banco Esprito Santo from destruction
amid the collapse of the Esprito Santo
family business empire. Non-viable
assets were split off into a bad bank.
Under an agreement reached with the
Bank of Portugal at the end of March,
Lone Star is to acquire 75 per cent of
Novo Banco in return for injecting 1bn
of fresh capital into the lender.
As a condition of the sale, at least
500m of senior Novo Banco bonds will
be exchanged for new, higher risk bonds
in a liability management exercise.
The Lone Star sale cannot go forward
unless at least 500m worth are
swapped.
If enough bondholders refuse to par-
ticipate, the sale would collapse, which
could give the central bank little choice
but to put the lender into a liquidation
process. Pimco, PJT Partners and the
Bank of Portugal declined to comment.
Moodys, which downgraded Novo
Bancos long-term senior debt in April,
described the planned transaction as a
Contracts & Tenders
distressed exchange that was likely to
leave senior bondholders with losses.
The consortium of bondholders, rep-
resented by advisers PJT Partners,
argues that they should not incur losses
on senior bonds while the resolution
fund the equity holder retains sig-
nificant value from its holdings.
We are not going to take even a nomi-
nal haircut, said one bondholder.
In April, BlackRock, one of the worlds
most powerful investors, and other
asset managers applied to Lisbons
administrative court for an injunction
to halt the sale of Novo Banco.
The move is part of a legal battle dat-
ing back to December 2015 when the
Bank of Portugal transferred 2.2bn in
senior Novo Banco bonds to the bad
bank, wiping out most of their value.
The BlackRock-led group of asset man-
agers claim they were discriminated
against as international investors.
Contacts between the central bank
and the bondholders are under way
with a view to settling the bad bank
issue, according to people familiar with
the talks.
16 FINANCIAL TIMES Tuesday 6 June 2017

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.05% -0.11% -0.29% -0.13% -0.03% -0.24% -0.11% -0.266% -0.005% -0.571% -1.00%
0.02% 0.388% 0.39%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
May 06 - - Index All World May 06 - Jun 05 Index All World May 06 - Jun 05 Index All World May 06 - Jun 02 Index All World May 06 - Jun 05 Index All World May 06 - Jun 05 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
2,437.80 7,547.63 20,170.82 2,368.62
12,822.94
2,389.52 15,396.70 15,385.27
7,234.53 12,647.78 19,445.70 2,241.24
Day -0.05% Month 2.01% Year 16.12% Day -0.37% Month -1.28% Year 8.13% Day -0.29% Month 3.13% Year 21.19% Day 1.25% Month 1.75% Year NaN% Day -0.03% Month 3.73% Year 21.20% Day -0.13% Month 5.68% Year 19.28%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
6,298.85 25,862.99
49,467.04 11,135.40
49,485.67 1,549.38 10,884.70 3,238.31
6,075.34 1,540.00 24,683.88 3,228.62
Day -0.11% Month 3.66% Year 27.42% Day 0.30% Month -0.04% Year 7.70% Day -0.13% Month -0.59% Year 14.98% Day -0.19% Month -1.16% Year 23.67% Day -0.24% Month 4.78% Year 23.47% Day -0.05% Month 0.30% Year 15.27%

Dow Jones Industrial New York Bovespa So Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
31,309.49
21,210.41 65,709.74 21,483.86 3,283.19
20,951.47 5,432.40 3,237.81
62,454.02 5,307.89 20,721.04 29,858.80
Day 0.02% Month 1.22% Year 19.09% Day -0.09% Month -4.88% Year 23.48% Day -0.66% Month -1.20% Year 20.04% Day -0.99% Month -3.55% Year 18.44% Day -0.42% Month -1.14% Year 5.21% Day 0.12% Month 3.93% Year 16.64%

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 22319.26 22518.99 Cyprus CSE M&P Gen 77.21 77.46 Italy FTSE Italia All-Share 22980.76 23200.77 Philippines Manila Comp 8001.38 7907.66 Taiwan Weighted Pr 10226.84 10158.15 Cross-Border DJ Global Titans ($) 276.95 276.94
Australia All Ordinaries 5792.10 5821.10 Czech Republic
PX 1007.91 1005.81 FTSE Italia Mid Cap 40336.15 40605.81 Poland Wig 60170.09 60754.42 Thailand Bangkok SET 1566.85 1567.60 Euro Stoxx 50 (Eur) 3580.19 3591.82
S&P/ASX 200 5754.90 5788.10 Denmark OMXC Copenahgen 20 1011.26 999.52 FTSE MIB 20721.04 20928.24 Portugal PSI 20 5278.13 5317.40 Turkey BIST 100 98867.90 97365.79 Euronext 100 ID 1025.14 1030.43
S&P/ASX 200 Res 3356.60 3369.90 Egypt EGX 30 13495.32 13467.29 Japan 2nd Section 6016.81 6003.92 PSI General 2909.74 2930.66 UAE Abu Dhabi General Index 4483.09 4478.81 FTSE 4Good Global ($) 6137.37 6144.36
Austria ATX 3157.73 3147.52 Estonia OMX Tallinn 1122.04 1123.64 Nikkei 225 20170.82 20177.28 Romania BET Index 8769.41 8688.50 UK FT 30 3363.90 3366.70 FTSE All World 309.98 310.32
Belgium BEL 20 3900.35 3915.03 Finland OMX Helsinki General 9794.93 9826.50 S&P Topix 150 1302.50 1305.76 Russia Micex Index 1877.35 1881.87 FTSE 100 7525.76 7547.63 FTSE E300 1540.00 1542.05
BEL Mid 6813.09 6847.69 France CAC 40 5307.89 5343.40 Topix 1609.97 1612.20 RTX 1044.75 1046.02 FTSE 4Good UK 6676.21 6700.80 FTSE Eurotop 100 3018.91 3020.41
Brazil Bovespa 62454.02 62510.69 SBF 120 4239.92 4267.15 Jordan Amman SE 2179.26 2179.22 Saudi-Arabia TADAWUL All Share Index 6927.59 6863.62 FTSE All Share 4114.40 4129.13 FTSE Global 100 ($) 1524.22 1525.50
Canada S&P/TSX 60 908.24 Germany
911.21 M-DAX 25695.74 25464.06 Kenya NSE 20 3473.19 3441.05 Singapore FTSE Straits Times 3238.31 3240.01 FTSE techMARK 100 4685.34 4711.40 FTSE Gold Min ($) 1508.75 1505.03
S&P/TSX Comp 15385.27 15442.75 TecDAX 2322.07 2313.17 Kuwait KSX Market Index 6830.02 6813.19 Slovakia SAX 306.92 306.92 USA DJ Composite 7363.57 7367.12 FTSE Latibex Top (Eur) 3981.60 3972.20
S&P/TSX Div Met & Min 663.63 682.75 XETRA Dax 12822.94 12664.92 Latvia OMX Riga 857.57 858.59 Slovenia SBI TOP 790.97 792.01 DJ Industrial 21210.41 21206.29 FTSE Multinationals ($) 1786.99 1772.54
Chile IGPA Gen 24517.98 24558.02
Greece Athens Gen 786.57 781.85 Lithuania OMX Vilnius 592.97 591.49 South Africa FTSE/JSE All Share 52870.12 52889.70 DJ Transport 9329.37 9331.72 FTSE World ($) 548.99 549.62
China FTSE A200 8991.06 9052.19 FTSE/ASE 20 2092.99 2077.72 Luxembourg LuxX 1723.35 1718.67 FTSE/JSE Res 20 30177.33 30350.86 DJ Utilities 730.35 732.63 FTSEurofirst 100 (Eur) 4347.78 4351.15
FTSE B35 9000.71 8988.96
Hong Kong Hang Seng 25862.99 25924.05 Malaysia FTSE Bursa KLCI 1787.95 1776.95 FTSE/JSE Top 40 46442.07 46522.53 Nasdaq 100 5879.45 5881.46 FTSEurofirst 80 (Eur) 4923.21 4939.97
Shanghai A 3237.81 3251.53 HS China Enterprise 10597.05 10666.43 Mexico IPC 49467.04 49317.38 South Korea Kospi 2368.62 2371.72 Nasdaq Cmp 6298.85 6305.80 MSCI ACWI Fr ($) 469.35 466.40
Shanghai B 318.22 317.38 HSCC Red Chip 4094.06 4083.54 Morocco MASI 11615.28 11560.40 Kospi 200 307.33 307.83 NYSE Comp 11697.46 11718.70 MSCI All World ($) 1935.21 1923.10
Shanghai Comp 3091.66 3104.69
Hungary Bux 35150.44 34762.46 Netherlands AEX 524.44 526.74 Spain IBEX 35 10884.70 10905.90 S&P 500 2437.80 2439.07 MSCI Europe (Eur) 1605.40 1599.38
Shenzhen A 1883.63 1870.70
India BSE Sensex 31309.49 31273.29 AEX All Share 799.44 802.37 Sri Lanka CSE All Share 6676.32 6689.07 Wilshire 5000 25339.85 25345.27 MSCI Pacific ($) 2602.68 2550.48
Shenzhen B 1082.86 1079.81 Nifty 500 8435.75 8406.55 New Zealand NZX 50 7499.97 7499.97 Sweden OMX Stockholm 30 1637.90 1646.67 Venezuela IBC 78140.22 76130.90 S&P Euro (Eur) 1641.23 1647.52
Colombia COLCAP 1441.81 1442.83
Indonesia Jakarta Comp 5748.24 5742.45 Nigeria SE All Share 31371.63 30314.14 OMX Stockholm AS 590.56 592.96 Vietnam VNI 743.49 738.81 S&P Europe 350 (Eur) 1583.39 1586.27
Croatia CROBEX 1853.31 1848.42
Ireland ISEQ Overall 7044.84 7056.98 Norway Oslo All Share 783.14 784.17 Switzerland SMI Index 9043.96 9024.92 S&P Global 1200 ($) 2150.66 2154.37
Israel Tel Aviv 100 12.94 12.96 Pakistan KSE 100 50120.93 48555.30 Stoxx 50 (Eur) 3233.71 3233.89
(c) Closed. (u) Unavaliable. Correction. Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERS

AMERICA LONDON EURO MARKETS TOKYO Jun 05 %Chg %Chg Jun 05 %Chg %Chg Jun 05 %Chg %Chg Jun 05 %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
Apple 20.2 153.81 -1.64 National Grid 151.0 1034.00 4.29 Telefonica 704.1 9.98 -0.04 Softbank . 947.3 9135.00 140.00 3i 932.50 7.0 32.0 Greencore 255.20 5.7 2.5 Lamprell 115.50 11.9 25.5 Forestry & Paper 22145.91 2.3 23.5
Nvidia 16.6 147.02 3.38 Bp 134.8 464.05 1.46 Cs N 390.3 12.29 0.08 Mitsubishi Ufj Fin,. 499.2 711.50 -10.10 Convatec 344.00 6.0 47.3 Rathbone Brothers 2653.00 5.3 34.5 Acal 292.00 7.1 29.2 Food Producers 8736.69 2.2 8.7
Amazon.com 15.3 1011.35 4.62 Hsbc Holdings 124.8 681.40 1.18 Roche Gs 293.9 243.76 0.09 Toyota Motor 419.6 5968.00 -124.00 Randgold Resources Ld 7500.00 4.3 17.0 Sophos 449.00 5.2 75.6 Baillie Gifford Shin Nippon 704.50 5.8 19.1 Health Care Equip.& Services 8528.48 1.4 16.2
Facebook 11.5 153.83 0.22 Vodafone 124.5 230.35 -1.19 Bayer Ag Na O.n. 284.5 121.60 2.55 Sumitomo Mitsui Fin,. 255.6 4121.00 -46.00 Admiral 2059.00 3.2 13.3 Stobart Ld 283.70 5.1 59.9 Tt Electronics 205.50 5.0 26.1 Pharmaceuticals & Biotech. 14709.93 1.4 9.1
Microsoft 10.1 72.68 0.92 Glaxosmithkline 111.9 1691.00 -13.35 Daimler Ag Na O.n. 273.4 65.84 0.77 Sony 251.1 4174.00 15.00 London Stock Exchange 3499.00 3.1 20.0 Ibstock 246.00 5.0 32.9 Tyman 352.00 4.9 28.5 General Industrials 6031.05 1.2 9.3
Tesla 8.8 338.91 -0.94 British American Tobacco 106.5 5580.00 7.00 Nestle N 258.6 76.33 0.14 Mitsubishi 235.9 2235.50 -72.50 Merlin Entertainments 524.00 3.1 19.1 Caledonia Investments 2973.00 4.8 15.2 Hostelworld 344.50 4.6 53.4 Personal Goods 37839.65 1.0 28.9
Alphabet 7.3 1003.11 6.99 Unilever 105.5 4354.00 -24.93 Novartis N 257.8 73.06 0.05 Tokyo Electron 217.6 16755.00 380.00 Glaxosmithkline 1691.00 3.0 8.4 Auto Trader 435.50 4.7 6.4 Imagination 120.25 4.6 -52.8 Electronic & Electrical Equip. 6013.12 0.9 22.5
Alphabet 6.4 982.76 7.16 Shire 94.8 4538.50 19.52 Deutsche Bank Ag Na O.n. 233.0 15.59 -0.02 Mizuho Fin,. 209.3 197.00 -3.10 Fresnillo 1622.00 2.9 33.3 Brewin Dolphin Holdings 346.50 4.5 13.6 Servelec 302.00 4.6 11.0 Aerospace & Defense 5481.50 0.9 18.1
Bristol-myers Squibb 5.1 52.65 -2.33 Lloyds Banking 94.1 69.39 0.03 Allianz Se Na O.n. 232.3 173.35 1.90 Honda Motor Co., 188.7 3117.00 -77.00 Paddy Power Betfair 8575.00 2.7 -2.7 Ig Holdings 585.00 4.5 18.4 Baillie Gifford Japan Trust 680.00 4.5 20.6 Software & Computer Services 2141.66 0.8 13.1
Bank Of America 5.1 22.60 0.15 Royal Dutch Shell 89.8 2089.50 1.09 Siemens Ag Na 218.5 129.50 2.65 Fuji Heavy Industries 186.0 3802.00 -115.00 Micro Focus Int 2489.00 2.7 14.0 Btg 674.50 4.3 14.2 Fidelity Japanese Values 116.25 4.2 15.3 Nonlife Insurance 3016.24 0.7 9.6
Astrazeneca 5343.00 2.5 20.7 Ocado 312.20 4.2 23.5 Charles Taylor 232.25 3.8 -4.3 Life Insurance 8392.67 0.7 6.1
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Rentokil Initial 271.20 2.4 22.0 Zpg 374.10 4.1 17.4 Brown (n) 288.25 3.8 29.8 Beverages 18900.01 0.6 13.0
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Michael Kors Holdings 34.08 1.03 3.12 Ocado 312.20 10.23 3.24 Edf 9.99 0.27 2.75 Yaskawa Electric 2410.00 93.00 4.01 Taylor Wimpey 183.50 -8.2 19.4 Tullow Oil 173.10 -13.4 -44.2 Enquest 31.50 -17.1 -25.0 Gas Water & Multiutilities 6297.46 -4.1 4.2
Nvidia 147.02 3.38 2.35 Onesavings Bank 414.30 10.94 2.70 Novo Nordisk B A/s 39.18 0.95 2.50 Konami 5660.00 200.00 3.66 Antofagasta 776.50 -5.8 15.0 Vedanta Resources 575.00 -10.7 -34.4 Ashley (laura) Holdings 10.75 -16.5 -46.3 Industrial Metals 2164.98 -3.0 -3.8
Zions Ban 41.01 0.91 2.27 Metro Bank 3781.00 98.89 2.65 Bayer Ag Na O.n. 121.60 2.55 2.14 Sumco 1915.00 64.00 3.46 Itv 188.30 -5.7 -8.5 Firstgroup 141.00 -8.5 35.1 Lonmin 75.75 -14.8 -48.1 Fixed Line Telecommunication 3517.92 -3.0 -15.8
Intercontinental Exchange 61.58 1.26 2.09 Bovis Homes 929.00 17.65 1.95 Siemens Ag Na 129.50 2.65 2.09 Shiseido , 3948.00 115.00 3.00 National Grid 1034.00 -4.8 0.0 Hunting 500.00 -8.1 -20.3 Braemar Shipping Services 267.00 -14.1 -4.2 Oil Equipment & Services 12570.47 -2.9 -23.0
Csra 30.99 0.55 1.81 Computacenter 853.00 14.50 1.73 Linde Ag O.n. 176.50 3.45 1.99 Kirin Holdings , 2445.00 62.00 2.60 Marks And Spencer 371.10 -3.9 6.0 Allied Minds 140.90 -7.6 -70.0 Robert Walters 385.25 -12.3 12.7 Real Estate & Investment Servic 2676.61 -2.8 8.2
Lloyds Banking 69.39 -3.3 11.0 Cairn Energy 196.20 -7.0 -16.9 Flybe 34.00 -9.3 -22.7 Mining 14580.89 -2.5 -1.5
Downs Downs Downs Downs
Experian 1586.00 -3.3 0.9 Capital & Counties Properties 301.00 -6.9 1.8 St. Ives 43.00 -9.0 -64.3 Industrial Engineering 11514.02 -2.3 12.3
Mallkrodt 39.55 -3.10 -7.27 Vedanta Resources 575.00 -30.06 -4.95 Colruyt 48.15 -1.56 -3.15 Hino Motors, 1315.00 -70.00 -5.05
Glencore 283.40 -3.3 2.0 Kaz Minerals 471.20 -6.7 32.2 Game Digital 39.75 -8.9 -32.6 Electricity 8773.20 -2.1 -4.9
yte 124.91 -6.60 -5.02 Kaz Minerals 471.20 -22.32 -4.51 Seadrill 0.41 -0.01 -2.99 Toho Z Co., 423.00 -21.00 -4.73
Sainsbury (j) 272.30 -3.2 9.4 Aldermore 230.10 -6.4 -2.7 Gulf Marine Services 63.00 -8.7 28.1 Food & Drug Retailers 3023.91 -2.0 -1.9
Kohl's 37.30 -1.68 -4.31 Fidessa 2394.00 -94.00 -3.78 Klepierre 37.07 -1.06 -2.78 Ntn 525.00 -24.00 -4.37
United Utilities 1001.00 -3.2 11.2 Euromoney Institutional Investor 1144.00 -6.2 -1.1 Premier Oil 54.50 -7.8 -25.6 Oil & Gas Producers 7771.44 -1.8 -8.6
Perrigo 70.33 -3.11 -4.23 Antofagasta 776.50 -28.50 -3.54 Edp 3.17 -0.07 -2.25 Sumitomo Heavy Industries, 727.00 -32.00 -4.22
Bhp Billiton 1165.00 -3.1 -10.7 Petra Diamonds 126.30 -5.1 -19.6 Renold 55.00 -7.8 24.6 General Retailers 2627.44 -1.4 1.4
Bristol-myers Squibb 52.65 -2.33 -4.23 Restaurant 345.20 -12.83 -3.51 Saipem 3.50 -0.08 -2.18 Kobe Steel, 1039.00 -43.00 -3.97
Bt 304.65 -3.0 -17.0 Talktalk Telecom 173.60 -5.0 2.3 Headlam 571.50 -7.1 17.2 Chemicals 13495.00 -0.6 9.7
Based on the constituents of the S&P500 and the Nasdaq 100 index Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Jun 5 Currency Mid Change Mid Change Mid Change Jun 5 Currency Mid Change Mid Change Mid Change Jun 5 Currency Mid Change Mid Change Mid Change Jun 5 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 16.0525 0.0275 18.0631 -0.0050 20.7598 0.1157 Indonesia Indonesian Rupiah 13286.0000 -19.5000 14950.0966 -51.8312 17182.0420 41.2907 Poland Polish Zloty 3.7245 0.0129 4.1909 0.0061 4.8166 0.0352 ..Three Month 0.7736 -0.0030 0.8699 -0.0051 - -
Australia Australian Dollar 1.3363 -0.0083 1.5036 -0.0123 1.7281 -0.0040 Israel Israeli Shekel 3.5452 -0.0020 3.9892 -0.0102 4.5848 0.0151 Romania Romanian Leu 4.0607 0.0091 4.5693 0.0011 5.2515 0.0320 ..One Year 0.7748 -0.0030 0.8694 -0.0051 - -
Bahrain Bahrainin Dinar 0.3773 0.0001 0.4246 -0.0007 0.4879 0.0020 Japan Japanese Yen 110.4450 -0.0050 124.2784 -0.2537 142.8322 0.5456 Russia Russian Ruble 56.6219 -0.0481 63.7139 -0.1814 73.2259 0.2210 United States United States Dollar - - 1.1253 -0.0022 1.2932 0.0050
Bolivia Bolivian Boliviano 6.9100 - 7.7755 -0.0155 8.9363 0.0345 ..One Month 110.4449 -0.0053 124.2785 -0.2536 142.8322 0.5455 Saudi Arabia Saudi Riyal 3.7506 0.0004 4.2204 -0.0080 4.8504 0.0193 ..One Month - - 1.1251 -0.1630 1.2934 0.0050
Brazil Brazilian Real 3.2877 0.0458 3.6994 0.0443 4.2517 0.0754 ..Three Month 110.4446 -0.0059 124.2785 -0.2535 142.8320 0.5452 Singapore Singapore Dollar 1.3815 -0.0002 1.5545 -0.0033 1.7866 0.0066 ..Three Month - - 1.1247 -0.1630 1.2936 0.0050
Canada Canadian Dollar 1.3492 -0.0023 1.5181 -0.0057 1.7448 0.0037 ..One Year 110.4430 -0.0090 124.2787 -0.2532 142.8322 0.5446 South Africa South African Rand 12.6969 -0.1037 14.2872 -0.1455 16.4202 -0.0702 ..One Year - - 1.1230 -0.1630 1.2948 0.0050
Chile Chilean Peso 668.4750 -2.2750 752.2027 -4.0662 864.5005 0.4103 Kenya Kenyan Shilling 103.3500 0.0300 116.2948 -0.1983 133.6566 0.5552 South Korea South Korean Won 1118.2500 -3.6000 1258.3129 -6.5702 1446.1688 0.9514 Venezuela Venezuelan Bolivar Fuerte 9.9950 0.0250 11.2469 0.0057 12.9260 0.0822
China Chinese Yuan 6.8010 -0.0152 7.6528 -0.0324 8.7953 0.0144 Kuwait Kuwaiti Dinar 0.3033 -0.0002 0.3413 -0.0009 0.3922 0.0013 Sweden Swedish Krona 8.6586 0.0117 9.7432 -0.0063 11.1977 0.0583 Vietnam Vietnamese Dong 22718.0000 11.5000 25563.4831 -38.0899 29379.9652 128.3959
Colombia Colombian Peso 2893.7350 -3.5850 3256.1814 -10.5402 3742.3021 9.8446 Malaysia Malaysian Ringgit 4.2635 -0.0178 4.7975 -0.0296 5.5137 -0.0016 Switzerland Swiss Franc 0.9646 0.0007 1.0854 -0.0013 1.2475 0.0058 European Union Euro 0.8887 0.0018 - - 1.1493 0.0067
Costa Rica Costa Rican Colon 569.1050 -0.1100 640.3864 -1.4020 735.9910 2.7027 Mexico Mexican Peson 18.3590 -0.2387 20.6585 -0.3103 23.7426 -0.2157 Taiwan New Taiwan Dollar 30.0815 -0.0235 33.8493 -0.0940 38.9027 0.1201 ..One Month 0.8885 0.0018 - - 1.1492 0.0067
Czech Republic Czech Koruna 23.4117 0.0676 26.3440 0.0236 30.2769 0.2040 New Zealand New Zealand Dollar 1.4006 -0.0010 1.5760 -0.0043 1.8113 0.0057 Thailand Thai Baht 34.0100 -0.1705 38.2698 -0.2686 43.9832 -0.0497 ..Three Month 0.8882 0.0018 - - 1.1491 0.0067
Denmark Danish Krone 6.6116 0.0135 7.4397 0.0004 8.5504 0.0504 Nigeria Nigerian Naira 314.7500 - 354.1730 -0.7068 407.0482 1.5731 Tunisia Tunisian Dinar 2.4312 0.0033 2.7357 -0.0017 3.1441 0.0165 ..One Year 0.8864 0.0018 - - 1.1486 0.0067
Egypt Egyptian Pound 18.1230 0.1490 20.3929 0.1273 23.4374 0.2825 Norway Norwegian Krone 8.4512 0.0140 9.5098 -0.0032 10.9295 0.0603 Turkey Turkish Lira 3.5225 0.0112 3.9636 0.0047 4.5554 0.0320
Hong Kong Hong Kong Dollar 7.7923 0.0007 8.7683 -0.0167 10.0773 0.0399 Pakistan Pakistani Rupee 104.8350 - 117.9658 -0.2354 135.5771 0.5240 United Arab Emirates UAE Dirham 3.6731 0.0002 4.1332 -0.0080 4.7502 0.0186
Hungary Hungarian Forint 273.1127 0.1459 307.3206 -0.4488 353.2010 1.5531 Peru Peruvian Nuevo Sol 3.2708 -0.0023 3.6804 -0.0099 4.2299 0.0134 United Kingdom Pound Sterling 0.7733 -0.0030 0.8701 -0.0051 - -
India Indian Rupee 64.3585 -0.1040 72.4195 -0.2618 83.2312 0.1877 Philippines Philippine Peso 49.4100 -0.1300 55.5987 -0.2575 63.8991 0.0795 ..One Month 0.7734 -0.0030 0.8700 -0.0051 - -
Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata
UK SERIES
FTSE ACTUARIES SHARE INDICES www.ft.com/equities FT 30 INDEX FTSE SECTORS: LEADERS & LAGGARDS FTSE 100 SUMMARY
Produced in conjunction with the Institute and Faculty of Actuaries Jun 05 Jun 02 Jun 01 May 31 May 30 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 3363.90 3366.70 3365.70 3367.10 3367.40 0.00 3391.10 3060.90 Personal Goods 29.48 FTSE 250 Index 10.65 Banks 4.55 FTSE 100 Price Change FTSE 100 Price Change
Jun 05 chge% Index Jun 02 Jun 01 ago yield% Cover ratio adj Return FT 30 Div Yield 1.46 1.46 1.46 1.47 1.47 0.00 3.93 2.74 Electronic & Elec Eq 23.84 Equity Invest Instr 10.57 Leisure Goods 4.27 3I Group PLC 932.50 2.00 London Stock Exchange Group PLC 3499 16.00
FTSE 100 (100) 7525.76 -0.29 6737.97 7547.63 7543.77 6273.40 3.68 0.91 29.90 145.66 6259.08 P/E Ratio net 30.61 30.54 30.51 30.36 30.36 0.00 19.44 14.26 Forestry & Paper 23.47 Health Care 10.55 Gas Water & Multi 4.19 Admiral Group PLC 2059 -12.00 Marks And Spencer Group PLC 371.10 3.40
FTSE 250 (250) 19868.67 -0.67 17788.84 20002.75 20010.62 17181.76 2.66 1.69 22.24 237.71 14397.82 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Household Goods & Ho 18.64 Chemicals 10.35 Real Est Invest & Tr 3.67 Anglo American PLC 1026 -3.50 Mediclinic International PLC 796.00 -1.50
FTSE 250 ex Inv Co (207) 21286.28 -0.71 19058.06 21438.99 21458.20 18667.95 2.70 1.72 21.51 263.32 15739.44 FT 30 hourly changes Aerospace & Defense 17.86 Nonlife Insurance 10.07 Telecommunications 3.53 Antofagasta PLC 776.50 -28.50 Merlin Entertainments PLC 524.00 -13.00
FTSE 350 (350) 4171.95 -0.35 3735.24 4186.81 4185.32 3499.92 3.50 1.01 28.24 75.47 6970.69 8 9 10 11 12 13 14 15 16 High Low Consumer Goods 17.45 Pharmace & Biotech 9.90 Utilities 2.28 Ashtead Group PLC 1587 -21.00 Micro Focus International PLC 2489 12.00
FTSE 350 ex Investment Trusts (306) 4137.40 -0.36 3704.30 4152.17 4151.01 3476.29 3.54 1.00 28.17 75.86 3561.28 3366.7 3384.5 3378.9 3374.4 3378.7 3373.5 3368.9 3361.6 3363.3 3390.3 3360.2 Health Care Eq & Srv 16.14 FTSE SmallCap Index 9.89 Media 2.23 Associated British Foods PLC 2988 -9.00 Mondi PLC 2056 -1.00
FTSE 350 Higher Yield (121) 3872.05 -0.20 3466.73 3879.77 3886.66 3219.90 4.75 0.74 28.54 95.65 6773.33 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Tobacco 15.68 Real Est Invest & Se 8.69 General Retailers 2.13 Astrazeneca PLC 5343 -21.00 Morrison (Wm) Supermarkets PLC 244.10 -3.00
FTSE 350 Lower Yield (229) 4074.08 -0.54 3647.61 4096.11 4084.39 3446.43 2.04 1.76 27.90 41.72 4455.04 Software & Comp Serv 15.66 Industrial Transport 8.34 Basic Materials 1.73 Aviva PLC 529.00 -3.00 National Grid PLC 1034 -
FTSE SmallCap (277) 5628.67 -0.41 5039.47 5651.70 5650.27 4599.70 2.71 1.21 30.50 65.82 8043.96 Financial Services 15.24 Food Producers 7.93 Mining -0.18
FTSE SmallCap ex Inv Co (146) 4991.60 -0.60 4469.08 5021.68 5022.26 4161.41 2.84 1.53 22.98 57.54 7493.31 FX: EFFECTIVE INDICES Mobile Telecomms 14.89 Automobiles & Parts 7.33 Food & Drug Retailer -1.27
Babcock International Group PLC 934.00 -4.00 Next PLC 4400 39.00
Bae Systems PLC 671.50 1.50 Old Mutual PLC 201.50 4.50
FTSE All-Share (627) 4114.40 -0.36 3683.71 4129.13 4127.68 3448.53 3.48 1.02 28.31 73.47 6950.65 Travel & Leisure 14.83 Financials 7.14 Industrial Metals & -2.06
Jun 02 Jun 01 Mnth Ago Jun 05 Jun 02 Mnth Ago Barclays PLC 211.70 0.80 Paddy Power Betfair PLC 8575 15.00
FTSE All-Share ex Inv Co (452) 4059.69 -0.36 3634.73 4074.37 4073.27 3410.57 3.52 1.01 28.05 73.89 3551.22 Industrial Eng 14.16 FTSE All{HY-}Share Index 6.61 Tech Hardware & Eq -4.51 Barratt Developments PLC 589.00 -5.50 Pearson PLC 710.50 -4.00
FTSE All-Share ex Multinationals (567) 1243.98 -0.43 923.10 1249.32 1250.31 1148.91 3.00 1.27 26.15 15.78 2217.67 Australia 91.98 91.66 93.72 Sweden 77.17 77.05 77.13 Beverages 13.49 Consumer Services 6.55 Electricity -4.75 Bhp Billiton PLC 1165 -20.00 Persimmon PLC 2397 -1.00
FTSE Fledgling (94) 9977.70 0.13 8933.25 9965.05 9961.36 7741.50 2.49 1.79 22.51 109.17 18644.17 Canada 86.68 86.93 85.97 Switzerland 161.33 161.00 160.34 Technology 13.48 NON FINANCIALS Index 6.42 Oil & Gas Producers -8.76 BP PLC 464.05 1.30 Provident Financial PLC 3033 -26.00
FTSE Fledgling ex Inv Co (45) 13993.38 0.38 12528.57 13940.92 13988.67 10480.78 2.84 2.90 12.13 158.52 25499.38 Denmark 108.99 108.88 107.89 UK 77.36 77.72 79.43 Industrials 12.20 Life Insurance 6.37 Oil & Gas -9.09 British American Tobacco PLC 5580 2.00 Prudential PLC 1758.5 -8.50
FTSE All-Small (371) 3914.53 -0.38 3504.76 3929.47 3928.45 3190.28 2.70 1.24 29.95 45.62 7181.01 Japan 139.14 138.39 139.57 USA 102.77 103.08 104.54 Support Services 11.59 FTSE 100 Index 5.67 Fixed Line Telecomms -16.04 British Land Company PLC 627.00 -3.00 Randgold Resources LD 7500 -155.00
FTSE All-Small ex Inv Co Index (191) 3740.91 -0.56 3349.31 3761.98 3762.91 3104.82 2.84 1.59 22.19 43.09 7114.56 New Zealand 118.57 117.94 115.00 Euro 91.53 91.29 89.08 Construct & Material 4.82 Oil Equipment & Serv -20.09 Bt Group PLC 304.65 1.50 Reckitt Benckiser Group PLC 7987 -30.00
FTSE AIM All-Share Index (799) 987.85 -0.40 884.44 991.80 990.77 743.34 1.59 0.82 76.95 5.65 1086.30 Norway 86.70 86.94 87.40
Bunzl PLC 2412 -24.00 Relx PLC 1679 -1.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1810 -8.00 Rentokil Initial PLC 271.20 0.80
Oil & Gas (16) 8135.70 0.19 7284.07 8120.35 8226.88 6608.58 6.37 0.40 38.99 259.92 7533.59 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 5050 -85.00 Rio Tinto PLC 3113 -43.00
Oil & Gas Producers (9) 7813.05 0.18 6995.19 7799.12 7902.59 6304.88 6.41 0.41 37.61 251.49 7489.83 Centrica PLC 196.90 -1.50 Rolls-Royce Holdings PLC 894.50 3.00
Oil Equipment Services & Distribution (7)13391.98 0.59 11990.12 13313.66 13412.37 13607.14 4.69 -0.22 -97.35 306.86 10453.46 FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2314 -11.00 Royal Bank Of Scotland Group PLC 259.70 1.30
Basic Materials (28) 5074.62 -1.26 4543.41 5139.17 5115.37 3409.59 2.46 1.13 35.94 90.92 5185.28 Compass Group PLC 1675 -15.00 Royal Dutch Shell PLC 2140 4.50
Chemicals (7) 14379.50 -0.48 12874.27 14449.20 14322.31 11943.16 2.12 2.35 20.11 95.63 12801.03 Jun 2 No of US $ Day Mth YTD Total
YTD Gr Div Jun 2 No of US $ Day Mth YTD Total YTD Gr Div Convatec Group PLC 344.00 1.40 Royal Dutch Shell PLC 2089.5 2.50
Forestry & Paper (1) 24165.26 -0.05 21635.67 24177.01 24106.49 15820.25 2.35 3.36 12.70 375.43 26360.68 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Crh PLC 2809 -31.00 Royal Mail PLC 440.00 0.90
Industrial Metals & Mining (2) 2332.03 -1.66 2087.91 2371.38 2400.67 1148.28 0.56 21.48 8.34 13.01 2046.19 FTSE Global All Cap 7722 531.60 0.6 2.5 11.0 755.03
12.3 2.3 Oil & Gas Producers 108 323.03 -0.9 -0.9 -8.1 530.27 -6.6 3.9 Croda International PLC 3998 -22.00 Rsa Insurance Group PLC 616.00 -9.00
Mining (18) 13969.66 -1.41 12507.34 14170.06 14107.49 9153.56 2.52 0.84 47.17 273.28 7477.80 FTSE Global Large Cap 1443 467.84 0.7 2.7 11.2 681.55
12.6 2.5 Oil Equipment & Services 28 310.27 -0.4 -0.4 -11.3 451.23 -10.3 3.2 Dcc PLC 7455 -85.00 Sage Group PLC 709.50 -19.50
FTSE Global Mid Cap 1644 717.70 0.4 2.3 11.4 967.38
12.5 2.0 Basic Materials 259 462.28 0.9 0.9 9.5 704.73 11.1 2.4 Diageo PLC 2349 -12.50 Sainsbury (J) PLC 272.30 -2.80
Industrials (112) 5496.91 -0.60 4921.50 5530.21 5525.76 4432.34 2.22 0.84 53.41 57.73 5667.28
Construction & Materials (15) 7159.56 -1.09 6410.11 7238.62 7214.22 5446.46 2.14 0.39 121.05 101.80 7606.55 FTSE Global Small Cap 4635 749.59 0.6 1.6 9.1 977.92
10.0 1.9 Chemicals 123 711.79 1.2 1.2 12.9 1090.87 14.5 2.4 Direct Line Insurance Group PLC 345.90 -0.70 Schroders PLC 3148 -10.00
Aerospace & Defense (9) 5679.22 0.07 5084.73 5675.36 5671.79 4176.27 2.11 -2.18 -21.73 63.69 6099.19 FTSE All-World 3087 310.32 0.6 2.6 11.2 465.56
12.6 2.4 Forestry & Paper 15 272.49 0.8 0.8 14.4 463.53 17.0 2.9 Easyjet PLC 1344 -45.00 Scottish Mortgage Investment Trust PLC 402.40 1.90
General Industrials (5) 4911.73 -0.88 4397.58 4955.20 4930.75 3812.82 2.68 1.20 31.22 56.24 5581.72 FTSE World 2544 549.62 0.7 2.6 11.1 1107.31
12.5 2.4 Industrial Metals & Mining 68 372.92 0.7 0.7 3.0 564.83 3.9 2.2 Experian PLC 1586 -14.00 Severn Trent PLC 2484 9.00
Electronic & Electrical Equipment (10) 7580.42 -1.08 6786.91 7662.87 7637.29 5493.09 1.67 1.91 31.44 53.21 6910.20 FTSE Global All Cap ex UNITED KINGDOM In 7395 550.83 0.7 2.4 11.0 770.47
12.2 2.3 Mining 53 534.53 0.5 0.5 4.2 812.25 5.9 2.3 Fresnillo PLC 1622 -29.00 Shire PLC 4538.5 -15.50
Industrial Engineering (12) 12647.43 -1.06 11323.51 12783.27 12772.51 8723.94 2.11 1.41 33.54 171.69 15445.75 FTSE Global All Cap ex USA 5826 482.60 0.9 3.2 13.6 733.86
15.4 2.8 Industrials 546 376.43 0.9 0.9 13.6 541.42 14.8 2.0 Gkn PLC 354.80 -1.20 Sky PLC 980.00 -10.00
Industrial Transportation (7) 5080.29 -0.75 4548.50 5118.69 5113.52 4504.37 3.84 1.23 21.23 52.62 4509.94 FTSE Global All Cap ex JAPAN 6435 543.06 0.5 2.2 10.9 778.48
12.2 2.4 Construction & Materials 112 524.73 0.7 0.7 13.9 789.09 15.3 2.0 Glaxosmithkline PLC 1691 -15.00 Smith & Nephew PLC 1370 -4.00
Support Services (54) 7705.15 -0.57 6898.58 7748.96 7754.55 6676.30 2.15 1.81 25.61 69.69 7996.13 FTSE Global All Cap ex Eurozone 7073 546.89 0.6 2.2 10.1 761.64
11.3 2.3 Aerospace & Defense 26 659.91 0.5 0.5 16.8 941.30 18.1 2.0 Glencore PLC 283.40 -3.35 Smiths Group PLC 1616 -11.00
FTSE Developed 2103 499.06 0.7 2.7 11.0 714.97
12.4 2.4 General Industrials 57 249.68 1.0 1.0 6.1 387.47 7.4 2.4 Hammerson PLC 584.50 -2.00 Smurfit Kappa Group PLC 2199 -11.00
Consumer Goods (38) 23059.06 -0.26 20645.26 23118.17 22962.12 19278.96 2.84 1.78 19.73 361.03 17029.63
FTSE Developed All Cap 5666 524.47 0.6 2.6 10.7 742.32
12.0 2.3 Electronic & Electrical Equipment 71 413.75 1.4 1.4 20.4 545.02 21.2 1.6 Hargreaves Lansdown PLC 1389 -27.00 Sse PLC 1480 -5.00
Automobiles & Parts (1) 8337.96 -0.34 7465.16 8366.17 8300.36 6544.88 2.49 1.89 21.17 138.65 8037.14
FTSE Developed Large Cap 918 460.30 0.7 2.8 10.9 669.51
12.3 2.4 Industrial Engineering 102 740.05 1.4 1.4 17.5 1050.48 18.9 2.0 Hikma Pharmaceuticals PLC 1675 -5.00 St. James's Place PLC 1173 -20.00
Beverages (5) 18930.42 -0.52 16948.81 19030.10 18875.79 15876.75 2.51 1.53 26.00 180.53 13338.17
FTSE Developed Europe Large Cap 227 366.58 0.7 4.4 14.8 614.32
17.6 3.3 Industrial Transportation 99 640.96 0.7 0.7 13.8 921.91 15.1 2.2 HSBC Holdings PLC 681.40 3.00 Standard Chartered PLC 753.00 8.00
Food Producers (8) 8752.22 0.39 7836.05 8718.64 8694.17 8309.19 1.90 2.00 26.30 15.96 7498.09
FTSE Developed Europe Mid Cap 313 589.15 0.6 3.9 19.6 883.21
21.7 2.6 Support Services 79 329.61 0.5 0.5 11.7 453.42 12.7 1.8 Imperial Brands PLC 3641 -8.00 Standard Life PLC 380.10 -3.50
Household Goods & Home Construction (15)15844.72 -0.42 14186.12 15911.45 15913.99 14295.99 2.72 2.18 16.85 272.13 11224.97
FTSE Dev Europe Small Cap 709 834.13 0.6 3.7 20.2 1211.06
22.1 2.4 Consumer Goods 430 484.43 1.0 1.0 15.9 715.45 17.3 2.3 Informa PLC 684.50 -2.00 Taylor Wimpey PLC 183.50 -1.30
Leisure Goods (1) 5748.43 -1.02 5146.69 5807.87 5655.03 5170.22 3.77 1.34 19.86 104.95 5187.52
FTSE North America Large Cap 296 521.50 0.4 2.1 9.0 708.91
10.1 2.1 Automobiles & Parts 105 397.74 1.7 1.7 8.1 568.41 9.8 2.7 Intercontinental Hotels Group PLC 4407 -61.00 Tesco PLC 182.20 -0.35
Personal Goods (6) 32969.84 -0.43 29518.60 33112.83 32761.12 24086.74 2.51 3.04 13.09 376.77 22232.80
FTSE North America Mid Cap 388 768.43 0.0 1.3 7.0 972.49
7.8 1.7 Beverages 45 636.19 0.4 0.4 15.3 951.56 16.5 2.5 International Consolidated Airlines Group S.A. 592.00 -15.50 Tui AG 1184 -14.00
Tobacco (2) 61078.25 -0.03 54684.66 61095.73 60546.02 51050.92 3.36 1.24 24.08 1304.93 39519.55
FTSE North America Small Cap 1431 784.17 0.4 0.9 5.0 964.01
5.7 1.6 Food Producers 107 629.21 0.5 0.5 10.6 956.36 12.2 2.2 Intertek Group PLC 4325 -5.00 Unilever PLC 4354 -18.50
Health Care (21) 10860.72 -0.54 9723.83 10919.80 10847.80 9329.35 3.23 0.72 43.12 209.15 8386.53
FTSE North America 684 348.37 0.3 1.9 8.7 484.71
9.6 2.0 Household Goods & Home Construction 49 461.34 0.8 0.8 14.1 676.50 15.6 2.3 Intu Properties PLC 267.00 -4.90 United Utilities Group PLC 1001 -1.00
Health Care Equipment & Services (9) 8636.69 -0.23 7732.62 8656.70 8548.24 7379.97 1.25 2.42 33.11 65.24 7494.92
FTSE Developed ex North America 1419 256.38 1.2 4.0 14.6 419.88
16.7 2.9 Leisure Goods 31 215.51 2.2 2.2 34.7 283.18 35.6 1.3 Itv PLC 188.30 -3.10 Vodafone Group PLC 230.35 0.40
Pharmaceuticals & Biotechnology (12)14600.03 -0.58 13071.71 14684.98 14598.67 12561.17 3.47 0.64 44.76 300.97 10051.43
FTSE Japan Large Cap 180 361.06 2.5 5.3 10.8 466.75
11.9 2.0 Personal Goods 81 698.21 1.1 1.1 20.7 975.79 21.9 1.9 Johnson Matthey PLC 3129 -19.00 Whitbread PLC 4116 -109.00
Consumer Services (94) 5176.91 -0.90 4635.00 5224.03 5223.45 4714.61 2.54 1.99 19.71 66.95 4861.62 FTSE Japan Mid Cap 313 591.78 2.3 5.8 14.6 734.66
15.5 1.6 Tobacco 12 1537.64 0.5 0.5 21.4 3156.72 22.8 3.3
Food & Drug Retailers (7) 3156.10 -0.59 2825.72 3174.75 3190.28 2733.95 1.32 2.24 33.82 22.81 3689.48 Kingfisher PLC 326.60 -2.90 Wolseley PLC 5040 5.00
FTSE Global wi JAPAN Small Cap 794 643.25 2.0 5.8 15.3 826.74
16.4 1.8 Health Care 181 479.30 0.7 0.7 13.3 689.67 14.6 2.0 Land Securities Group PLC 1067 -7.00 Worldpay Group PLC 311.10 -0.80
General Retailers (30) 2589.72 -0.06 2318.63 2591.40 2610.42 2689.54 3.02 2.00 16.57 33.55 2961.30
FTSE Japan 493 153.11 2.5 5.4 11.6 222.13
12.7 2.0 Health Care Equipment & Services 68 813.78 0.3 0.3 18.3 947.06 18.8 1.0 Legal & General Group PLC 253.90 -0.80 Wpp PLC 1734 -20.00
Media (21) 8061.95 -0.62 7218.04 8111.91 8106.37 7386.73 2.88 1.82 19.10 95.81 4964.85
FTSE Asia Pacific Large Cap ex Japan 548 660.76 0.9 2.0 16.6 1031.44
17.7 2.8 Pharmaceuticals & Biotechnology 113 340.77 0.9 0.9 11.4 512.81 13.0 2.4 Lloyds Banking Group PLC 69.39 0.04
Travel & Leisure (36) 9647.37 -1.56 8637.50 9799.86 9759.65 8336.18 2.41 2.13 19.52 147.66 9164.55
FTSE Asia Pacific Mid Cap ex Japan 412 881.56 0.6 1.4 15.9 1319.10
16.8 2.6 Consumer Services 384 447.79 0.6 0.6 13.5 597.20 14.4 1.6
Telecommunications (6) 3508.45 0.28 3141.19 3498.79 3496.61 3905.23 5.04 -0.02 -1063.0 4.42 3862.85 FTSE Asia Pacific Small Cap ex Japan 1448 548.14 0.8 0.8 12.7 807.10
13.5 2.5 Food & Drug Retailers 55 297.40 0.7 0.7 5.2 413.76 6.2 2.0
5
Fixed Line Telecommunications (4) 3585.67 0.53 3210.33 3566.68 3577.29 4977.43 4.88 1.20 17.12 0.00 3232.72
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
960 522.49
2056 715.23
0.8
0.5
2.0
1.1
16.5 866.31
17.6
14.2 1059.78
15.2
2.8 General Retailers
2.8 Media
120 618.51
80 340.10
0.6
0.3
0.6
0.3
13.6 803.04
11.8 454.41
14.5
12.5
1.5
1.6
UK STOCK MARKET TRADING DATA
Mobile Telecommunications (2) 5193.48 0.17 4649.83 5184.80 5173.66 5172.56 5.11 -0.51 -38.16 9.33 5138.77 FTSE Emerging Large Cap 525 676.72 0.5 1.7 14.4 1009.57
15.3 2.8 Travel & Leisure 129 458.01 0.9 0.9 20.3 618.37 21.5 1.6 Jun 05 Jun 02 Jun 01 May 31 May 30 Yr Ago
Utilities (7) 8795.37 -0.14 7874.68 8807.90 8938.87 8592.00 4.73 1.67 12.68 195.33 10034.67 FTSE Emerging Mid Cap 459 896.90 0.6 -1.3 12.8 1321.28
13.9 2.8 Telecommunication 94 166.54 0.3 0.3 3.4 309.99 5.1 4.1 SEAQ Bargains 5934.00 5330.00 5330.00 4210.00 4742.00 5546.00
Electricity (2) 8753.28 -0.27 7837.00 8777.30 8901.68 9045.01 5.62 2.02 8.83 149.05 12507.14 FTSE Emerging Small Cap 1072 744.05 0.6 -0.2 14.8 1058.81
15.6 2.6 Fixed Line Telecommuniations 43 135.73 0.1 0.1 -3.5 277.86 -1.6 4.8 Order Book Turnover (m) 461.05 1146.69 1146.69 367.61 346.64 344.31
Gas Water & Multiutilities (5) 8322.74 -0.11 7451.53 8331.73 8457.15 8012.88 4.50 1.55 14.31 196.83 9530.82 FTSE Emerging Europe 114 350.80 1.0 -1.7 4.3 541.04
5.2 4.0 Mobile Telecommunications 51 181.79 0.5 0.5 13.8 304.23 15.2 3.3 Order Book Bargains 854669.00 1075168.00 1075168.00 1089112.00 1303651.00 1057471.00
Financials (289) 5114.78 -0.10 4579.37 5120.07 5116.09 4183.32 3.54 1.04 27.08 102.23 4752.27 FTSE Latin America All Cap 230 835.85 0.1 -4.6 8.8 1286.15
10.3 2.9 Utilities 167 277.20 0.1 0.1 12.4 537.00 14.3 3.7 Order Book Shares Traded (m) 1322.00 1786.00 1786.00 1760.00 2953.00 1498.00
Banks (12) 4288.51 0.40 3839.59 4271.52 4276.41 3272.32 4.11 0.62 38.93 107.87 3189.21 FTSE Middle East and Africa All Cap 242 712.99 1.1 1.8 8.4 1110.80
10.1 3.0 Electricity 109 304.59 0.2 0.2 12.0 582.75 13.7 3.7 Total Equity Turnover (m) 7838.90 8922.47 8922.47 8935.74 11361.67 10212.87
Nonlife Insurance (10) 3434.70 -0.92 3075.16 3466.69 3452.88 2937.56 3.13 1.69 18.89 60.87 6064.06 FTSE Global wi UNITED KINGDOM All Cap In 327 344.87 -0.1 3.2 10.8 576.97
12.9 3.5 Gas Water & Multiutilities 58 290.60 -0.1 -0.1 13.2 579.09 15.4 3.6 Total Mkt Bargains 951523.00 1208052.00 1208052.00 1236412.00 1498417.00 1184824.00
Life Insurance/Assurance (10) 8513.15 -0.34 7622.00 8542.16 8491.87 7070.55 3.64 1.26 21.83 210.60 8362.58 FTSE Global wi USA All Cap 1896 600.61 0.4 1.9 8.7 792.51
9.6 1.9 Financials 699 228.60 0.5 0.5 7.2 372.80 8.8 2.9 Total Shares Traded (m) 3576.00 4252.00 4252.00 4561.00 6527.00 4153.00
Index- Real Estate Investment & Services (20) 2702.70 -0.36 2419.79 2712.45 2720.40 2747.74 2.53 1.86 21.25 32.47 7223.84 FTSE Europe All Cap 1440 429.16 0.7 4.0 15.7 693.87
18.3 3.1 Banks 248 202.80 0.5 0.5 5.3 355.29 7.2 3.4 Excluding intra-market and overseas turnover. *UK only total at 6pm. UK plus intra-market turnover. (u) Unavaliable.
Real Estate Investment Trusts (31) 2724.28 -0.86 2439.10 2747.95 2765.75 2848.25 3.57 1.19 23.46 45.98 3396.38 FTSE Eurozone All Cap 649 421.91 1.0 4.8 19.2 688.50
21.7 2.9 Nonlife Insurance 68 249.13 0.4 0.4 7.4 361.88 9.2 2.3 (c) Market closed.
General Financial (31) 9119.63 -0.48 8165.00 9164.02 9143.36 7609.60 3.17 2.17 14.56 109.17 10429.79 FTSE RAFI All World 3000 3042 6459.65 0.6 2.0 8.2 8516.43
9.8 3.0 Life Insurance 52 217.21 0.3 0.3 8.4 346.36 10.1 3.0
Equity Investment Instruments (175) 9640.59 -0.27 8631.43 9666.88 9645.57 7652.89 2.37 1.17 36.10 96.72 5265.82 FTSE RAFI US 1000 1000 10507.42 0.1 0.8 3.5 13751.38
4.6 2.4 Financial Services 148 263.28 0.6 0.6 9.3 361.96 10.3 1.9
Non Financials (338) 4862.50 -0.44 4353.50 4884.22 4883.21 4112.10 3.45 1.01 28.77 83.21 7187.03 FTSE EDHEC-Risk Efficient All-World 3087 374.96 0.5 2.9 12.0 521.13
13.2 2.1 Technology 182 237.55 1.0 1.0 22.4 290.63 23.2 1.5 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Technology (16) 2089.31 -1.22 1870.60 2115.02 2111.57 1443.43 2.15 1.30 35.76 26.90 2689.02 FTSE EDHEC-Risk Efficient Developed Europe 540 318.92 0.7 4.4 19.2 486.50
21.2 2.5 Software & Computer Services 89 406.76 0.9 0.9 22.2 474.58 22.9 0.9 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Software & Computer Services (12) 2390.27 -1.36 2140.06 2423.26 2417.84 1920.67 2.08 1.48 32.66 32.21 3250.32 Oil & Gas 145 344.17 -0.8 -2.3 -8.3 553.76
-6.9 3.7 Technology Hardware & Equipment 93 180.34 1.2 1.2 22.5 229.29 23.6 2.1 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Technology Hardware & Equipment (4) 1918.08 0.35 1717.30 1911.37 1920.67 1536.77 2.96 0.00-7390.24 12.16 2248.69 Alternative Energy 9 108.70 -1.0 -1.0 18.3 146.41 18.6 1.7 liable for any loss arising from the reliance on or use of the listed information.
Real Estate Investment & Services 107 330.15 1.1 1.1 19.6 549.08 21.3 2.5 For all queries e-mail ft.reader.enquiries@morningstar.com
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
FTSE 100 7557.79 7542.76 7530.17 7528.04 7525.87 7526.98 7531.09 7529.89 7527.83 7559.63 7519.13 mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index and RAFI are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Data provided by Morningstar | www.morningstar.co.uk
FTSE 250 20041.40 19983.02 19959.49 19959.14 19925.57 19918.29 19896.05 19890.35 19872.79 20041.40 19863.47
FTSE SmallCap 5657.87 5659.21 5651.57 5647.95 5643.95 5635.42 5637.17 5635.10 5629.14 5660.00 5628.17 WO 2008/118372, EPN 1733352, and HK1099110). EDHEC is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
FTSE All-Share 4135.05 4126.53 4120.02 4118.98 4116.79 4116.80 4117.89 4117.11 4115.46 4135.52 4112.37 www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. FTSE International Limited. 2013. All Rights reserved. FTSE is a trade mark of the London Stock Exchange
Time of FTSE 100 Day's high:07:05:00 Day's Low13:49:30 FTSE 100 2010/11 High: 7547.63(29/05/2017) Low: 7099.15(31/01/2017) Group companies and is used by FTSE International Limited under licence.
Time of FTSE All-Share Day's high:07:05:00 Day's Low13:50:00 FTSE 100 2010/11 High: 4130.15(29/05/2017) Low: 3858.26(31/01/2017)
Further information is available on http://www.ftse.com FTSE International Limited. 2013. All Rights reserved. FTSE is a trade mark of the
London Stock Exchange Group companies and is used by FTSE International Limited under licence. Sector P/E ratios greater than 80 are not shown.
For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. Values are negative.

UK RIGHTS OFFERS UK COMPANY RESULTS UK RECENT EQUITY ISSUES

Amount Latest Company Turnover Pre-tax EPS(p) Div(p) Pay day Total Issue Issue Stock Close Mkt
Issue paid renun. closing AFH Financial Group Int 13.865 11.7 1.151 0.859 3.71 2.9 - - - - - date price(p) Sector code Stock price(p) +/- High Low Cap (m)
price up date High Low Stock Price p +or- Bezant Resources Pre - - 1.18L 9.13L 0.67L 8.42L - - - - - 05/22 10.00 GFHG Grand Fortune High Grade Ltd 10.50 - 10.88 10.88 1680.0
There are currently no rights offers by any companies listed on the LSE. Maven Income and Growth VCT Pre 1.111 2.024 0.688 1.625 1 2.47 3.6 1.2 May 26 6 3.6 05/17 5.00 SOP Spinnaker Opportunities PLC 4.75 0.06 5.25 4.50 123.5
Westminster Group Pre 4.406 3.359 1.955L 1.988L 2.46L 3.49L - - - - - 05/09 100.00 DSM Downing Strategic Micro-Cap Investment 105.50 -1.25 109.50 100.00 5865.8
Trust PLC
04/25 160.00 AIM ESL Eddie Stobart Logistics PLC 159.50 -1.50 165.00 155.00 57088.0

Figures in m. Earnings shown basic. Figures in light text are for corresponding period year earlier. Placing price. *Intoduction. When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
Tuesday 6 June 2017 FINANCIAL TIMES 17

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

52 Week 52 Week 52 Week 52 Week 52 Week 52 Week
Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m
Australia (A$) Finland () Japan () Sweden (SKr) AutomData 101.53 0.55 105.68 85.23 2.24 25.37 45425.57 Lockheed 281.65 -0.11 284.00 228.50 2.55 22.00 81521.64
ANZ 27.81 -0.47 32.95 22.66 8.67 13.44 61103.8 Nokia 5.81 -0.03 5.96 3.66 2.74 -45.38 38121.64 AstellasPh 1414.5 0.50 1779 1392 2.36 13.50 26496 AtlasCpcoB 282.10 -4.70 302.00 183.80 2.16 31.92 12713.39 Avago Tech 252.90 -1.63 256.78 142.27 1.02 -46.51 101504.57 Lowes 79.59 -0.64 86.25 64.87 1.72 22.31 68230.84
BHPBilltn 23.66 -0.41 27.95 17.29 2.56 36.38 56866.2 SampoA 45.31 -0.32 47.28 34.42 4.66 15.47 28490.51 Bridgestne 4843 -52.00 4900 3089 2.96 13.82 35654.44 Ericsson 63.60 -0.45 67.75 43.19 7.41 -18.65 22567.55 BakerHu 54.85 -0.10 68.59 41.74 1.28 -12.08 23336.68 Lyondell 78.97 -1.07 97.64 69.82 4.45 8.70 31809.51
CmwBkAu 79.31 -1.07 87.74 69.22 7.66 14.52 102670.75 France () Canon 3943 -3.00 3956 2780 3.90 23.63 47616.73 H&M 217.00 -1.60 279.90 211.80 4.49 19.38 36606.84 BankAm 22.60 0.15 25.80 12.05 1.26 13.41 224912.92 Marathon Ptl 53.15 0.45 54.59 32.02 2.72 22.67 27570.89
CSL 132.25 0.25 136.85 91.62 1.50 38.03 44953.55 Airbus Grpe 74.76 -0.84 76.07 48.07 1.71 48.75 65151.16 CntJpRwy 18685 55.00 19835 16305 0.69 10.08 34850.92 Investor 404.20 -1.50 415.70 260.70 2.48 4.18 21262.75 Baxter 59.80 0.08 60.45 42.22 0.90 17.11 32511.41 Marsh&M 77.63 0.13 77.87 62.33 1.81 21.08 39914.24
NatAusBk 29.77 -0.48 34.09 23.90 10.02 13.14 59604.25 AirLiquide 110.45 -0.65 115.25 88.25 2.04 22.21 48374.34 Denso 4831 -78.00 5323 3317 2.46 15.82 34733.54 Nordea Bk 110.90 0.20 115.70 66.30 5.61 12.19 51871.78 BB & T 42.56 0.40 49.88 32.85 2.87 16.07 34527.86 MasterCard 125.78 0.58 125.86 86.65 0.67 31.75 132562.36
Telstra 4.48 -0.01 5.86 4.00 9.52 15.11 39873.71 AXA 23.85 -0.04 25.80 16.11 4.53 9.40 65106.12 EastJpRwy 10960 60.00 10990 8388 1.18 17.21 38642.86 SEB 104.50 - 107.30 67.75 5.28 13.24 26189.66 BectonDick 193.21 0.15 194.11 161.29 1.49 31.03 43676.16 McDonald's 153.24 -0.50 153.90 110.33 2.47 26.18 124901.35
Wesfarmers 42.03 0.06 46.06 38.62 6.61 120.48 35662.93 BNP Parib 63.10 -0.30 68.40 35.27 3.60 10.61 88620.61 Fanuc 22345 120.00 23410 15445 2.28 30.08 41284.79 SvnskaHn 121.30 0.10 136.30 90.25 4.13 14.52 26742.3 BerkshHat 250500 840.00 266445 205074 - 17.66 192611.96 McKesson 165.37 -0.33 199.43 114.53 0.70 6.87 34876.94
Westpc 29.96 -0.55 35.39 27.57 9.13 13.51 75257.39 ChristianDior 256.50 - 256.90 133.75 1.06 35.43 52099.36 FastRetail 38120 -120.00 44370 25305 0.91 38.62 36611.23 Swedbank 207.10 -0.50 234.00 162.90 5.20 11.93 27075.63 Biogen 257.40 0.75 307.33 205.43 - 15.59 54598.45 Medtronic 85.92 0.10 89.27 69.35 2.00 27.04 117614.6
Woolworths 26.53 - 27.72 20.30 4.20 12.62 25699.05 Cred Agr 13.72 -0.08 14.73 6.79 4.29 8.18 43923.45 Fuji Hvy Ind 3802 -115.00 5016 3252 3.75 9.71 26478.39 Telia Co 39.54 -0.32 41.30 33.93 10.15 10.71 19773.46 BkNYMeln 47.85 0.34 49.54 35.72 1.60 14.24 49758.12 Merck 64.89 -0.58 66.80 55.10 2.96 39.96 177484.83
Belgium () Danone 67.14 -0.18 70.53 57.66 1.89 37.74 50597.51 Hitachi 687.00 -5.10 699.70 400.00 1.73 14.31 30065.54 Volvo 144.80 -2.10 148.40 78.50 2.08 26.80 27357.42 BlackRock 415.81 1.10 417.71 317.60 2.31 20.87 67218.13 Metlife 51.44 - 58.09 36.17 3.22 -81.99 55346
AnBshInBv 104.70 -0.20 119.60 92.13 3.53 165.54 199487.39 EDF 9.99 0.27 12.23 7.33 15.32 8.85 30822.19 HondaMtr 3117 -77.00 3675 2417 2.86 13.27 51122.48 Switzerland (SFr) Boeing 189.55 -0.68 191.70 122.35 2.56 22.57 114408.78 Microsoft 72.68 0.92 72.89 48.04 2.13 30.96 561127.01
KBC Grp 66.35 0.25 70.98 39.35 1.48 10.81 31214.57 Engie SA 13.46 -0.04 15.21 10.77 7.29 -59.65 36884.56 JapanTob 4183 -9.00 4540 3607 3.19 19.16 75748.1 ABB 24.83 0.44 24.89 18.59 3.02 25.52 57054.6 BrisMySq 52.65 -2.33 77.12 46.01 3.03 17.67 86729.19 Mnstr Bvrg 51.00 -0.27 55.50 40.64 - 39.77 28958.4
Esslr Intl 118.70 -0.50 124.55 93.41 0.89 34.33 29191.72 KDDI 3073 -20.00 3378 2745.5 2.65 12.95 71986.11 CredSuisse 13.36 0.09 16.31 9.76 4.96 -15.69 29978.45 CapOne 78.51 0.47 96.92 58.03 1.83 12.71 37917.87 MondelezInt 46.87 -0.32 47.23 40.50 1.63 40.83 71114.83
Brazil (R$)
Hermes Intl 449.10 -0.35 468.30 314.00 0.71 47.64 53349.56 Keyence 51790 1230 52130 31555 0.23 - 57022.62 Nestle 82.95 0.15 83.45 71.45 2.68 30.51 267835.94 CardinalHlth 74.86 -0.93 85.52 62.70 2.48 17.28 23646.97 Monsanto 117.68 -0.14 118.00 97.35 1.90 31.76 51638.88
Ambev 18.78 0.21 20.09 15.79 2.20 24.53 89783.58
LOreal 191.20 -1.70 193.35 155.20 1.59 35.44 120269.78 MitsbCp 2235.5 -72.50 2705.5 1679.5 2.67 -26.81 32184.49 Novartis 79.40 0.05 82.80 67.40 3.43 28.22 215570.34 Carnival 64.97 -0.50 66.48 42.94 1.98 20.37 34863.87 MorganStly 43.07 0.55 47.33 23.11 1.70 14.09 79674.74
Bradesco 26.82 0.32 31.13 22.32 2.26 9.06 24917.85
LVMH 230.25 -1.20 239.65 130.55 1.53 29.75 131514.96 MitsubEst 2133.5 -33.00 2443 1724 0.84 31.66 26868.6 Richemont 81.50 0.75 85.90 65.60 2.04 35.84 44138.61 Caterpillar 105.72 -0.24 107.17 70.53 3.01-408.86 62282.74 MylanNV 38.51 -0.57 50.40 33.60 - 36.87 20640.65
Cielo 22.68 -0.32 31.48 20.36 2.41 14.54 18742.06
Orange 15.46 -0.09 15.80 12.38 3.81 82.94 46275.38 MitsubishiEle 1616 -27.50 1802 1108 1.81 14.27 31417.25 Roche 264.90 0.10 273.00 218.30 3.02 24.07 193089.03 CBS 59.84 -1.46 70.10 48.88 1.15 16.52 22042.55 Netflix 164.62 -0.56 165.50 84.50 - 206.72 70951.95
ItauHldFin 31.97 -0.10 36.38 22.27 4.75 8.32 32593.27
PernodRic 122.05 -0.45 122.80 90.00 1.51 26.14 36452.2 MitsuiFud 2672 -50.00 2863.5 2031.5 1.11 20.41 23985.58 Swiss Re 88.55 -0.15 98.50 86.30 5.40 8.97 33080.28 Celgene 118.11 -0.62 127.64 94.42 - 42.93 92223.16 NextEraE 142.31 -0.40 142.93 110.49 2.61 16.76 66624.23
Petrobras 13.89 0.15 19.72 10.30 - -17.02 31443.62
Renault 84.99 -0.22 90.76 63.64 2.77 6.95 28281.44 MitUFJFin 711.50 -10.10 778.80 425.80 2.24 13.99 91277.46 Swisscom 463.10 -2.80 489.80 426.80 9.43 15.00 24889.23 CharlesSch 39.25 0.30 43.65 23.83 0.66 31.79 52482.46 Nike 53.13 0.15 60.33 49.01 1.33 21.30 70212.4
Vale 26.44 -0.34 37.28 14.42 0.62 6.65 25873.34
Safran 80.07 0.29 80.49 53.00 1.31 -92.67 37573.91 Mizuho Fin 197.00 -3.10 225.30 142.00 3.77 6.04 45281.3 Syngent 463.00 -6.70 471.20 360.50 2.57 34.61 42748.26 Charter Comms 347.80 -5.23 355.00 214.06 - 18.31 93768.96 NorfolkS 123.49 -0.15 125.31 78.73 1.90 22.93 35785.26
Canada (C$) Murata Mfg 16010 -95.00 16790 10365 1.36 22.76 32653.99 Chevron Corp 102.91 -0.20 119.00 97.53 4.32 65.04 194969.34 Northrop 257.32 -1.20 259.23 206.69 1.42 20.17 44921.07
Sanofi 88.69 -0.18 92.97 62.50 3.24 26.66 125311.3 UBS 15.44 -0.07 17.49 15.11 5.46 15.72 61696.09
BCE 60.81 -0.27 63.41 56.80 4.53 18.83 40541.67 NipponTT 5347 65.00 5390 4156 2.22 13.85 101493.25 Chubb 145.32 0.18 145.88 121.08 1.97 15.65 67853.6 NXP 109.10 -0.06 109.90 73.62 - 19.08 37747.18
Sant Gbn 50.02 0.02 52.40 32.15 2.43 21.70 31271.28 Zurich Fin 284.30 -0.70 290.80 217.10 6.23 13.25 44627.42
BkMontrl 90.87 -0.40 104.15 79.82 3.78 11.59 43919.96 Nissan Mt 1080 -18.00 1220 893.10 4.13 9.09 41272.77 Cigna 164.20 -0.26 165.59 115.03 0.02 22.41 42037.6 Occid Pet 59.65 -1.05 78.48 57.20 5.30 -43.51 45607.53
Schneider 68.43 -1.19 74.50 49.50 2.87 22.57 45746.15 Taiwan (NT$)
BkNvaS 76.73 0.05 82.30 62.36 4.05 12.21 68354.28 Nomura 685.00 -13.00 784.00 338.80 1.74 15.91 21851.58 Cisco 31.70 -0.28 34.60 27.13 3.37 16.10 158480.22 Oracle 45.96 0.30 46.99 37.62 1.36 20.96 189090.3
SFR Group 31.78 -0.46 32.78 19.51 - -65.91 15819.26 Chunghwa Telecom 108.00 0.50 125.50 99.50 4.96 21.22 27851.17
Brookfield 51.31 0.13 53.08 41.39 1.44 29.66 37594.69 Nppn Stl 2435.5 -69.50 2912 1787.5 1.34 56.22 20956.2 Citigroup 61.63 0.52 62.69 38.31 0.89 11.94 169683.28 Pepsico 117.48 -0.19 118.12 98.50 2.65 24.53 167820.32
SocGen 47.03 -0.27 52.26 25.00 4.18 11.93 42755.48 Formosa PetChem 107.00 1.50 115.00 83.30 3.83 11.32 33883.84
CanadPcR 212.26 -1.07 218.78 156.01 0.99 20.19 23086.91 NTTDCMo 2735 18.00 2946 2361 2.98 15.00 96566.67 CME Grp 118.06 1.13 127.60 92.29 1.94 27.64 40113.68 Perrigo 70.33 -3.11 111.00 65.47 0.87 -2.86 10085.13
Total 45.82 -0.99 49.50 39.03 5.34 16.78 128030.93 HonHaiPrc 105.50 0.50 106.00 76.30 3.21 12.05 60774.31
CanImp 105.58 -0.05 120.83 95.50 4.61 8.92 31433.61 Panasonic 1470.5 -3.50 1476.5 831.40 1.68 16.53 32660.74 Coca-Cola 45.90 0.01 46.01 39.88 3.20 31.25 196110.47 Pfizer 32.34 -0.20 37.39 29.83 3.90 26.28 193000.09
UnibailR 232.25 -3.90 250.55 203.10 3.99 9.50 26058.75 MediaTek 243.00 7.50 260.50 203.00 4.64 14.27 12776.27
CanNatRs 39.06 0.12 46.74 36.26 2.53-195.25 32343.76 Seven & I 4815 23.00 4902 4051 1.92 42.94 38645.64 Cognizant 67.79 0.32 67.80 45.44 - 23.84 39928.1 Phillips66 76.81 0.44 88.87 73.67 3.39 23.06 39641.51
Vinci 77.80 -0.29 79.84 49.93 2.40 17.70 51868.02 TaiwanSem 212.00 3.00 212.00 154.00 2.90 15.13 182744.88
CanNatRy 106.04 0.18 106.73 72.78 1.52 20.98 59516.32 ShnEtsuCh 10240 90.00 10330 5603 1.22 25.16 40063.13 ColgtPlm 76.82 -0.29 77.11 63.43 2.11 26.98 67854.55 PhilMorris 121.23 -0.56 121.82 86.78 3.53 25.93 188287.55
Vivendi 19.90 -0.02 20.17 14.87 4.94 57.83 28826.08
Enbridge 52.53 -0.20 59.19 50.76 4.33 46.06 63801.91 Softbank 9135 140.00 9250 5194 0.46 27.01 91036.55 Thailand (THB) Comcast 41.72 -0.27 42.18 30.02 1.41 21.40 197482.14 PNCFin 120.02 0.86 131.83 77.40 1.85 15.71 58077.85
GtWesLif 33.64 -0.27 37.79 30.83 4.02 12.37 24685.33 Germany () PTT Explor 383.00 -8.00 430.00 303.00 2.60 11.86 32165.9
Sony 4174 15.00 4186 2700 0.47-115.67 47761.4 ConocPhil 44.14 -0.12 53.17 38.80 2.38 -33.87 54605.77 PPG Inds 108.67 -1.75 113.49 89.64 1.52 48.87 27840.91
ImpOil 37.70 -0.15 48.72 37.50 1.65 14.04 23684.9 Allianz 173.35 1.90 177.80 118.35 4.00 13.89 89321.42
SumitomoF 4121 -46.00 4768 2766.5 3.61 7.46 52762.22 United Arab Emirates (Dhs) Corning 29.62 -0.08 29.90 18.88 1.96 7.82 27252.66 Praxair 134.58 -2.04 138.69 106.31 2.33 24.46 38402.93
Manulife 23.57 -0.02 25.57 16.43 3.37 14.44 34526.86 BASF 85.31 1.48 94.32 63.00 3.32 18.34 88345.53
Takeda Ph 5806 25.00 5856 4098 3.07 34.70 41558.7 Emirtestele 17.50 - 20.20 17.20 4.77 16.46 41436.82 Costco 181.53 0.56 183.18 142.11 1.02 31.46 79681 Priceline 1896.39 0.43 1927.13 1148.06 - 41.40 93193.22
Potash 22.00 -0.16 26.62 19.93 5.07 33.55 13697.63 Bayer 121.60 2.55 122.00 85.00 2.01 22.10 113377.59
TokioMarine 4864 -39.00 5441 3063 2.55 12.28 33163.21 United Kingdom (p) CrownCstl 104.23 -0.36 104.68 79.38 3.62 104.83 38159.51 ProctGmbl 88.25 -0.34 92.00 80.95 3.14 23.84 225709.47
RylBkC 93.65 -0.11 99.90 74.64 3.73 12.28 101156.48 BMW 85.93 1.01 91.76 63.38 3.64 7.83 58324.82
Toyota 5968 -124.00 7215 4917 3.82 8.52 176319.17 AscBrFd 2988 -9.00 3183 1910 1.23 21.50 30591.95 CSX 54.19 -0.35 55.06 24.43 1.37 28.63 49999.8 Prudntl 106.25 -0.17 114.55 66.51 2.76 10.46 45581.25
Suncor En 41.84 -0.10 44.90 33.49 2.98 43.47 51771.13 Continental 202.00 1.90 210.35 158.20 1.81 14.67 45552.26
Mexico (Mex$) AstraZen 5343 -21.00 5505 3680 4.14 25.02 87460.54 CVS 78.57 -0.48 98.67 69.30 2.34 15.86 80046.75 PublStor 211.59 -2.33 262.74 200.65 3.61 29.69 36784.05
ThmReut 59.37 -0.22 62.83 50.01 3.21 28.56 31686.14 Daimler 65.84 0.77 73.23 50.83 4.88 8.72 79418.77
AmerMvl 14.93 0.01 15.15 10.40 1.89 24.28 36226.82 Aviva 529.00 -3.00 570.50 290.00 4.06 35.03 27809.7 Danaher 86.74 -0.10 88.01 73.40 0.66 28.62 60208 Qualcomm 58.74 0.16 71.62 50.84 3.73 18.93 86784.62
TntoDom 64.80 -0.04 71.31 54.20 3.42 12.98 88721.38 Deut Bank 15.59 -0.02 19.97 9.90 - -19.58 36329.08
FEMSA UBD 176.50 0.04 184.10 28.35 1.43 164.18 - Barclays 211.70 0.80 267.32 121.10 1.42 16.16 46631.02 Deere 125.78 0.87 126.44 76.73 1.91 22.67 40033.66 Raytheon 162.10 -1.18 164.35 130.97 1.40 20.25 47183.1
TrnCan 63.38 0.04 65.24 54.25 3.83 112.18 40912.8 Deut Tlkm 17.38 0.10 18.15 13.54 3.09 296.40 91648.1
WalMrtMex 43.87 1.12 46.10 34.70 1.29 26.22 41725.07 BP 464.05 1.30 521.20 355.00 6.63 -30.00 118102.68 Delphi 87.98 -1.06 89.93 58.04 1.38 19.97 23569.01 Regen Pharm 483.05 2.62 489.00 325.35 - 56.48 50420.35
ValeantPh 16.40 -0.50 42.25 11.20 - -2.89 4169.81 DeutsPost 32.64 0.31 33.31 23.50 2.55 15.90 44656.06
BrAmTob 5580 2.00 5612 4072 2.76 24.09 134544.24 Delta 50.97 -0.22 52.76 32.60 1.51 9.13 37516.06 ReynoldsAm 67.49 -0.25 67.73 43.38 2.84 28.25 96281.66
E.ON 7.83 0.09 9.72 5.99 6.24 -6.41 17672.21 Netherlands ()
China (HK$) BSkyB 980.00 -10.00 1050 560.00 3.35 27.22 21786.45 Devon Energy 32.89 -0.25 50.69 32.69 1.82 -1.80 17287.64 S&P Global 144.39 0.23 145.30 99.15 1.04 17.38 37223.74
Fresenius Med 86.54 1.17 86.62 70.00 0.90 21.39 29976.75 Altice 22.32 -0.31 23.43 12.20 - -16.73 29996.6
AgricBkCh 3.65 -0.09 3.80 2.75 5.36 5.65 14398.37 BT 304.65 1.50 440.22 297.40 4.74 15.95 39243.23 DiscFinServ 59.22 0.31 74.33 50.32 2.06 9.79 22514.9 Salesforce 91.54 0.68 91.88 66.43 - 481.98 65194.79
Fresenius SE 76.81 0.42 79.49 60.00 0.70 25.60 47934.58 ASML Hld 118.25 -0.70 124.95 79.38 0.87 29.85 58440.34
Bk China 3.92 -0.04 4.08 2.90 5.25 5.91 42067.02 Compass 1675 -15.00 1697 1242.15 1.89 24.89 35624.81 Disney 106.73 -0.46 116.10 90.32 1.46 18.37 167011.72 Schlmbrg 69.10 0.14 87.84 68.03 3.03 -53.24 96012.85
HenkelKgaA 111.90 1.00 112.25 87.00 2.66 23.42 32777.66 Heineken 87.92 -0.20 88.79 67.47 1.14 31.45 56985.17
BkofComm 5.96 -0.05 6.44 4.76 5.30 5.73 26779.17 Diageo 2349 -12.50 2379 1737 2.45 26.36 76475.64 DominRes 80.87 -0.33 81.65 69.51 3.62 22.46 50866.08 Sempra Energy 117.35 -0.16 117.92 92.95 2.72 19.53 29433.81
Linde 176.50 3.45 177.10 116.80 1.62 31.32 36961.51 ING 14.95 0.02 15.88 8.30 4.27 13.02 65351.39
BOE Tech 1.60 0.02 2.00 1.30 1.32 20.84 40.85 GlaxoSmh 1691 -15.00 1745.56 1363 4.73 49.59 107547.31 DowChem 63.05 -0.01 65.42 47.51 3.02 14.90 77022.25 Shrwin-Will 341.35 -4.05 346.86 239.48 1.03 27.20 31789.35
MuenchRkv 177.40 0.50 189.40 140.90 4.54 10.66 32213.68 Unilever 50.99 -0.10 51.22 36.22 2.43 28.56 98385.23
Ch Coms Cons 10.12 -0.10 11.74 7.81 2.20 8.48 5750.08 Glencore 283.40 -3.35 347.00 127.80 - -70.04 52757.45 DukeEner 85.86 -0.42 87.75 72.34 4.08 21.29 60092 SimonProp 152.53 -0.12 229.10 150.15 4.51 25.21 47617.42
SAP 96.10 0.78 96.32 64.94 1.17 32.89 133111.5 Norway (Kr)
Ch Evrbrght 3.68 0.03 4.06 3.18 6.06 5.00 3243.83 HSBC 681.40 3.00 715.20 392.37 6.10 120.28 176684.98 DuPont 80.50 -0.01 82.37 61.12 1.95 26.12 69796.08 SouthCpr 34.58 0.05 39.50 24.90 0.49 40.39 26730.91
Siemens 129.50 2.65 133.50 86.82 2.72 18.90 124109.27 DNB 142.40 -1.40 148.50 90.80 3.20 13.28 27490.12
Ch Rail Cons 10.46 -0.12 11.98 8.61 1.70 8.71 2787.12 Imperial Brands 3641 -8.00 4154 3324 4.26 34.28 45142.79 Eaton 77.11 -0.77 79.31 54.30 3.10 17.38 34490.18 Starbucks 64.44 -0.13 64.87 50.84 1.44 30.85 93315.56
Volkswgn 141.90 1.30 157.40 116.05 0.08 43.82 47211.97 Statoil 146.30 -0.80 163.50 123.90 5.19 -21.86 56641.33
Ch Rail Gp 6.37 -0.03 7.71 5.40 1.60 10.50 3439.42 LlydsBkg 69.39 0.04 73.58 47.10 3.39 28.91 64395.96 eBay 35.54 0.22 36.02 22.30 - 4.98 38462.07 StateSt 83.56 0.88 85.38 50.60 1.83 15.16 31438.26
ChConstBk 6.56 -0.04 6.71 4.73 4.88 6.03 202397.73 Hong Kong (HK$) Telenor 137.90 -0.10 150.90 122.50 5.56 71.40 24540.12 Ecolab 133.90 -0.43 134.40 110.65 1.11 30.90 38837.08 Stryker 144.27 -0.21 145.62 106.48 1.15 31.35 53923.08
Natl Grid 1034 - 1252.36 969.71 4.57 17.42 46004.97
China Vanke 20.00 -0.15 24.10 14.56 4.20 9.06 3375.02 AIA 55.35 - 56.15 42.65 1.37 19.61 85763.47 Qatar (QR) Emerson 59.18 -0.16 64.37 48.45 3.34 22.35 38140.33 Sychrony Fin 27.66 0.26 38.06 23.25 0.47 10.44 22432.63
Prudential 1758.5 -8.50 1801.5 1096 2.24 23.45 58805.99
ChinaCitic 4.76 -0.02 5.50 4.40 5.23 4.79 9090.92 BOC Hold 35.00 -0.40 35.50 22.00 3.68 14.54 47488.8 QatarNtBk 145.30 -0.60 173.00 134.00 2.26 10.45 36848.83 EOG Res 88.93 -0.75 109.37 78.04 0.78 -80.36 51336.48 Target 55.21 -0.32 79.33 52.72 4.27 11.55 30457.06
RBS 259.70 1.30 271.00 148.40 - -4.36 39886.33
ChinaLife 24.85 -0.40 26.05 16.00 1.98 30.80 23730.28 Ch OSLnd&Inv 23.45 0.05 27.85 20.15 2.53 6.50 32971.38 EquityResTP 67.16 0.44 71.53 58.28 3.10 28.23 24658.13 TE Connect 80.16 0.69 80.33 54.54 1.91 13.74 28458.99
Russia (RUB) ReckittB 7987 -30.00 8083 6496 1.84 31.14 72608.01
ChinaMBank 23.55 0.15 24.30 15.24 3.45 8.16 13874.67 ChngKng 59.90 0.25 60.00 44.75 2.27 12.66 28701.41 Exelon 36.54 -0.07 37.70 29.82 3.62 28.61 33834.94 Tesla Mtrs 338.91 -0.94 344.88 178.19 - -71.39 55669.27
Gzprm neft 118.91 -0.78 160.62 116.55 6.90 2.76 49716.03 RELX 1679 -1.00 1690 631.02 1.94 30.09 44351.82
ChinaMob 85.20 -0.30 99.30 80.30 2.92 15.27 223876.27 Citic Ltd 12.30 0.06 12.78 10.60 2.57 10.35 45918.4 ExpScripts 60.86 0.17 80.02 57.80 - 10.74 36535.04 TexasInstr 82.00 0.37 83.24 58.61 2.09 22.51 81698.55
Lukoil 2731 -3.00 3582 2560 7.12 8.28 41024.55 RioTinto 3113 -43.00 3718.5 1876.5 3.82 15.07 55573.4
ChinaPcIns 30.65 -0.45 31.60 24.25 3.73 19.43 10916.28 Citic Secs 16.18 -0.08 19.16 15.36 3.64 15.21 6059.65 ExxonMb 80.10 0.60 95.55 79.26 3.87 32.27 339404.97 TheTrvelers 125.38 0.23 125.80 103.45 2.21 11.94 35033.16
MmcNrlskNckl 7894 65.00 11199 7677 8.76 14.71 22061.95 RollsRoyce 894.50 3.00 898.00 588.00 1.31 -4.06 21286.85
ChMinsheng 7.77 -0.02 9.48 6.91 4.16 5.03 6913.75 CK Hutchison 100.80 -1.10 103.90 80.60 2.46 14.11 49902.36 Facebook 153.83 0.22 154.71 108.23 - 37.85 363774.51 ThrmoFshr 176.00 -0.39 176.40 139.07 0.35 31.00 68854.71
Novatek 611.00 -4.00 800.70 605.00 2.35 8.33 32764.41 RylDShlA 2089.5 2.50 2295.5 1670.5 7.21 44.52 120970.65
ChMrchSecs RMB 16.85 -0.05 20.09 15.21 2.44 18.08 12149.31 CNOOC 8.98 0.05 10.88 8.75 5.30-158.28 51452.62 Fedex 203.75 0.64 204.89 145.00 0.74 27.57 54477.65 TimeWrnr 99.37 0.19 100.60 68.97 1.68 18.20 77065.16
Rosneft 302.25 1.25 425.70 296.80 3.77 18.23 56573.5 Shire 4538.5 -15.50 5377 2707.19 0.53 120.75 53278.78
Chna Utd Coms RMB 7.47 - 8.05 3.75 0.78 551.50 23281.71 HangSeng 163.90 -1.10 165.90 127.60 3.38 21.30 40212.9 FordMtr 11.27 -0.08 14.04 10.67 5.15 5.50 44078.48 TJX Cos 74.92 -0.30 83.64 71.50 1.39 21.29 48194.26
Sberbank 154.78 -2.36 185.34 125.35 0.22 14.08 59009.43 StandCh 753.00 8.00 821.60 471.34 - -64.17 32036.39
ChShenEgy 19.66 0.52 20.45 11.96 1.91 14.67 8574.62 HK Exc&Clr 203.80 -1.20 213.20 175.00 2.58 39.54 32020.97 Franklin 42.83 0.07 44.35 30.56 1.84 13.36 24041.19 T-MobileUS 68.17 -0.15 68.88 40.50 - 34.15 56638.08
Surgutneftegas 26.99 0.37 34.40 26.00 - -11.86 17026.29 Tesco 182.20 -0.35 219.40 143.08 - 224.94 19292.64
ChShpbldng RMB 6.21 - 8.14 5.87 - -83.76 16766.04 MTR 44.00 -0.30 50.00 36.45 2.34 26.79 33373.66 GenDyn 202.79 -0.91 205.07 132.68 1.59 19.09 61178.79 UnionPac 110.90 -0.30 115.15 81.96 2.15 20.50 89545.01
Saudi Arabia (SR) Vodafone 230.35 0.40 240.10 186.50 5.23 -34.40 79312.16
ChStConEng RMB 9.53 -0.04 11.45 5.09 2.14 9.63 41598.77 SandsCh 34.70 -0.40 39.30 24.60 6.01 28.05 35948.19 GenElectric 27.98 0.10 33.00 27.10 3.48 26.73 242933.86 UPS B 108.23 0.56 120.44 101.95 3.03 26.70 74545.61
AlRajhiBnk 62.30 0.30 67.50 48.60 3.72 11.79 26995.23 WPP 1734 -20.00 1928.07 1204 2.79 16.06 28584.18
ChUncHK 11.38 0.16 11.58 7.70 1.76 211.87 34972.8 SHK Props 118.30 - 123.30 85.40 2.83 10.77 43963.64 GenMills 57.18 -0.37 72.95 55.57 3.45 20.38 32943.48 USBancorp 51.70 0.40 56.61 38.48 2.19 15.15 87129.14
Tencent 271.60 1.60 280.60 167.00 0.17 47.59 330336.91 Natnlcombnk 42.90 1.30 45.00 32.00 3.28 8.83 22878.78 United States of America ($)
CNNC Intl RMB 7.69 -0.09 7.84 6.58 1.19 25.03 4782.55 GenMotors 34.32 -0.13 38.55 27.34 4.58 5.14 51786.82 UtdHlthcre 179.88 0.49 180.24 132.39 1.44 22.27 173343.44
SaudiBasic 98.40 0.90 102.50 76.00 5.04 18.11 78715.8 21stC Fox A 27.67 -0.27 32.60 23.33 1.35 16.31 29112.83
CSR 7.28 -0.02 7.99 6.45 2.41 16.38 4083.71 India (Rs) GileadSci 65.23 -0.17 88.85 63.88 3.06 6.67 85238.02 UtdTech 121.55 -0.57 122.85 96.89 2.25 18.22 97389.2
SaudiTelec 69.40 0.65 74.00 51.00 5.94 15.56 37011.36 3M 206.83 0.13 207.39 163.85 2.25 24.18 123527.06
Daqin RMB 8.23 -0.19 8.61 5.98 5.58 14.66 17990.6 Bhartiartl 372.40 -0.85 401.00 283.05 0.37 38.20 23130.32 GoldmSchs 215.00 1.69 255.15 138.20 1.25 11.08 84630.63 ValeroEngy 62.40 0.30 71.40 46.88 4.14 13.20 27907.24
Singapore (S$) AbbottLb 46.64 0.14 46.75 36.76 2.32 50.67 80924.41
Gree Elec Apl 0.19 - 0.25 0.16 - -6.03 333.54 HDFC Bk 1635.55 1.30 1648 1144.25 0.56 33.63 65281.69 Halliburton 45.06 -0.25 58.78 40.12 1.65 -11.12 39101.81 Verizon 46.21 -0.23 56.95 44.46 5.14 14.94 188507.66
DBS 20.49 0.01 21.18 14.72 2.93 12.33 37711.95 Abbvie 67.37 0.12 68.12 55.06 3.54 17.73 107222.08
GuosenSec RMB 12.95 -0.05 18.94 12.39 4.73 21.51 4179.68 Hind Unilevr 1097.75 11.35 1103 781.95 1.54 51.79 36918.8 HCA Hold 82.21 -1.12 91.03 67.00 - 10.81 30162.31 VertexPharm 128.97 -0.93 130.00 71.46 - 178.15 32122.4
JardnMt US$ 65.89 0.69 67.27 52.90 2.30 9.42 47631.7 Accenture 126.79 1.05 126.88 108.66 1.89 18.15 83951.69
HaitongSecs 12.98 -0.14 15.24 11.98 4.11 15.00 5679.49 HsngDevFin 1606.15 1.50 1612.8 1182.15 0.92 25.88 39665 Hew-Pack 18.81 -0.18 19.58 11.48 2.73 12.89 31844.01 VF Cp 54.18 -0.16 65.28 48.05 2.96 18.62 21696.76
JardnStr US$ 42.00 0.25 43.78 28.45 0.72 8.59 46521.95 Adobe 143.96 0.48 144.34 90.35 - 52.87 71216.72
Hngzh HikVDT RMB 27.99 0.13 40.16 20.41 1.13 32.29 29869.39 ICICI Bk 319.75 1.60 327.40 221.10 1.55 22.10 28953.56 HiltonWwde 67.35 -0.06 67.79 44.10 1.20 94.39 22143.41 Viacom 35.25 - 46.72 33.44 3.95 9.81 12418.59
OCBC 10.61 0.03 10.65 8.22 3.47 12.27 32122.79 AEP 72.51 -0.16 72.72 57.89 3.28 49.03 35654.04
Hunng Pwr 6.01 -0.06 6.25 4.43 9.18 9.15 3625.26 Infosys 958.75 -10.70 1279.3 901.00 2.64 15.14 34217.63 HomeDep 154.65 -0.70 160.86 119.20 1.83 23.33 184892.58 Visa Inc 96.38 0.23 96.44 73.25 0.65 46.36 177941.61
SingTel 3.80 -0.01 4.36 3.59 4.65 15.76 44914.83 Aetna 147.89 0.16 148.70 104.59 0.70 44.41 49055.11
IM Baotou Stl RMB 2.15 0.01 2.37 1.96 - 115.31 6967.14 ITC 317.45 -1.75 319.90 222.00 1.40 36.65 59917.33 Honywell 133.90 -0.13 135.00 105.25 1.92 20.63 102077.08 Walgreen 83.30 0.20 88.00 76.26 1.85 20.61 90043.21
UOB 23.18 -0.17 24.02 17.41 3.09 11.81 27453.33 Aflac 75.87 -0.06 76.88 66.50 2.29 11.93 30108.75
In&CmBkCh 5.34 -0.06 5.43 4.03 5.15 5.93 59479.09 L&T 1804.9 20.90 1833.95 1295.1 0.79 37.91 26173.1 HumanaInc 233.94 -0.28 236.35 150.00 0.56 22.89 33760.31 WalMartSto 80.17 0.55 80.18 65.28 2.51 18.23 243039.86
AirProd 145.62 -1.17 150.45 124.02 2.51 20.41 31705.04
IndstrlBk RMB 16.28 -0.15 17.58 14.99 3.82 5.64 45606.91 OilNatGas 175.75 1.75 211.80 138.00 1.91 18.26 35045 South Africa (R) IBM 152.60 0.55 182.79 142.50 3.80 12.14 143365.35 WellsFargo 52.07 0.26 59.99 43.55 3.02 12.59 260210.35
Alexion 101.50 -0.33 156.25 96.18 - 46.73 22792.49
Kweichow RMB 444.41 -2.90 456.48 266.25 1.42 30.47 82086.01 RelianceIn 1329.35 4.60 1467.75 930.00 - 12.82 67159.65 Firstrand 49.80 0.33 54.46 41.50 4.41 11.99 22001.65 IllinoisTool 144.24 0.63 144.86 98.32 1.79 23.44 49827.86 Williams Cos 28.91 0.03 32.69 19.60 6.08 -48.45 23883.47
Allegran 228.31 0.15 261.27 184.50 0.32 -20.81 76597.16
Midea 1.71 0.02 1.87 1.62 6.15 22.90 47.19 SBI NewA 287.25 0.20 315.30 195.40 0.90 49.90 36196.56 MTN Grp 118.40 0.85 151.70 104.76 8.86 -84.61 17571.02 Illumina 182.48 -1.31 189.48 119.37 - 35.64 26642.08 Yahoo 50.56 -0.04 51.23 35.05 - -1629.66 48446.54
Allstate 86.81 0.14 86.94 65.27 1.59 17.76 31643.78
New Ch Life Ins 41.20 -0.95 42.85 25.50 - 21.74 5467.6 SunPhrmInds 512.80 -2.05 854.95 492.65 0.20 17.25 19117.24 Naspers N 2653 -16.73 2846.5 1925.98 0.14 108.25 91574.93 Intcntl Exch 61.58 1.26 61.98 48.15 1.16 24.83 36459.46 Yum!Brnds 74.13 0.14 74.46 56.80 2.41 26.45 25814.33
Alphabet 1003.11 6.99 1007.4 672.66 - 34.41 298554.43
PetroChina 5.16 -0.01 6.38 4.92 1.05 29.41 13971.48 Tata Cons 2603.95 39.05 2744.8 2051.9 1.83 19.04 79723.67 South Korea (KRW) Intel 36.24 -0.09 38.45 30.44 2.97 15.17 170630.62 Venezuela (VEF)
Altria 75.11 -0.01 76.55 60.82 2.65 30.14 145085.89
PingAnIns 50.20 -0.50 51.80 32.50 1.29 11.86 47979.23 Indonesia (Rp) HyundMobis 275500 5000 293500 212000 1.31 12.22 23982.32 Intuit 143.26 0.45 143.46 103.03 0.92 40.95 36705.64 Bco de Vnzla 750.00 - 800.00 93.00 - - 1362.57
Amazon 1011.35 4.62 1012.51 682.12 - 184.16 483398.13
PngAnBnk RMB 9.03 -0.14 10.26 8.52 1.44 6.91 22462.86 Bk Cent Asia 17725 175.00 18550 12625 1.02 20.11 32892.5 KoreaElePwr 43000 -450.00 63600 40050 4.46 4.04 24685.41 John&John 130.48 0.40 130.49 109.32 2.54 21.20 351491.34 Bco Provncl 10800 400.00 10800 2200 - 16.38 580.10
AmerAir 49.75 0.23 50.64 24.85 0.83 11.65 24506.29
Pwr Cons Corp RMB 7.89 -0.06 9.00 5.40 1.00 16.18 11137.15 SK Hynix 56100-1000.00 58800 27400 1.11 9.34 36522.18 JohnsonCn 42.26 0.01 46.17 37.31 2.77 -30.13 39644.47 Mrcntl Srvcs 33000 1750 33000 4500 0.06 58.94 1000.79
Israel (ILS) AmerExpr 79.04 0.55 82.00 57.15 1.64 13.80 70644.31
SaicMtr RMB 29.23 -1.06 30.73 19.60 4.75 9.86 47386.78 SmsungEl 2297000-1000.00 2361000 1360000 1.60 12.67 268406.47 JPMrgnCh 83.36 0.72 93.98 57.05 2.20 14.44 296161.72
TevaPha 103.80 2.30 217.70 99.40 4.62 17.01 29646.82 AmerIntGrp 63.95 -0.29 67.47 48.41 1.93 98.82 58969.37
ShenwanHong 0.29 -0.01 0.35 0.16 - -4.81 324.21 Spain () Kimb-Clark 130.15 -0.49 138.87 111.30 2.96 20.77 46193.9 Closing prices and highs & lows are in traded currency (with variations for that
Italy () AmerTower 131.58 -0.91 137.12 99.72 1.71 61.46 55922.74
ShgPdgBk RMB 12.85 -0.04 13.52 11.16 3.15 6.81 53100.09 KinderM 18.85 -0.10 23.36 17.07 4.67-118.34 42081.54 country indicated by stock), market capitalisation is in USD. Highs & lows are
Enel 4.71 -0.02 4.83 3.54 3.37 16.35 53928.54 BBVA 7.25 0.01 7.89 4.50 5.01 12.94 54419.62 Amgen 159.58 0.43 184.21 133.64 2.69 14.65 117355.36
Sinopec Corp 6.43 0.01 6.57 5.08 2.56 11.53 21052.92 Kraft Heinz 93.37 -0.17 97.77 79.69 2.63 32.13 113690.39 based on intraday trading over a rolling 52 week period.
ENI 13.96 -0.09 15.92 12.18 5.70 -5.28 57087.64 BcoSantdr 5.81 -0.01 6.35 3.15 3.47 14.07 95335.11 Anadarko 49.60 -0.46 73.33 48.67 1.25 -5.00 27792.82
Sinopec Oil RMB 3.69 0.10 4.51 3.02 - -3.24 1529.14 Kroger 30.00 -0.13 37.97 28.29 1.54 14.24 27378.19 ex-dividend
Generali 13.85 -0.20 16.00 9.76 5.10 10.70 24340.38 CaixaBnk 4.12 0.00 4.47 1.82 3.57 23.41 27730.19 Anthem 186.50 -1.08 188.28 114.85 1.37 21.88 49419.93
Denmark (kr) Iberdrola 7.19 0.05 7.23 4.80 5.67 17.27 52279.47 L Brands 51.89 -0.56 79.67 43.04 4.62 13.70 14778 ex-capital redistribution
IntSPaolo 2.56 -0.03 2.90 1.52 5.37 21.25 45614.97 Aon Cp 131.61 0.21 132.34 100.55 1.03 24.37 34491.03
DanskeBk 248.20 -0.40 259.30 161.80 3.55 11.79 35240.55 Inditex 36.63 -0.04 36.90 27.18 1.30 36.15 128462.07 LasVegasSd 62.23 -0.32 63.38 41.45 4.80 26.16 49302.84 # price at time of suspension
Luxottica 53.50 -0.65 56.90 39.92 1.63 30.81 29164.26 Apple 153.81 -1.64 156.65 91.50 1.53 17.33 801940.73
MollerMrsk 12880 210.00 13090 7775 3.55 -20.82 19638.84 Repsol 14.86 0.04 15.22 9.60 4.15 13.45 25013.33 LibertyGbl 31.57 -0.18 39.85 26.16 - 13.76 7487.12
Unicred 15.27 -0.22 30.80 11.93 3.87 -1.55 38243.17 ArcherDan 41.96 -0.27 47.88 39.01 3.01 17.19 23845.42
NovoB 291.50 7.10 384.80 218.20 3.18 20.03 86704.86 Telefonica 9.98 -0.04 10.63 7.45 7.29 21.59 56557.62 Lilly (E) 79.33 -0.80 86.72 64.18 2.67 37.06 87531.83
AT&T 38.83 -0.05 43.89 36.10 5.20 17.66 238696.1

FT 500: TOP 20 FT 500: BOTTOM 20 BONDS: HIGH YIELD & EMERGING MARKET BONDS: GLOBAL INVESTMENT GRADE
Close Prev Day Week Month Close Prev Day Week Month Day's Mth's Spread Day's Mth's Spread
price price change change % change change % change % price price change change % change change % change % Red Ratings Bid Bid chge chge vs Red Ratings Bid Bid chge chge vs
VertexPharm 128.97 129.90 -0.93 -0.72 9.05 7.5 12.27 IM Baotou Stl 2.15 2.14 0.01 0.47 -0.84 -28.1 2.73 Jun 05 date Coupon S* M* F* price yield yield yield US Jun 05 date Coupon S* M* F* price yield yield yield US
LasVegasSd 62.23 62.55 -0.32 -0.51 4.21 7.3 5.79 SunPhrmInds 512.80 514.85 -2.05 -0.40 -54.85 -9.7 -18.80 High Yield US$ US$
Keyence 51790.00 50560.00 1230.00 2.43 3140.00 6.5 13.23 Surgutneftegas 26.99 26.62 0.37 1.37 -2.72 -9.2 -5.15 Navient Corporation 03/20 8.00 BB- Ba3 BB 110.20 4.14 0.00 -1.27 2.84 FleetBoston Financial Corp. 01/28 6.88 BBB Baa3 A- 120.66 4.46 0.00 -0.13 2.29
Regen Pharm 483.05 480.43 2.62 0.55 27.88 6.1 12.66 Devon Energy 32.89 33.13 -0.25 -0.74 -2.94 -8.2 -13.65 High Yield Euro Citigroup Inc. 01/28 6.63 BBB+ Baa1 A 121.13 4.18 0.00 -0.01 2.01
Panasonic 1470.50 1474.00 -3.50 -0.24 82.50 5.9 9.82 Novatek 611.00 615.00 -4.00 -0.65 -47.20 -7.2 -12.21 Kazkommerts Intl BV 02/17 6.88 B Caa1 B 97.50 - 0.00 0.00 - SunTrust Banks, Inc. 01/28 6.00 BBB+ Baa1 A- 112.31 4.58 0.00 -0.25 2.40
MediaTek 243.00 235.50 7.50 3.18 13.50 5.9 11.47 Sinopec Oil 3.69 3.59 0.10 2.79 -0.23 -5.9 16.04 NationsBank Corp. 03/28 6.80 BBB Baa3 A- 120.35 4.45 0.00 -0.31 2.28
Hind Unilevr 1097.75 1086.40 11.35 1.04 56.80 5.5 14.74 Vale 26.44 26.78 -0.34 -1.27 -1.62 -5.8 1.50 Emerging US$ Merrill Lynch & Co., Inc. 06/28 6.75 BBB+ Baa1 A 123.69 4.10 0.00 -0.13 1.92
NovoB 291.50 284.40 7.10 2.50 14.50 5.2 10.12 Deut Bank 15.59 15.61 -0.02 -0.13 -0.90 -5.5 -5.46 Mexico 09/16 11.40 BBB+ A3 BBB+ 106.80 1.49 0.03 0.01 0.44 United Utilities PLC 08/28 6.88 BBB- Baa1 A- 120.22 4.60 0.00 -0.22 2.42
Fedex 203.75 203.11 0.64 0.32 9.49 4.9 5.87 SocGen 47.03 47.30 -0.27 -0.57 -2.70 -5.4 -9.35 Brazil 01/18 8.00 BB Ba2 BB 103.05 3.05 0.00 0.00 1.74
Peru 03/19 7.13 BBB+ A3 BBB+ 110.07 1.48 0.01 -0.25 0.17 Euro
Avago Tech 252.90 254.53 -1.63 -0.64 11.69 4.8 11.74 Natl Grid 1034.00 1034.00 0.00 0.00 -57.00 -5.2 -6.74 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 104.35 2.20 0.00 0.05 -
Hngzh HikVDT 27.99 27.86 0.13 0.47 1.25 4.7 -24.86 Naspers N 2653.00 2669.73 -16.73 -0.63 -146.00 -5.2 1.60 Peru 03/19 7.13 BBB+ A3 BBB+ 114.01 2.60 0.00 0.20 0.84
Brazil 01/22 12.50 BB Ba2 BB 112.13 9.23 0.00 0.00 7.50 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 104.53 2.18 0.01 0.01 -
AbbottLb 46.64 46.50 0.14 0.29 1.93 4.3 4.49 ChinaCitic 4.76 4.78 -0.02 -0.42 -0.26 -5.2 -1.65 Citigroup Inc. 02/30 4.25 BBB Baa3 A- 117.41 2.28 0.00 -0.05 -
Tesla Mtrs 338.91 339.85 -0.94 -0.28 13.77 4.2 9.66 ShenwanHong 0.29 0.30 -0.01 -3.39 -0.02 -5.0 -9.52 Colombia 03/23 2.63 BBB Baa2 BBB 97.45 3.14 0.00 -0.19 1.40
Poland 03/23 3.00 BBB+ A2 A- 101.69 2.70 0.00 -0.35 0.97 HBOS plc 03/30 4.50 BBB- Baa2 A- 117.51 2.43 0.00 -0.25 -
Bayer 121.60 119.05 2.55 2.14 4.90 4.2 4.20 BNP Parib 63.10 63.40 -0.30 -0.47 -3.25 -4.9 -7.04
Turkey 03/23 3.25 - Ba1 BB+ 81.20 7.28 -0.02 0.08 5.55 Yen
Sony 4174.00 4159.00 15.00 0.36 165.00 4.1 8.33 ValeantPh 16.40 16.90 -0.50 -2.96 -0.84 -4.9 19.58
Russia 05/26 4.75 - - BBB- 105.39 4.07 0.00 -0.09 1.89 Enagas Transportes, S.A.U. 09/39 3.23 A- Baa2 A- 106.57 2.85 0.00 0.01 -
EDF 9.99 9.72 0.27 2.75 0.39 4.0 13.52 Anadarko 49.60 50.06 -0.46 -0.92 -2.24 -4.3 -5.84
HK Exc&Clr 203.80 205.00 -1.20 -0.59 7.80 4.0 6.93 Ch Coms Cons 10.12 10.22 -0.10 -0.98 -0.44 -4.2 -4.53 Turkey 03/27 6.00 - Ba1 BB+ 107.60 5.07 0.00 -0.20 2.89 Sterling
ShnEtsuCh 10240.00 10150.00 90.00 0.89 389.00 3.9 6.69 ChMinsheng 7.77 7.79 -0.02 -0.26 -0.32 -4.0 4.72 Emerging Euro Electricite de France (EDF) 05/28 6.25 A A3 A- 134.82 2.57 0.00 -0.15 0.39
Canon 3943.00 3946.00 -3.00 -0.08 149.00 3.9 5.15 GoldmSchs 215.00 213.31 1.69 0.79 -8.53 -3.8 -5.30 Brazil 02/15 7.38 BBB- Baa2 BBB 111.75 0.73 0.00 0.00 0.09 HSBC Holdings plc 08/28 2.63 A A1 AA- 101.27 2.49 0.00 -0.22 0.32
E.ON 7.83 7.74 0.09 1.20 0.30 3.9 3.91 Unicred 15.27 15.49 -0.22 -1.42 -0.60 -3.8 -5.86 Mexico 02/20 5.50 BBB+ A3 BBB+ 113.99 0.28 0.00 -0.10 -1.02 Data provided by SIX Financial Information. US $ denominated bonds NY close; all other London close. *S - Standard & Poors, M -
Mexico 04/23 2.75 BBB+ A3 BBB+ 108.13 1.30 0.00 -0.05 -0.43 Moodys, F - Fitch.
Based on the FT Global 500 companies in local currency Based on the FT Global 500 companies in local currency
Bulgaria 03/28 3.00 BB+ Baa2 BBB- 108.90 2.07 0.00 -0.02 -0.11
Data provided by SIX Financial Information & Tullett Prebon Information. US $ denominated bonds NY close; all other
London close. *S - Standard & Poors, M - Moodys, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Jun 05 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Jun 05 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 0.50-0.75 14-12-2016 1.00 0.50-0.75 0.25-0.50 Index change change change 1 month 1 year VIX 9.71 -0.04 9.75 26.72 9.56 Jun 05 Price Yield Day Week Month Year High Low m
US Prime 4.00 16-12-2008 3.75 3.50 3.50 Markit IBoxx VXD 10.13 0.09 10.04 23.69 3.59 Tr 8.75pc '17 101.93 0.02 -33.33 100.00 -300.00 -94.12 105.16 100.00 11.14
US Discount 0.75 16-12-2015 0.75 1.00 0.75 ABF Pan-Asia unhedged 182.15 -0.02 -0.01 5.16 1.17 1.34 VXN 13.21 0.30 12.91 27.10 9.75 Tr 5pc '18 103.67 0.12 -14.29 20.00 71.43 -42.86 108.36 103.67 35.24
Euro Repo 0.00 10-09-2014 0.05 0.05 0.05 Corporates( ) 342.62 0.10 -0.14 3.79 1.21 9.95 VDAX - - - - - Tr 4.5pc '19 107.73 0.09 0.00 28.57 28.57 -71.88 111.97 107.73 36.35
UK Repo 0.25 05-03-2009 0.25 0.50 0.50 Corporates($) 272.20 -0.09 -0.09 3.40 -0.09 3.40 CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 112.76 0.11 0.00 37.50 -8.33 -78.85 117.02 112.76 33.31
Japan O'night Call 0.00-0.00 05-10-2010 0.00 0.00-0.10 0.00-0.10 Corporates() 224.02 0.13 0.07 1.24 0.45 2.74 Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 104.51 0.25 0.00 13.64 -10.71 -67.11 106.04 102.80 32.46
Switzerland Libor Target 0.00-0.25 15-01-2015 0.00-0.75 -1.25--0.25 0-0.25 Eurozone Sov() 231.27 0.06 -0.10 -0.61 0.49 -0.78 Tr 4pc '22 117.25 0.34 0.00 17.24 -5.56 -56.41 121.31 116.43 37.95
Gilts( ) 324.07 0.08 -0.24 2.20 0.45 5.88 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 131.92 0.75 0.00 5.63 -6.25 -35.34 138.11 129.09 35.08
INTEREST RATES: MARKET Global Inflation-Lkd 257.47 -0.18 -0.18 4.17 0.28 3.64 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 101.17 1.13 0.89 3.67 -5.04 -22.07 138.26 99.31 7.93
Over Change One Three Six One Markit iBoxx Non-Gilts 337.44 0.09 -0.15 3.39 1.01 8.58 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 137.68 1.45 0.00 3.57 -3.97 -20.33 148.92 131.34 35.44
Jun 05 (Libor: Jun 02) night Day Week Month month month month year Overall ($) 236.83 -0.08 -0.08 2.55 -0.08 2.55 Australia 10/19 2.75 102.61 1.63 0.00 0.00 -0.21 0.07 Tr 4.25pc '36 142.58 1.61 0.00 3.21 -4.73 -19.10 155.77 134.98 29.76
US$ Libor 0.93111 0.000 0.001 0.010 1.08617 1.22250 1.42822 1.73067 Overall( ) 325.00 0.08 -0.22 2.55 0.61 6.66 11/28 2.75 102.10 2.54 -0.02 -0.01 -0.31 0.00 Tr 4.5pc '42 157.18 1.72 0.00 3.61 -3.91 -16.91 174.65 147.27 26.64
Euro Libor -0.43000 0.000 -0.006 0.002 -0.40071 -0.37000 -0.28714 -0.16957 Overall() 227.70 0.07 -0.05 -0.14 0.42 0.00 Austria 10/19 0.25 99.98 0.26 0.00 0.00 0.00 0.00 Tr 3.75pc '52 156.44 1.63 0.62 3.82 -4.68 -17.26 177.28 143.66 23.59
Libor 0.22375 0.000 0.000 -0.002 0.25044 0.29163 0.42950 0.62613 Treasuries ($) 223.62 -0.09 -0.09 2.05 -0.09 2.05 04/27 0.50 99.36 0.57 0.02 -0.01 -0.10 0.00 Tr 4pc '60 175.71 1.56 0.65 4.00 -4.88 -18.32 201.27 159.78 23.21
Swiss Fr Libor 0.000 -0.78740 -0.72960 -0.66180 -0.49100 FTSE Belgium 06/18 1.25 101.93 -0.59 0.00 0.00 0.00 0.00 xd Ex dividend. Closing mid-prices are shown in pounds per 100 nominal of stock. Red yield: Gross redemption yield.
Yen Libor 0.001 -0.02229 -0.01250 0.02457 0.12700 Sterling Corporate () 118.53 -0.06 - - 0.69 3.95 06/27 0.80 101.37 0.66 0.02 -0.03 -0.15 0.00 This table shows the gilts benchmarks & the non-rump undated stocks.
Euro Euribor 0.002 -0.37200 -0.32900 -0.25500 -0.13100 Euro Corporate () 107.38 -0.08 - - 0.34 -1.06 Canada 08/19 0.75 100.05 0.73 0.00 0.00 0.00 0.00
Sterling CDs
US$ CDs
0.000
0.000
0.20000
0.97000
0.28000
1.13000
0.41500
1.31000
Euro Emerging Mkts () 800.25 -7.05 - - -0.19 -9.24 06/27 1.00 96.28 1.40 0.00 0.00 0.00 0.00 GILTS: UK FTSE ACTUARIES INDICES
Eurozone Govt Bond 112.08 -0.13 - - 0.29 -3.73 Denmark 11/20 0.25 102.31 -0.41 0.00 0.00 0.00 0.00
Euro CDs 0.000 -0.43500 -0.39500 -0.29500 11/27 0.50 99.56 0.54 0.00 0.00 0.00 0.00 Price Indices Day's Total Return Return
CREDIT INDICES Day's Week's Month's Series Series Fixed Coupon Jun 05 chg % Return 1 month 1 year Yield
Short 7 Days One Three Six One Index change change change high low Finland 09/19 1.75 100.54 1.51 0.01 -0.03 -0.09 0.30
07/28 2.75 115.37 1.45 0.00 0.00 0.00 0.00 1 Up to 5 Years 96.64 0.01 2434.26 0.09 1.19 0.20
Jun 05 term notice month month month year Markit iTraxx 2 5 - 10 Years 186.20 -0.02 3508.47 0.43 3.50 0.73
Euro -0.50 -0.35 -0.50 -0.35 -0.51 -0.36 -0.47 -0.32 -0.37 -0.22 -0.36 -0.11 Crossover 5Y 369.26 -12.07 35.21 40.34 390.04 288.69 France - - - - - - -
3 10 - 15 Years 217.69 -0.03 4266.48 0.74 5.44 1.18
Sterling 0.15 0.25 0.15 0.25 0.23 0.33 0.34 0.49 0.45 0.60 Europe 5Y 85.00 -1.98 7.21 7.01 90.43 67.59 11/20 0.25 102.44 -0.45 0.00 0.00 0.00 0.00
4 5 - 15 Years 193.63 -0.02 3695.47 0.54 4.11 0.94
Swiss Franc - - - - - - - - - - - - Japan 5Y 70.05 -2.51 2.21 -0.87 93.03 64.22 10/22 2.25 112.92 -0.14 0.00 0.00 0.00 0.00
5 Over 15 Years 342.96 -0.11 5187.03 1.84 9.11 1.64
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 111.86 -3.89 10.86 12.50 121.66 80.36 05/27 1.00 102.63 0.73 0.02 -0.05 -0.11 0.00
7 All stocks 183.69 -0.05 3596.90 0.97 5.18 1.43
US Dollar 0.90 1.00 0.95 1.05 1.00 1.10 1.10 1.20 1.25 1.35 1.50 1.60 Germany 10/19 0.25 102.26 -0.70 0.00 0.00 0.00 0.00
Markit CDX 08/23 2.00 113.97 -0.24 0.00 0.00 0.00 0.00
Japanese Yen 0.00 0.20 -0.05 0.15 -0.40 -0.10 -0.30 0.00 -0.25 0.05 -0.20 0.10 Day's Month Year's Total Return Return
Emerging Markets 5Y 198.09 -3.26 -11.46 -11.68 218.09 197.56 02/27 0.25 99.61 0.29 0.02 -0.03 -0.13 0.00
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: Index Linked Jun 05 chg % chg % chg % Return 1 month 1 year
Nth Amer High Yld 5Y 328.29 0.17 -17.13 -10.17 353.95 327.35 08/46 2.50 133.27 1.15 0.03 -0.01 -0.05 0.00
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 1 Up to 5 Years 314.78 0.00 -0.04 1.60 2472.07 0.17 3.51
Nth Amer Inv Grade 5Y 63.53 0.28 -4.09 -3.35 69.24 62.53 Greece 04/19 4.75 98.43 5.65 0.00 0.08 0.28 0.00
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 2 Over 5 years 720.04 -0.41 1.64 21.10 5360.40 1.76 21.75
02/27 3.00 84.18 5.98 -0.01 0.09 0.37 0.00 3 5-15 years 482.86 -0.10 0.75 9.37 3730.15 0.96 10.53
Ireland 10/19 5.90 115.10 -0.44 0.00 0.00 0.00 0.00 4 Over 15 years 925.23 -0.51 1.94 25.58 6741.78 2.03 26.03
05/26 1.00 102.04 0.76 0.01 -0.02 -0.10 0.00 5 All stocks 650.89 -0.38 1.51 18.87 4917.64 1.64 19.65
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED Italy 10/19 0.05 99.78 0.14 0.02 0.02 -0.08 0.00
11/21 0.35 98.41 0.72 0.01 0.06 -0.05 0.00 Yield Indices Jun 05 Jun 02 Yr ago Jun 05 Jun 02 Yr ago
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
06/27 2.20 99.59 2.26 0.00 0.08 0.02 0.00 5 Yrs 0.35 0.35 0.66 20 Yrs 1.74 1.74 2.08
Crude Oil Jun 47.36 -0.48 Corn Jul 373.50 1.50 Apr 21 Apr 21 Prev return stock Market stocks
03/47 2.70 87.87 3.37 0.00 0.13 0.09 0.00 10 Yrs 1.09 1.08 1.40 45 Yrs 1.55 1.54 1.94
Brent Crude Oil 49.43 -0.67 Wheat Jul 429.75 0.75 Can 4.25%' 21 121.46 -0.361 -0.372 0.29 5.18 75355.91 7
Japan 05/19 0.10 100.48 -0.15 0.00 0.00 0.00 0.00 15 Yrs 1.56 1.56 1.88
RBOB Gasoline Jun 1.57 -0.01 Soybeans Jul 923.25 -0.25 Fr 2.25%' 20 112.37 -1.431 -1.458 0.13 20.31 222459.38 16
03/22 0.10 100.99 -0.11 0.00 0.00 0.00 0.00
Heating Oil Jun 1.58 0.00 Soybeans Meal Jul 302.30 -0.20 Swe 0.25%' 22 114.09 -1.848 -1.830 0.17 30.03 229025.37 7
03/27 0.10 100.59 0.04 0.00 0.00 0.01 0.00 inflation 0% inflation 5%
Natural Gas Jun 2.97 -0.04 Cocoa (ICE Liffe)X Jul 1542.00 -12.00 UK 2.5%' 20 373.10 -2.880 -2.849 0.27 6.58 653041.71 27
03/47 0.80 99.90 0.80 0.00 0.00 -0.01 0.00 Real yield Jun 05 Dur yrs Previous Yr ago Jun 05 Dur yrs Previous Yr ago
Ethanol - - Cocoa (ICE US) Jul 1939.00 -63.00 UK 2.5%' 24 371.80 -2.205 -2.162 0.74 6.82 653041.71 27
Netherlands 01/20 0.25 102.41 -0.66 0.00 0.00 0.00 0.00 Up to 5 yrs -2.45 1.95 -2.45 -1.38 -3.17 1.95 -3.17 -1.96
Uranium Jun 18.10 0.00 Coffee(Robusta)X Jul 1995.00 17.00 UK 2%' 35 273.88 -1.791 -1.774 1.49 9.08 653041.71 27
07/27 0.75 102.42 0.50 0.02 -0.04 -0.12 0.00 Over 5 yrs -1.70 24.63 -1.71 -0.97 -1.72 24.71 -1.74 -1.00
Carbon Emissions - - Coffee (Arabica) Jul 126.10 0.55 US 0.625%' 21 103.72 -0.249 -0.260 0.21 35.84 1253376.13 38
White SugarX 413.10 3.10 New Zealand 04/20 3.00 102.50 2.09 0.00 0.00 0.00 0.00 5-15 yrs -1.95 8.45 -1.96 -1.04 -2.07 8.46 -2.08 -1.15
Diesel - - US 3.625%' 28 133.26 0.507 -0.260 0.58 16.78 1253376.13 38
Sugar 11 14.18 0.17 04/27 4.50 114.84 2.77 0.00 0.00 0.00 0.00 Over 15 yrs -1.67 29.71 -1.69 -0.96 -1.69 29.75 -1.71 -0.98
Unleaded (95R) - - Representative stocks from each major market Source: Merill Lynch Global Bond Indices Local currencies. Total market
Norway 05/19 4.50 107.60 0.59 0.00 0.00 0.00 0.00 All stocks -1.70 22.91 -1.72 -0.98 -1.73 23.01 -1.75 -1.01
Base Metals ( LME 3 Months) Cotton Jul 76.67 0.01 value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium 1902.00 -29.50 Orange Juice Jul 133.65 1.70 02/27 1.75 102.52 1.47 0.00 0.00 0.00 0.00 See the FTSE website for more details: http://www.ftse.com/products/indices/gilts
amount.
Aluminium Alloy 1670.00 -10.00 Palm Oil - - Portugal 06/19 4.75 109.12 0.22 -0.01 0.01 -0.12 0.00
Copper 5637.50 -50.50 Live Cattle Jun 131.00 0.00 BONDS: TEN YEAR GOVT SPREADS 04/27 4.13 109.23 3.02 0.01 -0.11 -0.36 0.00 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Lead 2103.50 -8.00 Feeder Cattle Aug 159.43 2.35 Spain 01/19 0.25 100.81 -0.24 0.00 0.00 0.00 0.00 at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor guarantee
Nickel 8880.00 -25.00 Lean Hogs Jun 81.25 0.00 Spread Spread Spread Spread 04/27 1.50 99.48 1.56 -0.01 0.02 -0.02 0.00 that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
Tin 20120.00 -175.00 Bid vs vs Bid vs vs Sweden 10/18 1.00 99.44 1.44 0.01 0.00 -0.04 0.40 loss arising from the reliance on or use of the listed information. For all queries e-mail
Zinc 2495.00 -41.00 % Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds 11/26 1.00 105.31 0.42 0.01 -0.07 -0.23 0.00 ft.reader.enquiries@morningstar.com
Precious Metals (PM London Fix) Jun 02 Month Year Australia 2.54 2.25 0.36 Italy 2.26 1.97 0.08 Switzerland 07/20 2.25 109.65 -0.83 0.00 0.00 0.00 0.00
Gold 1279.95 5.00 S&P GSCI Spt 371.23 0.93 -0.75 Austria 0.57 0.28 -1.61 Japan 0.04 -0.25 -2.14 06/27 3.25 134.94 -0.19 0.00 0.00 0.00 0.00 Data provided by Morningstar | www.morningstar.co.uk
Silver (US cents) 1752.00 33.00 DJ UBS Spot 81.98 -0.28 -5.92 Belgium 0.66 0.37 -1.52 Netherlands 0.50 0.21 -1.67 United Kingdom 07/19 1.75 103.45 0.12 0.00 0.00 -0.03 0.00
Platinum 932.00 1.00 R/J CRB TR 179.06 0.29 -5.50 Canada 1.40 1.11 -0.78 Norway 1.47 1.18 -0.71 07/22 0.50 99.95 0.51 0.02 0.00 -0.06 0.00
Palladium 837.00 14.00 M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark 0.54 0.25 -1.63 Portugal 3.02 2.73 0.85 07/27 1.25 101.02 1.14 0.02 0.00 -0.09 0.00
Bulk Commodities UBS Bberg CMCI TR 13.29 -0.39 -1.36 Finland 1.45 1.15 -0.73 Spain 1.56 1.27 -0.62 07/47 1.50 94.71 1.73 0.03 0.00 -0.09 0.00
Iron Ore (Platts) 56.40 -1.00 LEBA EUA Carbon 5.04 0.00 -13.55 France 0.73 0.44 -1.45 Switzerland -0.19 -0.48 -2.37 United States 05/19 1.25 99.89 1.31 0.01 0.00 0.00 0.00
Iron Ore (The Steel Index) 55.70 -0.60 LEBA CER Carbon 0.22 -8.33 -45.00 Germany 0.29 0.00 -1.89 United Kingdom 1.14 0.85 -1.03 05/22 1.75 100.09 1.73 0.01 -0.05 0.00 0.00
GlobalCOAL RB Index 76.60 3.10 LEBA UK Power 1180.00 -9.23 -57.09 Greece 5.98 5.69 3.80 United States 2.18 1.89 0.00 05/27 2.38 101.76 2.18 0.02 -0.07 0.00 0.00
Baltic Dry Index 821.00 -9.00 Ireland 0.76 0.47 -1.41 05/47 3.00 103.50 2.83 0.02 -0.08 0.00 0.00
Sources: NYMEX, ECX/ICE, CBOT, X ICE Liffe, ICE Futures, CME, LME/London Metal Exchange.* Latest prices, $ Data provided by SIX Financial Information Data provided by SIX Financial Information
unless otherwise stated.
18 FINANCIAL TIMES Tuesday 6 June 2017

MARKETS & INVESTING

INSIGHT Commodities

Henny
Sender Rise of automated trading sparks debate
Surge in use of algorithms
for energy, metal and food
contracts raises price fears
A double-tightening
in US and China bodes GREGORY MEYER NEW YORK
The machines are taking over markets
of algorithms, while others welcome
added volumes.
This is a charged debate, said Rick
Lane, chief executive of Trading Tech-
nologies, a software vendor.
The Commodity Futures Trading
Commission, a derivatives watchdog,
has suggested rules to lessen the risk of
pared with financial products such as
interest-rate and currency futures.
But, the analysts wrote, both the
level of automation and the speed of
trading continue to increase in physical
commodity contracts.
The automation of grain and oilseed
volumes rose from 39 to 49 per cent
25 % ing to the study. Both CFTC and CME
Group declined to comment.
Proportion of Automation has concerned some tra-
soyabean and
wheat volumes
traded through
automated systems
ditional users of agricultural futures
markets. Last year a US beef trade group
complained that lightning-fast traders
63%
were undermining the usefulness of the
market. A grain trader at a US hedge

ill for the over-levered for energy, metals and food.

Automated trading systems account
for half the volume in many commodity
futures after proliferating in the
mayhem should a computer go awry.
Industry groups have pushed back.
Automation can range from sophisti-
cated black-box trading systems to off-
between 2012-14 and 2014-16, the study
found, using data from futures
exchange operator CME Group. Live-
stock futures went from 32 to 46 per
Crude oil volumes
transacted
automatically in
fund lamented that fundamentals,
such as corn yields or exports, no longer
had as much effect on prices.
2014-16, up from Daan Vriens, chief executive of Cefe-

L
ast quarter, sales of excavators in China touched
levels not seen since 2009, when government
spending was lifted following the global finan-
cial crisis. Other indicators including rail freight
and property loans as a percentage of total lend-
ing also climbed to levels not repeated since. Commodities,
particularly metals, rallied.
In the US last week the big stock indices set record highs,
despite the fact that many economists expect the Federal
Reserve to raise short-term interest rates next week. Loan
defaults continue to fall, hitting a 16-month low in May.
It is true that the reflation trade, which has dominated
markets for much of the past year, is showing signs of
strain. That investors are prepared to pay a premium
for high-growth technology companies points to scepti-
cism that global economic growth is going to find a much
higher gear.
Those strains are not yet severe enough to cheer manag-
ers of distressed debt funds, who, outside the pain inflicted
on the energy sector during the past three years, have had
slim pickings.
However, more tightening in both the US and China is
surely on its way. The casualties so far are few, but they
send a signal of the wider distress to come for companies
that are laden with debt.
The double tightening is marginal but it is enough for
companies with the wrong capital structure to get into
trouble, says Eddie Tam, founder of Central Asset Invest-
ments in Hong Kong.
Consider Noble, the Singapore-listed commodities
trader that for many years was the best proxy for the
economic rise of Asia. Both the company and its investors
bet that rapid growth would continue indefinitely.
Noble switched its business model from asset-light
to the opposite, acquiring expensive plants and
processing units, which it
financed with too much debt
at the worst time in the cycle.
Shares are up in
Its bonds are trading at dis- tech behemoths
tressed levels and its shares
for mere cents.
such as Tencent
The same case could be that dont need
made for indebted US retail-
ers disrupted by the internet,
to borrow
and the most indebted Indian
conglomerates. Encouraged by the easy money from most
of the large central banks, plenty borrowed for the sunny
days. With interest rates slowly moving up, the probability
of rainy days is rising.
It is likely the tightening that will trigger more distress
for the indebted will come in spurts. Beijing will be anxious
to preserve social stability and is well aware of the need to
balance tightening with enough credit to support growth
and temper any wider disruption.
Meanwhile in the US conflicting economic signals are
just clear enough to make the Fed similarly cautious. Our
base case is relatively optimistic but if you are thinking of
risks the US being in the late cycle stage is clearly one of
the key risks, notes Chetan Ahya, Morgan Stanleys co-
head of global economic research.
At the end of March and in early April the China Banking
Regulatory Commission released seven documents that
revealed tighter financial regulations. In addition 55 cities
have introduced 160 cooling measures to slow the rising
cost of housing.
The Peoples Bank of China, at the same time, let short-
term money market rates rise. That triggered sell-offs in
equities, bonds and commodities, although pressure in the
stock market has eased since early May.
There have been just eight Chinese corporate defaults
this year, but expect that number to rise. Authorities in
Beijing are determined to reduce the leverage in the finan-
cial system in an orderly manner. That does not mean the
process will be free of corporate victims.
While investors would welcome an orderly reduction
in leverage, the risks present a headache. The safest invest-
ments should be in companies that do not depend on bor-
rowed money for growth, but the biggest problem for
investors in China is that technology is by far the strongest
sector financially and shares of those companies have
already appreciated significantly. Chinas tech behemoths
such as Tencent, with a $331bn market capitalisation,
dont need borrowed money.
The rally in US tech stocks this year shows that investors
are digging deep for fast-growing companies, suggesting
concern about the wider outlook.
Wherever they are, this is the moment for less-levered
companies to shine.
henny.sender@ft.com
past two years, a US government study
has found.
The rise of trading without human
intervention has sparked con-
troversy among the industrial compa-
nies, hedge funds, farmers and ranch-
ers, that trade futures.
Some contend that prices have
become disconnected from the forces
of supply and demand because
Effort to harmonise risky-loans rules in doubt
ECB finalises leveraged debt
guidelines as Washington
weighs fate of US regulations
ERIC PLATT NEW YORK
ROBERT SMITH LONDON
For banks in the business of buying and
selling risky loans, the prospect of trans-
atlantic harmonisation between regula-
tors looks like slipping further out of
reach.
Just as the European Central Bank has
finalised the framework of its regulation
on leveraged lending, to mirror existing
US guidelines, Washington is looking for
reverse gear. Rules that seek to prevent
a repeat of the excess of the pre-crisis
leveraged buyout boom, which saw the
debt-saddled buyouts of utility TXU,
casino Caesars Entertainment and radio
owner Clear Channel, are now at the
mercy of Congress.
In late May, the Government
Accountability Office agreed to examine
whether leveraged lending guidelines
should be subject to Congressional
review, at the behest of US senator Pat
Toomey. The senators office confirmed
to the Financial Times that the GAO
accepted its request to review the guide-
lines, but a timeline for a decision has
not yet been set.
Richard Farley, a partner at law firm
Kramer Levin, says that should the GAO
rule that the guidelines require Congres-
sional review, they would probably be
voted down by the Republican-control-
led upper and lower houses.
The guidelines introduced in 2013
from the Federal Reserve, Office of the
Comptroller of the Currency and Fed-
eral Deposit Insurance Corporation
steer banks away from deals where debt
ratios exceed earnings by more than six
times. The directions are meant to keep
banks from financing riskier transac-
tions in case markets seize up and
demand for the bonds and loans they
are meant to underwrite dries up.
The accumulation of huge loans on
bank balance sheets and large write-
downs could create stress in the finan-
cial system. Thus, deals that surpass the
six-times earnings ratio, or if a company
will be unable to repay half its total debt
in five to seven years, raise a red flag for
the regulators.
But a paper by economists at the New
York Fed casts doubt on the effective-
ness of the leveraged-lending guidelines
beyond stymying activity in the sector.
It is less clear whether it accomplished
its broader goal of reducing the risk that
these loans pose for the stability of the
financial system, a report said in May.
Mr Farley says there is a risk of creat-
the-shelf kit that helps execute large cent automated, precious metals 54% in 2012-14 tra, the largest supplier in Europe to the
orders. As electronic networks replace climbed from 46 to 54 per cent and animal feed market, said it had invested
exchange floors, trading speeds have crude oil increased from 54 to 63 per in two algorithmic trading funds. If you
accelerated to the point that someone cent. understand it better you can use it as an
clicking with a computer mouse is con- In soyabean and wheat contracts, extra tool to position yourself better.
sidered slow. more than a quarter of volumes now Dont ignore it, he said in March.
The study, by two CFTC analysts, consists of automated systems transact- Mr Lane said: Weve seen a greater
found that commodities such as grains, ing with each other, with an even larger acceptance and willingness to use auto-
oil and metals previously had a rela- share coming from deals that match mation across our client base.
tively small amount of automation com- automated and manual traders, accord- Additional reporting by Neil Hume
Analysis. Capital markets
Transatlantic drift
Average leverage multiples for European LBOs
First Lien/Ebitda Second Lien/Ebitda Other Debt/Ebitda 6
5
4
3
2
1
0
2001 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17*
* Jan to Apr
Average leverage multiple of US-sponsored transactions
First Lien/Ebitda Second Lien/Ebitda Other Debt/Ebitda 5
4
3
2
1
0
2000 03 05 07 09 11 13 15 17
Global leveraged loan index at record highs
Annual change in the S&P global leveraged loan index (%)
Year to
date 60
40
20
0
-20
-40
2006 07 08 09 10 11 12 13 14 15 16 17
Source: LCD/S&P Global
Theres ing a divergence between the three US has decided they might want to go in a apply to them, says one leveraged
agencies, which could each interpret different direction, says Malcolm finance banker.
plenty of their authority differently. Hitching, a partner at law firm Ropes & The Bank of England conducted a
scope At least you had uniformity on the Gray in London. review of the market in 2015, but intro-
rules, says Mr Farley. If that falls by The ECB released its final draft of the duced no regulation after deeming that
for the the wayside, each agency would have rules last month, making only subtle the UK banking system currently
different the legal authority to figure out how changes to the US blueprint. But mar- appears resilient to stress in the lever-
they are going to interpret regulating ket participants are also increasingly aged loan market.
central leveraged lending on their own accord. worried that the ECBs regulation will Banks are certainly still doing highly
banks to The big takeaway is that the lever- not even create a level playing field leveraged deals in Europe ahead of the
aged-lending guidelines will be invali- within Europe. guidelines taking effect in November.
interpret dated, says Margaret Tahyar, a partner It seems that the guidelines are going Center Parcs sold high-yield bonds last
the at law firm Davis Polk & Wardwell. to be enforced by the national central week that left the UK holiday parks
The most likely course is that the wise banks and, if so, theres plenty of scope business more than eight times levered.
guidelines banking regulators will go back and for the different central banks to inter- And banks are competing to under-
differently come up with more sensible guidelines pret the guidelines differently, says write debt backing the sale of German
and not wait for Congress to bring down Ronan Wicks, head of Shearman & Ster- metering company Ista at similar lever-
the blunt force of the Congressional lings European finance practice. age levels.
Review Act. And European banks that are not reg- I think youll have situations where
Rolling back the regulation would also ulated by the ECB could be outside the the leverage is higher than six times, but
put the ECB back out of step with the US. scope of the regulation entirely. the debt pay down makes it justifiable,
The European authorities have It begs the question of whether its a says a second banker, however. For me,
taken a good few years to catch up with level playing field when the UK and Ista and Center Parcs fall into that
the States, and in the interim the States Swiss banks are pretty sure it doesnt bracket.

Equities

Shenzhen take-up languishes at 5% as investors remember interventions

GABRIEL WILDAU SHANGHAI
Foreign investors have shown little
appetite for Shenzhen-listed stocks
available through a Chinese trading
scheme that grants unprecedented
access to mainland shares.
Since Stock Connect was launched six
months ago, only 5 per cent of the daily
quota for investment into Shenzhen has
been used. Net inflows have averaged
Rmb1bn ($147m) per day.
The modest take-up reflects caution
about high valuations, volatility and the
risk of government interference.
Since the scheme began, the Shen-
zhen Component index has fallen 10 per
cent. The other available stocks, from
the Shenzhen Small/Mid Cap Innova-
tion index, have fared even worse.
Many investors were still working
very hard to get up the knowledge
curve, said Xen Gladstone at the CLSA
investment group in Hong Kong.
In November 2014 the first Stock Con-
nect, between Shanghai and Hong
Kong, marked a new era for foreign
investors, who previously needed indi-
vidual licences and quotas to access
mainland bourses.
The latest scheme allows investors in
Hong Kong to buy a net Rmb13bn of
Shenzhen shares a day through local
brokers. Its Rmb10.5bn quota matches
that of Shanghai.
But unlike Shanghai, which is domi-
nated by blue-chips such as banks and
state-owned industrial groups, Shen-
zhen offers access to private companies
in technology and emerging sectors.
Shenzhen-listed companies are
smaller on average, and their shares
were more volatile during the stock
market boom-and-bust cycle in 2015.
Howard Ho at Maple-Brown Abbott
said the Sydney-based manager was still
laying the groundwork before investing
in Shenzhen.
He cited the risk of heavy-handed
government interventions such as bans
on stock sales by large shareholders.
Hundreds of companies halted trading
on flimsy pretexts in order to avoid fur-
ther price falls.
We took extreme caution away Many investors would still be
Shenzhen stocks tumble from the experience of 2015, with tempted to brave volatile prices and
after Connect launch respect to the spike in company suspen- government interventions if valuations
Rebased, Dec 2 2016=100 sions and various arbitrary interven- were more attractive. Even after its
Shenzhen Component Index tions, he said. recent decline, the price/earnings ratio
Shenzhen Small-/Mid-Cap Maple-Brown Abbott had exposure to for the Shenzhen Component index was
Innovation Index 100 Chinese businesses listed in Hong Kong 26 at Fridays close, versus 9.4 for the
98 and elsewhere, he said, and had no need Hang Seng China Enterprise, which
96 to expose clients to the additional risks tracks mainland companies listed in
94 of Shenzhen without a satisfactory Hong Kong, according to Thomson Reu-
92 margin for safety. ters data.
90 There were also technical issues For now most international inves-
88 regarding the changing pool of investa- tors are looking at this market on an
86 ble stocks on the two Shenzhen indices, asset allocation or thematic invest-
Dec 2017 Jun said Mr Ho. Since the scheme began, ment basis rather than a stockpicking
2016 96 of the original 881 eligible stocks have opportunity, said Mr Ho.
Sources: Shenzhen Stock Exchange; been removed. When a stock is removed Investment themes include artificial
Thomson Reuters Eikon
a rush of sell orders punishes the price. intelligence and robotics.
Tuesday 6 June 2017 FINANCIAL TIMES 19

MARKETS & INVESTING

Global overview
TRADING POST Markets update
Jamie
Chisholm
Nasdaq touches intraday peak as S&P 500 index
Change on day 0.03%

oil see-saws amid diplomatic row

This week contains a concentrated
batch of risk events that could rattle
markets.
On Thursday, investors must
contend with a UK election, whose
outcome has become much less certain
of late. A Labour victory or hung
parliament could have implications for
the course of Brexit and thus once
again throw a spotlight on the
eurozones political fragility.
The same day brings the European
Central Banks latest monetary policy
decision. The ECB is expected to keep
strategy unchanged. But will markets
become even more concerned that
president Mario Draghis dovish stance
is out of kilter with economic reality,
leaving him open to accusations that
suppressing peripheral debt yields are
his main focus?
Later in Washington, former FBI
director James Comey is due to testify
before the Senate Intelligence
Committee about Russias alleged
involvement in the US election and his
dealings with President Donald Trump
regarding that matter.
Though US equities have quickly
shrugged off previous bouts of
Trumpian angst, the buck and bond
yields may be hit by any revelations
that damage the White House.
So, how to play all this? Well, its
noticeable that gold began yesterday
by creeping above $1,280 an ounce, a
six-week high. And as the dollar
softens, another haven the yen
could provide protection. As the
dollar/yen one-week risk reversal
shows, put options currently are not
especially expensive relative to calls.
jamie.chisholm@ft.com
Dollar/yen 1-week risk
reversal
% points
2
0 at $49.24 by midday in New York. US
-2
-4
May 2016 2017 Jun
Source: Bloomberg
Crude briefly tops $50
after Arab nations cut ties
with Qatar, while sterling
edges up against dollar
and euro ahead of UK poll
DAVE SHELLOCK
Wall Street started the week on a cau-
tious note after setting records on Fri-
day as oil prices gave back early gains
and US economic data did little to alter
expectations that the Federal Reserve
would raise interest rates at its next
meeting.
Sterling gained ground against the
broadly firmer dollar as the countdown
to Thursdays UK general election con-
tinued. The euro was also in focus ahead
of this weeks policy decision from the
European Central Bank.
Oil markets had a volatile session
after a group of Arab nations, led by
Saudi Arabia, severed diplomatic ties
and cut transport links with Qatar,
accusing it of fuelling terrorism.
The dramatic breakdown in Qatars
relations with Saudi Arabia, UAE,
Egypt, and Bahrain does not pose any
immediate risk for Gulf energy supplies
but does have critical strategic impli-
cations for the US, and potentially
Libya, said Helima Croft, global head of
commodity strategy at RBC Capital
Markets. In addition, Qatar remains
firmly part of the coalition of the willing,
supporting the Opec production cuts.
Brent, the international crude bench-
mark, briefly regained the $50-a-barrel
mark after hitting a three-week low of
$48.95 on Friday.
But it failed to maintain this upward
momentum and was down 1.4 per cent
West Texas Intermediate was 1.3 per
cent lower at $47.05.
Meanwhile, the Qatar All Share
equity index fell 7.5 per cent.
Space chief warns UK on Brexit: FT.com/video
Johann-Dietrich Wrner of the European Space Agency
explains what an EU without Britain could mean for his sector
US energy stocks came under modest
pressure, helping to push the S&P 500
index down 0.1 per cent, to 2,346, from
Fridays record closing high.
The Nasdaq Composite hit a fresh all-
time intraday peak of 6,310.62 in early
trade before it too turned tail to stand
0.2 per cent softer.
The CBOE Vix volatility index, which
closed at its lowest level since 1993 on
Friday, was down 0.8 per cent at 9.67.
Activity in Europe was relatively sub-
dued with the German and some other
markets closed for Whit Monday.
The pan-regional Stoxx 600 index
ended 0.1 per cent lower, while in Lon-
don the FTSE 100 which also hit a
record high on Friday fell 0.3 per cent.
Stephane Corvaja
The decline for the UK blue-chip
benchmark index came as sterling
edged up 0.3 per cent against the dollar,
to $1.2919, and 0.6 per cent versus the
euro to 1.1483.
With just days left before the UK
goes to the polls on June 8, prime minis-
ter Mays Conservative party still holds
the lead, noted Jane Foley, senior FX
strategist at Rabobank. However, the
various polls published on Saturday
evening are showing that this margin
differs markedly.
The Brexit talks are due to com-
mence on June 19. Due to the complexity
of these negotiations, a weak govern-
ment after Thursdays election is likely
to take a toll on sterling.
2440
2420
2400
2380
2360
May 2017 Jun
The euro was also 0.3 per cent softer US equities A retreat for Apple shares
against the dollar at $1.1248 while the helped keep Wall Streets main indices
US currency eked out a 0.1 per cent gain on the back foot, with the S&P 500
versus the yen to 110.49. index edging down from Fridays
Fed fund futures continued to price in record closing and intraday highs
a roughly 95 per cent probability of the
US central bank raising rates by 25 basis FTSE 100 index
points when it concludes its June policy Change on day 0.29%
meeting next week, as survey data on 7600
the all-important services sector fell just
short of expectations. 7500
The Institute for Supply Manage- 7400
ments headline non-manufacturing
7300
index fell to 56.9 in May from 57.5,
May 2017 Jun
slightly lower than analysts had
expected. UK equities The FTSE 100 index
The fall was mainly driven by a dip for eased back from Fridays record
the new orders component from a 12- high as sterling edged higher and
year high, although the employment nerves began to set in ahead of
sub-index jumped to a 22-month high of Thursdays general election
57.8 from 51.4 in April.
Overall, the ISM survey suggests Eurofirst 300 index
that, despite the weaker payrolls data
for May released last week, the econ- Change on day 0.13%
1560
omy remains on course to recover
from the disappointing start to the 1550
year, said Andrew Hunter at Capital 1540
Economics.
1530
Accordingly, this provides even more
May 2017 Jun
reason to believe that another 25bp
interest rate hike is coming at the Fed- European equities The financial and
eral Open Market Committee meeting energy sectors suffered big falls as
next week. oil prices gave back early gains and
The dollar index a measure of the Spains Banco Popular extended its
US unit against a weighted basket of slide amid worries for its future
peers was up 0.1 per cent at 96.85,
while the yield on the policy-sensitive
two-year Treasury which moves Nikkei 225 index
inversely to its price was 1bp higher at (000) Change on day 0.03%
20.2
1.30 per cent.
20.0
Across the Atlantic, the 10-year Bund
19.8
yield edged up 2bp to 0.29 per cent.
The ECB may take out its easing bias 19.6
19.4
when meeting in Tallinn [on Thursday]
but president Mario Draghi will con- May 2017 Jun
tinue emphasising inflation downside Japanese equities The Nikkei held
risks, said analysts at Morgan Stanley. close to a 22-month high reached at
Gold was down $1 at $1,278 an ounce the end of last week as a rally for the
after earlier hitting a six-week high of yen against the dollar ran out of steam
$1,283.

Wall Street
Small banks weakness
extends Russell 2000s
underperformance
Joe Rennison
Weakness in domestic banks has driven
the divergence between the S&P 500
index and the Russell 2000, home to
smaller US companies, this year as
hopes for a stimulus package fade.
The financial sector rose after the
presidential victory of Donald Trump in
November, with the S&P 500 banks sub-
index rallying 16.5 per cent by the end of
2016. But that was outstripped by the
Russell 2000s financial sub-index with
an 18.9 per cent rise.
A broader rally across both indices
pushed the Russell 2000, which has a
27 per cent weighting to financials,
up 13.6 per cent over the same period,
against 4.6 per cent for the less
concentrated blue-chip index.
Russell 2000 Financials index losses each month since March. The
Russell 2000 financials sector has
2000 fallen 3 per cent this year. The S&P 500
1800 as a whole is up 8.9 per cent this year,
1600 while the Russell 2000 has risen just
1400 3 per cent.
Jun 2016 2017 Jun In late-morning trading in New York,
Source: Thomson Reuters Datastream
the Russell 2000 extended its
underperformance, falling 0.6 per
Indices Close
Day's
change
cent to 1,397, while the S&P 500 was
flat at 2,438.
S & P 500 2437.80 -1.27 Analysts said the larger number of
DJ Industrials
Nasdaq Comp
21210.41
6298.85
4.12
-6.94
small banks in the Russell 2000 than the
larger global banks in the S&P 500 had
Russell 2000 1204.70 -8.35
made it more sensitive to the flattening
VIX 9.71 -0.04
in the yield curve the difference
US 10 yr Treas Bd 2.18 0.02
between shorter and longer dated
US 2 yr Treas Bd 1.31 0.01
Treasuries. The spread between two-
year and 10-year Treasuries is narrower
than before the election.
But gridlock in Washington has Small-cap financials are much more
dashed hopes for looser financial rate sensitive, said Pravit
regulation, higher longer-term rates Chintawongvanich, head of derivatives
and improved profitability for banks. strategy at Macro Risk Advisors. They
The benchmark 10-year Treasury yield have been hurt a lot more by the
was 2.17 per cent yesterday, close to a flattening of the yield curve.
low for the year and down from 2.62 per The performance of technology
cent in March. stocks has also contributed to the
Interest rates are lower this year and outperformance of the S&P 500, with
the regulatory benefits have not the top 10 stocks, most of which are
materialised yet, said Venu Krishna, an in that sector, accounting for almost half
equity analyst at Barclays. It has put a the returns in the index.
lid in the short term on the performance You have this rally in big-cap tech
of financials . . . A lot of the Trump rally which you have not seen in small-cap
that caused small-caps to rally tech names, said Mr
massively has been given back. Chintawongvanich. Its a combination
The S&P 500 financials sector is up of weighting difference and sector
1 per cent for the year, having recorded performance.

London
Whitbread sinks as
travel and tourism
sectors recoil
Bryce Elder
Travel and tourism stocks pulled the
FTSE 100 away from its record high
yesterday with Whitbread among the
sharpest fallers.
The Premier Inn and Costa Coffee
owner faded 2.6 per cent to 41.16 after
Cenkos downgraded to hold. Both
brands appear to be running out of
road, it said.
Premier was at maximum occupancy
in London but seemed to be keeping to a
price limit of 200 per night, which
meant revenue per available room
(revpar) would grow more slowly than
the market average, said the broker.
Furthermore, with sharper
competition from the likes of
Travelodges SuperRooms premium-
economy brand, it was difficult to see
how the group grows revpar in line with
market estimates.
Cenkos fretted that Whitbread was
cannibalising Costa sales by moving into
smaller markets. Attempts to boost
average spend relied too much on food,
which as well as adding complexity and
costs risked a lack of focus on the core
business of selling coffee.
Whitbreads fall reflected worries that
tourism numbers will fall following the
London Bridge terrorist attack, which
weighed on travel stocks. Budget airline
EasyJet lost 3.2 per cent to 13.44 and
Merlin, the theme park operator,
slipped 2.4 per cent to 524p.
The UK accounted for more than a
third of easyJets group capacity,
estimated Merrill Lynch. It forecast that
every 1 per cent movement in ticket
pricing would shift current-year
consensus earnings 12 per cent.
Also in the leisure sector, Restaurant
Group lost 5.7 per cent to 345.2p on the
back of a profit warning from Comptoir,
its Aim-listed sector peer.
Comptoir tumbled 28.6 per cent to
22.5p after it said trading had
deteriorated in May at its retail-led
locations, which in combination with
rising costs had had a significant
impact on restaurant profitability.
Public holidays in Germany, Ireland
and Switzerland made for a quiet day in
London. The FTSE 100 drifted away
from a record high, ending 0.3 per cent,
or 21.87 points, lower at 7,525.76, on its
lowest daily volume this year.
Miners were weak, with Antofagasta
down 3.5 per cent to 776.5p and Kaz
Minerals off 4.7 per cent to 471.2p. HSBC
downgraded both to reduce after
forecasts were cut to reflect sterlings
rally against the dollar.
Software maker Sage fell 2.7 per cent
to 709.5p after Numis turned cautious,
partly in response to earnings dilution
from last weeks disposal of its US
payments business.
ConvaTec edged up 0.4 per cent to a
record high of 344p. After the close,
pre-flotation investors Nordic Capital
and Avista began selling 200m shares in
the FTSE 100-listed medical device
maker, equivalent to a 23 per cent stake.
20 Tuesday 6 June 2017

INSIGHT Analysis. Capital markets

James
Kynge
Investors bet Venezuela crisis triggers default
EM fund managers look Venezuelas recession
beyond the nations current is deepening
US Paris pullout raises turmoil to returns in 2028
GDP (% change)
10
green flag for a China STEVE JOHNSON
5
0
stocks megatrend Professional investors might normally
be expected to head for the hills at the
-5
-10
first hint of a security that is likely to

T
-15
default. Emerging market bond fund
wo events one that has just happened and managers, however, are queueing up to -20
one that may be imminent are swelling the buy long-dated Venezuelan sovereign 2005 08 10 12 14 16
ranks of investors willing to bet that a great bonds in the full expectation that Cara- as imports slump
environmental rehabilitation in smog-choked cas will renege on payment.
China will become a stock market megatrend. Investors have so far made a mint on Volume of imports of goods and
First came last weeks decision by Donald Trump to pull shorter dated Venezuelan debt. A bond services (% change)
the US out of the Paris climate accord, ceding leadership issued by PDVSA, the state oil company, 40
over the global green agenda to China and Europe. Then for instance, traded as low as 36 cents on 20
there is the prospect of MSCI, the index provider, deciding the dollar in February 2016 before being
this month to include some Chinese A shares into one of its repaid in full in April this year, more 0
benchmarks for the first time. than doubling the money of those who
What the Chinese dream about is blue sky and blue bought at the nadir. -20
water, says Karine Hirn, partner at East Capital, an But amid mounting expectation that
-40
emerging market asset manager. Investment into the glo- defaults are inevitable as the crisis-rid-
bal leaders in environmental protection is very exciting. den countrys coffers run dry and pro- 2005 08 10 12 14 16
Source: IMF
Environmental degradation in China the biggest emit- tests against the increasingly authori- Demonstrators clash in a rally against Venezuelan president Nicolas Maduro Carlos Garcia Rawlins/Reuters
ter of greenhouse gases has created an unstoppable tarian government mount, some inves-
green momentum, galvanised by social pressure and tors now believe the strongest returns Venezuelan oppositions attitude Yong Zhu, senior portfolio manager at start to be very strict on every country,
reinforced by Beijings regulatory will. might come from longer-term paper.
Goldman is towards the countrys outstanding debt. DuPont Capital Management, believes there would be very few that are
This means there is no chance that Beijing will follow the Kevin Daly, an emerging market debt accused of Goldman Sachs Asset Managements any future Venezuelan government squeaky clean in terms of democracy
US and back out of the 2015 Paris agreement to combat cli- specialist at Aberdeen Asset Manage- recent deal to buy $2.8bn of PDVSA would honour its debt because it would and human rights.
mate change, says Wang Yao, director-general of the Inter- ment, says he has been switching from
trying to bonds for a reported $865m from the in essence be paying for continued A further problem is that Venezuela is
national Institute of Green Finance in Beijing. Venezuelas 2019 sovereign bond to its make a Venezuelan central bank (albeit via a access to the global capital market. a fairly large constituent of EM bond
Mr Trumps move makes China into a leader, she adds 2028 equivalent, as well as a PDVSA broker), led to protests from opponents The Goldman deal also raised ques- indices, such as those operated by
in an interview. But really we are just doing what we must bond maturing in 2024.
quick buck of the administration of President tions about the morality of buying Vene- JPMorgan, meaning fund managers can
do for our own domestic reasons. We face a very serious The backdrop suggests we are mov- off peoples Nicols Maduro, who argue it provides a zuelan government debt. Ricardo Haus- feel pressured to hold its debt in order to
environmental challenge so we must continue with green ing closer to a credit event. The govern- desperately needed financial lifeline to mann, a Venezuelan economist at Har- minimise the risk of significantly under-
development. ment is becoming more dysfunctional,
suffering an increasingly repressive regime. vard University, has dubbed the coun- performing the index if Venezuelan
This imperative has acceler- the protests are becoming more fevered Julio Borges, head of Venezuelas trys debt hunger bonds, as the paper delivers strong returns, as it has to
ated an avalanche of invest- and it does feel like there could be splits opposition-controlled congress, said government has continued to service it date.
ment in clean technologies,
If MSCI lets in in the government and military, says Goldman was trying to make a a quick even as a brutal economic meltdown has If you have a big underweight you
green transportation and A shares it will Mr Daly. buck off the suffering of the Venezuelan led to an outbreak of malnutrition. can get hurt because its such a high
renewable energy in the past He adds that estimates of the recovery people, and threatened to renege on the Venezuela is scheduled to spend yielder, says Mr Daly.
few years. China has more
set off a great rate, the cents on the dollar that credi- debts should he win power. almost as much servicing the debt this Ultimately, Mr Daly says it is up to end
than a third of the worlds rebalancing in tors would receive in a restructuring Despite this, few believe a future Ven- year, around $10bn, as it will spend on investors to decide on any countries
wind power capacity; a quar- triggered by a default, vary from 35 to ezuelan government would renege and all non-oil imports, including food and they wish to avoid, either by investing in
ter of its solar power; six of the
global portfolios 85, but his best estimate is 60-70, helped risk becoming a financial market pariah medicines, according to Nomura. funds following ESG indices (which take
top 10 solar-panel makers; by the fact that Venezuela has vast oil as Cuba has been since its revolution in Claudia Calich, emerging markets into account environmental, social and
and four of the top 10 wind turbine makers. It recorded reserves and thus, in theory at least, 1959 and Argentina was for 15 years debt manager at M&G Investments, governance factors, but are still rare in
more battery-only electric car sales last year than the rest plenty of ability to pay. after its 2001 default, before it settled argues that with a lot of the countries the fixed income world) or via a specific
of the world combined. One potential problem is the current with holdout investors last year. [EM bond funds] invest in . . . If you mandate.
Ms Hirn estimates that a sum roughly equivalent to the
GDP of Denmark is invested in Chinese clean tech each
year, while the total market capitalisation of about 350
listed green Chinese companies is about $600bn. But Currencies
although these are big numbers, she says, China will need
far greater investment if it hopes to rehabilitate its con-
taminated air, land and water.
John Lin, portfolio manager at AllianceBernstein, is also
Mexican peso leaps
animated by the green theme. Opportunities have come in
industries where small polluting factories have been shut
after ruling party win
en masse, boosting profit margins for larger environmen-
tally friendly group, he says.
In paper production, shares in Nine Dragons Paper and ROGER BLITZ Brown Brothers Harriman
Shandong Chenming Paper have impressed, while there said the PRI performance
have been beneficiaries in steel, non-ferrous metals and Mexicos peso hit its highest was hardly assuring and
chemicals, Mr Lin says. level since November, believed the pesos bounce
Ms Hirn favours the clean transportation theme, partic- buoyed by projections was overdone.
ularly companies involved in new energy vehicle technol- pointing to a narrow victory Citi also said the guberna-
ogy. Opportunities beckon in waste management and air for the ruling party in the torial outcome would have
pollution control as local governments answer exhorta- countrys biggest state after no impact on Banxico, the
tions from Beijing to clean up their cities, she adds. polls had earlier predicted a central bank, which sur-
Many companies that stand to gain from the green tight race. prised markets last month
agenda are listed on the $7tn domestic A-share market, The gubernatorial election in by raising interest rates to
which remains exotic for many overseas funds. However, the populous State of Mexico 6.75 per cent and is expected
this could change on June 20. was a critical test for Presi- to hike them further before
If MSCI decides to include A shares in its emerging mar- dent Enrique Pea Nieto and the end of the year.
kets index, passive managers will be obliged to take on the ruling party, the PRI, Banxico is alarmed at the
exposure for the first time, while active managers seek the ahead of next years presi- pace of inflation, which is
best Chinese stocks, says Caroline Owen, chief executive, dential vote. running at twice its 3 per cent
of RMB Global Advisors in New York. We are on the verge The state, the presidents target. However, it revised
of one of the greatest rebalancings in global portfolios in power base, has been in PRI upwards its 2017 growth fore-
recent years, she says. hands for 88 years but sup- cast after first-quarter GDP of
MSCI delayed inclusion for a third straight year last port for the leftwing Morena 0.7 per cent and predicted
June, citing regulatory worries and the need for greater party, led by the populist that inflation would reverse
accessibility for global investors. This year it has reduced Andrs Manuel Lpez Obra- itsrisingtrendnextyear.
the number of A shares slated for inclusion from 448 to dor, has been worrying Investors had been preoc-
169, in a move that was intended to make inclusion more investors. cupied with Mexicos rela-
palatable to global asset managers. The preliminary result tions with the US, expecting
However, it is possible that yet again the decision will be generated a strong rally, its trade would suffer as Mr
negative. I heard there were some technical issues that pushing the currency 1.7 per Trump ratcheted up criti-
may make it tough to include A shares this year, says a cent upwards to trade as high cism of the North American
fund manager who declined to be identified. as 18.32 pesos to the dollar, Free Trade Agreement.
beyond the May 25 level of The peso fell to an all-time
james.kynge@ft.com 18.34, its previous high of the low of 22 to the dollar in mid-
year. The peso has returned January but investor scepti-
to a range seen last summer cism about US trade policy
ahead of Donald Trumps has resulted in it gaining 18
election as US president in per cent since then.
November. But BBHs emerging mar-
More comment and data on ft.com The currency was volatile ket forex model pointed to
in the final week of the cam- weak fundamentals for the
paign and dipped to its low- peso and Mr Thin said he
Y Fast FT Our global economies, headed est level in two weeks after expected the currencys per-
team gives you market- by Brazil, Russia, India polls predicted the race was formance to ebb.
moving news and views, and China. too close to call. The economy is still slug-
24 hours a day, five days ft.com/beyondbrics Elsa Lignos, forex strate- gish as several rounds of
a week. ft.com/fastft gist at RBC Capital Markets, monetary and fiscal tighten-
Y Podcast The Hard
Y Alphaville Our Currency podcast takes a warned against being too ing bite, he said.
irreverent financial blog. look at what is driving bullish on the peso because Alberto Ramos at Gold-
Join Paul Murphy and the global currency of probable court challenges man Sachs said the PRI
Bryce Elder for the daily market. ft.com/podcasts to the poll outcome. struggled not just in the State
Markets Live session at Citi analysts also cautioned of Mexico but also in Coahu-
Y Lex Video Analysis about over-interpreting the ila, another stronghold, and
11am. ft.com/alphaville
and opinion from the outcome, warning last week suffered losses elsewhere,
Y beyondbrics News and team on the hot issues that much could change which bode ill for the presi-
comment from more affecting companies and between now and the presi- dential election against an
than 40 emerging markets. ft.com/lexvideo dential election in July 2018. unpromising economic
Meanwhile, Win Thin at backdrop.