WEDNESDAY 31 MAY 2017
00
Martin Wolf
Donald Trump is undoing the world
the US made COMMENT, PAGE 9
Amazon beats
Google to hit
$1,000 a share
Amazon joined a small group of US com-
panies with shares worth more than
$1,000 each yesterday as investors
hunger for tech stocks drove the online
retailer past the landmark during trad-
ing in New York.
The company, which went public 20
years ago, just beat Google parent
Alphabet to the $1,000 level, briefly top-
ping $1,001. Alphabet A shares were
trading at a record high above $997
when Amazon surpassed four figures.
Amazon, founded in 1995 by chief
executive Jeff Bezos, right, has shunned
share splits that make stocks more
affordable. Other US-listed companies
trading at similar levels include Warren
Buffetts Berkshire Hathaway.
Equities page 18
US shoppers put economy back
on course to lead global recovery
3 Consumers shrug off political turmoil 3 Eurozone and Japan shun post-crisis doldrums
SAM FLEMING WASHINGTON
CLAIRE JONES FRANKFURT
The US showed signs it was leaving
behind a soft start to 2017 as data
revealed consumer spending grew at its
quickest pace of the year in April, sug-
gesting the worlds biggest economy was
shrugging off political turmoil and was
again poised to lead global recovery.
Consumer spending is the key driver
of the US economy and a slowdown ear-
lier in the year held gross domestic
product growth to an annual pace of just
1.2 per cent in the first quarter. The
Atlanta Fed said yesterday the stronger
data helped its closely followed GDP
tracker project second-quarter growth
of a robust 3.8 per cent.
This affirms our view that the US
economy will reaccelerate after a winter
Beijing data law puts trade
secrets at risk, critics fear
Chinas first data protection law has
been widely welcomed as a milestone
in much-needed data privacy but there
are fears that it could also help Beijing
steal trade secrets. The legislation
forces critical companies which that his government would serve out its
may include fast-food delivery groups
to store data on Chinese servers
while a required national security
review could force companies to hand
over the source code of their programs.
Analysis i PAGE 3
Lenders panic i PAGE 15
Subscribe In print and online
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THE FINANCIAL TIMES LTD 2017
No: 39,486
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
May 29 1997
$1.5052
Source: Thomson Reuters Datastream
lull and overall growth will remain
firmly in the 2 per cent range in the first
half of the year, Diane Swonk of DS Eco-
nomics said of the Bureau of Economic
Analysis data, which also showed solid
gains in personal incomes.
Household expenditure grew by a
seasonally adjusted 0.4 per cent from
March, the most since December,
according to the BEA. Spending on dis-
cretionary items, which exclude neces-
sities such as food and clothing, rose at
its quickest pace in seven months, acc-
ording to Berenberg Capital Markets.
The rebound comes as the two other
big developed economies the euro-
zone and Japan published data that
also showed renewed signs of breaking
out of post-crisis doldrums.
While US inflation has remained sub-
Temer fights back against scandal with
vow to stay on and pass fiscal reforms
JOE LEAHY SAO PAULO
President Michel Temer of Brazil
mounted a show of unity yesterday
designed to show that he retained
enough support to pass crucial
reforms, despite a corruption scandal
that has engulfed his government.
Flanked by key figures from his main
coalition partner, the PSDB party, as
well as the heads of the lower house of
congress and the senate, Mr Temer told
an investment conference in So Paulo
mandate until the next election in 2018.
We will arrive at the end of 2018 with
the house in order, he told the packed
conference, accompanied by the state
governor and the mayor of the city.
The declaration came nearly two
weeks after the release of a recording
secretly taped by Joesley Batista, former
STOCK MARKETS
May 30 prev %chg
S&P 500 2412.82 2415.82
Nasdaq Composite 6203.71 6210.19
Dow Jones Ind 21038.50 21080.28
FTSEurofirst 300 1533.66 1536.99
Euro Stoxx 50 3557.74 3578.95
FTSE 100 7526.51 7547.63
FTSE All-Share 4119.58 4130.15
CAC 40 5305.94 5332.47
Xetra Dax 12598.68 12628.95
Nikkei 19677.85 19682.57
Hang Seng 25701.63 25639.27
FTSE All World $ 306.71 306.90
WORLD BUSINESS NEWSPAPER
Brexit overload
Britain must reforge 759 accords
with 168 countries BIG PAGE, PAGE 7
dued, the brightening picture at home
and abroad is likely to provide reassur-
ance to Federal Reserve policymakers
planning for their fourth increase in
short-term interest rates since the end
of the financial crisis. The US central
bank has signalled a quarter-point
move is likely at its June meeting.
From the Feds perspective the most
important thing is the economy is
clearly bouncing back from the weak
first quarter, said Mickey Levy, an econ-
omist at Berenberg. You are clearly see-
ing a rebound in consumer spending.
Japans jobless rate held at 2.8 per
cent, its lowest in more than two dec-
ades, while retail sales increased by
3.2 per cent year-on-year in April.
In the eurozone, the recovery is
touching parts of the region among the
chairman of meatpacker JBS, allegedly
discussing bribes with Mr Temer during
a late-night conversation in March.
The recording and a plea bargain sub-
sequently signed by Mr Batista with
state prosecutors, sent markets plung-
ing when it was released amid specula-
tion the Temer government would fall.
Analysts still believe the president
might not serve out his term because of
the scandal. The government is hang-
ing from a thin thread, said Jimena
Blanco, head of Latin America research
at Verisk Maplecroft, a risk consultancy.
But Mr Temer, in comments to the
foreign media before the conference,
insisted his sprawling coalition in con-
gress remained solid, despite the defec-
tion of the PSB, a mid-sized party. Not
one [remaining] party has come to me
saying they wont support me, he said.
The president has questioned the
World Markets
CURRENCIES
May 30 prev May 30
-0.12 $ per 1.118 1.118 per $ 0.895 0.895 US Gov 10 yr
-0.10 $ per 1.286 1.284 per $ 0.778 0.779 UK Gov 10 yr
-0.20 per 0.869 0.870 per 1.151 1.149 Ger Gov 10 yr
-0.22 per $ 110.980 111.290 per 124.049 124.390 Jpn Gov 10 yr
-0.59 per 142.732 142.920 index 77.252 78.105 US Gov 30 yr
-0.28 index 91.251 91.162 $ index 103.211 103.176 Ger Gov 2 yr
-0.26 SFr per 1.090 1.091 SFr per 1.254 1.254
-0.50 COMMODITIES
-0.24 May 30 prev
-0.02 Oil WTI $ 49.33 50.00
0.24 Oil Brent $ 51.95 52.64
-0.06 Gold $ 1262.70 1265.05
USA $2.50 Canada C$3.
Tide of tears
Rome bids farewell to a timeless
sporting hero NOTEBOOK, PAGE 8
May 30 2017 Briefing
$1,000
i Chinese close in on 12bn British group
Beijings sovereign wealth fund has entered
late-stage talks to acquire Logicor from Blackstone
in a deal that values the London-based warehouse
property group at more than 12bn. PAGE 11
i Goldman attacked for Caracas bond buy
The US bank has come under fire for buying almost
$3bn worth of bonds from Venezuelas government
in what critics say is a cynical effort to make money
from the countrys misery. PAGE 2; LEX, PAGE 10
i Brussels urges UK to lift EU budget block
The European Commission has warned the UK that
it risks scuppering a raft of important employment
and education projects if it does not back the EU
budget after Britains general election. PAGE 4
i Panama dictator Noriega dies aged 83
Manuel Noriega, the dictator
Amazon initially seen by Washington as
an ideal buffer to Castro-style
Share price communism but whose excesses
sparked the US invasion that
toppled him, has died. PAGE 2
i Data lay bare Japanese labour shortage
The job-to-applicant ratio has hit its highest since
1974, as economists struggle with the question of
why there is little upward wage pressure despite the
fact that staff shortages are wreaking havoc. PAGE 3
i Philippines Islamists urged to surrender
Military chiefs have urged militants holed up in the
southern city of Marawi, in President Rodrigo
Dutertes home region, to lay down their arms after
a siege that has claimed more than 100 lives. PAGE 3
i Putin ally sees Trump witch hunt in US
Andrei Kostin, chief executive of VTB bank and an
associate of President Vladimir Putin, has accused
an American elite of waging a political witch hunt
worst hit by its debt crisis. While the against Donald Trump. PAGE 4; MARTIN WOLF, PAGE 9
EUs Economic Sentiment Indicator
dipped slightly between April and May,
readings for France and Portugal hit Datawatch
multiyear highs. A reading for France,
the regions second-largest economy
Consumer and once one of its laggards, hit 107.7 Retreat from oil Saudi Arabias
spending, the the highest level in six years. Saudi foreign reserves ($bn) foreign reserves
750
main driver of The US is coming closer to full emp- fell below the
the US economy, loyment after adding jobs at an average 700 $500bn level in
April for the first
grew at its monthly pace of 174,000 over the past 650 time since 2011
quickest pace of three months, but core inflation
600 as the kingdom
the year in April measured by the personal consumption pushed plans
expenditures gauge has stayed stub- 550 to restructure
bornly below the Feds 2 per cent target. 500 its economy
If the soft inflation data persist, that away from a
would be concerning and, ultimately, 450 reliance on oil
could lead me to reassess the appropri- 2011 12 13 14 15 16 17
ate path of policy, said Lael Brainard, a Source: Haver Analytics
member of the Feds board of governors.
veracity of the tape and denied further
allegations contained in the plea bar-
gain signed by Mr Batista.
Brought to power by the impeach-
ment of leftist predecessor Dilma Rous-
seff, Mr Temer is one of Brazils most
unpopular presidents, according to
opinion polls.
But his fiscal reforms to restore Bra-
zils sinking public finances and lift
Latin Americas biggest economy out of
its worst recession on record have won
market support. The most important of
these reforms is the proposed overhaul
of the generous pension system.
Mr Temer has appointed a new justice
minister, prompting concern that the
government might try to interfere with
corruption investigations. Police chiefs
warned against the danger of such
attempts by politicians.
JBS liquidity troubles page 12
INTEREST RATES
prev price yield chg
101.31 2.23 -0.02
101.72 1.07 -0.02
99.63 0.29 -0.03
100.64 0.04 0.00
102.09 2.90 -0.01
102.31 -0.71 0.00
price prev chg
Fed Funds Eff 0.91 0.82 0.09
%chg US 3m Bills 0.94 0.94 0.00
-1.34 Euro Libor 3m -0.37 -0.37 0.00
-1.31 UK 3m 0.30 0.30 0.00
-0.19 Prices are latest for edition Data provided by Morningstar
2 FINANCIAL TIMES Wednesday 31 May 2017

INTERNATIONAL

Political backlash Communications chief

Goldmans Venezuela bond buy stirs anger Dubke quits

as Trumps
Opponents say bank move reporting a shortage of medicine. Infla-
tion is running in triple figures. The
been held by Venezuelas central
bank, the Wall Street Journal reported.
in 2014, according to Bloomberg data.
Ricardo Hausmann, a former minis-
the regime will serve to strengthen the
brutal repression unleashed against the
top media
is way to make money out
of other peoples misery
International Monetary Fund estimates
that the economy shrank 18 per cent last
GSAM said it had bought the securi-
ties from a broker and did not interact
ter, now director of the International
Development centre at Harvard Univer-
hundreds of thousands of Venezuelans
peacefully protesting for political
aide after just
ALISTAIR GRAY NEW YORK
AND GIDEON LONG CARACAS
year and another big contraction is
expected in 2017.
Opposition groups have been on the
with the Venezuelan government. They
will be held in funds and accounts man-
sity, said that Goldman bought the
bonds at such a discount it could expect
a yield of 48 per cent. These are hunger
change in the country, he added.
I intend to recommend to any future
democratic government of Venezuela
3 months
streets almost daily for two months, bonds, he said. Goldman has issued a not to recognise or pay on these bonds.
Opponents of the Venezuelan govern- demanding elections to oust the unpop-
Goldman Sachs financial set of principles regarding human rights Mr Hausmann called on JPMorgan, DEMETRI SEVASTOPULO WASHINGTON
ment have lambasted Goldman Sachs ular president, Nicols Maduro. lifeline to the regime will that they commit to abide by. They vio- which runs benchmark emerging mar-
The White House head of communica-
for buying almost $3bn worth of bonds Foreign companies have largely lated their own commitments. ket bond indices, to exclude Venezuela
from the embattled country in what stopped investing. To fund bond repay-
serve to strengthen the Mr Maduro says anti-government from its calculations. It should instead
tions has resigned after three months,
as Donald Trump considers a wider
they say seems a cynical move to make ments Venezuela has been raiding its brutal repression forces are trying to organise a coup and introduce a Decent Emerging Markets
staff reorganisation to tackle the Rus-
money out of other peoples misery. foreign reserves, which have dropped are backed by global conspirators. index to save investors from moral
sia scandal engulfing his administra-
Demonstrators were preparing to from $30bn before Mr Maduro was aged on behalf of its clients. We recog- Nearly 60 have been killed, hundreds anguish by ensuring that only countries
tion.
descend on the US banks headquarters elected four years ago to about $10bn. nise that the situation is complex and arrested and thousands injured. adhering to minimal standards of
in Manhattan as they attacked its pur- Goldman bought the bonds issued evolving and that Venezuela is in crisis, In an open letter to Lloyd Blankfein, respect for citizens are included. Michael Dubke, a Republican consult-
chase of securities they described as by PDVSA, the state oil company, in it said. We agree that life there has to Goldmans chief executive, opposition Earlier this year demonstrators pro- ant who joined in February, told friends
hunger bonds. 2014 on the secondary market via its get better, and we made the investment lawmaker Julio Borges said Goldman tested in Manhattan about Goldman he was leaving for personal reasons. But
Venezuela is in the grip of an eco- asset management arm GSAM last in part because we believe it will. had decided to make a quick buck off alumni taking top jobs in Donald his departure comes as Mr Trump
nomic and political crisis, with the pub- week. It paid about $865m for $2.8bn PDVSA is paying an interest rate of the suffering of the Venezuelan people. Trumps administration. expresses growing frustration over the
lic facing queues for food and hospitals worth of bonds that had until recently 6 per cent on bonds that it issued Goldman Sachs financial lifeline to Lex page 10 way his public affairs team, including
spokesman Sean Spicer, handle the fall-
out from the FBI probe into ties between
his presidential campaign and Russia.
The White House has faced a mount-
UK election. Capital voters ing public relations crisis since Mr
Trump fired James Comey, the FBI

London anti-May sentiment bucks trend director, this month, over what he called
the Russia thing. He later told Sergei
Lavrov, Russias foreign minister, that
Mr Comey was a nut job whose dis-
missal had eased pressure on him.
Mr Trump has also faced scrutiny
In the only regional poll so far after Mr Comey claimed the president
the city was the Conservatives had urged him to halt an investigation
into Michael Flynn, the former national
worst performing region security adviser whose conversations
with Russian officials are being looked
at as part of the FBI probe. US media has
HENRY MANCE LONDON
also reported that Mr Trump urged two
When Lindsey Hall pounded the streets top intelligence officials to state there
of Westminster North for the Conserva- was no collusion between his campaign
tives in 2015, she ended up 2,000 votes and Russia.
short of winning the London parliamen- While Mr Trump attended G7 and
tary seat and in need of a hip replace- Nato summits last week, the Russia
ment. It didnt seem fair, she jokes, scandal grew with the revelation that
comparing herself to Tory candidates in the FBI is looking at Jared Kushner, his
south-west England who managed to son-in-law who also met Russian offi-
overturn huge majorities. cials during the transition.
Ms Hall, a councillor and antiques Mr Dubke said in a statement: It has
entrepreneur, is standing in next weeks been my great honour to serve Presi-
UK general election. This time she has dent Trump and this administration.
the advantage that the constituency is a Reince Priebus, the White House chief
designated target seat for the ruling of staff, said Mr Dubke had offered his
Conservatives, ensuring greater adver- resignation before Mr Trump travelled
tising firepower from party HQ. overseas. He added that he would help
London should be fertile territory for with the transition and be a strong
the Conservatives, who are seeking to advocate for the president.
increase their majority after Prime Min- Many Republicans, and privately
ister Theresa May called the snap elec- some of Mr Trumps own aides, say
tion. Of the 30 seats where it finished restructuring his team will have little
closest second to Labour, nine includ- impact unless he changes his own
ing Westminster North are in the capi- behaviour, including using Twitter to
tal. In 1983, 1987 and 1992, the party remark on the Russia probe.
dominated London, winning two-thirds Every White House is ultimately a
of the constituencies. Fightback: December Mr Goldsmith, by then an When the UK votes on June 8, even a For the Tory voters sense that the campaign is reflection of the president. So, you can
But in this election, London has been Prime Minister independent, also lost his seat in parlia- small swing could be sufficient for the not going entirely their way. Annabel hire and fire staff and shift responsibili-
a holdout in the national swing towards Theresa May ment in a by-election to the pro-EU Lib- Conservatives to make notable gains. In referendum Seaman, a long-time Tory voter in Ham- ties around but, ultimately, success is
Mrs May. In the only regional poll so far, campaigns with eral Democrats. 10 of Londons 73 seats, the Conserva- at least, mersmith, west London, says that Mrs still dependent upon a presidents abil-
by YouGov, it was the Conservatives Zac Goldsmith, Pollsters say London is different tives finished second by fewer than Mays so-called dementia tax wobbled ity to offer a very clear road map on
worst performing region: the party had Conservative largely because of its demographics. It 3,000 votes in 2015. London was me a little bit. Caroline Wyatt, a 63- what they want to get done and then
gained just 1 percentage point on 2015, candidate for has a higher than average number of Results in the capital could have different year-old pensioner, says that Mr Corbyn execute that plan in a very disciplined
and that was before the prime ministers Richmond Park young people, ethnic minorities and national implications for the opposition has definitely upped his game in the way, said Kevin Madden, a Republican
U-turn over government plans for social in south-west graduates, and a lower than average parties. While the Conservatives have because the election. Although I dont agree with his who was spokesman for Mitt Romney
care funding. London, on number of white, socially conservative virtually no chance of beating top people were policies, I get the impression he cares. during the 2012 presidential race.
London has lost its English- Monday. Mr voters. Unlike in other parts of the coun- Labour figures such as Jeremy Corbyn, Age has become a sharp dividing line, Mr Trump yesterday offered a
ness . . . Because of that its so far sepa- Goldsmith lost try, there are relatively few UK Inde- the partys leader, they could topple different; as in the Brexit referendum. Although reminder of why some of his staff are
rated from the rest of the country, says the seat to the pendence party voters who can bolster well-regarded Labour moderates, the people Mrs Mays policies on pensions and worried about his use of Twitter, partic-
Constantine Anton, an architect who pro-EU Liberal Conservative support. The Conservatives difficulties in Lon- increasing social care payments would ularly after the justice department
intends to vote Labour. Democrats in a However, there is little evidence that a don may be partly because their propos- werent hit elderly people, she retains the sup- named Robert Mueller, a former FBI
Londons exceptionalism has already by-election cosmopolitan city makes people more als on business rates and school funding different port of many older voters. The trouble head, to lead an independent investiga-
been seen at the ballot box. The city Leon Neal/AFP/Getty Images leftwing. The apparent London effect would adversely affect the capital. Ms with Labour is that people have lost tion into the Russia issue.
voted 60/40 to stay in the EU at a refer- at the EU referendum turned out to not Hall calls rates reform a bit of an own because faith in them, says Alan Barnett, a pro- Russian officials must be laughing at
endum last year, casting more Remain really exist once you [take into consid- goal politically. they were in Brexit pensioner in Finchley. the US & how a lame excuse for why the
votes than Scotland and Northern Ire- eration] things like age, education and She is hoping to capitalise on Labours Carl, 24, who works in sales, says he Dems lost the election has taken over
land combined. In elections for the city ethnicity, says Anthony Wells, director plans for tax rises on high earners. Yet in London normally votes Tory, but has been the Fake News, Mr Trump tweeted. He
assembly, the Conservatives share of of research at YouGov. For the referen- 2015 Ed Miliband, then Labour leader, unimpressed by the partys Facebook later retweeted a story from Fox News,
the vote has been declining since 2008. dum at least, London was different proposed a mansion tax that would ads against Mr Corbyn. Its probably which cited a source saying Mr Kushner
Labour recaptured the mayoralty last because the people were different; the affect wealthy Londoners, and still man- the only election where Ive found it had not suggested creating a secret com-
May after eight years, with Sadiq Khan people werent different because they aged to improve Labours vote share in very hard to decide who to vote for. munications channel with Russia.
beating Conservative Zac Goldsmith. In were in London. the city. FT Big Read page 7 Additional reporting by John Murray Brown

MAKE A SMART INVESTMENT Obituary Manuel Noriega, who has died aged 83,
was the de facto ruler of Panama
through the 1980s until US president
born in the working-class El Chorrillo
district of Panama City on February 11
1934 (although he often claimed to be
chief of staff of the Panama defence
forces, in charge of the country with the
strong backing of Washington.
Subscribe to the FT today at FT.com/subscription Dictator and George HW Bush launched a military
invasion to depose him in 1989.
four years younger) to an accountant
father who had emigrated from Colom-
Throughout the 1970s and 1980s, the
CIA was paying Noriega to provide

FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK 2.70 Channel Islands 3.00; Republic of Ireland 3.00
double agent Noriega had been an asset of the
Central Intelligence Agency for at least
two decades but his links with Colom-
bia and his housekeeper. It was in the
same district that he was to build his
popular base, maintain his military
information on Fidel Castro and on
leftwing militant groups in Central
America. But all the time the general
who alienated
Trump vs the Valley A Five Star plan? Dear Don...
Tech titans need to minimise Italys populists are trying to woo Mays first stab at the break-up
political risk GILLIAN TETT, PAGE 13 the poor BIG READ, PAGE 11 letter ROBERT SHRIMSLEY, PAGE 12

HMRC warns Lloyds of Brussels Insurance market

to tap new talent pool with EU base
UK 3.80; Channel Islands 3.80; Republic of Ireland 3.80
Briefing
SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017
bian drug lords and money launderers, headquarters and make his last stand was acting as a double agent, giving Cas-
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

and his persecution of opponents, against US troops. tro information on the US military and
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 i Report outlines longer NHS waiting times

CHANGING AN

US backers
A report on how the health service can survive

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

prompted Mr Bush to act, bringing him Of mixed Spanish, Amerindian and playingbothsidesoffagainsteachother.
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
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
to the US to be tried and jailed. African origin, his dark skin ensured When US TV crews captured horrific
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.
Noriega was the typical 1980s Ameri- him peasant and working-class support images of Noriega supporters beating
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.
can ally a US-trained military dictator in a country dominated by the rabiblan- leaders of the democratic opposition
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,
seen by Washington as an ideal buffer to cos, or whitetails, the economic elite of with baseball bats and iron bars in 1989,
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-
Manuel Noriega keep Castro-style communism from mainly Spanish ancestry. pressure grew in the US for action.
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

spreading through Central America. The At the age of five, Noriega was given Then, on December 16 1989, Panama-
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

subject ofinvestigations in the Nether-

lands, France and the UK. The bank said in Paris
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
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
Ruler of Panama
dictator, nicknamed Cara de Pia (pine- up by his father for adoption to a female nian soldiers killed an off-duty US
LAURA NOONAN DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to
JENNIFER THOMPSON LONDON

Subscriptions and Customer Service

A boastful WhatsApp message has cost
a London investment banker his job
Christopher Niehaus, a former Jeffer-
ies banker, passed confidential client
information to a personal acquaint-
ance and a friend using WhatsApp,
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

and a 37,000 fine in the first case of
Shutdown risk as border
regulators cracking down on commu-
1934-2017
according to the FCA. The regulator said 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
apple face) because of his acne scars, schoolteacher. The boy hoped to marine stationed in Panama City. Just
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
also presided over one of the worlds become a doctor but, lacking resources, four days later, 27,000 American troops
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

most vital waterways, the Panama ended up as a cadet at the Peruvian mili- invaded Panama by land and air in what
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EUs after Brexit with a trade deal.
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For the latest news go to S&P 500 2365.93 2361.13 0.20 $ per 1.074 1.075 per $ 0.932 0.930 US Gov 10 yr 98.87 2.38 0.00
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Canal, although at the time the US con- tary academy in Lima. After joining Mr Bush dubbed Operation Just Cause.
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 4011.01 4011.80 -0.02 SFr per 1.069 1.072 SFr per 1.244 1.238 price prev chg

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Mar 30
50.22
52.98
1248.80
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49.51
52.54
1251.10
Fed Funds Eff
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1.43 Euro Libor 3m
0.84 UK 3m
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trolled the canals traffic and security. Panamas National Guard in 1967, he Surrendering on January 3 1990 after
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letters.editor@ft.com rights reserved. Reproduction of the contents of this But his populist and anti-American was sent for training at the School of the days of bombardment, when US
Executive appointments newspaper in any manner is not permitted without rhetoric grew louder; he once whirled a Americas in Fort Benning, Georgia, troops blasted deafening rock music
www.exec-appointments.com the publishers prior consent. Financial Times and
FT are registered trade marks of The Financial
machete around his head and declared alma mater to some of Latin Americas from giant speakers, Noriega was flown
Published by Times Limited. Panama to be in a state of war with the most ruthless military dictators. to Miami and tried on charges of drug
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Tel: +1 917-551-5000; a self-regulation regime under the FT Editorial Code
Editor: Lionel Barber of Practice: www.ft.com/editorialcode the start of his downfall. ing to his ruthless style and appointed In 1992 he was jailed for 40 years,
Local media reported that his death, him head of the countrys dreaded G-2 later reduced to 30. The US extradited
Printed by Reprints are available of any FT article with your announced yesterday by Juan Carlos military intelligence service. When Tor- him in 2010 to France but he was soon
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Evergreen Printing Company, Bellmawr, NJ licences for reproduction of FT articles are also by complications following surgery to were rumours both of US-orchestrated sentence handed down in absentia.
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Manuel Antonio Noriega Moreno was ega. Whatever the case, Noriega became three daughters. Phil Davidson
Wednesday 31 May 2017
Multinationals sound alarm
on Beijing cyber crackdown
Fears grow that the state could steal trade secrets from foreign companies
Linked up: the subway in Beijing, China, where the new data protection law has raised wider concerns over possible theft of intellectual property Qilai Shen/Bloomberg
YUAN YANG BEIJING
Chinas first cyber security law will
increase costs for multinationals and
could give Chinese companies an unfair
advantage, business representatives
and analysts have warned.
Aspects of the measure, which comes
into force tomorrow, have been widely
welcomed as a milestone in introducing
much-needed data privacy, but analysts
have also expressed fears it could help
Beijing steal trade secrets or intellectual
property from foreign companies.
The law is both extremely vague and
exceptionally wide in scope, potentially
putting companies at risk of regulatory
enforcement that is not related to cyber
security, said Carly Ramsey, associate
director at Control Risks, a risk-man-
agement consultancy.
Foreign companies had petitioned
Beijing to delay the legislation. It is
vitally important that [these measures
are] proportionate, consistent, non-dis-
criminatory and formulated in a trans-
parent manner. Regretfully, this is not
yet the case, said Michael Chang, vice-
president of the European Chamber of
Commerce in Beijing.
The law is part of a drive by Beijing to
shield Chinese data from the eyes of for-
eign governments after US whistle-
blower Edward Snowden revealed that
the US was spying on communications
from multinationals, say analysts.
The message is clear that the govern-
ment will encourage more domestic de-
velopment of technology, and that it
sees privacy and cyber security as vital
national concerns, said Xun Yang, a
lawyer at Simmons & Simmons in
Shanghai.
Under the new law, companies must
introduce data protection measures a
novelty for many Chinese businesses
and data relating to the countrys citi-
Political risk
Holy month blackouts overshadow Pakistans recovery
FARHAN BOKHARI ISLAMABAD
KIRAN STACEY NEW DELHI
Nawaz Sharif has ordered power com-
panies not to cut electricity supplies in
the hours before or after the daily Ram-
adan fast, as outages in the first few
days of the Muslim holy month
threaten to embroil Pakistans prime
minister in a political crisis.
As the fasting period began on Sunday,
residents of Karachi, the countrys larg-
est city, were unexpectedly plunged into
darkness. The national distribution
company blamed a line fault that caused
two power stations to fail.
The outage has highlighted the fragil-
ity of Pakistans electricity network a
problem that threatens to undermine
the economic recovery and become a
significant political issue in the run-up
to next years general election.
Recent power cuts have already
prompted widespread protests, during
which two people reportedly died.
These power cuts in Ramadan will
zens or national security must be held
on Chinese servers. Companies will have
to submit to a review by regulators
before transferring large amounts of
personal data abroad.
However, critical companies a
wide definition that encompasses sensi-
tive entities such as power companies or
banks but also any company holding
data that, if breached, could harm peo-
ples livelihoods must store all data
collected in China within the country.
These companies, and any services
bought by them, must go through a
national security review to ensure
they and their data systems are secure
and controllable. The measure allows
Beijing to request computer program
source code, which is usually known
only by the software developer. National
security reviews might also allow Bei-
jing to delve into companies intellec-
tual property, analysts warn.
Data privacy to improve
but with added costs
Chinas new cyber security law, which
comes into force tomorrow, will improve
data privacy for citizens but
multinationals have warned it will
impose extra costs on doing business in
the country. Here are its main
provisions:
3 Government departments and
companies gathering private
information must protect digital data,
for example, through encryption.
3 Collecting citizens personal
information without permission
severely undermine the governments
reputation further, said Hasan Askari
Rizvi, a political commentator. If the
government fails to manage the electric-
ity situation, the risks for Nawaz Sharif
will mount.
Pakistan has endured an energy
shortfall for years, but this summer the
gap between supply and demand at
peak hours has reached six gigawatts
equivalent to the output of 12 medium-
sized coal-fired power stations.
Ministers hope that $35bn of Chinese
investment in the countrys power sec-
tor, part of the China-Pakistan Eco-
nomic Corridor, will help close the gap.
Unscheduled cuts during Ramadan
have angered those who fast during day-
light hours, putting extra importance on
having power to cook just before dawn
and just after dusk.
Usually the government keeps the
lights on during religious festivals by
paying independent companies to
restart expensive mothballed power
plants. But it has not done so this year
FINANCIAL TIMES
INTERNATIONAL
Even fast-food delivery companies
could be considered critical infrastruc-
ture, Shanghai regulators ruled during a
pilot run for the law presumably, ana-
lysts suggest, because they hold infor-
mation on millions of users.
Multinationals will be hardest hit, as
the data localisation measures prevent
them pooling client data in cloud stor-
age databases worldwide. The need to
store some data on China-based servers
and the rest elsewhere will add to frag-
mentation and cost. Its huge work for
foreign companies to restructure their
business, said Mr Yang. ernment to demand decryption sup-
Cloud storage companies are also
affected. One lawyer said his foreign cli-
ents were switching data from Amazon
Web Services in Singapore to Alibabas
China cloud service.
Chinas own tech companies will be
hit too. Most of Alibabas ecommerce is
in China, but it has been setting up cloud
becomes a criminal offence.
3 All companies must undertake a
security assessment before moving a
chunk of data out of China if it contains
the personal information of more than
half a million users or data likely to
affect national security or social public
interests.
3 Critical infrastructure companies
must store personal information and
other important data collected in China
inside the country.
3 Important network products and
services must undergo a national
security review before being sold in
China.
3 A supplementary encryption law
proposed in April may force
multinationals to comply with Beijing
requests to decrypt data for criminal
investigations or national security Additional reporting by Louise Lucas in
purposes. Yuan Yang
because Ramadan has fallen close to the
end of the financial year and the govern-
ment does not want to exacerbate the
fiscal deficit just before it reports its
final figures, according to analysts.
The power crisis threatens to under-
mine Pakistans improving economic
growth, which has been boosted by a
few years of relative political stability.
Figures released last week show annual
output growth for the year to the end of
Power cuts during Ramadan have
sparked political outrage
data centres globally. We comply with
applicable laws in jurisdictions where
we operate, said Alibaba.
While the new law is causing angst in
foreign boardrooms, the personal data
privacy provisions are in line with
worldwide practice, said Scott Thiel, a
partner at law firm DLA Piper in Hong
Kong. For example, it accords with
Europes data protection rules, he said.
But analysts suspect enforcement in
China might be tinged with political
goals. A proposed supplementary law
on encryption in April allows the gov-
erupted after a failed security force raid
port in the interests of national secu-
rity. This means the state can force com-
panies to decode encrypted data.
In the US, Apple refused to open [the
San Bernardino killers] iPhone for the
FBI. I cannot imagine that happening in
China, said one lawyer.
Although the law makes no distinc-
tion between local and foreign busi-
nesses, Chinese companies are less con-
cerned, say lawyers. They are less likely
to use cloud services and have a smaller
presence abroad, and those with over-
seas operations tend to send data back
to their Chinese headquarters.
Domestic companies are also less bo-
thered by legal vagueness, said Mr Yang.
Foreign companies take laws literally,
while their Chinese counterparts tend to
tease out their overall message in this
case, that they must take cyber security
seriously and wait for specific guide-
lines from their industry regulator. But
they also know the law is not designed to
cause trouble for local businesses.
The big banks are close to govern-
ment and know they will be considered
in the legislative process, said Mr Yang.
The same goes for big technology com-
panies like Alibaba.
Hong Kong
June is projected to exceed 5 per cent for
the first time in a decade.
The other factor that might threaten
economic stability is Pakistans increas-
ing current account deficit, which is
depleting its stock of foreign currency.
Last weeks data shows that, alongside
faster growth, the current account defi-
cit is projected to more than treble from
$2.5bn in the last fiscal year to $8.3bn
this year as Pakistan begins to pay Chi-
nese companies for work carried out as
part of the CPEC project.
Abid Hasan, a former World Bank
economist who has worked in Pakistan,
said: The higher current account defi-
cit will eventually turn into a crisis. This
situation has to be managed before it
gets out of control.
The solutions whether allowing the
rupee to devalue to boost exports or
making people pay their electricity bills
are politically unpalatable a year
before an election, say officials and ana-
lysts. Reforming Pakistan is tough
business, said one western diplomat.
Employment
Japans labour market tighter
than during the 1990 bubble
ROBIN HARDING TOKYO
Japans labour market is tighter than it
was at the peak of the bubble economy
in 1990, when the salaryman was king
and companies would compete fero-
ciously to hire university students.
According to government data pub-
lished yesterday, the ratio of open jobs
to applicants hit 1.48 in April, exceeding
the peak in July 1990.
It is the highest figure since February
1974, when the economy was booming
before the first oil shock.
Companies are looking for workers
after four years of economic stimulus
under Shinzo Abe, prime minister.
But the figure also highlights the cen-
tral puzzle about Japans economy.
Despite growing shortages of staff, with
shops and restaurants closing because
they cannot recruit enough people to
stay open, there is still little upward
pressure on wages.
That is frustrating the Bank of Japan,
which is relying on a tight labour market
to drive up wages and in turn push infla-
tion towards its goal of 2 per cent. Prices
in April were just 0.4 per cent higher
than a year ago.
James Malcolm of UBS in Tokyo said
the tight jobs market could start push-
ing up inflation this year. When you see
the labour market tightening to this
extent, its an indication that theres a
Duterte home region
Philippine troops urge besieged
Islamist militants to surrender
MICHAEL PEEL BANGKOK
GRACE RAMOS MANILA
Philippine military chiefs have urged
Islamist militants holed up in the
southern city of Marawi to surrender
after a week-long siege that has claimed
more than 100 lives and revealed the
regional power of Isis-aligned groups.
Government forces claimed they were
close to retaking control of Marawi after
an assault by troops backed by
armoured vehicles and helicopters.
Long-simmering militancy in Presi-
dent Rodrigo Dutertes home region has
clashes yesterday
last week to seize one of Asias most
wanted terrorists sparked a battle. The
Philippine and foreign fighters occupy-
ing Marawi have taken hostages and rel-
eased a propaganda video of a captured
Catholic priest pleading with authorities
to stop their effort to retake the city.
Government commanders yesterday
urged fighters to give up, after an opera-
tion they claimed had established con-
trol over most of Marawi.
We call on the remaining terrorists to
surrender while there is an opportu-
nity, Brigadier General Restituto
Padilla, a military spokesman, said. He
added that government forces were
aiming air strikes at specific targets of
resistance to protect our troops and has-
ten clearing of the city.
Military helicopters fired rockets yes-
Car blasts
Iraq bombs target families
breaking Ramadan fast
ERIKA SOLOMON ISTANBUL
More than 30 people were killed in two
car bomb attacks in Baghdad yester-
day, one at an ice cream parlour where
crowds had gathered after breaking
their daily Ramadan fast.
Isis claimed responsibility for a blast at
the al-Faqma shop in the Karrada dis-
trict in the Iraqi capital, killing at least 17
and wounding more than 30, police and
health officials told Associated Press.
Iraqi officials said explosives in a car
parked near the parlour, a favourite
spot for families on summer nights,
were detonated remotely. Video taken
at the scene showed the wounded crying
for help as fire engulfed the shop. Ice
cream cups were scattered on the pave-
ment.
Karrada, an affluent, mixed-sect
neighbourhood, home mostly to Iraqs
Shia majority and some from the Chris-
tian minority, has been targeted regu-
larly by Isis. The radical Sunni Islamist
group often targets other sects, particu-
larly the Shia, to exploit sectarian ten-
sions that have riven the country for
years.
During the Muslim holy month of
Ramadan, many families stay out late at
such places to enjoy meals and shop
until the early hours before they resume
their fast at daybreak.
The second attack hit crowds near a
3
fair amount of inflationary pressure in
the pipeline.
One important difference from the
1990 bubble is that a declining supply of
workers is to blame, rather than any
rapid growth in jobs. As the baby boom
generation retires, Japans working age
population is declining by about
700,000 a year.
The number of job offers has
increased, especially in medical care
and welfare, on the back of a labour
shortage rooted in demographics . . .
while the number of job applicants has
continued to trend downward, said
Yuichiro Nagai and Yukito Funakubo,
analysts at Barclays.
Economists have different theories to
explain the lack of wage growth: that it
stems from a latent reluctance to pay
more after decades of on-and-off defla-
tion; a segmented workforce where
many people never change jobs; mis-
matches between the skills employers
want and those of jobseekers; unexpect-
edly large numbers of women and for-
eign workers coming into the market; or
a pent-up potential for productivity
gains that is allowing companies to
adjust their operations rather than pay
more for staff.
Japans unemployment rate held
steady at 2.8 per cent in the latest data.
The jobs-to-applicants ratio for part-
time staff hit a new high of 1.77 times.
terday as troops tried to dislodge fight-
ers who occupied strategic positions in
Marawi last week. Local authorities said
clearing militants from the remaining
areas would be difficult, as some civil-
ians were trapped there. Many other
civilians have fled the mainly Muslim
city of 200,000 on the southern island of
Mindanao. At least 65 militants, 21 civil-
ians and 15 soldiers have died so far, mil-
itary and local authorities have said.
Militants released video of Father Ter-
Taking aim: troops
prepare for further
with Islamist
fighters on the
island of Mindanao
esito Soganub, vicar-general of Marawi
City and one of a group of hostages taken
last week, calling on Mr Duterte to halt
the Marawi security force operation.
We are asking your help to please
give what your enemies are asking for,
he said in footage broadcast on a chan-
nel used by Isis.
Mr Duterte cut short a trip to Russia
last week and declared martial law in
Mindanao for 60 days after fighting
erupted in Marawi. The trigger was a
raid to capture Isnilon Hapilon, a leader
of the Abu Sayyaf group, which has
joined forces with the local Maute
Islamist militant group in Marawi.
government building in the Karkh dis-
trict, killing 14 and wounding dozens,
officials said.
The jihadi group, which is on the
brink of losing its final foothold in
Mosul, Iraqs second city, has often
stepped up attacks during Ramadan.
Militants have been pushed out of all
but 7 per cent of the territory they took
when they swept through northern Iraq
in 2014.
The more territory the militants have
lost the more they have resorted to sui-
cide attacks and bombings.
During Ramadan last year, when the
US-led coalition was making rapid
progress against Isis, hundreds of people
were killed by a truck bomb at a Kar-
rada shopping centre in the deadliest
attack since the US invasion of 2003.
Iraqi officials have warned such
attacks could intensify as they wrest
back full control of Mosul in the coming
weeks.
The battle for Mosul is in its eighth
month and its recapture will sound the
death knell for Isiss territorial hold on
Iraq. This weekend Iraqi forces
launched a fresh assault to take the last
districts of the Old City, home of the
Grand Nuri mosque where Abu Bakr al-
Baghdadi, Isiss leader, declared the
establishment of the groups self-pro-
claimed caliphate across territory in
Syria and Iraq.
4 FINANCIAL TIMES
Midterm assessment
Brussels presses Britain over budget review
EU executive arm makes
veiled threat over payouts
to countrys farmers
PAUL MCCLEAN BRUSSELS
Brussels has warned the UK it risks
scuppering important employment and
education projects if it does not endorse
a review of the EUs budget after the
countrys general election.
The warning from Gnther Oettinger,
Germanys European commissioner
who has responsibility for the EU
budget, comes as Theresa May, UK
prime minister, steps up her rhetoric
against Brussels, criticising the EU for
its aggressive negotiating posi-
tion ahead of Brexit talks.
Mrs May had claimed EU officials
were interfering in the UK election.
Interview. Andrei Kostin
Putin ally attacks
US elite for
disabling Trump
Russian bank chief warns lack
of dialogue between nuclear
powers is very dangerous
NEIL BUCKLEY AND MARTIN ARNOLD
LONDON
A top Russian banker and associate of
President Vladimir Putin has accused
the American elite of waging a politi-
cal witch hunt against Donald Trump,
the US president, that leaves the two
nuclear-armed powers in a very dan-
gerous situation.
Andrei Kostin, chief executive of VTB,
the state-controlled bank that is Russias
second largest, said the madhouse in
Washington was thwarting any chance
of improvement in east-west relations
for the foreseeable future.
The turmoil could lead to western
sanctions on Russia of which his bank
is a prime target remaining in place
indefinitely, he added. Its ridiculous,
Mr Kostin told the Financial Times in an
interview in London. The fight against
Mr Trump using the Russian card is
close to absolute madness. Im stunned.
The elite in Washington, or bureau-
crats in America, are campaigning
against Trump and thats completely
paralysed his ability to do anything,
even to have any dialogue with Russia.
His words provide an insight into the
frustration in Russias ruling circle,
which had been optimistic Mr Trumps
election could bring a rapprochement
after three years of tensions sparked by
Moscows annexation of Crimea. US
media have presented Russias alleged
interference in last years US election as
a geopolitical coup for Moscow.
But Moscow worries the furore over
Mr Trumps alleged Russia links and
talk of impeachment could derail any
chances of normalising relations and
making progress on issues such as the
war in Syria. Mr Putin himself, being a
very experienced politician, never had
very high expectations, Mr Kostin said.
As far as I understand [from] my per-
sonal observations and discussions with
him, he always knew that it would be
not an easy way. He is just patient.
Ideas challenge
Kremlin enters economists into beauty contest to find answers to anaemic growth
KATHRIN HILLE MOSCOW
Business leaders and government offi-
cials from Russia and abroad are likely
to get an unexpected exposure to raw
political campaigning at the countrys
largest annual economic conference in
St Petersburg tomorrow.
Russias ailing economy is at the centre
of a beauty contest arranged by Presi-
dent Vladimir Putin, who has ordered
advisers to submit competing plans for a
strategy to pep up growth.
Russia emerged from a two-year
recession late last year but growth
remains anaemic far below the 3 per
cent the Kremlin would like and the
exchanges over rival plans are getting
increasingly heated as Mr Putin seeks
the policies to crown what is expected to
be the formality of a comfortable elec-
tion victory next March.
In the autumn, when the president
officially decides to run, he will use
these materials for his campaign pro-
gramme, says Yevgeny Gontmakher,
Without Londons approval for the
EUs midterm review of its budget, it
will not be passed, and a number of EU
projects will either have to be ditched or
watered down.
The UK outraged Brussels last month
when it refused to sign off on revisions to
the EUs seven-year budget plan, citing
rules that prevent the government from
engaging in politically sensitive matters
in the middle of an election campaign.
Brussels yesterday stepped up pres-
sure on London over the budget, issuing
a veiled threat that 2018 agricultural
subsidies that benefit UK farmers would
have to be pared back if there was no
agreement.
Mr Oettinger said as he unveiled the
161bn budget proposal for 2018 that
the calculations were made on the
assumption that London would lift its
objections to the midterm review.
I think it is very sad, not only because
of sanctions . . . I think as a human
being, having children, I am more
concerned about the security and the
stability.
With two great nations having a huge
nuclear potential . . . we are now enter-
ing the area of a further arms race and
not communicating on major interna-
tional problems. That is very dangerous.
But the blame is not with us, frankly
speaking, the blame lies with the Ameri-
can elite.
The VTB boss said the US president
has his weak points, including lack of
experience in the corridors of power
and mistakes in dealing with the
press. But he dismissed allegations of
links between Russia and Mr Trump
or any links with his own bank as
absolute nonsense.
VTB was among the Russian state-
controlled banks hit with sanctions in
2014 when the Russian-fomented war
in east Ukraine was at its height, pre-
venting it from raising western financ-
ing of more than 30 days maturity.
Combined with plunging oil prices,
that virtually wiped out VTBs profits in
2014 and 2015, though they recovered
to Rbs50bn ($880m) in 2016 and the
bank is targeting double that this year.
The ebullient Mr Kostin, who spent
five years in the Soviet embassy in Lon-
don during a previous diplomatic
career, said VTB the biggest banking
recipient of Russian state support since
the 2008 financial crisis was continu-
ing to reduce its reliance on central bank
funding. He was confident it could pros-
per even under prolonged sanctions.
When youre told, You will be under
sanctions, the first month is OK, the sec-
ond month is OK. But when youve
heard it for the two thousand and third
time, you just say, thats the answer, he
said, raising his middle finger with a
smirk.
He said he was very thankful to US
banks that had continued to work very
co-operatively with VTB as they
understood how to deal with compli-
ance issues, but some partners in the
Middle East and Asia had treated the
restrictions as a blanket ban.
The bank has been hit with new sanc-
an economist and former government
official.
Russias challenges are well known. It
is over-dependent on oil and gas
exports; it is failing to secure enough
investment to modernise its ageing
infrastructure; and productivity is
struggling to keep up with wage growth
driven by a shrinking labour force.
But the debate over meeting these
challenges has gained fresh urgency as
Mr Putin has failed to deliver on prom-
ises made at the start of his current term
to create millions of high-end jobs, im-
prove education and health services and
steeply raise real wages. As a result of
the latest recession, triggered in 2014 by
the oil price crash and western sanc-
tions, real incomes have fallen sharply.
The government says gross domestic
product will increase by 2 per cent this
year, but only 1.5 per cent annually in
the following years. The World Bank
expects only 1.3 per cent growth this
year and 1.4 per cent in 2018 and 2019.
The Kremlin says the dim outlook is
INTERNATIONAL
The commissioner said big projects
on education, research, investment,
from the agriculture [budget] to pay for
additional amounts devoted to security
business and free WiFi for EU commu-
nities would be at risk if the UK con-
and migration if no agreement was
reached.
tinued to block the budget after the June
8 election.
Brussels said a UK veto would also
mean the commission would lose the
flexibilities within the budget, most
notably on migration and security.
If after the election there Without additional flexibility until
was a different position 2020, the capacity of the EU budget to
provide a meaningful financial response
from the UK . . . we would to unforeseen events will be seriously
have to change our draft limited, particularly in the area of
migration, it added.
This concerns most prominently the Mr Oettinger said he expected the
remaining 700m for the Youth UK to formally adopt the budget revi-
Employment Initiative, which would sions after the election.
send a negative signal from Europe to its But, he added: It is true that if after
youth in need of support, a European the election there was a different posi-
Commission statement said. tion from the UK . . . we would have to
The EU executive went on to suggest it change our draft.
would probably need to use [money] The UK has insisted the decision not
tions in Ukraine, where Mr Kostin said
VTB had found willing buyers for its
local subsidiary but deals had been
thwarted by opposition from Kievs cen-
tral bank and he was now ready to
write it off.
Mr Kostin said Russias economic out-
look was improving, creating scope for a
further cut in the 9.25 per cent base rate
before the summer.
Speaking before Russias finance min-
istry hired VTBs investment banking
arm to place another international sov-
ereign bond, he suggested investor
even becoming a security concern, with als that steer clear of politics. But the
an economic security strategy approved groups calls for a partial rollback of the
this month citing slow growth, budget flexible exchange rate system, a looser
imbalances and widening income dis- monetary policy and subsidised corpo-
parities as security risks. rate loans call into question the key poli-
Mr Putins advisers are showing vary- cies of the central bank, whose governor
ing degrees of ambition in their propos- Elvira Nabiullina has earned Mr Putins
als. Although Mr Putin asked for policy
strategies and each politician is lobby-
ing for their respective plan, Kremlin Russia's unit labour costs
officials have said the president might rise sharply
cherry-pick individual measures. Indices rebased
Alexei Kudrin, one of Mr Putins most
senior economic advisers, argues that Total
modernising the bureaucracy, reform- Agriculture
Mining
ing the courts, rolling back the states
Manufacturing
role in the economy, and radically over- Transport and
hauling education and the labour mar-
communication
ket are indispensable. His strategy Construction
would entail far-reaching changes to the Finance
institutions of governance, leading
many to think it is too political for Mr
Putin to embrace in its entirety.
The Stolypin Club, a group headed by 2007 09 11 13
Boris Titov, ombudsman for entrepre- Sources: OECD; Rosstat; Haver Analytics;
World Bank staff estimates
neurial rights, has put forward propos-
to pass the budget was in line with its
pre-election protocol, known as pur-
dah. However, no decision has yet been
taken on whether or not to pass the mid-
term review after the election. A deci-
sion will be made by the new govern-
ment in June.
I would appreciate it if the United
Kingdom would work in the spirit of
agreement with the EU, rather than
against it, Michel Barnier, the EUs
chief Brexit negotiator, said last month.
The UK was broadly pleased with the
review, as it reduced the amount of
unallocated EU money in the budget.
The 2018 budget proposal embraces a
1.4 per cent rise in spending commit-
ments. The commission said the focus
was on migration and youth unemploy-
ment.
Deeper integration on hold page 9
See Markets
What
he said
The fight
against Mr
Trump
using the
Russian
card is close
to absolute
madness
We are now
entering the
area of a
further
arms race
. . . But the
blame is
not with us
Andrei Kostin:
his words
provide an
insight into the
frustration in
Russias ruling
circle Anton
Novoderezhkin/Tass/Getty
appetite could be stronger for such an
issue than when Moscow sold $3bn of
10-year bonds with a yield of 4.75 per
cent last year.
He insisted many investors remained
positive on Russia, citing the banks
recent sale of 50 per cent of St Peters-
burgs Pulkovo airport to a consortium
including funds from Qatar, Abu Dhabi
and China. Western investors . . . are
watching, he added. Sanctions do not
help. But I think they are waiting in the
west for a signal from America.
Martin Wolf page 9
trust by helping the country through the
oil price shock and western sanctions.
Prime Minister Dmitry Medvedev,
meanwhile, has submitted a policy ag-
enda that analysts call the most realistic
and flexible but also the least ambitious
of the three, since it largely entails min-
or tweaks in various sectors. Its one big
reform is a proposal to cut employers
social security contributions and raise
value added tax, aimed at making man-
ufacturers more competitive and for-
300 malising parts of the grey economy.
But Mr Titov warns a VAT rise would
strangle badly needed consumer dem-
250
and, while Mr Kudrin fears that cutting
employers social security contributions
200 will complicate pension system reform.
The government has deterred public
150 discussion of its plan until after the elec-
tion but the cabinet appears to be mov-
ing. Theyre ready to push the button
100 as soon as the election is over, said an
16 economist briefed on the issue.
Vladimir Nazarov, director of the
Finance Research Institute, a think-
Wednesday 31 May 2017
European Court of Justice
UK wrong to
deny Algerian
residency
rights, top EU
adviser says
ARTHUR BEESLEY BRUSSELS
EU nationals should not face stricter
residency rules if they become citizens
of another member country, a legal
adviser to Europes highest court has
argued in proposals with potential
Brexit implications.
A non-binding opinion from the Euro-
pean Court of Justice advocate-general
stated that EU citizens were entitled to
continue family life with their spouse in
the new country. The opinion came as
the court dismissed Britains refusal to
grant residency to an Algerian who mar-
ried a woman who had Spanish nation-
ality before she took UK citizenship.
The case centres on EU citizenship
rights that will feature heavily in the
opening phase of the Brexit negotiations
that begin next month. In anticipation
of Britains withdrawal, many UK citi-
zens have taken steps to gain nationality
in other EU states to protect rights they
have under European law.
Yves Bot, advocate-general, said
non-EU nationals had the right to live in
a member state in which an EU family
member lived before that family mem-
ber acquired the nationality of that
country. Citing free movement rights,
he added that EU citizens should be able
to continue the family life they have led
with their spouse in the member states
whose nationality they have acquired.
The matter will go for a binding ruling
of ECJ judges. Mr Bots opinion is not
binding on the court, but his proposals
can form the basis for its ruling.
The case involves Toufik Lounes, an
Algerian national, who entered the UK
in 2010 on a six-month visitor visa and
then overstayed illegally. In 2014 he
married Perla Nerea Garca Ormazbal,
a Spanish national who had become a
naturalised British citizen in 2009 after
moving to the UK as a student in 1996
and working there full-time from 2004.
After the marriage the UK refused to
grant Mr Lounes the residence card he
sought as the family member of a
national of the European Economic
Area, which includes the EU and a group
of other countries and is covered by free
movement rules within Europes single
market.
Mr Lounes was told his wife was no
longer considered an EEA national, as
she had acquired British nationality. As
such, she no longer had the right to rely
on rights under the directive on the free
movement of people.
Mr Bot said Ms Garca Ormazbals
UK naturalisation had profoundly alter-
ed her legal situation in EU and national
law. She no longer fell within the defini-
tion of a beneficiary of the free move-
ment directive, meaning her husband
was not eligible under the directive for a
derived right of residence in the UK.
Still, he said member states were req-
uired under European law to allow EU
citizens who are not their nationals to
move and reside within their territory
with a spouse who was not an EU citizen
and possibly certain family members.
An ECJ statement on Mr Bots opinion
said: EU citizens, such as Ms Garca
Ormazbal, should be able to continue
the family life . . . with their spouse in
the member state whose nationality
they have acquired.
The conditions for granting a
derived right of residence to a third-
country national, a member of the fam-
ily of an EU citizen, should not, in prin-
ciple, be stricter than those laid down by
the directive.
tank backed by the finance ministry,
says: Russia is one of the five countries
with the highest level of social security
contributions for employers in the
world. He points to Germanys success
in making exporters more competitive
through labour market and social secu-
rity reforms. But some experts caution
that the plan may fail to improve pro-
ductivity unless Moscow also makes the
labour market more flexible.
Mr Putin is keeping his options open
and had aides present their rival plans
privately yesterday. But Mr Kudrin and
Mr Titov have been sparring publicly.
Mr Kudrin wrote last week that his com-
petitors were behaving like medieval
alchemists [offering] to instantly turn
heaps of lead into piles of gold.
Mr Titov hit back. Maybe some-
where, some day, when the conditions
are right, the institutions will
improve, he said of Mr Kudrins advice.
But here and now, everyone will just
keep on stealing and taking the riches
abroad.
Wednesday 31 May 2017 FINANCIAL TIMES 5
6 FINANCIAL TIMES Wednesday 31 May 2017

ARTS

South African sun DA N C E

Giselle

lights up Donizetti
American Ballet Theatre, New York
aaaae
Apollinaire Scherr

The first impressive thing about Misty

OPERA
Lelisir damore
Royal Opera House, London
aaaae
Richard Fairman
The remarkable wave of young singers
coming out of South Africa has been one
of the major causes for rejoicing in the
world of opera over the past few years.
Aside from visits by the Cape Town
Opera, we have seen too little of them in
the UK, including at the Royal Opera
House until now.
While the Royal Opera is hard at work
preparing for its big first night of the sea-
son, a new production of Verdis Otello
starring Jonas Kaufmann, it is keeping
its stage occupied with a revival of Lelisir
damore. Donizettis delightful comedy is
easy to put on, hard to get wrong.
The run of nine performances is
shared between two casts. Lighting up
the first is the partnership between the
sunny Adina of South African soprano
Pretty Yende, all beaming smiles, and
Armenian tenor Liparit Avetisyan as
her charming Nemorino. With appear-
ances in many of the worlds major
opera houses behind her, Yende arrives
for her Royal Opera debut well schooled
in the bel canto style, singing with easy
agility and touching in her top notes del-
icately. She also decorates her music,
modestly and with charm. It does not
seem surprising that Avetisyans Nemo-
rino should be shy, faced with her ebul-
lience. He is a natural fit for the role,
combining disarming simplicity with a
gift for comedy, and singing from the
heart, even if his warm tenor does not
quite qualify for the top Italian grade.
A pair of assertive Italians sets them
off nicely. Paolo Bordogna turns Belcore
into a cardboard-comic army sergeant
and Alex Esposito takes this produc-
tions view of Dulcamara as a low-
grade charlatan one step further to
being a tattooed spiv. Both sing with
native Italian panache. The conductor
is the light and lively Bertrand de Billy.
The production, dating from 2007,
updates the opera to the Italy of the
1950s. For this revival somebody has
decided it needs to be pepped up, so the
chorus jig about in time to the music
and the elixir of love gets sprayed
from plastic bottles like insect repellent
(why?). But these are minor irritations.
For the rest, the sun shines on
Donizettis comedy.
To June 22, roh.org.uk
T H E AT R E
The Earthworks/Myth
The Other Place, Stratford-upon-Avon
aaaae /aaaae
Ian Shuttleworth
In the year or so since the Royal Shake-
speare Company opened the latest
incarnation of its Other Place address as
a centre for new work and new ideas, it
has yet to establish the kind of identity
that so marked out the 1970s original.
But matters are beginning to coalesce
under the supervision of RSC deputy
artistic director Erica Whyman,
with the periodic Mischief mini-
festivals serving as flagship events.
The latest Mischief includes talks,
work-in-progress showings and, front
and centre, a double-bill of one-act
plays that stimulate and provoke.
Tom Morton-Smith follows up his
2014 RSC success Oppenheimer with
another science piece, The Earthworks.
A journalist and a physicist share an
eventful night in a Geneva hotel before
the opening of Cerns Large Hadron
Collider. As with his earlier bioplay,
Morton-Smith blends accessible scien-
tific explanation with sensitive human
insight; Clare may be trying to exploit
Fritjof for material that she hopes will
take her article beyond mere churnal-
ism, but each shares a part of them-
selves that in the end reduces all the
physics to secondary importance.
Indeed, science fact blends with science
fiction, as Fritjofs account of his own
bereavement is driven by a trope that
originated in Bob Shaws 1960s short
story Light of Other Days.
Rebecca Humphries, who appears in
The Earthworks as an officious hotel
manager, takes the central role in
Myth, co-written by Matt Hartley from
an idea by Kirsty Housley (who also
directs), with Lena Kaur and Thomas
Magnussen switching from hack and
boffin to an irritating, self-satisfied
couple invited to dinner due to a Face-
book misunderstanding. What at first
seems simply an account of social
and personal awkwardness is then
replayed in condensed form, but things
begin to go wrong.
At first Humphries and Fehinti Balo-
gun as her boyfriend seem to be corps-
ing at unplanned errors, but matters
grow more serious and distasteful. By
the third run-through, the only lines left
are the handful which now express
worry at an eco-disaster that is not
imminent but current. The pleasantries
of conspicuous consumption, argue
Housley and Hartley, can only help us to
ignore this catastrophe for so long. One
hopes the RSC will continue to offer
more such Other work.
Festival to June 17, rsc.org.uk
Copelands Met debut as Giselle was the
audience. That the demographics could
shift so visibly the minute the ballet
world proved a smidge less impervious
to its race problem Copeland is Amer-
ican Ballet Theatres first black female
principal in its 77-year history is testa-
ment to the magnitude of the problem.
The new, more inclusive crowd did
not materialise on its own. Copeland has
devoted herself to a Yes We Can cam-
paign that encompasses a Misty Barbie
dressed in Firebird red, an uplift circuit
that runs from Chicagos South Side to
Harvard, and a nutrition and fitness
book that gives us a taste of the iron dis-
cipline behind the Misty magic.
There would be no cause for outreach,
though, without the dancing, of which
there is no test like Giselle. The Romantic
ballets titular heroine not only passes
from innocence to shattering knowledge
to forgiveness but also from the living to
the dead. Copeland gave an unusually
coherent reading of the peasant maiden.
Perfectly matched by recent ABT addi-
Easy agility: tion Alban Lendorfs noble yet boyish
Pretty Yende Albrecht, her Giselle was naive without
as Adina in being childlike. She may understand
Lelisir damore. nothing of the world beyond her village,
Below: Rebecca but she knows enough to absorb Albre-
Humphries chts intoxication with her. The duos
and Lena Kaur brave, unhurried pace allowed us to feel
in Myth the erotic charge growing between them.
Bill Cooper; Sarah Ainslie
Romantic bloom in place of bounding
innocence suits the 34-year-old
dancers technical strengths and short-
comings. Not much of a jumper, Cope-
land has developed a gorgeous ampli-
tude in torso, head, neck and arms. As
Giselle, she enfolded in her calming
embrace her mother, who has spooked
herself with a gothic tale of a daughters
doom. And in the second, ghostly act,
she floated in arabesque like a sylph in
the air of interminable afterlife.
But what about the mad scene? Why
would so mature a young woman crack?
Copelands answer was wise if hard to
convey: a world gone mad destroys the
sane. She was a Giselle for these times.
To May 31, abt.org

Sgt Pepper show guaranteed to raise a smile

of McCartneys contributions) wrong- of acid pastels. The group melt in and
DA N C E foots the many chronic clap-oholics in out of folksy lines and circles, quoting
the audience, bamboozling them with liberally from 20th-century social
Mark Morris: Pepperland three simultaneous time signatures dance: a Charleston here, a shoulder
Royal Court, Liverpool (four, five and six beats to the bar). shuffle there. Morris never ignores lyrics
aaaae Most songs are sung by Clinton but his illustrations are always larky and
Curtiss beefy baritone but in A Day in unexpected. When Penny Lane sings
Louise Levene the Life the vocal line is taken by the of a clean machine one man crawls
spectral soprano of the theremin played through anothers legs, carwash-style.
Pop songs are a mixed blessing for the by Rob Schwimmer, whose tickling fin- The dance, like the album, is a seam-
dancemaker. The familiar tunes can be gers conjure a nocturne from the ether. less synthesis of classical, vaudeville
an audience-magnet but their often A band this interesting doesnt really and psychedelia but there are B-side
simple rhythms and seductive lyrics can belong in a pit. moments when it all feels a bit like a
result in quasi-aerobic routines in which Meanwhile, on stage, Morriss 15 hip- party where the other guests got stoned
the dancers simply do the actions. sters caper blithely through the scores before you arrived.
Mark Morris, seasoned choreogra- 13 segments groovily dressed in Eliza-
pher of everything from baroque odes to beth Kurtzmans mind-bending palette sgtpepperat50.com
country and western hits, was the per-
fect choice for a danced response to Sgt.
Peppers Lonely Hearts Club Band, whose
50th birthday celebrations began at the
Royal Court Theatre in Liverpool last
weekend. Pepperland was the first of 13
anniversary events in the city, one for
each track on the album.
Rather than have his dancers frug
along to the CD, Morris has commis-
sioned his one-time musical director
Ethan Iverson to reinvent seven songs
(six from Sgt. Pepper plus Penny
Lane) subversively arranged for trom-
bone, sax, keyboards, percussion and
theremin. These are interleaved with
six Iverson compositions that take tiny
snatches of Beatles melodies as their
starting point.
The result is extraordinary. Iversons
arrangement of When Im 64 (argua-
bly the most winsome and ingratiating Mark Morris dancers perform the Beatles-inspired Pepperland Robbie Jack

OPERA
La Damnation de Faust
Staatsoper im Schiller Theater, Berlin
aaaae
Rebecca Schmid
Second world war references such as the
brandishing of swastikas have become a
clich on Germanys opera stages. Yet
Terry Gilliam does not spare the viewer
any details in his Berlin production of
Berliozs La Damnation de Faust at the
Staatsoper im Schiller Theater, from
Aryan acrobats in blond wigs to a pile of
gassed bodies from which Marguerites
soul rises to heaven.
The film-maker and former Monty
Python member strikes an unusual
blend of sardonic caricature and historic
realism, casting Berliozs lgende drama-
tique as an allegorical tale of German
history in which not just Faust but all
of society become pawns of the Devil.
It was a gamble when English
National Opera in 2011 invited Gilliam
to make his operatic debut. As the brief
but heated shower of boos for the
directors team revealed on opening
night, bringing his darkly humorous
take on Faust to the German capital is
also a bold move.
At his best, Gilliam synthesises his
narrative with Berliozs music into a
commentary of spiritual dimensions.
Religious choruses take on new meaning
when sung by SS officers, as in Auer-
bachs tavern, and Fausts invocations of
nature against Caspar David Friedrich-
inspired landscapes (sets: Hildegard
Bechtler) create a fresh, specifically
German context for the title characters
conflict. Torn between the peace of soli-
tude and the thirst for human progress,
Faust enters a pact with Mephistopheles
through which he unwittingly joins the
Nazi party.
Tableaux such as a re-creation of
Kristallnacht replete with the sound of
breaking glass or the final image of
Marguerite as a victim of the Holocaust
are too concrete, however, for Berliozs
ravishing, at times mystic score.
Gilliams filmic approach is most suc-
cessful when the music becomes a
kind of underscoring for the action, as
in Fausts dream, which takes place
not among gnomes and sylphs but at a
Nazi ball.
In the title role, Charles Castronovo is
a gripping presence, riding the orchestra
with resonant, refined tone. Florian Boe-
sch is a sly, indomitable Mephistopheles,
Magdalena Koen a sultry but vulnera-
ble Marguerite. Simon Rattle leads the
Staatskapelle Berlin in an elegant per-
formance, from rich strings to chiselled
woodwind solos and homogeneous
brass. If the house choruses do not rise to
the same standards in phrasing, they are
imaginatively set into action by Gilliam.
To June 11, staatsoper-berlin.de
Wednesday 31 May 2017 FINANCIAL TIMES 7

FT BIG READ. BREXIT

Leaving the EU was always going to be complicated. But as this exclusive FT research shows, few people
fully appreciate just how complex a task it will be. At least 759 different agreements, with 168 countries,
have to be renegotiated just for Britain to stand still, writes Paul McClean

Let the haggling begin

I
n the early 1970s the Queens
Messengers delivered a historic
parcel from London to Brussels,
stuffed with enough documents to
fill a tea-chest.
Since the 15th century these diplo-
matic couriers have carried the affairs of
state. This time the delivery included
scores of treaties, all bearing Royal
Arms, which stretched back decades
and traced the UKs commercial arteries
around the world. The arrangements
were largely to be subsumed by the
European Community when Britain
joined its trade bloc; this was, in paper
form, part of a handover of power.
Forty-six years on, when Britain
leaves the EU in 2019, the UK stands to
lose far more than it brought over to
Brussels that day. The treaty chest has
swollen into a small archive of EU agree-
ments, running to hundreds of thou-
sands of pages and spanning 168 non-EU
countries. Within them are covered
almost every external function of a
modern economy, from flying planes to
America and trading sows with Iceland
to fishing in far-flung seas.
On Brexit day, that will all fall away.
By law Britain will overnight be
excluded from those EU arrangements
with third countries, entering the
equivalent of a legal void in key parts of
its external commercial relations. Some
British officials are even peering into the
pre-1973 chest again to see whether
some seemingly obsolete treaties might
gain a new lease of life from a disorderly
Brexit. It is dusty in there, jokes one
ain, covering trade in nuclear goods,
customs, fisheries, trade, transport and
regulatory co-operation in areas such as
antitrust or financial services.
This includes multilateral agree-
ments based on consensus, where Brit-
ain must re-approach 132 separate par-
ties. Around 110 separate opt-in accords
at the UN and World Trade Organisation
are excluded from the estimates, as are
narrow agreements on the environ-
ment, health, research and science.
Some additional UK bilateral deals, out-
side the EU framework, may also need
to be revised because they make refer-
ence to EU law.
Some of the 759 are so essential that it
would be unthinkable to operate with-
out them. Air services agreements allow
British aeroplanes to land in America,
Canada or Israel; nuclear accords per-
mit the trade in spare parts and fuel for
Britains power stations. Both these sec-
tors are excluded from trade negotia-
tions and must be addressed separately.
Others agreements are less material,
at least to the UK: swordfish conserva-
tion in Chile, or the rules of procedure
of the International Rubber Study
Group. Such interests are impercepti-
ble compared with what is at stake with
Brexit, but ultimately the housekeeping
must be done.
All the agreements must be sifted,
creating a huge legal tangle. With Swit-
zerland alone there are 49 accords,
while there are 44 with the US and 38
with Norway. Even in potentially conse-
quential areas, some countries are
After Brexit the UK will lose more
than 750 international arrangements
Agreements by type
Trade
Bilateral deals and the countries
whose approval is needed to recreate
multilateral arrangements
especially on WTO terms. There will
need to be give and take. New Zealand,
for instance, wants its current quota of
lamb sales to the EU to be preserved
after Brexit, even though the size of the
market will shrink. On top of that, it
wants an additional quota for the UK so
it can make up for the impact Brexit will
have on its flexibility in making sales.
The political danger for Britain is that
any WTO member can veto such revi-
sions. It may be possible for the EU and
UK to collaborate on finding a smooth
transition at the WTO. But it will require
consensus at some point, a vulnerability
open to exploitation.
It is a hell of a task. Trade will keep
them very busy, says Vladimir Chizhov,
Russias ambassador to the EU. All the
quotas will have to be recalculated, and I
assume anti-dumping calculations
should be changed at some point. There
are 164 members at the WTO. And all of
Transport Nuclear them will have to agree.
Mainly airline Fuel, parts Asked whether this presented Mos-
services and know-how cow with a weakness to exploit against
Britain, he said with a smile: The Rus-
Regulatory co-operation Fisheries Customs Agriculture sian diplomatic service has been known
Everything from Access waters Controls All things for its tough negotiators. We are very
antitrust to or sustainable on goods food proud of that.
data sharing stocks transport
Time pressures
Perhaps the hardest task will be outside
of the sphere of trade. Some of Britains
most important external agreements
nuclear, airline access, fisheries and
financial services are either entirely, or
in large part, handled by the EU.
To merely stand still in these areas,

Whitehall official.
It poses a formidable and little-under-
stood challenge for Britains prime min-
ister after the June 8 election. While
Brexit is often cast as an affair between
Brussels and London, in practice Brit-
ains exit will open more than 750 sepa-
rate time-pressured mini-negotiations
worldwide, according to Financial
Times research. And there are no obvi-
ous shortcuts: even a basic transition
after 2019 requires not just EU-UK
approval, but the deal-by-deal authori-
sation of every third country involved.
The nearest precedent you can think
of is a cessation of a country you are
almost starting from scratch, says
Andrew Hood, a former UK govern-
ment lawyer now at Dechert. It will be a
very difficult, iterative process.
Britain finds itself at the diplomatic
starting line, with the status quo
upended and all sides reassessing their
interests.
To Brexiters this is a liberation that
allows Britain to negotiate better, more
ambitious deals with trading partners,
shorn of the encumbrance of Brussels
dogma and politics. At worst, they say,
existing arrangements would be contin-
ued through drafting tweaks replacing
EU with UK; at best they would be a massive logistical operation in itself.
improved. Boris Johnson, foreign secre-
tary, said nations were already queue-
ing up to do deals.
Even if it were this simple, critics still
fear it will open a bureaucratic vortex,
sapping energy and resources. Each
agreement must be reviewed, the coun-
try approached, the decision makers
found, meetings arranged, trips made,
negotiations started and completed
all against a ticking clock and the back-
drop of Brexit, with the legal and practi-
cal constraints that brings. Most incon-
venient of all, many countries want to
know the outcome of EU-UK talks
before making their own commitments.
We are talking about an enormous
number of complex acts that we rely on
today, says Lord Hannay, Britains
former EU ambassador. The challenge
of replacing them falls in the same cate-
gory as Alice in Wonderland running
furiously to stand in the same spot.
Housekeeping measures
At its most granular level, the sheer
administrative scale of the third coun-
try question is striking. Through analy-
sis of the EU treaty database, the FT
found 759 separate EU bilateral agree-
ments with potential relevance to Brit-
The missing
Absent from the FTs calculations
are agreements that the UK will
not seek to replace. Among them
are treaties with Canada
promoting mutual
understanding of the
languages, cultures and
institutions of the EU and
environmental deals with
the US to cover energy
efficiency labelling for
office equipment.
barely aware of Brexit implications.
When asked by the FT about a specific
customs agreement, one sanguine
Indian diplomat first denied it existed,
then said it would not matter anyway:
Im sure people have forgotten it.
The logistics are terrifying, even just
to go through these commitments and
treaties and scope them out, says
The simple:
Horizontal aviation agreements
A 2002 European court ruling forced
Britain to revise its bilateral aviation
agreements with third countries such as
New Zealand to ensure they treated all
EU airlines equally on issues such
as ownership
rules. It affects
around 40 UK
deals, but the
process is
straightforward.
Hosuk Lee-Makiyama, a former trade
official for Sweden and the EU now at
the European Centre for International
Political Economy. Do you want revi-
sions? Do they? Do you go there? How
many visits to Chile will this take? Thats
There will be a lot of countries with a
beef with the EU or the UK and will see
this as a golden opportunity to bring up
a nuisance issue. They might not get
anything, but they have to try, he adds.
There will probably be an accident in
areas you cannot predict.
Three-dimensional race
Most prominent and economically
significant are the trade deals. Liam
Fox, the UK trade secretary, has prom-
ised zero disruption by securing tran-
sition agreements to continue old trad-
ing terms post-Brexit. Britain will in
effect repurpose its EU inheritance, re-
activating the existing free-trade deals,
Mr Fox says. It is hardly a picture of
splendid isolation, he told parliament
this year.
For the most part there is a shared
interest in continuing arrangements,
since many nations will not want to lose
preferential access terms to the UK.
Some bigger economies see Brexit as a
window of opportunity, in the words of
one ambassador to the EU. Mr Fox has
started preliminary discussions with a
dozen-plus countries that want to fur-
ther liberalise their existing arrange-
ments; South Korea, Switzerland and
Norway fall into this category.
Wed like the best possible terms for
our fish. There is a complex web of tariff
quotas and red tape, and wed like to
reduce that, says Oda Helen Sletnes,
Norways ambassador to the EU. But in a
nod to the difficulty of negotiating this
while Brexit terms are still uncertain,
she added that fisheries discussions
would be complicated by three-way
discussions between EU-Norway-UK.
In other words, this is not a straightfor-
ward trade-off but a three-dimensional
game.
Other countries may be less
impressed by the disruption caused,
295 202
Britain not only needs external agree-
ments, but the national regulators to
69 65 49 45 34 negotiate and manage them. If Brexit
talks involve a clean separation from EU
regulatory agencies, for example, that
requires regenerating a UK capacity to
safeguard nuclear material, currently
handled by Euratom, or certify and
maintain airline parts or pilots licences,
all at potentially breakneck speed.
Here the US poses one of the biggest
Negotiations will need to take place with more than 160 countries technical and political challenges. Some
treaties, such as the EU-Euratom
Arrangements by type and region nuclear accord, require Congressional
0 20 40 60 80 approval usually a delicate and time-
consuming process. Meanwhile other
Americas arrangements, such as the EU-US Open
Trade Europe
Skies accord for airlines, were agreed
Africa
Asia when the forces of liberalisation were at
their peak. The political mood has hard-
Oceania
ened considerably since then.
Regulatory Americas John Byerly, the former US lead avia-
co-operation Europe tion negotiator who secured the Open
Africa Skies deal, says talented lawyers could
Asia work it out easily if Washington and
Oceania London want to maintain current
terms. But there can be slips between
Fisheries Americas lip and chalice. Im hopeful but lets see.
Europe Britains exit means it will lose The timing is tight. The US needs to
Africa fishing access rights but has know the UKs arrangements with the
Asia freedom to renegotiate its own.
Oceania Opens opportunities with Norway
The ridiculous:
Transport Americas We need to talk about swordfish
Europe The agreement with Chile to preserve
Africa swordfish in the southeastern Pacific
Asia came after a dispute in the early 2000s
Oceania Existing EU customs deals with that banned EU vessels from landing any
Turkey and Switzerland will be of the fish, caught in international waters,
Customs Americas hard for Britain to replicate in Chilean ports. Both parties exchange
Europe data on fish stocks, and agree to
Africa co-operate on marine research to
preserve swordfish numbers.
Asia
Oceania
Nuclear Americas
Europe
Africa A US-UK nuclear deal is
Asia essential for the flow of
Oceania EU before it can commit, and that may
fuel and spare parts for not be clear until late 2018.
reactors. It would need
Agriculture Americas Congressional approval
I dont think there are many prece-
Europe dents for doing so many agreements so
Africa quickly. Airlines load schedules months
Asia in advance, says Mr Byerly. It is not as
Oceania if you can wait until March 2019 to see
what the regime will be. You probably
0 20 40 60 80 need clarity by the early summer or
spring of 2018.
Source: FT research Excludes UN and WTO deals
It puts tremendous strain on White-
hall. In the months after the Brexit vote,
Britain had just three people dedicated
Trading places mean 700 front-line negotiators. but most were providing support for to negotiating aviation agreements. The
Too many deals, Whitehalls Trade Policy Group, which the European Commission. Supporting FT estimates they will need to renegoti-
will lead the negotiations, employs 300 the EU as it negotiates is very different ate 17 existing EU agreements with third
too few negotiators people but very few have experience of to striking deals yourself. countries, as well as around 40 UK bilat-
hammering out trade deals. The IFG says Whitehall should first eral deals that include EU clauses. This
The task of negotiating new free-trade Despite the creation of a new trade focus on building experience through may need to be done in the space of
deals and maintaining existing ones will department, the civil service and a series of smaller deals that are easier a few months, once the EU-UK terms
require a huge amount of money and ministers are not even close to being to achieve to provide vital real-world are clear and Britain decides how
manpower from Whitehall. ready to negotiate, let alone implement, experience for the bigger deals ahead. much of its aviation regulation will be
The UK Trade Policy Observatory, an new global trading relationships, says But it remains concerned that the UK repatriated.
independent think-tank, says Britain Jill Rutter at the Institute for lacks deal makers. Experience is the For Mr Chizhov, the potential for
will in essence be taking on the same Government, a think-tank. The civil major gap in the UKs capability, says bureaucratic overload has echoes of
trade policy task as [the EUs service has begun a programme of Ms Rutter. While the Trade Policy another time and place Soviet Russia.
department for] trade. Given the intense training for its negotiators to Group does house a core of officials Brexit means Brexit is a very interest-
nature of Brexit negotiations high make up for this lack of experience. who have worked on trade policy ing expression, says the Russian
stakes, short timeframes UKTPO The Department for International previously, it has very few who have sat ambassador, referring to Prime Minister
says the UK could need twice as many Trade began with just 45 trade officials in the negotiating chair. [That] will be a Theresa Mays mantra on exit. It
[negotiators] on its side. This would and says it is not starting from scratch, serious challenge for Whitehall. reminds me of Leonid Brezhnev saying,
the economy should be economical.
8 FINANCIAL TIMES
WEDNESDAY 31 MAY 2017
Merkels warning to
European partners
The chancellors domestic signalling has international implications
If Angela Merkel intended to announce
a fundamental shift in Europes stance
towards the rest of the world, a cam-
paign appearance in a beer hall would
have been a peculiar place to do it.
The German chancellors comments
on Sunday suggesting Europe could no
longer count on the US and the UK as a
reliable partner have attracted consid-
erable international attention. In real-
ity, they were aimed at a domestic audi-
ence and were presumably expected
not to cause consternation across the
Channel and the Atlantic.
But they should also stand as a warn-
ing to the rest of the EU. If Europe is to
supplant the USs role as both a security
and an economic hegemon, it needs to
accelerate collective action.
At one level, Ms Merkels comments
are a statement of the obvious.
Even before Donald Trump became
president, the US complained that
European nations were failing to pull
their weight, for example by falling
short of the Nato members target of 2
per cent of gross domestic product
spending on defence.
Barack Obamas foreign policy
instincts were more hands-off than
that of his predecessor, as evidenced by
his minimal military involvement in
Syria. The inception of Mr Trump, an
America-first president, has the poten-
tial rapidly to accelerate that trend: Mr
Trumps rumbling about trade imbal-
ances is threatening the USs leading
role in anchoring the world economy.
Ms Merkels remarks must be placed
in the context of Germanys forthcom-
ing election. She has been criticised by
Martin Schulz, her main rival, for risk-
ing an arms race by supporting the 2
per cent target. This intervention sug-
gests such a move reflects European
solidarity, not German belligerence.
Still, she must be hoping that the
comments are not taken sufficiently
seriously in London and Washington
Chinas real credit risk
lurks in shadow finance
A crackdown on irregular dealings is creating collateral damage
The downgrading of the worlds sec-
ond-largest economys sovereign debt
rating should rank as an important
event. But financial markets greeted
Chinas downgrade last week by
Moodys, the credit rating agency, with
their version of a nonchalant shrug.
Chinese domestic bond prices
remained steady and Hong Kongs
main stock index actually rose during
the week.
But the non-event should not lull
observers into complacency. China not
only has one of the most highly lever-
aged corporate sectors in the world
with company debts equivalent to
about 170 per cent of gross domestic
product it is also engaged in risky
manoeuvres to cut an overgrown
shadow finance sector down to size.
Indeed, the markets shrug says more
about the structure of Chinas financial
architecture than it does about the very
considerable risks that lurk within it.
The truth is that foreign rating agencies
have little influence over domestic
bond investors and foreign ownership
of Chinese bonds amounts to just
$61.5bn, or 4 per cent of the total.
In any case, Chinas outstanding for-
eign debt stood at a modest $1.42tn
or just 13 per cent of GDP at the end
of 2016. Beijings huge stash of foreign
exchange reserves, which currently
stands at $3tn, makes it highly unlikely
that the country would default on its
sovereign bonds.
Nevertheless, the one-notch relega-
tion of Moodys rating to A1 should
encourage observers to delve into the
strange nature of Chinese financial
risk. Although the downgrade puts
China on a par with Israel, Saudi Arabia
and the Czech Republic, there is almost
no equivalence between the challenges
it faces and those of these countries.
The risks inherent in Chinas system
derive mainly from the regulatory dis-
obedience of a state-owned phalanx of
that they become a self-fulfilling
prophecy.
In particular, painting the UK as an
unreliable ally will not facilitate the
Brexit negotiations. Meanwhile, the
USs tolerance for statements like this,
while large, is not inexhaustible. They
may cause Mr Trump to retaliate on
the trade front. The president has
sharply criticised Germany for its trade
surplus with the US.
The remarks should, however, be
taken in earnest in the rest of the EU.
For Europe genuinely to replace the
USs security role, including protecting
its eastern border, requires more mili-
tary spending and co-ordination, and a
more unified foreign policy.
The shambles of the EUs recent
response to the refugee crisis shows
European countries are often far from
united when responding to security
problems.
Greater coherence is also needed in
the economics sphere. European poli-
cymakers have long complained about
US economic hegemony, particularly
the dominance of the dollar. And yet
they have done little to facilitate
greater use of the euro, which would
include showing willingness to run cur-
rent account deficits to provide euros
abroad, and creating a eurozone-wide
deep and liquid pool of safe assets.
If Ms Merkel is serious about Europe
becoming a larger financial force, she
needs to face down those in Germany,
including her own ministers, who
oppose greater eurozone integration.
Hyperventilation over remarks
made in a stuffy beer tent is unwar-
ranted. Still, Ms Merkel needs to take
into account how her words might be
interpreted abroad. Even more so, she
should keep preparing the German and
the wider European public for the diffi-
cult task of increasing European secu-
rity and economic integration to turn
her aspiration into reality.
banks and companies that have reaped
handsome returns from a booming
netherworld of shadow finance. This
twilight domain has tripled in size over
the past five years to be worth $9.4tn,
or about 87 per cent of GDP, at the end
of last year, according to Moodys esti-
mates.
In recent months, the China Banking
Regulatory Commission (CBRC) and
other official bodies have sought to re-
impose Beijings authority by cracking
down on a long list of irregular but
commonplace financial dealings. Guo
Shuqing, the CBRC chairman, has been
quoted as saying he would rather resign
than see the banking system become a
complete mess.
But the crackdown is creating collat-
eral damage. A squeeze on the money
market, a font of shadow finance
liquidity, has driven short-term inter-
est rates higher, raising the costs of
funding not only for irregular dealings
but also for legitimate mid-sized banks
and companies that rely on such fund-
ing to manage stretched balance
sheets.
Bond market defaults are relatively
new; the first one was permitted in
2014. But this year there have been 13
defaults so far, the most recent in late
May when Dalian Machine Tool Group
one of the worlds largest machine-
tool companies failed to repay the
principle and interest on debt issued.
The potential for debt default conta-
gion is huge, due to a widespread prac-
tise of companies guaranteeing other
companies loans. Nearly half of the
lower-rated companies in China have
extended loan guarantees of more than
30 per cent of the value of their equity,
according to Everbright Securities, a
Chinese brokerage. Thus while the
Moodys downgrade may not signal a
clear and present danger, it should
alert investors to the myriad credit
risks within Chinas opaque economy.
Pentagon reforms and aid increases will boost Trumps case
Sir, President Donald Trump urges
Nato allies to increase their defence
spending to at least 2 per cent of gross
domestic product (May 26), but let us
hope that they do not emulate the US
example.
The Washington Post reported in
January that the Pentagon had just
suppressed a report that identified
$125bn of savings that should be made
over the next five years in the defence
departments bloated back-office
bureaucracy. The Pentagon employs
almost as many back-office people as
troops on active service 1m
compared with 1.3m.
RBS case shows why trust
must be rebuilt in business
Sir, It seems that the major players in
the RBS Action Group have accepted
the latest RBS settlement offer (May
30). This has, in effect, enabled RBS to
bully the small individual shareholders
into also accepting the settlement. I say
bully because RBS is threatening
anyone who pursues the case to risk
having costs awarded against them.
So now the case will be settled. No
one will be found responsible. RBS will
pay out 800m (of shareholders
money) to a group of its shareholders
without admitting any culpability or
liability. It all gets swept neatly under
the carpet and no one goes to jail. It has
taken nine years for this to happen. It is
not just RBS the HBOS Reading trial
took nearly 10 years to be investigated
and brought to court.
The key players do not come out of
this well. Something is wrong with the
Serious Fraud Office, Crown
Prosecution Service, Financial Conduct
Authority, Financial Reporting Council,
Department for Business, Energy and
Industrial Strategy, etc when 12bn of
RBS shareholders money raised in a
rights issue can disappear so quickly.
Very, very few people in the UK have
gone to jail as a result of their actions
that led to the 2007/08 financial crisis,
yet millions of people have suffered
severe hardship as a result. The SFO,
CPS and/or BEIS should be given more
resources and told to pursue problem
cases much more speedily. Companies
should not be allowed to hide behind
expensive lawyers. The whole process
of settlements, where management
admit no blame and shareholders pay
the fines/settlement amounts, mean
management get off scot-free and also
needs a review.
These steps plus others no doubt
are required to rebuild trust in
business and to tackle what Prime
Minister Theresa May calls the
anything goes business culture.
Cliff Weight
Director, ShareSoc
West Malling, Kent, UK
Inconsistent treatment
Sir, I note with interest the impending
settlement of the RBS court case (May
30). The similarity between the
treatment of their shareholders and
the Bradford & Bingley shareholders is
striking. In our case, not only were we
misled into parting with our money on
a false prospectus, but our shares
became worthless. This does not seem
fair to me.
George Melvin
Tranent, East Lothian, UK
Romes favoured
son quits the
pitch on a
tide of tears
dedicated to all the kids who have
Notebook
by James Politi
Letters
The problems do not stop there. The
Pentagons cost-plus contracts give
arms suppliers no incentive to be
efficient and deliver on time.
According to the Government
Accountability Office, the Pentagons
major acquisitions programmes over-
ran initial estimates by $300bn
between 2001 and 2007.
Another issue is members of
Congress holding stock in defence
companies in 2010, 19 out of the 28
members of the Senate armed services
committee were reported to have held
stock or options in companies with
Pentagon contracts.
Beijing is changing course
to avert headwinds
Sir, The Big Read on China and Japan
(May 29) is a timely reminder that
trees do not grow to the sky.
The Beijing government is doing all
the right things repositioning the
economy from exports to domestic
consumption, building an efficient
infrastructure of roads, high-speed
trains and underground lines and
pouring money into research and
development. (In PPP terms, R&D
investment equalled that of the entire
EU by 2013.) This strategy will carry
the economy through the next five
years but the danger signs are growing.
The most immediate concern is the
growing level of debt needed to achieve
an incremental 1 per cent growth in
gross domestic product, but there are
two more pervasive headwinds. The
demographic decline in the workforce
will be far more extreme and occur
over a far shorter period than that of
Japan. If the demographer Yi Fuxian is
correct and the true fertility rate from
1990 to 2016 was far lower than the
official figure, the labour shortage will
be intense, aggravated by the fact that
the drift from farm to factory is coming
to an end; by 2015 only 28.3 per cent of
workers were employed in agriculture.
Finally, investors might not want to
admit this but ownership of many
household goods from colour TVs and
mobile phones to air conditioners is
approaching saturation 30 per cent
of households already own a car. The
annual completion of apartments has
outstripped the growth of household
formation for years, and sales have
been inflated by speculation. Do not be
surprised if GDP growth after 2020 is
far lower than the 5 per cent forecast
by Moodys.
Richard Cragg
Kingston upon Thames, Surrey, UK
It did not hit me until the speech.
Francesco Totti, 40, had just
completed his final game as a
footballer for AS Roma on Sunday
night, to the adoration of the 70,000
fans packed inside the Olympic
stadium in the Italian capital.
Then he took a microphone and
began to read a farewell letter that
seemed aimed right at me. This is
spirit of many Romans. He was at
rooted for me, grown up and maybe
become fathers, he said.
I am not one to break down in tears,
even when life has thrown a lot worse
at me, but I couldnt help it and
started weeping in my living room. I
was not alone: across the Eternal City,
Tottis last day in the clubs traditional
red-and-yellow jersey triggered a
massive outpouring of emotion and
grief.
I have been a Romanista as long as I
can remember. Although I grew up in
northern Italy, my dads family is from
a small town north of the capital, and I
was quickly drawn in by Giallorossi
heroes of the 1980s such as Bruno
Conti and Giuseppe Giannini.
Its a day we would have never
wanted to live through, Carlo Zampa,
a long-time radio broadcaster in Rome
nicknamed The Voice, told me.
There was great sadness.
In a city that has seen it all
emperors, kings and popes Totti has
been the unrivalled idol for the past
24 years, as well as a totemic figure in
the citys sporting history.
His qualities the soft touch, the
precise passes and the powerful
Presidential appointees and
congressional staffers are prohibited
from holding such stocks. Members of
Congress should be held to a similar
standard.
Finally, of course, defence spending
is not the only way to win friends and
influence other countries.
Development aid can play an
important role in alleviating poverty
and promoting the kind of good
governance that eschews violent
confrontation. In this context, the US
lags well behind other industrial
countries, spending only 0.18 per cent
of gross national income on overseas
BA could divert resources
away from pension battle
Sir, On May 25 (FT.com) you reported
that British Airways will appeal against
the judgment on May 19 in which
Justice Morgan rejected all BAs claims
against the Airways Pension Scheme
trustees who, in 2013, had decided to
pay a 0.2 per cent discretionary
increase to APS pensioners.
The judge exonerated the APS
trustees and described the scheme
actuary as of outstanding ability. BA
is appealing on two points of law. The
judge said that he would allow the
appeal because, if he did not, BA would
apply directly to the Court of Appeal,
which would prolong the litigation and
result in an even longer delay in
making legitimate payments to
pensioners. At the anticipated
completion date of the permitted
appeal it is calculated that
approximately 6,100 pensioners (out
of 28,000) will have died since BA
initiated the litigation in 2013.
The discretionary increases are the
means to restore Colin Marshalls 1984
pre-privatisation pension promise, the
breach of which was collateral damage
from the governments 2010 decision
to pay CPI rather than RPI increases to
public-sector pensions. The litigation
has cost BA millions of pounds. Early in
the case, BA attempted to make the
APS trustees personally liable for the
costs of defending themselves. In July
2014, a judge ruled that it was entirely
unrealistic and unreasonable to
expect the trustees to put their
personal assets at risk for actions on
behalf of their beneficiaries. BA
subsequently agreed to pay all the costs
of the action.
Especially in view of BAs current
problems, would it not make better
sense for the BA board to abandon its
battle against its pensioners, their
trustees and their advisers and instead
to focus its efforts and money on
running the airline? Perhaps the huge
sums that have been spent on the
current, nihilistic legal battle would
have been better spent making BAs IT
system resilient?
Mike Post
Marlow, Bucks, UK
Role play based on
real life delivers results
Sir, Helen Barretts Editors Letter on
business schools using role play
(Executive Education Ranking, May
15) suggests that they have caught up
with the methodology of progressive
adult and further education in the
1970s and 1980s. Working with the
Manpower Services Commission in
strikes made him one of the best
attacking midfielders in the world.
But it was his loyalty to the team
colours that made him unique and
beloved. Totti was raised in the
neighbourhood of Porta Metronia, just
south-east of the Caracalla baths and
Circus Maximus, speaks with a thick
local accent and seems to embody the
good-natured but slightly irreverent
times tempted to leave by rival clubs,
including Real Madrid, but the
transfers always fell through.
He defied the rules of the market
and the sense that football is a
business like any other, says Marcello
Campo, a Rome-based journalist at
Ansa, the Italian press agency, and a
Roma season-ticket holder.
The loss of Totti is especially hard to
handle for a city that has suffered in
recent years from economic problems,
corruption scandals and a succession
of incompetent local administrations.
To many Romans, a strong
performance from Totti was
something that could be counted on
amid deteriorating social and
economic conditions.
The love of the city towards
Francesco was stronger than it was for
any public figure, even on a national
level, says Mr Zampa. Elsewhere in
Italy, Roma fans are often mocked for
melodrama and mood swings, not
least in their worship of Totti.
He had his dark moments, mostly a
result of his own bad behaviour. In
2004, he was ejected from the
European championships in Portugal
Wednesday 31 May 2017
Email: letters.editor@ft.com
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com
aid last year, compared with the UN
target of 0.7 per cent.
The UK, Germany, Denmark,
Sweden and Norway all met or
exceeded the target. The Netherlands
was not far behind, according to the
Paris-based OECD.
Mr Trump should clean up the
Pentagons act and increase the US
contribution to the kind of soft aid
spending that makes less likely the
need to use those beautiful weapons,
which he so loves to sell to foreign
autocrats.
Anthony Bottrill
Bethesda, MD, US
Scotland, we systematically recreated
challenging management situations for
learners to confront, think through and
resolve. Doing this in small groups
enabled us to look at a range of
different approaches providing rich
and realistic learning processes.
Then, as a community education
tutor at Northern College, Barnsley,
this was an approach regularly used
with women and men who had little or
no formal education since leaving
school, but a great deal of experience in
the workplace, often as union
representatives, organisers and shop
stewards. This enabled both students
and tutors to deploy not only their
everyday working and organising
experiences, but, in confronting real-
life dilemmas and apparent
contradictions, we were able to test
solutions based on their past personal
and group experience. Smaller groups
would produce different approaches.
These were later considered and
compared in seminars, looking for
optimum or alternative strategies.
It worked well since it was based
on the real work and recognisable life
experience of students and tutors. We
now know that those involved in these
learning processes students and
tutors went on to be successful
managers, leaders and representatives
across a wide range of professions in
management, education and unions.
David Browning
Huddersfield, W Yorks, UK
Coffers filled by poor ideas
Sir, Your editorial on May 30 defends
the venerable UK Treasury on the
grounds that it is a restraint on bad
ideas originating in the rest of
Whitehall. I dont doubt other
departments inclination to submit
misguided policy ideas, but a strong
case can be made for arguing the
Treasury is as much a creator of bad
policy as it is a blocker of it. Rail
privatisation, the failed Public Private
Partnership for London Underground,
tax credits and the Private Finance
Initiative have at the very least not led
to the benefits the Treasury promised;
at worst they have imposed substantial
costs on the British state and taxpayer.
Roger Lewis
London SE8, UK
Correction
c China supplies just over 20 per cent of
US imports, the same percentage as
Japan in the mid-1980s. A reference in
the FT Big Read on May 29 wrongly
stated that China buys just over 20 per
cent of US exports.
after spitting in the face of a Danish
rival. In 2010, a vicious foul on Mario
Balotelli of Inter Milan earned him
another suspension and widespread
criticism.
Both episodes fed a common
criticism of Totti: that he was too
undisciplined to play at the highest
European level, preferring to stay in
his Roman cocoon rather than test
himself at a more successful club
where he could win more. In his final
years, he was frequently left on the
substitutes bench by coaches Rudi
Garcia and Luciano Spalletti, which
caused tensions between the club and
the fans.
But there were also triumphant
days.
With Italy, it was the victory in the
2006 World Cup campaign; and a
penalty shootout in the 2000
European Championship semi-final,
in which Totti delicately chipped the
ball over Dutch keeper Edwin van der
Sar. With AS Roma, it was several big
wins in the derby against SS Lazio, the
crosstown rival, and leading his team
to victory in the 2001 Italian
championship with a 3-1 win over
Parma in the final match. That day
16 years ago, there were tears of joy
flowing through the streets of Rome.
But on Sunday, the dominant feeling
was an unsettling mix of gratitude and
anxiety over the future.
It was Totti who described it best:
Turning out the lights is not easy.
Now Im scared.
james.politi@ft.com
Wednesday 31 May 2017
OPINION
Adam
Glapinski
M
any Europhiles believed,
shortly after the UK
voted last June to leave
the EU, that getting rid of
Britain, that eternal trou-
blemaker, would pave the way to deeper
integration of the remaining states. One
year on, even after the ascent of
Emmanuel Macron as a pro-European
French president, it is time for a more
sober view.
The EU has made progress in areas
such as European banking supervision.
Yet no major member state is willing to
give up decision-making power over
vital issues of taxation and spending.
Further development of the economic
and monetary union is on hold. All the
ideas, including those from Paris, about
The rise and fall
of American
leadership
Martin Wolf Economics
Much is at stake in the world,
not least prosperity, peace and
protection of the commons
D
onald Trump has been the
American president for just
over four months. It is still
impossible to predict what
his presidency will mean.
But it is already a transformative event:
Mr Trump has revolutionised our ideas
of what the US stands for. We live in the
world the US made. Now it is unmaking
it. We cannot ignore that grim reality.
Mr Trumps domestic programme is
in accord with the agenda of the Repub-
lican party. Its aim is to cut taxes on the
rich by lowering spending on the poor.
The Congressional Budget Offices
analysis of the American Health Care
Act, recently passed by the House of
Representatives and the replacement of
Barack Obamas Affordable Care Act, is
startling. Over the 2017-26 period, the
act would reduce tax revenues by
$992bn, paid for by a $1.1tn reduction in
expenditures on Medicaid and other
subsidies. According to the CBO, the
number of uninsured might have
increased by 23m by 2026.
Proposals for tax reform and spend-
ing go in the same direction. Discretion-
ary spending proposals for next year
include a $52bn increase in defence
spending, paid for by big cuts in other
areas. These include a $13bn (16 per
cent) cut to health and human services;
$12bn (29 per cent) to the budgets of the
state department and the international
development agency; and $9bn (14 per
cent) to education. The diplomatic
capacity of the US would be devastated.
EMPLOYMENT
MENT
Sarah
nor
OConnor
O
f all the misfortunes we
millennials like to chew
over when feeling sorry for
ourselves, one of our
favourites is the notion we
will have to work until we die. It came as
no surprise to young people in the UK,
for example, when the World Economic
Forum last week urged the country to
prepare for a workforce of octogenari-
ans. Pensions? Retirement? Round-the-
world cruises? We know these will be
history by the time we are old.
Deeper European integration is on hold indefinitely
accelerating EU integration are no more
than a pipe dream.
Britannias ghost will haunt the EU
long after the UK has left. The EU mem-
ber states outside the economic and
monetary union are in no rush to join
the euro. Some are behaving conspicu-
ously like the British. Their antipathy
seems not to bother those running the
monetary union. They have enough
problems with current members.
Its hard to imagine a landmark event
that would reverse this reluctance for
greater economic integration. Immedi-
ately after Mr Macrons victory, many
German politicians were quick to offer
him support, provided he forgot any
idea of the EMU becoming a system for
transferring funds from creditor to
debtor countries.
Some question whether the UK will
survive Brexit. I would put the issue dif-
ferently. Britain offers Europe valuable
lessons about what is needed for deeper
integration, a long process requiring
many checks and balances. Over more
Hard power and lower taxes: these are
the US priorities under Mr Trump. They
are also traditionally Republican. Wag-
ing what amounts to an economic war
on ones supporters might seem per-
verse. But there is method in the mad-
ness. As the programmes poor whites
depend upon are slashed, those who
voted for Mr Trump will become more
desperate. This will make politics even
more polarised. That has been the all-
too successful ploy of pluto-populism.
So what is new at home? The answer is
Mr Trumps personality. He is in a per-
manent war with reality and so with the
media and his intelligence services. The
press and the bureaucracy have both
held up well. So has the legal system. But
these are early days. The president is
undisciplined and his administration
chaotic. Under Mr Trump, a terrorist
outrage might produce a lurch into
authoritarianism.
Mr Trumps impact on the very idea of
the west is already significant. The west-
ern alliance is still the worlds biggest
economic bloc and largest repository of
scientific and business knowledge. But
it is disintegrating. As Angela Merkel,
chancellor of Germany, admitted,
Europe can no longer rely on the US. It
might have been unwise to say so, but
she was surely right.
Mr Trump seems to prefer autocrats
to todays western Europeans. He is
warm towards Turkeys Recep Tayyip
Erdogan and Rodrigo Duterte of the
Philippines, not to mention Russias
Cheer up, millennials your pensions could be even worse
We have taken this wallowing a bit too
far. The retirement prospects of Brit-
ains young people have brightened,
thanks to a policy so successful that Ger-
many, Poland and Ireland may soon fol-
low suit. The outlook for my generation
is still not good. But it is better than it
was. This matters: fatalism is not condu-
cive to planning for old age. The first
step towards improving your pension is
to believe that you will have one.
In 2012 the UK became one of the first
countries in the world to require
employers to enrol almost all employees
automatically into a workplace pension.
Employees can opt out but by default
both they and their employers will pay
in. The policy has not yet been fully
implemented but the impact is clear.
Between 2012 and 2015 the number of
private-sector employees with a work-
place pension surged from 5.4m to 10m.
FINANCIAL TIMES
Comment
than three centuries, after Scotland and
England unified in 1707, the British cre-
ated a successful monetary union. Yet
England, Scotland, Wales and Northern
Ireland retain separate national football
teams to this day. Beyond the UK, it will
be a long time before European states
are willing to give up their places at the
More nations outside
the euro have started to
share British doubts
about the single currency
G7 or the International Monetary Fund.
The British were sceptical about the
single currency from the beginning. For
years this was seen as another sign of
Britains European backwardness. How-
ever, in the past couple of years, more
EU countries outside the euro have
started to share British doubts, showing
unmistakable fondness for preserving
Vladimir Putin. He appears to care not
at all about democracy or human rights.
Neither does he seem committed to the
mutual defence principles of Nato.
Mr Trumps alt- right supporters
see not a divide between the democra-
cies and the despotisms; but rather
between social progressives and glo-
balists, whom they despise, and social
traditionalists and nationalists, whom
they support. For them, western Euro-
peans are on the wrong side: they are
enemies, not friends.
Deep down, Mr Trump might agree.
He is surrounded by orthodox advisers,
such as James Mattis, defence secretary.
Yet the presidents heart seems not
to be in it. The west may not be dead.
But as a set of countries with shared
The west may not be
dead but, as a set of
countries with shared
interests, it is moribund
Young people benefited most. The pro-
portion of eligible 22- to 29-year-old pri-
vate sector employees with a workplace
pension shot up from 28 to about 80
per cent.
Contrast that with the baby boomers.
Their defined benefit pensions were
My generations outlook is
improving. This matters:
fatalism is not conducive to
planning for old age
vastly better than these new defined
contribution schemes but they were less
evenly spread. That led to pensioner
haves and have-nots. Even at the
peak of the defined benefit era 50 years
ago, one-third of men and two-thirds of
domestic currencies. Many policymak-
ers in these countries behave as if they
were under the influence of Sir Alan
Walters, Margaret Thatchers notori-
ously Eurosceptic economic adviser
when she was prime minister.
The British, with the 1991 opt-out
clause, were the first to secure the right
to stay outside the single currency. In
1993 the Danes followed suit. Sweden is
acting similarly despite not having an
opt-out. Central and eastern European
states that joined the EU in the 2000s
initially saw euro membership as a
badge of honour. Then the sovereign
debt crisis destroyed any belief that the
euro area is a New Jerusalem. And most
new members wrote the single currency
out of the monetary script.
The treaty obligation to join EMU was
invented to prevent competitive deval-
uations of the sort seen after the
break-up of fixed exchange rates. Yet
double-digit inflation and the threat
of competitive devaluations belong to
the history books. Exchange rates may
interests and values, it is moribund.
Now consider the west and, above all,
the US in the world. The rise of China
has reduced its economic and political
weight. A recent history of failed wars
and financial crises has savaged its lead-
ers credibility. The choice of Mr Trump,
a man so signally lacking in the virtues,
abilities, knowledge and experience to
be expected of a president, has further
damaged the attractions of the demo-
cratic system.
Now the west seems deeply divided
internally too. Across the world, people
question the future role of the US.
Would it not be wiser, they wonder, to
move closer to China?
Mr Trump would not appear to mind
if this did happen. He voluntarily with-
drew the US from the Trans-Pacific
Partnership, aimed at being an alterna-
tive to Chinese leadership. Under him,
the US seems to be abandoning the
notion of soft power. Indeed, the pro-
posed budget tells us that the adminis-
tration sees the idea as largely empty:
guns matter, diplomacy does not.
women were not members of any work-
place pension, according to the Pensions
Policy Institute. By contrast 95 per cent
of millennials are expected to have a pri-
vate pension income in retirement.
Generation X is arguably in a tighter
spot: many 40-somethings were born
too late to catch the defined benefit era
but too early to benefit from a full career
spent saving through auto-enrolment.
That is the good news for millennials.
There are three buts that take the
gloss off. First, people are not saving
enough into their auto-enrolment pen-
sions. By 2019, average combined con-
tributions from the employee and
employer will rise to roughly 6 per cent
of a full salary. Yet the WEF says people
need to save between 10 and 15 per cent
in order to have pensions worth about scoop them into the net.
70 per cent of their pre-retirement
incomes. Contribution rates (or other
be volatile but they are relatively stable.
In Poland, the zoty has hovered around
current levels since the start of the cen-
tury. In the Czech Republic, the koruna
has appreciated.
Mild currency fluctuations are a small
price to pay for preserving autonomous
monetary policy. For relatively small
economies, such policies are efficient.
Sweden has used the exchange rate as a
major tool to combat deflation. The
same is true for the Czech National
Bank, which intervened in the exchange
markets to prevent the currency from
rising, although it has since adjusted the
policy.
The Polish authorities quickly real-
ised how EMU imbalances were the key
reason behind the euro sovereign debt
crisis. Warsaw has signalled that in the
next 10 years it has no interest in join-
ing. The country needs time to bring
Polish living standards more in line with
the rest of the continent.
Some purists say remaining outside
EMU without an opt-out breaches the
The soft power of democracy is not
what it was. It has produced Mr Trump
as leader of the worlds most important
country. It is not an advertisement.
Yet much is at stake in the world.
Three big challenges exist: prosperity,
peace and protection of the commons.
On the first, Mr Trumps administra-
tion is still tempted by the idea of
restricting imports or at least by bilat-
eralism. So far its protectionist bark
seems worse than its bite. Nevertheless,
globalisation is stalled. Without US sup-
port it could well remain so.
On peace, the question remains
whether Mr Trumps instinct for con-
flict can be contained. The biggest chal-
lenge is the relationship with China. Mr
Trump seems to thinks he can do busi-
ness with Xi Jinping, Chinas president.
Maybe he likes the autocracy.
Perhaps the most depressing conse-
quence of Mr Trumps ascent to power
emerged at the G7 meeting in Taormina,
Sicily, at the weekend. The Paris climate
change agreement of December 2015
was not an answer to the challenge, but
savings) will need to rise. This is partic-
ularly true since investment returns are
uncertain, not to mention the gloomy
outlook for the state pension.
Opt-out rates are low but the test will
come when mandatory contribution
levels go up. More salary set aside for
tomorrow means less to take home
today. Young people have already suf-
fered the biggest drop in real wages of
any generation since the crash of 2008.
Employers also cite the cost of auto-en-
rolment as one reason they are handing
out meagre pay rises.
Second, auto-enrolment is designed
for a traditional labour market of
employers and employees. Yet about 15
per cent of the UK workforce is self-
employed. Innovation is needed to
our biggest policy failure.
Third, when experts predict the pen-
sion incomes people will need for a
9
European treaty. However, neither the
Swedes nor the new members were part
of the then-European Community when
the opt-out clause was introduced. And
the EU leadership must know it would
be foolish to force a country to meet
treaty obligations against the will of its
own people.
Overcoming the challenges of mone-
tary unification appears an insuperable
hurdle for the European establishment,
even after Mr Macrons victory. The
Treaty of Rome is 60 years old, far too
short a period to allow the European
nations to forget the benefits of national
policies.
EU citizens still behave the way Mrs
Thatcher once described. Conquering
Mount Everest, they plant not the EU
emblem but their national flag. Well
need a long time before a unified EU
football team takes the field in the union
colours.
The writer is president of Narodowy Bank
Polski, Polands central bank
it was at least a recognition that climate
change is a real and pressing danger.
Now may well be the last chance to head
off the worst of it.
In agreement with many Republi-
cans, Mr Trump refuses to recognise the
threat. He finds it impossible to admit
that strong and concerted government
action might be required. So he rejects
the very notion of environmental limits.
An optimistic and self-confident US
would embrace the challenge of over-
coming such limits. Alas, Mr Trump
does not speak for that US. If the US
withdrew from the Paris accord, the rest
of the world must consider sanctions.
It is possible to look at the first four
months of this presidency as a story of
successful containment. It is also possi-
ble to view Mr Trump as a normal
Republican. Unfortunately, regular
Republicans have damaging ideas and
Mr Trump may not be contained. This
still looks like the end of the US-led
world order.
martin.wolf@ft.com
decent retirement, it is often assumed
their mortgages will be fully paid. But
the UKs chronic failure to build enough
homes has pushed prices out of reach
for many millennials. They will buy
homes later in life or not at all. On cur-
rent trends, many will need to cover
rent or mortgages with their pensions.
Alternatively, they might use a chunk of
their pension pots to pay off housing
debt. Some will inherit property, of
course, but the distribution of such lega-
cies will be patchy and unequal.
The dangers posed to the future of
retirement by Britains festering hous-
ing crisis should trouble any policy-
maker feeling good about auto-enrol-
ment. It would be a tragedy if one of our
most successful policies falls victim to
sarah.oconnor@ft.com
10 FINANCIAL TIMES Wednesday 31 May 2017

Nintendo: power Switch

Nintendo shares have been boosted by the success of Switch, its most recent gaming device. Valuations are
in line with prior boom times and further upside will depend heavily on software sales

Twitter: @FTLex Email: lex@ft.com

Ryanair:
restricted leg room
Michael OLeary is a cheap guy, and he
does not mind hearing that from
others. Ryanair, the airline he runs, is
built on keeping costs low and passing
on savings in the form of lower fares.
Oddly, investors have to pay a high
valuation to own Ryanair shares. The
question is not whether the premium is
deserved but whether the price can
travel much higher.
Perennial cost-cutting has enabled
Ryanair to squeeze out profits even
when sales dip. Yesterdays full-year
results provided evidence of this.
Revenues grew 22m less than
expected, up by 2 per cent. Even so, net
income grew. Better, earnings per share
climbed 14 per cent. Share buybacks
made the difference. The airline
prefers this manner of returning
money to its shareholders. It has
bought back 22 per cent of its shares
since 2008, at an average price of
8.50. That looks cheap compared with
18 today. Yet Ryanair has paid an
increasingly high valuation for its own
shares in the past couple of years.
Although it has committed to
purchase a further 600m of stock this
year, expect fewer buybacks in future if
the shares stay dear.
They are starting to look that way.
Consider ratios of price to earnings or
enterprise value to earnings before
interest, tax, depreciation and
amortisation. On both measures the
valuation is cruising near a five-year
high. Relative to earnings the stock
trades two-thirds higher than the MSCI
European Airlines index. Only the
shares of Qantas and Aeroflot have
outrun it in the past three years. Yet
the carrier achieves its sector-leading
operating profit margins of 23 per cent
without the benefit of more lucrative
long-haul routes.
Pricing, as Mr OLeary will tell you, is
all about what the market will bear.
Ryanair expects fares to fall again this
year, but will recover some of that via
other charges. At 27 per cent of sales,
ancillary revenues span everything
from charging for seat reservations to
booking hotels through Ryanairs
website. The latter, the company
gleefully reminds us, is a product of
in-house IT efforts. British Airways has
outsourced its to, let us say, mixed
reviews. The plan is to lift these
ancillary sales to 30 per cent. Mr
OLeary, like a famous showman before
him, sees a silver lining in every crowd.
The market will want to see that
coined into profit before paying even
more for a ticket.
Lanxess/Warren Buffett:
hands-off investment
In chemistry, a catalyst is an agent that
facilitates a reaction without actually
participating in it. Berkshire
Hathaways acquisition of a stake in
Lanxess is the financial equivalent.
The 3 per cent stake in Lanxess
revealed on Monday confers no
management influence and is worth
185m, small beer by Berkshire
standards. But news of the purchase,
via insurer General Re, still pushed the
chemical groups shares up 9 per cent
by yesterday.
At first glance, the German company
does not look like typical Warren Buffett
fayre. It operates in a cyclical industry
selling intermediate products to other
manufacturers, rather than the
consumer-facing industries Mr Buffett
prefers. It has no obvious defensive
moat to insulate it from competition.
Returns on capital, Mr Buffetts
preferred metric for evaluating
companies, have been in single digits
for the past three years.
Berkshire knows parts of the
company, having held Great Lakes
Chemical Corp stock in the early
noughties. Great Lakes merged to form
Chemtura, which Lanxess acquired in
April. That transaction was pivotal.
Combined with its partial retreat from
synthetic rubber, the deal took Lanxess
away from cyclical sectors and into
higher-margin niches with lower
capital intensity, such as fire
retardants. By 2018, just a fifth of
revenues will come from sectors
deemed to be heavily cyclical.
Margins should improve, reflecting
the business mix. The Chemtura
purchase will push debt up, until rising
cash flow reduces it. Better profitability
and lower borrowing will automatically
boost returns on capital.
Lanxess shares are up 60 per cent in
a year, pushing its enterprise value to
more than seven times ebitda. That is
about what Berkshire paid for Lubrizol
in 2011.
Mr Buffett told that companys chief
Share prices
Rebased
2015
FT graphic Sources: Thomson Reuters Datastream; Macquarie Research; Citi Research
Nintendo has become the
20th-largest company traded on the
Tokyo Stock Exchange, with a
market value of over $43bn. The
main driver has been the unexpected
success of its new Switch device. But
upside in the longer term will depend
on software more than hardware.
Switch is designed to appeal to
both dedicated gamers and more
casual players. The former group is
mainly interested in gaming content
and is concentrated in the US.
Japanese gamers value convenience,
playing games as they commute.
Switch is designed to appeal to both.
Analysts initially underestimated the
appeal of the technology, perhaps
because of fatigue with the Pokmon
Go hype and the disappointing sales
executive to continue with his existing
strategy. His message to Lanxess is
likely to be the same.
London Stock Exchange:
bigger data
The London Stock Exchange Group
could rebrand itself as International
Data Inc. In a decade the company has
gone from a local equities market to a
global information and services
business. A deal to buy Citigroups
bond index and analytics platform
represents another bite of the cherry.
Amid the seemingly unstoppable
popularity of data-driven investment,
the $685m cash deal makes sense.
Unlike LSEs failed merger with
Big three console market shares
Per cent
160 Nintendo
Nintendo
140
120
2007 08 09
100
Game purchases per console
In year of launch
0 1
Nikkei 225 80 Wii
WiiU
3DS
60
Switch
16 17
performance of the Wii U console. Now
they are catching up; some predict
production will be twice Nintendos
stated 10m unit sales target for the
current fiscal year.
During Nintendos boom period in
the three years to March 2009, the Wii
and the DS console nearly quadrupled
sales to more than 1.8tn with margins
of 30 per cent before interest, tax,
depreciation and amortisation. The
groups valuation peaked in 2007
around 30 times its two-year forward
earnings.
Macquarie estimates that current
revenues of 489bn could double by
March 2019. For that to happen, 12m
Switch units would have be sold in
2018-19, along with three games per
device. Apply Nintendos boom-time
Deutsche Brse, the purchase is
unlikely to draw political heat.
Overseas ownership of national
exchanges is a difficult sell. Patriots are
less protective of data companies.
With an enterprise value 14.9 times
earnings before interest, tax,
depreciation and amortisation, the
purchase price is steeper than the
12.4 times multiple RBC Capital
estimates LSE paid for the Frank
Russell index business. But that was
three years ago valuations have
increased across the board since then.
Previous acquisitions, including
Russell, have been a success.
Consolidation has left a handful of
index providers whose fees are drawn
from the trillions of dollars
benchmarked against their products.
Russell has helped make the
Microsoft Sony Group
100
80
60
40
20
0
10 11 12 13 14 15 16
2 3 4 5
earnings multiple to the brokers
2019 net profit forecast and you get
to a market value of around $43bn.
A lot of success is priced in.
Nintendo could justify its rating
by selling more devices than
expected. Or it could sell more
software per unit. That would fatten
margins and extend revenues,
cushioning declines ahead of the
next product cycle.
Higher software sales depends on
the ability of Nintendo and third-
party game developers to anticipate
changing consumer tastes and
produce titles that meet them. That
is not easy. But the success of Switch
reminds investors never to
underestimate Nintendo or Mario,
the plumber featured in its games.
information division LSEs largest
source of revenue, responsible for two-
fifths of the 1.5bn total last year. It is
growing fast too, up 24 per cent in the
first three months of 2017 against the
same period of 2016. The traditional
capital markets business registered a
lacklustre 1 per cent.
What could knock the index business
from its perch? A revolt by fund
managers against high index fees,
perhaps. That has been mooted within
the powerful $4tn exchange traded
fund industry. But history suggests
such rebels are too divided to succeed.
Flagging growth is a more realistic
concern. LSEG, whose shares trade at a
steep 23 times forward earnings, has
bulked up through acquisition. Buying
Citis business is an astute move, but it
leaves one data gem less to absorb.
Venezuela/Goldman:
debt dilemma
Investors hunger for yield can appear
callous when people are genuinely
starving. One of the more anomalous
trades in emerging market debt
originates in Venezuela, the South
American nation in the midst of a
brutal economic meltdown that has
resulted in a malnutrition outbreak.
Against the odds, the country has
been intent on servicing its financial
obligations dubbed Hunger Bonds
by Ricardo Hausmann, a former
Venezuelan official. With debt trading
at cents on the dollar, several asset
managers are betting that either
payments will continue or any debt-
restructuring haircut will be small.
One such investor is the asset
management arm of Goldman Sachs.
According to press reports, the bank
has purchased nearly $3bn of debt
issued by Venezuelas national oil
company from the central bank, via a
broker, for about 30 cents on the dollar.
Critics argue the investment lends
legitimacy to a repressive government.
President Nicols Maduro has
unleashed a violent crackdown on
political opponents and his critics vow
to deny Goldman any future business
should they eventually take power.
For its part, Goldman says it wants
life to get better in Venezuela. It
claims it bought the debt because it
thinks it will. An economic turnround
would improve chances of debtholders
being repaid. But in any distressed debt
workout both principal and interest
may be slashed. It is not clear under
which political regime such a scenario
is more likely. But Goldman risks an
image problem if Mr Maduro is kinder
to creditors than his own citizens.
Mr Hausmann, also an economist,
has called on JPMorgan to remove
Venezuelan debt from its emerging
market benchmark and proposes the
creation of a Decent Emerging
Markets index to include ostensibly
humane nations. But with various
shades of economic misery in bond-
issuing countries from Greece to Puerto
Rico to South Africa, finding a standard
for financial morality will be tough.
Lex on the web
For notes on todays breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
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Wednesday 31 May 2017 11

Euro / dollar Brent crude GSK 10-yr Treasury LSE Italian stocks Talk Talk Gold
Media moves TVB saga shows (FTSE MIB)
Chinas influence over HK 0.1% 1.6% 1.8% 2bp 1.5% 0.2% 5.5% $4
INSIDE BUSINESS, PAGE 12
$1.1172 $51.48 16.73 2.23% 34.42 20,814 172.1p $1,261

China wealth fund closes on Logicor Short

View
3 CIC holds talks for UK warehouse group 3 Latest in flood of Chinese property investments
national Chinese takeover to date. CIC would be highly unusual for the fund to now owns more than 630 properties
Robin
Wigglesworth
JUDITH EVANS, ARASH MASSOUDI AND
JAVIER ESPINOZA LONDON won a bidding war against a joint ven- be doing a deal of this size on its own. 12 bn
across the continent, representing a
ture consisting of two Singapore state CIC did not respond to a request for The amount, total of 13m square metres of warehouse
including debt, at
Chinas sovereign wealth fund is in late- funds, Mapletree Investments and comment and Blackstone declined to which CICs offer space.
stage negotiations to acquire Logicor Temasek, according to a third person comment. values Blackstone- Blackstone agreed to sell IndCor to The astonishing tranquillity of stock markets has hogged
from its private equity owner Black- involved. Once a sleepy corner of the real estate owned Logicor Singapores GIC for $8.1bn in 2014. Late the finance industrys attention this year. But equities is
stone in a deal that would value the Lon- Global Logistic Properties, a company market, warehouses in particular last year, GIC reached a deal to buy P3, a not the only becalmed asset class. The $14tn US Treasury
don-based warehouse-property group controlled by Singapores sovereign those around major hubs and cities $33 bn
European storage company that owns market is also enjoying a serene spell.
at more than 12bn including debt. wealth fund GIC, also lost out in the have seen their value surge, driven by and manages more than 3.3m square The Move index measures the short-term expected vola-
The amount of
China Investment Corporation and process, according to Estates Gazette, the rise of ecommerce companies such Chinese investment meters of warehouses used in ecom- tility of US Treasuries implied by option prices, and in
Blackstone could announce an agree- the UK specialist publication that first as Amazon and the attempts of tradi- into global real merce, for 2.4bn. practice it is the bond equivalent of the more widely
ment for the European-focused com- reported the deal. tional retailers to respond with their estate last year A purchase by CIC would be the latest known Vix. Like Vix, it has sagged this year, to a three-year
pany as early as this week, according to Some of the parties that lost out have own online operations. a record in a flood of Chinese investment into low on Friday, the latest available data. The actual volatil-
people briefed on the discussions, who yet to be notified, suggesting there Blackstone used Logicor to consoli- global real estate, which hit a record ity of the 10-year Treasury futures contract is also the most
cautioned that the timing could still slip. remains a possibility the deal could fall date Europes fragmented warehouse $33bn last year. CIC, the worlds fourth- subdued it has been all year.
If agreed, it would rank as the second- through. real estate market, following a model it largest sovereign wealth fund with more Bonds are far steadier than equities, but this looks pecu-
largest European real estate transaction One person who has worked with CIC used to develop and sell a similar busi- than $800bn of assets, is a longstanding liar. While stocks have at least been underpinned by
on record and the fourth-largest inter- on previous international deals said it ness called IndCor in the US. Logicor investor in Blackstones funds. decent economic growth and buoyant corporate earnings,
US government debt is subject to fierce cross-currents that
should arguably produce some turbulence.
Subdued inflation, easy monetary policy and investor
appetite for safe government debt are big props for the
Treasury market. But at the same time, the US economy
Leagues ahead looks in reasonable shape, the labour market is taut, the
TV swells football Federal Reserve is tightening monetary policy and the
sources of Treasury demand are in flux. And no one knows
club values by 3bn what economic policies the Trump administration will be
able to enact.
As a result, analysts vews on where the 10-year US
The combined worth of European Treasury yield will end 2017 span from 1.6 per cent to 3.6
footballs leading clubs grew by about per cent. Moreover, Fed funds futures indicate scepticism
3bn over the past year, boosted by the that the US central bank will be able to raise interest rates
escalating value of broadcasting deals, more than once more this year, while the Fed itself has sig-
writes Murad Ahmed. nalled two more increases, and some fund managers fret
According to KPMG, which has that policymakers could even accelerate its tightening
analysed the accounts of several clubs plans when they meet in mid-June.
over recent seasons, the combined All told, whatever ones views of where the Treasury
enterprise value of Europes 32 richest market is heading, it looks like the perfect recipe for a
sides was close to 30bn in 2016, a rise of more volatile US government bond market. Instead, it is
14 per cent from the previous year. moribund.
The list is dominated by English The best explanation is the ongoing quantitative easing
Premier League teams and is topped by programmes by central banks in Europe and Japan, which
Manchester United, which became the spills over into the US and helps quell volatility. But inves-
first club to be valued at more than tors should gird themselves for some Treasury turbulence
3bn. Six other English sides are among at some point this year.
the 10 most valuable in Europe.
Andrea Sartori, KPMGs global head Treasury markets
of sports, said the value of clubs was Vix index tumbles
growing only in part because of Merrill Lynch Option
broadcasting revenues. Another factor Volatility Estimate
90
was the increased profitability of clubs
following the implementation of 80
so-called financial fair play rules,
which limit how much teams can spend 70 The bond markets
as a proportion of income. Real Madrid volatility index has
and FC Barcelona are second and third in 60 been moribund,
KPMGs rankings. Both earn more in but investors
broadcast revenues than most English 50 should prepare for
sides because Spains La Liga distributes Jun 2016 17 May some turbulence
money from television rights deals less Source: Thomson Reuters Datastream this year
evenly than the Premier League.
robin.wigglesworth@ft.com
Michael Sohn/AP

State Streets $230bn flagship ETF loses

out to rivals as money shifts to Europe
JOE RENNISON AND among asset managers who have been stocks have so far outperformed US
ROBIN WIGGLESWORTH NEW YORK
quick to switch money from US stocks equities this year.
The worlds largest exchange traded into Europe. There, a combination of Those investors with a longer time
fund, State Streets $230bn power- diminished political risk and improving horizon are more focused on the cost of
house, is losing out to rivals managed growth are proving appealing. By con- the ETFs, a battleground for the passive
by BlackRock and Vanguard this year trast, the failure of Donald Trumps asset management industry. State
as the industrys price war deepens and administration to deliver a fiscal stimu- Streets ETF charges an expense ratio of
Round of chemicals M&A investors shift money into Europe. lus plan has dented the appeal of the US 9 basis points compared with 4bp for
reshapes ailing industry market. those run by BlackRock and Vanguard.
Investors have pulled more than $10bn Flows are generally not related to Fee differentials are important, said
A slew of deals in chemicals, including so far this year from State Streets SPDR expense ratios, and more to do with the Robert Smith at Sage Advisory, an
last weeks proposed $20bn tie-up S&P 500 ETF, while its chief competi- market environment in the US, said investment adviser.
between Clariant and Huntsman, is tors, BlackRock iShares IVV and Van- Matthew Bartoloni, head of SPDR For us it is a question of what is the
reshaping a sector that has struggled guards VOO that also track the bench- research at State Street Global Advisors. least expensive with the highest degree
with weak demand. Companies are mark S&P 500, have sucked in $14bn Since March, the Trump adminis- of tracking efficiency.
seeking to boost earnings by buying and $7bn, respectively. tration has been more about the art of The ETF industrys need to drive
rivals and stripping out costs. Analysts say that the tribulations of damage limitation than the art of the down costs has prompted some asset
Analysis i PAGE 12 the State Street ETF, which was created deal. managers to float the idea of setting up
in 1993, is partly down to its popularity In sharp contrast to 2016, European their own index company.

Companies / Sectors / People

Companies
1MDB...............................................................13
AS Roma.........................................................8
Aer Lingus...................................................14
Aeroflot.........................................................10
Air France-KLM........................................14
Aircel...............................................................15
Akzo Nobel..................................................13
Amazon.........................................11,12,18,19
Andritz..........................................................20
Apple.........................................................12,18
AstraZeneca................................................15
BBC...................................................................12
BSI.....................................................................13
Bayer...............................................................13
Berkshire Hathaway..............................10
BlackRock................................................11,18
Blackstone....................................................11
British Airways...................................10,14
Brookfield Asset Management........15
Champions League.................................11
ChemChina..................................................13
Chemtura.....................................................10
China Investment Corporation........11
China Media Capital..............................12
Citigroup.......................................................10
Clariant...........................................................13
Clickair ..........................................................14
Credit Suisse..............................................13
Deutsche Brse........................................10
Dow Chemical............................................13
DuPont...........................................................13
Elliott Advisors.........................................13
Erste...............................................................20
Essential........................................................12
Exelon.............................................................12
FC Barcelona...............................................11
Facebook......................................................18
General Re..................................................10
GlaxoSmithKline.......................................19
Goldman Sachs................................2,10,13
Google......................................................12,18
Great Lakes Chemical..........................10
Huntsman Corporation........................13
Iberia .............................................................14
Incyte..............................................................15
IndCor..............................................................11
International Airlines Group.............14
JBS.................................................................1,12
JHL Capital Group..................................15
JPMorgan.......................................................2
Juventus........................................................11
La Liga............................................................11
Lanxess.........................................................10
Linde...............................................................13
Logicor............................................................11
London Stock Exchange...............10,19
Lonmin...........................................................19
Loxo Oncology..........................................15
Lubrizol.........................................................10
Lufthansa.....................................................14
Manchester United..................................11
Mapletree Investments.........................11
Mediclinic.....................................................19
Merck..............................................................15
Microsoft.......................................................18
Molycorp.......................................................15
Monsanto......................................................13
Mylan..............................................................15
Netflix.......................................................12,18
Nintendo.......................................................10
OMV...............................................................20
Oaktree Capital.........................................15
P3.......................................................................11
PDVSA.............................................................2
PPG Industries..........................................13
Pala Investments.....................................15
Peak Resources........................................15
Pfizer...............................................................15
Praxair............................................................13
QVT Financial............................................15
Qantas...........................................................10
Qualcomm....................................................12
Raiffeisen.....................................................20
Real Madrid..............................................8,11
Reliance Communications..................15
Roche..............................................................15
Ryanair....................................................10,14
Shenghe Resources................................15
Sherwin-Williams......................................13
Sinochem......................................................13
Sky....................................................................12
Sophos...........................................................19
Standard Chartered...............................13
State Street............................................11,18
Syngenta.......................................................13
TVB..................................................................12
TalkTalk........................................................19
Temasek........................................................11
UBS..................................................................13
UOB..................................................................13
VTB....................................................................4
Valspar...........................................................13
Vanguard.......................................................11
Voestalpine................................................20
Vueling..........................................................14
Westinghouse............................................12
Wienerberger............................................20
Young Lion..................................................12
easyJet...........................................................14
Sectors
Airlines.....................................................10,14
Banks.....................................................4,15,19
Basic Resources........................................12
Chemicals...............................................10,13
Energy............................................................12
Financial Services...................................10
Financials...........................................11,13,18
Food & Beverage.....................................12
Health.............................................................15
Industrials....................................................10
Media.........................................................12,12
Mining.............................................................15
Oil & Gas......................................................18
Personal & Household Goods.........10
Pharmaceuticals.......................................15
Property.........................................................11
Shipping.......................................................20
Technology..................................3,10,12,18
Telecoms......................................................15
Travel & Leisure......................................10
Utilities...........................................................12
People
Ambani, Anil...............................................15
Batista, Joesley......................................1,12
Batista, Wesley..........................................12
Blankfein, Lloyd..........................................2
Buffett, Warren.........................................10
Chan, Charles.............................................12
Cruz, Alex.....................................................14
Huntsman, Peter......................................13
Kostin, Andrei.............................................4
Kottmann, Hariolf....................................13
Li, Ruigang..................................................12
Litinsky, James.........................................15
OLeary, Michael................................10,14
Rubin, Andy................................................12
Singh, Gurdeep.........................................15
Soriot, Pascal..............................................15
Walsh, Willie...............................................14

The Financial Times Limited 2017 Week 22

12 FINANCIAL TIMES Wednesday 31 May 2017

COMPANIES
INSIDE BUSINESS
Energy
ASIA

Three Mile Island faces closure threat Tom

Owner says state support
could save site of most
serious nuclear accident
ED CROOKS NEW YORK
Three Mile Island, the power plant that
was the site of the most serious US civil
nuclear accident, will shut down in 2019
unless it is given additional government
support, the company that owns it has
other is licensed to keep running until
2034. But yesterday Exelon, which
owns the plant, said it planned to close
Three Mile Island around September
2019, with the loss of 675 jobs, unless
there were needed policy reforms
from the state of Pennsylvania.
Illinois and New York State have
already introduced subsidy mecha-
nisms to keep reactors open, and Exelon
is lobbying Pennsylvania to introduce
something similar, such as including
gas-fired generation, while the sluggish
economy and rising energy efficiency
have meant that electricity demand
growth has been weak.
US electricity generators have largely
given up on the idea of building new
nuclear plants, with the delays and cost
overruns at the new Westinghouse reac-
tors being built in Georgia and South
Carolina an additional disincentive.
The industry focus is on keeping alive
the plants in service today. New nuclear
Mitchell
Competition Wisconsin, Fort Calhoun in Nebraska
and Vermont Yankee in New York.
from cheap gas-
fired generation
Exelon warned last week that Three
Mile Island had been unsuccessful in an
auction to offer generation capacity for
TVB paper trail maps
is jeopardising
the economics
PJM, the electricity market stretching
from New Jersey to Tennessee, meaning
out Chinese influence
of new reactors
and even of
it was economically challenged. The
fact that there is only one reactor run-
ning at the site means its costs are higher
on Hong Kong groups
than for larger nuclear plants.
existing plants As the US continues to invest in

said. The planned closure is a sign of the
intense competition from cheap gas-
fired generation that is jeopardising the
economics not just of new reactors, but
even of existing nuclear plants.
One of Three Mile Islands two reac-
tors has remained closed since it suf-
fered a partial meltdown in 1979. The
nuclear plants in its Alternative Energy
Portfolio Standard that supports wind
and solar power. Three Mile Island has
been losing money for five years.
The flood of cheap gas released by the
US shale boom has driven down whole-
sale power prices and made it more dif-
ficult for nuclear plants to compete with
Food & beverage. Meat producers
construction in the US was slowed by
the Three Mile Island accident and had
stopped by Chernobyl in 1986, meaning
that the country has a large fleet of age-
ing reactors.
Closures of nuclear plants for largely
economic reasons have been announced
in recent years, including Kewaunee in
renewable energy, and its costs continue
to fall, wind and solar power may also
become significant competitive threats
to nuclear power across the US. For the
time being, however, nuclear plants
account for the great majority of Penn-
sylvanias electricity generated without
creating greenhouse gas emissions.
I
t is hard to exaggerate the cultural and political influ-
ence of TVB, Hong Kongs most powerful broadcaster,
in the Chinese territory.
Established by the media mogul Sir Run Run Shaw,
who died three years ago, TVB dominates television
news and entertainment in the city of 7m. Its broadcasts
can also be picked up by tens of millions more viewers
across the border in Chinas southern Guangdong prov-
ince. With no serious competition in its home market, TVB
wields considerable influence.
Under Hong Kongs Broadcasting Ordinance, TVB and
other TV stations can only be controlled by local residents.
This rule is one of the important guarantees of Hong
Kongs autonomy aside from foreign affairs and defence

Liquidity troubles loom for JBS as crisis drags on
Asset sales likely when lenders
have weighed up implications
of executives plea bargain
JOE LEAHY AND ANDRES SCHIPANI
SAO PAULO
Joesley Batista, the Brazilian meat
tycoon, left his reputation in tatters
when he departed Brazil for the US this
month after confessing to one of the
countrys biggest bribery scandals.
But one thing Mr Batista did not leave
behind was his 30-metre, Italian-made
Azimut 100 Leonardo yacht. Called
Why Not, it was one of the most luxu-
rious in Brazil.
It was shipped out of Itaja, bound for
the US, where it will be repaired and
sold, said So Paulo-based JBS, the
worlds largest meatpacker, which Mr
Batista used to run alongside his brother
Wesley until he resigned his chairman-
ship of the company last week. Wesley
Batista has stayed on in So Paulo as
chief executive.
Joesley Batistas resignation and
departure from his native country he
is reported to have decamped to New
Investors are rightly
concerned that value at
JBS USA could be used to
fund the payment of fines
York has left the vast meatpacking
empire facing a crisis.
He and six other JBS executives signed
a plea bargain in a case that reaches to
the very top: Mr Batista secretly taped
President Michel Temer allegedly dis-
cussing bribes and a fellow executive
admitted the company paid R$600m in
kickbacks to 1,829 politicians.
The company that successive Brazil-
ian governments fostered as a national
champion has now been downgraded by
credit rating agencies. It is facing probes
in Brazil for insider trading and has
been dumped by investors. Its stock is
down nearly 33 per cent this year and its
bonds off by about 15 per cent. It is fac-
ing up to R$11bn in fines from Brazilian
public prosecutors and unknown penal-
ties from regulators in the US, Australia,
the UK and the other 146 countries in
which the company operates.
Bankruptcy experts say it is only a
matter of time before the group enters a
form of restructuring or an asset dis-
posal programme to deal with expected
tightening liquidity conditions as lend-
ers focus on the implications of the plea
bargain. JBS declined to comment.
Fitch, the rating agency, downgraded
JBSs credit rating from BB+ to BB. I
dont think this is the end of the com-
Weighty stake: pany, but it is a serious situation and
aggressive theres still a lot of uncertainty about
dealmaking over whats coming, potential fines and any
the past 10 years increase in reputational risk, says
made Brazils Johnny Da Silva, director of corporate
JBS the worlds ratings at Fitch.
largest meat In JBSs favour are its solid assets,
producer in bankers say. The Batista brothers
terms of aggressive dealmaking over the past 10
revenue, years, with help from Brazils state
capacity and development bank, BNDES, made it the
production worlds largest meat producer in terms
Victor Moriyama/Bloomberg
of revenue, capacity and production. It
is the worlds biggest producer of beef,
chicken and leather and a leader in lamb
as well as being the second largest pork
producer in the US, Moodys Investors
Service wrote. This was the result of a
series of mergers from the acquisition of
Swift of the US in 2007 to Pilgrims
Pride, a US poultry company, in 2009.
Last year, JBS generated R$170.4bn in
sales and had R$46.9bn in net debt.
While its leverage was relatively high for
its rating before the scandal, it also had a
strong cash position, rating agencies
said. Its combined R$10.7bn in consoli-
dated cash and $4.3bn in revolving
credit facilities covered most of its
R$18.1bn in short-term debt as of March
this year, Moodys noted.
From a financial perspective, we
actually see they have a very reasonable get divorced or quit your job. Oh, and
schedule in terms of their debt and they you dont go out and sell assets, said one
are able to generate a reasonable ebitda banker in So Paulo.
from the businesses that they have, The admission by the brothers and
said Moodys analyst Erick Rodrigues. five other executives of JBS and its hold-
But bankers familiar with the group ing company J&F that they paid bribes
expect these fundamentals to be tested could lead to material adverse
in coming weeks as liquidity tightens. It changes that could trigger covenants,
was too early to say what assets said a bankruptcy expert.
thegroupmightunload, they said. Research house Covenant Review said
Someone very wise once said to me the covenants covering four bonds
that at the height of a crisis there are issued by a unit of the group, JBS USA,
four things you dont do get married, worth $3.5bn had a gaping hole that
allowed unlimited loans from the sub-
sidiary to JBS SA, the Brazilian arm.
JBS share price Investors are rightly concerned that
R$ value at JBS USA could be used to fund
the payment of fines resulting from that
14 scandal, Covenant Review said.
As for the brothers, their future is
12 uncertain. In an open letter to the Bra-
zilian media last week, Joesley Batista
10 blamed Brazils system of political cor-
ruption for leading them astray.
8 In other countries outside of Brazil,
we showed ourselves capable of expand-
6 ing our businesses without transgress-
ing ethical values, he said. The brothers
4 are about to find out whether regulators
Jan 2017 May will be swayed by that argument.
Additional reporting by Eric Platt in
Source: Thomson Reuters Datastream
New York
promised by Beijing on the former UK colonys reversion
to Chinese sovereignty in 1997. However, a recent routine
review by Hong Kongs market regulator unexpectedly
turned up evidence that TVB may in fact be controlled by a
mainland Chinese company. The discovery raises ques-
tions about whether other Hong Kong groups might be
controlled by Chinese partners.
The TVB situation, which the market regulator
described as a novel and difficult case, can be traced back
to 2011 when Shaw sold his controlling stake in the broad-
caster to a consortium headed by Hong Kong businessman
Charles Chan. Mr Chan, in accordance with the territorys
broadcasting code, is a permanent resident.
Mr Chan exercises his control of TVB through a holding
company called Young Lion, which owns a 26 per cent
stake in TVB. His partners in Young Lion include China
Media Capital, a Chinese government-backed fund that
has also invested in Manchester City Football Club, and
established a Shanghai-based production joint venture
with Steven Spielbergs DreamWorks Animation. CMC is
headed by Li Ruigang, a former Shanghai government
official and one of the most powerful media executives in
China.
With Mr Chan holding 56 per cent of Young Lions voting
shares, TVB appeared to be firmly in local hands. Or so
everyone thought until TVB proposed a share buy-back
that would boost Young Lions stake to 41 per cent, breach-
ing the 30 per cent level at
which controlling sharehold-
ers in Hong Kong are
TVB appeared
required to make an offer for to be firmly in
listed companies. If they do
not wish to, then the market
local hands. Or
regulator can be asked for an so everyone
exemption, also known as a
whitewash waiver.
thought
During its deliberations,
the regulator asked for more information about Young
Lions shareholding structure. Young Lion refused to com-
ply. The regulator had to use its statutory powers to force
Young Lion to divulge the information. While Mr Chan
holds 56 per cent of its voting shares, CMC controls 85 per
cent of its non-voting shares. Contrary to their moniker,
the regulator discovered that Young Lions non-voting
shares in fact give CMC power of nomination, approval or
disapproval [of non-executive directors] amounting to de
facto voting rights. Under a relationship agreement
with Mr Chan, CMC can even force him to sell his stake in
Young Lion to another Hong Kong permanent resident of
CMCs choosing. This, the regulator noted, is very far
from a normal situation in which the non-voting shares of
a company . . . have no real say except in situations which
affect their class rights.
SY Tam, TVBs spokesman, argues the regulator is using
a different yardstick and that only voting shares should
be counted when determining control under the Broad-
casting Ordinance. It is therefore wrong to say Li Ruigang
or CMC controls TVB from the shadows, Mr Tam said.
The market regulator also expressed concern that
Young Lion may not have provided Hong Kongs Commu-
nications Authority, which enforces the Broadcasting
Ordinance, a complete picture of its shareholding struc-
ture. This information has now been passed to the media
regulator, which will determine if TVB is in breach of Hong
Kongs local-control rule.
All this is happening just weeks before the 20th anniver-
sary of Chinas resumption of sovereignty over Hong Kong.
The July 1 festivities will be attended by a senior Chinese
Communist party official, possibly even President Xi Jin-
ping. It is easy to predict the comments about Beijings
respect for Hong Kongs autonomy under the one coun-
try, two systems formula.
But when it comes to understanding how the territory
really works, it is best to ignore the rhetoric. Follow the
corporate paper trail instead.
tom.mitchell@ft.com

Media Technology

Amazon live TV viewers will need licence in UK Android creator launches iPhone competitor
DAVID BOND MEDIA CORRESPONDENT
Users of the live television channels
that Amazon has added to its Prime
Video service in the UK will have to pay
the TV licence fee on top of two other
charges to access the broadcasters on
offer.
Although the live TV service, launched
by the technology group last week, does
not allow access to BBC channels, UK
law requires all users of live television to
buy a licence even if, like Prime, it is
being streamed over the internet. The
broadcasters being offered on Amazon
Prime include ITV, Eurosport and Dis-
covery.
The legislation means Prime custom-
ers will have to pay Amazons annual
79 subscription, the 147 annual
licence fee plus an extra fee for the chan-
nels they want to watch. In the case of
users wanting to watch ITV that would
cost an additional 3.99 a month.
Amazon is investing heavily in video
content and original programming such
as Jeremy Clarksons Grand Tour and The
Man in the High Castle, to try to lock in
Prime customers. The addition of the
live channels is seen as a direct chal-
lenge to rivals such as Sky and Netflix.
Amazon confirmed that customers
would need a licence fee to watch live
TV programmes, including through
Amazon Channels. It added that the
requirement was outlined on the Ama-
zon Channels online help page.
With 94 per cent of people in the UK
already correctly licensed, it is not
thought the introduction of Amazons
new channels will affect many British
households. But analysts said it was fur-
ther evidence of the increasingly frag-
mented nature of the TV industry as tra-
ditional live channels are upended by
streaming services such as Amazon and
Netflix.
Tom Harrington, Enders analyst,
said: Its a little bit confusing and a
product of how television is no longer
just what comes down the aerial and
into the TV set.
Users of the BBCs iPlayer service also
need a licence. In the past few weeks the
corporation has started asking users to
register, although the BBC says this is
not to catch licence fee cheats.
TIM BRADSHAW SAN FRANCISCO
Andy Rubin, the creator of Googles
Android platform, has launched a
gadget company called Essential, with
a modular mobile handset priced at
$699 and designed to challenge the
iPhone and a smart-home device to
rival Amazons Echo.
By creating devices that evolve with
you and will always play well with oth-
ers, Mr Rubin has pledged to fix some
of the problems that he admits Android
helped to create, such as planned obso-
lescence and lack of interoperability
between different platforms.
Google acquired Android, co-founded
by Mr Rubin, in 2005. First launched on
an HTC device as a challenger to Apples
iPhone in 2008, the Android operating
system now runs on more than 80 per
cent of all smartphones sold, according
to market researcher IDC. Google said
this month that there were more than
2bn Android devices in active use.
Mr Rubin started Essential after leav-
ing Google in 2014, where he had most
recently been in charge of its Replicant
robotics division. He also helps to run a
Silicon Valley venture capital firm, Play-
ground Global, which invests in hard-
ware start-ups.
Essentials first product is an
Android-based smartphone running
Qualcomms Snapdragon 835 processor,
with an edge-to-edge screen and a body
made of titanium and ceramic. The
company says these unusual materials
make its phone more resistant to drops
and scratches than the aluminium used
in Apples iPhones and much of Sam-
sungs range.
The device comes in four colours but
its minimalist design bears no branding.
Like Apples latest iPhone 7, it also lacks
a traditional headphone socket.
Essentials smartphone comes with a
360-degree camera accessory, the first
in an anticipated range of modular
attachments that could help the phone
to keep pace with trends such as virtual
reality without customers needing to
buy a whole new handset.
Essential Home, a voice-activated
assistant for the home that includes a
touchscreen, will go on sale later this
year, running its own Ambient OS.
Wednesday 31 May 2017
Blockbuster deals transform chemicals sector
Makers of products from paints to cosmetics ingredients to weedkillers are joining forces to lift earnings and cut costs
MICHAEL POOLER LONDON
From cosmetics ingredients to pillow
foam, from paints to crop sprays, a
chain reaction of deals is coursing
through an industry that makes many
everyday products as well as materials
that go into them.
The list of large transactions that has
spread through the chemicals sector
expanded last week with the proposed
merger between Switzerlands Clariant
and Huntsman Corporation of the US.
The combined group valued at
$20bn including debt would aim to
become a leader in specialty chemicals,
with products ranging from industrial
adhesives to colourants for lipstick.
It follows a succession of blockbuster
deals, which kicked off 18 months ago
with a transaction involving the largest
chemicals groups in the US: Dow Chemi-
cals agreed $69bn takeover of DuPont.
Deals to buy chemicals groups that
were either announced or completed in
2016 had an aggregate value of $263.7bn
including debt, according to data pro-
vider Dealogic, compared with $177.4bn
in 2015, when the figures were domi-
nated by the Dow-DuPont transaction.
This dealmaking is reshaping a
diverse sector that has struggled with
weak demand due to the lacklustre
recovery since the financial crisis.
Its very difficult for chemicals com-
panies to grow faster than [gross domes-
tic product], except in niches, says Kirk
McIntosh, partner at the Valence Group,
a specialist investment bank.
With limited prospects for revenue
growth, chemicals companies are look-
ing to boost earnings by buying rivals
and stripping out costs. The enlarged
groups are also seeking increased mar-
ket power to strike better contracts with
suppliers and customers.
These motivations are apparent in
two of the three recent agri-business
megadeals, where chemicals groups are
responding to a downturn in farming
that stems from a plunge in crop prices
following years of bumper harvests.
After Dow and DuPont unveiled their
merger in December 2015 following
pressure from activist investors to cut
costs, state-controlled ChemChina pro-
posed a $43bn takeover of Switzerlands
Syngenta in February 2016, and six
months later Germanys Bayer agreed to
buy Monsanto of the US for $66bn.
These transactions are aimed at beef-
ing up the capabilities of the enlarged
groups to feed the worlds growing pop-
ulation all three will have strong port-
folios involving seeds and crop sprays.
But while ChemChina pledged to sup-
port Syngentas existing operations, in a
recognition of the political sensitivities
surrounding the deal, Dow and Bayer
have sought to persuade investors of the
merits of their transactions partly by
outlining plans to cut costs.
And this drive to reduce expenses and
gain economies of scale has rippled out
to other parts of the chemicals industry.
In March 2016 Sherwin-Williams, a
US paintmaker, agreed to pay $11.3bn
for domestic rival Valspar, and high-
lighted opportunities to trim overheads.
One year later PPG Industries, the US
manufacturer of coatings and sealants
for aircraft and cars, made the first of
three offers for Akzo Nobel, the Dutch
paintmaker. Akzo has rejected the
offers, but is coming under pressure to
engage in talks from shareholders led by
Elliott Advisors, the UK offshoot of the
New York-based activist hedge fund.
Activists are not the only disruptive
force. Another is the rise of rivals in
China. The extent of Chinas ambitions
in chemicals became plain when
ChemChina swooped on Syngenta it
ranks as the countrys largest proposed
overseas takeover.
Bankers say an expected merger
between ChemChina and state-control-
led Sinochem, which would create the
largest chemicals group by revenue, is
aimed at giving the former company the
financial capacity to absorb Syngenta.
But even before the Syngenta deal,
China was shaking up the chemicals
industry. In certain products notably
Banks
Credit Suisse fined over 1MDB scandal
JEEVAN VASAGAR SINGAPORE
HUDSON LOCKETT HONG KONG
Singapores financial regulator has
wrapped up a two-year review of banks
involved in transactions related to a
Malaysian embezzlement scandal, as
the city-state seeks to draw a line under
the impact of the 1MDB corruption
saga.
The Monetary Authority of Singapore,
banned two private bankers for life
from Singapores securities industry
over misconduct relating to Malaysian
businessman Jho Low, who has been
M&A makeover
Dow-DuPont deal is the largest in sector
Transaction value ($bn)
ChemChina/ Bayer/
Syngenta Monsanto
46.9 66.3
Dow Chemical/
DuPont 68.6
2015 2016
Completed
* Aggregate revenues of 34 global chemicals companies including Bayer, BASF and Dow Chemical
Sources: CFETS; Dealogic; ; Bloomberg
Playing to strengths
Groups plan savings by
cutting back-office posts
Unlike some of the other large
chemicals deals announced over the
past 18 months, simplicity does not
appear to be at the heart of the
proposed merger between Clariant
and Huntsman.
With little overlap in their product
portfolios and no crossover in their
manufacturing operations, the
companies say their businesses are
complementary and so no factory
closures are proposed.
Instead, the companies intend to
extract $400m of annual cost savings
by cutting back-office functions as
well as procurement and logistics
overheads.
However, the wide array of specialty
chemicals that the combined group
would have has led some analysts to
question the logic of the deal.
Given the lack of business [and]
product overlap, the companies run
the risk of taking two businesses in a
variety of hard to understand . . .
markets and simply making something
more complex, says Graham Copley of
SSR, an investment research company.
One concern is the risk of a
so-called conglomerate discount in
the combined groups share price.
This refers to the tendency of
investors to undervalue diversified
companies compared with those
operating in a single area.
HuntsmanClariant
will be a larger, more
complex
conglomerate, say
analysts at Nomura.
Investors tend to
prefer simpler, pure
play companies.
linked by US prosecutors to the 1MDB
corruption scandal.
Regulators in the US, Switzerland and
Singapore have probed transactions
linked to the investment fund set up by
Najib Razak, Malaysias prime minister.
Mr Najib denies any wrongdoing.
US prosecutors say Singapores finan-
cial system played a key role in the
alleged theft of billions of dollars, alleg-
ing that banks there were used to chan-
nel 1MDB-linked funds while bankers
failed to report suspicious transactions
and covered up the source of funds.
Yesterday, the MAS fined Credit
FINANCIAL TIMES 13
COMPANIES
bulk chemicals such as caustic soda
China has turned from a net importer to
an exporter, says Graham Copley of SSR,
an investment research firm.
This has put downward pressure on
the prices of many commodity chemi-
cals, and served as a further spur to con-
solidation.
Another deal driver appears to be the
tricky position chemicals companies
occupy in supply chains.
This is an effort by the chemicals
industry in its entirety to match up the
level of consolidation of their customers
and suppliers, says Hassan Ahmed of
Alembic Global Advisors, a research
firm. Because of [greater] heft, you can
negotiate better sourcing deals.
Furthest down this path are chemi-
cals companies producing industrial
gases, a subsector that has been consoli-
dating over the past two decades. It took
another step with the $70bn merger
finalised last week between Germanys
Linde and Praxair of the US.
However, not all the chiefs of the
chemicals companies engaged in deals
are seeking to build empires some are
trying to dismantle sprawling groups
that have been accused of lacking focus.
This was encapsulated by Dow and
DuPonts original merger agreement,
which envisaged the combined group
splitting into three companies: one con-
centrating on seeds and crop sprays,
A flurry of M&A transactions Chemicals sector grapples with sales decline* another on materials such as plastics,
in the chemicals sector $bn and a third on speciality chemicals.
Deal value ($bn) 600 This month, Dow and DuPont said
Clariant/ the plan would be reviewed, amid inves-
Huntsman 300 500 tor concern that it was not correctly
10.2
Pending 250 400 configured.
Praxair/ Completed Akzo, meanwhile, is trying to fend off
Linde 42.5 200
300 PPGs interest by proposing to spin off
150 its specialty chemicals business.
200 Since many of the big deals are being
100
100 investigated by regulators, there is
2017 50 likely to be a second wave of transac-
0 0 tions stemming from divestments
Pending 1995 99 01 03 05 07 09 11 13 15 17 2011 12 13 14 15 16 required to safeguard competition.
Theres this aftermath of big mergers
were going to see, says one banker
involved in the sector.
Nevertheless, Clariant and
Huntsman are hoping to boost
revenue by cross-selling each others
products to their respective
customers.
Hariolf Kottmann, Clariant chief
executive, said: With a broader
diversified portfolio HuntsmanClariant
can better balance the inherent
fluctuations in certain specialty
product segments. By combining the
strengths of both companies we can
innovate faster and more effectively in
specialty products and scale faster in
joint growth areas.
Peter Huntsman, chief executive of
Huntsman, added: While we
acknowledge there is a recent trend
toward smaller simpler specialty
chemical companies in the US equity
markets, we believe over time it will be
consistent earnings growth that will
ultimately be rewarded driven by
higher top line growth and lower
costs.
Support for the all-stock merger of
equals has been secured from the
Huntsman family, which is the single
largest shareholder in the eponymous
group with a 15 per cent stake.
A group of Bavarian investors has
agreed to lock up its 14 per cent
holding in Clariant for 18 months to
help smooth the deal.
But the reception in stock
markets suggests other
investors are yet to be
convinced.
Shares in both Huntsman
and Clariant are trading below
their level before the merger
was unveiled.
Hariolf Kottmann,
Clariant chief
executive
Suisse S$700,000 ($500,000) and local
bank UOB S$900,000 after inspections
found breaches of anti-money-launder-
ing requirements and lapses in controls.
It also issued a lifetime ban against
Yak Yew Chee, a former managing
director of Swiss private bank BSI in Sin-
gapore, and Jens Sturzenegger, who
managed the Singapore branch of
Zurich-based Falcon Private Bank.
Singapore has imposed fines totalling
S$29.1m on eight banks and convicted
five people. It has barred former Gold-
man Sachs banker Tim Leissner from its
securities industry for 10 years.
14
Airlines
Ryanair lifts full-year profits after slashing fares
Revenues climb to 6.6bn
as passenger numbers
hit a record of 120m
TANYA POWLEY
TRANSPORT CORRESPONDENT
Ryanair has lifted full-year profits
despite slashing fares to stimulate
demand after terrorist attacks and Brit-
ains decision to leave the EU.
Europes biggest low-cost airline
posted a 1.32bn post-tax profit for the
financial year to March 31.
The figure was at the lower end of
guidance of between 1.3bn and
BA brand left stranded in zone of acute reputational risk
Pressure is on Cruz and the
IAG parent to tackle problem
of disintegrating goodwill
TANYA POWLEY AND TOBIAS BUCK
British Airways chief executive Alex
Cruz made his name in his native Spain,
where he was largely seen to have done a
good job at the countrys low-cost car-
rier Vueling.
His time in the UK is not looking as
promising as doubts intensify over his
handling of BAs disastrous computer
crash that stranded 75,000 passengers
over the bank holiday weekend.
Aviation analysts believe the IT out-
age that led to a weekend of chaos that is
expected to cost as much as 100m will
put pressure on Mr Cruz and the man-
agement of International Airlines
Group, parent of BA, to address deterio-
rating passenger views on BA.
I think this will refocus management
on how important BA is in the IAG
Group, says Robin Byde, analyst at Can-
tor Fitzgerald. Theyve had a lot going
on in the last few years acquiring Aer
Lingus, improving Iberia but BA is
really the important part of the busi-
ness.
Although investor reaction was rela-
tively calm, with shares only slightly
down, Mr Byde thinks management will
undoubtedly have to revisit cost-cut-
ting plans because of the reputational
risk to BAs branding as a premium air-
line. IAG fell 1.38 per cent to 605.5p.
Mr Cruz spent time at low-cost carrier
Clickair and then, after the companys
merger with rival Vueling, as head of the
combined group.
The Basque father of four quickly
gained a reputation for pushing aggres-
sively into new markets and destina-
tions, and for his evident determination
to apply the lessons of low-cost carrier
Ryanair to the staid Iberian market.
Everyone thought he was excellent,
says a consultant who worked with the
airline industry at the time. The big
question was always whether he could
lead a group as big as BA. The scale is
totally different, and the business con-
cept is different.
Whether Mr Cruz is the right man for
the job has now come under scrutiny
following last weekends customer serv-
ices disaster.
While he was largely seen to have
done a good job during his time at
Vueling, Mr Cruzs departure to BA last
April came just before the Spanish low-
cost carrier suffered huge operational
problems in the summer.
The summer operations meltdown
at Vueling was due to over scheduling
aircraft and leaving no slack for bad
1.35bn, but in line with analysts
expectations. Revenues were 2 per cent
higher at 6.6bn.
Ryanair had lowered its full-year fore-
cast from 1.37bn to 1.42bn last year
because of the impact of the weak
pound following the UK referendum.
European airlines have been strug-
gling with economic uncertainty
unleashed by the Brexit vote, the effect
of terror attacks in the EU, and a glut of
new capacity, which has been pushing
down fares.
Ryanair said it had cut average fares
13 per cent over the year to 41, which
helped it attract a record 120m passen-
gers, up from a previous estimate of
BA scores low: reputations of the worlds airlines
Customer ratings, out of 10 from Skytrax
8 Passenger
ANA
Korean Air Cathay Pacific
7 10
Ryanair
Aer Lingus
6 8
Iberia
5 Alitalia
British Airways
4 Etihad
Vueling
3 2
2 0
20 40 60
Employee perception of company/CEO performance (average, out of 100)
RBC Capital Markets, Mar 2017; company
Folly of letting the austerity merchants call all the shots
OPINION
Andrew
Hill
There are two types of redundancy.
One involves laying off staff, the other
laying on resources. The IT failures at
British Airways have exposed a truth:
airlines are far better at the first than at
the second.
Willie Walsh and Alex Cruz are guilty
of allowing that gap to widen. They are
merchants of austerity. Their cost-
cutting backgrounds recommended
them for their positions defending the
British flag carriers margins against
low-cost competition.
At roughly the same moment that
low-cost airlines such as EasyJet and
Ryanair realised they could add some
passenger perks, BA set about
trimming its frills. Better than any
FINANCIAL TIMES
COMPANIES
Ryanair performance
For year to end Mar (bn)
Revenue Profit attributable to
common shareholders
8 2.0
6 1.5
4 1.0
2 0.5
0 0
2012 13 14 15 16 17
Source: company
Airlines. IT outage
Qatar Airways
KLM
Lufthansa Qantas
Air France easyJet
Emirates Southwest
Virgin
Air Canada Wizz Delta
American
Spirit UAL
80
customer poll or staff engagement
survey, the chaos has revealed how
much goodwill the airline sacrificed in
the process.
This is where having different types
of people in the top jobs becomes
important. Airlines are prone to more
factors beyond their control than
almost any other customer-centric
business. Stuff happens, not just IT
outages but storms, mechanical
failures, terror threats, ash clouds,
involuntary denials of boarding and,
heaven forbid, accidents. Somebody
needs to anchor the public response.
If you set aside Mr Cruzs natural
reluctance not to submit to a public
stoning before establishing the detail of
what had happened, he said some of
the right things in his direct-to-
YouTube videos. In the first, which
went online on Saturday, he said he
was extremely sorry always the right
start and promised to speed refunds
to passengers. But his explanation of
Contracts & Tenders
116m. However, there have been signs of
a wider turnround, with large legacy
carriers BA owner International Air-
lines Group, Lufthansa and Air France-
KLM and UK-based low-cost airline
easyJet reporting increased demand for
tickets and improving pricing.
Ryanair gave a cautious outlook for
the year ahead, saying profits would rise
to between 1.4bn and 1.45bn, and
warned about the risk of any negative
Brexit developments or a repeat of last
years terrorist attacks.
It expected average fares for the full
year to fall by between 5 and 7 per cent
because of the weak pound and continu-
ing excess capacity in Europe. That
British flag carriers sales and earnings
revenues (bn)
6
4
2011 12 13
what went wrong was, and remains,
hopelessly sketchy and his tone was
unconvincing. What is more, BA
clearly lacked sufficient resources to
recover from its IT outage and fulfil its
passenger promises afterwards. In the
latest video, Mr Cruz tells passengers
whose luggage is still marooned
somewhere in the BA system that we
have your bags and will look after
them. His reassurance has all the cold
conviction of a kidnapper submitting a
ransom demand.
When Mr Cruz quits and he will,
maybe not this week or even this year,
but quietly, at some future point when
the outrage has died down the airline
should seriously reconsider the job
specification for his replacement.
For years, bosses of the old flag-
carrying airlines have been hired on
the basis that their whole life is about
how to squeeze an extra mile out of a
gallon of jet fuel. Of course, some of
the hysteria about BAs failings is an
would be an improvement from a
decline of 13 per cent last year. Ryanair
expects to fly 130m passengers this year,
a growth of 8 per cent, slower than the
13 per cent growth in 2016-17.
Michael OLeary, chief executive, said
the airline was happy with its perform-
ance despite difficult trading condi-
tions. We reacted to these challenges
by improving our customer experience,
1.3bn 13%
Profit after tax Reduction in the
for the financial carriers average
year ending fares over the
March 31 year, to 41
Andy Rain/epa
Operating profit before
exceptional items (bn)
1.5
1.0
0.5
0
14 15 16
over-reaction. Security concerns and
financial pressures have turned
airports and air travel, even on a good
day, into a barely tolerable experience.
Passengers are quick to crack.
But precisely for that reason, airline
chiefs need to have skills that go
beyond a good eye for an uncontrolled
overhead. They need to be able to
connect with passengers. They need to
be ready to handle emergencies with
aplomb, conviction and empathy.
Critically, they need to be prepared and
have the resources available to swamp
any problems with on-the-ground
customer care and compensation.
BA could have cushioned itself from
this crisis if it had benefited from a
little more redundancy the second,
rather than the first type and had
hired a chief executive for customer-
friendliness as much as for cost-
effectiveness.
andrew.hill@ft.com
Legal Notices
Wednesday 31 May 2017
and stimulating growth with lower
fares, he said.
The airline announced plans for a
600m share buyback to be completed
by the end of October. Since 2008 Ryan-
air has returned about 5.4bn to
investors through buybacks and special
dividends.
Gerald Khoo, analyst at Liberum, said
that while guidance for this year was a
touch light of consensus, it was not
enough to cause concern given Ryanairs
record of conservative forecasts.
Average fares are seen remaining
under pressure, but less so than in 2017,
he said.
See Lex
weather or events. French Air Traffic
Control strikes then caused chaos which
they seemed to struggle to recover
from, says one city analyst.
Vueling went from being the favourite
child in the IAG family with the highest
margins in 2014, to the airline with the
lowest margins last year.
As Mr Cruz was still chief executive of
Vueling when the summer timetable
was set, analysts point out he was
responsible for growing the airline too
aggressively. Mr Cruz got promoted
out of trouble, says one City analyst,
who wished to remain anonymous.
Another adds: Just as he moved over to
BA, Vueling blew up last summer.
For this reason, Mr Cruz was the only
one of 12 senior executives at IAG not to
receive a bonus for 2016.
For now, it appears that Mr Cruz, who
has refused to resign over the scandal,
will be the man faced with the task of
repairing the damage done to BA over
the short term. A spokeswoman for IAG
told the FT on Tuesday that Mr Cruz has
the full support of IAG chief executive
Industry analysts
believe that
Alex Cruz, chief
executive, will
have to revisit
cost-cutting plans
Willie Walsh, noting that Mr Cruz could
not have prevented the IT glitch.
Several analysts agree that there is no
need for heads to roll. Whats that
going to solve? Is it actually going to
make anything better to change the per-
son at the top or would it be better to
have the same person enforce change
with the benefit of painful lessons? says
Gerald Khoo, analyst at Liberum.
Experts believe BA must explain the
source of the power surge that the group
says triggered the computer system fail-
ure, now that flights have returned to
normal at Heathrow and Gatwick.
On Monday, Mr Cruz blamed the IT
failure on an exceptional power surge,
which he said had been so strong it also
disabled the airlines back-up system.
The statement left many in the avia-
tion and energy industry confused.
Electricity companies denied there
were any issues with networks that
serve Heathrow and the surrounding
area. Ryanair revealed that it had sev-
eral back-up systems in place to deal
with any similar problems. Thats what
most businesses would do. We take IT
very seriously, says Kenny Jacobs, chief
marketing officer at Ryanair.
There is no doubt the incident is
going to sharpen attention at BA on
operational resilience, says Mr Khoo.
Additional reporting by Nathalie Thomas
ft.com/lombard
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Business Services,
Business Wanted, Franchises
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Wednesday 31 May 2017
Banks
Lenders in panic over EU data law
Groups are struggling to
overhaul systems ahead
of next years deadline
MARTIN ARNOLD BANKING EDITOR
Banks have just under a year to
overhaul the way they handle customer
data if they are to avoid big fines. But
many of them are privately warning
that the challenge is already looking
insurmountable.
All companies will need to work out
what data they hold on their customers,
where they hold it, if they have permis-
sion to do so, whether it is stored safely,
and how they can extract it in an easily
portable form or delete it if
requested.
These are the main requirements of a
new European data protection law that
comes into force on May 25 2018. It
affects all companies holding data about
EU citizens.
Mining
Molycorp Mountain Pass near Las Vegas is the USs only significant source of rare earth elements, meaning a dependency on foreign sources Jacob Kepler/Bloomberg
Contenders line up for control of rare earths mine
HENRY SANDERSON LONDON
A battle is heating up for control of a
bankrupt mine that is the only signifi-
cant US source of the rare earth ele-
ments used in advanced electronics
and some defence applications.
A group led by a former nursing home
operator and a Switzerland-based pri-
vate equity fund will vie with a team of
US hedge funds and a Chinese rare
earths company in an auction set to
decide the fate of the bankrupt Moly-
corp-owned mine on June 14.
At stake is whether the US can suc-
cessfully mine its own resources of rare
earths, which are increasingly being
used in electric vehicle magnets as well
as wind turbines and end its reliance
on Chinese supplies.
Telecoms
RComm debt downgraded amid default fears
ALIYA RAM NEW DELHI
Reliance Communications woes con-
tinued after the Indian telecoms group
controlled by billionaire Anil Ambani
was downgraded by credit rating agen-
cies yesterday.
Care Ratings, Indias second-largest rat-
ing agency, downgraded all types of
RComms debt to default, the lowest rat-
ing. Moodys followed suit, cutting
RComms corporate family rating and
senior secured bond rating to Caa1, indi-
cating high credit risk.
The downgrades followed a turbulent
two days in which bond and share prices
in RComm slumped after reports it had
missed interest repayments to lenders.
The telecoms group has refused to
confirm or deny the reports, alarming
investors already unsettled by its first
annual loss, announced on Saturday. Its
net loss of Rs12.9bn ($200m) for the
year to March was in contrast to profits
of Rs6.6bn the year before.
The yield on the companys dollar
bonds due in 2020 rose to 18 per cent,
having risen 6 percentage points since
Yet consultants say banks face the
biggest challenges to comply in time
because of the difficulty of changing
their ageing and complex IT systems.
Banks are struggling with legacy sys-
tems, says Chris McMillan, a partner at
Oliver Wyman, a consultancy. From
our discussions with chief technology
officers at banks, they are concerned the
technical challenge may be impossible
given there is only a year to go.
He added: At some banks, a cus-
tomers data may be held on more than
100 systems, and each of these take a
long time to change, even for a simple
change. Sometimes even the simplest
changes take months and months. Mul-
tiply that by a hundred and it becomes a
very complicated task.
Mr McMillan says the smartest banks
will turn the new law to their advantage
by becoming the main data hub for their
customers, for instance, by offering to
check if they are getting the best deal
from their phone or energy provider.
Mike Pompeo, director of the CIA,
said this month that the US dependence
on foreign sources of rare earths was a
very real concern.
Last year, the US imported $120m of
rare earth metals, according to the US
Geographical Survey more than 70
per cent from China.
The winner of the auction is likely to
have to pass scrutiny by the Committee
on Foreign Investment in the US, and
take on an estimated $80m in environ-
mental liabilities.
Molycorp invested more than $1.5bn
into the Mountain Pass mine, which is
about 50 miles south of Las Vegas, but a
collapse in prices of rare earths led the
company to declare bankruptcy in 2015.
The mine contains elements such as
neodymium, praseodymium and dys-
Friday. By close of trading yesterday
shares in the group had fallen 22 per
cent to Rs19.90 since the start of the
week.
The crisis deepened yesterday after
Gurdeep Singh, chief executive, side-
stepped questions about the debt repay-
ments during an analyst call on Monday.
Analysts questions centred on a
report in Indias Economic Times, which
alleged that the group has failed to serv-
ice loans from more than 10 banks. Mr
Singh did not confirm or deny that it has
missed repayments, but said RComm
wanted to refinance loans that fall due
before September 30 with a new consor-
tium of lenders and was in talks.
He added that two pending transac-
tions, one to merge the groups wireless
business with rival Aircel and another to
sell its mobile phone towers to Canada-
based Brookfield Asset Management,
would boost sales and cash flow and
reduce debt by Rs250bn ($3.9bn).
RComm has net debt of Rs443bn, 9.7
times its earnings before interest, tax,
depreciation and amortisation.
Reliance Communications has for-
FINANCIAL TIMES
COMPANIES
A bank could see you have a direct
debit to a telco and ask you for permis-
sion to request the data from the telco to
check you are getting the best deal, he
says. That would be a compelling prop-
osition for a customer, knowing their
bank is trying to save them money.
The stakes for banks are high as
A customers data may be
held on more than 100
systems, and each of these
take a long time to change
breaches of the rules could trigger fines
of up to 4 per cent of a companys global
turnover or 20m, whichever is higher.
Oliver Wyman calculated that FTSE
100 companies could have been fined
up to 25bn for publicly known data
breaches in the past five years.
Scott Vincent, managing partner at
consultancy Parker Fitzgerald, says that
prosium that go into magnets used in
batteries and wind turbines.
Tom Clarke, a former care home oper-
ator who has been buying bankrupt US
coal mines, has teamed up with Switzer-
land-based Pala Investments and Aus-
tralian rare earths explorer Peak
Resources to offer $1.2m for the mine.
Theres a broad support that we need
tohavetheseelementshereintheUS,Mr
Clarke said, adding that there was a relia-
ble market for the materials given grow-
ing demand from electric vehicle batter-
$120 m $1.5 bn
US imports of rare Amount Molycorp
earth metals invested in rare
70% of which earths mine before
came from China prices collapsed
mally advised all its lenders that it will
be making repayment of an aggregate
amount of Rs250bn from the proceeds
of these two transactions, on or before
30 September 2017, the company said
yesterday before the downgrade.
Care said it acted due to significant
stress on its cash flows and high levels of
debt repayments. Moodys said that if
RComm did not receive covenant waiv-
ers there could be significant implica-
tions for bondholders. RComm did not
respond to requests for comment.
If lenders do not agree refinancing
terms, or if the deals fall through,
RComm could be pushed into technical
default. Market regulations do not
require RComm or its creditors to dis-
close missed loan repayments, but
agreements with rating agencies do.
Credit analysts say the group has
refused to clarify whether it has made
all its loan repayments on time.
Pawan Matkari, an analyst at Care,
said: Weve been trying to reach the
company . . . but we havent learnt any-
thing yet. We would have to recognise
missed payments as a default.
added to the alphabet soup of other
financial regulations coming into force
soon including Mifid II, PSD2 and
IFRS 9 banks face an enormous chal-
lenge in complying with the EUs Gen-
eral Data Protection Regulation. He
describes a growing sense of industry
panic about the data protection law.
Some bankers complain they are
being pulled in different directions by
contradictory regulations. Your head
will be spinning, Vivienne Artz, global
head of privacy at Citigroup, told a con-
ference last week. She said data protec-
tion laws restricting the amount and
type of information that can be shared
could conflict with requirements to dis-
close details of any cyber attacks.
Almost three-quarters of companies
believe they face serious challenges in
becoming compliant with GDPR, accord-
ingtoarecentsurveyof500ITexecutives
in different sectors for Varonis Systems.
At financial services companies, the fig-
ureedgeshigher,at76percent.
ies. We really do believe that even in the
current markets certain of these ele-
mentswillbeprofitable,hesaid.
Set against Mr Clarke in the auction is
a group of Molycorp creditor hedge
funds. They include Chicago-based JHL
Capital Group, run by James Litinsky,
and QVT Financial, which have teamed
up with Shanghai-listed Shenghe
Resources, a rare earths processor.
Adding to the complexity of the proc-
ess, a company owned by JHL, QVT and
New York-based asset manager Oaktree
Capital own the mineral rights to the
mine.
Mr Clarke said his group could still
use the mine site to process material
from elsewhere if they did not get the
mineral rights but he hoped to negoti-
ate for them if he won.
Pharmaceuticals. Cancer forum
Drugmakers and
investors sieve data
for breakthroughs
R&D revelations are set to
spur corporate rivalry at the
leading US oncology gathering
DAVID CROW NEW YORK
Each year 30,000 doctors descend on
Chicago for the annual meeting of the
American Society of Clinical Oncology
to pore over thousands of pieces of clini- patients.
cal research and learn about the latest
ways to battle cancer.
The event, to be held this weekend,
has become important for drugmakers
too. Many drugmakers hold back the
results of promising trials to make a
splash at the Asco conference.
Pharmaceutical investors will be
focusing on four main areas:
Herceptins future
Roches breast cancer medicine, one of
the best-selling oncology drugs, gener-
ated about $7bn of sales last year for the
Swiss drugmaker.
But with Mylan gearing up to launch a
cheaper biosimilar version, analysts
ask how long the franchise will survive.
Roche has been pushing the use of
Herceptin in combination with Perjeta,
a newer medicine with a longer patent
life. A large study of the drug cocktail in
patients with a type of breast cancer
known as HER2-positive is due to be
presented at the conference.
Oncologists say the benefit of the
expensive cocktail, compared with Her-
ceptin alone, would have to be substan-
tial for them to switch once the copycat
version is available. Also the combina-
tion can cause severe diarrhoea.
The big question is whether data are
enough to convince clinicians that the
standard of care in HER2-positive
breast cancer is now the Herceptin and
Perjeta combination, said Steve
McGarry, HSBC analyst.
He was concerned that the data
would be positive, but perhaps not posi-
tive enough to meet high expectations,
he said.
Focus on tumour location
For decades oncologists focused on
where the primary tumour is based
there are specialists for cancer of the
lung, brain, breast and so on.
But scientists are asking whether
patients should instead be treated based
on the genetic features of their cancer
and pharmaceutical companies are fol-
lowing suit.
Last week Merck became the first
company to win approval to use its
Keytruda immunotherapy in all
patients whose tumours have a biologi-
cal trait or biomarker regardless of
where the cancer is located.
At Asco the US group is due to present
full results from the trial that convinced
the regulators.
We have now approved a drug based
on a tumours biomarker without
regard to the tumours original loca-
tion, said Richard Pazdur, one of the
top oncologists at the US Food and Drug
Administration.
Investors are also watching out for a
study of a drug made by Loxo Oncology.
The small US biotechnology group has
been singled out by the organisers of
Asco as being of particular interest.
Loxo is developing a medicine for
patients whose tumours have a specific
genetic defect. It is being trialled in a
15
broad range of cancers including lung,
colon and melanoma.
Combination and immunotherapy
Immunotherapies, which turn the body
into a weapon against cancer, have pro-
duced some remarkable results,
extending the lives of patients by
months or years longer than doctors
would have expected. But they still
work only in 20 to 30 per cent of
Drugmakers have aimed to boost that
proportion by combining immuno-
therapies with other drugs in a flurry of
clinical trials.
Among the studies that have gener-
ated the most interest relates to using
Mercks Keytruda with an experimental
drug being developed by Incyte, a bio-
tech group.
Results from the trials published by
the organisers of Asco suggest the com-
bination could increase response rates
significantly. Shares in Incyte have
jumped 20 per cent since the data were
made public this month.
Andrew Baum, analyst at Citigroup,
said the performance of the cocktail in
lung cancer patients 35 per cent of
whom responded was his biggest
takeaway so far.
Investors will be waiting for the full
study to be presented this weekend to
see whether there are holes in the data.
One investor in Incyte said even a
small wrinkle could hit the shares,
which were priced for perfection.
AstraZenecas ambitions
When Pascal Soriot, the AstraZeneca
chief executive, rebuffed a 69.4bn bid
from Pfizer in 2014, he said the US group
had vastly undervalued his companys
oncology drugs.
Investors will soon find out whether
he was right, when the UK drugmaker
publishes the results from its trial of a
combination medicine for lung cancer.
Some investors see the Mystic trial as
a make-or-break moment for Astra-
Zeneca, and the company has been keen
to point to other promising cancer prod-
ucts in its portfolio.
Among these is Lynparza, which
blocks the ability of cancer cells to
repair themselves. The drug has been
approved for the treatment of some
ovarian cancer patients. Data from a
successful breast cancer trial will be
unveiled at the conference.
Timothy Anderson, analyst at Bern-
stein, predicts a practice-changing
result in the treatment of breast cancer
patients who have a mutation in their
BRCA genes.
Many groups hold back results of
trials to make a splash at the forum
16 FINANCIAL TIMES Wednesday 31 May 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 $

-0.12% -0.10% -0.20% -0.28% -0.22% -0.02% -0.06% -0.279% -0.115% -1.32% -0.19%
No change
0.24% 0.156%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
May 01 - - Index All World May 01 - May 30 Index All World May 01 - May 30 Index All World May 01 - May 30 Index All World May 01 - May 30 Index All World May 01 - May 30 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
7,547.63 2,343.68
2,412.82 19,677.85
2,384.20 15,586.13 12,598.68
15,373.36 7,288.72 19,289.43
12,438.01 2,205.44
Day -0.12% Month 1.21% Year 14.96% Day -0.31% Month -1.37% Year 9.13% Day -0.28% Month 4.43% Year 19.97% Day -0.24% Month 1.29% Year 21.92% Day -0.02% Month 2.51% Year 16.89% Day -0.39% Month 6.27% Year 19.02%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
6,203.71 25,701.63
49,261.33 49,379.49 1,533.66 10,876.90 3,204.79
6,047.61 1,517.54 10,715.80 24,578.43 3,171.36
Day -0.10% Month 2.59% Year 25.75% Day -0.14% Month 0.27% Year 7.34% Day -0.22% Month 0.94% Year 11.57% Day -0.07% Month 1.50% Year 19.43% Day 0.24% Month 4.41% Year 24.91% Day -0.30% Month 0.92% Year 14.35%

Dow Jones Industrial New York Bovespa So Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
31,159.40
21,038.50 65,403.25 3,288.93 3,257.06
20,940.51 64,098.01 5,305.94
5,267.33 20,814.48
20,609.16 29,918.40
Day -0.20% Month 0.47% Year 17.71% Day 0.53% Month -2.05% Year 30.83% Day -0.50% Month 0.73% Year 17.52% Day 0.15% Month 1.00% Year 13.79% Day 0.08% Month -0.78% Year 10.48% Day 0.16% Month 4.15% Year 16.91%

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 22233.12 22347.43 Cyprus CSE M&P Gen 76.67 77.09 Italy FTSE Italia All-Share 23058.36 23024.74 Philippines Manila Comp 7860.77 7886.03 Taiwan Weighted Pr 10101.95 10108.49 Cross-Border DJ Global Titans ($) 274.66 274.69
Australia All Ordinaries 5756.00 5747.70 Czech Republic
PX 1006.15 1012.90 FTSE Italia Mid Cap 40135.95 40092.59 Poland Wig 60344.58 60859.28 Thailand Bangkok SET 1568.57 1568.17 Euro Stoxx 50 (Eur) 3561.22 3578.95
S&P/ASX 200 5717.90 5707.10 Denmark OMXC Copenahgen 20 987.64 983.05 FTSE MIB 20814.48 20783.82 Portugal PSI 20 5279.80 5226.48 Turkey BIST 100 97725.95 97533.28 Euronext 100 ID 1022.64 1026.45
S&P/ASX 200 Res 3380.20 3367.70 Egypt EGX 30 13239.16 13207.94 Japan 2nd Section 5971.39 5964.36 PSI General 2908.83 2884.38 UAE Abu Dhabi General Index 4501.76 4492.92 FTSE 4Good Global ($) 6081.22 6076.46
Austria ATX 3160.27 3209.58 Estonia OMX Tallinn 1116.20 1116.80 Nikkei 225 19677.85 19682.57 Romania BET Index 8688.50 8673.50 UK FT 30 3367.10 3367.40 FTSE All World 306.71 306.90
Belgium BEL 20 3890.84 3893.47 Finland OMX Helsinki General 9711.88 9739.58 S&P Topix 150 1273.55 1271.62 Russia Micex Index 1932.91 1940.77 FTSE 100 7526.51 7547.63 FTSE E300 1533.66 1536.99
BEL Mid 6719.66 6703.98 France CAC 40 5305.94 5332.47 Topix 1572.67 1570.21 RTX 1074.81 1085.75 FTSE 4Good UK 6682.46 6693.63 FTSE Eurotop 100 3007.72 3016.81
Brazil Bovespa 64098.01 63760.94 SBF 120 4228.62 4245.47 Jordan Amman SE 2160.39 2155.26 Saudi-Arabia TADAWUL All Share Index 6870.62 6821.71 FTSE All Share 4119.58 4130.15 FTSE Global 100 ($) 1507.08 1507.77
Canada S&P/TSX 60 907.57 Germany
909.58 M-DAX 25229.32 25282.30 Kenya NSE 20 3438.17 3438.20 Singapore FTSE Straits Times 3204.79 3214.55 FTSE techMARK 100 4653.18 4673.33 FTSE Gold Min ($) 1506.40 1512.73
S&P/TSX Comp 15373.36 15421.91 TecDAX 2284.48 2275.91 Kuwait KSX Market Index 6726.87 6662.89 Slovakia SAX 304.13 307.54 USA DJ Composite 7283.92 7288.05 FTSE Latibex Top (Eur) 3976.10 3965.80
S&P/TSX Div Met & Min 701.59 708.06 XETRA Dax 12598.68 12628.95 Latvia OMX Riga 855.16 848.12 Slovenia SBI TOP 782.22 785.95 DJ Industrial 21038.50 21080.28 FTSE Multinationals ($) 1762.11 1762.36
Chile IGPA Gen 24558.07 24529.23
Greece Athens Gen 776.02 777.19 Lithuania OMX Vilnius 589.05 584.89 South Africa FTSE/JSE All Share 54158.04 53944.22 DJ Transport 9175.41 9176.20 FTSE World ($) 542.93 543.26
China FTSE A200 9019.42 9028.96 FTSE/ASE 20 2064.22 2068.21 Luxembourg LuxX 1745.71 1744.70 FTSE/JSE Res 20 31489.10 31253.22 DJ Utilities 722.69 720.22 FTSEurofirst 100 (Eur) 4338.65 4354.88
FTSE B35 9000.71 8988.96
Hong Kong Hang Seng 25701.63 25639.27 Malaysia FTSE Bursa KLCI 1765.34 1764.89 FTSE/JSE Top 40 47699.35 47533.50 Nasdaq 100 5794.36 5788.36 FTSEurofirst 80 (Eur) 4895.54 4915.56
Shanghai A 3257.06 3254.35 HS China Enterprise 10619.34 10579.67 Mexico IPC 49379.49 49450.48 South Korea Kospi 2343.68 2352.97 Nasdaq Cmp 6203.71 6210.19 MSCI ACWI Fr ($) 464.29 464.50
Shanghai B 320.83 320.37 HSCC Red Chip 4078.50 4056.22 Morocco MASI 11536.13 11534.46 Kospi 200 304.59 306.52 NYSE Comp 11603.81 11631.87 MSCI All World ($) 1911.70 1912.21
Shanghai Comp 3110.06 3107.46
Hungary Bux 34321.14 34138.11 Netherlands AEX 525.71 527.73 Spain IBEX 35 10876.90 10884.00 S&P 500 2412.83 2415.82 MSCI Europe (Eur) 1598.24 1600.03
Shenzhen A 1893.24 1895.13
India BSE Sensex 31159.40 31109.28 AEX All Share 800.11 802.22 Sri Lanka CSE All Share 6655.25 6679.46 Wilshire 5000 25057.00 25107.11 MSCI Pacific ($) 2533.33 2536.54
Shenzhen B 1086.47 1084.98 Nifty 500 8328.95 8299.50 New Zealand NZX 50 7411.95 7412.74 Sweden OMX Stockholm 30 1639.74 1631.91 Venezuela IBC 73959.10 72689.66 S&P Euro (Eur) 1633.09 1637.86
Colombia COLCAP 1448.93 1448.93
Indonesia Jakarta Comp 5712.33 5716.82 Nigeria SE All Share 29064.52 28467.61 OMX Stockholm AS 588.27 585.10 Vietnam VNI 738.21 746.25 S&P Europe 350 (Eur) 1578.15 1581.65
Croatia CROBEX 1854.08 1853.42
Ireland ISEQ Overall 6995.83 6972.30 Norway Oslo All Share 788.92 789.60 Switzerland SMI Index 9007.54 9031.96 S&P Global 1200 ($) 2128.40 2129.58
Israel Tel Aviv 100 12.96 12.97 Pakistan KSE 100 51453.16 52138.90 Stoxx 50 (Eur) 3220.57 3231.19
(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 May 30 %Chg %Chg May 30 %Chg %Chg May 30 %Chg %Chg May 30 %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
Nvidia 19.9 145.17 3.33 Glaxosmithkline 240.1 1673.00 29.84 Unicredit 519.7 15.85 -0.02 Softbank . 993.9 8980.00 248.00 Easyjet 1400.00 7.4 39.0 Wizz Air Holdings 2343.00 18.2 27.2 Oxford Instruments 1134.00 7.2 54.9 Industrial Metals 2269.32 3.3 0.9
Amazon.com 16.0 997.42 1.64 Shire 207.4 4503.00 -89.79 Intesa Sanpaolo 375.7 2.55 -0.02 Mitsubishi Ufj Fin,. 251.5 696.50 -1.40 3i 888.50 5.3 25.4 Countryside Properties 334.00 12.0 34.2 Lsl Property Services 235.00 6.8 2.0 Electronic & Electrical Equip. 6004.74 2.6 22.3
Tesla 14.5 332.47 7.33 Vodafone 165.3 229.15 -1.76 Santander 363.2 5.80 -0.06 Toyota Motor 194.9 5981.00 11.00 Wpp 1751.00 4.7 -3.5 Restaurant 361.40 12.0 8.0 Hss Hire 66.25 6.6 -18.9 Personal Goods 37475.71 2.6 27.5
Apple 11.5 153.89 0.28 Glencore 161.6 292.00 -0.56 Telefonica 356.8 9.98 -0.10 Tokyo Electron 186.0 15650.00 -165.00 Tui Ag 1192.00 4.3 2.3 Sophos 454.00 10.5 72.8 Stock Spirits 170.25 6.2 -5.8 Industrial Transportation 3174.58 2.1 4.0
Facebook 11.3 152.02 -0.11 British American Tobacco 157.9 5501.00 -83.50 Bnp Paribas Act.a 343.7 63.60 -2.75 Sony 184.2 4031.00 -7.00 Informa 669.50 4.0 -1.6 Intermediate Capital 880.50 9.6 26.8 Boot (henry) 298.50 6.2 48.6 Aerospace & Defense 5417.50 2.1 16.6
Bank Of America 6.4 23.08 -0.16 Bp 135.3 472.10 -1.82 Cs N 289.1 12.35 -0.14 Sumitomo Mitsui Fin,. 182.2 4048.00 7.00 Royal Mail 438.20 3.7 -5.0 Spirax-sarco Eng 5660.00 8.1 35.7 Hansard Global 91.00 6.1 -13.7 Software & Computer Services 2135.00 2.0 12.8
Alphabet 6.1 994.30 1.03 Hsbc Holdings 130.1 675.20 0.17 Nestle N 270.4 75.54 -0.05 Sumco 134.5 1787.00 7.00 Bae Systems 665.00 3.4 12.2 Computacenter 863.00 6.5 7.9 Communisis 52.00 6.1 19.9 Media 7978.99 2.0 1.7
Micron Technology 5.8 30.60 0.84 Reckitt Benckiser 118.5 7926.00 5.98 Novartis N 263.9 72.10 0.09 Kao 133.9 6974.00 66.00 Compass 1661.00 3.3 10.5 Electrocomponents 584.00 6.3 22.1 Imagination 119.75 5.7 -52.5 Household Goods 19121.08 2.0 19.2
Alphabet 5.3 973.48 2.01 Int Consolidated Airlines S.a. 112.0 605.50 -18.00 Bbva 240.9 7.36 -0.12 Honda Motor Co., 129.7 3073.00 9.00 Reckitt Benckiser 7926.00 3.2 14.4 Just Eat 652.00 6.2 11.9 Petropavlovsk 7.90 5.2 13.7 Mobile Telecommunications 5161.31 2.0 14.1
Comcast 5.3 41.30 0.39 Unilever 104.7 4310.00 -12.85 Ing Groep N.v. 239.2 14.93 -0.19 Nippon Telegraph And Telephone 123.8 5251.00 2.00 Convatec 320.00 3.0 38.1 Sig 152.70 5.8 48.6 Stv 372.38 5.0 5.7 Travel & Leisure 9906.72 2.0 13.3
Carnival 4959.00 2.9 19.4 Rank 220.00 5.1 13.2 Porvair 588.00 4.6 38.7 Industrial Engineering 11700.03 1.8 14.2
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Glaxosmithkline 1673.00 2.7 7.1 Ascential 352.60 4.7 32.4 Kcom 95.50 4.0 0.7 Nonlife Insurance 3023.58 1.7 9.8
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
First Solar 39.26 2.42 6.57 Ferrexpo 182.60 7.53 4.36 Amadeus It 51.00 2.05 4.18 Toho Z Co., 434.00 13.00 3.09 Kingfisher 324.00 -9.4 -7.1 Petrofac 396.20 -37.3 -54.4 Kainos 222.75 -13.2 8.9 Oil Equipment & Services 13063.85 -10.5 -19.9
Frontier Communications 1.38 0.05 3.76 Sophos 454.00 15.34 3.51 Publicise Sa 68.84 1.89 2.82 Softbank . 8980.00 248.00 2.84 Mediclinic Int 789.50 -9.3 2.3 Acacia Mining 284.40 -34.4 -23.9 Lonmin 80.00 -11.6 -43.5 Fixed Line Telecommunication 3562.68 -2.3 -14.9
Micron Technology 30.60 0.84 2.81 Countryside Properties 334.00 7.90 2.42 Ucb 63.06 1.47 2.39 All Nippon Airways Co., 362.10 8.60 2.43 Babcock Int 937.00 -3.2 -1.5 Onesavings Bank 423.50 -8.7 27.0 Renewi 93.75 -8.5 3.0 Electricity 8960.98 -2.0 -3.0
Hp 18.97 0.50 2.71 Computacenter 863.00 19.98 2.37 Swedbank Ab Ser A 21.52 0.49 2.34 Mitsui Mining And Smelting , 425.00 10.00 2.41 Shire 4503.00 -3.1 -2.6 Tullow Oil 192.70 -8.4 -37.7 Topps Tiles 90.00 -6.1 3.3 General Retailers 2653.46 -1.5 2.5
Borgwarner 41.96 0.97 2.37 Ibstock 242.90 5.20 2.20 Seadrill 0.42 0.01 2.05 Furukawa Electric Co., 4890.00 95.00 1.98 Experian 1615.00 -2.4 2.8 Tate & Lyle 737.00 -7.4 4.0 Enquest 37.75 -5.6 -10.1 Food Producers 8618.62 -1.2 7.2
Next 4380.00 -2.4 -12.5 Petra Diamonds 129.30 -7.0 -17.5 Soco Int 131.00 -5.2 -17.9 Mining 14914.16 -0.4 0.9
Downs Downs Downs Downs
Paddy Power Betfair 8095.00 -2.4 -6.4 Softcat 429.90 -6.0 45.9 Renold 56.75 -4.9 32.0 Life Insurance 8305.86 -0.3 4.9
Chesapeake Energy 5.06 -0.23 -4.35 Talktalk Telecom 172.10 -10.00 -5.49 Bnp Paribas Act.a 63.60 -2.75 -4.14 Concordia Fin Ltd 522.30 -12.10 -2.26
Barclays 209.20 -2.3 -6.3 Talktalk Telecom 172.10 -5.9 1.7 Headlam 610.00 -4.5 25.1 Support Services 7825.88 -0.2 11.2
Kinder Morgan 18.45 -0.80 -4.16 Mediclinic Int 789.50 -27.64 -3.39 Bureau Veritas 20.71 -0.57 -2.66 Citizen Holdings Co., 725.00 -16.00 -2.16
Sse 1515.00 -2.2 -2.3 Homeserve 737.50 -5.6 18.3 Sthree 306.25 -3.8 -0.3 Banks 4324.36 -0.1 4.5
Devon Energy 34.56 -1.26 -3.50 Tullow Oil 192.70 -6.69 -3.32 Natixis 5.94 -0.16 -2.61 Nippon Paper Industries Co Ltd 2137.00 -46.00 -2.11
Bt 308.85 -2.2 -15.8 Amec Foster Wheeler 525.00 -5.3 9.3 Norcros 167.00 -3.7 -7.2 Health Care Equip.& Services 8345.08 -0.1 13.6
Hess 46.61 -1.53 -3.18 Ip 140.00 -4.60 -3.18 Bk Of Ireld Cap.st.eo-,05 0.24 -0.01 -2.46 Takashimaya , 1024.00 -21.00 -2.01
Centrica 202.70 -2.1 -13.5 Cairn Energy 205.30 -5.1 -12.2 Chesnara 380.00 -3.7 2.9 Oil & Gas Producers 7886.13 -0.1 -7.2
Cimarex Energy Co 107.59 -3.36 -3.03 Polymetal Int 999.00 -31.58 -3.08 Raiffeisen Bank Internat. Ag 23.52 -0.57 -2.37 Familymart Co., 6420.00 -120.00 -1.83
Royal Bank Of Scotland 260.60 -1.7 15.9 Paypoint 948.00 -4.9 -5.8 Novae 543.50 -3.5 -20.9 Construction & Materials 6897.04 -0.1 1.2
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
May 30 Currency Mid Change Mid Change Mid Change May 30 Currency Mid Change Mid Change Mid Change May 30 Currency Mid Change Mid Change Mid Change May 30 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 16.0875 0.0975 17.9819 0.1098 20.6903 0.1558 Indonesia Indonesian Rupiah 13322.5000 0.5000 14891.3009 1.2195 17134.1726 25.9425 Poland Polish Zloty 3.7365 -0.0073 4.1764 -0.0080 4.8055 -0.0023 ..Three Month 0.7779 -0.0011 0.8689 -0.0012 - -
Australia Australian Dollar 1.3412 -0.0024 1.4991 -0.0026 1.7249 -0.0006 Israel Israeli Shekel 3.5435 -0.0181 3.9608 -0.0201 4.5573 -0.0166 Romania Romanian Leu 4.0896 0.0046 4.5712 0.0053 5.2597 0.0136 ..One Year 0.7791 -0.0011 0.8684 -0.0012 - -
Bahrain Bahrainin Dinar 0.3772 0.0000 0.4216 0.0000 0.4851 0.0007 Japan Japanese Yen 110.9800 -0.3100 124.0485 -0.3409 142.7322 -0.1873 Russia Russian Ruble 56.6313 0.1512 63.2999 0.1719 72.8339 0.3018 United States United States Dollar - - 1.1178 0.0000 1.2861 0.0019
Bolivia Bolivian Boliviano 6.9100 - 7.7237 0.0003 8.8870 0.0131 ..One Month 110.9798 -0.3103 124.0485 -0.3409 142.7322 -0.1874 Saudi Arabia Saudi Riyal 3.7504 - 4.1920 0.0002 4.8234 0.0071 ..One Month - - 1.1176 -0.1665 1.2862 0.0019
Brazil Brazilian Real 3.2672 -0.0032 3.6519 -0.0034 4.2020 0.0021 ..Three Month 110.9795 -0.3109 124.0486 -0.3408 142.7320 -0.1877 Singapore Singapore Dollar 1.3851 -0.0003 1.5482 -0.0003 1.7814 0.0022 ..Three Month - - 1.1172 -0.1665 1.2865 0.0019
Canada Canadian Dollar 1.3467 0.0028 1.5052 0.0032 1.7319 0.0062 ..One Year 110.9780 -0.3141 124.0487 -0.3405 142.7322 -0.1884 South Africa South African Rand 13.1238 0.1438 14.6691 0.1613 16.8786 0.2095 ..One Year - - 1.1155 -0.1665 1.2876 0.0019
Chile Chilean Peso 675.7300 1.7800 755.3010 2.0233 869.0615 3.5694 Kenya Kenyan Shilling 103.4100 0.0600 115.5871 0.0722 132.9964 0.2735 South Korea South Korean Won 1125.2000 3.5000 1257.6987 3.9682 1447.1282 6.6319 Venezuela Venezuelan Bolivar Fuerte 10.1764 0.0215 11.3747 0.0245 13.0879 0.0469
China Chinese Yuan 6.8610 - 7.6689 0.0003 8.8240 0.0130 Kuwait Kuwaiti Dinar 0.3037 -0.0001 0.3394 0.0000 0.3905 0.0005 Sweden Swedish Krona 8.7399 0.0437 9.7691 0.0493 11.2405 0.0727 Vietnam Vietnamese Dong 22711.0000 -30.0000 25385.3496 -32.4556 29208.8491 4.6063
Colombia Colombian Peso 2918.3850 6.8850 3262.0414 7.8415 3753.3578 14.3859 Malaysia Malaysian Ringgit 4.2825 0.0065 4.7868 0.0075 5.5078 0.0165 Switzerland Swiss Franc 0.9753 -0.0009 1.0901 -0.0010 1.2543 0.0006 European Union Euro 0.8947 0.0000 - - 1.1506 0.0016
Costa Rica Costa Rican Colon 576.5650 -4.0900 644.4587 -4.5426 741.5246 -4.1573 Mexico Mexican Peson 18.6605 0.1472 20.8579 0.1655 23.9994 0.2245 Taiwan New Taiwan Dollar 30.1050 - 33.6500 0.0015 38.7183 0.0572 ..One Month 0.8945 -0.0001 - - 1.1506 0.0016
Czech Republic Czech Koruna 23.6708 -0.0203 26.4582 -0.0215 30.4432 0.0189 New Zealand New Zealand Dollar 1.4111 -0.0022 1.5773 -0.0024 1.8149 -0.0001 Thailand Thai Baht 34.1300 -0.0005 38.1490 0.0011 43.8948 0.0642 ..Three Month 0.8941 0.0000 - - 1.1504 0.0017
Denmark Danish Krone 6.6554 -0.0006 7.4391 -0.0003 8.5596 0.0119 Nigeria Nigerian Naira 314.7500 - 351.8136 0.0157 404.8023 0.5978 Tunisia Tunisian Dinar 2.4318 -0.0021 2.7182 -0.0022 3.1276 0.0020 ..One Year 0.8924 0.0000 - - 1.1499 0.0017
Egypt Egyptian Pound 18.0005 -0.0840 20.1202 -0.0930 23.1506 -0.0737 Norway Norwegian Krone 8.4460 0.0365 9.4406 0.0413 10.8625 0.0630 Turkey Turkish Lira 3.5510 -0.0282 3.9691 -0.0313 4.5669 -0.0295
Hong Kong Hong Kong Dollar 7.7933 -0.0015 8.7111 -0.0012 10.0231 0.0129 Pakistan Pakistani Rupee 104.8350 - 117.1799 0.0052 134.8291 0.1991 United Arab Emirates UAE Dirham 3.6731 - 4.1056 0.0002 4.7239 0.0070
Hungary Hungarian Forint 275.6565 0.0100 308.1165 0.0250 354.5238 0.5364 Peru Peruvian Nuevo Sol 3.2870 0.0060 3.6741 0.0069 4.2274 0.0139 United Kingdom Pound Sterling 0.7775 -0.0011 0.8691 -0.0012 - -
India Indian Rupee 64.6375 0.1475 72.2489 0.1681 83.1308 0.3122 Philippines Philippine Peso 49.8300 0.0100 55.6978 0.0137 64.0867 0.1075 ..One Month 0.7777 -0.0011 0.8690 -0.0013 - -
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 May 30 May 26 May 25 May 24 May 23 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
Strlg Day's Euro Strlg Strlg Year Div P/E X/D Total FT 30 3367.10 3367.40 3359.20 3358.40 3338.30 0.00 3368.80 3060.90 Personal Goods 22.76 FTSE 250 Index 9.60 General Retailers 4.41 FTSE 100 Price Change FTSE 100 Price Change
May 30 chge% Index May 26 May 25 ago yield% Cover ratio adj Return FT 30 Div Yield 1.47 1.47 1.48 1.48 1.49 0.00 3.93 2.74 Electronic & Elec Eq 19.50 Real Est Invest & Se 9.31 Banks 4.38 3I Group PLC 888.50 20.00 London Stock Exchange Group PLC 3442 51.00
FTSE 100 (100) 7526.51 -0.28 6748.96 7547.63 7547.63 6230.79 3.67 0.91 29.96 139.74 6254.77 P/E Ratio net 30.40 30.36 30.11 30.05 29.85 0.00 19.44 14.26 Forestry & Paper 18.85 FTSE SmallCap Index 8.82 Utilities 3.80 Admiral Group PLC 2031 25.00 Marks And Spencer Group PLC 386.90 0.60
FTSE 250 (250) 19991.85 -0.17 17926.52 20024.92 20024.92 17184.73 2.63 1.70 22.39 231.82 14482.81 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Household Goods & Ho 16.88 Equity Invest Instr 8.63 Construct & Material 3.29 Anglo American PLC 1056 3.50 Mediclinic International PLC 789.50 -26.50
FTSE 250 ex Inv Co (207) 21442.54 -0.11 19227.34 21466.09 21466.09 18682.05 2.67 1.73 21.68 256.03 15849.58 FT 30 hourly changes Consumer Goods 14.26 Health Care 8.46 Real Est Invest & Tr 3.04 Antofagasta PLC 809.50 -15.00 Merlin Entertainments PLC 519.50 1.00
FTSE 350 (350) 4176.71 -0.26 3745.22 4187.61 4187.61 3480.31 3.49 1.01 28.32 72.54 6973.73 8 9 10 11 12 13 14 15 16 High Low Aerospace & Defense 13.45 Chemicals 8.19 Basic Materials 3.00 Ashtead Group PLC 1571 1.00 Micro Focus International PLC 2412 -6.00
FTSE 350 ex Investment Trusts (306) 4142.44 -0.25 3714.49 4152.99 4152.99 3456.64 3.52 1.01 28.25 72.88 3563.05 3367.4 3355.1 3363 3357.9 3357.4 3356.7 3359.1 3365.5 3367.1 3369.5 3346.0 Tobacco 13.10 Pharmace & Biotech 8.02 Leisure Goods 2.44 Associated British Foods PLC 2984 34.00 Mondi PLC 2019 8.00
FTSE 350 Higher Yield (121) 3882.81 -0.23 3481.68 3891.63 3891.63 3174.89 4.74 0.74 28.61 91.83 6785.45 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Industrial Eng 12.82 Nonlife Insurance 7.68 Mining 1.80 Astrazeneca PLC 5215 -12.00 Morrison (Wm) Supermarkets PLC 247.60 0.20
FTSE 350 Lower Yield (229) 4070.85 -0.30 3650.30 4083.10 4083.10 3458.13 2.01 1.78 27.98 40.23 4449.88 Software & Comp Serv 12.42 Automobiles & Parts 6.57 Telecommunications 1.18 Aviva PLC 524.50 -2.00 National Grid PLC 1089 -2.00
FTSE SmallCap (277) 5653.93 -0.13 5069.83 5661.48 5661.48 4596.01 2.69 1.21 30.58 61.66 8074.11 Financial Services 12.37 Financials 6.17 Media 0.20
FTSE SmallCap ex Inv Co (146) 5035.97 -0.15 4515.72 5043.67 5043.67 4179.77 2.81 1.54 23.09 54.02 7554.64 FX: EFFECTIVE INDICES Health Care Eq & Srv 12.10 Gas Water & Multi 5.85 Food & Drug Retailer -2.25
Babcock International Group PLC 937.00 -4.50 Next PLC 4380 -4.00
Bae Systems PLC 665.00 -0.50 Old Mutual PLC 191.30 -5.30
FTSE All-Share (627) 4119.58 -0.26 3694.00 4130.15 4130.15 3429.77 3.46 1.02 28.39 70.58 6954.51 Travel & Leisure 10.53 FTSE All{HY-}Share Index 5.54 Electricity -3.69
May 26 May 25 Mnth Ago May 30 May 26 Mnth Ago Barclays PLC 209.20 -2.45 Paddy Power Betfair PLC 8095 -220.00
FTSE All-Share ex Inv Co (452) 4065.23 -0.25 3645.26 4075.50 4075.50 3391.94 3.51 1.01 28.13 70.97 3553.51 Support Services 10.37 Life Insurance 5.39 Oil Equipment & Serv -5.50 Barratt Developments PLC 601.50 0.50 Pearson PLC 700.00 1.00
FTSE All-Share ex Multinationals (567) 1249.68 -0.25 928.76 1252.82 1252.82 1157.49 2.96 1.29 26.25 14.88 2226.25 Australia 92.58 92.83 94.18 Sweden 77.27 77.10 77.71 Technology 10.09 NON FINANCIALS Index 5.32 Industrial Metals & -5.76 Bhp Billiton PLC 1202.5 -2.50 Persimmon PLC 2453 10.00
FTSE Fledgling (94) 9904.40 0.17 8881.20 9887.69 9887.69 7665.31 2.50 1.79 22.37 103.30 18496.28 Canada 87.19 87.23 86.38 Switzerland 160.78 160.65 160.28 Industrials 9.99 Food Producers 5.08 Oil & Gas -7.02 BP PLC 472.10 -2.45 Provident Financial PLC 3057 -34.00
FTSE Fledgling ex Inv Co (45) 13829.86 0.53 12401.12 13757.25 13757.25 10401.72 2.87 2.90 11.99 152.50 25190.53 Denmark 108.75 108.72 107.95 UK 77.25 78.10 78.57 Beverages 9.91 Industrial Transport 5.00 Oil & Gas Producers -7.07 British American Tobacco PLC 5501 -90.00 Prudential PLC 1740 -9.00
FTSE All-Small (371) 3929.73 -0.12 3523.75 3934.37 3934.37 3186.25 2.68 1.24 30.02 42.76 7203.63 Japan 138.60 137.59 140.14 USA 103.21 103.18 104.18 Mobile Telecomms 9.90 FTSE 100 Index 4.59 Tech Hardware & Eq -9.13 British Land Company PLC 636.50 5.00 Randgold Resources LD 7165 -35.00
FTSE All-Small ex Inv Co Index (191) 3771.08 -0.13 3381.49 3775.84 3775.84 3117.06 2.81 1.60 22.28 40.50 7167.00 New Zealand 117.57 117.46 116.20 Euro 91.25 91.16 89.44 Consumer Services 4.54 Fixed Line Telecomms -13.85 Bt Group PLC 308.85 -4.95 Reckitt Benckiser Group PLC 7926 57.00
FTSE AIM All-Share Index (800) 991.11 -0.03 888.72 991.38 991.38 739.50 1.58 0.74 85.42 5.41 1089.62 Norway 87.80 88.02 87.30
Bunzl PLC 2428 -9.00 Relx PLC 1652 -2.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1786 8.00 Rentokil Initial PLC 264.10 -0.60
Oil & Gas (16) 8261.64 -0.28 7408.14 8285.25 8285.25 6423.26 6.27 0.40 39.60 259.92 7650.20 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 4959 24.00 Rio Tinto PLC 3183 -7.00
Oil & Gas Producers (9) 7930.38 -0.31 7111.11 7955.19 7955.19 6125.99 6.31 0.41 38.17 251.49 7602.31 Centrica PLC 202.70 -0.50 Rolls-Royce Holdings PLC 868.50 -4.50
Oil Equipment Services & Distribution (7)13834.36 0.73 12405.16 13733.68 13733.68 13358.78 4.54 -0.22 -100.57 306.86 10798.78 FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2247 -22.00 Royal Bank Of Scotland Group PLC 260.60 -1.00
Basic Materials (28) 5169.67 -0.23 4635.60 5181.44 5181.44 3193.78 2.41 1.09 37.98 90.92 5282.40 Compass Group PLC 1661 18.00 Royal Dutch Shell PLC 2165 -1.50
Chemicals (7) 14377.20 -0.56 12891.91 14457.55 14457.55 11601.96 2.12 1.89 25.03 95.63 12798.98 May 29 No of US $ Day Mth YTD Total
YTD Gr Div May 29 No of US $ Day Mth YTD Total YTD Gr Div Convatec Group PLC 320.00 -5.00 Royal Dutch Shell PLC 2115 -3.00
Forestry & Paper (1) 23730.38 0.40 21278.83 23636.35 23636.35 15820.25 2.39 3.36 12.47 375.43 25886.29 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Crh PLC 2804 14.00 Royal Mail PLC 438.20 -0.70
Industrial Metals & Mining (2) 2444.42 1.75 2191.89 2402.46 2402.46 1104.21 0.53 21.48 8.75 13.01 2144.81 FTSE Global All Cap 7724 525.58 -0.1 1.8 9.7 746.06
10.9 2.3 Oil & Gas Producers 108 329.81 0.1 0.1 -6.1 541.24 -4.7 3.8 Croda International PLC 3966 4.00 Rsa Insurance Group PLC 627.50 7.50
Mining (18) 14288.79 -0.24 12812.64 14323.76 14323.76 8489.78 2.47 0.84 48.25 273.28 7648.62 FTSE Global Large Cap 1442 462.86 0.0 2.1 10.0 673.89
11.3 2.5 Oil Equipment & Services 28 313.27 0.0 0.0 -10.4 454.83 -9.5 3.2 Dcc PLC 7345 55.00 Sage Group PLC 717.00 3.50
FTSE Global Mid Cap 1644 708.51 -0.1 1.5 10.0 954.53
11.0 2.0 Basic Materials 259 457.52 -0.1 -0.1 8.4 697.26 9.9 2.4 Diageo PLC 2323 -14.00 Sainsbury (J) PLC 279.70 -2.00
Industrials (112) 5486.38 -0.09 4919.59 5491.36 5491.36 4437.79 2.23 0.84 53.24 57.73 5656.41
Construction & Materials (15) 7154.34 0.54 6415.24 7115.80 7115.80 5468.94 2.14 0.39 120.97 101.80 7601.00 FTSE Global Small Cap 4638 739.34 -0.1 0.6 7.6 964.18
8.4 1.9 Chemicals 123 697.36 0.1 0.1 10.6 1068.27 12.1 2.5 Direct Line Insurance Group PLC 348.40 3.00 Schroders PLC 3168 3.00
Aerospace & Defense (9) 5615.08 -0.30 5034.99 5632.24 5632.24 4156.86 2.13 -2.18 -21.48 63.69 6030.30 FTSE All-World 3086 306.90 -0.1 2.0 10.0 460.16
11.3 2.4 Forestry & Paper 15 267.41 0.0 0.0 12.3 454.88 14.8 2.9 Easyjet PLC 1400 14.00 Scottish Mortgage Investment Trust PLC 398.80 -1.20
General Industrials (5) 4869.87 0.36 4366.77 4852.59 4852.59 3795.68 2.70 1.20 30.95 56.24 5534.15 FTSE World 2543 543.26 -0.1 1.9 9.8 1093.90
11.1 2.4 Industrial Metals & Mining 68 375.99 -0.6 -0.6 3.8 569.44 4.7 2.2 Experian PLC 1615 -26.00 Severn Trent PLC 2534 -
Electronic & Electrical Equipment (10) 7612.28 1.00 6825.87 7537.26 7537.26 5450.15 1.66 1.91 31.57 53.21 6939.24 FTSE Global All Cap ex UNITED KINGDOM In 7396 544.29 -0.1 1.7 9.7 760.90
10.8 2.3 Mining 53 538.25 -0.2 -0.2 4.9 817.84 6.6 2.3 Fresnillo PLC 1585 4.00 Shire PLC 4503 -148.50
Industrial Engineering (12) 12852.11 -0.67 11524.38 12939.36 12939.36 8613.79 2.08 1.41 34.08 171.69 15695.72 FTSE Global All Cap ex USA 5827 476.62 -0.1 2.6 12.2 724.24
13.9 2.8 Industrials 547 369.32 -0.1 -0.1 11.5 531.02 12.6 2.1 Gkn PLC 352.70 -1.80 Sky PLC 997.00 -
Industrial Transportation (7) 5078.75 -0.14 4554.08 5086.00 5086.00 4525.41 3.84 1.25 20.86 52.62 4508.57 FTSE Global All Cap ex JAPAN 6437 538.00 -0.1 1.7 9.9 770.75
11.1 2.4 Construction & Materials 113 517.23 0.0 0.0 12.3 777.50 13.6 2.0 Glaxosmithkline PLC 1673 29.50 Smith & Nephew PLC 1350 -1.00
Support Services (54) 7699.27 -0.26 6903.87 7719.03 7719.03 6713.14 2.16 1.81 25.59 69.69 7990.03 FTSE Global All Cap ex Eurozone 7075 540.99 0.0 1.6 8.9 753.12
10.0 2.3 Aerospace & Defense 26 653.65 0.0 0.0 15.7 931.19 16.8 2.0 Glencore PLC 292.00 -0.50 Smiths Group PLC 1590 8.00
FTSE Developed 2102 492.96 0.0 1.9 9.6 705.83
10.9 2.4 General Industrials 57 245.63 0.1 0.1 4.4 381.16 5.6 2.5 Hammerson PLC 584.00 3.00 Smurfit Kappa Group PLC 2182 4.00
Consumer Goods (38) 22896.14 -0.59 20530.78 23032.67 23032.67 19132.40 2.78 1.84 19.59 339.50 16893.48
FTSE Developed All Cap 5667 517.94 0.0 1.8 9.3 732.69
10.6 2.3 Electronic & Electrical Equipment 71 402.96 -0.1 -0.1 17.2 530.47 18.0 1.6 Hargreaves Lansdown PLC 1397 7.00 Sse PLC 1515 -4.00
Automobiles & Parts (1) 8288.61 -0.51 7432.33 8330.91 8330.91 6460.28 2.51 1.89 21.04 138.65 7989.57
FTSE Developed Large Cap 917 454.81 0.0 2.0 9.6 661.13
10.9 2.5 Industrial Engineering 102 721.96 -0.1 -0.1 14.6 1024.80 16.0 2.0 Hikma Pharmaceuticals PLC 1675 -17.00 St. James's Place PLC 1183 11.00
Beverages (5) 18692.64 -0.61 16761.54 18806.66 18806.66 15800.89 2.54 1.53 25.68 175.38 13167.02
FTSE Developed Europe Large Cap 227 362.42 -0.1 3.8 13.5 606.56
16.1 3.3 Industrial Transportation 99 627.16 -0.1 -0.1 11.4 901.85 12.6 2.2 HSBC Holdings PLC 675.20 0.20 Standard Chartered PLC 726.50 -7.00
Food Producers (8) 8635.78 0.76 7743.63 8570.33 8570.33 8304.79 1.88 2.05 25.95 9.11 7392.49
FTSE Developed Europe Mid Cap 314 580.37 -0.1 3.5 17.8 869.48
19.8 2.6 Support Services 79 323.25 -0.1 -0.1 9.5 444.64 10.5 1.8 Imperial Brands PLC 3607.5 -73.00 Standard Life PLC 384.90 1.00
Household Goods & Home Construction (15)16003.91 0.48 14350.57 15927.76 15927.76 14402.51 2.33 2.52 17.02 212.12 11295.36
FTSE Dev Europe Small Cap 709 822.65 -0.1 3.4 18.6 1193.07
20.3 2.4 Consumer Goods 430 476.39 -0.1 -0.1 13.9 703.19 15.3 2.4 Informa PLC 669.50 -19.00 Taylor Wimpey PLC 201.30 1.60
Leisure Goods (1) 5672.01 -1.62 5086.04 5765.41 5765.41 5372.88 3.82 1.34 19.60 104.95 5118.55
FTSE North America Large Cap 295 516.70 0.0 1.4 8.0 702.07
9.0 2.1 Automobiles & Parts 105 385.59 -0.1 -0.1 4.8 550.68 6.3 2.7 Intercontinental Hotels Group PLC 4346 -11.00 Tesco PLC 185.35 -1.45
Personal Goods (6) 32654.83 0.05 29281.31 32638.74 32638.74 23571.79 2.54 3.04 12.97 376.77 22020.38
FTSE North America Mid Cap 387 761.51 0.0 0.4 6.1 963.28
6.7 1.7 Beverages 45 630.18 -0.1 -0.1 14.2 941.24 15.2 2.5 International Consolidated Airlines Group S.A. 605.50 -8.50 Tui AG 1192 23.00
Tobacco (2) 60289.88 -1.70 54061.44 61335.40 61335.40 50273.72 3.41 1.24 23.77 1304.93 39009.45
FTSE North America Small Cap 1433 774.79 0.0 -0.3 3.8 952.26
4.4 1.6 Food Producers 107 622.32 -0.2 -0.2 9.4 945.62 11.0 2.2 Intertek Group PLC 4250 -45.00 Unilever PLC 4310 -0.50
Health Care (21) 10691.06 -0.10 9586.59 10702.05 10702.05 9173.03 3.28 0.72 42.45 208.49 8255.02
FTSE North America 682 345.18 0.0 1.2 7.7 480.05
8.6 2.0 Household Goods & Home Construction 49 453.55 0.1 0.1 12.2 664.66 13.6 2.3 Intu Properties PLC 270.20 0.50 United Utilities Group PLC 1041 6.00
Health Care Equipment & Services (9) 8454.27 -0.69 7580.88 8512.75 8512.75 7223.05 1.27 2.43 32.41 60.36 7332.41
FTSE Developed ex North America 1420 252.07 -0.1 3.0 12.7 412.51
14.6 2.9 Leisure Goods 31 212.03 -0.3 -0.3 32.5 278.59 33.5 1.3 Itv PLC 198.90 -1.30 Vodafone Group PLC 229.15 -1.05
Pharmaceuticals & Biotechnology (12)14381.68 -0.03 12895.94 14386.26 14386.26 12356.49 3.53 0.64 44.09 300.97 9901.11
FTSE Japan Large Cap 180 349.06 0.0 2.4 2.1 Personal Goods
7.1 451.24
8.2 81 685.74 0.0 0.0 18.6 957.97 19.7 1.9 Johnson Matthey PLC 3137 -38.00 Whitbread PLC 4229 -13.00
Consumer Services (94) 5203.57 -0.12 4666.00 5209.60 5209.60 4750.21 2.53 2.00 19.79 62.50 4882.48 FTSE Japan Mid Cap 313 570.83 0.1 2.9 10.5 708.65
11.4 1.7 Tobacco 12 1523.45 0.1 0.1 20.2 3127.60 21.7 3.3
Food & Drug Retailers (7) 3201.21 -0.63 2870.50 3221.65 3221.65 2840.33 1.30 2.26 33.98 22.81 3742.22 Kingfisher PLC 324.00 -4.30 Wolseley PLC 5040 52.00
FTSE Global wi JAPAN Small Cap 794 621.62 -0.1 3.0 11.4 798.94
12.5 1.9 Health Care 181 469.36 -0.1 -0.1 11.0 675.32 12.3 2.0 Land Securities Group PLC 1074 -1.00 Worldpay Group PLC 315.50 -2.00
General Retailers (30) 2615.26 -0.42 2345.08 2626.34 2626.34 2733.11 2.99 2.00 16.74 21.52 2976.73
FTSE Japan 493 147.95 0.0 2.5 2.0 Health Care Equipment & Services
7.8 214.64
8.9 68 798.60 -0.1 -0.1 16.1 929.33 16.6 1.0 Legal & General Group PLC 251.50 1.20 Wpp PLC 1751 14.00
Media (21) 8073.35 -0.05 7239.30 8077.04 8077.04 7390.16 2.87 1.82 19.13 95.38 4971.60
FTSE Asia Pacific Large Cap ex Japan 548 656.17 -0.2 2.1 15.8 1023.59
16.8 2.8 Pharmaceuticals & Biotechnology 113 333.41 -0.1 -0.1 9.0 501.69 10.5 2.5 Lloyds Banking Group PLC 71.12 -0.62
Travel & Leisure (36) 9682.11 0.10 8681.87 9672.05 9672.05 8339.00 2.39 2.14 19.56 146.27 9196.24
FTSE Asia Pacific Mid Cap ex Japan 412 874.88 -0.3 1.3 15.0 1308.02
15.8 2.6 Consumer Services 383 441.28 0.0 0.0 11.8 588.09 12.7 1.6
Telecommunications (6) 3503.14 -0.84 3141.24 3532.78 3532.78 3940.20 5.05 -0.01 -1337.4 4.42 3857.01 FTSE Asia Pacific Small Cap ex Japan 1449 541.31 -0.5 0.0 11.3 796.77
12.1 2.6 Food & Drug Retailers 55 292.69 0.1 0.1 3.5 407.16 4.5 2.0
8
Fixed Line Telecommunications (4) 3632.33 -1.60 3257.08 3691.51 3691.51 5117.92 4.82 1.20 17.35 0.00 3274.79
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
960 518.82
2057 715.15
-0.2
-0.2
2.0
2.0
15.7 859.64
16.7 2.8 General Retailers
14.2 1058.89
15.1 2.8 Media
120 611.59
79 336.60
0.0
-0.1
0.0
-0.1
12.3 793.31
10.7 449.65
13.1
11.4
1.5
1.6
UK STOCK MARKET TRADING DATA
Mobile Telecommunications (2) 5153.49 -0.50 4621.10 5179.55 5179.55 5159.70 5.15 -0.51 -38.27 9.33 5099.21 FTSE Emerging Large Cap 525 677.81 -0.2 2.8 14.5 1010.39
15.4 2.8 Travel & Leisure 129 447.17 0.1 0.1 17.5 602.97 18.5 1.7 May 30 May 26 May 25 May 24 May 23 Yr Ago
Utilities (7) 9134.18 -0.11 8190.54 9144.69 9144.69 8694.21 4.63 1.64 13.20 83.90 10293.69 FTSE Emerging Mid Cap 459 893.66 -0.5 -0.8 12.4 1315.76
13.5 2.8 Telecommunication 94 164.83 -0.1 -0.1 2.3 306.05 3.8 4.2 SEAQ Bargains 5546.00 5202.00 5202.00 5202.00 5058.00 6262.00
Electricity (2) 8940.63 -0.15 8016.99 8953.85 8953.85 8952.32 5.50 2.02 9.02 149.05 12774.83 FTSE Emerging Small Cap 1073 737.63 -0.4 -0.4 13.8 1049.31
14.6 2.6 Fixed Line Telecommuniations 43 133.83 -0.1 -0.1 -4.8 273.86 -3.0 4.8 Order Book Turnover (m) 344.31 193.78 193.78 193.78 139.89 454.55
Gas Water & Multiutilities (5) 8680.59 -0.11 7783.81 8689.85 8689.85 8155.86 4.41 1.51 14.98 63.82 9787.93 FTSE Emerging Europe 114 354.58 0.5 0.0 5.5 546.67
6.3 4.0 Mobile Telecommunications 51 180.79 -0.2 -0.2 13.1 301.02 14.0 3.3 Order Book Bargains 1057471.00 1020304.00 1020304.00 1020304.00 950568.00 976389.00
Financials (289) 5101.42 -0.18 4574.40 5110.78 5110.78 4212.94 3.54 1.04 27.01 101.66 4739.32 FTSE Latin America All Cap 230 843.39 -0.8 -1.4 9.8 1297.53
11.3 2.8 Utilities 167 273.75 -0.1 -0.1 11.0 529.49 12.7 3.7 Order Book Shares Traded (m) 1498.00 1702.00 1702.00 1702.00 1275.00 1511.00
Banks (12) 4270.46 -0.39 3829.29 4287.29 4287.29 3299.52 4.13 0.62 38.77 107.82 3175.75 FTSE Middle East and Africa All Cap 242 716.73 -0.9 3.4 9.0 1116.26
10.6 3.0 Electricity 109 299.98 -0.1 -0.1 10.3 573.45 11.9 3.7 Total Equity Turnover (m) 10212.87 8690.30 8690.30 8690.30 8386.30 9870.73
Nonlife Insurance (10) 3443.19 0.90 3087.48 3412.63 3412.63 2952.79 3.13 1.69 18.93 60.87 6079.06 FTSE Global wi UNITED KINGDOM All Cap In 328 343.86 0.4 3.5 3.5 Gas Water & Multiutilities
10.5 574.86
12.5 58 288.37 0.0 0.0 12.4 573.01 14.2 3.6 Total Mkt Bargains 1184824.00 1152315.00 1152315.00 1152315.00 1060320.00 1108477.00
Life Insurance/Assurance (10) 8426.38 -0.41 7555.86 8461.32 8461.32 7181.42 3.68 1.26 21.61 210.60 8277.35 FTSE Global wi USA All Cap 1897 594.38 0.0 1.1 7.6 783.97
8.4 1.9 Financials 698 227.69 -0.1 -0.1 6.7 371.00 8.3 2.9 Total Shares Traded (m) 4153.00 4794.00 4794.00 4794.00 3976.00 4546.00
Index- Real Estate Investment & Services (20) 2753.16 -0.46 2468.73 2765.92 2765.92 2774.32 2.48 1.86 21.64 31.00 7354.75 FTSE Europe All Cap 1441 424.22 -0.1 3.6 14.4 685.10
16.8 3.1 Banks 248 203.76 -0.2 -0.2 5.8 356.47 7.5 3.3 Excluding intra-market and overseas turnover. *UK only total at 6pm. UK plus intra-market turnover. (u) Unavaliable.
Real Estate Investment Trusts (31) 2753.97 0.49 2469.46 2740.49 2740.49 2849.08 3.53 1.19 23.72 44.78 3431.90 FTSE Eurozone All Cap 649 415.18 -0.2 3.9 17.3 676.21
19.5 2.9 Nonlife Insurance 68 246.05 0.0 0.0 6.1 357.30 7.9 2.3 (c) Market closed.
General Financial (31) 9104.84 0.41 8164.23 9067.41 9067.41 7700.46 3.17 2.17 14.52 108.34 10411.93 FTSE RAFI All World 3000 3043 6401.09 -0.1 1.4 7.2 8432.44
8.7 3.0 Life Insurance 52 215.09 0.0 0.0 7.4 342.89 9.0 3.0
Equity Investment Instruments (175) 9629.60 -0.34 8634.78 9662.48 9662.48 7615.74 2.37 1.17 36.12 93.60 5258.11 FTSE RAFI US 1000 1001 10428.27 0.0 0.0 2.8 13640.85
3.7 2.4 Financial Services 147 260.65 0.0 0.0 8.2 358.19 9.1 1.9
Non Financials (338) 4875.18 -0.28 4371.53 4888.90 4888.90 4073.37 3.43 1.01 28.90 78.79 7199.22 FTSE EDHEC-Risk Efficient All-World 3086 370.06 0.0 2.0 10.6 514.02
11.6 2.1 Technology 182 234.57 -0.1 -0.1 20.8 286.94 21.7 1.5 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Technology (16) 2077.18 0.32 1862.59 2070.60 2070.60 1431.67 2.17 1.30 35.55 26.90 2673.41 FTSE EDHEC-Risk Efficient Developed Europe 541 313.48 -0.2 3.6 17.1 477.83
19.0 2.5 Software & Computer Services 89 402.86 -0.1 -0.1 21.1 469.95 21.7 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) 2375.87 0.35 2130.42 2367.49 2367.49 1912.65 2.09 1.48 32.46 32.21 3230.73 Oil & Gas 145 350.77 0.1 -0.7 -6.5 564.09
-5.2 3.7 Technology Hardware & Equipment 93 177.46 0.0 0.0 20.6 225.62 21.6 2.1 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Technology Hardware & Equipment (4) 1911.41 -0.06 1713.95 1912.61 1912.61 1518.42 2.97 0.00-7364.55 12.16 2240.87 Alternative Energy 9 111.24 -0.1 -0.1 21.1 149.82 21.4 1.6 liable for any loss arising from the reliance on or use of the listed information.
Real Estate Investment & Services 107 322.95 0.7 0.7 17.0 536.99 18.6 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 7508.96 7508.56 7524.33 7517.92 7514.99 7511.05 7522.55 7527.71 7529.86 7535.60 7497.17 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 20015.48 19987.60 20016.68 19980.11 19967.35 19959.17 19968.53 19987.54 19996.07 20020.41 19944.26
FTSE SmallCap 5662.88 5658.63 5662.20 5660.43 5660.88 5665.61 5661.53 5663.75 5663.33 5669.46 5653.93 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 4112.97 4111.72 4119.70 4115.60 4113.90 4112.02 4117.26 4120.23 4121.44 4123.65 4105.93 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:14:56:30 Day's Low08:21:00 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:14:56:00 Day's Low07:23:00 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 Alexander Mining Pre - 0.008 0.583L 0.849L 0.08L 0.3L - - - - - date price(p) Sector code Stock price(p) +/- High Low Cap (m)
price up date High Low Stock Price p +or- Amedeo Resources Pre 0.108 0.128 1.887L 2.61L 0.058L 0.08L - - - - - 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. Energiser Investments Pre 0.16 0.154 0.211L 0.167L 0.4L 0.38L - - - - - 05/09 100.00 DSM Downing Strategic Micro-Cap Investment 107.75 -0.75 109.50 100.00 5990.9
FastJet Pre 68.538 65.055 65.823L 35.869L 0.87L 0.43L - - - - - Trust PLC
GAN Pre 7.803 6.011 5.199L 5.604L 5.81L 8.99L - - - - - 04/25 160.00 AIM ESL Eddie Stobart Logistics PLC 159.00 -0.66 165.00 158.00 56909.1
Gulfsands Petroleum Pre - - 19.755L 69.2L 0.042L 0.587L - - - - -
Helios Underwriting Pre 25.814 16.591 0.779 0.798 6.22 9.67 1.5 1.5 Jul 7 1.5 1.5
Horizon Discovery Group Pre 24.074 20.156 12.456L 10.544L 12.1L 11.2L - - - - -
Kainos Group Pre 83.504 76.594 13.32 14.261 8.9 10.7 4.4 4.2 Oct 20 6.3 6
Renold Pre 183.4 165.2 6.7 7.4 2.1 2.4 - - - - -
Xtract Resources Pre - - 3.891L 3.289L 0.08L 0.07L - - - - -

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.
Wednesday 31 May 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 101.25 -0.10 105.68 85.23 2.23 25.44 45300.3 Lockheed 280.30 -3.35 284.00 228.50 2.55 22.01 81130.89
ANZ 27.90 0.21 32.95 22.66 8.62 13.51 61076.23 Nokia 5.66 -0.04 5.96 3.66 2.81 -44.20 36921.8 AstellasPh 1403.5 - 1779 1396 2.37 13.41 27238.15 AtlasCpcoB 283.00 2.90 302.00 183.80 2.16 31.90 12635.38 Avago Tech 240.28 -0.93 241.60 142.27 1.07 -44.43 96439.37 Lowes 79.88 -1.03 86.25 64.87 1.70 22.52 68484.61
BHPBilltn 24.00 0.16 27.95 17.29 2.52 36.97 57471.35 SampoA 45.00 -0.29 47.28 34.42 4.70 15.34 28107.08 Bridgestne 4709 -6.00 4856 3089 3.05 13.45 34500.8 Ericsson 60.65 0.05 67.75 43.19 7.80 -17.72 21299.89 BakerHu 55.25 -0.20 68.59 41.74 1.27 -12.24 23506.87 Lyondell 80.70 -0.03 97.64 69.82 4.33 8.94 32506.36
CmwBkAu 79.44 0.55 87.74 69.22 7.63 14.57 102461.03 France () Canon 3795 -12.00 3869 2780 4.05 22.76 45608.51 H&M 220.10 -2.70 279.90 211.80 4.44 19.59 36784.61 BankAm 23.08 -0.16 25.80 12.05 1.23 13.77 229714.71 Marathon Ptl 52.74 -0.08 54.59 32.02 2.73 22.62 27357.69
CSL 131.64 -1.24 136.85 91.62 1.51 37.92 44580.97 Airbus Grpe 73.27 -0.45 76.07 48.07 1.75 47.72 63427.3 CntJpRwy 18190 -55.00 19835 16305 0.71 9.82 33764.1 Investor 399.10 1.10 415.70 260.70 2.52 4.11 20799.29 Baxter 58.79 0.15 59.41 42.22 0.91 16.91 31959.59 Marsh&M 76.75 0.38 76.79 62.33 1.82 20.96 39461.78
NatAusBk 29.73 0.46 34.09 23.90 10.01 13.15 59305.37 AirLiquide 108.90 -1.80 115.25 88.25 2.07 21.87 47377.74 Denso 4775 28.00 5323 3317 2.49 15.64 34165.42 Nordea Bk 113.10 0.30 115.70 66.30 5.53 12.38 52409.01 BB & T 42.10 -0.46 49.88 32.85 2.88 15.99 34158.69 MasterCard 121.16 -0.47 122.48 86.65 0.70 30.76 127693.24
Telstra 4.41 -0.03 5.86 4.00 9.65 14.90 39106.35 AXA 23.72 -0.17 25.80 16.11 4.56 9.33 64319.8 EastJpRwy 10700 - 10770 8388 1.20 16.81 37544.28 SEB 105.30 0.10 107.30 67.75 5.26 13.29 26144.8 BectonDick 186.26 -0.22 187.69 161.29 1.54 30.08 42105.08 McDonald's 149.96 0.10 150.33 110.33 2.51 25.76 122223.85
Wesfarmers 42.22 -0.33 46.06 38.62 6.57 121.25 35692.46 BNP Parib 63.60 -2.75 68.40 35.27 3.57 10.68 88727.77 Fanuc 21780 5.00 23410 15445 2.34 29.34 40049.59 SvnskaHn 122.50 0.10 136.30 90.25 4.11 14.61 26755.8 BerkshHat 247450-1090.00 266445 205074 - 17.54 190266.78 McKesson 162.14 0.94 199.43 114.53 0.71 6.77 34195.73
Westpc 30.33 0.31 35.39 27.57 9.00 13.70 75906.76 ChristianDior 255.05 0.70 256.00 133.75 1.06 35.19 51459.72 FastRetail 36970 -230.00 44370 25305 0.94 37.48 35335.58 Swedbank 210.20 4.80 234.00 162.90 5.14 12.06 27225.44 Biogen 247.71 -3.09 307.33 205.43 - 15.09 52543.54 Medtronic 84.64 -0.45 89.27 69.35 2.02 26.78 115862.43
Woolworths 25.86 -0.02 27.72 20.30 4.30 12.33 24957.95 Cred Agr 13.78 -0.13 14.73 6.79 4.28 8.21 43837.61 Fuji Hvy Ind 3782 15.00 5016 3252 3.77 9.67 26212.14 Telia Co 39.79 0.02 41.30 33.93 10.12 10.74 19713.49 BkNYMeln 47.18 -0.23 49.54 35.72 1.61 14.11 49061.4 Merck 64.87 -0.05 66.80 55.10 2.95 40.17 177430.12
Belgium () Danone 66.23 -0.42 70.53 57.66 1.92 37.19 48555 Hitachi 670.20 2.30 681.90 400.00 1.77 13.97 29188.95 Volvo 143.50 2.20 148.40 78.50 2.11 26.46 26859.76 BlackRock 408.05 1.03 408.42 317.60 2.34 20.59 65963.68 Metlife 50.55 -0.50 58.09 36.17 3.26 -81.02 54388.42
AnBshInBv 104.15 -0.90 119.60 92.13 3.55 164.48 197117.5 EDF 9.55 -0.05 12.35 7.33 16.04 8.46 29268.37 HondaMtr 3073 9.00 3675 2417 2.90 13.09 50157.86 Switzerland (SFr) Boeing 186.38 -0.21 187.61 122.35 2.59 22.32 112495.43 Microsoft 70.16 0.20 70.22 48.04 2.20 30.05 541671.31
KBC Grp 66.61 0.54 70.98 39.35 1.48 10.84 31128.13 Engie SA 13.37 0.12 15.21 10.77 7.35 -59.19 36393.85 JapanTob 4198 -5.00 4540 3607 3.17 19.24 75653.28 ABB 24.31 -0.05 24.89 18.59 3.12 24.73 55203.94 BrisMySq 53.84 -0.13 77.12 46.01 2.94 18.18 88701.99 Mnstr Bvrg 50.68 -0.22 55.50 40.64 - 39.74 28776.7
Esslr Intl 118.75 -0.55 124.55 93.41 0.89 34.31 29009.46 KDDI 3062 2.00 3378 2745.5 2.66 12.91 71382.67 CredSuisse 13.46 -0.15 16.31 9.76 4.97 -15.65 29848.26 CapOne 78.89 -0.90 96.92 58.03 1.81 12.84 38101.39 MondelezInt 46.40 -0.04 46.83 40.50 1.64 40.64 70401.71
Brazil (R$)
Hermes Intl 441.25 1.25 468.30 314.00 0.73 46.75 52067.85 Keyence 49390 470.00 49500 31555 0.24 - 54117.98 Nestle 82.35 -0.05 83.45 71.45 2.73 29.98 262776.97 CardinalHlth 73.00 -0.10 85.52 62.70 2.53 16.94 23059.43 Monsanto 116.90 0.12 117.33 97.35 1.90 31.72 51296.61
Ambev 18.90 0.02 20.09 15.79 2.16 24.98 90922.79
LOreal 189.60 0.20 191.05 155.20 1.61 35.10 119215.51 MitsbCp 2233 4.00 2705.5 1679.5 2.67 -26.80 31993.52 Novartis 78.60 0.10 82.80 67.40 3.50 27.65 210893.07 Carnival 63.79 0.43 64.05 42.94 2.00 20.11 34230.66 MorganStly 42.31 -0.53 47.33 23.11 1.72 13.92 78264.28
Bradesco 27.60 0.36 31.13 21.78 2.17 9.43 25803.03
LVMH 226.70 -0.30 239.65 130.55 1.56 29.25 128624.64 MitsubEst 2070 6.00 2443 1724 0.86 30.74 25943.23 Richemont 80.50 -0.75 85.90 65.60 2.09 35.05 43085.21 Caterpillar 105.53 -0.13 105.98 70.53 3.00-410.40 62171.86 MylanNV 39.33 -0.39 50.40 33.60 - 37.86 21080.16
Cielo 23.57 0.37 31.48 20.36 2.29 15.29 19599.46
Orange 15.65 -0.09 15.80 12.38 3.77 83.87 46532.02 MitsubishiEle 1548.5 -1.00 1802 1108 1.89 13.68 29959.82 Roche 266.70 0.20 273.00 218.30 3.03 23.99 192118.81 CBS 61.62 0.05 70.10 48.88 1.11 17.11 22698.23 Netflix 163.64 1.21 164.75 84.50 - 206.63 70529.57
ItauHldFin 32.24 -0.01 36.38 22.27 4.66 8.49 33074.27
PernodRic 120.10 0.15 121.75 90.00 1.54 25.69 35630.84 MitsuiFud 2580 -3.00 2863.5 2031.5 1.15 19.72 23048.08 Swiss Re 88.10 -0.35 98.50 86.30 5.48 8.84 32525.78 Celgene 115.50 -1.28 127.64 94.42 - 42.22 90185.21 NextEraE 140.56 -0.15 141.06 110.49 2.63 16.65 65804.95
Petrobras 14.31 -0.05 19.72 9.95 - -17.74 32597.2
Renault 84.93 0.29 90.76 63.64 2.78 6.94 28073.21 MitUFJFin 696.50 -1.40 778.80 425.80 2.28 13.71 88922.45 Swisscom 462.30 -2.80 489.80 426.80 9.54 14.82 24554.54 CharlesSch 38.75 -0.77 43.65 23.83 0.66 31.56 51813.9 Nike 52.73 0.14 60.33 49.01 1.33 21.26 69683.79
Vale 28.67 0.61 37.28 13.80 0.56 7.29 28231.15
Safran 79.15 -0.44 80.09 53.00 1.33 -91.50 36894.75 Mizuho Fin 195.20 0.20 225.30 142.00 3.81 5.99 44651.47 Syngent 463.00 -6.70 471.20 360.50 2.57 34.61 42748.26 Charter Comms 338.76 1.32 350.38 214.06 - 17.93 91331.73 NorfolkS 123.77 1.44 125.00 78.73 1.89 23.11 35866.4
Canada (C$) Murata Mfg 15455 -75.00 16790 10365 1.41 21.99 31370.06 Chevron Corp 104.43 -0.29 119.00 97.53 4.23 66.36 197849.07 Northrop 255.46 -1.53 257.93 206.69 1.43 20.13 44596.36
Sanofi 87.56 -0.06 92.97 62.50 3.29 26.29 122890.55 UBS 15.67 -0.23 17.49 15.11 5.44 15.79 61880.03
BCE 60.70 -0.03 63.41 56.80 4.51 18.93 40543.47 NipponTT 5251 2.00 5345 4156 2.26 13.61 99190.55 Chubb 141.75 -0.49 142.87 121.08 2.01 15.35 66186.68 NXP 108.13 0.13 108.29 73.62 - 19.01 37413.29
Sant Gbn 50.05 0.03 52.40 32.15 2.43 21.68 31081.59 Zurich Fin 283.00 -2.50 290.80 217.10 6.32 13.05 43901.82
BkMontrl 91.07 -0.44 104.15 79.82 3.74 11.70 44098.34 Nissan Mt 1074.5 0.50 1220 893.10 4.15 9.05 40864.63 Cigna 161.15 -0.17 164.88 115.03 0.02 22.11 41256.76 Occid Pet 60.26 -0.74 78.48 57.20 5.22 -44.20 46073.69
Schneider 68.83 -0.02 74.50 49.50 2.85 22.68 45707.02 Taiwan (NT$)
BkNvaS 76.58 0.46 82.30 62.36 4.03 12.27 68346.5 Nomura 669.40 0.40 784.00 338.80 1.78 15.56 21251.01 Cisco 31.72 0.22 34.60 27.13 3.35 16.19 158576.73 Oracle 45.20 -0.06 46.99 37.62 1.37 20.73 185983.72
SFR Group 31.30 -0.05 32.55 19.51 - -64.84 15476.54 Chunghwa Telecom 107.00 - 125.50 99.50 4.96 21.24 27571.75
Brookfield 51.34 -0.04 53.08 41.39 1.43 29.89 37686.5 Nppn Stl 2402.5 15.50 2912 1787.5 1.35 55.49 20572.6 Citigroup 61.85 -0.22 62.69 38.31 0.88 12.05 170288.99 Pepsico 117.92 0.01 118.00 98.50 2.63 24.76 168448.86
SocGen 49.02 -0.71 52.26 25.00 4.02 12.42 44263.22 Formosa PetChem 106.00 - 115.00 83.30 3.83 11.33 33541
CanadPcR 213.99 -0.50 218.78 156.01 0.97 20.50 23318.97 NTTDCMo 2729.5 9.50 2946 2361 2.98 14.98 95907.88 CME Grp 116.99 -0.99 127.60 92.29 1.95 27.54 39751.81 Perrigo 68.10 -1.85 111.00 65.47 0.89 -2.34 9765.36
Total 47.56 0.02 49.50 39.03 5.15 17.40 132008.09 HonHaiPrc 104.50 -0.50 105.50 76.30 3.53 12.06 60151.17
CanImp 105.42 -0.78 120.83 95.50 4.58 8.97 31288.31 Panasonic 1395 19.00 1410 831.40 1.77 15.69 30834.47 Coca-Cola 45.36 -0.04 46.01 39.88 3.22 31.05 193781.93 Pfizer 32.13 -0.01 37.39 29.83 3.91 26.25 191746.84
UnibailR 231.10 -0.55 250.55 203.10 4.01 9.44 25756.98 MediaTek 229.50 1.00 260.50 203.00 4.86 13.61 12057.07
CanNatRs 38.98 -0.82 46.74 36.26 2.52-196.29 32339.67 Seven & I 4742 3.00 4902 4051 1.95 42.32 37876.27 Cognizant 66.48 -0.31 67.13 45.44 - 23.50 39156.51 Phillips66 77.08 -0.36 88.87 73.67 3.36 23.27 39780.85
Vinci 76.54 -0.36 79.84 49.93 2.44 17.40 50688.06 TaiwanSem 207.00 - 208.50 154.00 2.94 14.92 178295.48
CanNatRy 104.27 0.89 104.68 72.78 1.53 20.79 58631.53 ShnEtsuCh 9884 -28.00 10120 5603 1.26 24.31 38483.89 ColgtPlm 76.04 0.59 76.86 63.43 2.12 26.86 67165.59 PhilMorris 119.87 0.04 119.93 86.78 3.55 25.78 186175.27
Vivendi 19.39 -0.13 20.09 14.87 5.08 56.28 27900.2
Enbridge 52.10 -0.33 59.19 50.76 4.33 46.02 63391.02 Softbank 8980 248.00 9066 5194 0.46 26.57 89060.46 Thailand (THB) Comcast 41.30 0.39 41.64 30.02 1.42 21.30 195494.07 PNCFin 118.98 -2.34 131.83 77.40 1.85 15.66 57574.59
GtWesLif 34.03 -0.14 37.79 30.83 3.94 12.60 25017.87 Germany () PTT Explor 392.00 -2.00 430.00 298.00 2.53 12.17 32806.03
Sony 4031 -7.00 4091 2700 0.49-111.79 45902.75 ConocPhil 44.72 -0.63 53.17 38.80 2.33 -34.51 55323.29 PPG Inds 106.33 -0.91 113.49 89.64 1.55 48.08 27241.41
ImpOil 38.59 -0.12 48.72 38.26 1.60 14.48 24289.05 Allianz 170.85 -0.75 177.80 118.35 4.09 13.60 87272.62
SumitomoF 4048 7.00 4768 2766.5 3.67 7.34 51577.74 United Arab Emirates (Dhs) Corning 29.25 -0.06 29.72 18.88 1.97 7.77 26912.17 Praxair 131.42 -0.55 133.68 106.31 2.38 24.02 37501.21
Manulife 23.48 -0.17 25.57 16.43 3.36 14.49 34466.19 BASF 84.17 -0.53 94.32 63.00 3.39 17.97 86411.83
Takeda Ph 5754 -37.00 5856 4098 3.10 34.41 40987.95 Emirtestele 17.45 - 20.20 17.30 4.76 16.46 41316.71 Costco 178.13 0.27 183.18 142.11 1.04 31.80 78188.6 Priceline 1848.73 -15.17 1927.13 1148.06 - 40.58 90851.1
Potash 22.43 -0.09 26.62 19.93 4.94 34.46 13991.29 Bayer 116.50 -0.20 118.40 85.00 2.11 21.03 107683.92
TokioMarine 4674 -20.00 5441 3063 2.65 11.81 31714.15 United Kingdom (p) CrownCstl 103.57 0.76 103.65 79.38 3.62 104.74 37916.05 ProctGmbl 87.54 0.29 92.00 80.74 3.15 23.77 223890.75
RylBkC 94.00 -0.47 99.90 74.64 3.68 12.42 101723.02 BMW 84.24 -0.32 91.76 63.38 3.74 7.62 56683.71
Toyota 5981 11.00 7215 4917 3.81 8.54 175851.39 AscBrFd 2984 34.00 3183 1910 1.23 21.47 30382.44 CSX 54.21 0.25 54.36 24.43 1.37 28.80 50010.69 Prudntl 104.51 -0.56 114.55 66.51 2.79 10.34 44834.79
Suncor En 42.46 -0.12 44.90 33.49 2.91 44.44 52630.5 Continental 200.25 1.45 210.35 158.20 1.84 14.44 44767.45
Mexico (Mex$) AstraZen 5215 -12.00 5505 3680 4.24 24.42 84887.15 CVS 76.68 0.04 98.67 69.30 2.38 15.56 78121.23 PublStor 215.15 -1.24 262.74 200.65 3.53 30.35 37402.94
ThmReut 58.84 0.04 62.83 50.01 3.21 28.51 31461.58 Daimler 65.20 -0.24 73.23 50.83 4.96 8.57 77967.25
AmerMvl 15.05 0.07 15.15 10.40 1.90 24.21 35927.91 Aviva 524.50 -2.00 570.50 290.00 4.09 34.74 27438.68 Danaher 84.57 0.17 88.01 73.40 0.67 28.06 58701.75 Qualcomm 57.62 0.10 71.62 50.84 3.78 18.67 85129.89
TntoDom 64.29 0.03 71.31 54.20 3.43 12.98 88756.9 Deut Bank 16.14 -0.30 19.97 9.90 - -20.12 37274.23
FEMSA UBD 175.90 -0.89 184.10 28.35 1.45 161.87 - Barclays 209.20 -2.45 267.32 121.10 1.43 15.97 45820.41 Deere 122.20 -0.59 123.59 76.73 1.72 27.89 38894.2 Raytheon 162.55 -0.75 163.61 129.00 1.39 20.42 47314.08
TrnCan 63.29 -0.08 65.24 53.85 3.81 112.85 40757.97 Deut Tlkm 17.78 -0.17 18.15 13.54 3.04 301.10 92947.3
WalMrtMex 43.14 -0.30 46.10 34.70 1.32 25.50 40367.97 BP 472.10 -2.45 521.20 349.35 6.51 -30.53 119478.24 Delphi 86.92 -0.58 89.58 58.04 1.39 19.84 23285.04 Regen Pharm 448.21 -6.96 464.40 325.35 - 52.69 46783.78
ValeantPh 16.60 -0.64 42.25 11.20 - -2.94 4228.5 DeutsPost 31.82 0.24 33.31 23.50 2.63 15.40 43164.65
BrAmTob 5501 -90.00 5602 4072 2.80 23.75 120395.82 Delta 49.37 -1.44 52.76 32.60 1.55 8.89 36334.71 ReynoldsAm 66.48 -0.50 66.99 43.38 2.86 27.98 94847.81
E.ON 7.57 0.02 9.72 5.99 6.50 -6.15 16933.52 Netherlands ()
China (HK$) BSkyB 997.00 - 1050 560.00 3.29 27.69 22042.08 Devon Energy 34.56 -1.26 50.69 32.81 1.72 -1.91 18170.66 S&P Global 140.33 0.12 141.11 99.15 1.07 16.98 36175.79
Fresenius Med 82.90 -0.30 86.13 70.00 0.95 20.34 28467.76 Altice 22.18 -0.14 23.43 12.20 - -16.60 29609.84
AgricBkCh 3.77 0.02 3.77 2.75 5.16 5.88 14867.14 BT 308.85 -4.95 453.62 297.40 4.68 16.17 39564.46 DiscFinServ 59.45 -0.35 74.33 50.32 2.04 9.88 22602.34 Salesforce 90.98 0.15 91.81 66.43 - 481.69 64795.96
Fresenius SE 75.50 -0.79 79.49 60.00 0.72 24.99 46709.94 ASML Hld 119.05 -0.20 124.95 79.38 0.87 30.02 58443.76
Bk China 3.90 0.01 4.08 2.90 5.24 5.92 41838.73 Compass 1661 18.00 1663.1 1242.15 1.91 24.68 35127.43 Disney 108.24 -0.17 116.10 90.32 1.43 18.74 169382.51 Schlmbrg 69.15 -0.94 87.84 68.94 3.01 -53.58 96082.32
HenkelKgaA 109.90 0.25 110.00 87.00 2.73 22.84 31913.67 Heineken 86.87 -0.16 87.84 67.47 1.15 31.04 55929.52
BkofComm 6.02 0.01 6.44 4.72 5.21 5.82 27040.01 Diageo 2323 -14.00 2348.09 1737 2.48 26.07 75207.17 DominRes 81.16 0.13 81.24 69.51 3.59 22.67 51048.48 Sempra Energy 115.51 1.03 115.51 92.95 2.75 19.33 28973.54
Linde 168.65 -2.70 174.00 116.80 1.70 29.72 35012.46 ING 14.93 -0.19 15.88 8.30 4.28 12.99 64829.2
BOE Tech 1.57 - 2.05 1.30 1.33 20.58 40.07 GlaxoSmh 1673 29.50 1745.56 1363 4.78 49.06 105806.33 DowChem 60.81 -0.26 65.42 47.51 3.11 14.45 74285.63 Shrwin-Will 334.50 -0.45 339.62 239.48 1.05 26.80 31151.42
MuenchRkv 173.65 -0.50 189.40 140.90 4.68 10.36 31260.28 Unilever 50.44 0.03 50.61 36.22 2.46 28.22 96675.64
Ch Coms Cons 10.60 0.04 11.74 7.81 2.09 8.95 6020.87 Glencore 292.00 -0.50 347.00 124.55 - -72.17 54058.44 DukeEner 85.33 0.26 87.75 72.34 4.09 21.27 59721.06 SimonProp 156.27 -0.99 229.10 152.09 4.38 25.97 48786.59
SAP 95.10 -0.12 95.52 64.94 1.19 32.32 130588.22 Norway (Kr)
Ch Evrbrght 3.68 - 4.06 3.18 6.02 5.03 3242.8 HSBC 675.20 0.20 715.20 392.37 6.16 119.19 174104.34 DuPont 77.57 -0.28 82.37 61.12 2.02 25.31 67255.67 SouthCpr 35.14 0.25 39.50 24.90 0.48 41.26 27159.93
Siemens 126.40 -0.20 133.50 86.82 2.80 18.32 120091.66 DNB 145.40 -0.40 148.50 90.80 3.13 13.57 28040.18
Ch Rail Cons 10.76 -0.02 11.98 8.61 1.64 9.02 2866.14 Imperial Brands 3607.5 -73.00 4154 3324 4.30 33.97 44480.67 Eaton 77.46 -0.10 79.31 54.30 3.07 17.56 34647.86 Starbucks 63.31 0.01 63.42 50.84 1.46 30.47 91679.21
Volkswgn 141.65 -0.30 157.40 116.05 0.08 43.44 46721.59 Statoil 148.80 -1.00 163.50 123.90 5.10 -22.25 57549.56
Ch Rail Gp 6.49 -0.01 7.71 5.40 1.56 10.77 3503.11 LlydsBkg 71.12 -0.62 73.58 47.10 3.30 29.63 65377.67 eBay 34.67 -0.24 35.30 22.30 - 4.88 37519.25 StateSt 81.68 -0.31 85.38 50.60 1.86 14.90 30730.93
ChConstBk 6.49 0.03 6.55 4.73 4.90 6.01 200173.86 Hong Kong (HK$) Telenor 137.20 -0.60 150.90 122.50 5.58 71.08 24390.25 Ecolab 131.35 0.05 131.58 110.65 1.13 30.48 38097.46 Stryker 141.24 -0.03 141.59 106.48 1.17 30.86 52790.57
Natl Grid 1089 -2.00 1252.36 969.71 4.34 18.35 52566.77
China Vanke 20.75 0.40 24.10 14.56 4.02 9.46 3500.45 AIA 54.75 - 56.15 42.65 1.37 19.52 84806.49 Qatar (QR) Emerson 58.86 -0.06 64.37 48.45 3.34 22.35 37934.1 Sychrony Fin 27.15 -0.23 38.06 23.25 0.47 10.31 22014.95
Prudential 1740 -9.00 1801.5 1096 2.26 23.20 57863.65
ChinaCitic 5.04 0.02 5.50 4.40 4.91 5.10 9622.51 BOC Hold 35.00 0.30 35.15 22.00 3.65 14.63 47473.58 QatarNtBk 147.90 -0.10 173.00 133.50 2.21 10.67 37513.87 EOG Res 90.00 -1.22 109.37 78.04 0.77 -81.78 51954.16 Target 54.88 0.48 79.33 52.72 4.28 11.55 30274.99
RBS 260.60 -1.00 271.00 148.40 - -4.38 39803.13
ChinaLife 25.60 0.25 25.75 16.00 1.91 31.94 24438.6 Ch OSLnd&Inv 23.65 0.35 27.85 20.15 2.49 6.60 33241.88 EquityResTP 65.28 0.11 71.53 58.28 3.17 27.60 23967.88 TE Connect 78.15 0.14 79.69 54.54 1.95 13.47 27745.38
Russia (RUB) ReckittB 7926 57.00 7926 6496 1.85 30.90 71419.53
ChinaMBank 23.55 -0.15 24.30 15.24 3.43 8.21 13870.21 ChngKng 57.80 0.15 59.75 44.75 2.34 12.30 27686.29 Exelon 36.04 0.22 37.70 29.82 3.65 28.38 33376.52 Tesla Mtrs 332.47 7.33 333.59 178.19 - -70.43 54611.43
Gzprm neft 122.31 -0.80 160.62 120.54 5.74 3.80 51129.11 RELX 1652 -2.00 1657.4 631.02 1.97 29.61 43575.11
ChinaMob 86.20 0.05 99.30 80.30 2.86 15.55 226431.2 Citic Ltd 12.30 0.06 12.78 10.60 2.55 10.42 45903.85 ExpScripts 59.34 -0.42 80.02 57.80 - 10.53 35622.56 TexasInstr 82.08 0.96 82.92 58.61 2.08 22.66 81778.26
Lukoil 2822.5 28.00 3582 2523 5.58 23.77 42392.05 RioTinto 3183 -7.00 3718.5 1853 3.74 15.41 56523.72
ChinaPcIns 29.95 0.10 31.00 24.25 3.80 19.12 10663.56 Citic Secs 16.38 0.10 19.16 15.36 3.57 15.50 6132.57 ExxonMb 81.17 -0.38 95.55 80.30 3.80 32.88 343938.84 TheTrvelers 123.84 0.18 125.49 103.45 2.23 11.86 34602.86
MmcNrlskNckl 8074 -69.00 11199 8035 8.52 15.12 22561.29 RollsRoyce 868.50 -4.50 895.00 588.00 1.35 -3.95 20554.03
ChMinsheng 7.99 -0.10 9.48 6.91 4.02 5.21 7107.2 CK Hutchison 101.80 -0.10 103.90 80.60 2.42 14.35 50381.25 Facebook 152.02 -0.11 153.60 108.23 - 37.61 359494.25 ThrmoFshr 172.76 -0.66 173.64 139.07 0.36 30.60 67587.15
Novatek 652.60 2.60 800.70 622.00 2.19 8.95 34989.39 RylDShlA 2115 -3.00 2295.5 1645 7.12 45.06 121771.36
ChMrchSecs RMB 16.80 - 20.09 15.21 2.45 17.97 11542.73 CNOOC 9.02 -0.06 10.88 8.75 5.24-160.05 51665.14 Fedex 194.61 0.35 201.57 145.00 0.77 26.48 52033.84 TimeWrnr 98.99 -0.08 100.60 68.97 1.67 18.23 76770.46
Rosneft 306.65 -0.60 425.70 300.85 3.70 18.59 57387.54 Shire 4503 -148.50 5377 2707.19 0.54 119.81 52534.46
Chna Utd Coms RMB 7.47 - 8.05 3.75 0.78 549.71 23078.01 HangSeng 163.70 -0.30 165.30 127.60 3.36 21.41 40150.95 FordMtr 11.07 0.14 14.04 10.67 5.21 5.43 43296.26 TJX Cos 75.02 -0.52 83.64 71.50 1.38 21.44 48255.37
Sberbank 161.52 -2.38 185.34 125.35 0.21 14.77 61569 StandCh 726.50 -7.00 821.60 471.34 - -61.91 30738.4
ChShenEgy 19.22 0.04 19.78 11.96 1.94 14.44 8380.05 HK Exc&Clr 197.20 1.20 213.20 175.00 2.65 38.52 30974.05 Franklin 41.64 -0.06 44.35 30.56 1.88 13.06 23373.22 T-MobileUS 67.31 -0.49 68.88 40.50 - 33.91 55923.56
Surgutneftegas 31.04 0.05 34.40 26.00 - -13.71 19578.56 Tesco 185.35 -1.45 219.40 143.08 - 228.83 19517.88
ChShpbldng RMB 6.21 0.06 8.14 5.87 - -83.48 16619.51 MTR 44.50 1.35 50.00 36.05 2.30 27.28 33742.05 GenDyn 201.44 -0.80 202.65 132.68 1.59 19.07 60771.52 UnionPac 110.36 -0.21 115.15 81.79 2.15 20.52 89108.99
Saudi Arabia (SR) Vodafone 229.15 -1.05 240.10 186.50 5.49 -9.44 78462.03
ChStConEng RMB 9.33 0.05 11.45 5.09 2.20 9.39 40369.74 SandsCh 35.20 0.30 39.30 24.60 5.88 28.64 36454.51 GenElectric 27.19 -0.27 33.00 27.10 3.56 26.12 236073.53 UPS B 107.25 1.38 120.44 101.95 3.04 26.60 73870.62
AlRajhiBnk 62.00 -0.25 67.50 48.60 3.73 11.77 26863.8 WPP 1751 14.00 1928.07 1204 2.76 16.21 28727.68
ChUncHK 11.34 0.16 11.36 7.70 1.76 212.54 34838.69 SHK Props 115.20 0.40 123.30 85.40 2.89 10.56 42797.87 GenMills 56.54 -0.78 72.95 55.57 3.47 20.26 32574.7 USBancorp 51.07 -0.38 56.61 38.48 2.21 15.05 86058.99
Tencent 274.80 -3.20 280.60 167.00 0.17 54.46 334121.74 Natnlcombnk 40.50 0.40 45.00 32.00 3.46 8.37 21597.7 United States of America ($)
CNNC Intl RMB 7.63 0.04 7.83 6.58 1.21 24.75 4703.71 GenMotors 33.52 0.45 38.55 27.34 4.66 5.05 50585.41 UtdHlthcre 176.46 -1.04 178.89 132.39 1.46 21.97 170047.72
SaudiBasic 97.75 0.50 102.50 76.00 5.06 18.05 78191.67 21stC Fox A 26.95 -0.08 32.60 23.33 1.37 15.98 28360.42
CSR 7.32 0.04 7.99 6.45 2.38 16.59 4104.82 India (Rs) GileadSci 64.55 0.05 88.85 63.88 3.08 6.63 84349.32 UtdTech 121.28 -0.57 122.84 96.89 2.24 18.28 97170.47
SaudiTelec 68.75 1.00 74.00 51.00 5.98 15.46 36662.76 3M 201.84 1.17 202.20 163.85 2.30 23.73 120549.46
Daqin RMB 8.46 - 8.61 5.98 5.45 15.02 18331.65 Bhartiartl 370.70 -2.40 401.00 283.05 0.38 38.07 22925.33 GoldmSchs 219.56 -3.97 255.15 138.20 1.22 11.38 86425.59 ValeroEngy 62.22 -0.23 71.40 46.88 4.13 13.24 27826.74
Singapore (S$) AbbottLb 44.58 -0.13 45.84 36.76 2.41 48.70 77358.43
Gree Elec Apl 0.19 - 0.25 0.16 - -6.10 335.17 HDFC Bk 1629.05 -2.85 1648 1144.25 0.56 33.54 64643.05 Halliburton 45.07 -0.70 58.78 40.12 1.64 -11.18 39110.49 Verizon 46.09 0.77 56.95 44.46 5.13 14.99 188014.05
DBS 20.60 -0.24 21.18 14.72 2.91 12.44 37815.86 Abbvie 65.99 -0.07 68.12 55.06 3.60 17.47 105025.76
GuosenSec RMB 13.17 0.06 18.94 12.39 4.64 21.92 4213.53 Hind Unilevr 1072.6 0.35 1077 781.95 1.57 50.66 35915.39 HCA Hold 82.48 -0.22 91.03 67.00 - 10.91 30262.29 VertexPharm 120.02 0.10 121.96 71.46 - 166.70 29891.99
JardnMt US$ 63.98 0.30 67.27 52.90 2.36 9.20 46250.97 Accenture 123.54 0.65 126.53 108.66 1.92 17.78 81799.76
HaitongSecs 13.18 - 15.24 11.98 4.02 15.33 5765.14 HsngDevFin 1579.5 -19.35 1603.9 1182.15 0.93 25.48 38838.49 Hew-Pack 18.97 0.50 19.58 11.48 2.75 11.77 32123.42 VF Cp 53.72 0.01 65.28 48.05 2.96 18.57 21512.55
JardnStr US$ 42.15 0.37 43.78 28.45 0.72 8.67 46688.1 Adobe 142.30 0.41 143.48 90.35 - 52.55 70395.52
Hngzh HikVDT RMB 26.74 - 40.16 20.30 1.79 30.75 18857.28 ICICI Bk 321.40 6.50 324.50 221.10 1.54 22.24 28976.33 HiltonWwde 65.37 0.03 66.39 43.34 1.23 92.13 21492.43 Viacom 34.75 -0.38 46.72 33.44 3.99 9.72 12242.44
OCBC 10.41 -0.03 10.65 8.22 3.53 12.07 31435.33 AEP 71.01 0.14 71.32 57.89 3.33 48.28 34916.47
Hunng Pwr 6.17 0.33 6.21 4.43 8.88 9.45 3720.59 Infosys 996.20 11.05 1279.3 901.00 2.54 15.75 35400.76 HomeDep 153.95 -0.95 160.86 119.20 1.83 23.35 184055.69 Visa Inc 94.50 -0.17 95.38 73.25 0.66 45.71 174470.66
SingTel 3.75 0.01 4.36 3.59 4.69 15.60 44208.77 Aetna 146.00 0.43 147.48 104.59 0.70 44.08 48428.2
IM Baotou Stl RMB 2.99 - 3.32 2.74 - 114.09 6860.37 ITC 311.45 -4.40 319.85 222.00 1.42 36.00 58531.07 Honywell 132.87 -0.38 135.00 105.25 1.92 20.59 101291.87 Walgreen 80.77 -0.48 88.00 76.26 1.90 20.09 87308.4
UOB 23.09 -0.26 24.02 17.41 3.09 11.80 27275.67 Aflac 75.05 0.21 76.88 66.50 2.30 11.86 29783.34
In&CmBkCh 5.20 0.01 5.27 4.03 5.26 5.81 57901.18 L&T 1767.55 -14.85 1833.9 1295.1 0.80 37.18 25520.84 HumanaInc 230.56 -1.69 234.88 150.00 0.57 22.69 33273.25 WalMartSto 78.28 0.15 79.44 65.28 2.61 17.48 237310.22
AirProd 143.71 -0.20 150.45 124.02 2.53 20.25 31288.99
IndstrlBk RMB 16.50 -0.07 17.58 14.99 3.79 5.69 45818.97 OilNatGas 178.65 2.90 211.80 138.00 1.87 18.58 35469.52 South Africa (R) IBM 152.40 -0.09 182.79 142.50 3.78 12.20 143179.33 WellsFargo 52.40 -0.01 59.99 43.55 2.98 12.74 261876.95
Alexion 97.90 0.20 157.02 96.18 - 45.33 21984.09
Kweichow RMB 451.92 1.32 456.48 255.20 1.40 30.89 82743.19 RelianceIn 1359.35 2.45 1467.75 930.00 - 13.13 68378.84 Firstrand 50.78 0.11 54.46 41.50 4.45 11.89 21704.9 IllinoisTool 140.65 0.28 142.82 98.32 1.83 22.98 48586.68 Williams Cos 28.95 -0.74 32.69 19.60 6.04 -48.80 23920.65
Allegran 222.88 -0.24 261.27 184.50 0.32 -20.42 74775.42
Midea 1.71 0.01 1.87 1.62 6.11 23.05 47.18 SBI NewA 288.85 4.85 315.30 194.60 0.89 50.24 36241.09 MTN Grp 119.00 -1.27 151.70 104.76 9.07 -82.73 17085.67 Illumina 173.50 -2.41 189.48 119.37 - 34.08 25331 Yahoo 50.66 -0.01 51.23 35.05 - -1641.94 48542.46
Allstate 86.21 -0.29 86.63 65.27 1.59 17.74 31425.1
New Ch Life Ins 40.80 -0.25 42.30 25.40 - 21.68 5412.78 SunPhrmInds 508.00 5.40 854.95 492.65 0.20 17.11 18856.53 Naspers N 2798.32 -0.68 2846.5 1925.98 0.14 111.08 93449.39 Intcntl Exch 60.19 -0.16 61.98 48.15 1.18 24.40 35636.49 Yum!Brnds 72.20 0.11 72.52 56.80 2.46 25.90 25142.24
Alphabet 994.30 1.03 997.62 672.66 - 34.30 295932.32
PetroChina 5.26 -0.03 6.38 4.92 1.03 30.18 14237.75 Tata Cons 2551.1 -21.75 2744.8 2051.9 1.87 18.68 77768.46 South Korea (KRW) Intel 36.34 0.08 38.45 30.44 2.94 15.30 171125.06 Venezuela (VEF)
Altria 74.66 0.25 76.55 60.82 2.65 30.12 144206.99
PingAnIns 50.35 0.35 50.90 32.50 1.28 11.97 48107.1 Indonesia (Rp) HyundMobis 281000 - 293500 212000 1.29 12.45 24310.01 Intuit 139.62 1.06 140.25 103.03 0.94 40.13 35773.01 Bco de Vnzla 750.00 - 800.00 93.00 - - 3762.2
Amazon 997.42 1.64 1001.2 682.12 - 182.63 476742.32
PngAnBnk RMB 9.15 0.05 10.26 8.49 1.71 6.98 22562.17 Bk Cent Asia 17775 - 18550 12625 1.01 20.25 32896.19 KoreaElePwr 42250 150.00 63600 40050 4.54 3.97 24105.03 John&John 127.00 0.08 129.00 109.32 2.59 20.75 342119.5 Bco Provncl 10000 -400.00 10400 2200 - 42.19 1483.05
AmerAir 48.05 -0.69 50.64 24.85 0.86 11.31 23668.94
Pwr Cons Corp RMB 7.86 0.17 9.00 5.40 1.00 16.07 10997.86 SK Hynix 57400 -500.00 58800 27400 1.08 9.55 37137.69 JohnsonCn 42.03 - 46.17 37.31 2.77 -30.14 39428.71 Mrcntl Srvcs 31150 1150 31150 4500 0.02 154.72 2608.36
Israel (ILS) AmerExpr 77.22 -0.24 82.00 57.15 1.66 13.55 69017.63
SaicMtr RMB 29.62 0.28 29.95 19.60 4.70 9.96 47599.03 SmsungEl 2232000-49000.00 2361000 1268000 0.95 16.80 259200.21 JPMrgnCh 84.48 -0.88 93.98 57.05 2.16 14.71 300140.87
TevaPha 101.30 -2.00 217.70 100.60 4.73 16.63 28733.75 AmerIntGrp 64.03 0.48 67.47 48.41 1.92 99.49 59038.53
ShenwanHong 0.31 0.01 0.35 0.16 - -5.18 346.91 Spain () Kimb-Clark 129.00 -0.51 138.87 111.30 2.97 20.70 45785.59 Closing prices and highs & lows are in traded currency (with variations for that
Italy () AmerTower 131.63 0.52 132.86 99.72 1.70 61.83 55943.57
ShgPdgBk RMB 12.84 -0.09 13.52 11.16 3.16 6.78 40457.53 KinderM 18.45 -0.80 23.36 17.07 4.75-116.47 41188.56 country indicated by stock), market capitalisation is in USD. Highs & lows are
Enel 4.73 0.03 4.81 3.54 3.37 16.38 53728.36 BBVA 7.36 -0.12 7.89 4.50 4.95 13.12 54869.51 Amgen 154.28 -0.73 184.21 133.64 2.77 14.25 113457.38
Sinopec Corp 6.37 -0.01 6.57 5.08 2.56 11.50 20849.84 Kraft Heinz 92.49 -0.50 97.77 79.69 2.64 32.00 112613.03 based on intraday trading over a rolling 52 week period.
ENI 14.32 0.04 15.92 12.18 5.56 -5.41 58169.72 BcoSantdr 5.80 -0.06 6.35 3.15 3.48 14.03 94553.36 Anadarko 51.21 -0.64 73.33 48.67 1.20 -5.19 28692.17
Sinopec Oil RMB 3.92 0.24 4.51 3.02 - -3.43 1610.25 Kroger 29.70 0.25 37.97 28.29 1.55 14.17 27104.32 ex-dividend
Generali 13.88 -0.18 16.00 9.76 5.09 10.71 24230.6 CaixaBnk 4.16 -0.05 4.47 1.82 3.54 23.59 27792.81 Anthem 183.76 0.68 185.00 114.85 1.39 21.68 48693.87
Denmark (kr) Iberdrola 7.05 0.02 7.07 4.80 5.80 16.91 50898.65 L Brands 51.10 0.59 79.67 43.04 4.80 12.56 14553.74 ex-capital redistribution
IntSPaolo 2.55 -0.02 2.90 1.52 5.39 21.20 45240.2 Aon Cp 130.33 0.32 130.60 100.55 1.03 24.27 34155.59
DanskeBk 248.80 -0.70 259.30 161.80 3.56 11.74 35021.6 Inditex 36.34 0.36 36.65 27.18 1.31 35.82 126578.61 LasVegasSd 58.84 0.82 63.38 41.45 5.05 24.87 46617.05 # price at time of suspension
Luxottica 53.90 -0.10 56.90 39.92 1.62 31.00 29186.57 Apple 153.89 0.28 156.65 91.50 1.52 17.44 802357.84
MollerMrsk 12540 60.00 12770 7775 3.67 -20.13 18955.81 Repsol 15.00 -0.01 15.22 9.60 4.11 13.57 25089.22 LibertyGbl 31.06 -0.07 39.85 26.16 - 13.61 7366.17
Unicred 15.85 -0.02 30.80 11.93 3.73 -1.61 39431.33 ArcherDan 42.19 -0.26 47.88 39.01 2.97 17.38 23978.99
NovoB 280.80 4.20 384.80 218.20 3.33 19.16 82803.13 Telefonica 9.98 -0.10 10.63 7.45 7.30 21.57 56186.44 Lilly (E) 78.18 0.13 86.72 64.18 2.70 36.72 86262.93
AT&T 38.50 0.38 43.89 36.10 5.22 17.61 236698

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
Surgutneftegas 31.04 30.99 0.05 0.15 4.14 15.4 11.27 SunPhrmInds 508.00 502.60 5.40 1.07 -132.15 -20.6 -20.87 May 30 date Coupon S* M* F* price yield yield yield US May 30 date Coupon S* M* F* price yield yield yield US
ChUncHK 11.34 11.18 0.16 1.43 0.98 9.5 12.95 ShgPdgBk 12.84 12.93 -0.09 -0.70 -2.20 -14.6 -14.68 High Yield US$ US$
Tesla Mtrs 332.47 325.14 7.33 2.25 28.61 9.4 5.81 Devon Energy 34.56 35.82 -1.26 -3.50 -3.26 -8.6 -12.51 Navient Corporation 03/20 8.00 BB- Ba3 BB 110.09 4.21 0.00 -1.29 2.93 SunTrust Banks, Inc. 01/28 6.00 BBB+ Baa1 A- 111.09 4.72 0.00 -0.02 2.49
NorfolkS 123.77 122.33 1.44 1.18 9.40 8.2 5.39 ValeantPh 16.60 17.24 -0.64 -3.71 -1.36 -7.6 31.23 High Yield Euro FleetBoston Financial Corp. 01/28 6.88 BBB Baa3 A- 120.98 4.43 0.00 -0.15 2.20
Intuit 139.62 138.56 1.06 0.77 10.47 8.1 11.53 Perrigo 68.10 69.95 -1.85 -2.64 -4.97 -6.8 -8.03 Kazkommerts Intl BV 02/17 6.88 B Caa1 B 97.50 - 0.00 0.00 - Citigroup Inc. 01/28 6.63 BBB+ Baa1 A 121.14 4.19 0.00 0.11 1.96
MediaTek 229.50 228.50 1.00 0.44 17.00 8.0 6.74 Alexion 97.90 97.70 0.20 0.20 -6.74 -6.4 -23.51 Nicor Gas Company 02/28 6.58 A Aa3 AA- 117.13 4.59 0.00 -0.07 2.36
ChinaMBank 23.55 23.70 -0.15 -0.63 1.60 7.3 16.58 Unicred 15.85 15.87 -0.02 -0.13 -1.02 -6.0 6.09 Emerging US$ NationsBank Corp. 03/28 6.80 BBB Baa3 A- 121.97 4.28 0.00 -0.29 2.06
China Vanke 20.75 20.35 0.40 1.97 1.37 7.1 5.12 Cred Agr 13.78 13.91 -0.13 -0.90 -0.85 -5.8 0.95 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- 120.02 4.62 0.00 -0.19 2.40
Charter Comms 338.76 337.44 1.32 0.39 19.97 6.3 -1.86 Deut Bank 16.14 16.43 -0.30 -1.80 -0.99 -5.8 -5.75 Peru 03/19 7.13 BBB+ A3 BBB+ 109.92 1.61 0.00 -0.18 0.33
Peru 03/19 7.13 BBB+ A3 BBB+ 114.01 2.60 0.00 0.20 0.84 Euro
Hunng Pwr 6.17 5.84 0.33 5.65 0.34 5.8 14.90 CanNatRs 38.98 39.80 -0.82 -2.06 -2.30 -5.6 -10.33 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 104.14 2.22 0.02 0.15 -
ICICI Bk 321.40 314.90 6.50 2.06 17.55 5.8 15.40 KinderM 18.45 19.25 -0.80 -4.16 -1.07 -5.5 -10.45 Brazil 01/20 12.75 BB Ba2 BB 124.48 3.00 0.00 0.41 1.72
Brazil 01/22 12.50 BB Ba2 BB 112.45 9.15 -0.07 -0.23 7.38 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 104.83 2.15 0.00 0.06 -
Ch Evrbrght 3.68 3.68 0.00 0.00 0.19 5.4 0.82 Generali 13.88 14.06 -0.18 -1.28 -0.79 -5.4 -4.47 Citigroup Inc. 02/30 4.25 BBB Baa3 A- 117.34 2.29 0.02 0.04 -
Hind Unilevr 1072.60 1072.25 0.35 0.03 54.00 5.3 14.72 Halliburton 45.07 45.76 -0.70 -1.52 -2.54 -5.3 -1.74 Poland 03/23 3.00 BBB+ A2 A- 100.95 2.84 -0.02 -0.20 1.07
Colombia 03/23 2.63 BBB Baa2 BBB 97.23 3.18 -0.02 -0.09 1.41 HBOS plc 03/30 4.50 BBB- Baa2 A- 117.08 2.47 0.02 -0.23 -
PngAnBnk 9.15 9.10 0.05 0.55 0.46 5.3 1.78 IntSPaolo 2.55 2.57 -0.02 -0.62 -0.14 -5.2 -4.56
Turkey 03/23 3.25 - Ba1 BB+ 80.65 7.41 0.06 0.27 5.64 Yen
ChMinsheng 7.99 8.09 -0.10 -1.24 0.40 5.3 4.31 Williams Cos 28.95 29.69 -0.74 -2.49 -1.54 -5.1 -5.47
Russia 05/26 4.75 - - BBB- 105.31 4.08 0.00 0.00 1.85 Enagas Transportes, S.A.U. 09/39 3.23 A- Baa2 A- 106.57 2.85 0.00 0.01 -
Softbank 8980.00 8732.00 248.00 2.84 445.00 5.2 6.44 ENI 14.32 14.28 0.04 0.28 -0.67 -4.5 0.35
IndstrlBk 16.50 16.57 -0.07 -0.42 0.81 5.2 7.35 Anadarko 51.21 51.84 -0.64 -1.22 -2.37 -4.4 -10.28 Turkey 03/27 6.00 - Ba1 BB+ 106.82 5.17 0.00 0.03 2.94 Sterling
Ch OSLnd&Inv 23.65 23.30 0.35 1.50 1.10 4.9 4.65 Shire 4503.00 4651.50 -148.50 -3.19 -207.00 -4.4 0.54 Emerging Euro Electricite de France (EDF) 05/28 6.25 A A3 A- 135.06 2.55 -0.01 -0.19 0.32
BOE Tech 1.57 1.57 0.00 0.00 0.07 4.7 2.61 ConocPhil 44.72 45.35 -0.63 -1.39 -2.04 -4.4 -6.67 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- 101.54 2.47 -0.01 -0.30 0.24
WPP 1751.00 1737.00 14.00 0.81 78.00 4.7 5.96 BkMontrl 91.07 91.51 -0.44 -0.48 -4.06 -4.3 -5.80 Mexico 02/20 5.50 BBB+ A3 BBB+ 113.88 0.35 0.00 -0.07 -0.92 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+ 107.90 1.35 0.02 -0.01 -0.42 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- 108.38 2.12 0.02 0.01 -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
May 30 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return May 30 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 10.43 0.62 9.81 26.72 9.56 May 30 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 10.45 0.85 9.60 23.69 3.59 Tr 8.75pc '17 102.10 0.01 0.00 0.00 -200.00 -97.44 105.16 100.00 11.14
US Discount 0.75 16-12-2015 0.75 1.00 0.75 ABF Pan-Asia unhedged 181.71 0.08 1.06 4.90 0.80 0.64 VXN 13.09 0.83 12.26 27.10 9.75 Tr 5pc '18 103.78 0.10 11.11 25.00 233.33 -66.67 108.38 103.78 35.24
Euro Repo 0.00 10-09-2014 0.05 0.05 0.05 Corporates( ) 343.37 0.24 1.41 4.01 1.59 11.04 VDAX - - - - - Tr 4.5pc '19 107.85 0.07 0.00 16.67 133.33 -84.44 111.97 107.85 36.35
UK Repo 0.25 05-03-2009 0.25 0.50 0.50 Corporates($) 271.45 0.05 0.75 3.11 0.75 3.11 CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 112.94 0.08 -11.11 -11.11 0.00 -87.88 117.02 112.94 33.31
Japan O'night Call 0.00-0.00 05-10-2010 0.00 0.00-0.10 0.00-0.10 Corporates() 223.44 0.13 0.20 0.98 0.46 2.65 Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 104.64 0.22 -8.33 -12.00 -12.00 -75.28 106.04 102.64 32.46
Switzerland Libor Target 0.00-0.25 15-01-2015 0.00-0.75 -1.25--0.25 0-0.25 Eurozone Sov() 231.47 0.24 0.53 -0.52 0.79 -0.59 Tr 4pc '22 117.56 0.29 -14.71 -17.14 -9.38 -68.82 121.31 116.43 37.95
Gilts( ) 325.82 0.23 0.79 2.75 0.92 7.46 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 132.35 0.71 -6.58 -6.58 -5.33 -45.38 138.11 129.09 35.08
INTEREST RATES: MARKET Global Inflation-Lkd 259.18 0.01 0.65 4.86 1.37 3.84 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 101.55 1.09 -5.22 -6.03 -3.54 -31.45 138.26 99.31 5.43
Over Change One Three Six One Markit iBoxx Non-Gilts 338.18 0.22 1.18 3.62 1.33 9.60 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 138.52 1.40 -2.78 -4.11 -3.45 -27.84 148.92 131.34 35.44
May 30 (Libor: May 26) night Day Week Month month month month year Overall ($) 236.23 0.05 0.48 2.29 0.48 2.29 Australia 10/19 2.75 102.65 1.62 -0.01 -0.08 -0.13 -0.03 Tr 4.25pc '36 143.62 1.56 -2.50 -3.70 -4.29 -26.42 155.77 133.98 29.76
US$ Libor 0.93000 0.000 0.001 0.001 1.04467 1.20178 1.41378 1.72122 Overall( ) 326.45 0.23 0.91 3.01 1.04 8.08 11/28 2.75 102.15 2.53 -0.01 -0.10 -0.20 0.00 Tr 4.5pc '42 158.85 1.66 -2.35 -3.49 -4.05 -24.89 174.65 145.64 26.64
Euro Libor -0.43000 -0.006 -0.003 0.000 -0.39857 -0.36929 -0.28500 -0.15543 Overall() 227.66 0.19 0.38 -0.16 0.60 0.09 Austria 10/19 0.25 99.98 0.26 0.00 0.00 0.00 0.00 Tr 3.75pc '52 158.57 1.57 -2.48 -3.68 -4.27 -25.94 177.28 140.85 23.59
Libor 0.22375 0.000 -0.001 0.000 0.25263 0.29963 0.44138 0.63813 Treasuries ($) 223.04 0.06 0.33 1.79 0.33 1.79 04/27 0.50 99.26 0.58 0.00 -0.11 -0.03 0.00 Tr 4pc '60 178.41 1.50 -2.60 -3.85 -4.46 -27.18 201.27 155.52 23.21
Swiss Fr Libor 0.000 -0.78540 -0.72960 -0.66180 -0.48960 FTSE Belgium 06/18 0.75 100.87 -0.11 0.00 0.00 0.00 0.00 xd Ex dividend. Closing mid-prices are shown in pounds per 100 nominal of stock. Red yield: Gross redemption yield.
Yen Libor -0.002 -0.01629 -0.01529 0.02300 0.12500 Sterling Corporate () 118.81 0.07 - - 0.96 5.46 06/27 0.80 101.44 0.65 -0.04 -0.12 -0.11 0.00 This table shows the gilts benchmarks & the non-rump undated stocks.
Euro Euribor -0.001 -0.37200 -0.32900 -0.25400 -0.13100 Euro Corporate () 107.41 -0.03 - - 0.13 -0.54 Canada 08/19 0.75 100.00 0.75 0.00 0.02 0.00 0.00
Sterling CDs
US$ CDs
0.000
0.000
0.20000
0.97000
0.28000
1.13000
0.42500
1.31000
Euro Emerging Mkts () 809.47 11.73 - - 1.17 -8.13 06/27 1.00 96.07 1.42 -0.02 -0.09 -0.09 0.00 GILTS: UK FTSE ACTUARIES INDICES
Eurozone Govt Bond 112.26 -0.09 - - 0.32 -3.07 Denmark 11/20 0.25 102.29 -0.41 0.00 0.00 0.00 0.00
Euro CDs 0.000 -0.43500 -0.39500 -0.29500 11/27 0.50 99.33 0.57 -0.02 -0.10 -0.03 0.00 Price Indices Day's Total Return Return
CREDIT INDICES Day's Week's Month's Series Series Fixed Coupon May 30 chg % Return 1 month 1 year Yield
Short 7 Days One Three Six One Index change change change high low Finland 09/19 1.75 100.48 1.54 0.00 0.00 -0.02 0.23
07/28 2.75 115.37 1.45 0.00 0.00 0.00 0.00 1 Up to 5 Years 96.73 0.03 2436.56 0.09 1.61 0.16
May 30 term notice month month month year Markit iTraxx 2 5 - 10 Years 186.85 0.08 3520.77 0.59 4.92 0.68
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 218.73 0.11 4286.83 0.93 7.44 1.13
Sterling 0.15 0.25 0.15 0.25 0.23 0.33 0.35 0.50 0.47 0.62 Europe 5Y 85.00 -1.98 7.21 7.01 90.43 67.59 11/20 0.25 102.44 -0.44 0.00 0.00 0.00 0.00
4 5 - 15 Years 194.39 0.09 3710.08 0.71 5.71 0.88
Swiss Franc - - - - - - - - - - - - Japan 5Y 70.05 -2.51 2.21 -0.87 93.03 64.22 10/22 2.25 112.98 -0.14 0.00 0.00 0.00 0.00
5 Over 15 Years 346.08 -0.16 5234.32 1.61 12.42 1.59
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 111.86 -3.89 10.86 12.50 121.66 80.36 05/27 1.00 102.59 0.73 -0.04 -0.11 -0.09 0.00
7 All stocks 184.65 -0.04 3615.80 0.91 7.09 1.38
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 0.25 102.29 -0.71 0.00 0.00 0.00 0.00
Markit CDX 08/23 2.00 114.03 -0.24 0.00 0.00 0.00 0.00
Japanese Yen -0.20 0.00 -0.20 0.00 -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 99.59 0.29 -0.03 -0.12 -0.04 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 May 30 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 2.50 133.68 1.14 -0.02 -0.10 0.03 0.25
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 1 Up to 5 Years 315.24 0.02 -0.12 2.00 2475.72 0.09 3.91
Nth Amer Inv Grade 5Y 63.53 0.28 -4.09 -3.35 69.24 62.53 Greece 04/19 4.75 98.38 5.68 0.10 0.16 -0.13 -1.39
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 2 Over 5 years 726.62 -0.53 -0.46 23.78 5409.41 -0.34 24.44
02/27 3.00 84.14 5.98 0.09 0.26 0.07 -1.25 3 5-15 years 485.43 0.10 0.32 11.28 3750.07 0.53 12.46
Ireland 10/19 5.90 115.28 -0.47 0.00 0.00 0.00 0.00 4 Over 15 years 934.83 -0.74 -0.71 28.56 6811.74 -0.62 29.01
05/26 1.00 102.06 0.76 -0.02 -0.09 -0.07 -0.04 5 All stocks 656.45 -0.49 -0.44 21.26 4959.69 -0.31 22.05
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED Italy 10/19 0.05 99.80 0.14 0.01 0.05 -0.12 0.00
11/21 0.35 98.48 0.70 0.04 0.08 -0.10 0.00 Yield Indices May 30 May 26 Yr ago May 30 May 26 Yr ago
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
06/27 2.20 100.33 2.18 0.00 0.06 -0.12 0.00 5 Yrs 0.30 - 0.82 20 Yrs 1.69 - 2.18
Crude Oil Jun 49.33 -0.66 Corn Jul 371.25 -2.50 Apr 21 Apr 21 Prev return stock Market stocks
03/47 2.70 89.72 3.27 0.02 0.06 -0.10 0.69 10 Yrs 1.03 - 1.55 45 Yrs 1.52 - 2.05
Brent Crude Oil 51.95 -0.30 Wheat Jul 435.50 -3.25 Can 4.25%' 21 121.46 -0.361 -0.372 0.29 5.18 75355.91 7
Japan 05/19 0.10 100.52 -0.17 0.00 0.00 0.00 0.00 15 Yrs 1.50 - 2.00
RBOB Gasoline Jun 1.61 -0.04 Soybeans Jul 925.00 -1.00 Fr 2.25%' 20 112.37 -1.431 -1.458 0.13 20.31 222459.38 16
03/22 0.10 101.07 -0.12 0.00 0.00 0.00 0.00
Heating Oil Jun 1.58 0.00 Soybeans Meal Jul 302.00 0.70 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 -0.01 0.02 0.00 inflation 0% inflation 5%
Natural Gas Jun 3.19 -0.02 Cocoa (ICE Liffe)X Jul 1582.00 83.00 UK 2.5%' 20 373.10 -2.880 -2.849 0.27 6.58 653041.71 27
03/47 0.80 100.00 0.80 -0.01 0.00 0.00 0.00 Real yield May 30 Dur yrs Previous Yr ago May 30 Dur yrs Previous Yr ago
Ethanol - - Cocoa (ICE US) Jul 1988.00 74.00 UK 2.5%' 24 371.80 -2.205 -2.162 0.74 6.82 653041.71 27
Netherlands 01/20 0.25 102.40 -0.65 0.00 0.00 0.00 0.00 Up to 5 yrs -2.51 1.97 -2.49 -1.25 -3.25 1.97 -3.24 -1.86
Uranium Jun 18.10 0.00 Coffee(Robusta)X Jul 2010.00 27.00 UK 2%' 35 273.88 -1.791 -1.774 1.49 9.08 653041.71 27
07/27 0.75 102.32 0.51 -0.03 -0.10 -0.03 0.00 Over 5 yrs -1.73 24.71 -1.75 -0.92 -1.76 24.80 -1.78 -0.95
Carbon Emissions - - Coffee (Arabica) Jul 132.15 1.10 US 0.625%' 21 103.72 -0.249 -0.260 0.21 35.84 1253376.13 38
White SugarX 438.00 -0.30 New Zealand 04/20 3.00 102.48 2.11 0.00 -0.03 -0.14 -0.03 5-15 yrs -2.01 8.47 -2.00 -0.91 -2.13 8.48 -2.12 -1.03
Diesel - - US 3.625%' 28 133.26 0.507 -0.260 0.58 16.78 1253376.13 38
Sugar 11 15.22 -0.15 04/27 4.50 114.35 2.82 0.00 -0.04 -0.17 0.23 Over 15 yrs -1.71 29.77 -1.73 -0.92 -1.72 29.81 -1.75 -0.94
Unleaded (95R) - - Representative stocks from each major market Source: Merill Lynch Global Bond Indices Local currencies. Total market
Norway 05/19 4.50 107.69 0.57 0.01 -0.01 -0.08 -0.05 All stocks -1.74 23.00 -1.76 -0.92 -1.77 23.11 -1.79 -0.96
Base Metals ( LME 3 Months) Cotton Jul 77.20 0.05 value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium 1928.50 -23.50 Orange Juice Jul 138.05 -0.95 02/27 1.75 102.24 1.50 -0.02 -0.03 -0.12 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 4.75 109.20 0.22 0.01 -0.06 -0.14 -0.83
Copper 5657.00 -5.00 Live Cattle Jun 122.63 0.00 BONDS: TEN YEAR GOVT SPREADS 04/27 4.13 108.60 3.10 -0.04 -0.06 -0.46 0.00 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Lead 2098.50 -24.50 Feeder Cattle Aug 147.20 -4.03 Spain 01/19 0.25 100.89 -0.28 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 9115.00 30.00 Lean Hogs Jun 81.88 0.00 Spread Spread Spread Spread 04/27 1.50 99.78 1.52 -0.01 -0.07 -0.12 0.00 that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
Tin 20375.00 50.00 Bid vs vs Bid vs vs Sweden 10/18 1.00 99.42 1.44 0.00 0.00 0.02 0.30 loss arising from the reliance on or use of the listed information. For all queries e-mail
Zinc 2625.50 -19.00 % Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds 11/26 1.00 104.62 0.50 0.01 -0.03 -0.09 -0.30 ft.reader.enquiries@morningstar.com
Precious Metals (PM London Fix) May 26 Month Year Australia 2.53 2.24 0.30 Italy 2.18 1.88 -0.05 Switzerland 07/20 2.25 109.54 -0.78 0.00 0.00 0.00 0.00
Gold 1262.70 -2.35 S&P GSCI Spt 381.36 -0.38 2.54 Austria 0.58 0.29 -1.65 Japan 0.04 -0.25 -2.19 06/27 3.25 134.53 -0.15 0.00 0.00 0.00 0.00 Data provided by Morningstar | www.morningstar.co.uk
Silver (US cents) 1727.00 -2.00 DJ UBS Spot 83.12 -1.10 -2.78 Belgium 0.65 0.36 -1.58 Netherlands 0.51 0.22 -1.71 United Kingdom 07/19 1.75 103.56 0.09 0.00 -0.04 0.01 0.00
Platinum 961.00 11.00 R/J CRB TR 182.69 -0.33 -2.27 Canada 1.42 1.13 -0.81 Norway 1.50 1.21 -0.73 07/22 0.50 100.29 0.44 -0.02 -0.08 -0.07 0.00
Palladium 780.00 13.00 M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark 0.57 0.27 -1.66 Portugal 3.10 2.80 0.87 07/27 1.25 101.68 1.07 -0.02 -0.09 -0.09 0.00
Bulk Commodities UBS Bberg CMCI TR 13.57 -1.32 1.79 Finland 1.45 1.15 -0.78 Spain 1.52 1.23 -0.70 07/47 1.50 96.34 1.65 0.00 -0.05 -0.07 0.00
Iron Ore (Platts) 57.80 0.00 LEBA EUA Carbon 5.04 0.00 -13.55 France 0.73 0.44 -1.50 Switzerland -0.15 -0.44 -2.38 United States 03/19 1.25 99.95 1.28 -0.03 -0.02 0.01 0.00
Iron Ore (The Steel Index) 57.90 0.10 LEBA CER Carbon 0.23 -8.00 -42.50 Germany 0.29 0.00 -1.94 United Kingdom 1.07 0.78 -1.15 04/22 1.88 100.49 1.77 -0.02 -0.06 -0.03 0.00
GlobalCOAL RB Index 73.75 1.00 LEBA UK Power 3060.00 225.53 57.73 Greece 5.98 5.69 3.75 United States 2.23 1.94 0.00 05/27 2.38 101.30 2.23 -0.02 -0.06 0.00 0.00
Baltic Dry Index 900.00 -12.00 Ireland 0.76 0.47 -1.47 05/47 3.00 102.07 2.90 -0.01 -0.05 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 Wednesday 31 May 2017

MARKETS & INVESTING

Currencies
Equities

Amazon at $1,000 highlights

US tech sector dominance
Amazon ascending to the
$1,000-a-share level in
New York trading
yesterday highlights how
technology stocks have
electrified this years US
stock market rally,
overtaking the so-called
Trump trade.
The strength of the tech
sector has helped active
fund managers achieve a
rare period of out-
performance so far in 2017.
The US stock market
climbed another 1.4 per
cent last week to close at a
fresh high, but the tech
industry has been the rallys
dominant fuel, particularly
the FAANGtastic five
Facebook, Apple, Amazon,
Netflix and Google which
have each gained between
25 and 32 per cent.
Excluding technology
and telecoms shares, the
20%
Rise so far this year for
S&P 500s tech sub-index.
Annualised, that would
make 2017 the best year
for the sector since 2009
S&P 500 is up 5.3 per cent
this year, while the tech
sub-index has climbed
almost 20 per cent.
Annualised, that would
make 2017 the best year
for the industry since the
post-crisis 2009 rebound,
and comes close to the
heady days in 1998-99 that
preceded the dotcom
bubble bursting.
Tech-focused mutual
funds have enjoyed 12
weeks of inflows, and there
are some concerns that the
valuations of big tech
shares are becoming
stretched.
Investors surveyed by
Bank of America in May
said that betting on the
tech-heavy Nasdaq was
the most crowded trade
in markets. Nonetheless,
the rally in tech shares has
been a big boon to many
mutual fund managers that
Tech stocks outperform
Indices rebased
Jan Feb
2017
Source: Thomson Reuters Datastream
Tech stars
Share prices rebased
Facebook
Apple
Amazon
Netflix
Google
Jan Feb
Source: Thomson Reuters Datastream
have struggled with poor
performance. About 52 per
cent of large-cap US equity
funds have outperformed
their benchmarks this year
the best rate of
outperformance since
2009 and tech has been
one of the primary
drivers of the strong
performance, according
to Goldman Sachs.
By contrast, value
stocks typically steady
companies trading at
cheaper prices which
initially jumped when
Donald Trump won the US
presidency last year, have
struggled for most of 2017.
Financial shares have
edged up just 1.3 per cent
while energy stocks have
tumbled nearly 13 per cent.
Hedge funds have also
been piling into the tech
sector this year and
reaped the benefits.
Apple, Google, Amazon,
Facebook and Microsoft
have been the top-five
contributors to the S&P
500s gains this year, and
all are in the top-10
holdings of hedge funds
tracked by Goldman Sachs.
So-called growth funds
which focus on racier,
faster-growing companies
and often have tech stocks
as their biggest holdings
have done particularly
well out of the rally. The
average growth fund has
jumped 12.5 per cent year
to date, exceeding the
Russell 1000 growth index
by 1.1 percentage points.
Overall, 63 per cent of
growth funds have made
juicier returns than their
benchmarks, a marked
improvement from the 10-
year average of 38 per cent.
MKM Partners notes
that, beyond the large-cap
technology titans, smaller
players are also performing
well this year. Consider
there are 303 technology
names within the Russell
3000. The median total
return YTD for those
names is 14.57 per cent,
and there are 169 names
(56 per cent) that are up
double digits or more, said
MKM Partners.
Robin Wigglesworth
and Adam Samson
125
Nasdaq Tech 100
120
115
110
105
S&P 500
100
Mar
Apr May
140
130
120
110
100
Mar Apr May
2017
Euro struggles after Draghi comments
Hawkish hopes fade after
ECB chief stresses need
for monetary support
MICHAEL HUNTER
The euro struggled to stay above $1.12
yesterday as Mario Draghis insistence
that the eurozone still needed extraor-
dinary support drained momentum
from the currencys rally.
In remarks on Monday when Lon-
don and New York markets were closed
Mr Draghi, president of the European
Central Bank, stressed that the currency
bloc still needed support in spite of a
strengthening recovery.
His remarks in combination with
the possibility of an early election in
Italy and renewed concern about
Greeces debt burden sent the single
Bond ETFs race to play catch-up
Asset managers push smart
beta products that seek to do
more than track an index
ROBIN WIGGLESWORTH
The exchange-traded fund industry has
swelled to $4tn this year, propelled in
part by a dizzying array of innovative
new products.
But one corner of the passive invest-
ment landscape has remained a waste-
land until now.
While there has been no shortage
of experimentation in equity ETFs,
with a growing number of smart beta
funds designed to give exposure to
specific investment factors such as
growth stocks or even quasi-hedge fund
strategies, bond ETFs tend to be plain by
comparison.
A simple bet on bonds has been
enough to make money for more than
three decades. However, with some
writing the obituary for fixed-incomes
bull market, more investors are
tempted to explore the gizmos Wall
Street is offering that bring factor
investing deeper into the bond universe.
Smart beta is the industrys jargon for
ETFs that attempt to improve returns
by going beyond mimicking a tradi-
tional index such as the S&P 500 for
equities, or the Bloomberg Barclays
Aggregate bond gauge, by weighting
their composition towards factors that
tend to perform well over time.
This is the next frontier of factor
investing, and will become the next bat-
tleground as money begins to pour in,
says Rob Nestor, head of BlackRocks US
iShares smart beta team.
Less than a decade ago, Morningstar, a
data provider, had only registered two
non-traditional bond ETFs with assets
of about $200m, managed by Invescos
PowerShares.
One invested in liquid, emerging mar-
ket bonds issued in dollars that mature
in at least three years; another was a
bespoke junk ETF.
Today, Morningstar tracks 23 such
non-traditional bond ETFs, with total
assets of nearly $10bn.
Although that is dwarfed by nearly
$600bn of smart beta equity ETFs,
industry experts expect much more
innovation in the fixed income land-
scape. BlackRock has counted 25 smart
beta bond ETFs, and Mr Nestor says
another 25 have been registered with
the Securities and Exchange Commis-
sion, and await approval to launch.
These strategies arguably make even
more sense for bond ETFs than equity
counterparts.
Almost all major indices are cap-
currency down as much as 0.5 per cent with a reduction, or tapering, of its
0.5% market will get a better idea of Mr
to a low for the day of $1.1106. monthly stimulus. Macrons ability to deliver his policy
The euro recovered to $1.1182 and However, Mr Draghis remarks to law- Single currencys agenda when French National Assembly
decline at one
made several runs above $1.12m, but makers in Brussels have reined in such point to an intraday elections take place.
there are signs that its advance from hawkish expectations for the policy low of $1.1106 At the end of the European summer
below $1.06 in early April is faltering. tightening cycle, just as concerns about comes the German presidential elec-
Draghi was clear, said Marc Chan- Italy and Greece return. tion, which could clear the way for euro-
dler, a strategist at Brown Brothers Har- An early hiking cycle from the ECB $1.1182 zone fiscal stimulus, with the ECBs Sep-
riman. The improving economy is nec- would have been a game-changer for the Where it closed, up tember meeting and the prospect of the
from $1.1106 earlier
essary but insufficient. The inflation euro, said George Saravelos, a forex in the day and from first clear signs of tapering.
outlook is still not on a self-sustained strategist at Deutsche Bank. $1.06 in April The ECBs next policy meeting is
path toward the target. But recent ECB commentary has scheduled for July 8 in Tallinn, Estonia.
Relief at Emmanuel Macrons win in confirmed American-style sequencing While it is not expected to overhaul pol-
the French election and a trend of with tapering coming first. The Fed icy then, some analysts are cautious on
improving data in the eurozone this experience showed us that this is not any extension of the euros rally against
month sent the currency to $1.1236, its particularly bullish for a currency. the dollar.
highest since November. Various obstacles for the euro are Yianos Kontopoulos, a strategist at
Hopes had risen in some quarters of coming into view for investors, taking UBS, said: From a trading perspective,
the foreign exchange markets that the the edge off its early summer rally. risk-reward has diminished for the euro
ECB would find room to tighten mone- Talks between Greece and its credi- against the dollar and we would de-
tary policy, perhaps even in the form tors need to be resolved before repay- risk . . . and concentrate long positions
of an interest rate rise to coincide ment deadlines in July. Next month the against the pound.
Analysis. Capital markets
Net assets
Non-traditional fixed income ($bn)
10
8
6
4
2
0
2007 09 11 13 15 17
Number of products
Non-traditional fixed income
25
20
15
10
5
0
2007 09 11 13 15 17
Source: Morningstar
A lot of weighted: the bigger the company, demic research into investment factors That makes constructing liquid,
the bigger its weighting in an equity has been focused on equities, where alternative indices to track much
bonds are benchmark. there is extensive and clean data going trickier.
issued by But for bond gauges, this means the back many decades. People have tried to jam an equity
more indebted a company or country, In contrast, corporate bond trades factor framework over fixed income,
companies the bigger it is in an index. have only been publicly reported but its different, she says.
that arent In practice, this perversely means since 2002. In equities you can go out and buy all
that passive investors end up lending The data hurdles are huge relative to the stocks in the index, but you cant
public, and even more money to heavily-indebted equities, says Rob Arnott, head of necessarily do that in fixed income.
even the borrowers. Research Affiliates and one of the pio- State Street manages smart beta bond
To take one example, the US, Italy and neers of the smart beta industry. ETFs under its Issuer Scored Corporate
price data Japan together make up more than half A lot of bonds are issued by compa- Index strategies. These aim to maintain
of the $47.5tn Bloomberg Barclays Glo- nies that arent public, and even the the same sectoral make-up as the
can be hard bal Aggregate, the biggest international price data can be hard to come by. broader indices, but tilts towards
to come by bond index. In contrast, the debts of But it also reveals some of the funda- listed issuers with strong financial met-
Brazil, Russia, India and China only con- mental differences between stocks and rics such as the return on assets
sist of 1 per cent of the index. bonds, with the latter being far more idi- aiming to generate better returns with
Investing more in the biggest issuers osyncratic securities that often only lower volatility.
of bonds isnt necessarily the best way to trade intermittently, according to Riti Smart beta products are far more
invest in fixed income, says Todd Samanta, head of smart beta fixed complicated than their plain vanilla,
Rosenbluth, director of ETF and mutual income at State Street Global Advisors. first-generation counterparts, and can
fund research at CFRA. perform differently in practice than the
The next wave [of ETFs] will be these theory underpinning them indicates.
new smart beta bond products. Were $4 tn 23 This is particularly true for smart beta
starting to see it. bond ETFs, which add another layer of
ETF assets, Non-traditional
The lack of experimentation in bond bolstered by bond ETFs intricacy.
ETFs relative to the equity universe is innovative tracked by Their time may have come, but their
partly down to the fact that most aca- new products Morningstar promise remains unproved.

Commodities

Oil prices slip as surprised bulls seek deeper cuts from Opec and its allies
ANJLI RAVAL AND NEIL HUME
Oil prices took a further hit yesterday,
reflecting disappointment among trad-
ers that Opec and its allies agreed to only
extend, but not deepen, production cuts
to drain a glut in the market.
Some of the worlds biggest producer
countries including Saudi Arabia and
Russia last week agreed to curb supplies
for a further nine months, into 2018, in
an effort to end an oil market downturn
that has entered its third year.
The outcome of the Opec meeting
took oil bulls by surprise, said Tamas
Varga at London-based oil broker PVM.
The market probably expected deeper
cuts and was disappointed that no more
non-Opec producers joined the deal.
Prices had risen ahead of last Thurs-
days Vienna meeting of ministers with
hedge funds closing out many of their
bearish bets on oil. The run-up to the
Opec meeting saw extensive short cov-
ering, said Carsten Fritsch at Com-
merzbank.
When ministers merely offered an
extension of the current deal, prices fell
5 per cent. They rebounded slightly but
then came under renewed pressure yes-
terday.
Brent, the global benchmark, fell $1 to
$51.19 a barrel in mid-afternoon trading
in London. West Texas Intermediate,
the US marker, slid 67 cents to $49.03 a
barrel.
Analysts and energy bodies such as
the International Energy Agency expect
supply and demand to balance during
the second half of this year.
But there are some concerns output
curbs from global producers could
accelerate after the nine-month mark,
while others say the cuts will be offset by
a reinvigorated US shale oil industry
keeping prices under pressure.
Goldman Sachs, one of the most influ-
ential banks in the commodities space,
reduced its forecasts for oil prices this
year, saying falling costs for US produc-
tion would help sustain output.
The bank sees Brent crude prices for
2017 at $55.39 a barrel, down from
$56.76 previously, and WTI at $52.92
a barrel, from an initial estimate
Oil prices of $54.80.
$ per barrel But some analysts have said that
58 while the oil market is focused on excess
supply from the US or those countries
Brent 56
participating in the cuts deal, the mar-
54 ket recovery could be derailed instead
by weaker demand growth.
52 Paul Horsnell, head of commodities
research at Standard Chartered, said:
50
You dont need an economic apoca-
48 lypse [for demand growth to disap-
WTI
point]. If one or two countries are
46 softer than expected, this strikes me as
44 a much more likely way the oil market
Jan 2017 May rebalancing is delayed.
Meanwhile, FGE analysts warned that
Source: Thomson Reuters Datastream should prices slip further, usage from
countries that rely on crude export reve-
nues to fill government coffers could fall.
Low oil prices means lower govern-
ment revenue, consequently less money
spent, they said. A further and sus-
tained drop in oil prices, potentially
towards $40 [a barrel] and lower, could
in fact be detrimental to global oil
demand growth.
These worries overshadowed expec-
tations of a strong start to the American
summer driving season when US holi-
daymakers spur demand for fuels such
as petrol, diesel and jet fuel. The Ameri-
can Automobile Association had pre-
dicted the long weekend just passed
would see the highest level of driving
activity since 2005.
Wednesday 31 May 2017 FINANCIAL TIMES 19

MARKETS & INVESTING

Global overview
TRADING POST Markets update
Jamie
Chisholm
Mixed data and energy concerns S&P 500 index
Change on day 0.10%

knock US equities off their highs

A great characteristic of the foreign
exchange market is its myriad
permutations; theres a pairing for all
occasions.
So, if you think investors are not
upbeat enough about Indias economy
but business optimism in Singapore
may have peaked for now, how about
betting the rupee (INR) will rally
relative to the city states dollar (SGD).
Thats what Royal Bank of Canadas
forex strategy team suggests in one of
its short-term trades of the week.
Revisions to Indias industrial
production and wholesale price indices
suggest gross value added may have
been understated and that sizeable
upward revisions are in store for
financial year 2016 and FY17 GDP
growth, says the bank.
In which case Indias central
statistical office may reveal positive
gross domestic product revisions
alongside first-quarter GDP data
today, which could boost the rupee.
In contrast, RBC notes that
Singapores final first-quarter GDP
reading showed the economy shrank
more than expected down 1.3 per
cent compared with a consensus
forecast of minus 0.9 per cent.
Furthermore, the bank reckons the
May Singapore purchasing managers
index due for release on Friday looks
likely to correct lower from what it
terms a high watermark.
SGD/INR has rallied sharply off
recent lows and consolidation offers a
good opportunity to sell into.
RBC has established a SGD/INR
short position at 46.60 with a target of
45.70 and a stop at 47.10.
jamie.chisholm@ft.com
Singapore dollar
Against the rupee (rupee per S$)
48
47
46
45
Nov 2017 May
2016
Source: Thomson Reuters Datastream
Oil producers weigh on
S&P 500 after WTI crude
benchmark dips further
below $50 as European
uncertainty grows
DAVE SHELLOCK
Wall Street eased back from last weeks
record highs as energy stocks were hit
by a fresh drop for oil prices and partici-
pants digested a batch of mixed US eco-
nomic data.
The euro touched a one-week low
against the dollar before recovering
as the markets responded to dovish
comments from Mario Draghi, presi-
dent of the European Central Bank, and
a renewed bout of political uncertainty
in the eurozone.
In equities the S&P 500 index was
down 0.1 per cent to2,413 at midday in
New York putting it on track for its
first decline in eight sessions after set-
ting all-time closing and intraday peaks
on Friday.
The Nasdaq Composite, which also
closed at a record at the end of last week,
was down 0.1 per cent too, even as a
fresh advance for Amazon briefly took
the online retailers shares above the
$1,000 mark.
Across the Atlantic, the pan-Euro-
pean Stoxx 600 index slipped
0.2 per cent, with the FTSE MIB index in
Milan steadying after Mondays 2 per
cent tumble. The 10-year Italian gov-
ernment bond yield ended flat at 2.17
per cent after rising 7 basis points in the
previous session.
Those moves came as nervous inves-
tors focused on a possible new electoral
system in Italy that could allow an elec-
tion to take place as soon as this
autumn, rather than waiting until
2018, noted Jim Reid, strategist at
Deutsche Bank.
Remember also that Italy is still to
Chinas iron ore demand still alive: FT.com/video
Despite the countrys credit rating downgrade, the FTs
Alan Livsey says its too soon to be bearish about the metal
pass its budget law, due in October,
which has the potential to complicate
matters. There is also the not-so-small
issue of Italys banking system woes,
which still need to be taken care of.
Lee Hardman, currency analyst at
MUFG, said the early decline for the
euro stemmed not just from the risk of
early elections in Italy but also from
uncertainty over negotiations to pro-
vide further financing for Greece, as
well as the ECB chiefs remarks.
President Draghi emphasised that
the eurozone still needs an extraordi-
nary amount of monetary support from
the ECB, in spite of its strengthening
economic recovery, he said.
The dovish comments will help to
his campaign promises, he said.
Brendon Thorne/Bloomberg
damp expectations for a more material
hawkish shift in policy at the ECBs
upcoming policy meeting on June 8.
As far as Greece was concerned, nego-
tiations appeared to be once again
going to the wire, Mr Hardman said.
Market participants could become
more concerned by developments if
there is a lack of progress.
Greeces two-year sovereign yield was
up 20bp on the day at 5.92 per cent in
after-hours trade, according to Reuters.
Meanwhile the euro fell as low as
$1.1110 before rallying back to $1.1187,
up 0.2 per cent on the day. The single
currency was up 0.1 per cent versus ster-
ling at 0.8696.
The US dollar was down 0.1 per cent
2420
2400
2380
2360
May 2017
against a basket of peers, as the yield US equities Sharp falls for the S&P
on the 10-year Treasury shed 2bp to 500 energy and financial sectors were
2.23 per cent. Despite the weaker dollar partially offset by a bout of strength
and lower yields, gold was down $4 at for technology stocks that briefly
$1,262 an ounce. drove Amazon above $1,000 a share
The Conference Boards index of US
consumer confidence slipped to 117.9 in FTSE 100 index
May from a downwardly revised 119.4 Change on day 0.28%
in April. The measure hit a 16-year high 7600
of 124.9 in March. 7500
James Knightley, an economist at 7400
ING, noted that the expectations com- 7300
ponent of the index had fallen 10 points
7200
in two months. This may reflect disap-
May 2017
pointment that President Trump has
not been able to push on with many of UK equities A modest rebound for
sterling against the dollar helped push
Other data showed US home prices the FTSE 100 back from Fridays
rising in March, while personal income record close, with British Airways
and spending figures pointed to solid owner IAG ending 1.4 per cent lower
consumption in the second quarter,
economists said. Eurofirst 300 index
The S&P 500 energy sector was down
0.8 per cent as oil prices came under Change on day 0.22%
1560
renewed pressure following last weeks 1550
agreement by Opec and non-Opec pro- 1540
ducers to extend output cuts for a fur-
1530
ther nine months.
Brent was down 1.4 per cent at $51.55 1520
May 2017
a barrel after hitting a two-week low
of $50.71 last week while US West European equities Banking stocks led
Texas Intermediate was 0.7 per cent the way as the Eurofirst 300 edged
weaker at $49.43. lower, after further negative broker
The market is very well aware of the comment on the sector and amid fresh
fact that, despite Opecs consistently eurozone political uncertainty
high compliance with its targets, there
has been very little impact to date in the
form of drawdowns in OECD crude and Nikkei 225 index
product stocks, noted Michael Wittner, (000) Change on day 0.02%
20.0
oil analyst at Socit Gnrale.
Opec and Russia want to see OECD 19.8
stocks return to the five-year average. 19.6
At this point and for a couple of
months already the oil market is no 19.4
longer pricing in expectations, because May 2017
expectations of global rebalancing have Japanese equities The Nikkei ended
not turned into reality, at least so far. flat as a 2.8 per cent jump for SoftBank
The bottom line is that nothing but a shares helped offset the impact of a
consistent pattern of stock draws will stronger yen against the dollar
provide sustainable uplift for prices.

KBW Banks index The KBW Banks index is still up by 20

Wall Street
Banks poised for
third monthly fall as
Trump rally stutters
Adam Samson and
Mamta Badkar
Shares in US banks and energy
companies extended their declines in
May, underscoring the deterioration of
two of last years hottest trades.
The KBW Banks index dropped as
much as 1.4 per cent yesterday and was
poised for a 1.3 per cent decline for the
month of May. That left the gauge,
which tracks shares in Americas largest
lenders, poised for its third-straight
monthly fall.
As Donald Trump has become
engulfed in a series of scandals, investor
sentiment on lenders has soured since a
sharp rally followed the US election late
last year. The controversy that has
swirled around the White House has
detracted from Mr Trumps pro-
100 per cent since Mr Trumps election but
that represents a significant pullback
80 from the 32.2 per cent rise at the
US election 60 beginning of March.
Among the biggest lenders, Bank of
40
Jan 2016 2017 May
America is seen as particularly sensitive
Source: Thomson Reuters Datastream
to the yield curve because of its large
retail-lending business.
Indices Close
Day's
change Its shares climbed as much as 50 per
S & P 500
DJ Industrials
2412.82
21038.50
-3.00
-41.78
cent in the wake of the election but have
since cut that rise to 35.7 per cent to
Nasdaq Comp
Russell 2000
6203.71
1204.70
-6.48
-8.35
trade at $23.11 a piece yesterday.
Energy stocks have also performed a
VIX 10.43 0.62 volte-face with the S&P 500 sector, which
US 10 yr Treas Bd 2.23 -0.02
led the benchmark index with a 24 per
US 2 yr Treas Bd 1.28 -0.03
cent gain last year, falling 1 per cent
yesterday and 3.2 per cent so far in May.
That took its year-to-date drop to
nearly 13 per cent, making it the biggest
business promises that included tax decliner on the S&P 500 this year and on
reform, looser regulations and a large track for its fifth consecutive monthly
infrastructure spending programme. drop.
As doubts set in over the effectiveness Sentiment has deteriorated amid
of the Trump administration, the yield concerns that Opecs accord intended to
curve has flattened dramatically a end a glut of supply may not be enough
bearish factor for banks that borrow on to bolster prices, as analysts cautioned
the short-term market and lend funds that US drillers could boost production
out over longer periods. in response to higher prices.
In fact, the difference in yield between Some investors had also hoped Opecs
10-year and three-month Treasuries, cuts would be deeper or prolonged
which is seen as an important measure further.
for bank profitability, contracted In midday trading yesterday, the
yesterday by 2.9 basis points to 1.29 S&P 500 slipped 0.1 per cent to 2,413.1,
percentage points, the first reading the Dow Jones Industrial Average
below 1.3pp since last September. The dipped 0.2 per cent to 21,037.7 and
spread had reached a post-election high the Nasdaq Composite also fell
of 2.1pp in December. 0.1 per cent to 6,206.5.

bar of showing statistical superiority. London Stock Exchange took on 1.5

London
GSK improves after
setback to rivals HIV
treatment trials
Bryce Elder
GlaxoSmithKline hit a two-month high
yesterday after a setback for a
competitor helped ease worries about
the sustainability of its HIV business.
Gilead Sciences announced that final-
stage trials of a drug that halts the
spread of the virus had met the primary
endpoint of non-inferiority to GSKs
best-in-class treatment. However,
Gileads results did not clear the higher
GSKs Tivicay and Triumeq HIV drugs
have taken market share from Gilead,
which had a near monopoly before
2013, and generate worldwide sales of
about $4bn a year.
Non-inferiority gives Gilead the
chance to maintain and potentially
rebuild share but does not provide
enough of a competitive edge to be
disruptive to ViiV, GSKs HIV franchise,
analysts said.
ViiV remains one of the biggest
growth drivers for GSK over 2016-20
and, as such, this competitive data set
has been in focus for many investors,
said Goldman Sachs. While todays
news means that Gilead will likely
compete effectively in this market, we
believe that is already incorporated in
our and consensus estimates.
GSK closed 1.8 per cent higher at
16.73 in a quiet wider market. The
FTSE 100 ended down 0.3 per cent, or
21.12 points, at 7,526.51.
Mediclinic faded 3.2 per cent to
789.5p, with JPMorgan Cazenove
advising caution. We still believe in the
longer-term structural outlook and
ultimate earnings recovery but suspect
weak guidance will temper near-term
enthusiasm, it told clients.
per cent to 34.42 after revealing the
$685m acquisition of Citis fixed-income
indices and analytics business, which
analysts saw as about 4 per cent
accretive to 2020 earnings from cost
savings alone.
Separately, Morgan Stanley was
positive on LSE going into its June 12
investor day with the broker expecting
new cost-cutting targets.
Sophos, the security software maker,
took on 3.9 per cent to 454p after Shore
Capital upgraded from sell to hold.
TalkTalk fell 5.5 per cent to 172.1p on
the back of a Sunday Times column
arguing that the broadband provider
lacks the funds necessary to reverse
market share losses.
Lonmin slipped 7.2 per cent to 80p
after Peel Hunt cut the platinum miner
to sell with a 70p target.
The need to keep cutting costs raises
real concerns that from here further
cash conservation measures will start to
have negative impact on the size and
scale of the business, said Peel Hunt.
In spite of forecasting higher
platinum prices, it modelled for Lonmin
to have fully drawn all of its remaining
credit lines ahead of a 2020 debt
maturity.
20 Wednesday 31 May 2017

INSIGHT Analysis. Commodities

Ralph
Atkins
Shipping fuel clean-up casts shadow over prices
Cap on sulphur content set to Forward price curves for
push up freight rates and cost marine fuels
Investors look out for of oil products including diesel
$ per tonne
500

post-poll valleys after EMIKO TERAZONO AND NEIL HUME

Low sulphur gas oil
400

Austrias stock peaks A change in international fuel regula-

tion little discussed outside the shipping 300
industry is set to wreak havoc on the
world of commodities. High sulphur marine fuel
200

S
mall, affluent and, at least until now, politically In an attempt to curb emissions from 2017 18 19 20
stable, Austria rarely features on global inves- ships, the UN International Maritime Source: S&P Global Platts
tors horizons. It might soon. Organization has placed a cap on sul-
Austrias stock market has been Europes star phur content in marine fuel oil from Shipowners intentions post
performer so far this year. The Austrian Traded 2020. While good news for the environ- regulatory changes
index (ATX) is up 20 per cent twice as much as Frances ment, the change in bunker fuel stand- % of respondents
CAC 40 or Germanys Dax. Only Venezuelan, Polish and ards threatens to raise fuel prices, hitting Other 2
Greek stocks have performed better, according to Bloom- airlines and consumers at the pump, as 5
Switch to
berg. Yet all is not well in the Alpine country famous for its well as pushing up freight rates. LNG
mountain scenery, schnitzel and The Sound of Music. Its very, very tricky, says Lars Rob- 19
A snap election called this month for October 15 offers ert Pedersen, deputy secretary-general Install
another chance for Europes rightwing populist politicians at the Baltic and International Maritime scrubber
74
to take power just three weeks after Germany is likely Council (Bimco), representing about 60
to have re-elected Angela Merkel as chancellor. The Free- per cent of the worlds shipowners. Buy low
sulphur fuel
dom party will play on Austrias economic underperform- Six months ago the IMO, which gov-
ance relative to its larger neighbour, and on Europes erns international shipping, decided to Source: UBS
migration crisis. cut sulphur limits in marine fuel from
The ATXs surge is partly stock specific, the result of 3.5 per cent to 0.5 per cent in 2020. Estimates calls the lowering of the bunker fuel Consulting commissioned by Bimco and about 90 per cent of goods traded, and
improvements at Erste and Raiffeisen banks and the OMV In two and a half years, shipowners suggest the emissions cap easily the most dramatic several petroleum associations shows fuel costs account for 70 to 80 per cent of
energy group, which make up more than 40 per cent of will either have to switch to more expen- shipping change in fuel specifications in any oil the fuel changes would increase prices total voyage expenses, according to S&P
the index. Nevertheless, Austria illustrates the increasing sive higher-quality marine fuel, invest industrys product market on such a large scale. by about $10 to nearly $20 per barrel, or Global Platts.
confidence in continental European economies and in emissions-cleaning systems, or move fuel costs will The problems for the oil market are 11 to 23 per cent, across all products Wood Mackenzie, the fuel consult-
the rapidly diminishing political fears after Frances presi- to alternative fuels such as liquefied nat- rise by up to twofold. Although high-sulphur bunker worldwide. ants, estimate the shipping industrys
dential election. The risks in terms of populism are for ural gas. $60bn in 2020 fuel accounts for only 4 per cent of glo- The product markets are already fuel costs could rise by up to $60bn in
now . . . most probably higher in the US than Europe, says Many analysts see ships shifting to following the bal oil demand, the marine market has reflecting the rule change, with forward 2020, or more than 50 per cent to
Fritz Mostbck, head of research at Erste. higher-grade marine fuel. A survey of 51 implementation traditionally been an important outlet prices in 2020 for high-sulphur fuel fall- $174bn. Sushant Gupta, research direc-
Historically and geographically a link between west and shipowners by UBS showed three-quar- of the IMOs for the refining industry, absorbing resi- ing and high-quality gas oil a bench- tor of the consultancys Asia Refining,
east Europe, Austria is a play on the continents formerly ters would buy low-sulphur fuel. cap on sulphur due from the refining process, which is mark for low-sulphur marine fuel ris- calculates that the bunker fuel rule
communist economies. Its Whatever choice they make, it will be emissions turned into heavier fuel oil. ing, according to S&P Global Platts. change will add $1 to a barrel of crude oil
companies are typically mar- expensive, with some estimates point- FT montage/ Reuters
Second, the higher demand for lower- Oil refiners will especially feel the transported from the Middle East to
ket leaders in industrial
The populism ing to shipping cost increases of up to 85 sulphur fuels will exacerbate the strain impact of the rule change as the supply Singapore,
niches and make sensible risks are per cent. But the knock-on effect of the of limited capacity and increase the and demand for various products shift. Despite these concerns, the IMO says
things the world needs in an rule change to marine fuel is likely to prices of oil products, including diesel, EnSys says its modelling shows the fuel last years decision was based on a
investment cycle upturn, such
probably higher ripple beyond the worlds shipping fleet jet fuel and gasoline. rule changes will lead to extreme diffi- review by consultancy CE Delft, which
as high-specification car parts in the US to the oil industry and commodities Since the key clean products gaso- culty and indeed potential infeasibil- concluded that the refining sector
(Voestalpine), bricks (Wien- trading. line, jet fuel and diesel are closely ity for oil refiners to supply the ship- would be able to produce sufficient low-
erberger) and hydropower
than Europe Its huge, says Kho Hui Meng, the related, when demand and pricing for ping and airline industries as well as sulphur bunker fuel to meet the indus-
equipment (Andritz). head of Asia for Vitol, an independent one surges that tends to also raise prices consumers needs. trys needs.
The ATX is also a post-global financial crisis catch-up oil trader, adding, it will put the trading of the others, says Martin Tallett, presi- The wider commodities industry Its been motivated by the huge ben-
story. The index is still 30 per cent lower than at the start of market in a spin. dent of EnSys Energy. from oil to coal to sugar also faces a eficial impact on the environment and
2007 even though the worst fears about its banks expo- The International Energy Agency A report by EnSys and Navigistics rise in freight rates. Shipping carries on human health, says the IMO.
sures never materialised. True, Austrias economic growth
trails that of Germany. But since the crisis it has matched
rivals such as France and the Netherlands, and has been
boosted by the fiscal stimulus triggered by the migration Capital markets
crisis and modest tax reforms.
It is perhaps not surprising, therefore, that recent politi-
cal upsets in Austria have left the financial markets look-
ing unperturbed.
Mideast sovereigns
The October 15 election will be a three-way contest. The
Social Democrats and the centre-right Peoples party cur-
go into debt overdrive
rently govern as a grand coalition. Until recently voter
disenchantment with their performance was spurring the
third contender the far-right populist Freedom party, KATE ALLEN CAPITAL that was among the strong-
which was leading in opinion polls. MARKETS CORRESPONDENT est I have seen in 20 years.
However, this month Sebastian Kurz, the 30-year-old Middle Eastern govern- Such big debt sales helped
foreign minister, took over the leadership of the Peoples ments have set a debt- to develop the whole
party. His youth and charisma have led to comparisons to raising record in the first regions capital markets
Frances new president, Emmanuel Macron, and his five months of the year, tak- because they made it easier
partys support in opinion polls has since leapt above that ing advantage of investor for new issuers to enter the
of the other two parties. demand for high-yielding market as investors devel-
But Mr Kurz would almost certainly need a coalition ally, emerging market bonds. oped knowledge of and con-
and there is a good chance he would turn to the Freedom fidence in the region, he
party which was internationally reviled in the past Some $38.5bn of syndicated added.
because of its perceived xenophobia and links with pan- sovereign bonds have been Middle Eastern countries,
German nationalism. sold in the region in 2017, including Egypt, have been
The implications might not be as dramatic as they would more than double the record the largest contributors this
have been if anti-establishment Eurosceptics had won in amount in the same period year, making up more than a
France or if they take control after Italys elections next last year, according to figures third of issuance by value.
year. The Freedom party does not seriously challenge Aus- from data provider Dealogic. The biggest Middle East-
trias membership of the EU or eurozone. I mean no Jan Dehn, head of research ern deal was by Saudi Arabia,
offence to Austria, but it would not be the same as if Italys at Ashmore Investment which raised $9bn last
[Eurosceptic] Five Star Movement was in office, says Fre- Management, which has month in a record-breaking
derik Ducrozet, economist at Pictet. bought into some of the issu- Islamic bond, or sukuk.
Nevertheless, a government that included the Freedom ance, said many Middle East- In second place Kuwait
party could add Austria to the awkward squad of EU ern countries needed to raise landed $7.9bn in five-year
countries obstructing the policies a newly revived Franco- debt to replace the income and 10-year tranches in
German partnership under President Macron and Chan- from oil they had previously March.
cellor Merkel especially on migration policies and Euro- relied on. Rajiv Shah, head of debt
pean economic integration. One of western Europes previ- Some countries revenues capital markets for the Mid-
ously most stable and predictable economies would have halved in 2015 and their dle East, Turkey and Africa
become less so a good reason to put it on global investors economies have not really at BNP Paribas, called the
watch lists. adjusted since, he said. market conditions amaz-
They have been draining ing, but warned that they
ralph.atkins@ft.com their reserves and spending were unlikely to last.
as though oil prices will go up We are very much in a
again. But as it is becoming sweet spot, he said.
clearer that oil prices will Issuers were taking advan-
stay lower for longer, they tage of demand to stock up
are realising that they need on finance, Mr Shah added.
More comment and data on ft.com to issue debt instead. Global markets have been
EM governments as a so positive this year that we
whole have raised just under are seeing a lot of front-load-
Y Fast FT Our global economies, headed $100bn in finance from ing of supply. People are par-
team gives you market- by Brazil, Russia, India investors in 2017 up from ticularly aware that US rates
moving news and views, and China. $80bn in the same period last are rising.
24 hours a day, five days ft.com/beyondbrics year, and nearly two-thirds The amount raised is
a week. ft.com/fastft of the 2016 total. almost as high as Middle
Y Podcast The Hard
Y Alphaville Our Currency podcast takes a Egypts move last week to Eastern sovereigns issuance
irreverent financial blog. look at what is driving raise $3bn via the sale of five- for the whole of 2016.
Join Paul Murphy and the global currency year, 10-year and 30-year Some observers cautioned
Bryce Elder for the daily market. ft.com/podcasts debt its second fundraising about the level of risk. It was
Markets Live session at of 2017 was the latest in a quite courageous to buy
Y Lex Video Analysis flurry of deals. Egypts 30-year debt given
11am. ft.com/alphaville
and opinion from the Camille Abousleiman, a the potential for geopolitical
Y beyondbrics News and team on the hot issues partner at the Dechert legal change in the region, said one
comment from more affecting companies and firm who advises issuers and person with knowledge of
than 40 emerging markets. ft.com/lexvideo investors, said it was really a the market who did not wish
unique moment, a boom to be named.