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Profit motive

Flight shame

Special report

Time to drop the shareholder-first mantra? — HEAD-TO-HEAD DEBATE, PAGE 9

Consumer backlash pushes airlines to cut emissions — BIG READ, PAGE 7

Why Africa is faring better than many realise — SEPARATE SECTION

Philip Morris and Altria discuss reuniting to forge $200bn giant 3 Fresh talks 11 years after split 3 Investor unease over plan 3 Race for tobacco substitutes ARASH MASSOUDI — LONDON JAMES FONTANELLA-KHAN AND ERIC PLATT — NEW YORK

$50bn

Combined sales

$15.3bn

Combined net income

35%

Altria’s stake in Juul Labs

A combination of the two companies would be the sixth biggest takeover ever

Page 10

and heated tobacco technology as sales of traditional products fall. Altria last year agreed to take a 35 per cent stake in ecigarette group Juul Labs ffor $13bn.

Uniting the two companies would also allow PMI to capture the full value of its IQOS heated tobacco technology,

Smokers bond by huddling together against the cold and discussing how to quit.

It is the same with tobacco companies, pariahs in a health-conscious world

KIRAN STACEY — WASHINGTON

Piëch leaves legacy of success and scandal at VW Obituary i PAGE 14

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which Altria is preparing to launch under licence in the US, according to Bonnie Herzog at Wells Fargo. Altria’s strong US free cash flow would also allow PMI to “catapult the growth” of IQOS around the world, she said.

The two companies are investing in e-cigarettes despite intense opposition from regulators in Washington, which have warned that teenage vaping has become an “epidemic”. According to one federally funded study last year, one in five high school seniors said they had vaped nicotine in the previous month.

“While US litigation risk was sufficient to break these companies apart back in 2008, US regulatory risk is on

Den220 €3.60 Dh45 €3.80 NKr35 OR1.60 Rupee350 Zl 20 €3.60 QR15 Ron17 €5.00 NewD420 €3.60 €3.50 €3.60 SKr39 SFr6.00 Din7.50 TL19 Dh17.00

A last-minute review of a $10bn Pentagon cloud computing contract has failed to seek new information from Amazon or Microsoft, the two bidders, raising concerns it is a political ploy aimed at reassuring the White House.

Mark Esper, the defence secretary, was due this month to announce the winner of the contract, known as Jedi, which would give one company responsibility for handling US military data and communications around the world.

But Mr Esper threw that process into doubt when he announced a fresh review of the bidding with just weeks to go before an expected decision. His announcement followed accusations by Oracle, the enterprise software group, that the process had been tainted by conflicts of interest within the Penta-

gon, and a late intervention by Donald Trump. The US president, who has criticised Amazon founder Jeff Bezos, weighed in on the way the contract was being handled, saying: “Great companies are complaining about it.”

However, since announcing the review Mr Esper has not asked, and is not planning to ask, for new information from either Amazon or Microsoft, according to three people close to the process. Instead, the process is more an opportunity for him to look at decisions that were made before he was appointed last month.

Sam McGowan, a research analyst at Beacon Policy Advisers, a consultancy in Washington, said: “The fact that Mr Esper has not contacted either of the two bidders suggests that his decision to review the contract . . . is more about finding a way to persuade the president

the same plane, in our view,” analysts at Stifel said.

They added: “We are surprised by this combination and believe this will result in a permanently lower multiple for Philip Morris’s stocks, as we see little resolve to the controversy around regulating tobacco products.”

The two companies have taken different approaches to the fast-growing cannabis market. PMI believes that marijuana remains too risky to invest in, while Altria has taken a 45 per cent stake in the Canadian group Cronos.

Additional reporting by Andrew EdgecliffeJohnson in New York Analysis page 13

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to stick with it rather than undermining US national security and scrapping the entire contracting process.”

Amazon, Microsoft and the Pentagon all declined to comment.

The defence department is seeking to move its information technology systems off its own servers into the cloud, and is offering one company $10bn over 10 years to handle the contract.

The Jedi contract is unusual in its scale and complexity and could result in a single company not only dominating US defence communications systems but also finding itself in pole position to win similar contracts around the world.

Oracle, which came third in the bidding, launched a legal challenge against it, while the Pentagon’s own inspectorgeneral is also looking into how the rules for the bid were drawn up and whether any officials had conflicts of interest.

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The Iranian president has ruled out a meeting until the US lifts sanctions on the Islamic republic, after President Emmanuel Macron of France offered to broker a deal.— PAGE 2; EDITORIAL COMMENT, PAGE 8

i Deutsche Bank puts excess cash to work Germany’s biggest bank has combined its treasury markets and investment operations, which raise funds and manage its cash and liquidity reserves, as negative rates squeeze European lenders.— PAGE 11 The US central bank has been forced to reassert its independence after former New York Fed chief Bill Dudley urged it to consider Donald Trump’s re-election prospects in setting rates.— PAGE 3

iA Australian charged with spying in China Canberra has confirmed that Yang Hengjun, who has been held since January after going missing in Guangzhou, has been arrested on charges of spying.— PAGE 4

i Putin woos Ankara with arms sales pitch The president has shown off military hardware to Turkish counterpart Recep Tayyip Erdogan at Russia’s annual air show, in a bid to strengthen ties despite their opposing objectives in Syria.— PAGE 4

i $60m revival plan for Dean & DeLuca

Amazon and Microsoft go unchallenged in review of Pentagon’s $10bn ‘Jedi’ deal

€3.80 Din1.8 €3.80 Lev7.50 Kn29 €3.60 Kc105 DKr37 E£42 €4.50 €3.80 €3.80 £2.70 €3.60 Ft1200 Rup220 €3.60 €6.99 LBP7500 €4.30 €3.80

iR Rouhani sets condition for Trump talks

iF Fed defends independence from politics

Philip Morris International is in talks to merge with Altria in a deal that would reunite the global and domestic US makers of Marlboro and create the world’s largest tobacco group, with a market value of nearly $200bn.

PMI said it was considering an allshare combination that would put it back together with Altria, 11 years after they were separated to shield PMI from a slowing US cigarette market as well as the threat of regulation and litigation.

However, investors gave a frosty reception to the prospect of a new combination, sending shares in both companies lower in the afternoon in New York.

A successful deal would create a vast business that last year reported combined sales of nearly $50bn and net income of $15.3bn.

PMI urged caution in a statement confirming talks with Altria, saying it could give “no assurance” that a transaction would “result from these discussions”.

A person close to the negotiations said that the nil-premium deal under consideration would see PMI shareholders own between 57 and 59 per cent of the combined group, while Altria would hold the remainder.

The acquisition of Altria by PMI would be the sixth largest takeover ever, according to data provider Refinitiv.

Shares in Altria climbed as much as 11.3 per cent before falling 2.5 per cent to $45.94. Its market value sat at $85bn and the company has $27bn of net debt.

PMI fell 7.1 per cent to $72.22, bringing its market value to $113bn. It has $26.5bn of net debt.

Two years ago, main rival British American Tobacco completed a deal to buy Reynolds American for $49.4bn.

Analysts then expected PMI to recombine with Altria, given that fears over US litigation had dissipated.

Tobacco groups are racing to increase their presence in electronic cigarettes

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Pace Development, the Thai owner of the gourmet grocery and café brand, has unveiled plans to issue debt to try to revive the US fortunes of a chain that pioneered pricey cheese and olive oil.— PAGE 11

i Japan parties worry at US tariffs threat Opposition groups have given a tepid response to US assurances that there are no plan for tariffs on Japanese cars “at the moment”. One said premier Shinzo Abe had been cornered by the US.— PAGE 4

Datawatch Pest control

South Asia is the only region where every country has legislation on workplace sexual harassment, with six introducing such laws in the past 10 years.

Seventy per cent of nations globally had such laws last year. In 2009 it 100 was 51 per cent

Countries with legislation on sexual harassment in employment (%) 2018 2009 South Asia OECD high income Eastern Europe Sub-Saharan Africa Lat Am & Caribbean East Asia & Pacific Mideast & N Africa Central Asia Source: World Bank

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FINANCIAL TIMES

Wednesday 28 August 2019

INTERNATIONAL Diplomacy. Flashpoints

Middle East

Iran’s leader rejects meeting Trump until sanctions lifted

With characteristic energy, president sets pace on issues from Iran to saving Amazon

Talks between Rouhani and US president were mooted at G7 summit MONAVAR KHALAJ — TEHRAN MICHAEL PEEL — BRUSSELS ANDREW ENGLAND — LONDON DEMETRI SEVASTOPULO — WASHINGTON

VICTOR MALLET — BIARRITZ

Iranian president Hassan Rouhani has ruled out meeting Donald Trump until the US lifts sanctions on the Islamic republic, saying he would not take part in a photo opportunity.

Mr Rouhani made the comments in a speech yesterday, a day after French president Emmanuel Macron suggested at the G7 summit that he could broker a meeting between the Iranian and US leaders. Mr Trump had said at the gathering that he would meet Mr Rouhani “if the circumstances were correct”.

But Iran, which accuses the Trump administration of waging an economic war against the country, played down the prospects of negotiations. Mr Rouhani said there would be no “positive development” until the US lifted its sanctions on Tehran.

“Iran is seeking a resolution to the problems through reasonable means rather than taking photos,” Mr Rouhani said. “If [Mr Trump] just wants to take a photo with Hassan Rouhani that would not be possible.”

Mohammad Javad Zarif, Iran’s foreign minister who met Mr Macron aat the G7, said he had told French officials that any meeting between Mr Rouhani and Mr Trump was “unimaginable”.

Mr Trump has expressed interest in meeting Iran’s leaders, in the same way that he has met North Korean leader Kim Jong Un. But Tehran has consistently said it would not negotiate while sanctions remained. In July, Mr Trump invited Mr Zarif to meet him in the White House during a visit to the US, but Iran turned down the offer.

Washington and Tehran have been locked in a stand-off since Mr Trump withdrew the US from the 2015 nuclear accord Iran signed with world powers and imposed crippling sanctions. Iran has responded by increasing its nuclear activity and exceeding the limits on key elements of the accord.

France has been working with the UK and Germany to try to save the deal and de-escalate tensions in the Gulf. At the summit, Mr Macron, who had spoken by phone with Mr Rouhani, suggested there could be a meeting between the Iranian and US leaders within weeks.

An EU spokesperson said yesterday the bloc would “support and welcome any diplomatic efforts to find the way out of the crisis, de-escalate the situation in the region and preserve the [nuclear deal]”.

One senior European diplomat said the Macron initiative appeared to reflect a variety of motives, including to save the accord, defuse the Gulf crisis, further his growing authority in the EU and road-test a way of working with Mr Trump. But they said it was not clear what Iran was being offered to come to the negotiating table.

“Macron is very keen to get movement on this for a number of reasons. But without concrete action I do not see any reason why it would provide Iran the incentive to sign up,” the diplomat said.

Tehran: a woman walks past a painting of the national flag yesterday while below, Hassan Rouhani is against a Trump photo opportunity

The Trump administration has said it would continue to intensify pressure on Iran in an attempt to persuade Tehran to come to the negotiating table. But Iran has also been adamant it would not negotiate against the backdrop of economic sanctions.

However, Mr Trump hinted at the G7 he could be willing to relax his “maximum pressure” strategy. The US has vowed to drive Iranian oil exports to zero, but Mr Trump suggested that states could club together to provide Tehran with an emergency credit line backed by its crude production.

“They may need some money to get them over a very rough patch and if they do need money, and it would be secured by oil . . . so we are really talking about a letter of credit,” he told the press. “It would be from numerous countries.”

The White House has not clarified whether Mr Trump has changed his position on Iran.

Any effort to provide a lifeline to Tehran could hurt the US president as he starts to focus more on his re-election campaign.

Tehran has repeatedly insisted it can

Atta Kenare/AFP/Getty

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Walkabout: Emmanuel Macron takes to the streets in Biarritz

ened to launch yet another trade war and impose new tariffs on French wine.

In Biarritz, when asked whether his wife Melania had tried a glass, he confessed cheerfully: “I can confirm that the first lady loved your French wine.”

Defending French farmers and confronting over-mighty US tech companies plays well with those French voters who criticise Mr Macron as a “president of the rich” and suspect the former investment banker of harbouring an unFrench love for ultraliberal capitalism.

Saving the Amazon rainforest is another popular cause in a country where greens won the largest share of the vote among the young in the European election in May. Instead of fighting what he said would be a fruitless battle with Mr Trump over global warming, he launched the G7 with an appeal to tackle the Amazon fires and a threat not to ratify the EUMercosur trade agreement with South American countries because Brazil president Jair Bolsonaro had “lied” to him in making false environmental promises.

That conveniently coincided with harsh criticism from French farmers, and a rebellion from some of Mr Macron’s own members of parliament, about the likely consequences for France of the Mercosur trade deal.

“In France as elsewhere, foreign policy doesn’t usually earn you votes, it only loses you votes,” said François Heisbourg, special adviser at the Fondation pour la Recherche Stratégique, a think-tank. “But it is true that the Amazon thing plays to the electorate extremely well.”

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European diplomat

“resist” US pressure. But the sanctions have pushed Iran into a deep recession and caused its oil exports to plummet from about 2.8m barrels per day in mid2018 to less than 500,000 bpd.

Any talks with Mr Trump would need approval from Ayatollah Ali Khamenei, Iran’s supreme leader, who has the final say on all state matters. Mr Khamenei has ruled out negotiations with the US, calling any such talks “double poison”.

US pressure on Iran has emboldened regime hardliners who feel vindicated in their criticism of the nuclear deal and a weakened Mr Rouhani, a pragmatist who sealed the accord in his first term.

Hossein Shariatmadari, editor of Kayhan, a state-run paper viewed as the hardliners’ mouthpiece, wrote yesterday that a meeting between Mr Trump and Mr Rouhani would be “madness”.

“The nuclear deal is the most obvious outcome of your . . . talks with the US, which no one — I insist no one — has the least doubt was a disaster,” he said.

Mohammad Ali Abtahi, a reformist vice-president, said Mr Rouhani should be wary of being seen to positively react to the notion of talks with Mr Trump, saying the Iranian leader could fall into a “major political trap”.

‘Macron is talking a wonderful game. It’s obvious he’s the only European leader’

SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017

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3 Confidence in IT plans ‘has collapsed’ 3 Fivefold rise in declarations expected JAMES BLITZ — WHITEHALL EDITOR

‘Without concrete action I do not see any reason why it would provide Iran the incentive to sign up’

Emmanuel Macron’s outing on foot through the streets of Biarritz on Sunday evening at first looked like a typical French presidential walkabout.

He let residents take selfies with him and thanked them for tolerating the disruption of the G7 summit in the middle of the Atlantic resort’s summer season.

But then he ducked into the town hall for a secret meeting with Mohammad Javad Zarif, the Iranian foreign minister, after a months-long French drive to reduce tensions in the Gulf and return the US and Iran to the negotiating table.

“I want to be prudent,” Mr Macron said at his closing news conference. “I think we have succeeded, at this stage anyway, in calming things down and creating the right conditions.”

Iranian president Hassan Rouhani yesterday ruled out holding talks with President Donald Trump until the US lifted sanctions on the Islamic republic.

But bringing Mr Zarif to Biarritz during the G7 was a characteristically high-risk diplomatic initiative from the 41-yearold French president. He has taken the lead among western leaders in seeking to broker solutions to intractable global crises, from climate change to the war in Ukraine.

Mr Macron had prepared Mr Trump with a two-hour private lunch before the start of the summit, and went straight from his meeting with Mr Zarif to brief the US president in his suite at the Hotel du Palais, and also spoke by telephone to Mr Rouhani.

He has been equally methodical in deploying his charm to try to solve the conflict between Russia and Ukraine. If Volodymyr Zelensky, Ukraine’s newly elected president, and Russia’s Vladimir Putin meet for a summit as expected in the coming weeks, together with Mr Macron and German chancellor Angela Merkel, it will be because Mr Macron has relentlessly courted both sides.

Diplomats and analysts say the French president has risen to prominence in foreign policy not only because of his evident energy and grasp of detail but also because of the absence of plausible rivals: Mr Trump is inconsistent; Ms Merkel is on the way out; and UK prime minister Boris Johnson is almost entirely consumed by Brexit.

“Macron is talking a wonderful game,” said Ronald Tiersky, an author on French politics. “It’s obvious he’s the only European leader and he feels strong.”

Mr Macron’s own speeches about his diplomatic missions suggest he has two

main motivations: he wants to emulate his hero, Charles de Gaulle, in presenting France as a noble and civilising power (albeit one of relative weakness that must work with EU partners in a world dominated by the US and China); and he wants to win more votes in future elections.

He told the French people in a televised address before the G7 that he was negotiating at the summit “in your name” to try to resolve foreign crises that might seem distant but would directly affect them.

“If the Middle East goes up in flames, we will be affected. If we don’t fix the situation in Libya, we will continue to suffer the scandal of migration across the Mediterranean and the destabilisation of a large part of Africa,” he said.

While ultimate success on Iran, described by one of his advisers as “probably the most complicated issue in the world”, is far from assured, the meeting saw some concrete achievements for Mr Macron. Finance minister Bruno Le Maire extracted from Steven Mnuchin, the US Treasury secretary, an agreement to accept a new French turnover tax on big tech companies, a deal that marks a climbdown for the US and vindicates the French position.

Mr Trump had previously been so outraged by the French tax, which he said unfairly targeted US groups such as Facebook and Google, that he threat-

UK £2.70 Ch

Trump vs the Valley Tech titans need to minimise political risk — GILLIAN TETT, PAGE 13

FEBRUARY 4 2017

FRIDAY 31 MARCH 2017

Macron uses G7 to burnish foreign policy ambitions

Mar 31

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Nasdaq Composite Dow Jones Ind

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5918.69 5914.34 0.07 $ per £ 20689.64 20728.49 -0.19 £ per € 1503.03 1500.72 0.15 ¥ per $ 3495.59 7322.92 3990.00 5122.51

3481.58 0.40 ¥ per £ 7369.52 -0.63 € index

Mar 31

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1.069 SFr per £

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12312.87 12256.43 0.46

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Nikkei

18909.26 19063.22 -0.81 Oil WTI $ 24111.59 24301.09 -0.78 Oil Brent $ 297.38 298.11 -0.24 Gold $

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Hang Seng

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0.932 US Gov 10 yr 0.801 UK Gov 10 yr

1.169 1.164 Ger Gov 10 yr 119.180 119.476 Jpn Gov 10 yr

77.226 76.705 US Gov 30 yr 104.536 104.636 Ger Gov 2 yr 1.252 1.244

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Since winning power in 2015, the socially conservative Law and Justice has sharply boosted welfare spending, with handouts to pensioners and families proving key to cementing support among older and less well-off Poles.

It made further generous promises this year, including an income tax exemption for those under 26 and an expansion of its flagship child benefit programme, prompting rating agencies to warn that, despite its booming economy, Poland could come close to the EU’s 3 per cent budget deficit limit in 2020.

However, Poland’s prime minister Mateusz Morawiecki said yesterday he expected the central government deficit to fall to zero in 2020 and thus ensure

Poland was on “a good economic course” despite a macroeconomic environment clouded by a German slowdown and fears of a US-China trade war.

“We have economic growth that is three times faster than in the eurozone, and even four or five times faster than some states in western Europe,” he told a press conference in Warsaw.

Opposition politicians dismissed the proposal — which still has to be approved by parliament — as a pre-election gimmick. Although the central government budget is projected to be in balance, the general government budget — which includes social security and local government outlays — is forecast to be 0.3 per cent in deficit.

“There’s supposed to be no budget deficit in 2020,” Aleksandra Dulkiewicz, the mayor of Gdansk, wrote on Twitter.

“Did it evaporate? It is being pushed on to local governments instead: for example, there are pay rises for teachers, an increase in energy prices and lower income tax receipts. In Gdansk, that is minus 160m zloty [$40.6m].”

DAVIDE GHIGLIONE AND HANNAH ROBERTS — ROME

Talks between Italy’s anti-establishment Five Star Movement and the opposition Democratic party (PD) aimed at forming a new government hit bumpy ground yesterday as negotiations temporarily broke down, before being restarted later.

Following the collapse of the government last week, President Sergio Mattarella had asked the parties for guarantees by today that a new coalition would produce a stable administration. Otherwise he is expected to dissolve parliament and call snap elections.

But according to PD officials, talks between Nicola Zingaretti, PD chief, Luigi Di Maio, Five Star leader, and Giuseppe Conte, who resigned as prime minister last week, ran aground over who would be the new prime minister.

Mr Zingaretti said any new government must break with the past, while Five Star insisted Mr Conte, who enjoys high approval ratings, should take the

post. Other disagreements centred on the government programme and key ministerial positions.

Five Star cancelled talks scheduled for yesterday morning but later agreed to restart negotiations in the evening. A PD adviser confirmed Mr Zingaretti and Mr Conte had been in contact “throughout the day to discuss the situation”.

Italy’s fractious 14-month coalition between Five Star and the anti-immigration League party collapsed following Mr Conte’s resignation after he accused Matteo Salvini, interior minister and leader of the League, of weakening the country by calling for an election. Mr Salvini hoped to trigger a vote to capitalise on his party’s poll lead.

Mr Mattarella is under pressure to get a government in place before a difficult autumn budget, in which Italy needs to make €23bn in spending cuts.

Tensions rose earlier yesterday after the PD said Mr Di Maio had demanded to be deputy prime minister and interior minister and for Five Star to choose the country’s EU commissioner.

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INTERNATIONAL

Trudeau muddles message in China dispute Canada prime minister accused of not standing up to Beijing ‘bullying’ after nine-month campaign of insults and snubs JASON KIRBY — TORONTO

When Justin Trudeau vowed that Canada would “not escalate but . . . not back down” in its diplomatic spat with China last week, Beijing dismissed the comments as “loudness”.

Yet to many onlookers the prime minister’s response to China’s nine-month campaign of insults and snubs, the detention of two Canadians and an onslaught of trade blockades was anything but loud or forceful.

While Mr Trudeau gingerly noted China had become “increasingly assertive” on the world stage, he also paid homage to the “deep people-to-people ties” between Canada and China and touted the “real economic opportunities” China offered Canadians.

It was a muddled message that reflected a government “having difficulty accepting that its previous assumptions about China were wrong”, said Charles Burton, a senior fellow with the Macdonald-Laurier Institute in Ottawa. Those assumptions, he said, centred on the belief that if Canada tolerated China’s behaviour it would generate goodwill in Beijing and lead to Canadian prosperity through trade and investment. “That’s all turned to dust now,” said Mr Burton.

The dispute began in December when Canada arrested Huawei Technologies’ chief financial officer Meng Wanzhou on a US warrant after the Department of Justice accused her and the tech company of doing business in Iran in violation of sanctions.

China retaliated by arresting Canadians Michael Spavor and Michael Kovrig on accusations of spying. It imposed bans on imports of Canadian agricultural commodities, including canola seed, soya and all pork and beef products.

With less than two months to go before a federal election, Mr Trudeau’s handling of the diplomatic rift is being closely watched.

One poll this summer showed threequarters of Canadians felt China was trying to “bully” Canada. Conservative leader Andrew Scheer, whose party is tied with the governing Liberals ahead of the October 21 vote, has accused Mr Trudeau of doing “nothing to stand up for Canada in response”.

A spokesperson for Chrystia Freeland, Canada’s foreign minister, said the government’s priority was the welfare of the two men “arbitrarily detained” by China and that it had “rallied an unprecedented number of partners around the world in support of Canada’s position”.

Last week Mike Pompeo, the US secretary of state, joined their ranks, pledging to pressure China to free them “until such Meng Wanzhou: arrested by Canada in December

‘There’s no perceivable basis for thinking that if we carry on the same way things will get better’

In the spotlight: Justin Trudeau arrives at the G7 summit in Biarritz. He has long had a soft spot for China Andrew Harnik/AP

time as they are home and returned to their families”.

The approach was necessary to show that Canada “still has friends who are powerful and willing to go to bat for us”, said Stephanie Carvin, an associate professor at Carleton University and a former national security analyst.

She added that Mr Pompeo’s “strong and forceful” statement was exactly what Canada needed from a US administration that was no longer seen as having Canada’s back. “With China it’s all about a long game,” she said.

Even so, Mr Trudeau’s party has repeatedly found itself on the defensive over Ms Meng’s case as rifts emerged within his Liberal party over how to manage China.

In January Mr Trudeau fired John McCallum, Canada’s ambassador to Beijing and a former longtime Liberal MP, after he echoed China’s claim that the US charges were politically motivated.

Canada’s position was also undermined by reports of a proposal being floated by former Liberal prime minister Jean Chrétien this summer that Canada should cancel the extradition process in order to curry favour with Beijing.

Ms Freeland rejected the capitulation strategy, saying it set a “dangerous precedent”.

Mr McCallum further complicated things for Mr Trudeau last month when he warned China that further retaliatory actions could result in a Conservative government which would, he said, be “much less friendly to China than the Liberals”.

It has all put Mr Trudeau’s own views on China under a microscope. Like his father, former prime minister Pierre Trudeau, who was one of the first world leaders to recognise China’s Communist party in 1970, Mr Trudeau has long had a soft spot for the regime.

In 2013 he professed his

Interest rates

Ex-Fed chief asks central bank to think about Trump ‘threat’ PETER WELLS AND COLBY SMITH NEW YORK BRENDAN GREELEY — WASHINGTON

The Federal Reserve was forced to reassert that “political considerations play absolutely no role” in policymaking after the former head of the New York Fed urged the central bank to consider Donald Trump’s re-election prospects in setting rates.

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A spokeswoman for the Fed’s board of governors told the Financial Times that the central bank’s rate-setting body rejected the suggestion by Bill Dudley, who also served as the Fed’s vice-chairman. Mr Dudley also wrote that they should “refuse” to dole out stimulus to cushion the damaging effects of Mr Trump’s trade war.

“The Federal Reserve’s policy decisions are guided solely by its congressional mandate to maintain price stability and maximum employment,” the spokeswoman said. “Political considerations play absolutely no role.”

The rare rejection of a former official’s public statements came after Mr Dudley wrote a column for Bloomberg yesterday saying that providing additional stimulus would encourage Mr Trump’s aggressive trade policies, doing longterm damage to the US economy.

He also urged officials to consider how their decisions could affect the outcome of next year’s presidential election.

There is no official policy on communications for former Fed governors or

presidents. Generally, they comment on the state of the economy but avoid discussing the Fed’s mandate. “It’s unlikely he speaks for the Fed”, a former Fed official said.

The comments from Mr Dudley come days after the annual central banker gathering at Jackson Hole, Wyoming, where Fed chairman Jay Powell raised concerns about how the Fed responds to uncertainty around the trade war.

“Trump’s re-election arguably presents a threat to the US and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives,” Mr Dudley wrote in his column. “If the goal of monetary policy is to achieve the best longterm economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020,” he concluded.

Ebrahim Rahbari, chief G10 currency strategist at Citigroup, said the resilience of the US economy and the Fed’s ability to react is something that allows Mr Trump greater freedom in making policy decisions that, in principle, pose risks to the US economy.

Traders are currently pricing in a 94 per cent chance the Fed will cut its benchmark interest rate by 25 basis points in September, with the odds of a more aggressive 50 basis point cut much smaller, at 6 per cent. Following Mr Powell’s speech and Mr Trump’s threat of fresh tariffs on China, the probability was as high as 17 per cent.

admiration for the country’s “basic dictatorship” which allowed Beijing to turn the country’s economy round “on a dime”.

“It turns out dictatorships aren’t so great. Who would have thought,” Ms Carvin said.

In recent weeks the Trudeau government has faced pressure to take a tougher stance with China. Mr Scheer said that if elected he would rescind Canada’s five-year, $250m commitment to the China-led Asian Infrastructure Investment Bank and consider retaliatory tariffs.

Mr Burton said Canada had several other options. It could step up inspections of all Chinese shipments into Canada on the grounds that China had failed to stem the flow of fentanyl, an opioid. He said Canada should also adopt foreign influence transparency legislation similar to measures Australia implemented last year.

The situation was deteriorating, said Mr Burton, “and there’s no perceivable basis for thinking that if we carry on the same way things will get better”.

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INTERNATIONAL Defence ties

Bilateral relations

Putin and Erdogan mask rift over Syria

Japanese give tepid reaction to outlines of US trade deal

Russian leader hopes to deepen links with Turkey despite tension on Idlib HENRY FOY — MOSCOW LAURA PITEL — ANKARA

President Vladimir Putin turned aircraft salesman yesterday as he showed off Russia’s military wares to his Turkish counterpart, in an effort to deepen defence ties between the two countries and gloss over tensions resulting from their opposing objectives in Syria.

Mr Putin took President Recep Tayyip Erdogan on a tour of Russia’s annual air show, where Moscow’s new SU-57

stealth fighter was exhibited, just weeks after Turkey’s decision to buy a Russian missile defence system saw it barred from adopting a rival US warplane.

Ties between Russia and Nato member Turkey have deepened significantly in recent years, reflected in Ankara’s decision to buy the S-400 missile defence system despite Washington’s threat that it would result in the suspension of Turkey’s order for 100 F-35 fighter jets. The Pentagon has already begun following through on that vow, and Ankara may face further sanctions in retaliation for the Russian purchase.

But the heavy focus on military co-operation — affirmed by a decision to begin a second shipment of S-400 com-

ponents just hours before the talks — belied heightened friction between the leaders over a Russian-backed assault

by Syrian government forces on Idlib, the country’s last opposition bastion.

That bombing campaign has pushed to the brink of collapse a shaky TurkishRussian agreement aimed at avoiding a full military assault on the province, which Mr Erdogan fears will bring a fresh wave of refugees across the border.

In a joint press conference, Mr Erdogan praised Turkish-Russian cooperation in Syria but warned of a “humanitarian disaster” in Idlib after a surge in attacks against civilians. “It is unacceptable for the [Syrian] regime to use the excuse of fighting terrorism to

bombard civilians from the ground and from the air,” he said.

Turkey is already grappling with rising public opposition to the 3.6m Syrians who have sought safety there since the conflict began in 2011. Mr Erdogan said “hundreds of thousands” of people in Idlib had fled their homes and warned “a large number of these people are now moving towards our borders”.

Mr Putin said he and Mr Erdogan had outlined measures to “eliminate terrorist hotbeds in Idlib and normalise the situation in this area, and, respectively, in Syria as a whole”.

Russia has previously blamed Turkey for failing to clear the Idlib region of militants using it as a base to launch attacks

against Syrian and Russian troops, a task Mr Erdogan agreed to as part of the ceasefire deal made last September.

Turkey has in turn accused Damascus of violating the agreement with a series of attacks, backed by Russian air support. Nonetheless, both leaders insisted after yesterday’s meeting that the deal remained in place.

The at-times tense press conference contrasted with the personal bonhomie between the two leaders during the heavily choreographed tour of the air show at an airport close to Moscow.

When Mr Erdogan asked his host whether the SU-57 was available to purchase, Mr Putin replied: “You can buy it,” provoking laughter from both men.

‘[It is not acceptable for the Syrian] regime to use the excuse of fighting terrorism to bombard civilians’ Recep Tayyip Erdogan

Turkey’s Recep Tayyip Erdogan, left, and Russia’s Vladimir Putin tour the annual Moscow air show yesterday Alexey Nikolsky/EPA

India. Fiscal policy

Central bank payout gives Modi spending options Economists say $25bn transfer should cut New Delhi’s debt and not just fix a hole in the budget AMY KAZMIN — NEW DELHI

For those who fear India’s central bank has lost too much of its independence to prime minister Narendra Modi, the transfer of $25bn to the government this week was always just a matter of time.

With growth faltering and the government’s fiscal position parlous, on Monday the Reserve Bank of India seemed to ride to Mr Modi’s rescue, agreeing the unprecedented transfer from its balance sheet. The handout for the government’s coffers, from the RBI’s profitable central banking operations, amount to about 1 per cent of gross domestic product.

It was fear of such a transfer that last year sparked a confrontation between Mr Modi’s administration and Urjit Patel, then RBI governor. The feud cost Mr Patel his job and triggered stern warnings about the loss of the central

India’s central bank: the logic of the payout has split opinion and directed attention towards PM Modi

the government is raiding something that belongs to the RBI. But normally, this is something that goes to the government anywhere else in the world,” said economist Ila Patnaik, a professor at the National Institute of Public Finance and Policy.

Debate over whether India could use some of the RBI capital more productively goes back at least a decade. But

New Delhi’s focus on the RBI balance sheet intensified during Mr Modi’s first term, after Arvind Subramanian, then chief economic adviser, argued that excess central bank equity be used to recapitalise ailing public sector banks.

Struggling with ambitious spending commitments and disappointing tax revenue New Delhi put pressure on the RBI to surrender its surplus capital with no strings attached. Tensions over the issue erupted into public view last October, when then deputy governor Viral Acharya warned, with Mr Patel’s blessing, that New Delhi could “incur the wrath of the financial markets, ignite economic fire” if it undermined the RBI’s independence.

Within weeks Mr Patel had resigned and the RBI, under Mr Das, set up a committee to propose a new capital framework, including the appropriate level of reserves. Economists say the committee’s recommendations, which were approved on Monday, paving the way for this week’s transfer, have deftly balanced payouts with prudence.

Saurabh Mukherjea, founder of Marcellus Investment Managers, said: “It’s

punchy . . . but not so large to let critics say the government is raiding RBI coffers and destroying its balance sheet.”

The committee, led by former governor Bimal Jalan, recommended the central bank maintain its equity in a range of 5.5 to 6.5 per cent of assets, from 6.8 per cent previously. That facilitated the transfer of the RBI’s entire net income of $17.4bn from last year, and $7.4bn of what was deemed excess capital.

The transfer, which includes $3.9bn paid as an interim dividend in February, is about 2.5 times higher than the average payout in the last five years, but it was still below what New Delhi sought.

HSBC said: “The government has got some extra money without eroding RBI credibility, given this is based on wellarticulated and sound economic principles.” Attention now turns to how New Delhi intends to use the funds. Many economists believe it should pay off debt to reduce pressure on the bond market. But some said it was more likely the funds would be used to repair the hole in the budget to hit the fiscal deficit target of 3.3 per cent of GDP. Bond in doubt see Markets

Immunity from threatened tariffs on its car exports is a minimum demand for Japan in talks for a “mini” or “early harvest” trade deal with the US. Mr Trump and Japanese prime minister Shinzo Abe announced an agreement in principle at the G7 summit last weekend and aim to sign it in September.

Speaking at a press conference after the G7 in France, Mr Trump said he was not considering automotive tariffs on Japan at present. “It’s something I could do at a later date if I wanted to, but we’re not looking at that,” he said.

But Mr Trump was fiercely critical of US trade ties with Japan, signalling that any reprieve from tariffs might not last and raising questions about what, if anything, Japan would gain from striking a deal with Washington.

“We just want to be treated fairly.

Japan has had a tremendous trade surplus with the United States for many, many years, long before I came here,” said Mr Trump. “We’re taking these horrible, one-sided, foolish, very dumb, stupid . . . trade deals that are so bad and we’re making good, solid deals out of them.”

Yuichiro Tamaki of the opposition Democratic Party for the People said, however, that Mr Abe had been cornered by the US. Nobuyuki Baba, secretary-general of the Japan Innovation party, an opposition party that usually backs trade deals, said: “It’s hard to see the merits for our country.”

Tobias Harris, senior vice-president at advisory firm Teneo in Washington, said Mr Trump’s statement was better than nothing for Mr Abe but it raised questions about whether the proposed trade deal would include binding language to protect Japan from future US tariffs. “Imagine the domestic backlash for Abe if, after reaching a deal, Trump nevertheless threatened Japan again with auto tariffs over some other issue.”

No details of the planned US-Japan deal have been released, but the broad outline is a reduction in Japanese agricultural tariffs to levels agreed in the Trans-Pacific Partnership, a regional trade pact from which Mr Trump withdrew. In return, the US will cut some industrial tariffs.

Unlike the TPP, however, the US will not cut tariffs on passenger cars. That will leave Mr Abe trying to sell a deal that is visibly worse than the TPP. “The Trump administration — by simultaneously celebrating Japan’s concessions while offering virtually no public details about US concessions — is making matters significantly harder for Abe,” said Mr Harris.

Economists said the outline deal would do little to boost Japan’s economy although protection from automobile tariffs would be welcome.

Meanwhile, Japan’s farmers fear they will be exposed to huge imports of beef.

The TPP included a safeguard whereby higher tariffs would kick in if beef imports to Japan from member nations exceeded a certain quota over 12 months. That quota was set assuming the US was part of the TPP.

IMF austerity

China arrests Australian writer on spying charges

Egypt reform wins investor praise but swells ranks of poor

An Australian writer has been formally arrested on charges of espionage in China in a move that threatens to worsen Canberra’s strained diplomatic relations with Beijing.

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Yang Hengjun has been held since January, when he disappeared in the southern city of Guangzhou, as his wife and child awaited visas to travel to Australia.

Yesterday Canberra confirmed Mr Yang had been formally arrested by Chinese authorities and would continue to remain in criminal detention.

Marise Payne, Australia’s foreign minister, said Canberra was “very concerned and disappointed” to learn of Mr Yang’s formal arrest and criticised the harsh conditions onditions he has been held in for seven months without charge.

“Since that time, China has not explained the reasons for Dr Yang’s detention, nor has it allowed him access to his lawyers or family visits,” she said.

“I respectfully reiterate my previous requests that if Dr Yang is being held for

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The RBI is one of the world’s best-capitalised central banks, with an equity to assets ratio of about 28 per cent, compared to a global average of 8 per cent.

Without any legal obligation to transfer its earnings to its sole shareholder, the government, as many central banks do, the RBI has instead issued small ad hoc dividends, amassing a large capital base as a buffer for any potential crisis.

“The impression that is created is that

Donald Trump’s assurances that he is not planning to impose tariffs on Japanese automobiles “at this moment” has received a lukewarm reception in Japan as the broad outlines emerged on a trade deal with the US.

Strained relations

JAMIE SMYTH — SYDNEY

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bank’s autonomy and credibility. Many analysts were quick to repeat those warnings after the RBI’s decision, authorised by Mr Patel’s successor Shaktikanta Das. “Once they introduce this notion that the central bank is going to assist with budgetary financing, it brings up the obvious question of whether monetary policy will be used more broadly to finance government operations,” said Eswar Prasad, a Cornell University economics professor.

But others defended the logic of the payout — and more in future — as a sensible use of capital by one of the world’s most robust central banks. The key question, they suggest, is whether New Delhi puts the revenue to productive use or uses it as a short-term fix for its finances as tax collections fall short.

“I don’t see anything egregious in the transfer — there is no real reason as to why the RBI should be sitting with those kind of reserves,” said Jahangir Aziz, chief of emerging markets research at JPMorgan. “The question is, what does the government do with that money?

That’s a completely different question.”

ROBIN HARDING — TOKYO

his political beliefs, he should be released.”

Geng Shuang, Chinese foreign ministry spokesman, confirmed Yang Jun, as Mr Yang is referred to in China, had been arrested on suspicion of spying.

“China’s state security department will process the case in accordance with the law and fully ensure Yang Jun’s various rights,” Mr Geng said.

“China expresses strong dissatisfaction with the statements that Australia has made about this case. China is a country with rule of law. Australia should conscientiously respect China’s judicial sovereignty and should not via any means interfere in China’s lawful handling of the case.”

Beijing has also criticised Canberra for its decision to bar Huawei from providing 5G mobile equipment in Australia on security grounds and for the introduction of tough laws aimed at curbing foreign influence on its politics and society — a move interpreted as targeting China.

Additional reporting by Christian Shepherd

HEBA SALEH — CAIRO

Three years ago, Egypt’s economy was in crisis, as entrepreneurs scoured the black market for dollars and foreign investors shunned the country. Now it is one of the Middle East’s fastest-growing economies, favoured by bond investors seeking high yields in an uncertain global environment.

The turnround is an important success for the authoritarian regime of President Abdel Fattah al-Sisi. His government has been criticised by human rights groups for a severe crackdown on freedoms, but investors praise its implementation of bold and sensitive reforms shunned by previous administrations.

The challenge for Mr Sisi, a former general who ousted his elected predecessor in 2013, is to turn the country’s macroeconomic improvements into prosperity for its 100m people. Poverty has been rising, official statistics say, and foreign direct investment is paltry outside the oil and gas sector.

“The best reform story in the Middle East, perhaps in any emerging market,” Ruchir Sharma, Morgan Stanley chief global strategist, wrote this month.

“Egypt is on track to become a breakout nation,” he concluded in an upbeat note.

With the completion in July of a programme of tough reforms agreed with the IMF under a $12bn loan deal, Egyptian officials boast they have staved off collapse and set the economy on a more sustainable path. Economic growth accelerated to 5.6 per cent in the fiscal year that ended in June, the highest level since 2010. Debt and the budget deficit have been on a downward trend. The deficit fell to 8.2 per cent of gross domestic product this June down from 12.2 per cent three years ago.

Even so, economists and businessmen say Egypt has to make reforms to unshackle the private sector if it wants to wean itself off debt and speed up job creation. This would mean cutting the country’s notorious bureaucracy, improving access to industrial land and reassuring investors about the limits of military involvement in the economy.

Since coming to office in 2014, Mr Sisi has turned to the army in the absence of private sector investment. In recent years the military have expanded in cement, steel, pharmaceuticals, fish farming and real estate.

Under the IMF deal, Cairo pushed through a steep currency devaluation, slashed energy subsidies and imposed a value added tax. Attracted by yields above 17 per cent, foreign debt investors flocked to the country. “Given the scale of the devaluation of the currency in late 2016 they are not afraid of another one imminently creating low currency risk plus high interest rates,” said David Cowan, Africa economist at Citibank.

Egypt’s growth set to outpace big regional players

Real gross domestic product, rebased 180

Forecast

Iraq

160

Egypt Other countries*

140 120

Iran

100 80 2010 12

14 16 18 20

* including Qatar, Pakistan, UAE, Saudi Arabia Sources: IMF, FT calculations

But a World Bank report in July warned that “non-oil private sector activity continues to be stifled by a challenging business environment”. It said future reforms “should put larger emphasis on levelling the playing field to allow for more private sector participation in the economy.”

Mohamed Abou Basha, head of macro analysis at EFG-Hermes, a regional investment bank, said multinationals had shown an appetite for investment in Egypt, but the sums committed were still modest.

Inflation, which averaged 21 per cent in the fiscal year to June, had cut deeply into the purchasing power of families, hurting demand. Inflation fell to 8.7 per cent in July, its lowest level in four years.

Official figures also show the impact of the austerity measures on poverty.

The number of Egyptians below a $1.45 a day poverty line rose to 32.5 per cent in 2018, from 27.8 per cent in 2015, according government figures.

This adds more than 4m people to the ranks of the poor. Despite the economic austerity there has been no popular backlash because protests are banned and dissent is not tolerated.

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Wednesday 28 August 2019

FINANCIAL TIMES

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Wednesday 28 August 2019

ARTS

‘A lot of people don’t remember what conflict is’

the trauma that surrounded the family, Cousins only ever saw his father cry once, watching It’s a Wonderful Life. In 2019, America is again key to the story — the excitement of Brexit supporters about a US trade deal cooled by Nancy Pelosi’s insistence that Congress would never support one reached through imperilling peace in Northern Ireland.

“American politicians have understood the complexity of Northern Ireland far better than recent British politicians,” Cousins says. “Now there may be cynicism involved, a pursuit of the IrishAmerican vote, but frankly we don’t care. Bill Clinton spoke about Northern Ireland with nuance and knowledge ahead of the Good Friday Agreement, and that was crucial.”

In Cousins and Martin’s film, the signing of the GFA in April 1998 is a glorious twist in the tale, the beginning of the end of a nightmare. As the current crisis loomed, Cousins re-read the actual document. “It’s at once a boringly written slab of prose and a masterpiece of political reason. It stands as a more successful

Mark Cousins’s new documentary chronicles Northern Ireland’s Troubles through film and cinema. He talks to Danny Leigh

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he voice of Mark Cousins — lyrical, gentle — cracks as he speaks. “I’m sorry, I struggle to talk about this,” he says. The subject is Northern Ireland, specifically the future of the Good Friday Agreement in a no-deal Brexit. “It takes our breath away that the politicians responsible could jeopardise that, knowing how many lives have been saved by it. Or maybe I’m being naive. Maybe we’re just collateral damage.”

The film-maker and sometime critic is in his adopted hometown of Edinburgh, but still uses “we” to describe his Northern Irishness. The aim is to discuss 50 Years of the Troubles: A Journey Through Film, a television documentary of which he is writer and presenter. It was intended to mark the anniversary of the deployment of British troops to the province in 1969 and the years of violence that followed. The time lag of production is such that it will broadcast amid the potential return of a hard border with the Republic, the GFA at risk of being undone.

Peace is fraying. Journalist Lyra McKee was murdered this April in Londonderry; last week, a bomb exploded in the County Fermanagh borderlands.

The timing is bleak. “When we started this documentary,” Cousins says, “we had no idea it would go out with Britain on the verge of rewinding the clock.”

Here the “we” is Cousins and director Brian Henry Martin. The maker of singular, inquisitive documentaries about cinema, life and points between, Cousins has walked similar ground before — his 2015 project I Am Belfast was a bittersweet hymn to the city in which he was born and spent much of his childhood.

But that film came out in the spring before the EU referendum, a time whose relative calm now feels very distant, and in few places more than Northern Ireland. As a result, Cousins says, the new documentary has a journalistic mission its predecessor did not.

Different too is that Cousins is not behind the camera but in front of it. The change of role is the first flashback in a film built around them. In an earlier professional life during the 1990s, he

Soldiers allow a resident to pass a barrier on Belfast’s Divis Street — PA Archive

‘American politicians have understood the complexity of Northern Ireland far better than recent British politicians’ was a presenter of TV shows on film and film-makers. “I don’t enjoy being that side of the camera these days, but I tiptoed back for this subject and this moment.”

Cousins was four in 1969, a skinny boy left to navigate childhood between the Catholic Falls Road and Protestant Shankill. While the films he directs are always personally driven, his presentation here can be raw. Discussing childhood memories is difficult enough without them involving gunmen.

Menace then was ever-present.

Although he doesn’t mention it on camera, Cousins’s mother was Catholic and his father Protestant. A “Romeo and Juliet family”, he calls it, a lovely phrase for a fraught reality, mistrusted by both sides. There were moves in and out of Belfast, exiles to towns such as Ballymena, the coastal nook of Ardglass.

“My parents wanted to stay ahead of what might happen,” Cousins says.

“The whisky breath of the violence on our necks.”

Belfast boy: film-maker Mark Cousins.

Left: President Bill Clinton visits Belfast’s Shankill Road in 1995 Adam Butler/PA

Cousins speaks now of being lucky, because none of his immediate family were killed — only their friends. The legacy of such dread does not easily dissolve. “I have a reasonably high level of anxiety all these decades later. The memories don’t disappear. They just settle into your subconscious.”

Which is where films land too. Cousins puts some of his passion for cinema down to factors that might have shaped it anywhere — a working-class boyhood, a natural pull towards the visual. His and Martin’s film is rich with the kind of insights honed on projects such as The Story of Film, the 15-hour voyage through movie history he released in 2011. Now among others, Cousins unwraps the elegiac noir Odd Man Out, with James Mason as a fugitive IRA man in a snowy Belfast; the Hollywood inanity of A Prayer for The Dying, as confused as star Micky Rourke’s accent; he lauds Elephant, director Alan Clarke’s stark account of sectarian killings.

But his cinephilia was, he says, also down to Northern Ireland — to the need for refuge. “If you’ve had fear in your life, film allows you to process that. Cinema is a place to be scared in safety.” Yet an awful irony follows — the sadness of cinemas in war zones. We see archive footage of crowds filling the Ritz, a grand Art Deco 2,200-seater in the

centre of Belfast. In 1977, it was firebombed. Cinemas closed throughout the Troubles, culture withered by violence. Cousins left Northern Ireland at 18. But it never left him. In a career defined by a fierce internationalism, he was drawn to other places of conflict — staging a film festival in Sarajevo during the siege, making movies with children in Kurdish-Iraqi villages.

“I used to wonder if it was a kind of masochism. But I like to find a more positive interpretation, because what you find in these places is recovery.”

Another geographical thread runs through his documentary — that between Belfast and America. At home, the Cousinses listened to Elvis. For all

piece of diplomacy than the Treaty of Versailles or the Dayton Accords because it held. The violence dwindled.”

The future was always a work in progress. On screen, Cousins rages at the grimly named “peace walls”, the looming iron fences between communities that still scar Belfast. But slow as renewal can be, he insists it was only possible at all because of Good Friday. “The idea the agreement itself would be seen as contentious has shocked me. It can only be that the Eton-centric worldview is so removed from Northern Ireland.”

Typically, you would expect an optimist like Cousins to take pleasure in the youthful demographics of a country where 40 per cent of the population are under 25. He cannot.

“It means a lot of people who don’t remember how bad the bad times were.

Who don’t know what conflict really is.

Combine that with the fact they are still very segregated and that would make the situation dangerous even if Westminster politicians understood Northern Ireland.”

When I ask him to tell me about the mood there now, his answer is immediate. “We’re scared.”

‘50 Years of the Troubles: A Journey Through Film’ is on Channel 4 on September 1 at 10.20pm British soldiers investigate a burning building in Belfast, 1972 Polaris/Eyevine

Disarray and disrepair make fine drama T H E AT R E

Appropriate Donmar Warehouse, London

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Sarah Hemming Ever since the Greeks, the family gathering has been prime material for dramatists. It’s a form particularly loved by American playwrights, with the great family drama in part a testbed for the state of the nation.

Branden Jacobs-Jenkins’ Appropriate makes dazzling use of that fact. A play about history, legacy and appropriation, it is in itself a deliberate and mischievous act of appropriation of that whole “family drama” genre and a test of what is and isn’t appropriate. It is, again, a shrewd analysis of the state of the nation; it’s also a comment on whose stories get told and how that shapes our understanding. It’s brilliantly sophisticated, often bitingly funny and it confirms Jacobs-Jenkins as one of the sharpest young US dramatists writing today.

Here, as so often, there has been a death, and the scattered relatives have hauled themselves down to the parental home to dispose of the property.

The place is in a state of spectacular disarray and the Lafayette family are in similar disrepair.

Older sister Toni (Monica Dolan, furious and desolate), seethes with resentment at having to pick up the pieces; Bo (Steven Mackintosh, bustling and brittle), agitates about money; Franz (Edward Hogg, damaged and desperate), the dissolute younger son, pitches

up with a new lifestyle, a hippy fiancée and an apology in his pocket.

Before long they are tearing chunks out of each other as the play unfolds along expected lines. But gradually Jacobs-Jenkins uses that familiar template to broaden the picture and to draw attention to the unseen, the unspoken and the unresolved.

The home, which the siblings hope to get a price for, is a former plantation house in Arkansas: out in the grounds there is a slave burial ground full of unmarked graves. Underpinning the onstage drama about heritage, focused on a troubled white family, is the much bigger legacy of America’s bitter racial history. The people we don’t see are as important, if not more so, than those we do, and their silent story is entwined with the characters on stage. The space is haunted.

All this comes into sharp focus when the family finds a horrific photograph

album of lynched black people among their dead father’s possessions. Whose was it? How should they deal with it?

Hide it? Destroy it? Sell it? A story about ownership and about moving on from the past takes on new and deeper meaning, as does the word “appropriate”.

The play is not without its flaws: the sheer volume of argument creates a sense of battle fatigue in places. But these are quibbles in what is, essentially, a brilliantly subtle and revealing piece of drama. Ola Ince’s fine, taut production and excellent cast ride its twists and turns expertly.

Dolan, Mackintosh and Hogg all subtly suggest the fragility lurking behind their characters’ aggression and there’s great work too from Isabella Pappas and Charles Furness as the bemused teenage children, who will inherit this story next.

To October 5, donmarwarehouse.com Edward Hogg, left, and Steven Mackintosh in ‘Appropriate’

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Wednesday 28 August 2019

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FT BIG READ. AVIATION Spurred on by environmental activists such as Greta Thunberg, there is a growing consumer backlash against air travel. However, the industry has few easy technological solutions to reduce its emissions.

By Janina Conboye and Leslie Hook

Airlines face flight shame turbulence

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hen cyclist Anna Hughes stopped flying 10 years ago, it seemed like a radical idea. But now the founder of Flight Free UK has convinced thousands of people to join her in a bid to mitigate the climate impact of air travel.

Her campaign is just one part of a nofly movement that is spreading rapidly across Europe and has given birth to a new phrase: flygskam, or Swedish for flight-shame, which means feeling guilty about jetting off on holiday. “It has become a social norm that you think holiday, you think flight,” says Ms Hughes, who no longer goes anywhere that cannot be reached by bike, train or boat. “Most people are unaware of how flying affects the environment.”

That awareness is growing fast though, as climate concerns have sparked a public backlash against flying that would have been almost unthinkable even a year ago. One of its most prominent advocates is Greta Thunberg, the 16-year-old Swedish activist, who is sailing to New York to attend a climate summit next month because she has forsworn air travel. She is set to complete the journey today.

For airlines, the sudden take-off of this movement presents a potentially dangerous challenge. Passenger growth shows signs of weakening in countries where flygskam is catching on. There was a 3 per cent fall last year in the number of passengers for domestic flights going through 10 of Sweden’s state-owned airports, compared with the year before.

The movement has not only taken aim at summer holiday flights, but also at airport expansion plans including Heathrow in London.

“This is an existential question for us,” says Rickard Gustafson, chief executive of Scandinavian Airlines (SAS), which is based near Stockholm. “If we don’t clearly articulate a path to a sustainable aviation industry, it will be a problem.”

He says the issue of passengers’ attitudes to emissions was not considered a priority when he brought it up at the board of the International Air Transport Association, on which he sits. But that has now changed. “Six months later this was a hot topic,” says Mr Gustafson.

Airline executives have begun to take the impact of emissions and climate risks more seriously. “Aviation needs to reinvent itself,” admits Johan Lundgren, chief executive of easyJet, the European low-cost carrier.

The problem for the aviation industry is there are few technological solutions available that will help it reduce emissions and address the potential consumer backlash.

“The basic trouble is that humankind has not worked out how to put a passenger jet on a long-distance flight yet without burning through something on the order of 100 tonnes of fossil fuels,” says Mike Berners-Lee, a carbon footprint specialist and professor at Lancaster University. “We have to bite the bullet on aviation, because we just don’t know how to do it in a low-carbon way.”

Not just a CO2 problem

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Airlines account for about 2 per cent of carbon dioxide emissions globally. But the headline figures obscure the broader

impact of air travel. When planes fly through the sky they emit other substances that have a significant warming effect — such as nitrogen oxide and contrails, the long thin clouds of frozen vapour that are visible from the ground.

A growing body of research shows the climate impact of aeroplanes is about twice as much as their CO2 emissions alone would suggest — closer to 5 per cent of human-caused warming.

Volker Grewe, professor of atmospheric physics at the German Aerospace Centre (DLR), says these “non-CO2 effects”, such as particle emissions, nitrogen dioxide and contrails, are a major contributor to the warming impact of planes.

“Aircraft are flying at higher altitude of 10-12km and whatever emissions they produce at that altitude remains longer in the atmosphere,” Mr Grewe says. “That is the big difference between

How planes cause pollution

Landing Aircraft engines emit particulate matter and soot, which contributes to pollution near airports. Sulphur pollution can also be a problem because of the high levels of the chemical in jet fuel

Take-off The aircraft’s initial climb is the most energy-intensive part of the journey, consuming as much as one-quarter of the plane’s total fuel on short flights In-flight The water vapour from the engine creates contrails, long thin clouds of frozen water, which have a warming effect. Aircraft also emit nitrogen oxides, which interact with other particles to form ozone, a warming gas Source: FT research

Fuel taxes Politicians could seek to raise funds from air travel The financial impact of “flight shame” has so far been limited: global air travel is still growing healthily, driven by demand in Asia, particularly China.

But investors are starting to pay attention — during the latest round of corporate results in the sector, environmental issues were among the most prominent questions for executives.

Analysts say that if the flyksgam movement spreads beyond Europe — or if governments introduce punitive taxation in response — it could begin to pose financial risks. Countries such as Sweden have already seen a drop in air travel, and an increase in train travel, because of the movement.

Daniel Röska, analyst at Bernstein, says there is often a discrepancy between people’s vocal support for less pollution, and their willingness to actually reduce their air travel habits.

But governments could still use emissions concerns as a pretext to increase air taxes in the future, he adds.

“I expect air travel to become more expensive, and this in turn will reduce the cheapest, least valuable demand in the market,” says Mr Röska. “Likely it will lead to a period of slower growth for aviation in markets that push the emissions agenda.”

Last month France announced an environmental tax on all flights leaving the country, part of President Emmanuel Macron’s efforts to win over the increasing green vote.

The tax is initially quite low — it starts at roughly €1.50 for economy flights and goes up to €18 for business tickets — but it provides a signal that politicians are picking up on the issue.

Activists have also started to push for more attention on fuel taxes — especially as jet fuel is exempt from taxation in many EU countries. Sweden and the Netherlands have been calling for an EU agreement to introduce an aviation fuel tax.

Research suggests the climate impact of aircraft is about twice as much as their CO2 emissions alone would suggest.

Below: climate activist Greta Thunberg — Getty Images aviation and surface transportation, which doesn’t have these additional effects.”

The threat of a consumer backlash over emissions is not a complete surprise for the industry. Some executives have been trying to focus attention on emissions for at least a decade. Iata, the aviation industry body, made a commitment in 2009 that the entire industry would halve emissions by 2050, relative to 2005 levels.

“It’s very ambitious,” says Chris Goater, an Iata spokesman. “We have a big responsibility and it is a huge challenge to deal with this.”

Some airlines, especially in European countries with particularly environmentally-engaged customers, have made their own specific pledges. SAS has said it will cut emissions by 25 per cent by 2030 and is aiming to run domestic flights on biofuels.

IAG, which owns British Airways and Spain’s Iberia, has pledged to invest $400m on developing alternative fuels over a 20-year period, while United Airlines has said it will spend up to $2bn annually on fuel-efficient aircraft and is working with biofuel producers.

“We see this as the future in this space,” says Aaron Robinson, senior sustainability manager at United Airlines.

He is optimistic about using waste for biofuels given that it is cheaper to develop than crops.

However, the disadvantage of biofuels is that they are still much more expensive than regular fuels, and would face serious land constraints to being scaled up.

At present biofuels can be manufactured on a small scale using agricultural and household waste, but to reach the level of production that would have a big impact on aviation emissions much more land would be needed to grow the crops to convert into biofuel.

As a result, many environmentalists are dismissive of biofuels as a long-term solution, particularly because a growing world population will need more food.

To limit global warming to a 1.5C

Exploring other options Dutch carrier KLM even launched a campaign urging passengers to fly less.

It includes tips such as “consider making video calls instead of meeting face to face” and “explore other travel options” like the train for shorter trips.

With the rise of flight shame, airlines are racing to find an answer for how to decarbonise and reduce their climate impact. But the challenge is that there are no easy ways to reduce emissions meaningfully — at least not in the near term.

Underscoring the difficulty of the problem, different airlines are taking quite separate approaches to reducing the emissions of their flights. Willie Walsh, chief executive of IAG, acknowledges that there are no simple, shortterm solutions for the airline industry.

“Therefore aviation needs to use some of its money to provide incentive to others and we’ll only do that where, you know, these are real carbon reductions,” he says.

Some airlines, including IAG, believe one of the most promising areas is alternative low-carbon fuels, which could be used in existing aircraft, but with a lower carbon footprint. These include biofuels, which can be made from plants, waste or algae, and synthetic fuel, a substance resembling jet fuel that can be manufactured using renewable energy. Others are pinning their hopes on electric aircraft and hybrid battery-fuel designs.

At present, the only one of these technologies that is being used commercially is biofuels, albeit at a very small scale. Californiabased AltAir Fuels supplies United Airlines with biofuels made from agricultural waste.

United has also partnered with Fulcrum BioEnergy, which is developing wasteto-fuel refineries.

‘We are seeing that all around, people are going, “oh crikey, aviation is actually part of my [carbon] footprint”’ increase in temperature would require so much biofuel that it would take up to 7m square kilometres of arable land — roughly the size of Australia — to produce that much feedstock, according to a recent report from the UN Intergovernmental Panel on Climate Change.

“If you were to replace all today’s aviation fuel with biofuel, with firstgeneration biofuel, it would be at the expense of 2,100 calories per person per day for everyone on the planet,” says Prof Berners-Lee. “It would take almost all of humankind’s calorific requirements . . . So that is absolutely not a solution.”

There is one area where airlines have managed to make considerable progress in reducing emissions — by improving the efficiency of aeroplanes. United Airlines, for example, says it has improved its fuel efficiency by 45 per cent since 1990, thanks in part to more efficient planes.

However, these gains have been outstripped by the total rise in global air travel — airline CO2 emissions in Europe increased 26 per cent between 2013 and 2018, according to the EU. And Iata predicts annual passenger numbers will double to 8.2bn by 2037.

Electric and hybrid aircraft could generate another major reduction in emissions. Several of the industry’s biggest manufacturers, such as Boeing and Rolls-Royce, are working on electricpowered aircraft, including hybrid

planes that run on a combination of fuel and battery power.

At this year’s Paris Air Show, Israeli start-up Eviation unveiled an electric aircraft taxi called “Alice” that can carry nine passengers for up to 1,050km.

EasyJet is also confident about these technologies, which tend to be suitable for the type of short-haul flights that the low-cost carrier specialises in. The company is advising Seattle-based start-up Wright Electric as it designs an electric plane that could serve the airline for flights of less than 500km.

“We know what we think would work for easyJet, so that’s why we’re looking at electrification and hybrid,” says Gary Smith, director of operations transformation at the carrier. He adds that biofuels are “not going to solve [easyJet’s] problem”.

Meeting objectives Budget carriers such as Ryanair, easyJet and Wizz Air point out that their flights tend to be some of the most efficient, in terms of CO2 emissions per passenger per km, because they have newer fuelefficient aircraft, no first class service and are usually full.

However, the total emissions for the budget carriers are still high. EU data this year revealed that Ryanair was Europe’s tenth biggest polluter in 2018.

The other nine were power plants.

Electric aircraft are not going to be available anytime soon. Furthermore the heavy batteries required for electric aircraft mean that they will not be suitable for long-haul flights.

For these reasons, not everyone in the industry is enthusiastic about electric planes. Mr Walsh, of IAG — whose flights include a relatively large proportion of long-haul trips — says electric and hybrid technologies will not be relevant to the business for another 25-30 years.

Whatever the technological challenges, industry executives realise that the passenger focus on airlines’ emissions is only likely to grow.

“There is going to be more awareness of climate change,” says Joszef Varadi, chief executive of Wizz Air, the Hungarian low-cost carrier. He points to the recent EU parliamentary elections where Europe’s green parties gained ground.

Flygskam activists are also growing more impatient with an industry which has set lofty objectives but which does not yet have the tools to meet them.

Without solutions that can reduce the climate impact of flying in the immediate future, they say that people just have to fly less.

“We are really seeing a growing no-fly movement, and that is because, even though there might be some technological solution in the long-term horizon, we really do have to tackle the growth that is happening right now,” says Lucy Gilliam, an aviation and shipping expert at Transport and Environment, a Brussels based non-profit group.

“We are seeing that all around, people are going, ‘oh crikey, aviation is actually part of my footprint’,” she adds.

“And when they look at things that they have direct control of, aviation comes up in the top three things that you can actually do to reduce your impact.”

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Letters

Wednesday 28 August 2019 Email: letters.editor@ft.com Include daytime telephone number and full address Corrections: corrections@ft.com If you are not satisfied with the FT’s response to your complaint, you can appeal to the FT Editorial Complaints Commissioner: complaints.commissioner@ft.com

Slow fashion is better for the environment

WEDNESDAY 28 AUGUST 2019

Macron’s G7 summit calms the storm, for now Brexit has already pushed Britain to the margins of global affairs Such is the capriciousness of Donald Trump’s approach to global affairs that many will count the weekend’s meeting of G7 leaders in Biarritz as a significant success. In other circumstances the absence of public acrimony among leaders of the world’s big democracies would have been unremarkable. With Mr Trump in the White House, it is cause for considerable relief if not raucous celebration, not least in the world’s financial markets.

The summit had been preceded by a dangerous escalation of the US president’s trade war against China and a White House suggestion that Russia’s Vladimir Putin be invited to rejoin the group despite Moscow’s continued military presence in Ukraine. The split between the US president and European leaders over the international community’s nuclear deal with Iran threatened further ruptures as did the US administration’s disdain for international action to limit climate change.

Much credit goes to the meeting’s host, French president Emmanuel Macron, for his adroit diplomacy in defusing these potential time bombs.

Mr Macron has had his own domestic political troubles, but he has emerged as a leader with weight and seriousness in international affairs. His willingness to act as a broker in an effort to bring together Mr Trump with Iranian president Hassan Rouhani for direct talks on the nuclear crisis showed laudable diplomatic imagination.

In handling Mr Trump, Mr Macron found a balance between necessary if embarrassing flattery of the president and strong resolve to promote Europe’s commitment to the multilateral international order. There is a lesson for Boris Johnson, Britain’s prime minister.

Mr Johnson, affirming at his first G7 summit his willingness to see the UK crash out of the EU without a deal with its European partners, already has the

look of a prime minister caught, vassallike, in Mr Trump’s slipstream.

Mr Trump’s relatively conciliatory comments at his end-of-summit press conference held the hope, at least, of a sustained de-escalation of the tit-fortat trade war with China. Nothing can be taken for granted, but it may be that the stark evidence that trade tensions are driving the world towards recession has changed the calculations in the White House. Appealing to his political base by taking a tough line with China is one thing; a recession during 2020 could wreck his chances of re-election.

In suggesting Mr Trump holds direct talks with Mr Rouhani, Mr Macron has appealed directly to the US leader’s ego.

“Go on, do the deal” is a challenge the US president finds hard to resist. The hope now must be that the Iran hawks surrounding the president — notably John Bolton, the national security adviser — do not succeed in undermining the initiative. The world cannot afford another war in the Middle East.

Measured against such issues, Mr Johnson’s demands of the US president at the summit seemed eccentric. The terms of any post-Brexit trade deal between the two governments, he told Mr Trump, must include ready access to the US market for Melton Mowbray pork pies, British-grown cauliflowers and British-made shower trays. Such, perhaps, is the inevitable fate of a prime minister who has been so eager to surrender the influence Britain has exerted on international affairs through a leading role in the EU. It is impossible to say whether the G7 summit will help calm the serious disturbances in global economic and geopolitical affairs. For as long as he is in the White House Mr Trump will be a dangerous and destabilising force. Mr Macron, however, deserves considerable thanks for his efforts to calm the storms.

Edited genes are not ready to be inherited DNA changes should benefit patients but not yet their descendants

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Recent technological advances have for the first time given scientists the power to make specific changes in human DNA that will be passed on to future generations. Whether and when to use that power is the biggest issue in contemporary bioethics, which will be highlighted this week at a meeting on gene editing convened by the World Health Organization in Geneva.

At the same time, industry has joined the debate for the first time. The international Alliance for Regenerative Medicine declared that its member companies would use gene editing only to treat disease in individual patients but would stay away from procedures leading to mutations in sperm or eggs — the human germ line — which would be inherited by their children and descendants.

The sense of urgency comes from the rapid worldwide adoption of new gene editing techniques — Crispr in particular — which enable scientists to modify an organism’s DNA far more precisely than the cruder methods used previously for genetic engineering. While Crispr was transforming agriculture and moving into medicine, supercharging gene therapy research, scientists worldwide avoided human germ line editing.

The informal moratorium was broken last November when the Chinese biophysicist He Jiankui shocked fellow scientists with an announcement that his lab had edited an immune system gene in early embryos, leading to the birth of twin girls resistant to HIV infection. Their descendants will inherit this mutation.

Dr He may have wanted honour and glory as an inspired pioneer but instead he has quite rightly received almost universal condemnation from scientists, politicians and ethicists — now joined by biotech companies.

The overwhelming reason why it is

wrong to edit embryos is that we still know too little about the long-term effects of a procedure with consequences lasting indefinitely into the future. In contrast, the risks and benefits of manipulating an individual’s genes last no longer than his or her lifetime.

Looking ahead to the prospect that gene editing for medical purposes could lead eventually to the enhancement of other inherited characteristics such as intelligence and appearance, there may be moral objections to the social inequity of potentially enabling wealthier people to design their own descendants. And some opponents of human germ line editing have more fundamental objections, including religious beliefs that it is wrong for humans to design their own future.

For now, however, the key issue is to construct an international regulatory framework to stop inherited gene editing, while allowing the technology to be used in individual gene therapy. Thirty-one clinical trials are already under way to treat diseases from cancer to haemophilia and blindness. Their progress must not be blocked by any backlash against more controversial applications of Crispr.

The world’s scientific academies and the World Health Organization are working on a dual track to control human gene editing, with the WHO planning a registry of research in the field. If their efforts are well co-ordinated and supported by national regulatory authorities, it should be possible to prevent any more premature attempts to create edited babies, while permitting human embryology research that could lead to germ line engineering when the science is ready.

It would be wrong to rule out a technology that could eventually stop people passing on a vast range of inherited diseases to their descendants.

Your editorial “Global recycling crisis should be a wake-up call” (August 24) calls for the reduction of waste through reuse and investment in recycling facilities, saying that the current crisis is an opportunity for change. Surely the great opportunity here is to buy better quality goods but fewer of them.

In this regard you failed to mention that among the greatest sources of plastic pollution around the planet is the fast fashion industry and clothing made of supposedly cheap man-made fibres such as polyester and nylon.

These materials are petroleum-based, not biodegradable, and release billions if not trillions of microplastics into the world’s oceans every year. Such

garments are often worn just a handful of times and the retail price fails to reflect the true cost to the planet.

Slow fashion, thankfully a growing trend, may cost slightly more at retail but is certainly a better deal for the environment. Furthermore, quality clothing made from natural fibres continues to look good for years and even decades, not just months or weeks. On a “per wear” basis, wellmade clothes from quality fibres and fabrics are a definite bargain.

In 2017 Greenpeace published the results of a survey investigating the fashion shopping habits of more than 1,000 20- to 45-year-olds in Europe and Asia. It concluded that there was a

EU could declare no-deal decision reversible

reinstatement of a hard land border with the Republic of Ireland?

If a referendum were to show this solution to be acceptable to the Northern Irish population as a whole, the European Council could add a codicil to the withdrawal agreement disapplying the backstop clauses. Mr Johnson could claim he had a new agreement; the EU could claim the agreement was unchanged; the Irish government and the US Congress could profess themselves satisfied that the Good Friday Agreement was not threatened. With the looming prospect of a no-deal alternative, Mr Johnson could even hope for a parliamentary majority. Everyone could claim victory except, perhaps, the DUP. Nicholas Boyle Emeritus Schröder Professor of German, University of Cambridge, UK

According to emails leaked at the weekend, the UK government is seeking advice on the legality of proroguing parliament for five weeks before October 31. Failing that, the alternative strategy is to arrange an election shortly after October 31, dissolving parliament for 25 working days before so that the UK would automatically exit with no deal in place on October 31.

However, this undemocratic trickery, in imposing an outcome that was not part of the 2016 referendum, is easily avoidable. The EU could announce that it regarded a decision to leave without a deal without parliamentary legitimacy as reversible by an incoming, democratically elected new government.

To be precise, this would involve the UK reapplying for membership of the EU, with the EU quickly passing the necessary legislation so that the UK could revert to the pre-October 31 status quo. If an election was held in early November, voters would then have a clear say on a no-deal Brexit.

Boris Johnson’s only hope of winning would then be the electorate’s fear of Jeremy Corbyn, best friend to the no-deal Brexiters. Were Mr Corbyn to stand aside, no-deal would surely lose.

Prof John Muellbauer Nuffield College, Oxford, UK

A chance to resolve the backstop impasse Boris Johnson, the UK prime minister, has said that renegotiation of the EU withdrawal agreement is “touch and go” (report, August 26). Maybe the chances are better than he implies.

The Irish backstop is a necessary part of the present agreement because the Democratic Unionist party will not accept an arrangement that treats Northern Ireland differently from the rest of the UK. In particular they will not accept that, unlike the rest of the UK, Northern Ireland should remain subject to the regulations of the European single market and customs union — what has come to be called the “checks in the Irish Sea” option. But the DUP can speak neither for the suspended Stormont government nor for a majority of the Northern Irish electorate.

Might a solution to the impasse be to hold a referendum in Northern Ireland on the acceptability of “checks in the Irish Sea” as an alternative to the

A complicated Lebanese marriage on the rocks

Beirut Notebook

by Chloe Cornish

It’s time to plan for the things we can control Daniel Thomas’s report “Two-thirds of businesses fear economy will worsen” (August 27) — and in particular the chart titled “Companies are pessimistic about economic prospects” — reveals some important truths about the economic outlook, the likely impact of Brexit and the way forwards: • Yes, we’re generally pessimistic about the global economic outlook; • Yes, we’re generally materially even more pessimistic about the UK economic outlook; but • We’re generally much more bullish about prospects in our own industries.

Takeaway: we tend to have this generalised fear about the economy and about Brexit, but most of us are actually quite sanguine about the prospects for our own businesses. If ever there was a time to “person up” and focus on planning for the things we can control and delivering them, then this is it. Plus this maximises the odds of a “good” Brexit.

Mark O’Hare Chief Executive, Preqin, London EC4, UK

I recall when the UK was a leading voice in EU circles Reading the insightful article by Miriam González Durántez (“Britain is becoming a mere geopolitical toy”, August 26), I could not help but recall a time when the UK was a leading voice in EU circles; a more than constructive partner.

This was the period 1986-92. Our purpose then as now was to enhance

Travelling to Beirut in September, air passengers found a paean to a central bank governor in the seat-back pockets in front of them. The in-flight magazine celebrated Riad Salamé’s 25th year at the helm of the Banque du Liban, which owns the national carrier Middle East Airlines — his face was in heroic profile on the glossy black and white cover.

Lauded as an “engineer of stability in a time of crises”, Mr Salamé was particularly praised because of his management of the Lebanese lira-US dollar peg, held at about 1,500 lira to the dollar, for more than two decades.

But reports this month that the black-market value of the lira has slipped to 1,560 to the dollar have shaken that reputation. “It looks like he’s losing control of the peg,” said an ex-banker in a smart, semi-deserted restaurant — a sign of straitened times in Beirut’s ostentatious downtown.

In the face of a heavy outflow of hard currency that is depleting the country’s dollar reserves, Mr Salamé’s legacy as defender of Lebanese financial stability is under threat.

With unemployment rising and businesses closing, he has said that Lebanon is facing “zero growth”.

Mr Salamé has for years bolstered reserves to buy time for the government to fix its fiscal deficit, using measures he dubbed “financial engineering”. The governor has four times orchestrated complex deals with local banks, involving government debt issuance and swapping lira for dollars, to shore up

high incidence of compulsive shopping, often fuelled by access to online shopping and social media, motivated by a longing for excitement and satisfaction, or to kill time and relieve boredom. The survey also reports that the excitement of a shopping binge is usually gone within a day, and often followed by feelings of emptiness and guilt.

A transition from “quick hit”, short lifecycle products to the purchase of long-term high quality goods would therefore also improve the wellbeing of consumers, not just our planet.

Michael Modiano G Modiano Ltd, Wool Merchants, London EC2, UK

the EU’s co-ordination so as to present, as far as feasible, a common position on matters discussed in the UN. In meetings among the EU members, conversations were held in French and English but as English was more often than not the lingua franca, our UK partners, as frequent penholders, held sway and did so in a most useful way, not only enabling the EU to reach a common position but also frequently helping to bring on board many likeminded third countries to vote with the EU on UN resolutions in the General Assembly.

Arlette Laurent New York, NY, US Former chargé d’affaires, EU delegation to the UN

You’ve still got your Brexit blinkers on, FT The Financial Times’ ability to see the Brexit issue from the point of view of any European country but Britain is evidenced by your editorial “Boris Johnson’s European tour leaves all the work to do” (August 24).

You suggest that Mr Johnson, prime minister of a country with 65m people, should be rushing off to Dublin to talk to the prime minister of a country with less than 5m. Should it not be the other way round, given that a no-deal Brexit would do far more damage to the Irish economy than to Britain’s?

Your attitude merely reinforces the view, sedulously cultivated by former prime minister Theresa May, that in all this Britain is, or should be, a supplicant rather than the world’s fifthlargest economy and one of Europe’s most successful.

Roger White Sherborne, Dorset, UK

BdL’s foreign exchange reserves, protecting the local currency.

“Of course, maintaining the peg is costly . . . but less costly than floating the currency,” he said. BdL maintains that devaluing the lira would hurt people whose savings and wages are in lira, potentially leading to instability.

The west cares deeply about Lebanon’s stable presence in a volatile region — so much so that international donors have pledged soft loans worth $11bn for Lebanese infrastructure projects, which the government is struggling to unlock. But the country’s economic woes are increasingly stark.

Because Lebanon does not produce much, it has a severe trade imbalance.

A steady supply of dollars via bank deposits has therefore been crucial to maintaining the foreign exchange reserves Mr Salamé so prizes. But for the first time since 2007, net deposit growth has turned to shrinkage since the beginning of this year, according to Goldman Sachs. This is a big problem for Mr Salamé. BdL reserves have lost $8bn from January to June, writes Goldman.

Beirut’s banks have long been its economic lifeblood. Anonymity for account holders and a fun-loving atmosphere in a conservative region made it an attractive place to park money. Lenders were profitable.

Lebanese economist Jad Chaaban has noted the “extraordinary influence” of Beirut’s bank boardrooms over monetary, fiscal and political affairs.

Now, the relationship between the BdL, local banks and the finance

If businesses want to do right by the community, start with solar panels It is nice to read that the US Business Roundtable is concerned about the environment and its effect on climate change. There are profitable ways to address this issue.

According to the US Energy Information Administration, businesses are major users of electricity. The commercial sector accounts for about 35 per cent of our nation’s total electrical usage while the industrial sector consumes a little over 24 per cent. My suggestion is that if businesses want to do what is right for their communities, then they should begin putting solar panels on their roofs. Solar panels pay for themselves after seven to 15 years and can last for more than 25 years.

Conservatively speaking, companies could probably expect to have at least 10 years’ worth of free electricity.

That’s a good deal.

Some companies though, may not be able to provide for all of their electrical needs with renewable energy. They may be located in a high-rise building or a shopping mall. In that case, a mechanism could be set up where those companies donate 60 per cent of their electric bill into a fund for lowincome property owners to install solar panels on their homes. This will do much to reduce greenhouse emissions from the residential sector.

On an optimistic note, we do not have to eliminate all carbon dioxide emissions. Prior to 1950, existing plant life was enough to remove any manmade carbon dioxide from the atmosphere with photosynthesis. If we can get back to that point, we will still be able to use some fossil fuels for our transportation needs, but in order to do that, we must reduce substantially the amount of fossil fuels we use to generate electricity. Businesses can make that happen by switching over to solar power.

If the Business Roundtable wants to make a difference in stakeholders’ lives, its members should invest more in renewable energy. The return for society will be greater than any money paid out for buybacks.

Walter Weis Forest Hills, NY, US

German universities are having a research impact Frederick Studemann muses on whether German universities might move up the rankings following recent changes there (“German universities are back in vogue for foreign students”, Notebook, August). This may be happening already. For example, no German university appears in the top 50 economics departments in the world using the overall QS rankings.

However, when just research impact is used, the picture changes dramatically, with three German universities, Bonn, Mannheim and Munich, in the top 50, all above Cambridge and Oxford on this ranking.

The other part of the QS ranking is based on international reputation with academics and employers, a much more subjective measure and subject probably to long time lags, given the difficulty of building up brand/reputation.

John O’Hagan Emeritus Professor of Economics, Trinity College Dublin, Ireland

ministry, which kept Lebanon financially stable in defiance of economic gravity, looks to be on the rocks. Banks have all but stopped subscribing to the finance ministry’s debt auctions, whose notes yield much less than do deposits at BdL. Local media reports say the government is delaying paying its bills.

More than half of the commercial banking sectors assets are now stashed in the central bank, which has, in effect, offered them an eyewateringly high interest rate of 14 per cent on dollars. This has raised questions about the availability of cash. A widely-watched measure of money supply was down 9 per cent year on year in June.

Last week, Beirut earned another ratings downgrade to its enormous debt pile, reclassified on Friday to CCC from B- by Fitch, which will raise debt servicing costs. The tiny country, whose entire population is smaller than London’s, already has the world’s third highest debt to gross domestic product ratio, at about 150 per cent.

About half of government revenues went on debt servicing in 2018.

“Any marriage is a complicated relationship, and there is a marriage between the government and the banks,” Nadim Munla, an adviser to Lebanese prime minister Sa’ad Hariri, admitted in May at the Grand Serail, the prime ministerial headquarters, symbolically located parallel to the city’s main street of banks. chloe.cornish@ft.com

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Wednesday 28 August 2019

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FINANCIAL TIMES

Opinion

Are companies right to abandon the shareholder-first mantra?

Retail investors should be able to access private equity funds Hal Scott

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Yes Balancing interests will spur business to be more innovative Sarah Kaplan

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he Business Roundtable, an association of leading US chief executives, last week announced plans to repudiate a singular focus on the interests of shareholders and instead pledged to “deliver value” to all stakeholders. This is a big step for a group that had previously argued that stockholders were “paramount” and the “interests of stakeholders are relevant as a derivative of the duty to stockholders”.

And, it is a necessary one.

In one day this month, Greenland lost 11bn tons of ice. In one week, the US experienced four mass shootings. In one year, the world sends 21bn tons of textile waste to landfills. In one decade, OECD countries have made almost no progress on the gender wage gap. Corporations are implicated in all these problems, and so must be part of the solution.

The Business Roundtable’s about-face takes guts. At the same time, these chief executives are facing a new reality as stakeholders make their voices heard in new ways. “Clicktivists” are creating social media storms about company mis-steps; consumers are shopping with their values; and millennial workers are walking away from jobs at companies that don’t behave responsibly.

Even shareholders want more than financial performance. BlackRock chief Larry Fink’s recent letter to the heads of the companies in which his group invests makes this clear by demanding that companies have purpose as well as profits. Research also shows that the

investor base of more socially responsible companies shifts over time towards longer-term investors who don’t worry as much about boosting quarterly returns. Sovereign wealth funds and large pension funds are increasingly divesting from companies that do not meet social standards. Some $30tn (more than one-third) of global investable assets — are now managed by socially responsible vehicles.

Considering the interests of all of the stakeholders that surround them will force company executives to manage multiple goals and look beyond the single-minded focus of the financial bottom line. Done badly, this could divert attention and lead to suboptimal outcomes on all goals. But the work of psychologists and moral philosophers suggests that humans are capable of accommodating multiple values at the same time. Given what we know about the way cognitive biases can distort decision-making, having multiple objectives might actually help.

The Business Roundtable’s announcement is a strong indicator of its political will to address the conflicting interests of various stakeholders. But ensuring that this is not mere window-dressing will take skill. There are no easy solutions that have not been implemented already. To start, managers must become better at identifying the tradeoffs in their business models. Then they should treat them as opportunities for innovation and rethinking the way they do business.

In the past, corporate social responsibility was often focused solely on making the business case to shareholders for investing a broader range of stakeholders. But this approach risks making only incremental changes, because the need to produce profits still dominates.

Instead, we need to think of stake-

This is an opportunity for real change. There are no easy solutions that have not already been implemented

holder trade-offs as innovation challenges. Let’s say garment workers are spending dangerous amounts of overtime at their sewing machines. Rather than simply complying with factory safety standards, companies should rethink the way they design products and place orders so that time pressures don’t mount.

If you use toxic glues to assemble your running shoes, then you should invent an assembly process that substitutes 3D stitching for adhesives. In other words, this is not about incremental change. It is about transformation. Thoughtful companies will flourish in this more complex world.

The Business Roundtable announcement is an important first step; now CEOs must follow up with concrete action.

The writer, a professor at the University of Toronto’s Rotman School of Management, is the author of ‘The 360º Corporation’

No Straying too far from focusing on profits would be a serious mistake Geoffrey Owen

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he pronouncement by the Business Roundtable, a group that represents CEOs, that companies should downgrade the interests of shareholders in favour of employees, local communities and society at large reflects a significant shift in thinking.

Not surprisingly, the statement was promptly criticised by the Council of Institutional Investors on the grounds that it “undercuts notions of managerial accountability to shareholders”.

But how has this shift come about?

The business community is understandably concerned by the low esteem in which companies, especially big companies, are now held. This is in part a consequence of the 2008 financial crisis, which provoked justifiable anger at the behaviour of banks. But there is also a wider perception that many of the world’s ills — rising inequality, stagnant or falling wages, and environmental pollution, among others — are due to the activities of profit-maximising corporations, and that these ills can only be corrected by radical changes in the way businesses are run.

There are things that companies can do to improve their image. But in doing so they should be careful not to concede too much. They would do well to take note of remarks made some years ago by David Henderson, the late British economist. His critique of a growing enthusiasm for what was then called corporate social responsibility equally applies to today’s view that companies should focus on “purpose” as well as profits.

In Misguided Virtue, Henderson argued that the case for CSR rested on a mistaken view of how a market economy works. Advocates, he wrote, were wrongly assuming there was a disjunction between profitability and the interests of society.

If we want to measure the contribution that a business makes to the general welfare, there is an obvious solution.

Henderson wrote that we should put a value on the benefits that arise from its operations, and then subtract the associated costs. In his view, “the benefits to people in general are indicated — not precisely measured but clearly indicated — by what they are prepared to pay for what it produces and sells — that is, by the revenues accruing to the business”.

It is not as though society has conferred privileges on businesses in return for which they must do good

The business’s costs, meanwhile, can be defined as the value of what could have been produced if the resources that the business used had been deployed elsewhere. In this view, “profits are the difference between the two flows, revenues minus costs. Hence they are a prima facie measure of the good that a business is doing for people in general”.

When businesses concern themselves directly and predominantly with profits, they are not showing excessive regard for owners as distinct from stakeholders. Nor are they slighting other worthy objectives or allowing greed to govern its actions. Prioritising profits means focusing on the most obvious value to society. The idea that a company’s main contribution to society comes from other aspects of its activities not directly related to profitability derives from a fundamental misunderstanding of what business does.

Of course, this is not the whole story.

There are various reasons why profits may be a dubious or unreliable measure of a company’s contribution to the general welfare: distortions in the tax system, a lack of competition in the relevant market, lax regulation that allows firms to offload some of their costs on to others. There are also situations in which companies should “do the right thing” even though there is no legal obligation to do so and the decision may lead to reduced profits.

Companies should always behave responsibly, and should be seen to do so.

But Henderson’s arguments about profits are a useful corrective to some fashionable ideas about what companies are for.

It would be a serious mistake to assume that the contribution that a business makes directly to the welfare of society is largely independent of its profitability. It is equally wrong to conclude that society has conferred on businesses certain privileges in return for which they must do good works that are not related to profitability.

The writer is head of industrial policy at Policy Exchange

Social mobility is no longer an aspiration on the left INEQUALITY

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mid the UK’s annual fret over exam results, this summer has seen an increase in fears that the nation’s education system condemns a “forgotten third” to failure — roughly the proportion of 15 to 16year-olds who fail to gain a standard pass in GCSE English and maths.

The argument pits headteachers concerned about a long tail of demoralised young people, with no clear path into subsequent education or training, against ministers who pushed through reforms designed to ensure “rigour” — their buzzword. Proper assessment, the latter camp insists, will always rank people by their achievements. But the face-off is part of a broader political

fight about aspiration and meritocracy in the UK — not least because exam results tend to map so depressingly on to patterns of economic deprivation.

In June, the opposition Labour party signalled it would drop social mobility as a policy goal. Party leader Jeremy Corbyn noted the degree of consensus in recent years across all parties for building a system to “allow talented and hard-working people to succeed whatever their background”. This, he said, had “failed, even on its own terms”, and Labour would instead aim for social justice. John McDonnell, shadow chancellor, was more outspoken: “Behind the concept of social mobility is the belief that poverty is OK as long as some people are given the opportunity to climb out of it, leaving the others behind.”

Only a few people reacted to this remarkable swivel, calling it “anti-aspiration”. They included Justine Greening, the comprehensive-educated Conservative former education secretary from Rotherham whose background makes her an outlier in her party’s upper echelons. She found the Labour move

“perverse”, pointing out: “We’ve got a very long way to go on equality of opportunity.”

The backlash against the concept of social mobility is telling, though. It stems partly from the left’s dislike of politicians who have been in government for a generation — and, yes, there is a clear continuum from New Labour’s

In Labour’s analysis, the concept is underpinned by an individualism that must be rejected education policies, through the coalition years, to now. In the CorbynMcDonnell analysis, that was underpinned by an individualism that must be rejected along with neoliberal economics.

But switching the focus of Labour’s policy and rhetoric to tackling broad patterns of inequality also chimes with a transformation in Britain’s political con-

versation since the Brexit referendum — the plight of “left-behind” areas, where prospects are poor, has become central.

A broad anxiety hangs over the whole political scene; that the UK’s internal migration, where jobs and universities pull young people towards the prosperous cities, further weakens struggling communities. So an agenda that encourages the talented or ambitious to aspire — to a degree or an apprenticeship at a blue-chip employer, for example — has fallen out of favour. As Rachel Reeves, an economist and Labour MP for Leeds, observed at a Financial Times debate: “It’s not just about getting people out of those towns.”

The 2016 vote was divided most starkly along educational lines, which in many cases mirror geographical chasms in terms of opportunity. In parts of London that voted Remain, 70 per cent of school places offer an education that makes a significant positive difference to results. In the north-east of England, where the Leave vote was overwhelming, there are virtually no such highperforming schools. There should be an

outcry about these opportunity deserts.

But Duncan Exley, author of The End of Aspiration?, is exasperated at the conflict between those who prioritise community or class and those who want to liberate talent and potential. He points out that the things you need to do are the same on both sides. There is a baseline of economic security without which very few will be able to rise — a stronger safety net would serve both the collective and the individual, as would a strategy to boost neglected areas, making it unnecessary to “leave to achieve”.

He is also in favour of the talent schemes Labour disavows because they tackle class segregation and change the mix of the elite, who set the policies. His case studies of social mobility show “posh friends raise your aspirations”, disrupting the idea of a “pre-ordained” station in life. But the desire to have prospects should be recognised as universal. As with other strands of the UK’s political debate, polarising arguments are far from helpful. miranda.green@ft.com

espite all the attention that is paid to the ups and downs of the big stock indices, private markets are where much of the action is.

Last year, companies in the US received twice as much investment — $2.9tn — from private sources than they raised in the public equity and debt markets, and academic studies have found that the average private equity and venture capital fund has significantly outperformed the S&P 500 in recent decades.

That creates a potential problem for ordinary Americans who want to save for retirement, home purchases and higher education. Today, more than 98 per cent of US households are prohibited from investing in private equity and venture capital funds, and their 401(k) retirement plans cannot invest in these funds either.

Meanwhile high-net-worth individuals with more than $5m in assets, and institutional investors, including university endowments and sovereign wealth funds, are reaping the benefits of these booming private markets.

The rules are designed to protect retail investors from being burnt by risky strategies, charged unexpectedly high fees or locked into investments that they cannot sell. But studies suggest that such restrictions are misguided. A 2017 study by Voya Financial found that private equity investing reduces the risk of an investment portfolio through diversification.

Securities and Exchange Commission chairman Jay Clayton is considering eas-

Retirement savers are missing out because they cannot gain from these booming markets ing these restrictions. This summer, the SEC put out a report exploring ways to expand safely retail investor and retiree access to private equity and venture capital. The comment period on the proposal expires next month.

The Committee on Capital Markets Regulation, which I chair, believes we have the answer. The SEC should allow retail investors to put money into public closed-end funds that primarily invest in private equity or venture capital funds — so-called funds of funds. These funds and their advisers are registered with the SEC and generally listed on exchanges, which makes it easier for investors to sell their shares.

Such public closed-end funds are also subject to mandatory disclosure requirements about the private funds that they invest in and the fees charged by those funds. This addresses concerns about the transparency of private equity investing. Furthermore, the managers who run the closed-end funds are sophisticated investors who have a legal duty to select funds that are good for retail investors. Together, these protections will insure that retail investors are not left to fend for themselves.

We believe retirement savers are also missing out because they cannot invest in private markets. Defined-benefit pension plans offered by government employers are presently able to invest in private equity, but company-provided 401(k) defined contribution plans generally do not. Based on a recent Boston College analysis, we calculate that an investment in defined benefit plans would have outperformed one in the 401(k) plans that avoid private equity by 29 per cent over a 30-year period.

Allowing retail investors to invest in funds of private equity funds would solve the problem for people who save through individual retirement accounts. But there is another barrier for those who use company-provided 401(k) plans. Most of these plans avoid investing in private equity because they fear lawsuits claiming the funds are too risky or the fees are excessive. The Department of Labor, which regulates such plans, should make it much harder to bring meritless claims.

The SEC’s consultation is a good first step. It is time to give middle-class Americans the same investment opportunities as institutions and the wealthiest 2 per cent.

The writer is professor emeritus at Harvard Law School. John Gulliver, executive director of the Committee on Capital Markets Regulation, also contributed

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FINANCIAL TIMES

Wednesday 28 August 2019

Costco/China: flat contradictions

The no-frills approach of the US cash-and-carry business means lower operating margins than rivals but makes it popular with customers on budgets. Its shares have outperformed since the start of the year. China is the next part of Cosco’s plan, but few retailers are able to succeed abroad.

Twitter: @FTLex

Costco has performed strongly ...

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regulatory risk and lower growth potential have depressed Altria’s valuation, they have also created a buying opportunity. For Philip Morris, rewards and risks are stacked more evenly than they are for smokers.

Philip Morris/Altria: smokin’ Smokers bond by huddling together against the cold and discussing how to quit. It is the same with tobacco companies such as Philip Morris International and Altria, corporate pariahs in a health-conscious world.

Yesterday, the groups said that they were in talks to create a tobacco giant with a market value of more than $210bn. The merger proposal has merits for both sides.

The case for reunification — little more than 10 years after the two companies separated — lies in the push for tobacco alternatives. Pooling resources to develop and market new products make sense.

Philip Morris is known for its heatnot-burn product Iqos. These cigarettelike devices produce fewer harmful chemicals than cigarette smoke. They have sold well in some markets, such as Japan. Meanwhile, Marlboro cigarette maker Altria owns a 35 per cent stake in vaping start-up Juul, bought for $12.8bn in December. In June it also acquired a majority stake in a Swiss maker of nicotine pouches. By joining forces, the combined company could benefit from marketing the full range of products globally.

Altria spun off its international wing, bearing the name Philip Morris, more than a decade ago, partly as a response to shares trading at a discount to the sum of the company’s parts. That gambit was a damp squib. The two companies have a market value of nearly $220bn, more than a third higher than at the announcement of the split back in 2007. But that is less than the combined growth in operating earnings over the same period.

Even so, recombining carries risks to Philip Morris’s valuation, which might explain why its share price fell yesterday. Since the 2008 split, it has outperformed, benefiting from its international growth potential. The valuation gap may also have been widened by Altria's purchase of Juul, whose popularity with young people heightens regulatory risks.

At the end of 2016 the two traded at a similar price to forward earnings multiple of about 14 times. By the middle of this month, before rumours of a merger, Philip Morris traded at a multiple half again as high. While

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Every so often, America wins foreign hearts and minds with a slick consumer proposition. One thinks of Russia’s first McDonald’s and Selfridges, the UK’s first US-style big store. Should Costco Shanghai join the roll of honour? The first Chinese outlet of the discount retailer is no glitzier than stores back home. Huge crowds still forced the shop to shut early.

Mass-retailing models generally travel no better than fresh vegetables. Walmart and Best Buy failed to revolutionise UK shopping.

Tesco’s Fresh & Easy flopped in the US. Why should Costco Wholesale do any better in China? Price is the reason Costco could thrive.

Consumerism is unchained in

China. But average wages remain modest. Costco has low group gross margins — the difference between the cost of goods and selling prices — of 13 per cent. That compares with US supermarket chain Kroger at 22 per cent and general retailer Target at 29 per cent, according to S&P CIQ. Costco stores in the US are bright, cheerless barns, where newbies risk a skittling from trolleys laden with heavy bulk purchases. These merit big discounts, encouraging 90 per cent of subscribers of the members-only retailer to renew yearly.

Inhabitants of nominally Communist countriesareinured to austerity. Costco may fail other tests. First, where would the typical Chinese shopper stash all that stuff? In the US, Costco sells some

toilet rolls in packs of 30. No problem in an average US dwelling of over 2,000 sq ft. It is trickier in a Chinese apartment less than a third that size.

The second problem is the Chinese mostly shop locally and often. Huge destination stores are poorly adapted to this preference. Japanese “combinis� — convenience stores such as FamilyMart — look better positioned.

JPMorgan has prophesied that Costco can double its store base through global expansion. This is optimistic, despite exuberant scenes in Shanghai.

The chain has little presence outside North America. Only one thing is overpriced at Costco — shares trading at 33 times forward earnings.

partner, he has unlimited liability. That is bad for Lagardère and bad for the reputation of the Paris bourse.

companies engaged in gene-editing research, insists DNA must not be altered in a way that passes genetic changes on. That channels a nearuniversal consensus about safety and ethics — reflected in an outcry after a Chinese scientist claimed to have genetically edited two babies. The industry also argued against extra “arbitrary� oversight. That might hurt patients by delaying research, it said.

That argument could be validated by progress from 31 gene-editing clinical trials that are under way. In July, Crispr Therapeutics hinted the approach might be working for beta thalassaemia, or blood disorders. Its Nasdaqlisted shares have more than tripled since their IPO. Editas is also breaking new ground. This month, the US group said it was on the cusp of making

history. It hopes to launch the first treatment dependent on genome editing inside the patient’s body. Its shares are up 50 per cent since its IPO. The evil corporation in Rampage avoided pesky red tape by undertaking research in space. But even if rogue operators try to sidestep rules, nations should agree what practices are unacceptable. That might not be easy. In the related area of genetically modified crops, Europe and North America took different approaches 20 years ago.

Tighter regulation is inevitable. The only question is what form it will take.

The biotech industry has good, selfinterested reasons for steering the debate away from restrictions. It cannot rely on Dwayne “the Rock�

Johnson to sort everything out, as the actor did in Rampage.

Gene editing: even Crispr “Are you familiar with genetic editing?� asks the scientist. Shortly afterwards, havoc is unleashed by an albino gorilla created with Crispr technology. The scriptwriters of the 2018 film Rampage are not alone in thinking gene editing could be the stuff of nightmares. The public is worried. The industry has set out its first collective response to some of those fears. It is right to step in. A backlash could choke off life-saving advances. The declaration, signed by 13

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Emmanuel Macron has had some burning issues to deal with. From the gilets jaunes movement at home to championing the Brazilian rainforest.

Another smouldering issue for the French leader is ramshackle governance of listed companies, such as Lagardère, the media group. If Mr Macron wants to lure London’s financiers away after Brexit, he should start by curtailing the clubby relations of the French corporate elite.

The laxity of standards is apparent at Lagardère, where Arnaud Lagardère, the chief executive, has used his shareholding as a piggy bank. A private holding company Lagardère Capital & Management, controlled by him, has borrowed more than ₏200m against Lagardère shares, which have performed poorly since he took over from father Jean-Luc in 2003, trailing the broad French market (including dividends) by 187 percentage points.

France offers dubious examples of governance such as Groupe Casino, which has dumped assets to pay debts.

Most CEOs would have left — not Mr Lagardère. His company has a partnership-like structure uncommon in France. He has extraordinary control despite owning just 7 per cent of the outstanding shares. General partners cannot be easily removed by other shareholders.

It may help to have a chairman of the supervisory board, such as Lagardère has with Xavier de Sarrau. He has been in the role for more than nine years. He collects a salary of nearly â‚Ź100,000, and has received an extra â‚Ź240,000 for services “above and beyond his remitâ€? since 2010. Activist investors raising the alarm get little support from the government. Finance minister Bruno Le Maire wants their efforts halted.

Mr Lagardère may ignore the heat for a while longer. But his holding company has pledged its 7 per cent shareholding against the debts. A clear conflict of interest exists and as general

1000

30

Costco

Lagardère: no, no Arnaud

1010

LOW

Operating margin

Gross margin

180

ACROSS 9 It’s exasperating getting hold of operator when flying (9) 10 Officer to harm little woman in custody (5) 11 Pacify ace German mathematician returning to base (7) 12 Bush to stop Arab travelling west (7) 13 Cat starts to torment old Macavity (3) 14 Body knight buried in old northeast French citadel (11) 17 Tobias returned, missing one shoe (5) 18 Blimey, hotel runs out of clarified butter (3) 19 Criticise Sunday lunch? (5) 21 Cue Aggers – I’m broadcasting score from the West Indies (6,5) 23 Mike left a fortune for another bloke (3) 25 Besiege Kray following rumour of jealousy (7) 27 Agent Gerald stripped of military rank (7) 28 Standard American opera (5) 29 Commercial vehicle time after time making a profit (9) DOWN 1 Horrified – part of Reichstag has termites! (6) 2 Ad hoc social media group: “keep it quiet; Farah’s putting on weight�

(5,3) 3 Vacations at sea taking in Ontario’s premier island (4,6) 4 Constant sport, to put the icing on the cake! (4)

5 Whisks off Best, 21, missing the second part (10) 6 Germany and Spain failing to respect Arab ruler (4) 7 Amateur Jack Rooney announced as a seed (6) 8 Mail intended reporting weapons (8) 15 Kray, with terrible ailment relating to military manouevres (10) 16 Featured in Australian commonly, Syd Cohen’s regularly taken poison (10) 17 Copper despatched to seize criminal gear (8) 20 Aero Bar melted, left in sylvan setting (8) 22 Direct navy to support Tory minister (6) 24 Explosive device found in Kabul letterbomb (6) 26 Allegedly pulled a blade in the street (4) 27 Donated 26 grand upfront (4) Solution 16,256 ( 1 ) $ & 2 7 5 , 1 6 ( 5 $ ( ' 5 8 0 0 1 , 7 ( 1 2 1 ( , % ( 5 , 1 ( $ 5 $ 1 & + $ 2 % $ 0 % 8 / 2 ( 5 $ 6 % ( 6

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Carpetright/Meditor: floor exercise Hedge fund manager Talal Shakerchi is a successful poker player. His investment in struggling retailer Carpetright is one of his riskier wagers.

The UK floor-covering retailer, once an entrepreneurial success story, has fallen on hard times.

Mr Shakerchi’s vehicle Meditor yesterday did a deal that left it with the bulk of Carpetright’s secured lending.

The retailer’s survival is now more likely. Minority shareholders still have reason to be nervous.

Lossmaking Carpetright’s problems encapsulate the story of UK high streets. Before the 2008 financial crisis, it was worth almost £900m, compared with less than £50m today. Last year, a rights issue, which raised £60m from existing shareholders, was needed.

In addition to the debt, Meditor owns a third of Carpetright’s shares and it has lent the company £17.25m in unsecured funds. Interest rates of 18 per cent a year compounding monthly and £2.3m in arrangement fees showed how desperately it needed the cash.

A large, expensive property portfolio has been a bigger problem than online competitors. Bricks and mortar rivalry has added to its woes, however.

Founder Lord Harris of Peckham left in 2014. That did not stop a land grab by his son Martin. His company, Tapi, has opened 100 stores. It has a 4 per cent market share. Carpetright’s share has fallen to 18 per cent, from 20 per cent a year ago. Shoppers have benefited, and Mr Shakerchi was able to buy the debt more cheaply. They are the only winners from this fight so far.

Tapi’s latest accounts show an £11m operating loss, just under half that of Carpetright in the latest full year.

Meditor’s next step will be to renegotiate Carpetright’s lending agreements. Whether that benefits or hurts shareholders lies largely in Mr Shakerchi’s hands.

Store closures and steps to reduce rents will help stem outflows. Minority shareholders, however, are now little more than onlookers in a game whose odds they no longer fancy.

Lex on the web For notes on today’s breaking stories go to www.ft.com/lex

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11

From the ashes Stock prices soar as investors flock back to Greece — MARKETS, PAGE 19

Turning hostile Japan starts to embrace shareholder activism — KANA INAGAKI, PAGE 12

Deutsche revamps treasury unit 3 German bank fights negative interest rates 3 Excess cash to be put into longer-dated assets STEPHEN MORRIS — LONDON

Deutsche Bank is overhauling its treasury function to put its excess cash reserves to work as European lenders become squeezed by negative interest rates.

Germany’s biggest bank has combined all its treasury markets and investment operations, which raise funds and manage the bank’s cash and liquidity reserves, into a single team. François Jourdain, formerly of Barclays and the Bank of England, will run the unit.

Deutsche has €246bn in liquidity reserves — defined as cash and cash-like instruments such as sovereign bonds —

and has identified a surplus of about €30bn it can use to retire expensive liabilities and invest in higher-returning assets, treasurer Dixit Joshi told the Financial Times in an interview.

“What we are seeking to do is to offset the drag of parking cash at the central bank in a negative rate environment, for example by buying a bond that pays more than cash,” he said.

Additionally, the bank will start investing some of the surplus cash in longer-dated assets that could earn even more, between 100 and 120 basis points more than it currently earns.

“That might be a highly collateralised loan, an asset-backed security as an

example,” said Mr Joshi. “We are starting to do what we should be: optimising liquidity, whilst managing resources safely and soundly.”

Across the eurozone, banks’ earnings have been suffering from negative interest rates because it reduces the amount of interest they can charge to lend.

Deutsche estimates that repositioning its liquidity reserves to a more equal balance of cash and securities should add €300m a year to its revenues.

Last month Deutsche revealed a dramatic overhaul of its business model to reduce its reliance on investment banking, under which it will cut 18,000 jobs, exit equity trading and set up a €288bn

‘We are seeking to offset the drag of parking cash at the central bank’ Dixit Joshi

bad bank. Executives have made reducing its high funding costs and improving its credit rating their top priorities, in order to improve lending margins.

It will be more difficult for Deutsche to increase revenues if the European Central Bank cuts interest rates further into negative territory next month, as is widely expected. The current deposit rate is minus 0.4 per cent cent, meaning it costs banks to place cash with the ECB. Mr Jourdain, the man charged with running the enlarged unit, was previously chief compliance officer for Barclays’ international unit and also head of the British lender’s treasury funding and investment operation.

Costco clamour First store in China forced to close early Costco, the US big-box retail chain, was forced to close early on its first day of operations in China yesterday because of overcrowding by bargain-hunters.

Despite a trade war between Beijing and Washington, thousands of shoppers thronged the aisles of its maiden store in Shanghai as the US chain became the latest overseas retailer to try its luck in China’s fast-growing consumer market.

Traffic within 1km of the outlet was brought to a near-standstill as queues formed. The store suspended operations in the afternoon after officials warned over the traffic congestion.

The Costco opening comes almost three months after German chain Aldi opened its first stores in China, setting up a battle for customers in a fragmented market in which foreign operators have traditionally struggled.

France’s Carrefour sold a majority stake in its China operations to local retailer Suning for $700m in June, following in the footsteps of Britain’s Tesco and Spain’s Dia, which have also sold out of China. Germany’s Metro is in the process of selling its China unit, while Walmart is growing but has struggled to gain more than a single-digit share.

Tom Hancock and Wang Xueqiao Lex page 10

People struggle to buy roast chicken yesterday at Shanghai’s newly opened Costco , the US retailer’s first outlet in China — Hector Retamal/AFP/Getty

Dean & DeLuca owner cooks up debt issue to pay suppliers and revive brand JOHN REED — BANGKOK

Logistics app aims to ease freight trade across Africa A Nigerian start-up that uses an Uber model to link companies to truckers looks set to revolutionise the logistics systems that are key to the success of a landmark pan-African free trade pact. Kobo aims to bring an app-based system to a sector mired in paperwork.

Analysis i PAGE 12

The Thai owner of the gourmet grocery and café brand Dean & DeLuca plans to issue $60m of long-term debt in a bid to revive the US fortunes of a chain that was a pioneer in selling pricey curated cheeses, olive oils and cakes.

Sorapoj Techakraisri, chief executive of parent company Pace Development, told the Financial Times it had no plans to sell Dean & DeLuca, which it acquired in 2014 but has since been laid low by high costs and online competition.

He said that Pace would use proceeds from the sale of the debentures to pay back some of the money owed to banks, artisanal patissiers and other suppliers left with unpaid bills because of a

cash crunch at the Bangkok-based property group.

“The first priority in the US is to bring in new money to pay off those creditors that we owe money to and then slowly start rebuilding the brand,” Mr Sorapoj said ahead of a trip to the US. The company has closed most of its stores in the US and faces lawsuits from angry suppliers. Its mounting losses mark a rare high-profile failure of an overseas acquisition for Thailand, whose Sino-Thai family conglomerates are big investors abroad but typically attract little publicity. Pace reported a second-quarter net loss of Bt726m ($24m).

“Our plan now is to raise money at the Pace level, and also to continue with two

real estate projects that we have,” Mr Sorapoj said, adding that because of its losses in the US, Pace had frozen work on nearly completed high-rise condominium developments in Bangkok and Hua Hin. “More money will come out at completion, and hopefully by then the US is more stable, and we can start thinking about growing again,” Mr Sorapoj said.

When Pace bought the food emporium brand in 2014 for $140m from US financial investors, Mr Sorapoj spoke of expanding it to hundreds of stores in Asia and elsewhere in a café/ restaurant format.

When asked what went wrong, a weary looking Mr Sorapoj said the story was “pretty complicated, and not fun”.

Companies / Sectors / People Companies

DFS Group...................................................13 Dangote Sugar..........................................12 Dean & DeLuca.........................................11 Descente.......................................................12 Deutsche Bank...........................................11 Dometic........................................................20 Ducati.............................................................14 easyJet.............................................................7 Editas.............................................................10 Elliott Management................................12 Endo International..................................13 Enel.................................................................20 Ethiopian Airlines....................................14 Facebook........................................................2 Ferguson......................................................20 Fermaca.........................................................12 Fortress.........................................................12 Frontline,......................................................14 Gebr Heinemann......................................13 Google..............................................................2 Groupe Casino..........................................10 HDFC Asset Management................20 HDFC Life...................................................20 HIS....................................................................12 Honeywell Flour Mills...........................12 Huawei.........................................................3,4 IAG......................................................................7

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© The Financial Times Limited 2019

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SE v GR k. D B A com Y " M W : t /w h .m sn at e/ w 's N w s ew ha s" ts nw s

African Industries....................................12 Aldi....................................................................11 AltAir Fuels...................................................7 Altria................................................1,10,13,20 Amazon............................................................1 Askul................................................................12 Audi.................................................................14 Autonomy Capital...................................19 Avia Capital Services............................14 BMW................................................................14 Bain Capital.................................................12 Bank of America.....................................20 Barclays..........................................................11 Best Buy.......................................................10 BlackRock.......................................................9 Blackstone..................................................20 Boeing........................................................7,14 ........................................................

British Airways............................................7 ............................................

British American Tobacco Tobacco.............1,20 Bugatti...........................................................14 ...........................................................14 ...........................................................

14 Camsing International.........................

International.........................20 International .........................

Carpetright..................................................10 ..................................................

Carso Energy Energy..............................................12 ..............................................

China Merchants Bank........................

Bank........................20 Bank ........................

Costco.......................................................10,11 Costco.......................................................

Costco .......................................................

Crispr Therapeutics Therapeutics...............................10

Iberia.................................................................7 JD.com...........................................................20 JM Smucker...............................................20 JPMorgan....................................................20 Johnson & Johnson.........................13,20 Just Eat........................................................20 Juul..................................................................10 KKR..................................................................12 KLM...................................................................7 Kobo360........................................................12 Kroger............................................................10 Lagardère....................................................10 Lion Air.........................................................14 Lori...................................................................12 Lotte................................................................13 MAN................................................................14 McKesson.....................................................13 Meditor..........................................................10 Mercedes......................................................14 Microsoft.........................................................1 Noah Holdings.........................................20 Pace Development..................................11 Papa John’s................................................20 Philip Morris................................1,10,13,20 Porsche..........................................................14 Rockwool.....................................................20 Rolls-Royce....................................................7

Rostec............................................................14 Ryanair.............................................................7 Scania.............................................................14 Sempra Energy.........................................12 Shilla................................................................13 SoftBank........................................................12 Standard Life Aberdeen....................20 Suning.com.................................................20 Symphony Financial Partners..........12 TC Energy....................................................12 TPG.................................................................20 Taco Bell......................................................20 Takeaway.com..........................................20 Tapi.................................................................10 Target............................................................10 TechnipFMC..............................................20 Tesco..............................................................10 Teva.................................................................13 Third Point..................................................12 Trafigura.......................................................14 Trian...............................................................20 Uber.................................................................12 Unilever.........................................................12 United Airlines.........................................7,7 Unizo Holdings.........................................12 Volkswagen ...............................................14 Walmart.........................................................10

Wizz Air...........................................................7 Yahoo Japan...............................................12

Sectors Aerospace & Defence.......................7,14 Airlines.............................................................7 Automobiles...............................................14 Banks...............................................................11 Energy............................................................12 Financials................................................12,19 Food & Beverage...................................20 Healthcare...................................................10 Industrial Goods......................................20 Industrials...................................................20 Insurance.....................................................20 Media..............................................................10 Oil & Gas..........................................12,14,20 Personal & Household Goods........20 Pharmaceuticals.................................13,20 Retail..............................................10,11,13,20 Support Services....................................20 Technology.........................................1,10,12 Tobacco.........................................1,10,13,20 Transport................................................12,14 Travel & Leisure.................................11,12

People Baran, David...............................................12

Bezos, Jeff......................................................1 Brennan, Ed................................................13 Dieter Pötsch, Hans..............................14 Fink, Larry.....................................................9 Fredriksen, John......................................14 Gibbins, Robert...................................19,19 Harris, Martin............................................10 Harris, Philip..............................................10 Hasenstab, Michael................................19 Hvide Macleod, Robert........................14 Joshi, Dixit....................................................11 Jourdain, François....................................11 Lagardère, Arnaud.................................10 Lundgren, Johan........................................7 Lutz, Bob......................................................14 Lynch, Rob.................................................20 Meng, Wanzhou......................................3,4 Muilenburg, Dennis................................14 Ozor, Obi.......................................................12 Piëch, Ferdinand......................................14 Sarrau, Xavier de....................................10 Shakerchi, Talal........................................10 Son, Masayoshi.........................................12 Techakraisri, Sorapoj.............................11 Varadi, Joszef..............................................7 Walsh, Willie..................................................7 Winterkorn, Martin.................................14

Week 35

Tail Risk Laurence Fletcher August has proved to be anything but a summer lull for financial markets. Stocks have bounced up and down at the mercy of news on the health of the global economy or, judging by President Donald Trump’s comments this week, a possible truce in the US-China trade war.

Yields on German Bunds and other major government bonds have been moving steadily lower, as prices rise. That has burnished their credentials not just as a safe haven in uncertain times but also as a way of making money for investors who have bought and held them.

There are, of course, good reasons for Bund yields to be so low, such as the shortage of supply from a country rapidly shrinking its debt-to-GDP ratio and the vast quantities of bonds that have already been bought by the European Central Bank. There is also the belief that Europe is heading for an apparently permanent state of low rates and low inflation, like Japan. But investors should be wary of the sheer weight of expectation of further central bank stimulus already priced into Bunds and across the eurozone.

Those hopes have hardly been damped by the ECB When Italian itself. From president Mario Draghi’s dovish speech in 10-years are at Portugal in June to com1.3%, German ments by governing council member Olli Rehn this yields at minus month that stimulus could 0.7% do not seem exceed expectations, it is hard to believe that anything quite so pricey but a big stimulus package is now baked into eurozone yields. But that leaves plenty of room for disappointment at the ECB’s September meeting.

Policymakers are, after all, aware of the damage that such a flattened yield curve is doing to commercial banks, which borrow short and lend long. Increasing demand for longer-dated government bonds — which, in Germany’s case, are already scarce — through further quantitative easing would only worsen that problem.

“I just don’t see them [the ECB] doing QE in sovereigns,” said Anna Raytcheva, chief investment officer at hedge fund Sonya Capital Management, citing the lack of compensation that investors are receiving for holding longerterm bonds. The shape of the curve is “impairing the banks’ ability to lend and make money, and puts a lid on growth”, she said.

Ultra-low yields on Bunds have also appeared justified by those on offer elsewhere. When Italian 10-years are at 1.3 per cent, with all Rome’s political dysfunction, German yields at minus 0.7 per cent do not seem quite so expensive.

But that could change. “Bund yields are the wrong price,” said Christopher Mahon, director of asset allocation research at Barings. Shorting Bunds has been a painful trade for years and remains risky; however expensive they get, there has been usually been someone ready to buy them at a higher price. But owning them looks more and more unappealing. laurence.fletcher@ft.com

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FINANCIAL TIMES

Wednesday 28 August 2019

COMPANIES INSIDE BUSINESS

Financials

Oil fund urged to cut Europe exposure Central bank advises Norway’s $1bn sovereign investor to switch into US RICHARD MILNE — OSLO

The world’s largest sovereign wealth fund should slash its investments in Europe and increase them sharply in North America, according to a recommendation from its managers.

Norway’s central bank, which handles management of the of $1tn oil fund, said that the investor should move away from its position of being overweight in European equities and underweight in US shares relative to global stock indices and more towards the norm, without naming a specific target.

The fund, which is one of the world’s largest equity investors, on average owns the equivalent of 1.5 per cent of every listed company globally. Europe represents 34 per cent of its equity benchmark against 40 per cent for North America.

The fund, which is watched closely by other shareholders, recommended moving towards a market weight adjusted for the amount of shares available to be bought, known as the free float, which currently gives Europe a share of 19 per cent and North America 57 per cent.

“We are of the opinion, however, that the geographical distribution should be adjusted further towards float-adjusted market weights by increasing the weight of equities in North America and reduc-

ing the weight of equities in European developed markets. The gap to market weights will then be smaller than today,” the bank said.

The Scandinavian country’s government will decide whether to follow the central bank’s advice and is likely to announce its response in the spring, when it publishes an annual white paper on the fund, which is then voted on by parliament.

Norway last changed the regional allocation of the fund in 2012 when it cut back on European equities at the height of the eurozone government debt crisis.

At the time, European equities accounted for 50 per cent of the total, and North America 35 per cent.

The government defended the higher allocation to Europe before 2012 by

34

% Percentage represented by Europe in fund’s equity benchmark

40

% Percentage represented by North America

insisting that the fund should largely mirror the country’s trade flows. However it abandoned this because it led not just to an underrepresentation of US assets but also of those from emerging markets.

In 2012, however, it decided against moving to full market weights as that would have been “too dramatic” a change in the fund.

Norway’s central bank also considered yesterday whether it should make changes to emerging markets, not least by making its own sub-index for the asset class, but recommended against making alterations.

Emerging markets account for 11 per cent of the fund’s equity benchmark today and under float-adjusted market weights the figure would be 10 per cent.

Technology. Land transport

Uber-style app drives change for African trucks E-logistics start-up sets out to clear obstacles in the way of the continent’s drivers NEIL MUNSHI — TIN CAN ISLAND

Until a year ago, Friday Ighodaro spent three or four nights a month getting pulled out of his 30-tonne Steyr truck on the unlit highways of rural Nigeria by armed robbers. They know that longhaul truckers carry cash advances for provisions along the way, he said.

“Nowadays in Nigeria when you carry money, it’s very dangerous,” he said.

Bandits prowl the roads across the country, “but now when they stop you on the road, when they see the Honeywell sign, they know we don’t carry cash”.

Mr Ighodaro is an owner-operator who hauls grain to every corner of Nigeria for Honeywell Flour Mills and other clients of Kobo360, a 20-monthold start-up which announced this month that it had raised $30m in debt and equity in a funding round led by Goldman Sachs.

The company uses an “Uber for logistics” model to connect drivers and fleet

‘Drivers can now use payment apps on their phones to pay for food or buy discounted fuel’ operators to companies bringing goods into and around Africa’s most populous country, and also Togo, Ghana and Kenya, as it attempts to bring a cashless, app-based paperless system to an industry mired in reams of paperwork and handshake relationships.

Where many drivers might get 30 per cent of their pay upfront in cash from traditional trucking companies — for food and fuel en route — Kobo pays them 70 per cent on starting the trip, directly to their bank account. Drivers can then use apps on their phones to pay for food, or use a Kobo service to buy discounted fuel at petrol stations via their phones.

Its operations became all the more relevant last month on the signing of a continent-wide free trade deal aimed at bolstering intra-African commercial links, which are far less than developed than those elsewhere.

Mr Ighodaro signed up with Kobo a year ago, and has not had to hustle for business in the crowded truck depots of Lagos since. Nor have he and his fellow drivers — Kobo said it has signed up more than 10,000 — had to wait in the notorious, winding line that leads to Lagos’s main ports. Kobo provides its drivers with a lift via barge to its customers inside the port.

“Tin Can [in Lagos’ port] is the hardest place to move goods in the world —

Long haul: Obi Ozor, left, and Ife Oyedele II, co-founders of Kobo360, which aims to drag the haulage industry into the modern age

the hold-up for days, the soldiers extorting money from drivers in line,” said Goni Gombe, whose family fleet of 60 trucks has seen business triple in the year since it signed up with Kobo. “But now we can go in and out.”

Shoddy infrastructure is one of many challenges, along with corruption, poorquality trucks and high fees, that make logistics among the biggest obstacles for businesses trying to make it in Africa’s largest economy and the continent.

Most African countries rank near the bottom of the World Bank’s annual logistics performance index because the system is rife with inefficiencies. Sending a container from China to Lagos is sometimes cheaper than moving one from the Lagos port across the city, said Obiora Madu, head of the Nigeria-based African Centre for Supply Chain.

“If you are shipping coffee from Kenya, you actually have to go to Europe first before it comes to Nigeria [as there are no roads connecting the two countries],” he said. “And by that single act, you have destroyed any cost advantage you were supposed to have had.”

Companies such as Kobo360 and Kenya’s Lori, its main competitor, are trying to revolutionise the logistics systems that will be key to the success of the recently signed African Continental Free Trade Area agreement. The accord

aims to boost growth on a continent with a combined gross domestic product of more than $3tn and a fast-growing population.

“Logistics is at the heart of the [agreement] — that’s the only thing that will make it work, because it’s not like we have rail,” said Obi Ozor, co-founder of Kobo360. Africa’s limited rail system has remained largely unchanged since it was built by colonial powers. “And do I think any of the countries will have full rail in the next 25 years? That’s not possible. [We are] already moving stuff from Nigeria to Ghana, and it’s taking us 16 days to [move 460km].”

In the west, the unstable and demanding nature of work under the gig economy has generated a significant backlash from workers and commentators alike. But in Nigeria, where nearly a quarter of the population is unemployed, platforms that connect freelance workers to jobs can be a lifeline.

“They would be my second god if they [could] give me even more business,” said James Okoruwa, a Kobo driver.

“That’s what we’re praying for.”

Kobo offers truck financing, discounts on diesel, healthcare and school fees assistance, per-trip insurance and upfront payments — for pay cheque to pay cheque truckers used to waiting two or three weeks to get paid.

And it offers customers — like Unilever, Dangote Sugar and steel manufacturer African Industries — the ability to track deliveries in real time. If a truck breaks down — a frequent occurrence on highways with potholes big enough to swallow cars — Kobo said it can dispatch a team to fix it, secure the payload from bandits and move the load to a new truck for delivery.

Kobo plans to use the $20m in equity from Goldman, Y Combinator, the International Finance Corporation and others to push further into Nigeria, expand into 10 countries and launch a blockchain-enabled logistics platform to bring together all its services. The additional $10m in debt it raised from Nigerian banks will be used to offer financing to drivers and fleet operators.

Mr Ozor, 30, had brief stints as a JPMorgan investment banker and as operations manager for Uber in Nigeria before launching Kobo in 2017. He plans to visit China this month to start designing “a truck that works for Africa” to halve the costs for Nigerian hauliers.

“There is no truck driver in Africa who uses AC, so why do we have $11,000 more additional costs for that? We have this digital dashboard — we don’t need that, take that $7,000 out and spend $4,000 on new suspension — that’s what we need in Africa.”

ASIA

Kana Inagaki

Japan Inc wakes up to investor activism in its own backyard

A

spate of hostile takeover battles has raised hope among investors that corporate Japan is finally embracing shareholder activism. But for companies that were spooked by foreign buyout groups, called hagetaka (vulture) funds by the domestic media in the early part of the past decade, recent deals show they face a new opponent: Japanese corporate owners who have turned belligerent in their pursuit of higher returns and growth.

Last week, HIS, the travel agency, abandoned a hostile takeover of Unizo Holdings, the hotel chain operator, following a white knight counter-offer from SoftBank-owned Fortress. A month before, SoftBank-backed Yahoo Japan ousted the chief executive and three independent directors of Askul, saying it was unhappy with the stationery supplier’s performance. In March, Itochu amassed a 40 per cent stake in Descente through a hostile bid, giving the trading house more say in the management of the sportswear group.

The rise in unsolicited offers and proxy fights has coincided with breakthrough private equity deals by the likes of Bain Capital and KKR, which in turn have sparked renewed interest from Third Point, Elliott Management and other activist funds. But it is the emergence of more aggressive domestic acquirers that has convinced longtime investors in Japan such as David Baran, chief executive of Symphony Financial Partners, that the tide has turned. “This is about Japanese corporate owners saying I have to grow my business,” said Mr Baran.

For decades, big Japanese investors have generally sought to protect the companies they invested in — often due to historical business ties — from outside intervention.

Now, as some large Japanese investors turn against businesses they consider poorly managed, companies face a dilemma. They can defend their management strategy and lament a breakdown of trust with shareholders — but it is no longer acceptable to simply criticise a hostile strategy nor can they rely on sympathy from other investors.

Both the corporate governance code for Japanese companies and the stewardship code for institutional investors call for engagement and pursuit of higher investment returns. Domestic shareholder activism is supported ‘This is about

by Shinzo Abe, the prime minister, who has bolstered Japanese owners his governance campaign saying I have with changes in merger and acquisition and tax rules to to grow my facilitate all-stock deals. business’ Still, the way some of these deals have played out shows how unprepared some Japanese companies remain.

Unizo has staved off the hostile approach by HIS but it may have opened itself up to a bidding war in its search for a white knight. Among its top shareholders are Ichigo Asset Management, a value-focused Japan investor, and Elliott Management.

Having exposed itself as a massively undervalued company with a coveted property portfolio, it is unlikely investors will be satisfied with Fortress’s counter offer of ¥4,000 ($38) a share. A UBS calculation, based on unrealised gains and book value, estimates Unizo has a pre-tax net asset value of closer to ¥10,000. If a bidding war erupts, it is unclear if Unizo will end up in friendly hands.

In the case of Yahoo Japan’s overthrow of Askul’s management, the battle could not have been uglier. The dispute stemmed from a clash over the future of Lohaco, their ecommerce joint venture, but it quickly became a governance disaster after Yahoo Japan sought not only the removal of the chief executive but also of three external directors. The campaign was widely seen as an improper exercise of power by a controlling shareholder, reinforcing the view what parent-child listings should be eradicated, since the structure is ripe for abuse of minority shareholders and conflicts of interest.

As a shareholder with a 45 per cent stake, Yahoo Japan has a legitimate right to seek action to fix Askul’s financial performance to increase its value, but its implementation was simply misguided.

Masayoshi Son, SoftBank’s founder, waded in, expressing his disapproval of Yahoo Japan’s conduct. But his comments, and subsequent remarks by other SoftBank executives, were uncalled for. They should have stuck to their argument that the campaign was an independent decision made by Yahoo Japan’s management, instead of a laboured lament about how parent-child listings are not unique to Japan — a point that while true is irrelevant to the debate.

Japanese companies may find it uncomfortable dealing with their newly aggressive domestic investors, but it is a reality that is fortunately here to stay, so they may as well get used to it. kana.inagaki@ft.com

Energy

Mexico paves way for investment after striking deal to settle pipeline dispute JUDE WEBBER — MEXICO CITY

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Mexico’s president Andrés Manuel López Obrador has claimed victory in a dispute over pipeline contracts that he said would result in $4.5bn in savings for the state and pave the way for big private sector investment in a largescale infrastructure plan.

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The deal reached on Monday night resolves a bitter battle over pipeline contracts signed by the state electricity company, CFE, before Mr López Obrador took office last December, which his government claimed were “exorbitant and unfair”. The dispute had threatened

fragile business confidence by raising the prospect that the government would not honour contracts with which it disagreed. While the contracts were in the end renegotiated, Carlos Salazar, head of Mexico’s powerful CCE business lobby, called it a “win-win” for all sides.

Mr López Obrador told his daily news conference that the new contracts — which lower tariffs for transporting gas in pipeline projects with US, Canadian and Mexican companies — were beneficial to all sides, and praised business leaders for their goodwill.

The president had spooked investors before taking office last December by

scrapping a $13bn airport project in which Carlos Slim, Mexico’s richest man, had been a leading investor. But Mr López Obrador singled out the telecoms mogul for particular praise yesterday, saying he had been the first to sign on to the new pipeline terms.

That agreement by Carso Energy “set the tone” for IEnova, a unit of US company Sempra Energy, and Canada’s TC Energy to follow suit, Mr López Obrador said. Fermaca, a Mexican company, was still in negotiations.

Full details of the deal were not immediately available, but Mr López Obrador said the companies had agreed to a

roughly 30 per cent cut in their profits.

The resolution of the dispute, which the CCE had escalated last month by initiating international legal action, paves the way for a key subsea pipeline carrying cheap US gas from southern Texas to Tuxpan, built by TC Energy and IEnova, to start operations “in a week at the most”, the president said.

“I think it’s very positive that today we are in a different place, that there’s a different tone,” said Pablo Zárate, managing director of FTI Consulting and an energy expert. “This was not the only problem for business confidence, but it had become a major one . . . Today we

have a happy ending, but this is a situation the government created.”

The deal comes just days before Mr López Obrador’s first state of the nation speech on September 1, in which he will emphasise how he has delivered on campaign promises, including social programmes and higher minimum wages.

But promises of stronger growth have failed to materialise. Revised gross domestic product data published last week showed zero growth in the second quarter, after a small contraction in the first quarter, pushing Latin America’s second-biggest economy to the brink of

a technical recession as investment remains on hold.

Mr López Obrador has promised to lift Mexico’s stubbornly sluggish historical growth rates to 4 per cent a year during his presidency. “Growth may be zero, that doesn’t matter. The important thing is that there hasn’t been a lot of investment and that it is now imminent, even starting this year,” Mr Slim said, adding there were opportunities in hydrocarbons, road, water, education, health, ports and airport projects.

Mr López Obrador said the government would soon announce a national infrastructure plan, but gave no details.

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COMPANIES

Tobacco groups look to a post-cigarette future Philip Morris and Altria face a challenge in convincing investors of the future merits of proposed $210bn merger ANDREW EDGECLIFFE-JOHNSON AND ALICE HANCOCK

When the world’s largest tobacco company announced in 2007 that it planned to break in two, the rationale was that its US and international operations faced fundamentally different dynamics.

The 2008 split of Altria and Philip Morris International would free a fastergrowing international division to pursue the emerging markets consumers who were trading up from the US operation hobbled by years of litigation and staring at an inexorable decline in the number of smokers.

That the two are exploring a merger little more than a decade later speaks to profound changes in their marketplaces, technologies and attitudes towards their core product.

The biggest of these is what Wells Fargo analyst Bonnie Herzog described as a “global arms race for reduced-risk products”. After decades of fruitless and sometimes halfhearted investments by tobacco companies, two alternative technologies are showing signs of persuading cigarette smokers to switch to something less harmful. Altria and PMI have a substantial interest in both.

PMI has invested $6bn in the past decade — more than any rival — to develop a product that heats tobacco for a cigarette-like experience that exposes smokers to fewer harmful chemicals than burning the leaf does.

Iqos, its third attempt at creating such a product in 20 years, has performed well in Asian markets, converting more than 7m smokers. But its biggest test awaits: Altria had planned to begin testing Iqos in Atlanta next month, with a view to rolling out sales across the US. That arrangement would have seen Altria license the technology from PMI. But under the common ownership the merger talks are aiming for, PMI would have access to the full economic benefits if Iqos takes off among the 40m adult smokers in the US, Ms Herzog noted.

Altria has made its own $13bn bet on an alternative to cigarettes. It took a 35 per cent stake last year in Juul, putting a $38bn valuation on the company that has seized more than 70 per cent of the US ecigarette market on an

PMI/Altria revenue

Altria’s revenue growth

Altria and Philip Morris’s M&A activity

Total revenue ($bn) Altria Philip Morris

Annual growth in revenue by product type (%)

Deals over $100m (deal value, $bn)

30 25

Philip Morris 10

Smokeable Smokeless

8

20

4

5 12

14

16

18

Source: S&P Capital IQ

Juul has taken about 70 per cent of the US ecigarette market — Gabby Jones/Bloomberg

0 2013 14

15

16

17

18

Sources: S&Q Capital IQ, FT calculations

explicit mission to end smoking. The deal gave Altria exposure to the most successful vaping start-up. The appeal for Juul was the prospect of Altria using its marketing and distribution power to promote the Juul brand from Marlboro packets to retailers’ shelves.

Bernstein Research analysts cautioned that non-compete clauses could restrain any plan for PMI to promote Juul internationally, but Robert

Endo International, a pharmaceutical company, fell 9 per cent to $2.65, Teva, the Israeli drugmaker, lost 4.6 per cent to $7.08, and McKesson, a distributor, fell 3 per cent to $142.55 in late-morning trading in New York.

The falls come after an Oklahoma judge on Monday ruled that J&J was responsible for bills relating to the state’s opioid crisis, with the US drugmaker being ordered to pay $572m.

Harry Nelson, an attorney and author of The United States of Opioids, said that Oklahoma paved the way for more cases because it succeeded on a “public nuisance theory”, proving only that J&J manufactured a product that caused harm — not that there was evidence of fraud or conspiracy at the company.

“Failure to do anything — rather than malicious intention — was more than sufficient for a judge to hold J&J responsible,” he said. “So all of the distributors and more peripheral manufacturers can now expect to be held responsible.”

The verdict was handed down as 22 opioid manufacturers, distributors and pharmacies are trying to win permission to negotiate as a class in a multidistrict litigation case that is due to go to court in October. The outcome in Okla-

Retail

Korean duty-free groups circle Changi SONG JUNG-A — SEOUL

South Korea’s top two duty-free groups are bidding to operate the liquor and tobacco shops at Singapore’s Changi Airport, seeking to expand their overseas footprint as growth at home slows.

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Lotte and Shilla said yesterday that they were in the running, along with Germany’s Gebr Heinemann, for the tender that closed on Monday. The opportunity came about after DFS Group, the longtime operator, dropped out unexpectedly. A winner is expected to be announced by year-end, the Korean companies said.

Lotte and Shilla, the world’s secondand third-largest duty-free chains respectively, have been actively expanding abroad in recent years as they seek to counter market saturation at home.

Duty-free sales in South Korea, the world’s largest duty-free market, continue to grow but the pair have found it challenging to maintain high margins as competition has increased and the number of Chinese tour groups visiting the country has fallen in the wake of a political spat oover ver Seoul’s plans to host a US missile defence system.

The winner will take over alcohol and tobacco sales rights from DFS in mid2020, for all four Changi terminals for six years. Hong Kong-based DFS is esti-

mated to have generated $425m in sales last year from the business, according to industry journal Moodie Davitt Report.

DFS, which has held the Changi dutyfree rights for nearly 40 years, withdrew from the race due to higher costs and recent regulatory changes linked to global economic uncertainties sparked by the deepening China-US trade war.

“Changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option,” Ed Brennan, chairman and chief executive of DFS, said in a statement.

Changi is one of the world’s busiest

Lotte and Shilla are looking abroad as challenges mount at home

Source: Dealogic

Waldschmidt, a strategist at Liberum, said bringing together the leading ecigarette business and heat-not-burn brand would make a dangerous competitor for tobacco rivals.

“I expect the existing incumbents of Imperial, BAT, Japan Tobacco will need to revisit their playbooks for M&A and value creation,” he said.

However, the fact that shares in Altria and PMI were under pressure after the

homa could embolden the plaintiffs to push for more in any negotiation — and even open up the possibility of more cases.

Earlier this month, Endo announced it had settled in principle by agreeing to pay $10m and up to $1m in products to two plaintiff counties in Ohio. The settlement included no admission of wrongdoing or liability.

Teva was also named in the Oklahoma lawsuit but settled on the eve of the trial for $85m, without admitting liability or wrongdoing. With net debt of about $26.6bn, Teva is in a “tough financial position,” said analysts at BTIG, especially if opioid liabilities rise far above $3.5bn to $4bn. “We believe a major driver for the shares will be the upcoming multi-district litigation,” they said.

airports, handling a record 65.6m passengers last year, according to its website. But Singapore has been tightening rules on liquor and tobacco consumption. In February, it said it would reduce the duty-free alcohol allowance from three litres to two litres, and it plans to standardise tobacco packaging from July next year with larger graphic health warnings, which is expected to hurt sales.

The higher costs of entry and rising economic risks have deterred other potential bidders, according to people close to the deal, who said the winner must pay an initial deposit of $20.5m and shoulder heavy capital expenditure requirements.

Lotte and Shilla are eager to expand their overseas presence, banking on their strong financial firepower. Shilla, which already runs perfumes and cosmetics duty-free shops at Changi, saw its overseas sales surpass Won1tn ($824m) last year, accounting for about a quarter of overall sales. It has duty-free operations in five countries, all in Asia.

Lotte posted Won240bn in 2018 overseas sales, and aims to increase that to more than Won1tn by the end of next year. It operates 13 duty-free shops in seven countries in the Asia-Pacific region. “We are actively expanding abroad as domestic growth is limited,” Lotte said.

11

12

13

14

Feb 2014 Green Smoke (e-vapor business) 0.13

0

Oklahoma ruling hits opioid industry Shares in US-listed opioid makers and distributors fell yesterday on fears that a loss for Johnson & Johnson in a case in Oklahoma could embolden prosecutors in the thousands of lawsuits seeking compensation for an epidemic that has ravaged the US.

10

2

Pharmaceuticals

HANNAH KUCHLER — NEW YORK

2008 09

10

10

Dec 2018 JUUL Labs (33.7%) 12.8 After sale of SABMiller Altria holds 9.6% of AB InBev

6

15

2008

Altria

Sep 2008 UST (100%) 11.8

15

16

17

18

19

Dec 2018 Cronos (45%) 1.8 Jun 2019 Burger Söhne (80%) 0.37

companies disclosed the talks yesterday underlines the task they face in convincing investors a deal is the best way to address the looming disruption.

One of the biggest hurdles in the path of a successful PMI-Altria recombination is the uncertainty about how regulators will treat the new products on which the industry’s growth depends.

In April, the US Food and Drug Administration authorised Altria to

‘I expect the existing incumbents will need to revisit their playbooks’

start selling PMI’s Iqos heated tobacco system in the US, but analysts are concerned the regulator could clamp down on the ecigarette market, after warning of an “epidemic” of youth vaping.

Ryan Tomkins, an analyst at Citi, said the biggest threat to the deal was the FDA, which has focused its efforts to curtail vaping on Juul in particular due to its high take-up among teenagers and is investigating reports tying seizures to vaping use.

Mr Tomkins added that a Centers for Disease Control and Prevention survey of youth tobacco use in the US was due out any day, “the results for which could be dangerous for Juul”.

Since their split, PMI and Altria have diverged in other ways. Altria last year took agreed to take a C$2.4bn stake in the Canadian cannabis company Cronos, but PMI says it sees too many risks in a market where international regulators have found no consensus.

More profoundly, the two companies have differed in their commitment to killing off their main product. PMI talks about “building a future on smoke-free products”. Altria has framed its stance more cautiously, emphasising smokers’ “consumer choice” alongside its commitment to innovation and harm reduction.

Stifel analyst Christopher Growe said a merger would boost PMI’s earnings and extract $400m in savings, but Altria’s higher regulatory burden and slowing growth would reduce the multiple at which PMI’s shares trade.

That concern had driven PMI’s shares down almost 11 per cent from Friday’s close by lunchtime yesterday in New York, pointing to the potential that investors’ concern could yet prove the biggest obstacle to the deal.

If it does happen, however, it could be just be a prelude to another split, Mr Growe speculated: “Perhaps this merger would allow the combined company to create two separate businesses — one focused on cigarettes and generating strong free cash flow and one focused on growth with new, innovative products such as Iqos and Altria’s stake in Juul.”

Additional reporting by James FontanellaKhan in New York

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COMPANIES Aerospace & defence

Boeing faces first lawsuit from 737 Max customer Russian client accuses US plane maker of negligence and deceit in sales drive SYLVIA PFEIFER — LONDON PATTI WALDMEIR — CHICAGO

A Russian aircraft leasing company is suing Boeing for breach of contract in connection with its grounded 737 Max in what is the first lawsuit brought against the US manufacturer by a customer over the safety crisis.

Avia Capital Services, a subsidiary of Russian state conglomerate Rostec, claims two deadly crashes were due to

the “negligent actions and decisions of Boeing” not just in designing a plane that was “defective” but also in “withholding critical information” from the US aviation safety regulator during certification.

The complaint, filed in Cook county circuit court in Chicago on Monday, claims that Boeing “intentionally” failed to disclose information about the airworthiness of the Max to its customers, including Avia, in order to induce them to buy the aircraft.

Avia ordered 35 Max 8 jets from Boeing before they were grounded worldwide in March, and now it wants to cancel the order. The company says it

gave Boeing a cash deposit of $35m to secure the order, and is asking for that amount to be returned with interest, along with $75m in lost profits for a total of $115m in compensatory damages, plus “several times the amount” in punitive damages.

Avia’s lawyer, Steven Marks of the Miami aviation law firm Podhurst Orseck, told the Financial Times in an

$115m

Compensation Avia is claiming, plus much larger punitive damages

$4.9

bn The charge taken as compensation negotiations with customers unfold

interview that Boeing had offered compensation but it was inadequate. He said other Boeing customers had been in touch with him about bringing similar lawsuits. The Chicago-based aircraft manufacturer has been negotiating compensation deals with customers and it took a $4.9bn charge in the second quarter for that purpose.

“I think you will see a number of other operators filing suit in coming months.

This will be the first of many to come,” Mr Marks said.

The lawyer is also representing 30 families of victims of both the Lion Air crash in October last year and the Ethiopian Airlines tragedy in March, which

together killed 346 people. The fallout from those two crashes has damaged Boeing’s reputation and finances; the company posted its biggest quarterly loss in July.

Even before the crashes, Avia and Boeing had agreed to delay delivery of 33 of the Max aircraft to the Russian company. Originally scheduled for delivery between October 2019 and February 2022, the orders were pushed back to between March 2022 and December 2024. The reason for the delay was not clear.

While official investigations into the accidents are ongoing, an anti-stall system called MCAS, which is unique to the

Max, has been implicated. The system is designed to pitch the plane’s nose automatically downwards when it senses a stall is imminent, which it was found to have done repeatedly in both accidents.

Boeing has been working on a software fix to ensure the system only activates once. It will also no longer be triggered by only a single sensor.

Dennis Muilenburg, Boeing’s chief executive, said in April that the company had “followed exactly the steps in our design and certification processes that consistently produce safe aeroplanes”. The company has said it expects the Max to start returning to service “early in the fourth quarter”.

Obituary Driven and ruthless engineer who built Volkswagen Ferdinand Piëch Car businessman 1937–2019

Ferdinand Piëch, the gifted and ruthless engineer who transformed Volkswagen into both the world’s largest carmaker by sales and a company beset by scandals, has died aged 82.

Piëch, the grandson of Beetle designer and founder of the eponymous sports car maker Ferdinand Porsche, reunited VW and Porsche and made them part of a 12-brand empire that stretched from Lamborghini to Skoda.

Chosen as car executive of the century in 1999, Piëch was at the heart of the German car industry for five decades, leading motor racing competition at Porsche in the 1960s, turning Audi around in the 1970s and 1980s, and reviving VW in the 1990s and 2000s.

But his cold manner and often cutthroat leadership style contributed, according to critics, to three big scandals at VW in the past 30 years, culminating in the company-threatening crisis in 2015 over diesel emissions test cheating.

The German weekly Der Spiegel once described work life at VW as “North Korea without the labour camps”.

Bob Lutz, former vice-chairman of General Motors, told the Financial Times that Piëch was “one of the greats in the automotive industry . . . There’s no question Ferdinand was a brilliant person, a brilliant engineer, and a great leader.” He added: “I didn’t always agree with his dictatorial style of leadership, but he was certainly results-driven and accepted no excuses for failure.”

Piëch’s death was confirmed by his widow Ursula, who said he died “suddenly and unexpectedly”. German media reported he had collapsed at a restaurant.

Hans Dieter Pötsch, Piëch’s successor as chairman, said: “Ferdinand Piëch has written automotive history — as a manager, ingenious engineer and a visionary entrepreneur. Since the 1960s, he has shaped the development of the automobile like no other, pushing forward the entire industry and above all Volkswagen.”

Richard A Johnston, in his 2005 book Six Men Who Built the Modern Auto Industry, said Piëch “more than any single individual, promoted and maintained Europe’s technical advantage over the rest of the automotive world in the second half of the 20th century”.

Piëch was born in 1937 in Vienna with “petrol in his blood”, as he wrote in his memoir, Auto. Biographie. His mother Louise was the daughter of Ferdinand Porsche, who designed the Beetle at the behest of Adolf Hitler, while his father Anton Piëch ran the main VW factory for the Nazis for most of the second

Ferdinand Piëch was born in 1937 in Vienna with ‘petrol in his blood’, as he wrote in his memoir, ‘Auto.

Biographie’.

Below, with Angela Merkel, Germany’s chancellor — Jochen Luebke/EPA-EFE

world war. After his father died when Piëch was 15, he was sent to Swiss boarding school. Allies said that helped to form a personality that allowed few to get close to him.

He dreamt from an early age of becoming an engineer, and after earning a degree at a respected technology college in Zurich, Piëch went to work at the sports car maker his grandfather had recently started. He became responsible for its motorsport division in the 1960s, and built his reputation by setting out to dominate the Le Mans 24-hour race.

Contracts & Tenders

Against the recommendation of Porsche’s board, he invested to build the 917, which became one of the most successful racing cars in history, winning two Le Mans races that transformed the company, but in the process nearly bankrupted it.

In 1972, he moved to Audi where, as head of technical development, he launched the Quattro and engineered a series of innovations that turned a lacklustre brand into a viable competitor to the two leading luxury brands of BMW and Mercedes.

After rising to serve as Audi’s chief executive, he took the same job at parent company VW in 1993. He saved the company from financial oblivion and launched an empire-building spending spree that led to the purchases of expensive luxury brands such as Bugatti, Bentley and Lamborghini as well as truckmakers Scania and MAN, and motorcycle brand Ducati. But he was also known for pricey follies such as a failed attempt to compete with Mercedes via the VW Phaeton and the development of the world’s fastest but lossmaking car, the Bugatti Veyron.

He cemented his power in 2002 by becoming chairman, but concerns grew about his brutal management style, his interest in technical excellence over profitability and his disregard for corporate governance standards.

He had a habit of defenestrating rivals and executives that displeased him with a few choice words to the media, most memorably in 2006 when he undermined his successor as chief executive, Bernd Pischetsrieder, by saying that an extension of his contract was “on open issue”.Monthslater,hewasdismissed.“It is not possible to bring a company to the summit while maintaining harmony,” Piëch once said. “VW, family, money” washiswayoflistinghispriorities.

The dismissal of Mr Pischetsrieder led to discussions between VW’s then largest shareholder, the state of Lower Saxony where many of its factories are located, and Anglo-American investors about ousting Piëch. But the wily Austrian outmanoeuvred them all, and soon had the chance to show his disdain for corporate governance norms.

In 2012, he nominated his wife Ursula, the family’s former nanny and

‘Ferdinand Piëch has written automotive history — as a manager, ingenious engineer and a visionary entrepreneur’

19 years his junior, to VW’s supervisory board. “Kindergarten teacher with additional qualifications in business and law (not currently working)” was how VW described her qualities in a letter to shareholders.

By then, Piëch’s control over VW seemed almost total, as his extended family had become the carmaker’s biggest shareholders after a complicated deal in which it also bought Porsche.

Still, his tenure at VW was partly overshadowed by a series of scandals that both insiders and outside critics blamed on the system Piëch developed in which he managed the company closely with workers. In 1993, he poached a top executive from GM, leading to a torrent of insults and lawsuits over alleged corporate espionage. A second scandal, this time involving bribery and VW allegedly paying for prostitutes and even Viagra for workers, broke out in 2005. Piëch admitted there had been “irregularities” but said he had no knowledge of them.

Most seriously of all came the diesel emissions scandal in 2015, only a few months after Piëch had been ousted as chairman following a boardroom struggle with his one-time acolyte and then chief executive Martin Winterkorn.

Many blamed Piëch’s domineering management style for creating an atmosphere in which the cheating could flourish. Mr Lutz recalled once complimenting Piëch on the finish of the new VW Golf, particularly how small the gaps were between the doors and the frame.

Piëch’s response stunned Lutz. He said he had cobbled together his body engineers and manufacturing team and said: “In six weeks I want 3-4mm gaps on everything. If I don’t have it, everyone in this room will be fired.”

It has never been fully explained what happened between Piëch and Mr Winterkorn that led to the chairman’s abrupt departure from VW in 2015 just before the scandal. The paranoia at the time in Wolfsburg, home to VW’s headquarters, was that Piëch had leaked the scandal to bring down his adversary.

Months after the scandal broke, leaked testimony caused uproar in Germany when it emerged that Piëch had told prosecutors that certain VW board members had early knowledge of the cheating. No evidence was produced to back the claims, which were never stated directly. Piëch himself remained publicly silent about the episode.

He was vague about his private life and according to various interviews had 12 or 13 children with three, four or more women. Ursula told the DPA: “Ferdinand Piëch’s life was marked by his passion for the automobile and for the workers who built them. He was an enthusiastic engineer and car lover until the end.”

Oil & gas

Tanker group Frontline prepares for market surge MYLES MCCORMICK — LONDON

The oil tanker industry is approaching an “inflection point” as shipowners prepare for greater volumes of crude pumped out of the Permian basin and the impact of tougher environmental regulations, says one of the world’s biggest operators in the sector.

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Businesses For Sale Business for Sale, Business Opportunities, Business Services, Business Wanted, Franchises Runs Daily

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

Frontline, controlled by John Fredriksen, the Norwegian billionaire, is hoping to ride a wave of growing demand after announcing last week it would buy 10 Suezmax tankers from Trafigura, the commodities trader, in a $675m deal.

Robert Hvide Macleod, chief executive, said: “Frontline is well positioned as we approach what we believe is an important inflection point in the tanker market.”

The company cited three factors: rising US production, the return of

refineries from maintenance and the impact of tighter International Maritime Organisation rules on emissions.

US crude output has grown rapidly in recent years, fuelled by the fracking boom in the Permian Basin that straddles Texas and New Mexico, making the country the world’s largest oil producer.

The US is set to become a net oil exporter by 2021, according to International Energy Agency forecasts, with the anticipated resolution of pipeline bottlenecks over the next 18 months set to further boost growth.

With much of these exports being shipped to Asia — the longest possible seaborne journey — that is set to boost tanker operators. However, analysts have warned that the looming threat of recession could crimp global demand.

Frontline also expected to benefit from the introduction of the stricter

emissions regulations set to be imposed by the IMO from 2020. These will force owners to either switch to low-sulphur fuels or install exhaust scrubbers.

The company anticipated a “large number of older vessels will be taken out of the market” as a result, decreasing competition to the advantage of its younger fleet — which has an average

The tanker Front Altair that came under attack in the Gulf of Oman

age of less than four years. Lukas Daul, analyst at ABG Sundal Collier, said: “With the new regulations I think there will be an adjustment period and people are anticipating some disruption in terms of supply and transit patterns, and that is typically good news for ship owners.”

Frontline’s comments came as it reported first-half results broadly in line with analysts’ expectations, with net income of $41.1m up from a loss of $36.5m in the same period last year.

However, the bulk of this — $40m — came through in the first quarter as a result of the recent refinery outages.

The company said its Front Altair tanker, which was damaged in an explosion close to the Straight of Hormuz in June, that the US blamed on Iran, would return to operations in the fourth quarter of the year, following repairs.

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MARKET DATA WORLD MARKETS AT A GLANCE

FT.COM/MARKETSDATA

Change during previous day’s trading (%) S&P 500

Nasdaq Composite

-0.14%

Dow Jones Ind

-0.18%

FTSE 100

-0.18%

FTSE Eurofirst 300

-0.08%

Nikkei

0.61%

Hang Seng

FTSE All World $

-0.06%

0.96%

$ per €

$ per £

-0.090%

0.11%

0.491%

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

Jul 28 - S&P 500

All World

New York

3,020.97

Index

Jul 28 - Aug 27 S&P/TSX COMP

All World

Toronto

16,531.04

16,169.19

2,874.36 Day -0.14%

Month -4.99%

Year 0.00%

Nasdaq Composite

Day 0.44%

New York

8,293.33

Month -2.19%

Year -1.68%

IPC

40,673.53

All World

London

Month -5.88%

Year -1.33%

Dow Jones Industrial

Day 1.48%

Month 0.05%

Year -19.29%

Bovespa

Country

Month -4.95%

Day -0.08%

Month -6.17%

FTSE Eurofirst 300

Year 0.22% Latest

Day 0.61%

Month -4.55%

Year -2.72%

CAC 40

Month -5.87% Index

Year 24.20% Latest

Previous

Day 0.67% Country

Month -3.97% Index

Year -0.84%

Cyprus Czech Republic Denmark Egypt Estonia Finland France

0.87%

0.12%

Month -5.55%

Hang Seng

1,924.60

Hong Kong

FTSE Straits Times

Milan

Year -7.36%

Shanghai Composite

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

Month -4.03% Index

Year 0.77% Latest

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

7747.38 55996.04 4806.69 3046.75 9258.55 2640.78 1250.93 8257.86 3067.52 343.69 857.53 53895.75 42863.71 48147.85 1924.60 253.50 8728.90 5908.93 1530.81 590.84 9786.08

Singapore

Country

7889.41 55909.06 4808.23 3051.67 9044.48 2658.24 1268.25 8241.67 3065.33 343.69 861.54 53811.89 42586.00 48042.94 1916.31 252.19 8679.20 5881.72 1520.85 587.37 9715.83

Taiwan Thailand Turkey UAE UK

USA

Venezuela Vietnam

Month -1.44% Index

BSE Sensex

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

Previous

10387.23 1615.47 116840.94 4997.22 2896.60 7089.58 6536.21 3899.22 5326.95 8573.97 25851.55 9796.07 844.40 7572.07 7839.74 12502.09 2874.36 29393.91 45186.26 976.79

Mumbai 37,641.27

Day 0.39%

Year 6.33% Latest

3,067.52 Year -4.70%

Month -8.98%

37,830.98

2,902.19

Day 1.35%

Previous

Day 0.07%

Shanghai

20,991.30

Country

Year -16.07%

25,664.07 Month -9.73%

2,941.01

Day 1.52%

Month -6.86%

3,381.26

Day -0.06%

Year NaN%

FTSE MIB

All World

Seoul

Day 0.43%

Year -9.49%

8,728.90 Month NaN%

Index

Jul 28 - Aug 27 Kospi

Country

10354.57 1622.73 116315.98 4968.16 2885.60 7094.98 6526.05 3898.58 5342.63 8587.56 25898.83 9834.72 842.40 7575.02 7853.74 12519.62 2878.38 29461.44 45196.02 982.88

Month -0.64% Index DJ Global Titans ($) Euro Stoxx 50 (Eur) Euronext 100 ID FTSE 4Good Global ($) FTSE All World ($) FTSE E300 FTSE Eurotop 100 FTSE Global 100 ($) FTSE Gold Min ($) FTSE Latibex Top (Eur) FTSE Multinationals ($) FTSE World ($) FTSEurofirst 100 (Eur) FTSEurofirst 80 (Eur) MSCI ACWI Fr ($) MSCI All World ($) MSCI Europe (Eur) MSCI Pacific ($) S&P Euro (Eur) S&P Europe 350 (Eur) S&P Global 1200 ($) Stoxx 50 (Eur)

Cross-Border

Year -1.60% Latest

Previous

321.92 3363.98 1045.20 6981.82 331.57 1469.68 2864.37 1771.91 1941.79 4440.00 1974.32 590.29 4015.54 4619.71 502.43 2105.22 1538.52 2552.42 1533.61 1507.92 2338.73 3083.23

321.95 3348.84 1037.81 6975.91 331.22 1460.84 2847.37 1770.21 1918.86 4432.20 1964.19 589.78 3993.50 4591.15 500.94 2094.63 1537.02 2593.81 1522.71 1498.28 2335.82 3070.88

UK MARKET WINNERS AND LOSERS

LONDON ACTIVE STOCKS

EURO MARKETS ACTIVE STOCKS

TOKYO ACTIVE STOCKS

stock traded m's Amazon.com 20.4 Apple 19.2 Philip Morris Int 18.7 Altria 17.0 Johnson & Johnson 13.9 Facebook 10.3 Microsoft 10.2 Advanced Micro Devices 7.4 Netflix 7.1 Boeing 6.3

close price 1759.26 204.79 74.20 46.26 130.30 182.34 135.66 29.90 290.66 356.76

Day's change -9.61 -1.70 -3.54 -0.86 2.50 1.98 0.21 -0.38 -4.32 -2.28

stock traded m's Hsbc Holdings 387.7 Astrazeneca 332.7 Royal Dutch Shell 220.3 Diageo 186.9 Bp 186.7 British American Tobacco 153.6 Unilever 147.4 Glaxosmithkline 135.4 Anglo American 135.1 Royal Dutch Shell 129.8

close price 580.90 7240.00 2248.00 3444.50 488.05 2832.00 5095.00 1687.20 1690.40 2243.00

Day's change -5.50 -73.00 -18.50 26.50 0.05 -129.00 85.00 -4.00 23.80 -9.00

stock traded m's Novo Nordisk B A/s 267.8 Unilever 244.6 Enel 236.4 Sap Se O.n.

233.9 Total 229.3 Intesa Sanpaolo 209.5 Santander 192.6 Lvmh 187.3 Muench.rueckvers.vna O.n.

186.8 Allianz Se Na O.n.

182.3

close price 47.42 55.14 6.50 108.54 43.97 1.95 3.47 359.85 217.70 198.76

Day's change 0.35 1.00 0.17 1.82 0.13 0.01 -0.03 6.25 -0.90 -0.40

stock close traded m's price Softbank .

492.9 4647.00 Fast Retailing Co., 403.3 62330.00 Tokio Marine Holdings,.

293.7 5387.00 Toyota Motor 255.1 6919.00 Shinsei Bank, 239.9 1430.00 Shiseido , 214.4 8590.00 Sony 197.6 5882.00 Fanuc 187.0 17860.00 Tokyo Electron 186.5 19110.00 Mitsubishi Ufj Fin,.

172.8 497.20

BIGGEST MOVERS

Day's change

Day's chng%

BIGGEST MOVERS

Day's change

Day's chng%

Day's change

Day's chng%

50.34 287.20 40.53 24.54 17.66

1.65 8.74 1.08 0.53 0.37

3.39 3.14 2.74 2.19 2.16

1170.00 37.77 411.50 2298.00 149.15

96.00 2.92 30.30 141.00 8.25

8.94 8.38 7.95 6.54 5.86

Ups Snam Lufthansa Ag Vna O.n.

Terna Enel Saipem

Close price

BIGGEST MOVERS

Ups Future Intu Properties Provident Fin Nmc Health Centamin

Close price

BIGGEST MOVERS

Ups Activision Blizzard Costco Wholesale Newmont Gold Technipfmc Nektar Therapeutics

Close price

4.56 13.85 5.73 6.50 4.23

0.13 0.40 0.16 0.17 0.11

3.03 2.97 2.87 2.67 2.55

Downs Jm Smucker (the) L Brands Philip Morris Int Dxc Technology General Mills

102.70 16.13 74.20 31.86 51.74

-10.23 -0.79 -3.54 -1.43 -2.24

-9.05 -4.67 -4.55 -4.30 -4.15

Downs Ti Fluid Systems Computacenter Clarkson Renishaw British American Tobacco

165.40 1346.00 2340.00 3390.00 2832.00

-13.00 -78.00 -130.00 -170.00 -129.00

-7.29 -5.48 -5.26 -4.78 -4.36

Downs Deutsche Boerse Na O.n.

Casino Guichard J.martins,sgps Natixis Seadrill

128.95 36.43 14.30 3.47 2.02

-2.30 -0.57 -0.19 -0.04 -0.02

-1.75 -1.54 -1.28 -1.25 -1.17

Based on the constituents of the S&P500

All World

Tokyo

28,106.41

Day NaN%

STOCK MARKET: BIGGEST MOVERS AMERICA ACTIVE STOCKS

Madrid

5,387.09

22541.25 35932.61 20676.83 6288.47 20261.04 1225.88 1478.03 1825.42 2491.97 6603.51 1022.32 688.66 1209.80 1600.53 40081.72 11562.40 543.31 802.62 10483.47 27629.66 924.33 30520.60

25848.26 6531.00 6440.10 4467.40 2897.47 3487.04 7783.65 96429.60 961.86 16098.79 627.48 23491.22 10106.77 8988.96 2999.74 261.20 2863.40 1638.42 942.48 1505.29 1873.74

Country

Gold $

20,456.08

21,837.74

96,795.75 Day 0.38%

Oil Brent $ Sep

2,029.48

Day 0.96%

Year NaN%

Ibex 35

Paris

FTSE Italia All-Share 22863.06 CSE M&P Gen 68.46 68.68 Italy FTSE Italia Mid Cap 36223.91 PX 1034.13 1039.35 OMXC Copenahgen 20 1030.65 1024.69 FTSE MIB 20991.30 EGX 30 14291.03 14340.51 Japan 2nd Section 6297.12 OMX Tallinn 1247.77 1249.97 Nikkei 225 20456.08 Austria OMX Helsinki General 8951.72 8909.83 S&P Topix 150 1234.19 Belgium CAC 40 5387.09 5351.02 Topix 1489.69 SBF 120 4256.94 4228.82 Jordan Amman SE 1823.43 Brazil Germany M-DAX 25181.93 24999.67 Kenya NSE 20 2477.66 Canada TecDAX 2745.78 2719.99 Kuwait KSX Market Index 6633.44 XETRA Dax 11730.02 11658.04 Latvia OMX Riga 1024.46 Greece Athens Gen 831.64 828.95 Chile Lithuania OMX Vilnius 690.30 China FTSE/ASE 20 2041.68 2030.73 Luxembourg LuxX 1226.67 Hong Kong Hang Seng 25664.07 25680.33 Malaysia FTSE Bursa KLCI 1590.84 Mexico IPC 40673.53 HS China Enterprise 9996.19 10013.51 Morocco MASI 11610.09 HSCC Red Chip 4126.64 4107.12 Netherlands AEX 547.28 Hungary Bux 39107.94 39661.47 AEX All Share 807.74 India BSE Sensex 37641.27 37494.12 New Zealand NZX 50 10513.16 Nifty 500 9022.25 8964.70 Colombia Nigeria SE All Share 27800.17 Indonesia Jakarta Comp 6278.17 6214.51 Croatia Norway Oslo All Share 931.89 Ireland ISEQ Overall 5831.34 5743.33 Pakistan KSE 100 30584.85 Israel Tel Aviv 125 1459.73 1459.73 (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.

24718.38 6565.60 6471.20 4469.30 2896.19 3502.19 7788.19 96795.75 965.29 16169.19 641.15 23568.12 10230.09 9000.71 3040.42 263.28 2902.19 1669.07 947.47 1519.08 1872.87

Month 0.68%

9,215.40

Previous

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

Previous

Index

21,658.15

Day 0.62%

Europe

1,538.32

Latest

Argentina Australia

Index

-0.550%

11,730.02 7,089.58 Year -6.52%

5,601.10

25,851.55

-0.057%

Jul 28 - Aug 27 Nikkei 225

Frankfurt

7,549.06

São Paulo

103,482.63

Day -0.18%

All World

1,469.68

New York

27,221.35

Index

Jul 28 - Aug 27 Xetra Dax 12,417.47

7,839.74 Day -0.18%

£ per €

ASIA Index

Jul 28 - Aug 27 FTSE 100

Mexico City

41,276.67

¥ per $

Based on the constituents of the FTSE 350 index

Based on the constituents of the FTSEurofirst 300 Eurozone index

Day's change 110.00 1100.00 -25.00 50.00 -2.00 -7.00 43.00 70.00 195.00 1.50

Ups Fuji Heavy Industries Nippon Express Co., Isetan Mitsukoshi Holdings Konica Minolta Holdings, .

Toppan Printing Co.,

Close price

Day's change

Day's chng%

2874.00 5380.00 784.00 745.00 1636.00

135.00 190.00 26.00 23.00 49.00

4.93 3.66 3.43 3.19 3.09

Downs Toto Sumitomo Metal Mining Co., Rakuten .

Comsys Holdings Recruit Hldgs Co Ltd

3825.00 2913.50 994.00 2935.00 3307.00

-80.00 -54.00 -15.00 -36.00 -40.00

-2.05 -1.82 -1.49 -1.21 -1.20

Based on the constituents of the Nikkei 225 index

FTSE 100 Winners Nmc Health Tui Ag British Land Fresnillo Land Securities Flutter Entertainment Standard Life Aberdeen Dcc Itv Persimmon Next Barratt Developments

Aug 27 price(p)

%Chg week

%Chg ytd

2298.00 825.60 517.20 697.60 784.60 6754.00 250.70 6894.00 114.00 1930.00 5882.00 647.20

23.5 8.5 7.8 6.4 6.0 5.0 4.8 4.7 4.6 4.5 4.1 4.0

Losers British American Tobacco Scottish Mortgage Investment Trust Prudential Carnival Phoenix Holdings Bhp Hsbc Holdings Rolls-royce Holdings Glencore Just Eat Evraz Legal & General

2832.00 508.00 1348.00 3407.00 634.20 1672.60 580.90 748.60 223.80 756.00 483.10 219.70

-5.0 -4.9 -4.5 -3.9 -3.8 -3.6 -2.7 -2.7 -2.6 -2.1 -2.0 -1.9

Aug 27 price(p)

%Chg week

%Chg ytd

81.5 -29.0 -55.1 -57.3 373.8 -38.4 -48.7 -54.5 -85.0 -44.1 -1.1 21.7

FTSE SmallCap Winners Just Batm Advanced Communications Ld Asa Int Marston's Premier Foods Aptitude Software Nanoco Lookers Goodwin Stv Dp Eurasia N.v.

Photo-me Int

46.26 46.80 391.00 127.40 35.20 600.00 12.80 52.30 3500.00 384.00 92.40 105.00

14.8 9.1 8.9 7.6 7.3 7.1 7.1 7.0 6.7 6.7 6.5 6.1

-72.0 85.7 13.0 -17.4 28.3 -50.2 -49.9 74.6 16.4 -56.9 -43.6

Aug 27 price(p) Industry Sectors Winners Real Estate Investment Trusts 2815.52 Real Estate & Investment Servic 2432.33 Index - Technology Hardware & Equipment 1438.63 Industrial Transportation 2293.12 Electricity 6662.48 Industrial Engineering 11850.68 Automobiles & Parts 3991.29 Construction & Materials 5782.30 Household Goods 16062.06 General Retailers 2096.87 General Industrials 5723.52 Health Care Equip.& Services 8589.91

-36.1 -40.4 80.5 29.8 -58.2 -34.6 -56.3 -18.6 -37.2 46.1 -59.2 -8.5

Losers Nostrum Oil & Gas Thomas Cook Hostelworld Gulf Marine Services Alfa Fin Software Holdings Countrywide Puretech Health Chesnara Macau Property Opportunities Fund Phoenix Spree Deutschland Blackrock Latin American Investment Trust Anglo-eastern Plantations

24.30 7.08 138.40 7.94 75.20 4.79 269.00 278.00 126.50 270.00 444.50 437.50

-30.6 -17.8 -14.5 -11.8 -10.5 -9.5 -7.9 -7.8 -7.3 -5.9 -5.5 -5.5

-92.5 -94.3 -63.6 -82.4 -86.1 -90.9 80.5 -28.9 -29.9 -30.2 -3.3 -40.1

Losers Oil Equipment & Services Tobacco Industrial Metals Life Insurance Mining Fixed Line Telecommunication Banks Oil & Gas Producers Aerospace & Defense Electronic & Electrical Equip.

Equity Investment Instruments Beverages

Aug 27 price(p)

%Chg week

%Chg ytd

-19.9 -46.6 -24.4 -51.4 -21.1 -24.1 -48.4 -8.0 -32.1 -29.8 30.7 -0.9

FTSE 250 Winners Entertainment One Rank Sirius Minerals Hammerson Future Provident Fin Newriver Reit Royal Mail Intu Properties Riverstone Energy Premier Oil Big Yellow

586.00 176.40 10.39 232.60 1170.00 411.50 167.60 206.90 37.77 700.00 75.56 1046.00

41.7 14.2 13.1 12.9 12.1 11.2 10.1 9.1 8.6 8.4 7.8 7.7

-42.7 13.3 -28.4 -30.5 19.7 9.4 -24.1 -11.1 -43.2 -2.7 36.2 -18.7

Losers Ferrexpo Wood (john) Puretech Health John Laing Playtech Renishaw Kaz Minerals Clarkson Sanne Kainos Cybg Schroder Asiapacific Fund

193.65 390.10 269.00 355.00 363.90 3390.00 390.00 2340.00 512.00 485.00 135.90 430.00

-11.9 -9.4 -7.9 -7.4 -5.5 -5.4 -4.9 -4.7 -4.7 -4.5 -4.0 -4.0

%Chg week

%Chg ytd

4.5 3.7 3.6 3.3 2.7 2.7 2.6 2.4 2.3 2.0 2.0 2.0

7.0 4.0 53.5 8.0 1.1 12.8 16.8 8.0 13.1 13.1 23.9

-5.6 -4.2 -4.0 -2.9 -2.1 -2.1 -1.9 -1.3 -0.8 -0.4 -0.3 -0.3

5.6 0.6 -4.0 -0.4 -9.0 -2.4 11.9 20.1 11.0 21.6

8433.01 31741.57 4533.24 6491.98 17035.48 1895.72 3372.00 8231.50 4866.17 7584.03 10213.23 27156.74

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

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

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

DOLLAR Closing Mid 55.5910 1.4787 0.3770 6.9100 4.1668 1.3263 722.6400 7.1670 3464.6500 566.5200 23.2876 6.7173 16.5500 7.8470 296.6985 71.4875

Day's Change 0.2870 0.0028 0.0230 -0.0026 4.0900 0.0245 34.5200 -0.1150 0.0802 0.0074 0.0213 0.0017 0.4102 -0.5300

EURO Closing Mid 61.7116 1.6415 0.4185 7.6708 4.6255 1.4723 802.2025 7.9561 3846.1080 628.8937 25.8515 7.4568 18.3721 8.7109 329.3649 79.3583

POUND Day's Closing Day's Change Mid Change 0.2497 68.2408 0.6452 0.0013 1.8152 0.0113 -0.0005 0.4628 0.0020 -0.0086 8.4824 0.0366 0.0204 5.1149 0.0502 -0.0046 1.6281 0.0038 3.6450 887.0776 8.8264 0.0183 8.7979 0.0679 34.0472 4253.0352 60.5410 -0.8337 695.4323 2.8599 0.0601 28.5867 0.2214 -0.0001 8.2458 0.0446 0.0030 20.3160 0.1137 -0.0079 9.6325 0.0436 0.0862 364.2126 2.0728 -0.6781 87.7546 -0.2692

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

Currency Indonesian Rupiah Israeli Shekel Japanese Yen

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

DOLLAR Closing Mid 14255.0000 3.5201 105.9150 105.9148 105.9143 105.9126 103.4500 0.3038 4.2040 19.9795 1.5705 362.5000 9.0190 157.2300 3.3836 52.2700

Day's Change 15.0000 -0.0014 -0.0600 -0.0605 -0.0613 -0.0648 0.0500 -0.0002 0.0010 0.0684 0.0057 0.2500 0.0342 -0.0200 0.0070 -0.0100

EURO Closing Mid 15824.4874 3.9076 117.5762 117.5762 117.5763 117.5765 114.8398 0.3372 4.6669 22.1792 1.7434 402.4112 10.0120 174.5410 3.7561 58.0249

POUND Day's Closing Day's Change Mid Change -1.0769 17498.7620 93.8364 -0.0059 4.3210 0.0170 -0.1987 130.0161 0.4876 -0.1986 130.0160 0.4874 -0.1985 130.0157 0.4869 -0.1982 130.0160 0.4860 -0.0733 126.9902 0.6090 -0.0005 0.3729 0.0014 -0.0041 5.1606 0.0235 0.0511 24.5259 0.1894 0.0043 1.9278 0.0152 -0.1738 444.9873 2.2255 0.0268 11.0713 0.0896 -0.2181 193.0079 0.8083 0.0036 4.1535 0.0265 -0.0762 64.1641 0.2646

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

DOLLAR Closing Mid 3.9400 4.2638 66.5063 3.7503 1.3884 15.3288 1211.2500 9.6536 0.9817 31.3830 30.5700 2.8594 5.8335 3.6732 0.8146 0.8148

Day's Change 0.0173 0.0091 0.4363 0.0006 0.0975 -6.6500 -0.0090 0.0036 -0.0970 -0.0400 -0.0014 0.0276 -0.0035 -0.0035

EURO Closing Mid 4.3737 4.7332 73.8286 4.1632 1.5413 17.0164 1344.6083 10.7165 1.0898 34.8383 33.9357 3.1742 6.4758 4.0776 0.9043 0.9042

POUND Day's Closing Day's Change Mid Change 0.0144 4.8365 0.0421 0.0047 5.2340 0.0336 0.4020 81.6398 0.8854 -0.0047 4.6037 0.0199 -0.0011 1.7043 0.0080 0.0893 18.8168 0.2004 -8.8997 1486.8714 -1.7129 -0.0220 11.8503 0.0402 0.0027 1.2051 0.0095 -0.1469 38.5242 0.0477 -0.0825 37.5262 0.1130 -0.0051 3.5100 0.0134 0.0234 7.1609 0.0646 -0.0046 4.5090 0.0195 -0.0049 -0.0049 -

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

Currency

United States Dollar

Venezuelan Bolivar Fuerte Vietnamese Dong Euro

DOLLAR Closing Mid 0.8151 0.8161 23197.5000 0.9008 0.9006 0.9001 0.8980

Day's Change -0.0035 -0.0035 -1.5000 0.0010 0.0010 0.0010 0.0010

EURO POUND Closing Day's Closing Day's Mid Change Mid Change 0.9040 -0.0049 0.9031 -0.0049 1.1101 -0.0012 1.2276 0.0053 1.1098 -0.1121 1.2277 0.0053 1.1093 -0.1121 1.2280 0.0053 1.1073 -0.1122 1.2290 0.0053 25751.5593 -30.6072 28476.1555 121.0360 1.1058 0.0060 1.1057 0.0060 1.1055 0.0060 1.1046 0.0060

Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata

UK SERIES

FTSE ACTUARIES SHARE INDICES

www.ft.com/equities

Produced in conjunction with the Institute and Faculty of Actuaries

£ Strlg Day's Euro £ Strlg £ Strlg Aug 27 chge% Index Aug 23 Aug 22 FTSE 100 (100) 7089.58 -0.08 6121.58 7094.98 7094.98 FTSE 250 (250) 19335.88 0.52 16695.79 19236.13 19236.13 FTSE 250 ex Inv Co (192) 20275.10 0.59 17506.78 20156.02 20156.02 FTSE 350 (350) 3952.36 0.02 3412.71 3951.50 3951.50 FTSE 350 ex Investment Trusts (291) 3901.54 0.02 3368.83 3900.91 3900.91 FTSE 350 Higher Yield (109) 3379.42 -0.30 2918.00 3389.57 3389.57 FTSE 350 Lower Yield (241) 4219.64 0.35 3643.50 4205.11 4205.11 5381.06 -0.13 4646.34 5387.88 5387.88 FTSE SmallCap (279) FTSE SmallCap ex Inv Co (154) 4313.10 -0.09 3724.20 4316.80 4316.80 3899.22 0.02 3366.83 3898.58 3898.58 FTSE All-Share (629) FTSE All-Share ex Inv Co (445) 3821.20 0.01 3299.46 3820.66 3820.66 FTSE All-Share ex Multinationals (561) 1116.19 0.43 798.80 1111.42 1111.42 FTSE Fledgling (102) 9213.70 -0.24 7955.68 9235.81 9235.81 FTSE Fledgling ex Inv Co (46) 10914.90 0.27 9424.60 10885.76 10885.76 FTSE All-Small (381) 3735.79 -0.13 3225.71 3740.77 3740.77 FTSE All-Small ex Inv Co (200) 3220.24 -0.07 2780.55 3222.65 3222.65 FTSE AIM All-Share (768) 870.19 -0.14 751.38 871.42 871.42

Year Div P/E ago yield% Cover ratio 7617.22 4.62 1.48 14.63 20849.24 3.24 1.48 20.80 22250.14 3.45 1.38 20.95 4248.82 4.39 1.48 15.39 4204.23 4.47 1.46 15.30 3837.11 6.39 1.34 11.72 4273.67 2.39 1.87 22.43 5882.66 3.83 0.89 29.45 4993.54 4.34 1.38 16.66 4194.24 4.37 1.46 15.65 4123.75 4.47 1.46 15.33 1244.20 4.10 1.41 17.30 11238.59 5.42 -0.36 -51.54 16721.86 14.27 -0.39 -17.76 4106.41 3.92 0.79 32.41 3767.61 4.65 1.21 17.72 1101.63 1.76 1.36 41.94

FTSE Sector Indices Oil & Gas (13) 8520.75 Oil & Gas Producers (9) 8258.85 Oil Equipment Services & Distribution (4) 8772.86 Basic Materials (26) 5723.40 13009.94 Chemicals (8) Forestry & Paper (1) 19605.26 Industrial Metals & Mining (2) 4883.02 16261.54 Mining (15) Industrials (105) 5399.32 Construction & Materials (15) 6027.36 Aerospace & Defense (10) 5076.91 General Industrials (6) 4609.36 Electronic & Electrical Equipment (10) 8920.81 Industrial Engineering (12) 13071.21 Industrial Transportation (6) 3678.14 Support Services (46) 8283.37 19820.33 Consumer Goods (42) Automobiles & Parts (2) 4011.75 Beverages (5) 27193.33 Food Producers (11) 7110.68 Household Goods & Home Construction (15)13443.68 Leisure Goods (2) 12271.94 Personal Goods (5) 37570.40 Tobacco (2) 31741.63 12342.86 Health Care (18) Health Care Equipment & Services (9) 8602.04 Pharmaceuticals & Biotechnology (9) 16834.22 Consumer Services (89) 5209.39 Food & Drug Retailers (6) 3771.33 General Retailers (25) 2013.02 Media (19) 9031.67 Travel & Leisure (39) 9329.37 Telecommunications (5) 2200.57 Fixed Line Telecommunications (3) 1965.27 Mobile Telecommunications (2) 3423.65 Utilities (8) 6501.63 Electricity (3) 6647.36 Gas Water & Multiutilities (5) 6113.82 Financials (306) 4534.76 Banks (10) 3330.10 Nonlife Insurance (8) 3608.84 Life Insurance/Assurance (7) 6582.57 Real Estate Investment & Services (18) 2366.99 Real Estate Investment Trusts (40) 2554.32 General Financial (39) 9510.19 Equity Investment Instruments (184) 10472.42 Non Financials (323) 4716.18 Technology (17) 2105.44 Software & Computer Services (14) 2332.34 Technology Hardware & Equipment (3) 3342.25

9908.37 6.16 1.33 12.22 394.70 8931.98 9513.36 6.16 1.33 12.17 383.31 8971.25 16553.00 6.06 0.98 16.80 355.08 7378.14 6116.32 5.64 2.56 6.92 243.93 6481.29 17842.67 2.57 2.16 18.03 280.34 12227.89 27024.80 4.52 2.44 9.08 885.56 23155.29 4979.85 14.41 1.48 4.70 538.98 5748.08 16668.03 5.85 2.66 6.43 704.94 9678.38 5830.63 2.62 1.00 38.29 87.63 5864.66 6826.85 2.77 0.27 131.21 115.33 6760.28 5735.05 2.68 -0.26 -144.36 79.31 5703.66 5670.67 3.42 1.06 27.66 70.47 5575.81 8556.00 1.59 2.02 31.14 83.75 8437.26 14760.31 2.52 1.56 25.42 254.64 16744.22 5199.93 5.98 0.87 19.25 141.07 3657.86 8316.60 2.37 1.64 25.80 120.69 9034.87 20660.66 4.17 1.64 14.61 577.99 15990.69 11430.01 2.60 2.89 13.32 108.61 4101.37 22016.93 2.03 1.73 28.54 534.17 20364.11 7149.92 2.55 1.97 19.93 108.14 6443.85 14314.44 4.57 1.90 11.55 504.97 10493.89 11133.07 3.65 1.41 19.38 290.69 12413.70 34779.66 2.67 2.60 14.42 757.63 27148.70 43464.26 7.58 1.20 10.98 1331.31 23213.92 10980.16 3.46 0.88 32.78 352.68 10337.95 7998.16 1.59 2.52 25.02 90.60 7730.46 14921.60 3.71 0.79 34.23 522.53 12648.14 5501.70 3.02 1.79 18.49 118.49 5211.81 4491.72 2.59 1.98 19.53 69.65 4608.46 2378.12 3.56 2.02 13.92 43.89 2479.53 8617.85 2.88 1.87 18.53 213.27 5943.52 9851.59 3.09 1.58 20.41 220.82 9436.46 2639.71 6.11 0.34 48.32 73.67 2840.57 2672.78 9.05 1.40 7.87 123.49 2100.58 3922.61 5.12 -0.30 -64.95 81.43 3959.82 6969.26 6.85 0.58 25.23 340.23 8535.16 7608.03 8.32 0.32 37.50 541.72 11491.42 6429.01 6.43 0.67 23.10 269.37 7937.52 5140.90 4.63 1.58 13.73 172.57 4605.38 4089.22 6.04 1.71 9.66 175.01 2750.88 3775.32 3.93 1.54 16.54 112.91 6882.38 8488.56 5.68 1.76 9.98 360.84 7153.90 2639.14 2.30 1.94 22.36 34.55 6664.00 2762.08 4.53 0.30 74.60 75.00 3490.26 9371.04 3.54 1.75 16.12 249.05 11772.17 10598.04 2.59 1.54 25.09 180.05 6054.97 4981.47 4.29 1.42 16.43 146.81 7630.61 1896.14 3.02 0.83 40.05 43.01 2863.31 2118.95 3.09 0.77 41.73 48.04 3353.94 2509.63 1.73 2.47 23.35 57.83 4083.92

-0.38 -0.39 0.37 0.22 0.30 1.24 -0.47 0.17 0.35 0.79 -0.11 1.35 -0.62 0.71 0.84 0.25 -0.06 -3.04 0.74 0.19 1.74 -0.46 1.25 -3.31 -0.47 0.63 -0.62 0.66 0.71 0.71 0.64 0.64 0.61 0.53 0.64 0.47 0.58 0.44 -0.17 -0.80 -0.03 -0.82 0.74 1.45 0.61 0.06 0.08 -0.16 -0.28 2.00

7357.34 7131.20 7575.03 4941.94 11233.59 16928.40 4216.31 14041.22 4662.11 5204.40 4383.71 3980.01 7702.78 11286.50 3175.93 7152.38 17114.10 3463.99 23480.40 6139.80 11608.10 10596.36 32440.61 27407.69 10657.59 7427.54 14535.71 4498.11 3256.40 1738.17 7798.51 8055.55 1900.11 1696.94 2956.19 5613.91 5739.74 5279.05 3915.59 2875.42 3116.10 5683.80 2043.81 2205.56 8211.69 9042.53 4072.24 1817.97 2013.89 2885.90

8553.02 8291.06 8740.74 5710.58 12971.08 19365.72 4905.92 16233.35 5380.73 5979.96 5082.45 4548.01 8976.04 12978.62 3647.49 8262.54 19831.63 4137.44 26992.66 7096.84 13213.15 12328.99 37108.22 32827.27 12400.86 8548.48 16938.58 5175.15 3744.76 1998.87 8973.91 9269.63 2187.27 1954.96 3402.03 6471.00 6609.10 6086.81 4542.48 3357.10 3609.82 6637.21 2349.50 2517.71 9452.22 10466.23 4712.45 2108.81 2338.87 3276.56

8553.02 8291.06 8740.74 5710.58 12971.08 19365.72 4905.92 16233.35 5380.73 5979.96 5082.45 4548.01 8976.04 12978.62 3647.49 8262.54 19831.63 4137.44 26992.66 7096.84 13213.15 12328.99 37108.22 32827.27 12400.86 8548.48 16938.58 5175.15 3744.76 1998.87 8973.91 9269.63 2187.27 1954.96 3402.03 6471.00 6609.10 6086.81 4542.48 3357.10 3609.82 6637.21 2349.50 2517.71 9452.22 10466.23 4712.45 2108.81 2338.87 3276.56

X/D adj 254.12 389.73 431.70 131.38 132.51 155.05 85.89 122.22 98.26 128.13 128.92 33.67 181.40 245.39 84.19 73.29 8.17

Total Return 6494.04 14902.46 15972.23 7231.28 3682.38 6679.66 4880.77 8249.78 6953.38 7207.63 3663.64 2164.31 18320.31 21316.04 7348.63 6576.53 985.22

8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Hourly movements FTSE 100 7074.29 7064.92 7046.22 7066.07 7081.68 7085.13 7102.49 7097.32 7091.70 7110.70 7044.81 FTSE 250 19257.89 19233.05 19222.62 19246.69 19284.76 19297.16 19325.46 19330.46 19320.07 19341.29 19204.97 FTSE SmallCap 5388.00 5388.61 5387.18 5384.49 5384.99 5390.80 5391.57 5388.27 5385.31 5397.94 5381.06 FTSE All-Share 3890.12 3885.19 3876.54 3886.03 3894.18 3896.26 3904.88 3902.66 3899.76 3908.35 3875.92 Time of FTSE 100 Day's high:14:38:45 Day's Low08:59:15 FTSE 100 2010/11 High: 7686.61(29/07/2019) Low: 6692.66(03/01/2019) Time of FTSE All-Share Day's high:14:39:00 Day's Low08:59:00 FTSE 100 2010/11 High: 4186.17(29/07/2019) Low: 3657.52(03/01/2019) 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

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FT 30 INDEX

FTSE SECTORS: LEADERS & LAGGARDS

Aug 27 Aug 26 Aug 23 Aug 22 Aug 21 Yr Ago High Low Year to date percentage changes FT 30 2896.60 2885.60 2895.40 2906.50 2875.20 0.00 3135.80 2704.70 Leisure Goods 35.79 FT 30 Div Yield 0.00 3.93 2.74 Tech Hardware & Eq 30.73 P/E Ratio net 0.00 19.44 14.26 Health Care Eq & Srv 21.77 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Personal Goods 21.18 FT 30 hourly changes Beverages 21.00 8 9 10 11 12 13 14 15 16 High Low Technology 20.78 2885.6 2874.3 2868.4 2905.1 2886.5 2889.7 2897.4 2897.6 2894 2901.7 2868.1 Software & Comp Serv 20.29 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Electronic & Elec Eq 19.52 Health Care 19.08 Pharmace & Biotech 18.74 Financial Services 18.61 Support Services 16.68 Aug 23 Aug 22 Mnth Ago Aug 27 Aug 23 Mnth Ago Media 16.20 Australia - Sweden - Construct & Material 14.92 Canada - Switzerland - Industrials 14.65 Denmark - UK 75.70 75.71 76.22 Consumer Goods 13.67 Japan - USA - Aerospace & Defense 12.04 New Zealand - Euro Norway Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100.

Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk

FX: EFFECTIVE INDICES

Industrial Eng Consumer Services General Retailers Equity Invest Instr FTSE 250 Index Food & Drug Retailer Tobacco Food Producers NON FINANCIALS Index Travel & Leisure Industrial Transport FTSE All{HY-}Share Index Household Goods & Ho FTSE 100 Index Real Est Invest & Tr FTSE SmallCap Index Nonlife Insurance Industrial Metals &

+or-

Financials Mobile Telecomms Electricity Utilities Gas Water & Multi Real Est Invest & Se Mining Basic Materials Oil & Gas Producers Oil & Gas Life Insurance Forestry & Paper Chemicals Banks Telecommunications Oil Equipment & Serv Fixed Line Telecomms Automobiles & Parts

0.86 0.58 0.53 0.27 0.19 -0.05 -0.45 -1.18 -2.05 -2.37 -3.15 -3.49 -7.15 -8.20 -9.84 -19.60 -30.63 -38.61

FTSE GLOBAL EQUITY INDEX SERIES Aug 26 Regions & countries FTSE Global All Cap FTSE Global Large Cap FTSE Global Mid Cap FTSE Global Small Cap FTSE All-World FTSE World FTSE Global All Cap ex UNITED KINGDOM In FTSE Global All Cap ex USA FTSE Global All Cap ex JAPAN FTSE Global All Cap ex Eurozone FTSE Developed FTSE Developed All Cap FTSE Developed Large Cap FTSE Developed Europe Large Cap FTSE Developed Europe Mid Cap FTSE Dev Europe Small Cap FTSE North America Large Cap FTSE North America Mid Cap FTSE North America Small Cap FTSE North America FTSE Developed ex North America FTSE Japan Large Cap FTSE Japan Mid Cap FTSE Global wi JAPAN Small Cap FTSE Japan FTSE Asia Pacific Large Cap ex Japan FTSE Asia Pacific Mid Cap ex Japan FTSE Asia Pacific Small Cap ex Japan FTSE Asia Pacific Ex Japan FTSE Emerging All Cap FTSE Emerging Large Cap FTSE Emerging Mid Cap FTSE Emerging Small Cap FTSE Emerging Europe FTSE Latin America All Cap FTSE Middle East and Africa All Cap FTSE Global wi UNITED KINGDOM All Cap In FTSE Global wi USA All Cap FTSE Europe All Cap FTSE Eurozone All Cap FTSE RAFI All World 3000 FTSE RAFI US 1000 FTSE EDHEC-Risk Efficient All-World FTSE EDHEC-Risk Efficient Developed Europe Oil & Gas

No of US $ stocks indices 8884 565.35 1773 503.07 2146 739.10 4965 773.59 3919 331.22 2592 589.78 8572 591.89 7066 457.93 7547 582.70 8215 591.11 2170 538.80 5692 564.18 907 501.21 237 341.99 347 546.12 737 756.85 267 619.27 407 857.65 1349 868.28 674 409.19 1496 241.04 189 351.07 323 546.61 825 594.34 512 147.42 900 638.14 824 774.00 1757 492.95 1724 499.66 3192 688.20 866 657.73 883 843.69 1443 682.02 81 368.41 234 829.59 333 626.10 312 307.18 1818 704.45 1476 400.36 669 386.43 3287 6352.26 1062 11385.30 3919 389.27 584 298.33 152 323.80

Day % 0.2 0.3 0.1 0.0 0.3 0.3 0.3 -0.8 0.4 0.2 0.4 0.4 0.5 0.1 -0.2 -0.4 1.1 0.8 0.7 1.1 -0.7 -1.6 -1.7 -2.2 -1.6 -1.3 -1.5 -1.7 -1.3 -1.2 -1.1 -1.4 -1.6 -0.7 -2.4 -1.4 -0.4 1.0 0.0 0.3 0.1 1.0 0.1 -0.2 -0.2

Mth % -5.4 -5.2 -5.9 -5.8 -5.3 -5.3 -5.3 -5.8 -5.5 -5.4 -5.1 -5.1 -4.9 -5.0 -6.0 -5.0 -4.7 -5.7 -5.7 -4.9 -5.4 -3.2 -4.5 -5.4 -3.5 -7.6 -7.9 -7.6 -7.6 -7.7 -7.7 -8.0 -6.8 -6.6 -12.1 -8.3 -6.9 -5.1 -5.2 -5.5 -6.5 -6.0 -5.2 -5.3 -9.6

YTD Total % retn 10.1 847.21 10.1 775.63 9.8 1044.28 10.5 1053.32 10.1 525.03 10.6 1254.81 10.6 871.53 4.5 744.76 10.8 881.99 10.5 867.39 11.1 814.04 11.1 840.85 11.2 770.17 6.7 619.09 5.3 871.32 5.8 1164.15 14.8 881.23 15.5 1127.59 15.0 1104.86 14.9 595.18 4.7 422.25 3.8 475.62 -1.2 705.33 0.6 794.24 2.8 223.75 2.2 1069.48 -3.4 1243.92 -1.3 775.17 1.6 889.49 1.6 1096.45 1.6 1055.04 1.0 1339.58 2.7 1041.53 12.9 649.97 -1.4 1368.95 -1.6 1041.55 1.7 563.55 15.0 969.24 6.6 697.45 6.6 674.02 4.4 8975.90 10.2 15733.41 8.6 569.66 4.5 484.89 -2.4 567.42

YTD Gr Div Aug 26 No of US $ Day Mth YTD Total YTD Gr Div % Yield Sectors stocks indices % % % retn % Yield 12.1 2.5 Oil & Gas Producers 107 315.47 -0.2 -0.2 -3.9 565.00 -1.0 4.7 12.2 2.6 Oil Equipment & Services 34 235.88 -0.1 -0.1 5.8 371.63 9.2 5.2 11.5 2.3 Basic Materials 354 444.91 -0.5 -0.5 -0.6 725.11 1.7 3.6 11.9 2.1 Chemicals 163 663.27 -0.5 -0.5 0.3 1076.57 2.3 2.9 12.1 2.6 Forestry & Paper 20 217.85 -0.6 -0.6 -12.1 399.56 -9.1 4.6 12.6 2.6 Industrial Metals & Mining 94 307.09 -1.4 -1.4 -14.2 500.43 -12.2 5.2 12.5 2.4 Mining 77 634.46 -0.1 -0.1 8.4 1049.52 11.4 4.0 7.0 3.3 Industrials 749 397.52 0.0 0.0 13.4 597.91 15.0 2.1 12.8 2.5 Construction & Materials 146 482.01 -0.5 -0.5 9.2 760.13 11.3 2.5 12.3 2.4 Aerospace & Defense 35 865.32 0.6 0.6 22.5 1285.94 24.2 1.9 13.0 2.5 General Industrials 65 194.89 0.0 0.0 2.9 318.97 4.7 2.5 13.0 2.5 Electronic & Electrical Equipment 133 414.04 -1.1 -1.1 10.4 567.05 11.9 1.9 13.2 2.6 Industrial Engineering 151 679.46 -0.8 -0.8 2.9 1013.08 4.8 2.7 10.2 3.8 Industrial Transportation 129 692.00 0.2 0.2 12.4 1045.70 14.1 2.4 8.0 3.2 Support Services 90 472.18 0.7 0.7 27.7 673.25 28.9 1.5 549 472.32 0.2 0.2 11.5 738.88 13.6 2.7 8.3 3.2 Consumer Goods 16.5 2.1 Automobiles & Parts 136 327.02 -0.1 -0.1 -3.4 499.30 -1.0 3.8 16.8 1.8 Beverages 64 703.53 0.8 0.8 17.7 1109.08 19.4 2.3 16.1 1.6 Food Producers 130 661.62 0.3 0.3 18.3 1059.46 20.6 2.2 16.5 2.0 Household Goods & Home Construction 60 464.95 0.7 0.7 16.1 724.71 18.6 2.6 7.3 3.4 Leisure Goods 44 207.68 -0.6 -0.6 12.2 281.51 13.2 1.3 5.2 2.6 Personal Goods 102 829.52 0.3 0.3 15.7 1210.82 17.2 1.9 0.0 2.4 Tobacco 13 916.93 -1.2 -1.2 2.8 2104.07 6.0 6.4 1.9 2.4 Health Care 277 534.16 0.3 0.3 5.2 803.42 6.9 2.1 4.1 2.6 Health Care Equipment & Services 92 1023.79 0.3 0.3 10.1 1218.81 10.7 1.0 4.4 3.1 Pharmaceuticals & Biotechnology 185 359.18 0.3 0.3 2.9 570.74 5.0 2.6 -1.4 3.4 Consumer Services 453 512.94 0.7 0.7 14.7 707.89 15.9 1.5 65 264.00 0.4 0.4 0.7 387.59 2.6 2.6 0.8 3.2 Food & Drug Retailers 3.8 3.1 General Retailers 150 818.16 0.7 0.7 18.0 1089.91 18.8 1.0 4.1 3.2 Media 90 358.06 1.3 1.3 15.6 497.32 17.0 1.8 148 496.28 0.3 0.3 13.6 697.11 15.1 1.9 4.0 3.1 Travel & Leisure 3.5 3.7 Telecommunication 91 150.39 -0.1 -0.1 5.0 309.59 8.3 4.5 38 124.50 0.5 0.5 5.2 285.87 9.2 5.2 5.2 3.4 Fixed Line Telecommuniations 18.6 6.5 Mobile Telecommunications 53 160.67 -0.9 -0.9 4.7 291.78 7.0 3.5 1.0 3.7 Utilities 189 299.10 0.4 0.4 11.4 628.46 14.2 3.5 130 336.01 0.6 0.6 12.3 695.46 15.0 3.3 0.8 3.7 Electricity 59 300.43 0.1 0.1 9.5 652.72 12.7 3.8 5.2 4.5 Gas Water & Multiutilities 840 234.34 0.2 0.2 7.2 409.86 9.9 3.5 16.4 1.9 Financials 277 182.00 0.0 0.0 -1.1 347.06 2.2 4.6 9.9 3.7 Banks 72 282.69 0.8 0.8 10.4 431.70 12.6 2.3 9.8 3.5 Nonlife Insurance 60 210.41 -0.7 -0.7 5.2 360.80 8.0 3.5 7.0 3.5 Life Insurance 203 329.52 0.6 0.6 18.8 472.77 20.4 1.9 12.1 2.6 Financial Services 265 302.03 0.7 0.7 19.5 381.79 20.7 1.4 10.5 2.6 Technology 134 542.82 0.9 0.9 20.5 645.00 21.1 0.8 7.3 3.3 Software & Computer Services 0.6 4.7 Technology Hardware & Equipment 131 216.32 0.6 0.6 18.2 289.26 20.1 2.2 Alternative Energy 11 101.32 -0.6 -0.6 7.3 141.91 8.8 1.5 Real Estate Investment & Services 145 329.57 -1.3 -1.3 3.4 583.45 5.6 3.2 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/ mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC (US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2, WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence.

UK COMPANY RESULTS closing Price p

11.49 10.64 10.57 10.07 9.91 9.42 9.38 8.96 7.96 6.86 6.51 6.08 6.07 5.45 4.72 4.07 2.59 1.24

FTSE 100 SUMMARY

Company Bunzl Cadogan Petroleum PureTech Health

FTSE 100

Closing Day's Price Change FTSE 100

3I Group PLC Admiral Group PLC Anglo American PLC Antofagasta PLC Ashtead Group PLC Associated British Foods PLC Astrazeneca PLC Auto Trader Group PLC Aveva Group PLC Aviva PLC Bae Systems PLC Barclays PLC Barratt Developments PLC Berkeley Group Holdings (The) PLC Bhp Group PLC BP PLC British American Tobacco PLC British Land Company PLC Bt Group PLC Bunzl PLC Burberry Group PLC Carnival PLC Centrica PLC Coca-Cola Hbc AG Compass Group PLC Crh PLC Croda International PLC Dcc PLC Diageo PLC Direct Line Insurance Group PLC Evraz PLC Experian PLC Ferguson PLC Flutter Entertainment PLC Fresnillo PLC Glaxosmithkline PLC Glencore PLC Halma PLC Hargreaves Lansdown PLC Hiscox LTD HSBC Holdings PLC Imperial Brands PLC Informa PLC Intercontinental Hotels Group PLC International Consolidated Airlines Group S.A. Intertek Group PLC Itv PLC Jd Sports Fashion PLC Johnson Matthey PLC Just Eat PLC Kingfisher PLC

1079 2165 1690.4 810.40 2153 2267 7240 535.20 3842 358.50 541.00 136.68 647.20 3967 1672.6 488.05 2832 517.20 160.00 2027 2109 3407 66.66 2689 2075 2660 4564 6894 3444.5 289.00 483.10 2535 5884 6754 697.60 1687.2 223.80 1951.5 1909 1585 580.90 2061.5 864.20 5086 422.70 5332 114.00 603.60 2833 756.00 193.00

-7.50 8.00 23.80 -1.60 6.00 -11.00 -73.00 10.20 -10.00 -2.90 -0.20 -1.36 11.20 -2.00 -7.80 0.05 -129.00 20.40 1.06 -6.00 -26.00 -27.00 1.12 21.00 25.00 16.00 -16.00 112.00 26.50 1.30 1.60 20.00 -100.00 34.00 13.20 -4.00 -1.70 -8.00 20.00 5.00 -5.50 6.50 7.00 -23.00 2.90 -32.00 -0.90 2.80 27.00 -16.20 2.40

Closing Day's Price Change

Land Securities Group PLC Legal & General Group PLC Lloyds Banking Group PLC London Stock Exchange Group PLC Marks And Spencer Group PLC Melrose Industries PLC Micro Focus International PLC Mondi PLC Morrison (Wm) Supermarkets PLC National Grid PLC Next PLC Nmc Health PLC Ocado Group PLC Pearson PLC Persimmon PLC Phoenix Group Holdings PLC Prudential PLC Reckitt Benckiser Group PLC Relx PLC Rentokil Initial PLC Rightmove PLC Rio Tinto PLC Rolls-Royce Holdings PLC Royal Bank Of Scotland Group PLC Royal Dutch Shell PLC Royal Dutch Shell PLC Rsa Insurance Group PLC Sage Group PLC Sainsbury (J) PLC Schroders PLC Scottish Mortgage Investment Trust PLC Segro PLC Severn Trent PLC Smith & Nephew PLC Smith (Ds) PLC Smiths Group PLC Smurfit Kappa Group PLC Spirax-Sarco Engineering PLC Sse PLC St. James's Place PLC Standard Chartered PLC Standard Life Aberdeen PLC Taylor Wimpey PLC Tesco PLC Tui AG Unilever PLC United Utilities Group PLC Vodafone Group PLC Whitbread PLC Wpp PLC

784.60 219.70 49.76 6840 189.60 167.85 1566.8 1596 182.20 854.10 5882 2298 1236 809.00 1930 634.20 1348 6254 1949 447.80 530.70 3934.5 748.60 184.15 2243 2248 528.60 693.00 196.25 2671 508.00 776.60 2052 1937.5 331.70 1572.5 2490 7795 1128.5 938.40 606.80 250.70 148.40 213.70 825.60 5095 795.00 151.28 4306 947.20

24.80 -2.00 -0.23 8.00 2.90 2.15 -2.40 19.50 0.40 1.10 116.00 141.00 36.00 -9.00 20.50 -5.40 -14.50 148.00 23.00 3.90 2.80 10.00 -1.40 1.20 -9.00 -18.50 -2.40 5.40 -0.55 33.00 -3.00 3.80 22.00 4.50 7.50 -11.00 78.00 -80.00 4.50 5.40 -7.60 10.00 1.30 1.10 21.80 85.00 7.80 0.94 30.00 -5.00

UK STOCK MARKET TRADING DATA Aug 27 Aug 23 Aug 22 Aug 21 Aug 20 Yr Ago Order Book Turnover (m) 150.51 43.90 43.90 43.90 50.81 40.46 Order Book Bargains 876641.00 782535.00 782535.00 782535.00 802055.00 694536.00 Order Book Shares Traded (m) 1449.00 1173.00 1173.00 1173.00 1161.00 1097.00 Total Equity Turnover (£m) 5942.14 5300.83 5300.83 5300.83 4284.99 4418.17 Total Mkt Bargains 1045830.00 904458.00 904458.00 904458.00 924670.00 813839.00 Total Shares Traded (m) 3908.00 4347.00 4347.00 4347.00 4526.00 3395.00 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable. (c) Market closed.

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

For all queries e-mail ft.reader.enquiries@morningstar.com

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

UK RECENT EQUITY ISSUES Int Int Int

Turnover 4528.400 4343.700 5.313 3.319 4.977 4.387

Pre-tax 200.500 197.300 0.422L 2.652 16.060L 11.123

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier.

For more information on dividend payments visit www.ft.com/marketsdata

EPS(p) Div(p) Pay day 45.100 0.00000 15.20000 46.500 0.001L 0.00000 0.00000 0.011 0.030L 0.00000 0.00000 0.100

Total 35.000 47.200 0.000 0.000 0.000 0.000

Issue date 07/29 07/26 07/17

Issue price(p) 10.00 5.00 1.15

Sector AIM

Stock code MUST BSFA UPR

Stock Mustang Energy PLC BSF Enterprise PLC Uniphar PLC

§Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/ir For a full explanation of all the other symbols please refer to London Share Service notes.

Close price(p) 11.00 5.00 1.12

+/0.60 -0.02

High 11.65 0.00 1.25

Low 10.00 0.00 1.09

Mkt Cap (£m) 92.4 101.7 305.8

RELEASED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws ★

Wednesday 28 August 2019

17

FINANCIAL TIMES

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

52 Week High Low

Price Day Chg

Yld

26.38 34.95 77.15 234.05 27.30 3.74 39.10 27.62 35.97

0.11 0.26 0.39 0.15 0.24 0.04 0.41 0.30

29.60 42.33 83.99 239.76 28.78 4.01 40.43 29.11 36.65

22.98 30.31 65.23 173.00 22.52 2.71 30.40 23.30 27.03

85.16 51.72

0.06 -0.20

92.71 68.70

56.39 48.65

18.12 28.00 7.28 28.90 26.75 43.35

0.03 -0.03 -0.02 0.14 0.34 0.55

20.77 35.89 15.46 91.08 33.70 62.42

14.54 1.85 24.05 68394.43 19.73 1.16 13.74 27093.95 6.25 18.69 7.04 4746.74 27.19 4.58 10.32 34390.01 21.01 1.15 10.74 47779.59 40.51 3.68 16.34 29442.91

61.73 88.37 68.38 67.74 314.86 99.86 30.33 120.91 43.80 28.31 31.74 21.66 65.25 97.83 37.29 89.36 71.62 65.19 30.80

0.32 -4.01 0.61 -0.01 2.09 -0.99 -0.16 1.07 0.22 0.05 -0.16 -0.15 0.62 -0.05 0.01 1.42 -0.21 0.51 -1.06

62.75 109.00 78.60 69.17 323.71 125.21 46.39 127.96 51.22 34.42 44.69 25.18 76.17 107.91 54.51 93.44 80.05 67.15 36.02

2.97 2.95 5.18 0.90 6.00 3.19 8.41 5.05 5.78 27.60 3.99 18.28 35.65 65.40 31.65 5.07 16.37 6.04 15.14 5.92 5.48 7.79 5.56 5.28 7.65 0.01 13.72 7.48 31.33 4.29 1.51 4.87 18.27 1109 1.29 34.10 3.73 90.20 14.31 4.80 24.96 0.06 11.30 4.51 2.36 87.72 7210 353.60

6.00 4.74 5.59 1.06 7.18 3.35 5.63 6.74 2.59

P/E MCap m 12.36 14.77 16.88 38.81 13.42 20.64 22.79 13.96 28.88

50567.61 69625.17 92358.35 71721.26 53225.09 30080.29 29980.36 65185.1 30617.33

2.07 26.42 160072.49 6.70 8.98 23893.31

50.72 86.25 66.36 49.87 228.35 97.55 30.10 96.46 39.40 26.83 31.51 18.33 59.97 90.10 35.53 61.32 65.56 47.90 14.01

4.91 19.40 41892.54 4.12 10.10 42571.7 4.60 10.99 62920.87 1.17 18.20 50854.86 0.86 19.59 33014.32 5.60 8.64 33497.2 4.58 7.73 27179.2 1.61 20.38 65701.39 6.30 18.96 66836 5.55 11.23 19809.3 2.44 8.23 18254.12 4.38 7.74 31966.43 3.31 164.53 28183.32 4.14 11.02 105814.95 4.10 10.55 43737.45 2.13 136.97 33765.68 3.56 12.44 98271.11 4.32 14.73 45848.16 -8.68 8158.48

-0.01 3.91 -0.01 3.84 -0.03 7.06 0.03 1.21 0.15 8.87 0.07 4.10 0.11 11.94 0.14 8.21 0.03 7.21 35.60 0.04 5.41 23.35 -0.25 42.75 -1.00 87.70 -1.35 34.75 0.04 6.36 -0.08 19.99 0.07 7.57 0.02 20.40 0.06 7.10 0.03 6.72 -0.05 10.70 0.16 6.73 0.03 8.62 -0.03 9.13 0.00 0.04 0.01 15.13 0.05 11.50 0.68 37.24 -0.02 5.29 0.02 2.11 -0.03 6.19 0.17 20.66 6.05 1133.56 1.69 -0.75 46.95 -0.02 6.52 -0.30 98.00 0.06 15.22 0.17 6.25 0.93 32.80 0.16 12.38 -0.05 8.03 0.04 3.35

2.93 6.67 4.58 11634.34 2.91 6.66 4.47 31436.96 5.10 6.16 4.85 23112.38 0.83 35.80 22.82 5.80 4.66 4.62 3385.4 3.09 6.40 5.18 5154.29 8.25 2.50 6.11 2225.27 4.82 2.59 6.23 2707.71 5.55 5.70 5.20 177088.99 21.50 3.68 7.61 5550.09 3.92 7.24 4.08 7567.28 15.44 0.97 14.55 17334.74 27.35 2.91 9.60 20857.24 62.05 4.74 11.24 170651.89 24.20 3.49 10.01 11193.92 4.98 1.67 3.97 5375.83 11.13 2.12 23.44 13062.67 4.91 0.89 41.66 17863.43 14.66 6.61 6.06 6557.26 3.86 0.19 147.24 15166.92 4.91 2.82 6.27 31457.29 6.96 1.94 19.64 30375.98 5.19 2.03 18.41 12075.35 5.16 3.13 11.71 2941.16 7.38 6.17 7.85 15868.67 0.01 0.00 17.32 6.71 0.88 24.34 15697.51 6.31 3.49 10.79 3250.14 22.32 1.93 25.33 35294.88 4.04 2.65 32.44 2569.75 1.44 0.33 21.53 6674.07 4.81 5.53 5.33 53866.12 14.50 3.57 6.16 48567.84 509.02 1.32 35.15 194380.3 1.18 7.49 -15.34 35.35 27.30 1.76 11.15 4493.86 3.69 2.74 11.65 10029.15 65.95 2.13 9.95 85609.23 9.15 1.98 9.87 34282.97 4.56 1.94 9.82 7463.85 22.69 7.37 8.40 40062.2 0.06 -2.13 67.01 9.60 4.01 5.70 44310.36 4.49 13.66 8.56 14663.85 1.82 - 146.58 3965.53

-0.02 16.00 2.60

86.46 6716 265.15

195.45 10085 356.50

9.58 5.97 11259.2 2.03 111.28 10798.48 2.28 22.84 98046.47

Stock

Price Day Chg

Week change change % 19.22 22.5 8.94 9.1 25.01 7.5 0.14 6.3 2.91 6.0 8.44 5.8 157.50 5.8 0.71 5.5 14.23 5.2 53.12 5.0 7.70 4.9 0.28 4.9 18.60 4.7 3.45 4.4 636.00 4.3 0.26 4.2 159.00 3.7 1.90 3.7 9.97 3.7 0.03 3.4

Month change % 20.34 3.17 3.37 -0.84 -1.45 -3.83 9.58 1.70 1.97 15.68 4.57 1.51 16.73 4.43 6.91 4.65 -8.19 -4.26 -0.41 -5.94

INTEREST RATES: OFFICIAL Current 2.25-2.50 5.50 3.00 0.00 0.75 0.00-0.10 -1.25-0.25

Over night 2.08838 -0.46729 0.67688

Last 2.00-2.25 5.25 2.75 0.00 0.50 0.00 -0.75--0.25

Mnth Ago 2.00-2.25 5.25 2.75 0.00 0.50 0.00--0.10 -1.25--0.25

Year Ago 1.25-1.50 4.25 1.75 0.00 0.25 0.00--0.10 -1.25--0.25

Day -0.005 -0.001 0.002

Change Week -0.010 0.000 0.009

Month -0.006 -0.001 0.001 -0.005 0.004 -0.010 0.000 0.000 -

One month 2.13950 -0.45286 0.70900 -0.85680 -0.10017 -0.42300 0.75000 2.45000 -

Three month 2.14438 -0.44871 0.76200 -0.84220 -0.08583 -0.41800 0.77000 2.56000 -

Six month 2.08013 -0.44043 0.80550 -0.82140 -0.04800 -0.41500 0.82500 2.65000 -

One year 2.02850 -0.38500 0.86625 -0.71700 0.04400 -0.36400

Short term -0.61 -0.31

7 Days One Three Six One Aug 27 notice month month month year Euro -0.67 -0.37 -0.57 -0.27 -0.61 -0.31 -0.63 -0.33 -0.59 -0.29 Sterling 0.45 0.55 0.70 0.80 0.72 0.82 0.75 0.90 0.78 0.93 Swiss Franc Canadian Dollar US Dollar 2.04 2.34 2.08 2.38 2.03 2.33 2.01 2.31 1.96 2.26 1.87 2.17 Japanese Yen -0.20 0.00 -0.40 -0.20 -0.20 0.10 -0.10 0.20 -0.05 0.25 0.00 0.30 Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA.

COMMODITIES Energy Price* Crude Oil† Sep 54.27 Brent Crude Oil‡ 58.72 RBOB Gasoline† Aug 1.64 Heating Oil† Natural Gas† Sep 2.22 Ethanol♦ Uranium† Sep 25.15 Carbon Emissions‡ Diesel† Base Metals (♠ LME 3 Months) Aluminium 1760.00 Aluminium Alloy 1160.00 Copper 5667.50 Lead 2092.00 Nickel 15675.00 Tin 15730.00 Zinc 2272.00 Precious Metals (PM London Fix) Gold 1503.80 Silver (US cents) 1705.00 Platinum 851.00 Palladium 1460.00 Bulk Commodities Iron Ore 83.10 GlobalCOAL RB Index 57.00 Baltic Dry Index 2213.00

www.ft.com/commodities

Change 0.47 -0.14 0.01 -0.01 0.00 -7.50 10.00 33.00 26.50 5.00 -190.00 25.50

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

1.75 9.00 S&P GSCI Spt -4.00 DJ UBS Spot -18.00 TR/CC CRB TR M Lynch MLCX Ex. Rtn -2.90 UBS Bberg CMCI TR -0.75 LEBA EUA Carbon 45.00 LEBA CER Carbon LEBA UK Power

Oct Sep Oct

Price* 358.00 473.00 845.75 290.90 1644.00 2217.00 1320.00 93.85 306.40 11.46 57.24 98.10 101.23 135.78 63.80

Change -0.75 0.00 -6.25 -1.20 -7.00 0.00 40.00 -0.40 -4.10 0.02 -0.35 0.10 0.00 2.93 0.00

Aug 23 392.61 76.35 177.61 231.14 13.70 26.60 0.21 2090.00

% Chg Month -5.74 -3.02 -4.53 -9.84 -5.02 -5.64 0.00 132.22

% Chg Year -15.31 -8.76 -10.02 -33.05 -8.39 19.82 -16.00 -5.22

Sep Sep Sep Sep Sep Sep Sep Sep Oct Sep

TE

LE

LE

A

SE v GR k. D B A com Y " M W : t /w h .m sn at e/ w 's N w s ew ha s" ts nw s

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

RE

Stock

Price Day Chg

Japan (¥) AstellasPh 1446 Bridgestne 4002 Canon 2745.5 CntJpRwy 20735 Denso 4416 EastJpRwy 10100 Fanuc 17860 FastRetail 62330 Fuji Hvy Ind 2874 Hitachi 3563 HondaMtr 2484 JapanTob 2249.5 KDDI 2799.5 Keyence 61160 MitsbCp 2554.5 MitsubEst 1996.5 MitsubishiEle 1259 MitsuiFud 2472.5 MitUFJFin 497.20 Mizuho Fin 152.90 Murata Mfg 4370 NipponTT 4937 Nissan Mt 647.30 Nomura 410.70 Nppn Stl 1455.5 NTTDCMo 2613.5 Panasonic 809.00 Seven & I 3695 ShnEtsuCh 10465 Softbank 4647 Sony 5882 SumitomoF 3435 Takeda Ph 3462 TokioMarine 5387 Toyota 6919 Mexico (Mex$) AmerMvl 13.70 FEMSA UBD 178.10 WalMrtMex 55.36 Netherlands (€) Altice 3.92 ASML Hld 193.46 Heineken 94.88 ING 8.50 Unilever 55.14 Norway (Kr) DNB 142.65 Equinor 151.00 Telenor 185.65 Qatar (QR) QatarNtBk 18.02 Russia (RUB) Gzprm neft 223.72 Lukoil 5055 MmcNrlskNckl 15394 Novatek 1245.8 Rosneft 403.55 Sberbank 216.10 Surgutneftegas 25.90 Saudi Arabia (SR) AlRajhiBnk 64.70 Natnlcombnk 50.00 SaudiBasic 99.40 SaudiTelec 106.00 Singapore (S$) DBS 24.17 JardnMt US$♦ 52.24 JardnStr US$♦ 31.47 OCBC♦ 10.58 SingTel 3.20 UOB 24.46 South Africa (R) Firstrand 57.90 MTN Grp 100.42 Naspers N 3415.5 South Korea (KRW) HyundMobis 240500 KoreaElePwr 25150 SK Hynix 73000 SmsungEl 44050 Spain (€) BBVA 4.29 BcoSantdr 3.47 CaixaBnk 2.05 Iberdrola 9.30 Inditex 27.16 Repsol 12.55 Telefonica 6.14

52 Week High Low

Yld

P/E MCap m

18.50 53.00 48.50 15.00 31.00 70.00 70.00 1100 135.00 47.00 31.00 15.00 41.00 900.00 3.00 -13.00 9.00 -8.00 1.50 16.00 35.00 -1.50 7.30 10.00 24.00 2.10 46.00 75.00 110.00 43.00 13.00 14.00 -25.00 50.00

2056 4661 3679 26255 6036 10940 22800 70230 3498 4198 3519 3010 3173 73870 3638 2127 1600.5 2857 740.90 205.00 16430 5294 1108.5 565.90 2435 3095 1386 5203 11300 6045 6973 4775 4943 5833 7257

1356 3888 2687.5 20385 4081 9063 15570 47040 2208.5 762.20 2412 2186.5 2331.5 50780 2520 1657 1146 2263.5 490.50 150.10 4304 4050 638.10 330.70 1413.5 2257.5 787.70 3573 7982 3401.5 4507 3380 3438 4929 6045

2.49 3.79 5.53 0.66 3.01 1.41 2.53 0.73 4.75 1.41 4.28 6.41 3.56 0.31 4.64 1.42 3.01 1.69 4.20 4.65 4.05 3.46 8.35 1.39 5.21 3.99 3.52 2.44 1.81 0.45 0.56 4.97 4.69 3.17 3.01

12.89 25787.08 11.42 28774.67 16.98 34573.46 9.58 40328.66 15.46 32852.43 13.15 36039.44 27.48 34405.03 40.60 62423.37 13.93 20871.56 14.36 32539.49 8.56 42483.01 10.70 42477.46 11.63 62256.22 36.05 70219.43 7.82 38350.11 21.53 26223.66 11.35 25523.55 15.66 23144.01 8.61 64161.03 47.57 36656.87 38.38 27882.79 11.85 90913.44 12.74 25794.9 -28.99 13546.78 6.94 13059.46 14.92 82298.33 7.20 18736.91 16.22 30924.83 14.62 42249.96 4.80 91690.21 9.51 70626.42 9.30 45393.76 34.03 51525.73 14.14 36111.69 11.06 213158.48

0.46 1.56 0.27

16.57 192.50 57.70

12.32 163.60 47.41

2.34 13.56 30768.67 1.42 17.61 19265.04 1.54 25.46 48382.75

-0.06 1.04 0.36 0.08 1.00

4.52 211.50 104.00 12.14 55.35

1.53 130.12 74.28 8.20 45.43

2.84 5098.82 1.07 36.01 91414.57 1.59 28.62 60668.2 7.92 8.67 36744.99 2.82 15.76 94554.17

0.60 1.10 2.15

174.20 234.60 190.80

135.50 144.50 148.10

5.90 8.72 24995.01 5.49 7.03 55897.3 4.56 26.80 29692.02

-0.18

20.05

16.45

3.20 13.03 45703.42

-5.18 -60.00 54.00 -38.20 -2.15 -2.40 0.39

256.40 5996 15558 1382.2 522.80 250.65 29.10

-0.30 0.05 -0.40 0.80

76.90 64.40 129.20 117.40

50.83 38.35 98.80 74.50

0.08 -0.43 -0.23 0.04 0.04 0.01

28.64 72.05 40.70 12.19 3.56 27.97

22.65 10.99 30.80 10.36 2.83 23.39

143.25 3.43 4492 4.24 10558 14.24 1014.9 2.13 390.75 6.53 166.00 7.53 24.06 2.32

3.20 5.75 9.67 6.84 7.30 5.34 1.26

79635.09 57005.92 36628.6 56876.3 64308.15 70142.9 13913.13

5.27 4.03 4.25 3.62

15.74 14.22 20.95 19.43

43129.88 39996.81 79513.65 56528.82

6.14 3.14 1.04 4.02 5.41 4.05

10.01 12.14 11.45 9.92 18.82 9.69

44535.75 38566.6 34812.58 32351.37 37635.61 29544.46

-0.32 71.95 54.86 -0.80 114.43 69.07 35.50 3750.01 2290.85

4.88 10.71 21188.27 5.22 19.91 12344.02 0.19 24.79 97739.85

1500 250000 165000 -50.00 36000 23850 1200 84300 56700 450.00 48450 36850

2.10 11.28 18923.64 -8.80 13329.53 2.08 5.12 43875.48 3.23 7.96 217105.41

0.01 -0.03 0.00 0.04 0.27 -0.05 0.09

5.79 4.68 4.23 9.40 28.86 17.24 8.06

4.19 3.42 1.98 5.94 21.85 12.37 5.86

6.00 6.03 31758.34 6.57 8.58 62462.91 8.21 9.29 13598.68 5.71 18.15 65709.83 2.12 25.33 93968.02 7.22 10.25 22273.96 6.44 35406.91

Stock

Price Day Chg

52 Week High Low

Sweden (SKr) AtlasCpcoB 247.10 4.50 287.50 Ericsson 77.48 -0.88 96.74 H&M 180.30 0.32 180.94 Investor 443.90 3.90 467.80 Nordea Bk 60.80 1.22 99.34 SEB 82.50 0.18 100.50 SvnskaHn 84.02 1.06 113.00 Swedbank 123.85 0.05 221.70 Telia Co 41.70 0.37 43.96 Volvo 126.70 0.80 162.20 Switzerland (SFr) ABB 18.15 0.05 23.54 CredSuisse 11.19 -0.02 15.44 Nestle 109.06 0.98 109.66 Novartis 88.21 1.85 94.40 Richemont 76.00 0.18 89.58 Roche 271.80 1.55 283.30 Swiss Re 98.58 -0.34 102.95 Swisscom 484.70 4.60 499.40 Syngent 453.40 0.90 471.20 UBS 10.32 -0.01 16.11 Zurich Fin 347.20 -1.10 354.70 Taiwan (NT$) Chunghwa Telecom♦ 107.50 0.50 117.50 Formosa PetChem 95.50 0.30 151.00 HonHaiPrc 72.20 0.20 102.00 MediaTek 345.50 2.50 356.50 TaiwanSem 250.00 1.50 286.00 Thailand (THB) PTT Explor 40.75 -0.25 55.25 United Arab Emirates (Dhs) Emirtestele 16.12 0.10 17.80 United Kingdom (p) AscBrFd 2267 -11.00 2659 AstraZen♦ 7240 -73.00 7479 358.50 -2.90 498.50 Aviva♦ Barclays♦ 136.68 -1.36 185.54 BP♦ 488.05 0.05 603.20 BrAmTob 2832 -129.00 4058 BSkyB 1727.5 1.50 1740 BT♦ 160.00 1.06 268.60 Compass 2075 25.00 2113 Diageo♦ 3444.5 26.50 3538 GlaxoSmh♦ 1687.2 -4.00 1749.4 Glencore 223.80 -1.70 343.60 580.90 -5.50 695.90 HSBC♦ Imperial Brands♦ 2061.5 6.50 2851 49.76 -0.23 66.79 LlydsBkg♦ Natl Grid 854.10 1.10 892.00 1348 -14.50 1819.5 Prudential♦ RBS♦■ 184.15 1.20 274.20 ReckittB♦ 6254 148.00 7174 RELX♦ 1949 23.00 1995.13 3934.5 10.00 5039 RioTinto♦■ RollsRoyce 748.60 -1.40 1024 2248 -18.50 2687 RylDShlA♦ Shire# 4690 111.00 4780 StandCh 606.80 -7.60 742.60 Tesco 213.70 1.10 260.10 Vodafone 151.28 0.94 176.18 WPP 947.20 -5.00 1323.5 United States of America ($) 21stC Fox A 32.06 -0.02 41.70 3M♦ 155.75 -0.37 219.75 AbbottLb 83.59 0.47 88.76 Abbvie 66.07 -0.39 98.70 Accenture 195.77 0.30 197.93 Adobe 287.97 -0.77 313.11 90.79 -0.04 91.99 AEP♦ Aetna 212.70 0.70 213.36 Aflac♦ 49.08 0.13 57.18 AirProd 224.08 1.29 232.47 Alexion 112.22 0.56 141.86 161.52 1.30 197.00 Allergan♦ Allstate 102.98 -0.23 109.13 Alphabet 1171.67 0.49 1296.98 Altria 46.26 -0.86 66.04 Amazon 1759.26 -9.61 2050.5 AmerAir 24.66 -0.53 43.89 AmerExpr 117.60 -0.93 129.34 AmerIntGrp 52.56 -0.52 57.59 AmerTower 230.83 0.76 231.64 Amgen♦ 206.05 0.64 211.90 Anadarko 72.77 0.56 76.23 Anthem 258.45 -2.06 317.99 Aon Cp 190.98 -0.54 198.61 Apple 204.79 -1.70 233.47 37.73 -0.09 52.07 ArcherDan♦

Yld

P/E MCap m

187.68 1.28 17.71 9988.26 72.82 1.301287.05 24658.99 120.50 5.34 25.14 27280.78 366.10 2.94 12.36 20944.35 57.20 12.03 10.06 25507.16 78.88 7.30 9.57 18544.96 82.02 6.57 9.62 16708.57 120.75 11.51 6.68 14522.89 38.91 5.61 21.87 18183.57 112.85 3.87 8.80 21669.51 17.25 10.36 77.74 69.22 60.44 229.20 85.88 427.00 402.50 9.86 282.40

4.09 2.28 2.18 2.99 2.28 3.11 5.28 4.41 6.30 5.20

43.56 40085.46 12.66 29134.93 35.99 330612.77 17.86 227095.57 14.85 40411.53 20.44 194516.19 78.87 32877.21 17.02 25576.45 28.04 43035.76 10.00 40567.86 13.82 52912.2

96.30 94.00 67.00 199.50 206.50

4.35 4.90 3.37 2.82 3.12

23.88 26572.51 27.60 28987.97 9.02 31893.34 27.06 17501.23 20.21 206564.01

40.75

4.72 11.68 38074.76

15.20

4.77 16.14 38166.57

2011 5312 3.87 136.47 5.08 2336.5 893.50 157.67 1467.5 2513 1408.8 188.50 6.30 1821.4 48.16 744.50 1325 176.55 5559 1466.5 3460.5 723.40 2209.5 2944 514.20 187.05 1.50 791.00

1.99 3.09 8.37 4.76 6.61 7.03 0.76 9.48 1.82 1.93 4.74 7.02 6.89 9.11 6.45 5.45 3.66 2.99 2.73 2.16 6.13 1.56 6.60 0.58 2.72 1.72 8.66 6.33

19.58 22031.17 53.57 112555.26 6.19 17661.35 7.60 28629.92 14.20 119405.76 10.54 64816.22 36.60 38843.72 7.41 19487.41 28.12 41890.48 26.48 106445.14 18.99 101854.89 40.69 39628.51 10.71 142974.29 12.68 24135.24 9.36 44022.64 19.37 35191.97 13.35 42812.8 8.06 27049.6 19.49 54062.55 25.28 46516.44 6.35 64778.11 -5.96 17090.92 11.54 126859.58 11.63 56567.13 48.88 24557 15.77 21478.68 -10.80 49534.32 17.01 14721.53

27.73 155.08 65.22 62.66 132.63 204.95 68.92 166.89 41.45 148.44 92.56 114.27 77.00 977.66 42.40 1307 24.58 89.05 36.16 140.40 166.30 40.40 227.16 135.30 142.00 36.45

0.69 12.93 11363.17 3.47 19.48 89600.29 1.38 53.50 147736.77 5.93 24.38 97684.91 1.45 27.92 131255.3 55.27 139791.8 2.79 23.53 44831.66 0.92 19.50 69637.98 2.08 12.38 36338.01 1.95 30.05 49377.18 19.62 25162.72 1.74 -6.57 52983.84 1.80 14.24 33900.17 24.53 350952.29 6.67 14.32 86418.12 75.65 870228.54 1.56 7.54 10978.51 1.28 15.09 97569.63 2.35-1816.59 45722.38 1.44 72.30 102182.79 2.59 16.90 123568.44 1.50 -63.37 36563.54 1.16 17.29 66115.96 0.83 35.42 45041.08 1.39 18.02 925482.87 3.50 16.86 21011.85

Stock

Price Day Chg

Week change change % 0.00 -23.1 -3.79 -19.0 -8.81 -10.6 -1.44 -10.2 -1.95 -8.3 -1.57 -8.2 -5.71 -7.3 -5.57 -7.3 -3.21 -7.1 -2.40 -7.1 -1.80 -6.9 -3.01 -6.8 -10.82 -6.7 -333.00 -6.7 -1.16 -6.1 -2.50 -5.8 -6.70 -5.6 -0.30 -5.4 -2.78 -5.4 -2.60 -5.3

Index

Day's change

Month's change

Year change

Return 1 month

Return 1 year

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

201.32 309.38 240.48 257.62 282.20 263.64 249.64 246.17

0.01 0.45 -0.02 0.06 0.30 0.47 0.05 0.52

-0.09 2.73 0.53 1.69 3.15 3.00 1.37 3.31

5.31 13.10 7.55 9.56 9.21 10.18 8.42 8.68

0.01 2.73 0.69 2.19 2.65 3.00 1.74 3.31

8.39 13.10 6.42 10.70 7.62 10.18 8.87 8.68

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

104.47 405.81 110.04

-0.05 -0.43 -0.19

-

-

0.54 -9.80 -0.34

-1.73 11.90 -0.64

Index

Day's change

Week's change

Month's change

Series high

Series low

264.81 50.20 63.11 60.00

-5.06 -1.46 -1.06 -3.34

-8.18 -1.74 1.74 -5.14

21.95 2.57 8.18 1.80

315.74 73.15 72.09 93.48

234.62 45.37 53.56 53.22

Month change % -47.37 -38.90 -13.04 -32.71 -15.97 -23.88 -14.17 -15.46 -18.41 -21.22 -21.12 -20.69 -10.15 -18.01 -17.50 -13.76 -12.97 -15.63 -8.91 -14.31

Red date Coupon

S*

Ratings M*

F*

Bid price

Bid yield

B+

WR

BB

105.02

4.87

0.02

-0.56

3.16

B

71.10

28.23

0.00

0.64

25.98

BBB+ BBBBBBB ABB BBB BB+ BBB+ BBB

104.40 115.93 95.75 97.75 100.62 88.50 105.50 101.26 103.50 168.37

2.60 5.21 3.80 3.24 2.83 6.59 2.58 5.82 3.66 3.62

-0.18 -0.01 0.10 0.01 -0.30 -0.03 0.00 0.01 -0.03

-0.96 -0.40 -0.38 -0.21 0.91 -0.17 0.17 -0.02 -0.34

0.34 3.50 1.29 0.99 0.58 4.34 1.12 3.07 0.80 -

08/21

7.63

High Yield Euro Aldesa Financial Services S.A.

04/21

7.25

-

-

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

03/19 01/22 01/23 03/23 03/23 03/23 10/23 03/27 08/27 06/28

7.13 12.50 2.63 2.63 3.00 3.25 4.00 6.00 4.13 12.75

BBB+ BBBBBBBABBB+ BBB+ BBB-

A3 Ba2 Ba2 Baa2 A2 Ba3 A3 Ba2 A3 Baa3

Mth's Spread chge vs yield US

Emerging Euro Brazil 04/21 2.88 BBBa2 BB- 104.45 0.08 -0.05 -0.11 -1.63 Mexico 02/22 1.88 BBB+ A3 BBB 104.49 0.07 -0.01 -0.10 -1.64 Mexico 04/23 2.75 BBB+ A3 BBB+ 107.76 0.76 0.00 -0.07 -1.56 Bulgaria 03/28 3.00 BBBBaa2 BBB 117.04 1.00 0.02 -0.15 -1.42 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

VOLATILITY INDICES

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

Markit CDX Emerging Markets 5Y 213.78 0.18 1.42 56.71 219.14 155.49 Nth Amer High Yld 5Y 354.14 -8.25 4.16 39.14 374.87 311.41 Nth Amer Inv Grade 5Y 56.28 -2.53 0.86 3.46 70.26 49.61 Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names.

BONDS: INDEX-LINKED Price Month Value No of Yield Aug 26 Aug 26 Prev return stock Market stocks Can 4.25%' 21 108.97 0.266 0.273 -0.06 5.18 84252.51 8 Fr 2.25%' 20 Swe 0.25%' 22 115.40 -2.306 -2.302 -0.24 33.18 245516.53 7 UK 2.5%' 22 116.59 -2.970 -2.958 -0.44 15.74 765417.64 28 UK 2.5%' 24 375.21 -2.857 -2.854 -0.14 6.82 765417.64 28 UK 2%' 35 307.12 -2.559 -2.559 2.73 9.08 765417.64 28 US 0.625%' 21 100.51 0.354 0.333 0.25 35.84 1412651.98 40 US 3.625%' 28 130.36 0.093 0.084 1.84 16.78 1412651.98 40 Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par amount.

BONDS: TEN YEAR GOVT SPREADS Bid Yield

Spread Spread vs vs Bund T-Bonds

Australia 0.89 - -0.63 Italy Austria -0.77 - Japan Belgium - Netherlands Canada - Norway Denmark - Portugal Finland - Spain France 0.43 - Switzerland Germany - United Kingdom Greece 2.01 - United States Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

Bid Yield 1.11 -0.32 0.04 0.45 1.52

Spread Spread vs vs Bund T-Bonds -

-0.41 -1.84 -1.48 -1.07 0.00

Aug 27 Day Chng Prev 52 wk high 52 wk low VIX 20.16 0.84 19.32 36.20 11.03 VXD 20.15 0.34 19.81 33.17 4.07 VXN 24.13 0.89 23.24 38.70 14.55 VDAX 19.62 -0.81 20.43 10.48 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. ‡ Deutsche Borse. VDAX: DAX Index Options Volatility.

BONDS: BENCHMARK GOVERNMENT Red Bid Bid Day chg Wk chg Month Year Date Coupon Price Yield yield yield chg yld chg yld 12/21 2.00 102.99 0.70 -0.04 -0.02 -0.16 -1.37 11/28 2.75 116.46 0.89 -0.09 -0.03 -0.34 -1.66 Austria 10/23 1.75 110.68 -0.77 0.01 0.01 -0.17 -0.69 02/47 1.50 134.52 0.21 -0.01 -0.03 -0.36 -1.15 Belgium 06/21 1.50 104.08 06/47 1.60 128.62 Canada 03/21 0.75 98.90 1.49 0.02 0.04 -0.05 -0.67 Denmark 11/20 0.25 101.39 11/23 1.50 110.23 Finland 09/20 0.38 101.17 -0.73 0.00 0.03 -0.05 -0.19 France 11/20 0.25 101.25 -0.75 0.01 0.00 -0.09 -0.25 05/25 0.50 106.84 -0.67 0.01 0.01 -0.17 -0.85 05/48 2.00 142.28 0.43 -0.02 -0.01 -0.35 -1.14 Germany 10/20 0.25 101.26 -0.85 0.00 -0.01 -0.15 -0.25 02/25 0.50 107.82 -0.89 0.01 0.00 -0.21 -0.82 08/48 1.25 142.11 -0.17 -0.02 -0.03 -0.37 -1.18 Greece 02/25 3.00 110.52 2.01 -0.01 -0.18 -0.08 -2.28 02/25 3.00 110.52 2.01 -0.01 -0.18 -0.08 -2.28 Ireland 10/20 5.00 106.48 -0.65 -0.04 0.01 -0.07 -0.20 05/30 2.40 125.35 0.03 -0.01 0.02 -0.19 -1.03 Italy 11/21 0.35 100.45 0.14 0.02 -0.11 0.01 -1.68 10/23 0.65 100.39 0.55 0.02 -0.11 -0.03 -1.92 09/28 4.75 131.17 1.11 0.02 -0.12 -0.26 -2.14 03/48 3.45 124.16 2.29 0.01 -0.05 -0.27 -1.36 Japan 12/21 0.10 100.98 -0.32 -0.02 -0.04 -0.12 -0.23 12/23 0.60 104.16 -0.36 -0.03 -0.04 -0.12 -0.29 12/28 1.90 121.00 -0.32 -0.05 -0.06 -0.15 -0.44 09/47 0.80 118.26 0.14 -0.06 -0.06 -0.20 -0.68 Netherlands 07/21 3.25 107.82 07/25 0.25 105.95 New Zealand 05/21 6.00 108.19 Norway 05/21 3.75 104.49 Portugal 04/21 3.85 107.29 10/23 4.95 122.21 Spain 01/21 0.05 100.82 -0.52 0.00 -0.01 -0.04 -0.36 10/28 5.15 146.84 0.04 -0.01 0.00 -0.22 -1.35 Sweden 12/20 5.00 107.17 11/23 1.50 109.34 Switzerland 04/21 2.00 105.21 -1.08 0.00 -0.04 -0.18 -0.41 United Kingdom 01/21 1.50 101.45 0.46 -0.02 -0.04 -0.02 -0.31 09/23 2.25 107.49 0.38 -0.01 -0.02 -0.07 -0.63 12/28 6.00 150.40 0.45 -0.01 0.00 -0.20 -0.90 07/47 1.50 109.94 1.09 -0.01 0.03 -0.26 -0.67 United States 11/20 1.75 100.04 1.71 0.02 0.03 -0.27 -0.94 12/23 2.25 103.30 1.46 0.02 -0.03 -0.41 -1.29 11/28 5.25 131.92 1.52 0.01 -0.06 -0.52 -1.31 11/47 2.75 115.30 2.03 0.01 -0.05 -0.58 -0.95 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

Australia

Yld

P/E MCap m

Stock

52 Week High Low

Price Day Chg

Yld

P/E MCap m

Lockheed 377.83 -2.49 386.93 241.18 2.20 19.09 106698.25 Lowes 106.81 0.41 118.23 84.75 1.69 38.32 83623.31 Lyondell 69.59 0.04 116.63 68.61 5.61 7.52 23328.07 Marathon Ptl♦ 45.51 -0.53 88.45 43.96 4.20 10.26 29960.11 Marsh&M 97.19 0.21 103.37 74.30 1.65 34.75 49208.38 MasterCard 275.93 -0.50 283.33 171.89 0.32 44.08 276788.29 McDonald's 217.22 0.31 221.93 156.56 1.99 29.59 164966.46 McKesson 141.63 -5.45 150.82 106.11 1.06 46.91 26187.97 Medtronic 107.66 0.77 109.70 81.66 1.75 33.53 144382.22 Merck 86.07 0.19 87.25 66.10 2.39 25.00 220371.45 44.02 -0.82 51.16 37.76 3.72 7.53 41222.42 Metlife♦ Microsoft♦ 135.66 0.21 141.68 93.96 1.28 27.801035819.64 Mnstr Bvrg 56.16 -0.49 66.38 47.74 30.33 30600.42 MondelezInt 54.53 0.07 55.85 38.79 1.84 22.17 78640.47 Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29 MorganStly 39.62 -0.54 50.43 36.74 2.92 8.93 65482.67 MylanNV 18.51 -0.28 39.59 16.63 - 319.87 9548.75 Netflix 290.66 -4.32 386.80 231.23 - 118.64 127262.66 NextEraE 224.38 0.76 225.36 164.25 2.03 33.62 107501.03 Nike 82.36 0.11 90.00 66.53 1.02 33.96 103103.49 170.81 -0.54 211.46 138.65 1.87 17.21 44992.51 NorfolkS♦ Northrop 362.45 -4.20 377.34 223.63 1.31 19.46 61325.88 NXP 99.67 0.96 108.51 67.62 0.97 15.97 32761.8 Occid Pet 42.05 -0.08 83.35 41.83 7.16 8.63 31468.06 Oracle 52.50 0.37 60.50 42.40 1.50 18.15 175113.82 Pepsico 134.22 0.48 135.24 104.53 2.69 15.44 187662.31 Perrigo 46.13 -0.43 78.90 36.28 1.63 73.58 6276.2 Pfizer♦ 34.62 -0.22 46.47 33.97 3.90 16.47 191496.51 95.74 -0.57 121.55 78.44 3.32 8.65 42943.38 Phillips66♦ PhilMorris 74.20 -3.54 92.74 64.67 5.93 15.29 115435.54 PNCFin 124.11 0.01 147.00 108.45 2.95 11.64 55260.83 107.38 0.21 121.29 94.37 1.72 22.13 25373.13 PPG Inds♦ Praxair 164.50 -0.99 169.75 140.00 2.11 14.32 47306.22 Priceline 1905.64 -1.38 2067.99 1612.41 19.33 92937.2 ProctGmbl 120.67 1.35 121.76 78.49 2.32 87.49 301992.74 Prudntl♦ 78.15 -1.46 106.64 75.61 4.69 8.26 31416.3 PublStor 264.00 2.71 264.56 193.89 2.92 32.66 46093.81 Qualcomm 73.61 0.70 90.34 49.10 3.25 26.68 89484.57 Raytheon 177.42 -4.29 210.89 144.27 1.93 16.94 49417.73 Regen Pharm 285.08 0.35 442.00 283.49 16.41 30783.91 S&P Global♦ 256.86 -0.34 266.22 156.68 0.80 33.84 63264.62 Salesforce 153.98 -1.16 167.56 113.60 - 127.99 135040.46 Schlmbrg 31.50 -0.09 65.57 31.11 6.12 21.92 43563.97 Sempra Energy 141.67 -0.12 142.86 104.88 2.54 20.18 38895.58 Shrwin-Will♦ 513.89 0.43 536.74 355.28 0.75 42.76 47409.61 SimonProp♦ 147.64 0.66 191.49 145.50 5.29 20.46 45475.12 SouthCpr 29.91 0.38 45.98 29.01 5.16 16.49 23122.19 Starbucks 96.43 -0.07 99.72 52.45 1.44 35.45 115426.71 StateSt 49.65 -0.17 90.20 48.62 3.65 9.34 18498.57 Stryker 218.73 1.59 222.59 144.75 0.90 24.28 81827.68 Sychrony Fin 31.39 -0.45 36.87 21.78 2.58 6.78 20822.07 T-MobileUS 77.44 -0.63 85.22 59.96 21.07 66164.88 104.75 -0.02 106.52 60.15 2.28 19.52 53667.04 Target♦ 89.33 0.38 97.99 69.84 1.92 9.91 30009.1 TE Connect♦ Tesla Mtrs 214.71 -0.29 379.49 176.99 - -60.16 38460.41 TexasInstr 122.33 0.66 130.37 87.70 2.31 23.19 114209.73 TheTrvelers 147.14 -0.20 155.09 111.08 2.05 15.24 38312.84 ThrmoFshr 272.62 1.70 305.45 208.34 0.25 32.27 109175.69 TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69 53.41 -0.04 57.15 41.49 1.38 23.25 64768.57 TJX Cos♦ UnionPac 159.32 0.21 180.54 128.08 1.90 20.73 112245.68 114.20 -0.16 125.09 89.89 3.04 23.13 79749.85 UPS B♦ USBancorp 51.22 -0.07 57.81 43.14 2.79 12.47 80713.84 UtdHlthcre 227.82 -3.26 287.94 208.07 1.60 17.75 215900.6 UtdTech♦ 124.59 -0.90 144.40 100.48 2.25 21.25 107499.29 ValeroEngy♦ 72.30 -1.41 122.42 68.81 4.54 12.39 29961.37 Verizon 57.43 0.72 61.58 52.28 4.05 15.55 237516.97 VertexPharm 179.70 -0.94 195.81 151.80 21.82 46189.27 VF Cp 79.44 -0.25 96.20 67.18 2.42 25.50 31631.14 Viacom 24.44 -0.35 34.44 23.31 3.16 6.37 8650.9 Visa Inc♦ 177.55 -0.04 184.07 121.60 0.52 35.40 306623.79 Walgreen♦ 49.92 -0.12 86.31 49.12 3.43 10.07 45084.92 WalMartSto 112.06 0.07 115.49 85.78 1.76 41.47 319900.16 WellsFargo♦ 44.72 -0.27 59.48 43.02 3.80 9.58 197019.08 Williams Cos 22.93 30.48 20.36 6.06-237.74 27791.67 Yum!Brnds♦ 116.97 -0.26 119.72 84.30 1.29 28.94 35592.3 Venezuela (VEF) Bco de Vnzla 950.00 90.00 950.00 3.50 346.97 210.04 Bco Provncl 83500 500.00 87000 370.00 9.02 545.83 Mrcntl Srvcs 124100 100.00 128000 750.00 0.00 8.23 458.03 Closing prices and highs & lows are in traded currency (with variations for that country indicated by stock), market capitalisation is in USD. Highs & lows are based on intraday trading over a rolling 52 week period. ♦ ex-dividend ■ ex-capital redistribution # price at time of suspension

BONDS: GLOBAL INVESTMENT GRADE Day's chge yield

Aug 27 High Yield US$ Qwest Capital Funding, Inc.

52 Week High Low

AT&T 34.77 -0.16 35.50 26.80 5.63 15.34 254064.39 AutomData 166.54 -0.27 172.00 121.40 1.77 32.95 72268.84 Avago Tech 277.89 0.67 323.20 208.23 2.98 35.77 110620.67 BakerHu 21.65 0.35 34.49 20.09 3.21 60.65 11176.88 BankAm 26.42 -0.36 31.49 22.66 2.19 9.75 245925.3 Baxter 86.21 0.44 88.48 61.05 0.88 29.89 44015.02 45.73 -0.29 52.58 40.68 3.42 11.74 35029.65 BB & T♦ BectonDick 249.31 0.50 264.68 208.62 1.18 91.66 67300.92 BerkshHat 299464.5-1434.50 335900 279410 17.58 212570.68 Biogen 221.89 -1.87 357.50 216.12 8.57 40926.99 BkNYMeln 41.13 0.02 54.27 40.77 2.63 11.08 38771.69 BlackRock 406.90 1.43 492.00 360.79 3.05 16.04 62896.46 Boeing♦ 356.76 -2.28 446.01 292.47 2.04 43.16 200752.42 BrisMySq 47.95 -0.16 63.69 42.48 3.28 13.12 78435.01 CapOne 83.17 -1.11 101.26 69.90 1.86 7.45 39117.6 CardinalHlth 42.39 -1.45 58.31 41.03 4.35 9.70 12636.4 Carnival♦ 43.32 -0.17 67.69 43.19 4.50 10.49 22825.17 Caterpillar 114.30 -0.12 159.37 112.06 2.90 10.99 64303.94 CBS 41.13 -0.63 59.56 41.10 1.69 5.24 14472.15 Celgene 96.87 -0.13 98.97 58.59 13.76 68654.28 CharlesSch 36.61 -0.07 52.70 36.01 1.58 14.27 47849.44 Charter Comms 399.45 2.67 417.13 272.91 70.43 88469.25 Chevron Corp♦ 115.60 -0.14 127.60 100.22 3.85 15.52 219457.18 Chubb 155.41 0.20 160.23 119.54 1.82 19.72 70828.03 Cigna 150.33 -2.58 226.61 141.95 0.03 14.44 56766 Cisco 47.08 -0.02 58.26 40.25 2.68 17.42 201536.91 Citigroup 61.55 -1.17 75.24 48.42 2.82 8.86 139044.93 CME Grp 215.67 1.03 217.65 161.05 1.30 43.76 77229.8 Coca-Cola 54.55 0.01 54.82 44.25 2.79 33.07 233257.3 59.70 -0.17 78.59 56.73 1.29 17.15 32971.78 Cognizant♦ ColgtPlm 73.31 0.54 76.41 57.41 2.22 28.90 62900.45 Comcast 43.61 0.26 45.30 32.61 1.77 17.26 196942.77 ConocPhil♦ 50.78 -0.59 79.96 50.13 2.28 8.51 56372.99 Corning 27.15 -0.08 36.56 26.98 2.70 16.96 21200.51 Costco 287.20 8.74 287.55 189.51 0.80 36.23 126306.22 CrownCstl 147.46 -0.13 148.70 103.21 2.89 88.89 61307.27 CSX 64.95 -0.08 80.73 58.47 1.37 16.23 51841.52 CVS 60.15 -0.62 82.15 51.72 3.21 17.57 78218.38 Danaher 138.08 1.68 145.50 94.59 0.44 43.11 99054.12 Deere 150.35 -0.46 171.22 128.32 1.82 15.56 47661.8 Delphi 12.66 -0.78 38.21 12.61 2.59 5.36 1102.83 Delta 55.82 -0.46 63.44 45.08 2.42 8.65 36294.2 Devon Energy 21.41 -0.16 43.60 20.37 1.49 9.06 8653.92 DiscFinServ♦ 77.47 -0.59 92.98 54.36 1.99 9.42 24654.13 Disney 135.03 0.42 147.15 100.35 1.26 18.59 243245.61 DominRes 76.85 0.03 79.47 67.41 4.40 53.12 61740.29 DowDupont♦ 30.52 -0.65 48.38 30.06 12.46 8.93 68559.76 92.23 0.88 92.32 78.00 3.88 21.30 67195.23 DukeEner♦ Eaton 76.62 -0.21 89.46 64.46 3.45 15.45 32180.4 eBay 39.39 -0.01 42.00 26.01 0.33 15.37 33038.9 Ecolab 204.85 1.95 209.87 135.77 0.84 41.48 58945.97 57.15 -0.13 79.70 55.39 3.30 16.83 35153.05 Emerson♦ EOG Res 71.12 -1.13 133.53 71.11 1.15 11.99 41296.76 EquityResTP 83.98 0.37 84.23 62.40 2.54 43.53 31144.21 Exelon♦ 46.52 0.84 51.18 42.19 2.93 20.61 45198.11 ExpScripts 92.33 -3.47 101.73 66.93 11.10 52061.19 ExxonMb♦ 67.34 -0.51 87.36 64.65 4.77 16.82 284922.7 Facebook 182.34 1.98 208.66 123.02 32.04 438659.56 Fedex 151.78 -0.71 259.25 150.68 1.67 76.77 39585.5 FordMtr♦ 8.82 0.00 10.56 7.41 6.56 16.94 34584.71 Franklin 26.01 0.08 35.82 25.84 3.75 10.06 13100.37 GenDyn 182.89 -1.76 207.72 143.87 2.06 16.81 52826.7 GenElectric 7.98 -0.07 13.78 6.66 1.81 -3.35 69642.03 GenMills 51.74 -2.24 55.43 36.42 3.69 18.32 31224.61 GenMotors 36.12 -0.13 41.90 30.56 4.06 5.96 51569.58 GileadSci 63.23 0.23 79.61 60.32 3.66 14.16 80077.98 GoldmSchs 197.29 -2.36 245.08 151.70 1.59 8.57 70938.29 Halliburton 17.49 -0.01 42.57 17.36 3.97 12.01 15320.06 HCA Hold 119.67 -0.74 147.42 110.31 1.21 11.95 40805.41 Hew-Pack 17.75 -0.09 27.08 17.10 3.18 7.63 26736.68 HiltonWwde♦ 91.02 -0.63 101.14 65.64 0.64 34.82 26109.5 HomeDep 218.98 0.33 222.66 158.09 1.91 23.44 240940.65 156.76 -0.15 178.47 123.48 1.88 18.47 112790.08 Honywell♦ HumanaInc 279.42 -9.37 355.88 225.65 0.54 15.80 37746.65 130.83 0.84 154.36 105.94 4.67 14.03 115899.05 IBM♦ IllinoisTool 145.42 0.12 160.78 117.75 2.65 20.24 47040.19 Illumina 284.72 2.44 380.76 268.62 46.86 41853.84 Intcntl Exch 92.88 0.37 93.40 69.69 1.07 27.28 52051.32 Intel♦ 45.80 0.24 59.59 42.36 2.59 11.07 202894 Intuit 282.81 0.04 295.78 182.61 0.60 55.11 73316.62 John&John♦ 130.30 2.50 148.99 121.00 2.70 22.40 343883.27 JohnsonCn 41.93 0.34 43.22 28.30 2.39 19.49 33363.98 JPMrgnCh 105.41 -1.46 119.24 91.11 2.93 11.15 337046.89 Kimb-Clark 140.87 0.62 143.16 100.32 2.78 28.20 48478.48 KinderM 19.94 0.02 21.50 14.62 4.11 20.88 45128.96 Kraft Heinz♦ 25.06 -0.52 59.91 24.89 7.89 -2.86 30572.99 23.35 -0.57 32.74 20.70 2.20 10.60 18651.95 Kroger♦ 16.13 -0.79 38.00 16.10 12.26 7.51 4457.37 L Brands♦ LasVegasSd 53.99 0.32 69.60 47.39 5.43 22.39 41560.73 LibertyGbl 25.69 -0.18 29.55 19.88 - -13.52 5275.96 Lilly (E)♦ 111.66 -0.12 132.13 103.66 2.09 27.50 107800.24

BONDS: HIGH YIELD & EMERGING MARKET Day change change % 0.00 -9.09 -0.79 -4.67 -3.54 -4.55 -0.78 -5.80 -0.16 -0.74 -0.01 -0.06 -1.41 -1.91 -1.13 -1.56 -0.08 -0.19 -0.09 -0.29 -0.35 -1.41 -0.63 -1.51 -2.58 -1.69 110.00 2.42 -0.09 -0.50 -0.25 -0.61 0.60 0.54 0.03 0.57 0.13 0.27 0.25 0.54

Close Prev price price Gree Elec Apl 0.01 0.01 L Brands 16.13 16.92 PhilMorris 74.20 77.73 Delphi 12.66 13.44 Devon Energy 21.41 21.57 Halliburton 17.49 17.50 ValeroEngy 72.30 73.71 EOG Res 71.12 72.25 Occid Pet 42.05 42.13 Schlmbrg 31.50 31.59 Viacom 24.44 24.79 CBS 41.13 41.76 Cigna 150.33 152.91 Softbank 4647.00 4537.00 Hew-Pack 17.75 17.84 PTT Explor 40.75 41.00 SHK Props 112.50 111.90 CSR 5.28 5.25 Aflac 49.08 48.95 MTR 46.65 46.40 Based on the FT Global 500 companies in local currency

BOND INDICES Since 19-12-2018 19-12-2018 19-12-2018 16-03-2016 02-08-2018 01-02-2016 15-01-2015

INTEREST RATES: MARKET Aug 27 (Libor: Aug 23) US$ Libor Euro Libor £ Libor Swiss Fr Libor Yen Libor Euro Euribor Sterling CDs US$ CDs Euro CDs

P/E MCap m

FT 500: BOTTOM 20 Day change change % -0.02 -0.02 0.41 0.39 -2.28 -0.64 0.04 1.72 0.83 1.63 -1.16 -0.75 135.00 4.93 0.46 3.47 8.74 3.14 6.05 0.55 1.75 1.07 0.07 1.17 7.30 1.81 1.55 1.94 54.00 0.35 0.17 2.67 31.00 0.71 -0.04 -0.07 0.04 0.01 0.03 3.45

Close Prev price price Target 104.75 104.77 Lowes 106.81 106.40 Boeing 356.76 359.04 Sinopec Oil 2.36 2.32 Renault 51.66 50.83 Salesforce 153.98 155.14 Fuji Hvy Ind 2874.00 2739.00 AmerMvl 13.70 13.24 Costco 287.20 278.46 Kweichow 1109.00 1102.95 PernodRic 166.00 164.25 Chna Utd Coms 6.04 5.97 Nomura 410.70 403.40 HenkelKgaA 81.40 79.85 MmcNrlskNckl 15394.00 15340.00 Enel 6.50 6.33 Denso 4416.00 4385.00 TJX Cos 53.41 53.45 Intuit 282.81 282.77 BOE Tech 0.90 0.87 Based on the FT Global 500 companies in local currency

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

Yld

Finland (€) Nokia 4.48 -0.03 5.74 4.17 1.10 -45.26 28016.57 SampoA 36.68 -0.07 44.94 36.30 7.69 13.58 22564.21 France (€) Airbus Grpe 122.56 -0.28 133.86 77.50 1.33 25.75 105863.03 AirLiquide 123.70 127.20 102.05 2.12 25.15 58885.76 AXA 21.26 -0.04 23.99 18.43 5.88 22.19 56984.21 BNP Parib 40.33 -0.23 55.34 38.14 7.41 6.73 55946.95 ChristianDior 445.80 4.40 498.20 310.20 1.33 30.32 89330 Cred Agr 10.08 -0.06 13.12 9.10 6.77 8.04 32074.86 Danone 80.60 0.90 81.16 60.20 2.34 22.37 61388.22 EDF 10.58 0.13 15.73 10.23 2.90 18.12 35833.18 Engie SA 13.66 0.16 14.39 11.31 5.43 41.83 36928.56 Esslr Intl 128.75 1.30 129.55 100.60 1.60 39.69 32686.21 Hermes Intl 618.00 9.00 652.00 462.40 0.66 46.50 72425.01 LOreal 244.10 5.50 257.80 182.00 1.56 35.19 152166.48 LVMH 359.85 6.25 392.65 243.50 1.65 27.70 201904.32 Orange 13.52 0.09 15.22 13.08 5.12 19.25 39923.59 PernodRic 166.00 1.75 168.10 128.35 1.41 30.58 48910.98 Renault 51.66 0.83 78.96 47.59 6.82 4.29 16959.01 Safran 128.25 0.25 137.20 101.00 1.24 43.95 62041.32 Sanofi 77.87 0.92 80.28 71.74 3.90 27.51 108233.23 Sant Gbn 31.80 0.12 38.92 28.18 4.06 42.16 19295.11 Schneider 73.62 -0.18 81.36 57.58 3.16 18.17 47562.87 SFR Group 34.50 34.56 21.87 - -23.02 17905.81 SocGen 22.43 -0.12 38.44 20.81 9.71 6.11 21243.82 Total 43.97 0.13 56.82 42.65 5.77 12.59 130160.34 UnibailR 190.00 0.35 236.45 177.35 5.82 23.36 22215.04 Vinci 97.82 1.02 98.62 70.18 2.70 18.21 65249.51 Vivendi 25.31 -0.02 26.69 20.81 1.95 67.29 34278.02 Germany (€) Allianz 198.76 -0.40 219.05 170.46 3.84 11.90 93654.23 BASF 58.24 0.24 81.77 55.64 5.44 21.20 59381.68 Bayer 66.98 0.36 82.95 52.02 4.14 157.43 69339.42 BMW 59.49 -0.08 86.74 58.04 5.82 8.24 39755.66 Continental 107.88 -0.42 162.45 103.62 4.36 9.09 23952.23 Daimler 41.54 0.21 60.00 40.31 7.74 11.17 49333.99 Deut Bank 6.43 0.09 10.63 5.78 1.69 -3.84 14741.03 Deut Tlkm 14.90 0.09 15.88 13.35 4.65 27.89 78756.86 DeutsPost 29.23 0.25 32.18 23.36 3.89 17.07 39862.54 E.ON 8.34 0.14 10.26 8.08 5.10 33.73 20385.61 Fresenius Med 60.30 -0.16 91.74 55.44 1.92 15.12 20371.97 Fresenius SE 43.96 -0.08 69.90 38.28 1.80 13.34 22005.68 HenkelKgaA 81.40 1.55 99.10 75.55 2.22 15.85 23475.7 Linde 167.00 0.95 191.25 130.75 1.77 17.04 100218.45 MuenchRkv 217.70 -0.90 228.80 180.25 4.20 13.41 34877.11 SAP 108.54 1.82 125.00 83.95 1.37 42.03 148022.75 Siemens 89.00 0.43 114.12 84.42 4.22 16.75 83979.04 Volkswgn 146.15 2.15 167.40 129.60 3.25 6.05 47875.69 Hong Kong (HK$) AIA 75.35 -0.15 88.50 58.20 1.08 20.76 116080.58 BOC Hold 26.45 -0.05 39.95 25.30 4.76 9.05 35638.09 Ch OSLnd&Inv 24.60 0.15 31.30 22.35 3.34 6.21 34347.47 ChngKng 54.30 0.50 72.50 49.00 3.39 6.79 25557.93 Citic Ltd 8.99 0.16 13.28 8.65 4.30 5.38 33327.84 Citic Secs 14.14 0.04 21.20 11.62 2.74 15.28 4105.48 CK Hutchison 69.30 92.50 64.30 4.43 7.02 34056.24 CNOOC 10.94 15.78 10.74 5.11 8.42 62246.14 HangSeng♦ 166.90 1.10 215.60 162.00 4.41 13.42 40663.77 HK Exc&Clr♦ 241.40 -1.88 286.20 195.60 2.69 32.92 38703.87 46.65 0.25 55.75 37.50 2.32 18.29 36597.26 MTR♦ SandsCh 35.50 0.50 44.70 29.85 5.41 19.32 36585.26 SHK Props 112.50 0.60 142.00 99.50 3.99 9.02 41544.83 Tencent 326.20 0.20 400.40 251.40 0.30 31.87 397211.15 India (Rs) Bhartiartl 348.30 378.75 254.15 1.32 -63.71 25003.84 HDFC Bk 2259.95 2503.3 1885 0.66 26.93 86439.08 Hind Unilevr 1861.4 1889 1477.2 1.18 64.26 56367.35 HsngDevFin 2174.3 2357.85 1644.5 0.92 22.85 52479.2 ICICI Bk 418.60 443.90 294.80 0.36 40.49 37800.03 Infosys 784.65 809.95 599.85 2.17 21.88 47953.57 ITC 245.50 322.95 234.65 2.34 24.36 42161.8 L&T 1356.95 1607 1182.5 1.15 22.02 26634.1 OilNatGas♦ 125.60 185.40 115.75 6.04 5.55 22102.92 RelianceIn 1274.85 1417.5 1016.4 18.80 113045.5 SBI NewA 285.70 373.80 247.40 - 113.91 35667.21 SunPhrmInds♦ 416.75 679.30 344.55 0.48 33.46 13987.38 Tata Cons 2236.5 2292.5 1784.35 1.56 26.17 117394.07 Indonesia (Rp) Bk Cent Asia 22300 200.00 24700 16800 38879.26 Israel (ILS) TevaPha 25.00 89.36 21.75 -1.90 7780.95 Italy (€) Enel 6.50 0.17 6.62 4.22 4.14 13.40 73347.92 ENI 13.30 0.08 16.67 12.92 6.17 14.00 53664.38 Generali 16.43 0.25 17.38 13.63 5.42 11.78 28631 IntSPaolo 1.95 0.01 2.47 1.80 10.01 8.43 37868.29 Luxottica 49.00 -0.34 59.54 48.62 2.11 22.75 26878.18 Unicred 9.72 0.13 14.35 9.07 2.75 6.06 24096.04

FT 500: TOP 20

Aug 27 US US US Euro UK Japan Switzerland

52 Week High Low

Aug 27 US$ Barclays plc SunTrust Banks Inc. Barclays plc SunTrust Banks Inc. Goldman Sachs Group, Inc. (The) Goldman Sachs Group, Inc. (The) Euro Citigroup Inc. HBOS plc HBOS plc Goldman Sachs Group, Inc. (The) Yen Mexico £ Sterling innogy Fin B.V. innogy Fin B.V.

Red date Coupon

S*

Ratings M*

F*

Bid price

Bid yield

Day's chge yield

Mth's Spread chge vs yield US

01/28 01/28 01/28 01/28 02/28 05/29

4.34 6.00 4.34 6.00 5.00 5.25

BBB BBB+ BBB BBB+ BBB+ BBB+

Baa3 Baa1 Baa3 Baa1 A3 A3

A AA AA A

104.89 117.93 104.89 117.93 111.24 114.63

3.57 3.51 3.57 3.51 3.47 3.47

0.07 0.02 0.07 0.02 0.53 0.02

-0.35 -0.37 -0.35 -0.37 -0.44 -0.46

1.95

02/30 03/30 03/30 02/31

4.25 4.50 4.50 3.00

BBB BBBBBBBBB+

Baa2 Baa1 Baa1 A3

AAAA

118.59 113.36 113.36 125.46

0.78 1.51 1.51 0.68

-0.01 0.01 0.01 0.01

0.00 0.07 0.07 -0.18

-0.74 -0.01 -0.01 -0.84

06/26

1.09

BBB+

A3

BBB

101.51

0.86

-0.05

-0.06

-

06/30 06/30

6.25 6.25

BBB BBB

Baa2 Baa2

AA-

128.68 139.91

3.20 2.07

0.00 -0.01

-0.01 -0.07

0.40 0.55

Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

GILTS: UK CASH MARKET Red 52 Week Change in Yield Price £ Yield Day Week Month Year High Low Tr 3.75pc '19 100.09 0.50 -20.63 -19.35 -19.35 -21.88 102.02 100.00 Tr 4.75pc '20 102.24 0.50 -7.41 -13.79 -9.09 -27.54 106.13 102.23 Tr 1.5pc '21 101.50 0.42 -10.64 -14.29 -16.00 -44.74 101.77 101.20 Tr 4pc '22 109.22 0.33 -15.38 -17.50 -25.00 -59.76 110.96 109.00 Tr 5pc '25 125.69 0.31 -16.22 -13.89 -38.00 -72.07 125.90 122.06 Tr 1.25pc '27 107.00 0.35 -16.67 -10.26 -43.55 -73.48 107.13 96.94 Tr 4.25pc '32 144.27 0.64 -9.86 0.00 -31.91 -58.97 145.40 128.48 Tr 4.25pc '36 153.12 0.81 -7.95 1.25 -28.95 -51.50 154.68 133.08 Tr 4.5pc '42 172.58 1.00 -4.76 3.09 -23.66 -43.18 175.42 145.84 Tr 3.75pc '52 176.73 1.01 -4.72 1.00 -23.48 -40.94 179.98 141.38 Tr 4pc '60 201.59 0.96 -5.88 -1.03 -25.00 -41.46 204.89 156.07 Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.

Aug 27

Amnt £m 28.74 33.70 32.84 38.39 35.49 23.73 35.86 30.11 26.95 23.87 23.89

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

Day's chg % 0.12 0.45 0.71 0.52 1.22 0.75

Aug 27 91.84 188.44 226.26 197.04 385.06 191.85 Aug 27 313.94 847.73 529.09 1113.34 753.26 Aug 27 0.20 0.49 0.83

Day's chg % 0.14 1.17 0.64 1.33 1.04 Aug 23 0.27 0.57 0.89

Yr ago 0.97 1.42 1.70

Total Return 2463.45 3734.42 4748.65 3983.24 6157.27 3982.87

Month chg % 0.21 7.71 2.73 9.25 6.66 20 Yrs 45 Yrs

Year's chg % 1.33 19.29 11.00 21.95 17.31

Return 1 month 0.19 1.27 2.57 1.64 6.30 3.46 Total Return 2540.74 6378.27 4176.40 8168.06 5761.95 Aug 27 1.00 0.96

Return 1 year 1.89 7.48 11.55 8.60 18.13 10.89

Yield 0.35 0.34 0.57 0.43 0.97 0.86

Return 1 month 0.21 7.71 2.73 9.26 6.66

Return 1 year 2.81 19.84 11.98 22.34 17.96

Aug 23 1.06 1.02

inflation 0% inflation 5% Aug 27 Dur yrs Previous Yr ago Aug 27 Dur yrs Previous Real yield Up to 5 yrs -2.72 2.96 -2.67 -1.92 -3.21 2.98 -3.17 Over 5 yrs -2.27 25.62 -2.22 -1.58 -2.29 25.68 -2.25 5-15 yrs -2.80 10.23 -2.74 -1.68 -2.87 10.24 -2.81 Over 15 yrs -2.22 29.80 -2.17 -1.57 -2.23 29.84 -2.19 All stocks -2.27 22.70 -2.23 -1.58 -2.31 22.81 -2.26 See FTSE website for more details www.ftse.com/products/indices/gilts ©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSE Gilt Closing Prices information contained herein is proprietary to Tradeweb; may not be copied or re-distributed; is not warranted to be accurate, complete or timely; and does not constitute investment advice.

Tradeweb is not responsible for any loss or damage that might result from the use of this information.

Yr ago 1.79 1.65

Yr ago -2.42 -1.61 -1.80 -1.59 -1.62

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate at the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, nor Morningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT nor Morningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on the use of the listed information. For all queries e-mail ft.reader.enquiries@morningstar.com

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

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18

FINANCIAL TIMES

Wednesday 28 August 2019

MANAGED FUNDS SERVICE Fund

Bid

Offer D+/- Yield

Aberdeen Standard Capital

(JER)

Fund

Bid

GBP Accumulating Share Class GBP Distributing Share Class EUR Accumulating Share Class GBP Distributing Class (H)

£ £ € £

32.03 19.82 29.40 10.94

Offer D+/- Yield -

0.45 0.28 0.38 0.10

0.00 0.75 0.00 0.58

PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130 FCA Recognised Aberdeen Standard Capital Offshore Strategy Fund Limited Bridge Fund £ 1.9811 - -0.0158 1.97 Global Equity Fund £ 2.6867 - -0.0348 1.12 Global Fixed Interest Fund £ 0.9878 - 0.0017 4.25 Income Fund £ 0.5979 - -0.0035 Sterling Fixed Interest Fund £ 0.8974 - 0.0046 3.12 UK Equity Fund £ 2.0310 - -0.0209 3.64

Dragon Capital Group 1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam Fund information, dealing and administration: funds@dragoncapital.com Other International Funds Vietnam Property Fund (VPF) NAV $

0.80

-

Fund

Bid

Hermes European Alpha Equity Fund Class F Dis Hermes European Alpha Equity Fund Class F Acc EUR Hermes GEMs SMID Equity Fund Class F GBP Acc Hermes Global Emerging Markets Fund Class F Acc Hermes Global Emerging Markets Fund Class F Acc USD Hermes Global Equity Fund Class F Acc Hermes Global Equity Fund Class R Acc USD Hermes Global ESG Equity Fund Class F Acc Hermes Global High Yield Credit Fund Class F Acc Hermes Global High Yield Credit Fund Class F Acc EUR Hermes Global Small Cap Fund Class F Acc Hermes Global Small Cap Fund Class F Acc USD Hermes Impact Opportunities Equity Fund F Hermes Impact Opportunities Equity Fund F Hermes Multi Strategy Credit Fund Class F Acc Hed Hermes SDG Engagement Equity Fund F Hermes SDG Engagement Equity Fund F Hermes Unconstrained Credit Fund Class F USD Acc Hermes US SMID Equity Fund Class F Acc Hermes US SMID Equity Fund Class F Acc USD

£ € £ £ € £ € £ £ € £ € $ £ £ $ £ $ £ €

Offer D+/- Yield

1.62 3.35 1.13 2.01 4.03 2.46 5.08 1.82 1.59 3.28 1.62 2.17 1.98 1.09 1.19 2.15 1.18 2.20 2.71 4.54

1.62 3.35 2.01 4.03 2.46 5.08 1.82 1.59 3.28 1.62 2.17 1.19 2.71 4.54

-0.02 -0.04 -0.01 -0.03 -0.07 -0.03 -0.09 -0.03 0.00 0.00 -0.02 -0.01 -0.03 -0.02 0.00 -0.03 -0.01 0.00 -0.06 -0.11

1.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.03 0.00

Intrinsic Value Investors (IVI) LLP

Algebris Investments Regulated Algebris Allocation Fund - Class I EUR Algebris Core Italy Fund - Class R EUR Algebris Financial Credit Fund - Class I EUR Algebris Financial Credit Fund - Class R EUR Algebris Financial Credit Fund - Class Rd EUR Algebris Financial Income Fund - Class I EUR Algebris Financial Income Fund - Class R EUR Algebris Financial Income Fund - Class Rd EUR Algebris Financial Equity Fund - Class B EUR Algebris Macro Credit Fund - Class I EUR Algebris Macro Credit Fund - Class R EUR Algebris Macro Credit Fund - Class Rd EUR Algebris Quant Arbitrage Fund - Class EB EUR

(IRL) € 97.76 € 93.10 € 160.06 € 140.42 € 100.71 € 132.48 € 124.17 € 86.52 € 98.88 € 108.54 € 107.09 € 107.09 € 97.47

-

0.26 -0.47 -0.67 -0.58 -0.41 -1.09 -1.02 -0.71 -1.47 -0.13 -0.14 -0.14 -0.14

0.00 0.00 0.00 0.00 5.82 0.00 0.00 4.91 0.00 0.00 0.00 0.00 0.00

(IRL) Ennismore Smaller Cos Plc 5 Kensington Church St, London W8 4LD 020 7368 4220 FCA Recognised Ennismore European Smlr Cos NAV £ 141.37 0.10 0.00 Ennismore European Smlr Cos NAV € 156.21 0.01 0.00

(IRL) 1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210 FCA Recognised IVI European Fund EUR € 23.18 - -0.09 0.00 IVI European Fund GBP £ 28.02 - -0.09 0.16

Kames Capital ICVC Ennismore European Smlr Cos Hedge Fd Other International Funds NAV

€ 577.11

-

6.99 0.00

Equinox Fund Mgmt (Guernsey) Limited Regulated Equinox Russian Opportunities Fund Limited $ 184.74

-

$ 606.62 € 575.63

-

-12.79 -12.22 0.00

Arisaig Partners

Euronova Asset Management UK LLP Regulated Smaller Cos Cls One Shares Smaller Cos Cls Two Shares Smaller Cos Cls Three Shares Smaller Cos Cls Four Shares

€ € € €

44.27 29.67 15.01 19.20

-

$ $ $ € £ $

10.64 91.58 11.50 13.34 15.40 25.59

-

-0.06 -0.08 -0.01 -0.03 0.05 -0.30

0.00 0.00 0.00 0.00 0.00 0.00

(UK) Artemis Fund Managers Ltd (1200)F 57 St. James's Street, London SW1A 1LD 0800 092 2051 Authorised Inv Funds Artemis Monthly Dist R Acc £ 0.92 - -0.01 4.16 Artemis US Smllr Co?s I Hdg Acc £ 1.04 - -0.01 -

9.92 0.00

-0.49 -0.33 -0.13 -0.22

0.00 0.00 0.00 0.00

FIL Investment Services (UK) Limited (1200)F (UK) 130, Tonbridge Rd, Tonbridge TN11 9DZ Callfree: Private Clients 0800 414161 Broker Dealings: 0800 414 181 OEIC Funds Fidelity American Fund W-ACC-GBP Fidelity Cash Fund Y-ACC-GBP FID Emerg Europe, Middle East and Africa Fund W-ACC-GBP Fidelity Global Enhanced Income Fund W-ACC-GBP Fidelity Global Focus Fund W-ACC-GBP Fidelity Global High Yield Fund Y-ACC-GBP Fidelity Japan Fund W-ACC-GBP Fidelity Japan Smaller Companies Fund W-ACC-GBP Fidelity Select 50 Balanced Fund PI-ACC-GBP Short Dated Corporate Bond Fund Y ACC GBP Fidelity Special Situations Fund W-ACC-GBP Fidelity UK Growth Fund W-ACC-GBP Fidelity UK Select Fund W-ACC-GBP

£ £ £ £ £ £ £ £ £ £ £ £ £

46.34 1.01 2.20 1.93 25.51 14.85 4.02 3.30 1.08 10.70 35.64 3.34 3.16

-

-0.69 0.00 -0.03 -0.02 -0.27 0.00 0.00 -0.02 -0.01 0.02 -0.27 -0.05 -0.03

Institutional OEIC Funds Europe (ex-UK) Fund ACC-GBP

£

5.95

-

-0.04 0.91

Findlay Park Funds Plc Ashmore Investment Management Limited (LUX) -

-0.07 -0.63 -0.02 -2.57 -2.41 -1.56 -0.05 0.02 -0.27

0.65 5.08 0.00 0.00 0.00 6.11 5.70 0.00

0.59 0.55 2.88 3.43 0.35 3.21 0.44 0.57 3.75 -

(IRL)

30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900 FCA Recognised American Fund USD Class $ 125.55 - -2.53 0.16 American Fund GBP Hedged £ 64.92 - -1.31 0.17 American Fund GBP Unhedged £ 102.27 - -2.26 0.15

Foord Asset Management

Kames Capital VCIC 1 North Wall Quay, Dublin 1, Ireland +35 3162 24493 FCA Recognised Absolute Return Bond B GBP Acc 1117.03 1.33 938.75 - -0.06 Eq Market Neutral B Acc High Yield Global Bond A GBP Inc 513.32 0.37 High Yield Global Bond B GBP Inc 1088.87 0.86 Kames Emerging Market Bond Fund - B Acc USD $ 11.26 - -0.03 Kames Global Equity Income B GBP Acc 1859.05 - -23.94 Kames Global Equity Income B GBP Inc 1455.44 - -8.32 Kames Global Diversified Growth Fund - B Acc EUR € 11.02 - -0.03 Kames Global Equity Market Neutral Fund - B Acc GBP £ 10.06 0.02 Global Sustainable Equity B Acc GBP £ 17.00 - -0.22 Global Sustainable Equity C Acc GBP £ 17.16 - -0.23 Kames Absolute Return Bond Global Fund - B Acc GBP £ 10.33 0.01 Short Dated High Yld Bd B Acc GBP £ 10.48 0.01 Short Dated High Yld Bd C Acc GBP (Hdg) £ 10.55 0.01 1160.37 5.18 Strategic Global Bond A GBP Inc 658.55 2.99 Strategic Global Bond B GBP Inc

1.70 0.00 3.49 4.15 0.00 0.00 3.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.74 1.39

Regulated American Dynamic American One Bond Global Eurocroissance Far East

(LUX)

(UK)

65 Gresham Street, London, EC2V 7NQ Order Desk and Enquiries: 0345 922 0044 Authorised Inv Funds

$ 4966.61 $ 4736.79 € 1543.61 € 1048.03 $ 851.23

4966.61 58.25 4736.79 -55.01 1543.61 3.24 1048.03 -6.01 - -4.05

0.00 0.00 0.00 0.00

Barclays Investment Funds (CI) Ltd

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

371.05 359.19 402.28 364.44 389.70 308.29 411.71 325.80

-

-0.76 -0.74 -0.81 -0.73 -1.61 -1.27 -1.67 -1.33

0.89 0.83 1.43 1.45 3.03 3.09 3.02 3.08

-

0.0040 2.77 0.0034 3.81 0.0070 2.27

Lloyds Money Fund Limited Sterling Class

£ 52.3590

-

-0.0010 -0.20

-

-0.0020 -0.0100 -0.0170 -0.0120

Franklin Emerging Market Debt Opportunities Fund Plc

Lloyds Multi Strategy Fund Limited Conservative Strategy £ 1.3010 Growth Strategy £ 1.8580 Aggressive Strategy £ 2.4900 Global USD Growth Strategy $ 1.6130 Dealing Daily

Franklin Emg Mkts Debt Opp CHFSFr Franklin Emg Mkts Debt Opp GBP £ Franklin Emg Mkts Debt Opp SGD S$ Franklin Emg Mkts Debt Opp USD $

MMIP Investment Management Limited

-

-0.04 0.01

-

-

0.02 0.00 -0.14 -

Franklin Templeton International Services Sarl (IRL) JPMorgan House - International Financial Services Centre,Dublin 1, Ireland Other International Funds 16.92 11.01 23.26 18.19

-

0.31 0.29 0.43 0.26

8.94 6.47 5.00 6.37

0.00 0.00 0.00 0.00

0.49

-

(UK)

Senator House 85 Queen Victoria Street London EC4V 4ET Authorised Inv Funds Diversified Income 1 Units GBP Inc £ 1.61 1.61 0.00 2.43 Diversified Income 2 Units GBP Inc £ 1.55 1.55 0.00 2.46 Diversified Income 3 Units GBP Inc £ 1.56 1.56 0.00 2.43

CG Asset Management Limited

funds@gam.com, www.funds.gam.com Regulated LAPIS TOP 25 DIV.YLD-D £ 110.55

-

GYS Investment Management Ltd Regulated Taurus Emerging Fund Ltd

(GSY)

Bid

Offer D+/- Yield

Fund

Bid

Offer D+/- Yield

0.05 0.74

Oasis Global Mgmt Co (Ireland) Ltd

(IRL)

Oasis Crescent Global Short Term Income Fund I - Class A Dist Oasis Crescent Global Equity Fund Oasis Crescent Variable Balanced Fund OasisCresGl Income Class A OasisCresGl LowBal D ($) Dist OasisCresGl Med Eq Bal A ($) Dist Oasis Crescent Gbl Property Eqty

$ $ £ $ $ $ $

0.99 29.13 9.23 10.87 11.70 12.35 8.59

-

0.01 0.20 0.02 0.01 0.04 0.05 0.03

2.43 0.59 0.11 3.01 0.94 0.48 1.69

Pictet Asset Management (Europe) SA 15, Avenue J.F. Kennedy L-1855 Luxembourg Tel: 0041 58 323 3000 FCA Recognised Pictet-Absl Rtn Fix Inc-HI EUR € 111.13 Pictet-Asian Equities Ex Japan-I USD F $ 284.81 Pictet-Asian Local Currency Debt-I USD F $ 176.37 Pictet-Biotech-I USD F $ 797.89 SFr 526.46 Pictet-CHF Bonds I CHF Pictet-China Index I USD $ 137.95 Pictet-Clean Energy-I USD F $ 98.27 Pictet-Digital-I USD F $ 421.07 Pictet-Em Lcl Ccy Dbt-I USD F $ 180.40 Pictet-Emerging Europe-I EUR F € 393.94 Pictet-Emerging Markets-I USD F $ 602.63 Pictet-Emerging Markets Index-I USD F $ 269.88 Pictet-Emerging Corporate Bonds I USD $ 134.12 Pictet-Emerging Markets High Dividend I USD $ 120.54 Pictet-Emerging Markets Sust Eq I USD $ 100.87 Pictet-EUR Bonds-I F € 647.40 Pictet-EUR Corporate Bonds-I F € 222.83 Pictet-EUR Government Bonds I EUR € 179.88 Pictet-EUR High Yield-I F € 287.12 Pictet-EUR Short Mid-Term Bonds-I F € 137.93 Pictet-EUR Short Term HY I EUR € 129.41 Pictet-EUR Sov.Sht.Mon.Mkt EUR I € 100.69 Pictet-Euroland Index IS EUR € 153.55 Pictet-Europe Index-I EUR F € 193.44 Pictet-European Equity Selection-I EUR F € 716.64 Pictet-European Sust Eq-I EUR F € 282.59 Pictet-Global Bds Fundamental I USD $ 131.99 Pictet-Global Bonds-I EUR € 193.18 Pictet-Global Defensive Equities I USD $ 186.56 Pictet-Global Emerging Debt-I USD F $ 438.80 Pictet-Global Env.Opport-I EUR € 223.04 Pictet-Global Megatrend Selection-I USD F $ 304.25 Pictet-Global Sust.Credit HI EUR € 159.94 Pictet-Greater China-I USD F $ 618.98 Pictet-Health-I USD $ 318.44 Pictet-SmartCity-I EUR € 199.14 Pictet-India Index I USD $ 118.23 Pictet-Indian Equities-I USD F $ 574.99 Pictet-Japan Index-I JPY F ¥ 16626.87 Pictet-Japanese Equities Opp-I JPY F ¥ 10449.40 Pictet-Japanese Equity Selection-I JPY F ¥ 15034.30 Pictet-LATAM Lc Ccy Dbt-I USD F $ 140.77 Pictet-Multi Asset Global Opportunities-I EUR € 124.73 Pictet-Nutrition-I EUR € 238.13 Pictet-Pacific Ex Japan Index-I USD F $ 433.70 Pictet-Premium Brands-I EUR F € 200.12 Pictet-Russia Index I USD $ 89.29 Pictet-Russian Equities-I USD F $ 80.61 Pictet-Security-I USD F $ 286.28 Pictet-Select-Callisto I EUR € 99.23 Pictet-Small Cap Europe-I EUR F € 1282.31 Pictet-ST Emerg Local Currency Debt-I USD F $ 104.49 Pictet-ST.MoneyMkt-I € 138.52 Pictet-ST.MoneyMkt JPY I USD ¥ 100873.58 SFr 120.54 Pictet-ST.MoneyMkt-ICHF Pictet-ST.MoneyMkt-IUSD $ 143.89 Pictet-Timber-I USD F $ 164.00 Pictet TR-Agora I EUR € 127.32 Pictet TR-Corto Europe I EUR € 142.32 Pictet TR-Divers Alpha I EUR € 108.16 Pictet TR-Kosmos I EUR € 109.35 Pictet TR-Mandarin I USD $ 153.65 Pictet-US Equity Selection-I USD $ 263.59 Pictet-US High Yield-I USD F $ 173.63 Pictet-USA Index-I USD F $ 265.76 Pictet-USD Government Bonds-I F $ 717.07 Pictet-USD Short Mid-Term Bonds-I F $ 137.95 Pictet-USD Sov.ST.Mon.Mkt-I $ 108.24 Pictet-Water-I EUR F € 385.56

-

(LUX)

0.15 3.60 0.12 5.90 2.08 -1.71 0.75 3.80 0.28 -3.37 -4.69 -3.57 0.17 0.43 0.29 1.47 0.42 0.27 0.39 0.07 -0.24 0.00 0.22 -1.58 -2.02 -0.82 0.65 -0.27 -1.74 -0.18 2.07 2.31 0.45 5.18 2.33 -0.28 1.21 6.95 121.00 16.87 30.94 -2.14 -0.35 -2.44 -7.14 1.90 -0.47 -0.69 2.34 -0.22 -2.04 0.11 0.00 -0.43 0.00 0.01 0.99 0.11 -0.11 -0.11 0.01 -0.65 1.77 0.08 2.91 4.01 0.20 0.00 3.73

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Odey Asset Management LLP Regulated OEI Mac Inc GBP A OEI Mac Inc GBP B OEI MAC Inc USD Odey European Inc EUR Odey European Inc GBP A Odey European Inc GBP B Odey European Inc USD

£ 220.43 £ 139.69 $ 1197.92 € 500.49 £ 203.45 £ 115.33 $ 248.61

(CYM) -

0.24 1.16 2.42 -2.51 -1.06 -0.61 -1.05

0.00 0.00 0.00 0.00 0.00 0.00 0.00

Odey Wealth Management (CI) Ltd -

-1.07 0.00

$ 850.74

-

-11.57 0.00

Superfund Asset Management GmbH

www.ram-ai.com Other International Funds RAM Systematic Emerg Markets Core Eq RAM Systematic Emerg Markets Eq RAM Systematic European Eq RAM Systematic Funds Global Sustainable Income Eq RAM Systematic Long/Short Emerg Markets Eq RAM Systematic Long/Short European Eq RAM Systematic North American Eq RAM Tactical Convertibles Europe RAM Tactical Global Bond Total Return RAM Tactical II Asia Bond Total Return

www.superfund.com, +43 (1) 247 00 $ 92.85 $ 163.59 € 426.51 $ 119.24 $ 116.36 € 145.32 $ 289.78 € 143.49 € 147.96 $ 149.91

-

-1.07 -2.48 -0.73 0.27 0.00 -0.48 -0.31 2.90 -0.03 -0.04 0.42 -

Ruffer LLP (1000)F

Other International Funds Platinum All Star Fund - A $ 131.43 Platinum Global Growth UCITS Fund $ 10.56 Platinum Global Dividend UCITS Fund $ 56.28

-

0.05 0.00 -1.01 -

Regulated Superfund Green EUR SICAV Superfund Red EUR SICAV

£ 125.86 £ 34050.12 £ 165.05 £ 172.77 £ 100.65 £ 213.97

125.86 0.16 34050.12 -179.92 165.05 -0.87 172.77 -2.25 100.65 -0.29 213.97 0.95

Other International Funds Emerging Mkts NAV

£

7.21

-

-0.16

-

1.20 0.96 1.22 1.75 2.00 2.50

$ 115.81 $ 180.34 SR 283.14

-

£ 399.90

-

Other International Funds

Dodge & Cox Worldwide Funds

-

mimi@milltrust.com, +44(0)20 8123 8369 www.milltrust.com Regulated MAI - Buy & Lease (Australia) A$ 102.52 2.25 0.00 MAI - Buy & Lease (New Zealand)NZ$ 97.29 0.06 0.00 3.18 0.00 British Innovation Fund £ 100.02 Milltrust Global Emerging Markets Fund - Class A $ 82.96 - -0.14 0.00

Polar Capital Funds Plc

Other International Funds Phaeton Intl (BVI) Ltd (Est)

HPB Assurance Ltd

Optima Fund Management Other International Funds JENOP Global Healthcare Fund Ltd OPTIKA Fund Limited - Cl A Optima Fd NAV Optima Discretionary Macro Fund Limited Platinum Fd Ltd Platinum Japan Fd Ltd Optima Partners Global Fd Optima Partners Focus Fund A Optima STAR Fund (hedged) Optima STAR Long Fund The Optima Lloyd George Asia Fund

$ 17.42 $ 209.80 $ 101.11 $ 82.66 $ 95.50 $ 63.46 $ 17.22 $ 17.85 $ 99.84 $ 142.48 $ 94.86

-

0.10 -2.51 -0.21 0.36 -4.44 -0.46 -0.07 0.00 0.16 1.63 -0.89

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -

Other International Funds NAV (Fully Diluted)

£ £

0.53 0.64

-

$ 522.06

-

£

9.10

-

-0.52 0.00

€ 923.87 € 832.17

-

0.84 0.00 -5.24 0.00

Dodge & Cox Worldwide Funds plc-Global Stock Fund USD Accumulating Share Class $ 20.23 0.16 0.00 GBP Accumulating Share Class £ 27.23 0.35 0.00 GBP Distributing Share class £ 19.13 0.25 0.99 EUR Accumulating Share Class € 27.37 0.32 0.00 GBP Distributing Class (H) £ 10.35 0.08 1.19 Dodge & Cox Worldwide Funds plc-U.S. Stock Fund USD Accumulating Share Class $ 25.16 0.22 0.00

Asset Management

FCA Recognised ASG Managed Futures Fund I/A (USD) Harris Global Equity Fund R/A (USD) Loomis Sayles Global Growth Equity Fund I/A (USD) Loomis Sayles U.S. Growth Equity Fund I/A (USD)

$ 110.06 $ 290.53 $ 146.79 $ 153.93

110.06 290.53 146.79 153.93

Natixis Investment Funds Authorised Funds DNCA European Select Equity Fund Harris Global Concentrated Equity Fund H2O MultiReturns Fund N/A (GBP) Loomis Sayles U.S. Equity Leaders N/A (GBP)

0.26 0.00 1.30 0.00 0.81 0.00 1.70 -

Superfund Asset Management GmbH www.superfund.com, +43 (1) 247 00 Other International Funds Superfund Green Gold SICAV

0.94 1.74 1.74 2.96

-

Offer D+/- Yield

$ 1172.59

-

6.04 0.00

(UK)

The sale of interests in the funds listed on these pages may, in certain jurisdictions, be restricted by law and the funds will not necessarily be available to persons in all jurisdictions in which the publication circulates.

Persons in any doubt should take appropriate professional advice. Data collated by Morningstar. For other queries contact reader.enquiries@ft.com +44 (0)207 873 4211.

Authorised Corporate Director - Link Fund Solutions LF Ruffer European C Acc LF Ruffer European C Inc LF Ruffer European O Acc LF Ruffer Equity & General C Acc LF Ruffer Equity & General C Inc LF Ruffer Equity & General O Acc LF Ruffer Equity & General O Inc LF Ruffer Gold C Acc LF Ruffer Gold C Inc LF Ruffer Gold O Acc LF Ruffer Japanese C Inc LF Ruffer Japanese C Acc LF Ruffer Pacific & Emerging Markets C Acc LF Ruffer Pacific & Emerging Markets C Inc LF Ruffer Pacific & Emerging Markets O Acc LF Ruffer Total Return C Acc LF Ruffer Total Return C Inc LF Ruffer Total Return O Acc LF Ruffer Total Return O Inc

608.22 111.89 595.50 440.95 406.12 431.76 400.59 205.54 124.40 201.17 122.78 262.76 366.19 101.97 358.21 451.86 297.96 442.40 291.56

-

-0.70 -0.13 -0.71 -2.98 -2.75 -2.94 -2.74 -4.08 -2.47 -4.02 -0.86 -1.85 3.44 0.96 3.34 0.92 0.61 0.88 0.58

0.20 0.27 0.00 0.10 0.10 0.00 0.00 0.00 0.00 0.00 0.50 0.50 0.90 0.90 0.57 1.38 1.39 1.38 1.40

0.00 0.00 0.00 0.00 0.00 2.38 0.00 0.00 0.28 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Regulated Monument Growth 20/08/19

28 Dorset Square, London, NW1 6QG www.orbis.com 0800 358 2030 Regulated Orbis OEIC Global Cautious Std GBP Inc £ 10.23 Orbis OEIC Global Balanced Standard £ 13.85 Orbis OEIC Global Equity Standard £ 15.76 Orbis OEIC UK Equity Standard £ 7.48

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

Toscafund Asset Management LLP www.toscafund.com Authorised Funds Aptus Global Financials B Acc Aptus Global Financials B Inc

£ £

3.65 2.64

(UK)

-

0.02 4.61 0.02 4.79

Toscafund Asset Management LLP www.toscafund.com Tosca A USD Tosca Mid Cap GBP Tosca Opportunity B USD Pegasus Fund Ltd A-1 GBP

$ 312.42 £ 317.88 $ 472.49 £ 74.01

-

-6.19 12.03 21.65 -2.08 0.00

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

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

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

OEIC: Open-Ended Investment Company. Similar to a unit trust but using a company rather than a trust structure.

Different share classes are issued to reflect a different currency, charging structure or type of holder.

S W Mitchell Capital LLP

(IRL)

Regulated SWMC European Fund B EUR € 16131.02 SWMC Small Cap European Fund B EUR € 12819.75

-

-227.96 0.00 23.64 0.00

RobecoSAM

(LUX)

Tel. +41 44 653 10 10 http://www.robecosam.com/ Regulated RobecoSAM Sm.Energy/A £ 18.76 0.10 RobecoSAM Sm.Energy/N € 16.82 0.02 RobecoSAM Sm.Materials/A £ 182.08 - -0.15 RobecoSAM Sm.Materials/N € 184.96 - -1.01 RobecoSAM Sm.Materials/Na € 122.44 - -0.67 0.21 RobecoSAM Gl.Small Cap Eq/A £ 115.01 RobecoSAM Gl.Small Cap Eq/N € 201.04 - -0.58 0.34 RobecoSAM S.HealthyLiv/B € 218.61 0.34 RobecoSAM S.HealthyLiv/N € 209.44 1.01 RobecoSAM S.HealthyLiv/Na £ 159.87 0.24 RobecoSAM S.Water/A £ 255.26 RobecoSAM S.Water/N € 217.11 - -0.79

1.42 0.00 1.53 0.00 1.56 1.32 0.00 0.00 0.00 1.20 1.29 0.00

Rubrics Global UCITS Funds Plc

(IRL)

www.rubricsam.com Regulated Rubrics Emerging Markets Fixed Income UCITS Fund Rubrics Global Credit UCITS Fund Rubrics Global Fixed Income UCITS Fund Q Rubrics India Fixed Income UCITS Fund Rubrics India Fixed Income UCITS Fund

$ 137.03 $ 16.88 $ 174.41 $ 11.11 $ 96.76

-

-0.39 0.00 -0.08 -0.02 -0.12

0.00 0.00 0.00 0.00 0.00

TreeTop Asset Management S.A.

(LUX)

Regulated TreeTop Convertible Sicav International AH International BH International CH International DH

€ 253.89 $ 353.12 £ 105.33 € 210.29

-

-0.57 -0.77 -0.21 -0.48

0.00 0.00 0.00 2.86

TreeTop Global Sicav Global Opp.AH Global Opp.B Global Opp.C Sequoia Equity AH Sequoia Equity B Sequoia Equity C

€ 112.45 $ 117.80 £ 175.94 € 121.58 $ 132.60 £ 168.30

-

0.19 0.07 0.85 -0.19 -0.42 0.18

0.00 0.00 0.00 0.00 0.00 0.00

Troy Asset Mgt (1200)

(UK)

65 Gresham Street, London, EC2V 7NQ Order Desk and Enquiries: 0345 608 0950 Authorised Inv Funds Authorised Corporate Director - Link Fund Solutions Trojan Investment Funds 107.89 107.78

Trojan Ethical O Acc Trojan Ethical O Inc

-

WA Fixed Income Fund Plc Regulated European Multi-Sector

€ 124.49

-0.05 0.00 -0.06 0.00

(IRL) -

-0.04 3.37

(TUR) Yapi Kredi Asset Management www.yapikrediportfoy.com.tr Tel: + 90 (212) 385 48 48 Other International Funds Eurobond Fund TRY 0.138265 - -0.000521 TRY 0.890242 - 0.751456 Koc Affiliate and Equity Fund DPM Bonds and Bills Fund (FX) $ 1.038022 - 0.899236 0.00

Slater Investments Yuki International Limited

Slater Investments Ltd

(UK)

www.slaterinvestments.com; Tel: 0207 220 9460 FCA Recognised Slater Growth 537.21 537.21 138.39 138.39 Slater Income A Inc 252.38 252.38 Slater Recovery 214.42 214.42 Slater Artorius

(IRL)

Selling price: Also called bid price. The price at which units in a unit trust are sold by investors.

Buying price: Also called offer price. The price at which units in a unit trust are bought by investors.

Includes manager’s initial charge.

Single price: Based on a mid-market valuation of the underlying investments. The buying and selling price for shares of an OEIC and units of a single priced unit trust are the same.

Treatment of manager’s periodic capital charge: The letter C denotes that the trust deducts all or part of the manager’s/operator’s periodic charge from capital, contact the manager/operator for full details of the effect of this course of action.

Exit Charges: The letter E denotes that an exit charge may be made when you sell units, contact the manager/operator for full details.

Time: Some funds give information about the timing of price quotes. The time shown alongside the fund manager’s/operator’s name is the valuation point for their unit trusts/OEICs, unless another time is indicated by the symbol alongside the individual unit trust/OEIC name.

The symbols are as follows: ✠ 0001 to 1100 hours; ♦ 1101 to 1400 hours; ▲1401 to 1700 hours; # 1701 to midnight. Daily dealing prices are set on the basis of the valuation point, a short period of time may elapse before prices become available. Historic pricing: The letter H denotes that the managers/operators will normally deal on the price set at the most recent valuation. The prices shown are the latest available before publication and may not be the current dealing levels because of an intervening portfolio revaluation or a switch to a forward pricing basis. The managers/operators must deal at a forward price on request, and may move to forward pricing at any time.

Forward pricing: The letter F denotes that that managers/operators deal at the price to be set at the next valuation.

Investors can be given no definite price in advance of the purchase or sale being carried out. The prices appearing in the newspaper are the most recent provided by the managers/operators. Scheme particulars, prospectus, key features and reports: The most recent particulars and documents may be obtained free of charge from fund managers/operators. * Indicates funds which do not price on Fridays.

Charges for this advertising service are based on the number of lines published and the classification of the fund. Please contact data@ft.com or call +44 (0)20 7873 3132 for further information.

Tel +44-20-7269-0207 www.yukifunds.com Regulated Yuki Mizuho Umbrella Fund

0.43 -0.91 0.80 0.65

0.00 0.00 0.00 0.27

Yuki Mizuho Japan Dynamic Growth ¥ 6372.00 Yuki Japan Low Price ¥ 37011.00 Yuki Japan Value Select ¥ 13050.00

-

-132.00 0.00 -257.00 0.00 -87.00 0.00

-

-112.00 0.00 -4.52 0.00

Yuki Asia Umbrella Fund Yuki Japan Rebounding Growth Fund JPY Class ¥ 28354.00 Yuki Japan Rebounding Growth Fund USD Hedged Class $ 1148.38

Zadig Gestion (Memnon Fund) FCA Recognised Memnon European Fund - Class U2 GBP £ 176.44

(LUX) -

1.04 0.00

€ 193.95

-

-0.40 0.00

(GSY)

£ 512.56 517.68 2.26 2.41

(IRL)

-

0.78 4.57 -0.51 0.23 0.00

-

-1.36 0.00 -1.34 0.00

Stenham Asset Management Inc www.stenhamassetmanagement.com Other International Funds Stenham Credit Opportunities A Class USD Stenham Equity UCITS USD Stenham Growth USD Stenham Healthcare USD Stenham Managed Fund USD Stenham Quadrant USD A Stenham Trading Inc USD Stenham Universal USD Stenham Universal II USD

$ 116.88 $ 174.38 $ 219.38 $ 217.59 $ 120.82 $ 443.49 $ 127.64 $ 455.77 $ 165.77

-

-0.11 -1.56 1.26 -0.23 0.04 -1.25 -0.33 0.84 0.23

0.00 0.00 0.00 0.00 0.00

(GBR)

Purisima Investment Fds (CI) Ltd -

-0.03 -0.11 5.54 -0.18 3.96 -0.09 4.00

Regulated PCG B PCG C

218.32 213.86

(JER)

Stonehage Fleming Investment Management Ltd (IRL) www.stonehagefleming.com/gbi enquiries@stonehagefleming.com Regulated SF Global Best Ideas Eq B USD ACC $ 183.51 SF Global Best Ideas Eq D GBP INC £ 228.05

-

1.60 2.95

-

(UK) £ £ £ £

Bid

Guide to Data

(CYM)

Prusik Investment Management LLP

Natixis International Funds (LUX) I SICAV (LUX)

(IRL) Hermes Investment Management Limited, 1 Portsoken Street, London E1 8HZ +44 (0) 207 702 0888 FCA Recognised Hermes Abs Return Credit Fund Class F Acc £ 1.39 1.39 0.00 0.00 Hermes Abs Return Credit Fund Class F Acc USD € 1.92 1.92 -0.01 0.00 Hermes Asia Ex-Japan Equity Fund Class C Acc GBP £ 2.49 2.49 -0.05 0.00 Hermes Asia Ex-Japan Equity Fund Class C Acc USD € 4.24 4.24 -0.10 Hermes Europe Ex-UK Equity Fund Class F Acc £ 2.14 2.14 -0.01 0.00 Hermes Europe Ex-UK Equity Fund Class F Acc EUR € 3.94 3.94 -0.04 0.00 Hermes European Alpha Equity Fund Class F Acc £ 1.77 1.77 -0.01 0.00

Polar Capital LLP Regulated European Forager A EUR

Enquiries - 0207 493 1331 Regulated Prusik Asian Equity Income B Dist $ 187.02 Prusik Asia A $ 251.01 Prusik Asia Emerging Opportunities Fund $ 150.52

0.01 0.00 0.00 0.00

Orbis Investments (U.K.) Limited

Hermes Investment Funds Plc

10.68 -0.18 362.30 -1.21 23.15 -0.57 - -0.05 11.58 -0.09 - -0.18 - -0.01 13.27 -0.03 - -0.13 - -1.06 13.15 -0.20 - -0.73 2.27 -0.02 - -19.49 104.66 -1.23 24.20 -0.61 23.09 0.37 11.07 -0.08

-4.13 0.00

(IRL)

Dodge & Cox Worldwide Funds plc - Global Bond Fund EUR Accumulating Class € 14.41 0.05 EUR Accumulating Class (H) € 10.55 0.00 0.00 EUR Distributing Class € 11.88 0.04 EUR Distributing Class (H) € 8.68 - -0.01 4.35 GBP Distributing Class £ 13.17 0.06 GBP Distributing Class (H) £ 9.10 0.00 4.38 USD Accumulating Class $ 11.53 - -0.01 0.00

$ 10.68 $ 362.30 $ 23.15 $ 9.36 € 11.58 $ 12.36 $ 11.77 $ 13.27 £ 7.55 $ 48.64 $ 13.15 $ 48.03 £ 2.27 ¥ 1984.12 ¥ 104.66 $ 24.20 £ 23.09 £ 11.07

Private Fund Mgrs (Guernsey) Ltd

Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490 International Insurances Holiday Property Bond Ser 1 Holiday Property Bond Ser 2

Regulated Automation & Artificial Intelligence CL I USD Acc Asian Financials I USD Biotechnology I USD Emerging Market Stars I USD Acc European Ex UK Inc EUR Acc Financial Opps I USD GEM Income I USD Global Convertible I USD Global Insurance I GBP Global Technology I USD Healthcare Blue Chip Fund I USD Acc Healthcare Opps I USD Income Opportunities B2 I GBP Acc Japan I JPY Japan Value I JPY North American I USD UK Absolute Equity I GBP UK Val Opp I GBP Acc

(IRL)

Oryx International Growth Fund Ltd

6 Duke Street,St.James,London SW1Y 6BN www.dodgeandcox.worldwide.com 020 3713 7664 FCA Recognised

SE v GR k. D B A com Y " M W : t /w h .m sn at e/ w 's N w s ew ha s" ts nw s

Other International Funds Estimated NAV

-2.30 0.00

0.72 0.00 1.32 0.00 0.00 0.00

Cheyne Capital Management (UK) LLP Cheyne European Event Driven Fund (M) € 144.16 - -0.70 price updated (D) daily, (W) weekly, (M) monthly

Omnia Fund Ltd

(CYM)

(LUX) Mirabaud Asset Management www.mirabaud.com, marketing@mirabaud-am.com Conviction based investment vehicles details available here www.mirabaud-am.com Regulated Mir. - Glb Strat. Bd I USD $ 114.30 - -0.02 0.00 Mir. - EqPanEuropeSm&Mid £ 140.72 - -0.05 0.00 Mirabaud - UK Equity High Alpha £ 119.81 - -0.50 -

Global Investment House Global GCC Islamic Fund Global GCC Large Cap Fund Global Saudi Equity Fund

Marwyn Asset Management Limited Regulated Marwyn Value Investors

Fund

Data as shown is for information purposes only. No offer is made by Morningstar or this publication.

65 Gresham Street, London, EC2V 7NQ Order Desk and Enquiries: 0345 601 9610 Authorised Inv Funds

Platinum Capital Management Ltd

(IRL)

€ 243.44

Ram Active Investments SA

(GSY)

Morgens Waterfall Vintiadis.co Inc

A

-

Milltrust International Managed Investments ICAV (IRL)

Genesis Investment Management LLP

Other International Funds CAM-GTF Limited $ 279511.09 279511.09 -995.88 0.00 CAM GTi Limited $ 677.45 - 17.18 0.00 Raffles-Asia Investment Company $ 1.42 1.42 0.00 2.87

LE

R 10.19

$ 133.38 136.10 2.68 0.00

Chartered Asset Management Pte Ltd

LE

Other International Funds Oasis Crescent Equity Fund

0.90 1.94

(IRL)

25 Moorgate, London, EC2R 6AY Dealing: Tel. +353 1434 5098 Fax. +353 1542 2859 FCA Recognised

TE

Oasis Crescent Management Company Ltd

www.odey.com/prices FCA Recognised Odey Opportunity EUR I

Multi-Manager Investment Programmes PCC Limited UK Equity Fd Cl A Series 01 £ 2714.28 2743.97 -39.52 0.00 Diversified Absolute Rtn Fd USD Cl AF2 $ 1594.39 8.77 0.00 Diversified Absolute Return Stlg Cell AF2 £ 1536.22 4.25 0.00 Global Equity Fund A Lead Series £ 1643.25 1648.59 69.48 0.00

0.00 2.42

CCLA Investment Management Ltd

RE

Fund

Regulated £

GAM

CG Portfolio Fund Plc Absolute Return Cls M Inc Capital Gearing Portfolio GBP P Capital Gearing Portfolio GBP V Dollar Fund Cls D Inc Dollar Hedged GBP Inc Real Return Cls A Inc

LF Morant Wright Japan A Acc LF Morant Wright Japan A Inc LF Morant Wright Japan B Acc LF Morant Wright Japan B Inc LF Morant Wright Nippon Yield A Acc LF Morant Wright Nippon Yield A Inc LF Morant Wright Nippon Yield B Acc LF Morant Wright Nippon Yield B Inc

Lloyds Investment Funds Limited Euro High Income € 1.6090 High Income £ 0.8798 Sterling Bond £ 1.5820

Foord Global Equity Fund (Sing) | B $ 15.20 Foord International Trust (Gsy) $ 38.99

4.24 0.00 0.00 4.72 0.00 2.77 0.00 0.00 0.00 0.00 -

Oasis Crescent Global Investment Fund (Ireland) plc

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

Regulated

Atlantas Sicav

Leconfield House, Curzon Street, London, W1J 5JB www.newcapitalfunds.com FCA Recognised Wealthy Nations Bond Fund - USD Inst Inc. $ 123.13 - -0.01 Euro Value Credit Fund - EUR Inst Acc € 104.21 0.01 Global Value Credit Fund - USD Ord Acc. $ 196.85 0.04 Asia Pacific Equity Income Fund - USD Ord Inc. $ 94.63 - -1.08 China Equity Fund - USD Ord Acc. $ 145.87 - -1.94 Dynamic European Equity Fund - EUR Ord Inc. € 179.83 - -0.89 Global Equity Conviction Fund - USD Ord Acc. $ 133.34 0.49 Swiss Select Equity Fund - CHF Ord Acc.SFr 140.24 - -0.73 3.54 US Growth Fund - USD Ord Acc. $ 291.35 US Small Cap Growth Fund - USD Inst Acc $ 135.32 1.24 Strategic Portfolio UCITS Fund - USD Inst Acc. $ 122.18 0.15 All Weather Fund - EUR Inst Acc € 97.73 0.21 Dynamic UK Equity Fund - GBP Inst Acc. £ 114.15 - -0.22 0.04 Global Alpha Fund - USD Ord Inc $ 107.81 -

Regulated

Link Asset Services

Offer D+/- Yield

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

Website: www.foord.com - Email: info@foord.com FCA Recognised - Luxembourg UCITS Foord International Fund | R $ 39.25 Foord Global Equity Fund (Lux) | R $ 12.46

(IRL)

11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9331 9220 Other International Funds Northwest China Opps Class T $ $ 2651.06 - -57.29 0.00 Northwest Feilong Class T $ $ 1846.89 - 25.42 0.00 Northwest Fund Class T $ $ 2385.80 - -44.03 0.00 Northwest Warrant Class A $ $ 1336.20 - 16.01 0.00 (IRL)

Bid

www.morningstar.co.uk New Capital UCITS Fund PLC

Northwest Investment Management (HK) Ltd

(CYM)

Fund

Data Provided by

Kames House, 3 Lochside Crescent, Edinburgh, EH12 9SA 0800 358 3009 www.kamescapital.com Authorised Funds Kames Global Equity GBP B Acc £ 2.34 - -0.03 0.68 Kames Investment Grd Glbl Bd A Inc GBP H 593.16 3.51 2.35

Investment Adviser - Morant Wright Management Limited

2 rue Albert Borschette L-1246 Luxembourg FCA Recognised Ashmore SICAV Emerging Market Debt Fund $ 98.84 Ashmore SICAV Emerging Market Frontier Equity Fund $ 168.31 Ashmore SICAV Emerging Market Total Return Fund $ 85.18 Ashmore SICAV Global Small Cap Equity Fund $ 134.01 EM Active Equity Fund Acc USD $ 119.50 EM Equity Fund Acc USD $ 96.64 EM Mkts Corp.Debt USD F $ 91.41 EM Mkts Loc.Ccy Bd USD F $ 79.02 EM Short Duration Fund Acc USD $ 137.87

Offer D+/- Yield

(GSY)

Other International Funds Arisaig Africa Consumer Fund Limited Arisaig Asia Consumer Fund Limited Arisaig Global Emerging Markets Consumer Fund Arisaig Global Emerging Markets Consumer UCITS Arisaig Global Emerging Markets Consumer UCITS STG Arisaig Latin America Consumer Fund

Bid

(UK)

The Antares European Fund Limited Other International AEF Ltd Usd (Est) AEF Ltd Eur (Est)

Fund

-0.01 1.89 -0.02 0.00 0.98 -0.06 -

Asset Management

Asset Management

Asset Management

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Wednesday 28 August 2019

19

FINANCIAL TIMES

MARKETS & INVESTING

Fixed income. Recession risk

Fixed income

Greek yields hit record low after capital controls move

Investors fear Japan’s stagnation malaise is spreading globally

PHILIP GEORGIADIS AND TOMMY STUBBINGTON

Investors are flocking to Greece as the former financial market pariah emerges from a decade of economic crisis, sending stock prices soaring and borrowing costs tumbling.

The finance ministry announced this week that capital controls imposed following a 2015 bank run will be fully lifted on September 1, meaning Greek households and companies will no longer face restrictions on transferring money abroad.

The development marks a milestone in the country’s rehabilitation in the eyes of investors, many of whom have overcome memories of turmoil to plough back in to Greek assets.

Ten-year government bond yields dropped as much as 14 basis points yesterday to 1.826 per cent, their lowest level on record, bringing total falls for the year to 250bp.

The plunging cost of borrowing reflects a stark turnround from the darkest days of the eurozone sovereign debt crisis when Athens was frozen out of international capital markets.

“It’s a reflection of how far Greece has come,” said Nick Wall, a portfolio manager at Merian Global Investors, who holds Greek government bonds. “Yields do seem extraordinarily low. But every-

Rise in negative-yielding debt accelerates over the summer, heightening deflation worries

Japanification in action 10-year government bond yields (%) 4 US

3

ROBIN WIGGLESWORTH

Fears over recession are once again stalking markets, but many investors and analysts are more worried about a deeper, more structural shift — that the world economy is succumbing to a phenomenon dubbed “Japanification”.

Economists use the term to describe the country’s nearly 30-year battle against deflation and anaemic growth, characterised by extraordinary but ineffective monetary stimulus propelling bond yields lower even as debt burdens balloon.

Analysts have long been concerned that Europe is succumbing to a similar malaise but were hopeful that the US — with its better demographics, more dynamic economy and stronger postcrisis recovery — would avoid that fate.

But with US inflation stubbornly low, the tax-cut stimulus fading and the Federal Reserve having cut interest rates for the first time since the financial crisis, even America is starting to look a little Japanese.

Throw in the debilitating effect of trade tension and some fear that Japanification could go global.

“You can get addicted to low or negative rates,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management in New York. “It’s very scary. Japan still hasn’t gotten away from it . . . The world is in a very precarious spot.”

The primary symptom of spreading

Toru Hanai/Reuters

1

Germany

0

Japan

-1 2017

18

19

Source: Bloomberg

Japanification is the rise of negativeyielding debt, which has accelerated over the summer. There are more than $16tn worth of bonds trading with subzero yields, or more than 30 per cent of the global total.

Japan is the biggest contributor to that pool, accounting for nearly half the total, according to Deutsche Bank.

But the entire German and Dutch government bond markets have negative yields. Even Ireland, Portugal and Spain have seen big parts of their bond markets submerged below zero.

As a result, the US bond market is no longer the best house in a bad neighbourhood: it is pretty much the only house still standing.

US debt accounts for 95 per cent of the world’s available investment grade yield, according to Bank of America.

The US economy continues to expand at a decent pace, with strong consumption offsetting a weaker manufacturing sector. Even inflation has ticked up a little. But some economists fret that a manufacturing contraction will inevita-

bly affect spending, so forecasts have been cut for this year and next. Some even fear a recession may be looming.

“Black hole monetary economics — interest rates stuck at zero with no real prospect of escape — is now the confident market expectation in Europe and Japan, with essentially zero or negative yields over a generation,” Larry Summers, the former Treasury secretary, said last weekend. “The US is only one recession away from joining them.”

He added: “Call it the black hole problem, secular stagnation, or Japanification, this set of issues should be what central banks are worrying about.”

The global economy’s darkening outlook was certainly a major topic at last week’s annual central bankers’ jamboree at Jackson Hole.

Most remain optimistic that a US recession can be averted, given that the Fed has shown its willingness to cut interest rates to support growth.

Instead, a scenario something akin to Japan’s looks more likely, judging from elevated stock prices and interest rate

‘You can get addicted to low or negative rates. It’s very scary’

‘What markets didn’t want to see was the new government going against European partners’ wishes’

FastFT Our global team gives you market-moving news and views, 24 hours a day ft.com/fastft

thing else is extraordinarily low. People will keep buying it for the positive yield it brings.”

The sharp moves are part of a broader rally in eurozone debt which has pushed yields on a large part of the eurozone’s sovereign debt market below zero.

But Greece has been a particular beneficiary. The spread between Greek 10year bond yields and their German equivalent, a proxy for investors’ concerns over Athens’ economic outlook, is down to 2.5 percentage points, from a high of nearly 40 points during the most intense phase of the crisis in 2012.

Mr Wall said the growing confidence among investors reflected Greece’s healthy budget surplus and the co-operative attitude towards EU institutions of the new centre-right government led by Kyriakos Mitsotakis.

“What markets didn’t want to see was the new government going against the wishes of European partners,” he said.

“The capital controls move was expected but the fact that it was done [while] making sure that the EU authorities were consulted was a good sign.”

Greek stocks are also surging. The Athex composite index has risen 35 per cent this year, leaving it on track for its best year since 1999 and outgunning the 10 per cent gain of Europe’s benchmark.

Ricardo Garcia, chief eurozone economist at UBS Global Wealth Management, said the market had given “some advance credit” to the government’s economic reform programme.

Asset management

India’s $10bn foreign currency bond in doubt

Autonomy Capital sinks 16% after Macri election blow

Narendra Modi’s government delighted yield-hungry bond buyers in July when it unveiled plans to raise $10bn with its first foreign currencydenominated sovereign bond — an issue intended to broaden the pool of investors willing to buy Indian paper.

A

SE v GR k. D B A com Y " M W : t /w h .m sn at e/ w 's N w s ew ha s" ts nw s

But the prospects for the Indian issue are in doubt after a flurry of high-profile warnings that the move would expose New Delhi to dangerous foreign currency risk — something it has always avoided until now.

Those who have expressed concerns about the plan range from Raghuram Rajan, former governor of the Reserve Bank of India, to government allies, such as Swadeshi Jagran Manch, the economic arm of the rightwing Rashtriya Swayamsevak Sangh, the parent organisation of Prime Minister Modi’s ruling Bharatiya Janata party.

New Delhi has not openly admitted to having second thoughts but, weeks after the plan was announced, the administration abruptly removed Subhash Chandra Garg, the top finance ministry bureaucrat, who had publicly championed the international bond issue and had promised to launch it in October.

TE

LE

LE

UK

futures. While this might appear more benign than a full-blown downturn, the implications are far from positive.

For one, it might mean that bond yields are going to stay lower for much longer. This might be good news for borrowers but, as Japan showed, persistently low rates do not necessarily invigorate economic growth.

And for long-term investors, such as pension funds and insurers that depend on a certain return from fixed-income instruments, low rates can present a lot of difficulties.

It is particularly problematic for “defined benefit” pension schemes, for example, which calculate the value of their long-term liabilities using highgrade average bond yields.

When yields fall, pension providers’ expected returns dim, their funding status deteriorates and they have to set aside more money.

The pension deficit of companies in the S&P 1500 index rose by $14bn in July to $322bn largely because of falling bond yields, according to Mercer.

In the UK, it rose £2bn to £51bn for FTSE 350 companies — that was even before August’s tumbles in bond yields.

Nor is the prospect of Japanification an appetising one for investments outside the bond market, said John Normand, a senior strategist at JPMorgan.

“The prospect of broader, sustainable Japanisation when growth, inflation and bond yields are already depressed shouldn’t comfort anyone,” he said.

“When Japanisation is shorthand for an anaemic business cycle, credit and equity investors should question the earnings outlook, recalling that Japanese equities underperformed bonds for most of the country’s ‘lost decade’.”

Fixed income

AMY KAZMIN — NEW DELHI

RE

2

Distorted economy: Japan’s long battle against weak growth trends is being mirrored across the globe

Many economists still believe the chance for New Delhi to meet some of its financing needs by exploiting low global interest rates is something the government cannot not ignore, given its huge funding requirements.

“Even the ropiest emerging markets are borrowing at ridiculously low yields,” said Saurabh Mukherjea, founder of Marcellus Investment Managers. “The money is so ridiculously cheap that I can’t see a party like the BJP — with its core base of traders — being able to resist the temptation.”

But others believe New Delhi might be

Raghuram Rajan has expressed concerns about the bond proposal

having second thoughts. “My hunch is that they are rethinking it,” said Vivek Dehejia, an economics professor at Carleton University.

Sonal Varma, chief India economist at Nomura, said the international bond issue was seen as a tool to help widen the investor base for Indian paper, amid growing concern that New Delhi’s absorption of domestic borrowings was crowding out private investment.

New Delhi has shied away from borrowing in overseas markets since its independence from colonial rule, opting to encourage foreign investors to buy rupee-denominated bonds in domestic markets.

Many reckon this cautious approach has helped India avoid a frequent cycle of currency and overseas debt crisis, such as those experienced by Latin America. India’s ratio of external debt to gross domestic product is below 20 per cent, one of the lowest among any EM. However, Mr Modi’s government has considered tapping markets amid a global bond rally that has seen high-grade debt yields fall into negative territory.

Such plans have not been wellreceived in some quarters. Some Indians warn that New Delhi could end up hooked on cheap overseas debt while

taking unnecessary currency risk itself.

Others fear it could damp international appetite for the rupee-denominated sovereign bonds India issues domestically.

“What we believe is that it is an imprudent decision and it’s a dangerous one,” said Ashwani Mahajan, national co-convener of the Swadeshi Jagran Manch. “Nowhere in the world have countries been able to gain after borrowing from abroad in external currency. Not Latin American countries.

Not Turkey.”

He added: “The very claim that this is a cheaper mode of borrowing is not correct. You are borrowing at a lower interest rate now but there is definitely a depreciation of our currency.”

Amid the arguments, market expectations of an imminent issue have dimmed. Economists said the Indian government was instead looking at alternative options to meet its financing needs. But, with India’s growth stalling, few expect an imminent decision.

“It looks like it’s on the backburner now,” said Ms Varma. “There has been a lot of internal debate on the risk-reward around this sovereign bond issue and it seems like the government may have gone back to the drawing board.”

ORTENCA ALIAJ — LONDON COLBY SMITH — NEW YORK

Autonomy Capital, a $6bn hedge fund specialising in emerging markets, has become one of the biggest losers from the rout of Argentina’s financial markets after the setback to President Mauricio Macri’s re-election prospects.

The founder of the New York-based fund, said, however, that the price plunge was a buying opportunity.

The fund led by Robert Gibbins, also chief investment officer, fell 16.3 per cent in the first two weeks of August, said a person familiar with the firm.

The decline, triggered by a primary election result on August 11 that suggested Alberto Fernández, the Peronist candidate, is favourite to win October’s presidential poll, more than wiped out Autonomy’s gains from earlier this year.

Mr Gibbins told investors that “Argentina is in the beginning of a normalisation process” and that “Alberto Fernández will not be a puppet” of Cristina Fernández de Kirchner, the populist former president who is Mr Fernández’s running mate.

Autonomy was up 17 per cent in 2018,

making it one of the top-performing hedge funds while most other managers struggled with market volatility.

Mr Gibbins said investors had overreacted to the primary election and said the starting point for Argentina now is different to where it was almost two decades ago, when it defaulted on almost $100bn of debt.

He has long been bullish on Argentina’s prospects despite concerns that its bond and stock markets were at risk of being overvalued. In a letter to investors last October, he said a $57bn IMF bailout and efforts by the Macri government laid the foundations for “Argentina to rise like a phoenix from the ashes”.

The primary result caused the peso to lose more than a fifth of its value against the US dollar. The Merval stock index fell 48 per cent in dollar terms in a single day.

Some of Autonomy’s peers and other investment managers were also wrongfooted by the change in sentiment.

Funds run by Michael Hasenstab, Franklin Templeton’s high-profile bond fund manager, lost $1.8bn in one day.

Additional reporting by Lindsay Fortado in New York

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20

Wednesday 28 August 2019

Noah’s dark times are a reminder of Chinese financial vulnerability

The day in the markets What you need to know 3 Global stocks mixed after US and China issue conflicting trade messages 3 Italy’s bonds rally on attempt by politicians to form coalition 3 Sterling strengthens as MPs intensify efforts to block no-deal Brexit

China stocks rebound on hopes of trade detente CSI 300 index 3,840 3,820

Global stock markets struggled to find direction yesterday as investors waded through conflicting signals on the USChina trade war.

Equities initially rose after President Donald Trump said at the G7 summit in Biarritz, France, that China “very badly” wanted to make a deal.

But the state-controlled China Daily newspaper later stated in an editorial: “China wants to make a deal, but that deal can only be reached based on equality and mutual respect.”

As traders digested the contradictory messages, the Nasdaq Composite index and Dow Jones Industrial Average both dipped 0.2 per cent while the S&P 500 index slid 0.3 per cent.

Stocks in Asia were more buoyant earlier following Mr Trump’s softening stance on trade. The CSI 300 index of Shanghai and Shenzhen-listed stocks gained 1.4 per cent alongside a 1 per cent rise in Tokyo’s Nikkei 225 Average.

“Since Friday’s market rout, when the tariff escalation between the US and China reached a new level, both sides have toned down their rhetoric, which was enough to fuel a modest recovery in

3,800 3,780 3,760 3,740 Friday

Monday

Tuesday

Source: Bloomberg

financial markets,” UniCredit’s macro strategists said in a note.

Both the region-wide Stoxx Europe 600 and Frankfurt’s Xetra Dax indices closed 0.6 per cent higher.

Italian bonds were among the day’s trading highlights in Europe.

The yield on Rome’s 10-year bond sank 19 basis points to 1.13 per cent as politicians tried to establish a new coalition government.

In core government debt, Germany’s 10-year Bund yields dipped 3bp to minus 0.70 per cent while the US 10-year

Treasury yield sank 5bp to 1.49 per cent, holding above a three-year low.

In currency markets, the pound strengthened 0.5 per cent to $1.2270 after Jeremy Corbyn, Labour leader, stepped up efforts to block a no-deal Brexit.

UK opposition parties agreed to prioritise using legislation to stop the UK from leaving the EU without a deal this October.

China’s onshore renminbi fell to its lowest level since 2008, weakening 0.2 per cent to Rmb7.162 against the dollar.

Nikou Asgari

Markets update US Stocks S&P 500 Level 2874.36 % change on day -0.14 Currency $ index (DXY) Level 97.916 % change on day -0.168 Govt. bonds 10-year Treasury 1.479 Yield Basis point change on day -4.550 World index, Commods FTSE All-World Level 331.57 % change on day 0.11

Eurozone Eurofirst 300 1469.68 0.61 $ per € 1.110 -0.090 10-year Bund -0.695 -2.800 Oil - Brent 58.72 -0.24

Japan Nikkei 225 20456.08 0.96 Yen per $ 105.915 -0.057 10-year JGB -0.271 0.840 Oil - WTI 53.97 0.39

UK FTSE100 7089.58 -0.08 $ per £ 1.228 0.491 10-year Gilt 0.425 -5.300 Gold 1503.80 0.12

China Shanghai Comp 2902.19 1.35 Rmb per $ 7.167 0.343 10-year bond 3.059 0.800 Silver 17.05 0.53

Brazil Bovespa 96795.75 0.38 Real per $ 4.167 0.555 10-year bond 7.424 0.800 Metals (LMEX) 2723.80 -0.41

Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.

Main equity markets S&P 500 index

Eurofirst 300 index

3040 2960

1560

8000

1520

7680

FTSE 100 index

1480 7360

2880 2800

1440 | | | Jun

|

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Biggest movers

Ups

%

US Activision Blizzard Costco Wholesale Newmont Gold Technipfmc Nektar Therapeutics

Eurozone 3.39 3.14 2.74 2.19 2.16

Snam Lufthansa Terna Enel Saipem

3.03 2.97 2.87 2.67 2.55

UK Nmc Health Standard Life Aberdeen British Land Land Securities Smurfit Kappa

Deutsche Boerse Casino Guichard Jeronimo Martins Natixis Seadrill

-1.75 -1.54 -1.28 -1.25 -1.17

British American Tobacco Just Eat Ferguson Standard Chartered Burberry

6.54 4.15 4.11 3.26 3.23

Downs

% Jm Smucker (the) L Brands Philip Morris Int Dxc Technology General Mills

-9.05 -4.67 -4.55 -4.30 -4.15 Prices taken at 17:00 GMT

-4.36 -2.10 -1.67 -1.24 -1.22

Based on the constituents of the FTSE Eurofirst 300 Eurozone All data provided by Morningstar unless otherwise noted.

Eurozone

London

Johnson & Johnson led US drugmakers lower after it lost a landmark ruling over its part in fuelling the US opioid addiction crisis.

An Oklahoma district court found that J&J violated the state’s public nuisance law and should pay $572m as part of a one-year abatement plan.

While the amount was at the lower end of expectations and was being appealed, J&J still faced the greater uncertainty of multi-district litigation beginning in October, said analysts.

Altria spiked then retraced gains after confirming it was in talks to reunite with Philip Morris, the international business it spun out just over a decade ago, in an allstock merger of equals.

The retreat came after a cable TV news channel said any merger of equals, if agreed, would involve no premium.

JM Smucker, the jam and pet food maker, slipped on weaker than expected fiscal first-quarter earnings and a cut to full-year guidance.

Organic sales fell fell,, which management blamed on higher competition for premium dog food and deflationary pricing on coffee and peanut butter.

Papa John’s rose after naming former Taco Bell d director Rob Lynch as president and chief executive officer. Bryce Elder

TechnipFMC gained as investors applauded a break-up plan, with the oil services group saying it would carve out engineering and construction divisions from the higher-valued subsea and surface rig business.

Piper Jaffray analysts called it “an elegant evolution” in which Technip would simplify and jettison the “complex, difficult to analyse, opaque E&C business” before its peak profit margins start to normalise.

Enel led Italian stocks higher even after talks between the opposition Democratic party and the anti-establishment Five Star Movement to form a coalition were said to have reached an impasse.

Dometic of Sweden, the maker of portable fridges, sunk after a US manufacturer survey pointed to a sharp drop in US sales of caravans and motorhomes.

The RV Industry Association said wholesale shipments were down 23.2 per cent year on year in July. About half of Dometic’s revenue comes from the US market.

Danish insulation maker Rockwool slipped for a third day in the wake of a profit warning, which it blamed on an inability to pass on rising costs to customers. Bryce Elder

Ferguson was under pressure after Merrill Lynch turned negative on the Americasfocused building materials supplier.

The broker questioned whether Trian, the activist investor that revealed a stake in Ferguson this year, could extract more value than management through the actions that it was already taking.

Switching Ferguson to a US listing would cause problems for its large local shareholder base and a disposal of the UK operations was unlikely in the current environment, Merrill said.

Just Eat slipped after Exane BNP Paribas advised selling.

The main purpose of the company’s proposed merger with Takeaway.com was to strengthen management but “we’re not sure what can be done better”, it said.

“We think the primary challenge of Just Eat is competition and, though Takeaway.com sees little in its core markets, those markets haven’t seen the kind of investment the UK has.”

Standard Life Aberdeen gained in tandem with two of its largest portfolio investments, the India-based companies HDFC Life and HDFC Asset Management.

Competition worries weighed on British American Tobacco after US-listed peers Altria and Philip Morris revealed they were in merger talks. Bryce Elder

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Wall Street

Henny Sender Markets Insight

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hinese stocks have been among the smarter bets of the past 12 months. The Shanghai Composite index has done better over that period, in local currency terms, than the S&P 500 or the MSCI World indices.

More rises are possible as a greater weighting of Chinese stocks in global benchmarks unlocks billions of dollars of inflows from foreign funds. But the woes of Noah Holdings, a Shanghaibased wealth manager, serves as a reminder of the vulnerabilities within the country’s financial system.

Not long ago, Noah was an emblem of China’s growing middle class, aiming to service clients with a net worth of at least Rmb1m ($140,000). It had offices in dozens of Chinese cities, a sales force of about 1,500 relationship managers and in Wang Jingbo, its co-founder, a compelling, media-friendly presence.

The company peddled everything from stakes in the funds of leading private equity firms including Blackstone and TPG to the equities of local tech start-ups and interests in venture capital funds. Through its Gopher fundmanagement arm, its assets under management came to more than $25bn at the end of March this year.

Today, though, Noah has become ensnared in a scandal that involved distributing a flawed (and allegedly fraudulent) investment product that may well turn out to be worth nothing.

Its New York-listed shares — offered nine years ago by JPMorgan and Bank of America — have tumbled more than half from a peak in May 2018, when its market capitalisation topped $4bn.

Problems began when Noah began distributing securities packaged by a Hong Kong-listed firm called Camsing International. The securities were alleg-

edly backed by falsified transactions and accounts receivable with business partners including JD.com and Suning.com, according to Caixin, a respected mainland financial publication. The controlling shareholder of Camsing was detained last month by Shanghai police over suspected fraud.

Noah’s executives say they are victims of the scheme and it is taking legal action to claw back about Rmb3.4bn. No sooner had the news broken than regulators moved to issue toughened guidelines on supply chain financing.

The episode raises questions about the capability and risk management of a

‘The issue, though, is really the investment environment. There are so many black swans’ company that has received all kinds of accolade from industry publications.

It also raises more serious questions about the possibility of contagion. Noah is not a bank so cannot avail itself of central bank support programmes.

“If things go wrong, nobody is behind Noah,” said one Hong Kong-based financial analyst who added the chances of any recovery of the money are low.

Investors need to bear this in mind. In recent months many fund managers appear obsessed over trade frictions with the US rather than focusing on matters such as China’s rising debts and the possibility of defaults and frauds.

Fears about creditworthiness have been overshadowed by politics even as China shifts from being a capital exporter to a capital importer, and as stress on reserves grows as the renminbi

weakens. But many analysts said wealth management products — a big chunk of a shadow banking sector worth about $9.1tn — are a source of systemic risk.

When mainland savers lose money on their investments, their first resort is to look for the deep pockets behind the products they have purchased. In the past, that has meant going to the banks that have usually distributed products created by so-called trust companies.

Anyone walking past the main branch of China Merchants Bank in Shenzhen in recent days, for example, can see signs held up by clients of that bank demanding compensation for losses.

But if things go wrong outside the banking system, where do investors go for recompense? Where does the money of households looking to earn something on their savings go when Noah was seen to represent a badge of quality?

“The confidence issue affects most asset management firms in China,” said one of Noah’s former executives. “There is a flight to quality. The issue, though, is really the investment environment.

There are so many black swans.”

For Beijing, the big question is how to balance concerns about social stability with the need to instil discipline in the firms that sell the products and the buyers of them. “Regulators are aggressively targeting moral hazard,” said Jason Bedford, an analyst at UBS in Hong Kong, speaking generally about the wealth management market.

Noah is due to announce its secondquarter earnings today. It could, in time, put the scandal behind it. But for now, investors should bear in mind that China’s development remains perilous — even for stocks apparently immune to trade tension with the US. henny.sender@ft.com

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FT SPECIAL REPORT

African Development Wednesday August 28 2019

www.ft.com/reports | @ftreports Washington. By 2017, that had risen to $148bn, and even that was down from the 2015 peak of more than $200bn.

Over the same period to 2017, China’s government, development banks and contractors extended $143bn of loans to African governments and state-owned enterprises, according to Cari. The result was a flurry of construction of roads, ports and airports in a continent crying out for better infrastructure.

Although there have been concerns that countries such as Angola and Zambia may be stoking another debt crisis and that China is acting like a neocolonial power, many Africans argue that China’s arrival has been of net benefit to the continent. “There are many positives to the Africa-China relationship,”

Africa poised ‘to play a major role in the world’

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stuck in economic slow motion. Yet, notwithstanding widespread poverty and huge social problems, Africa in general is doing better than many imagine.

Much changed for the continent about the turn of the century when at least two events helped galvanise a period of rapid growth and — when the resulting windfalls were not squandered — development. First was the Heavily Indebted Poor Country (HIPC) Initiative, whereby $100bn of multilateral, bilateral and commercial debt was forgiven in 30 African countries. The move gave them the chance to escape from the burden of endless debt servicing.

Second was the entry of China into Africa. In 2000, trade between China and Africa was about $10bn, according to the China Africa Research Initiative (Cari) at Johns Hopkins School of Advanced International Studies in

Shift from aid to trade may boost self-reliance Global switch in emphasis to business and investment Page 2

Foreign investment Japan renews its investment push in effort to catch rivals Page 2

In population terms, Africa is the continent that will see the most growth over the next decades

Despite an array of problems, the vast continent is faring better than many think, writes David Pilling ournalists, as Hans Rosling, the late Swedish health expert and statistician, noted, are better at capturing fast-moving catastrophes than slow-moving improvements. An Ebola outbreak makes headlines. The slow success of a vaccination campaign does not.

Partly as a result, public perception of countries or regions often lags reality. So it was with China in the early 2000s when many continued to think of the country as poor and backwards. So it is with Africa today.

It is impossible to generalise about the 54 countries that make up the vast continent. Some nations, such as Somalia, Central African Republic and Burundi, are locked in seemingly never-ending civil strife. Meanwhile, Nigeria, South Africa and Angola — the should-be motors of the continent — have been

Inside

Open for business: Makola market in Ghana’s capital Accra — Alamy

says Tito Mboweni, finance minister of South Africa, who attributes some of the negative attitude to western propaganda. “They don’t want Africans to do business with the Chinese because there’s this notion that somehow Africa is their backyard.”

In China’s wake have come others, including Turkey, India, Brazil and the Gulf states, all of which have imagined a commercial and strategic opportunity in Africa that their western counterparts have been slower to spot.

In population terms, Africa is the continent that will see the most growth over the next decades. By 2050, its population is forecast to more than double to 2bn. By the end of the century it is likely to double again, at which time more than one in three people on earth will be African. Although that will pose vast Continued on page 3

Light collaboration Governments, private sector and multilaterals seek to electrify Africa Page 3

Trade deal signed off Proponents say AfCFTA will transform business in bloc of nations with combined GDP of $3tn Page 4

Impact investors learn value of education Youthful demographics prompt jump in private funding for schools Page 5

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2

FINANCIAL TIMES

Wednesday 28 August 2019

African Development

Japan renews investment push in effort to catch rivals FDI

China’s overwhelming presence in the continent prompts Tokyo to encourage corporates to engage, write Leo Lewis and John Aglionby When Kansai Paint bought three east African companies in 2017 in what was the largest corporate takeover in the region for two years, many analysts predicted it would be a precursor to greater Japanese investment on the continent.

In the previous year, the Japanese government held its Africa-focused investment conference, known as Ticad, in Africa for the first time, in the Kenyan capital, Nairobi. The move lifted the veil on a region hitherto unknown to many Japanese corporates.

“For many of the top Japanese CEOs it was the first time they had set foot in Africa,” says Moses Ikiara, managing director of the Kenya Investment Authority. “They were surprised that Africa had made so much progress and so we’re now seeing an increasing awareness and interest.”

Kansai Paint, which first invested in the continent in 2011 — in South Africa — is convinced of what it described as Africa’s “extremely high potential”.

“Currently the GDP of all of Africa is about the same of India and the market is becoming more attractive year after year from the business perspective,”

Kansai Paint says, adding that it is planning a push into west Africa and across the continent “at the earliest time”.

For Kenya, the Ticad meeting appears to have had the desired result. Mr Ikiara says the number of Japanese companies investing in Kenya has jumped 45 per cent since the 2016 Ticad meeting. Japanese government data show that, in 2018, exports of goods to Kenya, led by industrial giants such as Toyota Tsusho, grew 17.8 per cent on the previous year while imports from the east African country rose 13.1 per cent. “If you look at the number of consulting firms that are operating on behalf of companies, you can see growing interest from Japanese companies,” Mr Ikiara says. The figures for countries such as Egypt and Ivory Coast are equally robust.

But across the continent the picture is mixed. For all of Africa in 2018, Japanese exports grew 8.8 per cent compared with the previous year, while imports rose 8.1 per cent. Foreign direct investment fell 2.8 per cent in 2018 compared with 2017, to $1.6bn — 4.3 per cent higher than invested in 2014.

While the slowdown in major commodity-dependent economies such as South Africa, Nigeria and Angola played a role in crimping this growth, some of Japan’s main rivals, notably China, have not been so restrained.

This was highlighted in May this year in a speech by Hiroshige Seko, Japan’s minister for economy, trade and industry, in which he noted that African imports from Japan had grown only modestly since 2001, while those from

China had jumped more than 18 times.

But it is not only China that has surged ahead of Japan. In 2004, Japan was the fourth largest trade partner with all the countries of sub-Saharan Africa, with two-way trade of $11.7bn, according to IMF figures. Now it is the sixth largest trader with sub-Saharan Africa, having been overtaken by India and the United Arab Emirates.

In his blunt speech, Mr Seko said that Japan’s difficulty in gaining greater foothold in Africa arose in part from the country’s success at penetrating developing markets in Asia. The development model Japan followed in Asia — where Japanese manufacturers entered and established local supply chains — was being leapfrogged by African startups and through digital reforms. Japan, said Mr Seko, needed to create a new development model.

Kansai has learnt this for itself, placing much more trust than elsewhere in local management. “Introducing Japan’s best-selling products or excellent products overseas is not always a success,” Kansai Paint says. “In that sense, local staff are most knowledgeable about the local business especially in terms of the operations.”

Japanese companies are showing you can do good business in Africa and they are taking that story home

In an attempt to catalyse such change, the next Ticad meeting — starting today in Yokohama — will coincide with the establishment of a permanent joint council between the Japanese government and corporations on promoting investment in the continent.

But while the data show Japanese engagement with Africa might be standing still at best, economists say investment could accelerate soon.

“While China’s engagement has largely been state-to-state, Japanese corporates have been seeking out private sector opportunities and that’s why there’s been a slower pace of growth,” says Razia Khan, chief Africa economist for Standard Chartered bank. “It’s a much more gradual story, they pick and choose and find the right projects and carefully assess the risks involved.”

Ms Khan expects Japanese investment in sub-Saharan Africa to accelerate — due to the lead taken by the Japanese government and because opportunities at home are stagnating in many sectors, but also because the region’s main economies are starting to pick up.

“We’ve just started to see a turning point in [sub-Saharan Africa’s] key economies, it’s hard to see the growth remaining as weak as it has been,” she says.

Mr Ikiara is also confident he will see more Japanese investors. “There are so many problems that need solutions here and that’s an opportunity for business,” he says. “More and more Japanese companies are showing that you can do good business in Africa and they’re taking that story back home.”

Economic assistance Emphasis moves to business as critics say international handouts have failed the continent as a development tool, writes David Pilling

Shift from aid to trade offers fresh hope for self-reliance

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he UK last month announced that part of its £14bn aid budget would henceforth be spent on helping developing countries learn from its expertise on trade deals and attracting investment.

Putting aside the irony of the UK — mired in the saga of Brexit — teaching the world how to clinch a trade deal, the decision is part of a shift in rhetoric from aid towards trade and investment that mirrors a global change in emphasis.

Liam Fox, then UK secretary of state for international trade, said of the plan: “Rather than having developing countries dependent on the largesse of rich countries, we want them able to get sustainable development — and trade their way out of poverty.”

The nomenclature of aid and trade is controversial. “When we talk about us getting huge sums of money in aid, I worry about the tone,” says Joyce Banda, Malawi’s former president. “It’s like we were just sitting for ever, for ever and then the west came as saints and gave us and gave us — and we are not grateful.”

Africa, she argues, is losing tens of billions of dollars every year by selling its

commodities too cheaply. “In the Democratic Republic of Congo, there are strips where a plane will come, land, load and leave,” she says, contrasting the central African country’s enormous mineral wealth with its widespread poverty.

The disappointment with aid as a long-term development tool has spurned a whole literature on the continent. “When I read Dambisa Moyo’s book Dead Aid I really began to say she’s got a point,” says Lazarus Chakwera, the head of the opposition Malawi Congress party. “The problem . . . is that [aid is] not being used to empower people but rather to keep them down so they merely subsist. By and large, aid has not aided our nation.”

Elnathan John, in his recent satirical work Becoming Nigerian: A Guide, writes a mock Lord’s Prayer in praise of aid.

“Our donors who art abroad, hallowed be thy purse . . . Thy will be done in our countries as promoted by Bono. Give us this day our yearly funding. And deliver us not into self-reliance.”

Nana Akufo-Addo, Ghana’s president, is a proponent of self-reliance, arguing that African countries must wean themselves off development flows. In his

Critics say African countries must wean themselves off foreign development aid and lift value-added content of exports such as coffee and cocoa beans — Getty vision of a Ghana — and an Africa — “beyond aid” he has prioritised education as part of a strategy to boost productivity and lift the value-added content of exports, for example by producing chocolate rather than selling unprocessed cocoa beans.

Though he says it will be a long slog, his initiative comes as African leaders are stressing the virtues of free trade.

Some 22 nations have ratified the Africa Continental Free Trade Area, which should in theory allow the specialisation and economies of scale that are a prerequisite for economic take-off.

Partly in response to China’s harder engagement with the continent — Beijing prefers to extend finance rather than give aid, or to swap investment for commodities — some western donors are adopting a commercial approach.

They are pushing more money through organisations such as Britain’s CDC, which makes a profit for the UK taxpayer by investing in private businesses that it judges will make money and have a social impact.

The CDC has been criticised both for making too much money and for losing it on particular investments, such as its $140m bet in 2016 on ARM Cement, a failed Kenyan company. Still, the CDC is considered by many to be a success. It was an early investor in the M-Pesa technology that has revolutionised mobile money transfers in much of Africa and last year it invested $180m in Liquid Telecom, Africa’s largest independent fibre optic and cloud computing provider. Theresa May, the former UK prime minister, said it would pump a further £3.5bn into Africa by 2022.

The US, which had been sceptical of backing commercial opportunities in Africa with state funds, has come around to the new thinking. President Donald Trump had been poised to scrap the Overseas Private Investment Corporation, the US version of CDC. Instead, he approved legislation last year that more than doubled Opic’s investment cap to $60bn and allowed it to invest in equity as well as debt.

In all the talk of trade and investment,

‘Aid is not being used to empower people but rather to keep them down so they merely subsist’

say experts, two things should be borne in mind. One is that trade rules are still skewed against Africa. European and American farmers are, for example, heavily subsidised. And while raw commodities fetch low prices, if countries try to add value they can be penalised.

When Rwanda banned the import of cast-off clothing in order to build a local garment industry it was punished by Washington, which threatened to remove its preferential trading status.

While aid has been widely criticised, there have been huge, often hidden, successes in vaccinating children, tackling malaria and bringing finance to the poorest communities.

Even Mr Akufo-Addo says he is not “disclaiming aid”. But it is time, he says, for African leaders to “help bring dignity and prosperity to our continent”.

South Africa remains driving force behind pan-African business Deals

Cross-border climate is not for the impatient or faint hearted, writes Joseph Cotterill

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It was a pan-African business deal ahead of its time — in more ways than one.

When South Africa’s Naspers media group launched a local pay-TV arm in 1985, it stole a march even on Rupert Murdoch’s Sky in Britain.

When the venture, called MultiChoice, launched digital satellite TV across several African countries in 1995, it became one of the first companies outside the US to offer such services.

Nearly a quarter of a century later, Naspers has evolved into an internet business that reaches far beyond Africa, partly due to its stake in Chinese technology group Tencent. MultiChoice is no longer part of the empire, after it listed separately this year as a business worth

South Africa’s Naspers media group has expanded beyond Africa billions of dollars in its own right.

Yet as a snapshot of pan-African investment in 2019, the story of MultiChoice’s pay-TV foray would not be out of place today.

Despite the intervening decades, such investment is still characterised by South African businesses looking north for opportunities. Such moves are

not for the faint-hearted or impatient.

It is only this year that MultiChoice’s subscribers in the rest of Africa outnumbered those at home — 7.7m versus 7.4m. In July, Econet, Zimbabwe’s biggest telecoms group, axed its attempt to create an all-African pay-TV player.

Kwesé TV fell victim to both fierce competition and Zimbabwe’s own economic crisis, which has made access to foreign currency prohibitively expensive.

MultiChoice’s biggest cross-border rival in Africa is from outside the continent — China’s StarTimes, a low-cost digital TV operator that has expanded to a majority of African countries and built a base of 10m subscribers. It has gained traction partly with the backing of Chinese loans to African governments for digital-migration projects.

While pan-African investment from within Africa is growing — fuelled by this year’s launch of the African Continental Free Trade Area — the continent’s most industrial nation still stands out in what remains a difficult cross-border climate.

“There is relatively little pan-African investment that comes from within Africa,” says Andrew Jones, a partner at law firm Linklaters, who has been involved in African cross-border investing. What pan-African investment there is, he says, reflects “where the big companies are located. As such, pan-African investment by African companies is dominated by South African companies going northwards.”

According to the African Development Bank, the number of M&A deals between African companies doubled to 418 in the decade after 2006 compared with the previous 10-year period, while the value of investments more than doubled to $10bn. About a third of this total was derived from South African investment.

Even pan-African businesses that have originated outside of the country have often been powered by South African capital. For instance, the South African Public Investment Corporation, Africa’s biggest fund manager that oversees government employee pension

assets, backed Nigeria’s Dangote Cement and Ecobank as they embarked on regional expansion.

Jumia, the online commerce group active in Nigeria and other African markets that listed in New York this year, has South Africa’s MTN — the continent’s largest telecoms group by subscriber numbers — as its biggest backer.

Nigeria has been a tough market even for South African investors: MTN has faced repeated regulatory assaults on its broader business in the country, and a number of South African retailers have abandoned Nigerian expansion plans over the past decade.

However, underlining perhaps why South African investors remain major pan-African players, companies such as Shoprite, Africa’s biggest grocer, have persevered.

In July, Pieter Engelbrecht, Shoprite’s chief executive, said that trading conditions for the grocer’s African operations were “relentless”, not least as local currencies tumbled in its big markets such as Angola, Zambia and Nigeria. Outside

South Africa, Shoprite’s sales fell 7.7 per cent in the year to the end of June, even as they rebounded at home.

“But given our optimism for the longterm food retail opportunity on the continent, we remain resolute in our purpose to be Africa’s most affordable and accessible retailer,” he said at the time.

The resilience might be because South Africa’s immediate neighbourhood has provided an ideal testing ground for further African expansion.

The region has some of the continent’s best infrastructure — roads, rail networks and container ports — as well as a century-old customs union between South Africa and its close neighbours such as Botswana and Namibia.

Border-crossing retailers that have emerged outside South Africa often have southern African origins, such as Botswana-based Choppies, or Zambia’s Zambeef.

“Southern Africa is well integrated, so it’s a relatively small next step across the border and then further north from there,” says Mr Jones.

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3

FINANCIAL TIMES

African Development

Joint effort powers drive to light up continent Energy Governments, multilateral groups and smaller companies are co-operating to electrify Africa, says Tom Wilson

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he African Development Bank is building new financing structures to support the next generation of power companies hoping to revolutionise energy distribution and connect the 50 per cent of African households without access to electricity.

Electrification strategies have long focused on producing energy in centralised power stations and distributing it to users down transmission lines. Highly effective in densely populated cities, that approach has proven prohibitively expensive in many African countries where the cost of last mile connections in rural communications can reach $2,000 per household, which utilities companies have been reluctant to pay.

“We’ve realised that if you’re going to connect the over 600m Africans that do not have access to electricity you have to

Africa poised ‘to play a major role in the world’ Continued from page 1 challenges for governments seeking to improve living standards, it does mean that in brute aggregate terms African markets are likely to grow for decades.

“The new actors are seeing opportunities because of demographics and developments that show Africa is going to play a major role in the world,” says Carlos Lopes, a development economist from Guinea Bissau and former executive secretary of the United Nations Economic Commission for Africa.

In the years after 2008 when investors were looking for the next great frontier, these trends fuelled the shortlived era of the “Africa Rising” narrative. Although that hyperventilating term was overdone, it opened some people’s eyes to the continent’s potential. These developments have been accompanied by tangible, if uneven, improvements in governance and living standards.

Africa is no longer the continent of coups and civil wars. In 1990, 12 African leaders owed their position to a military overthrow, with only six in charge as a result of multi-party elections, according to the Brookings Institution. By 2016, 45 leaders had gone through a multi-party process. Admittedly some of those exercises in democracy, such as the recent disputed contest in Democratic Republic of Congo, are little more than a sham. But in sub-Saharan Africa

$10bn Value of trade between Africa and China in 2000

$148bn Value of trade between Africa and China in 2017

almost no government owes its position directly to a coup, the recent military overthrow of Omar al-Bashir in Sudan notwithstanding.

In areas from health to steadily expanding economies, the picture is of gradual improvement. Last year, six of the world’s fastest-growing economies — Ghana, Ivory Coast, Senegal, Djibouti, Ethiopia and Tanzania — were African.

With a slightly different cast, that feat is likely to be repeated this year.

Life expectancy has also improved. A newborn baby in Africa today has an average lifespan of 65 years. Although that lags western Europe by 17 years, it is

adopt a number of different, innovative approaches,” says Wale Shonibare, the AfDB acting vice-president for power, energy, climate change and green growth. “You can’t do everything by extending the grid,” he says.

One of Mr Shonibare’s plans is to help so-called distributed energy companies — which provide off-grid, largely solarpowered electricity solutions — to expand and ultimately service state utilities to provide energy to customers.

“If you weave these distributed energy companies into utilities, the utility of the future is just going to say: ‘You want to be able to have access to electricity, and how we serve you doesn’t really matter so much’,” he says. “There will be a fusion of what we currently call off-grid and on-grid.”

As state-owned utilities in many countries have failed to maintain transmission and distribution networks, those most disadvantaged have been in rural communities, where 493m Africans remain without access to electricity, according to the AfDB. Improvements in the efficiency and cost of both solar panels and batteries in the past decade has meant private companies such as M-Kopa, BBOXX and Zola have filled the gap, providing home

China-Africa trade

$bn China imports from Africa China exports to Africa

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Source: UN Comtrade 2002-17; Chinese customs

a far cry from a few decades ago when the crises of Aids, malaria and tuberculosis had cut life expectancy to below 50 in several African countries.

The news is far from all good. Many African nations face challenges from climate change to inadequate public health and education. On almost all development measures, most lag the rest of the world. Though the continent is urbanising, most cities are chaotic.

Few countries have escaped the extractive models that see them sell low-value-added commodities to rich nations.

According to the Ibrahim Foundation, which tracks governance, African democracy has gone into reverse. In east and central Africa, some leaders have changed the constitution to prolong their rule or held flawed elections.

“What our people need is to have a vision, a 10, 20 or 30-year vision,” says Napoleon Dzombe, a Malawian businessman and philanthropist.

Yet, despite all this, the idea that African countries can grow their way out of poverty has gained traction, says Mr Lopes, the development economist who is an Afro-optimist.

A country that has epitomised steady improvement is Ethiopia. In spite of its volatile political situation and — until recently at least — autocratic government, the country of 105m people has changed greatly over the past 30 years.

Today it is more likely to be associated with skyscrapers and the push for middle-income status than with the famines that defined its image in the 1980s.

Health and education indicators have improved and the country has recorded a decade of growth averaging about 8 per cent. “Development for me is about the income level in my society increasing every year,” Abiy Ahmed, Ethiopia’s prime minister, said earlier this year.

“The level of ambition from leaders has gone up,” says Mr Lopes, who sees a continent that — for all its problems — is brimming with energy. “This is the continent with the youngest population in the world. It will lead to a transition different from anywhere else.”

Contributors David Pilling Africa editor

Mark Wembridge Commissioning editor

Neil Munshi West Africa bureau chief

Steven Bird Designer

Joseph Cotterill Southern Africa bureau chief

Esan Swan Picture editor

Tom Wilson East Africa correspondent

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Leo Lewis Tokyo correspondent

John Aglionby Assistant UK news editor

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Andrew Jack Global education editor

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and mini-grid solar systems to rural households that state utilities have been unable to service.

Supported by advances in mobile payment technologies, such companies have been able to offer pay-as-you-go options that generate reliable cash flows, but have been unable to expand faster without to access to debt.

Lenders are still focused on large, central power stations backed by buyers who are able to guarantee payment for

Half of African households have access to electricity Bloomberg

‘If you’re going to connect 600m Africans to electricity you have to adopt different, innovative approaches’

future electricity, Mr Shonibare says.

The problem has been exacerbated, he adds, by a “currency mismatch” for the energy companies whose off-grid consumers pay in local currency, while funding is raised in foreign exchange.

Through a financing programme launched last month, the AfDB is now offering credit guarantees to local banks to provide local-currency lending to offgrid energy providers. This should enable those companies to expand quicker and reach more households.

In a trial of the scheme last year, the AfDB helped Zola mobilise a loan facility in Côte d’Ivoire worth $27m to support an off-grid project to reach 100,000 households with pay-as-you-go solar home systems by 2020.

In the future, the AfDB says it could also package those cash flows from payas-you-go energy consumers into securitised products to sell to local and international investors. “The whole purpose of this is to be able to support those distributed energy companies to roll out at a faster rate,” says Mr Shonibare.

Romain Py, head of investments at African Infrastructure Investment Managers, says this type of thinking has been lacking from the power sector, leaving large parts of the population dis-

connected. “People have not followed the advances in technologies and they are a bit stuck from a planning standpoint, 30 to 40 years behind,” he says.

Too often governments, multilateral institutions such as the World Bank and infrastructure investors have focused on megaprojects when, to expand electrification, countries should aim for a mix of industrial power plants, on-grid renewable projects and distributed power, he adds.

The introduction of distributed power companies into the energy mix should also see a new role for governments.

Where in the past a government would attract investment in power infrastructure with a commitment to purchase energy directly, they now need to “mobilise affordability through direct and indirect means”, says Mansoor Hamayun, chief executive and cofounder of BBOXX. In Togo, where BBOXX is installing 300,000 solar home systems by 2022 in partnership with the French energy group EDF, the government is providing a monthly subsidy of about $4 to help families to purchase the power.

“Government’s role has turned to providing a much more enabling environment,” Mr Hamayun says.

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Wednesday 28 August 2019

African Development International trade Supporters say pact will spur economic growth across region, writes Neil Munshi

Continent-wide trade deal aims to create $3tn single market

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fter more than a year of delay, Nigeria last month signed a continent-wide trade agreement, supercharging a pact that supporters believe could transform business across Africa.

As Africa’s largest economy, mostpopulous country, biggest crude producer and cultural powerhouse, Nigeria has long been seen as essential to any pan-African deal, which has had broad support among business leaders across the continent. But President Muhammadu Buhari, a protectionist at heart, heeded calls from his country’s labour and manufacturing trade groups to study the deal’s effects before signing.

Amy Jadesimi is one of the few among Lagos’s business elite to support Mr Buhari’s deliberative approach because, she says, of how important the deal is.

“We need a continental-focused solution that is developed by the [African Union], and targets making the trade agreement a mechanism for local industrialisation,” says Ms Jadesimi, managing director of Ladol, a Lagos-based industrial free zone.

“That should be the aim of this trade agreement, rather than just something broad and high level about economic growth or prosperity — those things won’t come if, underlying all of this, we do not create jobs and lift our economies through industrialisation,” she adds.

Supporters argue that the Africa Continental Free Trade Area (AfCFTA) has the potential to spur economic growth in a bloc of nations with a combined gross domestic product of more than $3tn, creating the world’s largest free trade zone.

But major challenges remain, and sceptics such as Ms Jadesimi argue that any pact must offer incentives to boost African manufacturing or it will fail — an outcome that could turn the continent into a dumping ground for cheap Chinese, US or European goods.

“Are we going to create an entirely new paradigm for trade, that is Africacentric, that is controlled by African countries, and that disincentivises foreign companies and countries outside of the continent from importing — are we going to do that?” she asks. “That’s going to be really tricky.”

The African Union summit in Niger in July was a landmark moment for the pact whose roots stretch back decades.

Although the deal officially came into force on May 30, the implementation of any final agreement is at least three years away and specifics on everything from rules of origin to intellectual property must be agreed between a diverse group of largely fragmented economies.

The agreement must also contend with a history of regional trade agreements that have largely flopped and done little to bolster trade integration —

The African Union, based in Ethiopia’s capital Addis Ababa, was instrumental in brokering the AfCFTA Alamy

the AfCFTA will need to be harmonised with eight such regional pacts.

Beyond the issue of whether the costs of an open market outweigh the benefits to specific countries, there is also the question of whether it is possible for Africa to overcome its structural challenges to trade.

The agreement aims to remove 90 per cent of tariffs to create a single market with free movement of goods and services. However, sceptics question how under-resourced governments — newly deprived of that tariff revenue — will be able to afford to upgrade poor infrastructure. “The bigger problems with intra-African trade is not really tariffs — it is the poor infrastructure, extremely poor customs co-ordination, lack of access to finance and lack of export

orientation,” says Amaka Anku, Africa head for Eurasia Group, a consultancy.

“I’m stunned that all over the continent people are like, ‘Oh, trade agreement, yay let’s sign it’,” she says. “Trade agreements don’t benefit all. There will be winners and there will be losers, and sometimes people who lose will never win, some sectors will be killed and you could end up substantially increasing inequality. And what happens when you do that? Unrest, social unrest.”

Foreign investors have largely shied away from Africa, which receives about a tenth of the foreign direct investment received by developing Asia, according to UN data. A single market would provide them with economies of scale, allowing companies to spread the risk of entering some of Africa’s smaller

‘I’m stunned that all over Africa people are like: “Oh, trade deal, yay let’s sign it’.”

Amaka Anku, Eurasia Group

markets, says Arancha González, executive director of the International Trade Centre, the joint UN-WTO development agency. But it is only a first step in driving development in Africa, she adds.

“It’s a necessary but insufficient condition [for developing the continent] in that you still must do much more than the AfCFTA — you must work on securing finance flows for companies to take advantage of the AfCFTA, you have to build ease of doing business at home, you have to build the hard infrastructure connectivity, in terms of roads, grids, harbours, airports,” she says.

“It’s insufficient in that it’s not the only ingredient . . .[but] without it the rest would not be as powerful as they could be in modernising the economies of the African continent.”

Investment arms race breaks out in developing markets Foreign capital

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Countries from Russia to India to Qatar are vying for business opportunities and political influence across the region, writes Tom Wilson When Ethiopian Prime Minister Abiy Ahmed departed for his first official state visit outside of Africa in May 2018 he did not travel to Washington, London or Beijing but to Riyadh, the Saudi capital, before heading to Abu Dhabi in the United Arab Emirates. That was followed by a trip to the Qatari capital Doha and return visits to Riyadh and Abu Dhabi, all within his first year in office.

That Mr Abiy eschewed the traditional global centres of capital by heading instead to the Middle East was symbolic of the new freedom enjoyed by African governments to choose sources of foreign direct investment, as competition for opportunities in Africa’s fastgrowing economies intensifies.

Largely dependent on governmentbacked investment from China for much of the past decade, Mr Abiy, since coming to power in 2018, has promised to liberalise Ethiopia’s economy and open various sectors to new sources of foreign investment.

In downtown Addis Ababa, the capital, an Abu Dhabi-based real estate group is developing 4,000 apartment units, three hotels and a mall on a 36hectare plot surrounding the city’s former train station. By the end of 2018 some 200 Turkish companies were operating in the country, according to Turkey’s foreign ministry.

Later this year when Ethiopia invites investors into its telecommunications sector for the first time, companies from the UK, France, South Africa and the UAE are all expected to bid for either spectrum or a stake in stateowned Ethio Telecom.

“We’re seeing investment interest in Ethiopia from almost every corner of the world,” says Ashley Elliot, managing partner at advisory business Sofala Partners. “But it is not just Ethiopia, this diversification in investor origin is happening right across the continent,” he says.

Attracted by the continent’s vast nat-

ural resources, but also its fast-growing populations, under-developed markets and open attitude to innovation, countries from Russia to India to Qatar are vying for opportunities and influence.

On the continent, this heightened level of investor interest has given African states greater agency and more power to shape the composition of the foreign direct investment they receive, says Abebe Abebayehu, head of the Ethiopian Investment Commission.

“In the past, any walk-in investor would get his investment permit from the commission, but now we actually do sectoral studies and we identify countries that have successful performance in that particular sector,” he says. “We will try to draw lessons and even adopt certain policy instruments that may have worked in that country.

“We would also zoom in to the specific companies that may have driven the growth of that specific sector in those countries and then we will try to approach those companies.”

Such heightened competition has provoked a new investment arms race as old donors and new partners seek to strengthen their commercial relationships with African countries.

This year the US is set to bolster its influence in the region through the creation in October of the US International Development Finance Corporation, which will boast a $60bn budget and mandate to invest in developing countries. CDC Group, the UK’s overseas investment arm, has committed to investing £3.5bn in African businesses between 2018 and 2021, while Russia is expecting to host dozens Ethiopia’s PM Abiy Ahmed has courted Middle East investment

of heads of state at its first Russia-Africa summit in October in the Black Sea resort of Sochi.

The competition is not only drawing in new investors but pushing existing players into new markets, says Andrew Jones, head of the Africa group at UK law firm Linklaters.

“You’re also seeing existing Africa investors going to places in Africa that they hadn’t thought of going before.

South Africans in francophone Africa, the French in English-speaking Africa,” he says.

In 2017, Emmanuel Macron became the first French president to visit English-speaking Ghana in 60 years.

This year he organised state visits to Ethiopia, Kenya and Djibouti trailed by a delegation of French executives.

Mr Elliot says the push-pull factors driving each strand of foreign direct investment are different. “It’s a mix of motives. The aggressive push into African markets we’ve seen from the Gulf and especially Morocco is about statecraft: strategic investment bound up with political promises,” he says.

“We’ve seen an uptick in investment from places like Turkey and South Africa — my hunch here is that higher investment risk at home is driving firms to diversify into sub-Saharan markets,” he continues. “Next [I expect] is the surge in African deals from the big Japanese trading houses, perhaps looking to catch up in the race for African opportunities.”

The result will be positive for Africa’s development, says Ethiopia’s Mr Abebe, if countries are strategic and able to manage the new competition effectively.

“We are not exclusively catering to China, or the EU or America . . . we try to have a pragmatic approach in our investment selection drive,” he adds. “There is so much potential.”

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FINANCIAL TIMES

African Development

Impact investors learn value of education Investment Youthful population fuels demand for private funding for classroom programmes, writes Andrew Jack

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n classrooms across Nigeria’s Edo state, teachers are equipped with information systems designed to better instruct and track the progress of pupils in an effort to encourage children to stay in school.

The programme — dubbed EdoBest — provides services from Bridge International Academies, a US company that began operating private, low-cost schools in Africa with backing from donors and social impact investors but which is increasingly focused on providing support to state-run systems.

“By investing in social enterprises and other non-state actors, investors can improve government schools and help to create more high-quality learning opportunities, ultimately helping to transform the development path of low and middle-income countries,” says Jay Kimmelman, Bridge chief executive.

His organisation’s approach, which has elicited both praise for impact and criticism over quality and price, highlights the considerable scope but also the potential pitfalls of impact investing in Africa, notably in the highly sensitive and politicised field of education.

Amit Bouri, head of the Global Impact Investing Network, an association for impact investors, says a survey of its members suggested that sub-Saharan Africa has become one of the top regions targeted by funds, accounting for 14 per cent of their assets under management.

Education — like healthcare — is becoming a sector of interest, although it only accounts for 4 per cent of assets invested in the region. “It’s still early days,” Mr Bouri says. “Capital deployed has not caught up with the level of interest, partly because finding a role can be complicated because of the state.”

On paper, there is enormous potential for investors, including those with a

focus on social impact. The continent’s young population is expanding, and the need for additional funding is clear.

There is a chronic undersupply of teachers, and wide variations in the quality of education provided.

There is interest from groups including Novastar Ventures, backed by the UK’s Department for International Development (Dfid) through its Impact Fund which is managed via CDC; and Investisseurs & Partenaires, a Paris-

based Africa-focused vehicle that is preparing an education fund in partnership with the government of Monaco.

Its recent study in francophone Africa highlighted the scope for greater technical and vocational training; the potential to support the private sector for schooling; and opportunities in ancillary services, such as teacher training, student loans and equipment supplies.

But, as with the other pillar of “human capital” — health — there are

Educational: Pupils at Bridge International Academies in Nigeria

‘It’s still early days.

Capital deployed has not caught up with the level of interest’

tensions for investors. Many aspects of both medicine and teaching are considered by civil society to be the domain of government, with an imperative for equity and fair access.

That is why a number of investors and providers alike have focused on supporting state provision. Amel Karboul, head of the Education Outcomes Fund, is exploring a three-year programme co-funded by Dfid and the government of Ghana, which will link payments to

improving attendance in the country’s schools. One difficulty for such projects is how to measure performance effectively, and the distortion that such metrics risk creating.

Sam Freedman, head of Ark Education Partnerships Group, a non-profit consultancy that advises a number of African countries, says: “It’s incredibly difficult to measure outcomes in education. Even in the UK, if you make organisations financially dependent on the measure, they will start focusing everything on it rather than the education.”

“In countries where accountability data is relative weak, it’s even harder,” he adds. “You have to collect data yourself with nothing to cross reference.”

If measurement is difficult for funders, another challenge is a lack of projects in which to invest. “Most schools in Africa are predominantly mom and pop operators,” he says. “They don’t have the risk profile that would make people want to invest in them, nor the capacity to grow, nor any sign of quality or ability to develop quality.”

Oliver Sabot, head of Nova Pioneer, a network of low-cost schools based in Kenya, sees a funding gap for education projects. “There’s a missing middle,” he says. “If you are looking for a small amount of seed funding to get an idea going, there is a fair number of opportunities. If you are a large operator with a strong track record that is profitable, there are lots of backers. But the path inbetween is barren. There are few players who are able or willing to work with teams in that middle portion.”

He also points to a barrier to school operations in many cities in Africa: property prices, which undermine efforts to keep costs low. “For any school or university, it’s one of the biggest impediments,” he says. “It would unlock huge growth if some big funders came together and created a pool of capital for education property.”

He highlights a number of new entrepreneurial school operators, but adds: “It’s a small number when you think about the scale of the continent. Even if you believe the private sector should only have a sliver of the sector, given the needs of the next 10 or 20 years, we need to seed entrepreneurs and managers.”

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