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€ per $ 0.837 0.837

Nov 30 prev

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price yield chg

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UK Gov 10 yr 0.30 0.02

Ger Gov 10 yr -0.57 0.02

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US Gov 30 yr 117.64 1.58 0.00

Ger Gov 2 yr 105.67 -0.75 0.02

price prev chg

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UK 3m 0.04 0.04 0.00Prices are latest for edition Data provided by Morningstar

Pilita Clark and Judith Evans

Unilever is to give advocates of the four-day working week one of their biggest boosts when the consumer goods group launches a year-long trial of the practice in New Zealand.

The company behind Lipton tea and Dove soap will from next week start paying its 81 staff in New Zealand for five days while they work four. After 12 months, Unilever said it would look at the lessons the trial offered for how the rest of its 155,000 staff work.

“I’ve got colleagues all over the world who are saying ‘Please don’t stuff this thing up because we want to have a go at it some time in the future’,” said Nick Bangs, Unilever’s New Zealand manag-ing director.

He told the Financial Times that most of his staff sold or distributed Unilever

goods and he was “very conscious” that more thought would be needed to make a four-day week work at manufacturing sites. The company does not carry out manufacturing in New Zealand.

His colleagues would still have to pro-duce the same output, he added, but if they worked four very long days “then we’ve completely missed the point”.

The group’s move is among the most ambitious efforts so far to test an approach that advocates say makes workers happier, healthier and more productive.

A number of large companies have begun trials in the past two years, even though critics argue the practice would send many into a loss.

Microsoft said employee productivity rose when it offered a four-day week in August last year to its staff in Japan, home to some of the world’s longest

working hours. US burger chain Shake Shack also started trialling the measure last year to help recruit and retain staff.

Mr Bangs said he had been inspired by Andrew Barnes, founder of Perpetual Guardian, a New Zealand estate plan-ning group. It drew global headlines in 2018 when it said that giving its 240 staff a day off at full pay for eight weeks had led to such big productivity gains it was making the change permanent.

Mr Barnes has set up a non-profit group to promote the four-day week, and in May Jacinda Ardern, New Zealand’s prime minister, suggested such measures might bolster domestic tourism.

Mr Bangs said Alan Jope, Unilever’s chief executive, who has said the pan-demic offers a “hybrid future of work”, had offered “overwhelming support” for the trial.

Unilever tests 4-day week in effort to boost staff happiness and productivity

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Briefing

i Lloyds completes changing of the guardLloyds Bank has poached HSBC banker Charlie Nunn as its new chief with Robin Budenberg set to take over as chairman in January and after William Chalmers became CFO last year.— PAGE 6; LEX, PAGE 18

i AI company unravels protein structureDeepMind, the UK-based artificial intelligence group owned by Alphabet, has said it can predict the structure of proteins, a breakthrough that could greatly speed up drugs research.— PAGE 3

i ABN Amro to axe more than 2,500 jobsThe Dutch lender said it would cut more than 2,500 jobs and abandon its profit targets as it prepares for record low rates even after the impact of the virus eases.— PAGE 7; LEX, PAGE 18

i UNDP accused of climate project fraudThe UN Development Programme is facing several claims of fraud and cor­r­uption linked to the multibillion-dollar Global Environment Facility, the Financial Times has found.— PAGE 2

i Moderna requests vaccine approvalsBoston-based Moderna has submitted its Covid-19 inoculation for regulatory approval in the US and the EU, making it the second western vaccine maker on track to start distribution in December.— PAGE 4

i Yoox Net-a-Porter chief is replacedRichemont, the owner of Cartier, has promoted Geoffroy Lefebvre to chief executive of Yoox Net-a-Porter, replacing its founder, Federico Marchetti, after a nine-month search.— PAGE 8

i Fund wades into Mongolia mine disputeRio Tinto faces a new front in a dispute over how to finance its biggest project, the $6.8bn expansion of the Oyu Tolgoi mine in the Gobi desert, after a US hedge fund threatened it with legal action.— PAGE 7

Datawatch

Americans born into low-income households are more likely to stay at the bottom of the income ladder than their European counterparts. The US ranks lowest in terms of rich men who were born to low-earning fathers.

Social mobility% of men who had low-earning fathers

Source: OECDRichest and poorest 25 per cent

Rich menLow-earning men

DenmarkChile

UKNetherlands

SpainItaly

GermanyUS

10 20 30 40

Georgia on his mindThe Senate races that could kickstart Biden’s presidency — BIG READ, PAGE 15

Buck the trendContrarian bets to disrupt dull 2021 consensus — MARKETS INSIGHT, PAGE 10

Iran funeral Doubt clouds nuclear hopesSoldiers carry the coffin of Mohsen Fakhrizadeh, the Iranian nuclear scien-tist assassinated on Friday, at his funeral yesterday. Iran blames Israel for a kill-ing that has fuelled geopolitical tension as Donald Trump cedes power to Joe Biden. The US president-elect is keen to restart talks on the 2015 nuclear deal between Iran and global powers.

Israel denies any involvement in the ambush but vehemently opposes resuming nuclear talks. One former senior Israeli military figure said that whoever carried out the attack “had a short period of time to take action to weaken the Iranian nuclear programme and to convince Biden that . . . he should not return to the agreement”.Report page 3

Iranian Defence Ministry Office via ZUMA Wire/dpa

James Fontanella-Khan and Ortenca Aliaj — New York Harry Dempsey — London

S&P Global has agreed to buy analytics group IHS Markit in a $44bn deal that will create a data and information pow-erhouse able to compete with Bloom­-berg, the market leader.

The largest deal of 2020 will give S&P Global, which is best known for its rat-ing agency, a data provider that supplies financial information to 50,000 custom-ers across business and governments.

It is the US group’s most substantial effort to create a financial information juggernaut and is the latest in a string of deals in the sector.

Under the terms of the all-share deal, S&P Global will pay 0.28 of its own stock for each IHS Markit share. The agree-

ment will give S&P Global shareholders nearly 68 per cent of the new group.

Before yesterday’s deal, the most notable financial data deal had been the London Stock Exchange’s $27bn pur-chase last year of Refinitiv, best-known for its Eikon terminals. That was fol-lowed this summer by New York Stock Exchange owner Intercontinental Exchange’s purchase of US mortgage data provider Ellie Mae for $11bn.

IHS Markit itself was forged from the $13bn merger of IHS and Markit only four years ago.

Shares in IHS Markit jumped 7 per cent to $99.40 in early morning trading on Wall Street, while S&P Global’s stock climbed 2.2 per cent to just over $349.

The combination of S&P Global and IHS Markit, which is expected to gener-

ate $11.6bn in annual revenue, is likely to attract significant regulatory scrutiny from watchdogs concerned by theinfluence of a shrinking group of data providers.

LSE’s deal with Refinitiv has faced intense scrutiny in Brussels, signalling that regulators will subject any new large transactions to lengthy probes and force possible divestitures.

By combining the two businesses, S&P Global, which has a market value of $82bn, said it plans to generate $480m of annual cost savings, as well as $350m of cross-selling opportunities. Some of the savings will be reinvested into improving technology, as the new group laid out plans to invest $1bn a year in that area.

“Through this exciting combination,

we are able to better serve our markets and customers by creating new value and insights,” said Douglas Peterson, chief executive of S&P Global, who will lead the combined group.

IHS Markit chairman and chief exec-utive Lance Uggla, who owns a stake in the group worth about $20m, will stay on for a year as a special adviser and is expected to leave after that.

A former trader who founded Markit in 2003, Mr Uggla is set to receive nearly $46m thanks to change of control clause in his contract, according to a regulatory filing. The rest of IHS Markit’s top man-agement will earn about $70m from the deal if they leave after it closes.

London-based IHS Markit had been considered a potential takeover target since the LSE bought Refinitiv.

S&P Global takes on Bloomberg with $44bn deal for IHS Markit3 Biggest tie-up this year 3 Data analytics powerhouse 3 $480m of annual savings touted

Any agreement to combine S&P Global with IHS Markit is likely to attract significant regulatory scrutiny

Cyril RamaphosaAfrica’s progress must not be derailed by debt — OPINION, PAGE 17

DECEMBER 1 2020 Section:FrontBack Time: 30/11/2020 - 19:03 User: nick.miller Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1

2 ★ FINANCIAL TIMES Tuesday 1 December 2020

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INTERNATIONAL

Edward White — WellingtonLeslie Hook — London

The UN Development Programme is facing several allegations of fraud and cor­r­uption linked to the multibillion-dollar Global Environment Facility, the Financial Times has found.

A copy of a November 2020 draft report by the UNDP’s office of audit and investigations described “financial mis-statements” worth millions of dollars across UNDP’s portfolio of GEF-funded

projects. Signs of “fraud­ulent activities” were flagged at two country offices and “suspicions of collusion among various project managers” at another, without naming the countries. “Issues identified by the audit could seriously compro-mise the achievement of the objectives of the audited entity,” the report added.

The GEF was set up in 1991 as part of the World Bank to fight environmental challenges. It has since become an inde-pendent body and dispersed more than $21bn in 170 countries, including $7bn in projects managed by the UNDP.

The audit of the UNDP’s GEF-funded projects, which covers 2018 and 2019 and is the first review of its kind since 2013, comes against a backdrop of rising

concern from some donor countries over management and oversight at the UNDP. Foreign Policy, a website, in 2019 published whistleblower accounts alleg-ing the misappropriation of millions of dollars at a UNDP-run GEF project in Russia. Twelve donor countries, includ-ing the US, France, Australia and Japan have since sought an independent rev­-iew of the UNDP’s handling of that project, a letter seen by the FT stated.

“Matters of misconduct and misap-propriation of funds continue to obst­-ruct sustainable development” world-wide, donors told Achim Steiner, UNDP administrator since 2017 in March.

The UNDP told the FT it “takes all cases of financial mismanagement and

other irregularities extremely seri-ously”, adding that its GEF projects were some of the organisation’s “most closely monitored”. “The portfolio . . . is sub-ject to an intricate system of regular reviews, independent assessments and audits,” the UNDP said.

While there have been “allegations of misuse of funds” at certain projects, such complaints affected “a tiny frac-tion — 1.4 per cent” of the UNDP’s GEF-funded portfolio, it added. The GEF did not respond to a request to comment.

Other project audits from independ-ent consultants as well as complaints from current and former UNDP staff, all seen by the FT, suggest concerns over alleged financial misconduct and poor

overs ight may be widespread.“Things going wrong are very com-

mon,” said Frank Klinckenberg, an environmental expert who has review­-ed GEF projects for more than 10 years.

An independent review of a GEF-funded UNDP project in Uzbekistan, seen by the FT, warned financial infor-mation provided by the UNDP was not reliable and “must be questioned”.

The claims are not the first linked to the UN’s climate work and represent one of its many challenges.

“The words ‘climate’ and ‘corruption’, people see these as two different worlds, but there is a lot of overlap,” said Brice Böhmer at Transparency International, the global anti-corruption group.

Martin Arnold — Frankfurt

The second wave of coronavirus infec-tions and lockdowns poses “a consider-able risk” to the eurozone economy, the IMF has warned, adding that recent progress on vaccines will not deliver a recovery in the near future.

The gloomy short-term outlook means the bloc needs more support from both fiscal and monetary policy, the fund said in a report on the conclusions of its lat-est official visit to the eurozone.

The EU might need to provide “sol-vency support” to businesses, the IMF said, and it called on the European Cen-tral Bank to consider “direct support” to companies if bank lending dries up.

Governments should switch from shielding economies from the impact of the pandemic to prioritising support for companies that are most likely to prove viable once the crisis is over, “while facilitating the exit of unviable compa-nies” and boosting overall demand.

The launch of the EU’s €750bn recov-ery fund, delayed by rifts between member states, could provide “a mean-ingful boost” to growth if implemented effectively, the IMF said, but it warned that “further delays would damage euro area recovery prospects”.

The eurozone economy contracted by a record 16 per cent in the first half of the year, before rebounding by 12.6 per cent in the third quarter.

The IMF said output in the final three months of this year and the first quarter of 2021 was likely to be weaker than expected as “rising infections and reim-posed lockdowns have damaged confi-dence and lowered mobility”.

The ECB is due to announce its latest monetary policy decision on December 10, when it is widely expected to expand its €1.35tn emergency bond-buying scheme and its €1.5tn of ultra-cheap loans to banks. The IMF said a further cut in the ECB’s deposit rate from its record low of minus 0.5 per cent “should also be considered”.

“What has been done is unpreceden­-ted, it deserves praise, but we need to recognise there is plenty still to do espe-cially for the vibrancy of the eurozone economies,” said Kristalina Georgieva, IMF managing director. “We are still in a place where motivation has to be hope for the best but prepare for the worst.”

Alfred Kammer, head of the IMF’s Europe department, said that in a severe scenario the ECB could set up a special purpose vehicle to lend directly to small businesses, similar to the $600bn Main Street Lending Program launched this year by the US Federal Reserve.

“With the ongoing second wave, national fiscal policies will likely need to provide broad-based support for longer than initially envisioned,” the IMF said, adding that “as the recovery gains trac-tion, the focus should gradually shift to facilitating reallocation of labour and capital, sustainably boosting inclusive growth and reducing fiscal vulnerabili-ties”.

The IMF said the EU’s fiscal rules, which restrict the size of public deficits and debt levels but which were sus-pended at the start of the pandemic, should be reintroduced only when they had been simplified and the recovery had firmly taken hold.

Global Environment Facility

UN body accused of climate project fraudInternal audit describes signs of corruption within development programme

Recovery outlook

IMF warns of second wave threat to the single currency bloc

Daniel Dombey — Madrid

Spain is set to approve a budget that will lead to a rise in the tax take, more spending on social services and a land-mark use of money from the EU’s coro-navirus recovery fund, according to María Jesús Montero, the minister steering the measure through.

Prime minister Pedro Sánchez has been trying to pass a budget since coming to power in 2018 — his failure to do so last year precipitated a general election. But Ms Montero, who has held the budget brief for all that time, expressed confi-dence the Socialist-led government would win Congress’s backing this week for its 2021 plans, even though it holds only 155 out of 350 seats.

“Everything indicates that we are almost there,” she said in an interview with the Financial Times. “This budget is an urgent necessity and it is going to allow us to realise many of the commit-ments we made on taking office.”

Even opposition politicians concur that approval of the budget is likely to cement Mr Sánchez’s hold on power — possibly until the 2023 end of the legis-lature. But secessionist parties’ support

for the measure has proved hugely con-troversial within Spain.

The chamber of deputies is due to vote on the budget on Thursday, and the Senate is likely to give final approval before the end of the year.

Ms Montero, a trained doctor and former hospital administrator, said planned tax rises for high earners and big corporations would be a first step to increasing Spain’s overall tax take towards the European norm, in line with more spending on social services.

She acknowledged Spain’s decision to increase such levies during the pan-demic stood out from much of the rest of the EU. But she said that, with a tax take of 39 per cent of gross domestic product, the country was about seven percentage points below the EU average.

“Just as there is this seven-point gap in terms of revenues, there’s a gap in expenditure,” she said. “And this is what we want to correct, in a reasonable way, during the lifetime of the parliament.”

The budget sets out a 10 per cent increase in social spending — including on unemployment benefit, pensions, health and education.

According to European Commission

forecasts, Spain is by some distance the EU economy worst hit by the pandemic and is due this year to run the biggest budget deficit as a percentage of GDP, at 12.2 per cent.

But Ms Montero argued the Socialist-radical left government’s plans were sustainable, adding that the budget would reduce next year’s deficit by more than three percentage points.

The government is also anticipating almost €1bn in revenue from a new dig-ital services tax included in the budget, and Ms Montero held out hope that the EU could agree a worldwide regime for

such levies with the incoming Biden administration.

Suggesting that an EU budget stand-off with Hungary and Poland was likely to be resolved soon, she also said Spain intended to use all of the approximately €140bn it expects to receive from the bloc’s €750bn coronavirus recovery fund over the next six years — money made up in broadly equal parts by grants and loans. Some government officials had previously suggested Madrid might not take up all of the €70bn of loans available.

“Spain needs the totality of these resources,” she said, adding that the EU funds would add some two percentage points to annual growth.

But she acknowledged such estimates depended on Spain’s “absorption capac-ity” — its ability to use the funds effi-ciently. The 2021 budget already includes €27bn borrowed against the prospective EU grants, months ahead of any formal authorisation by the bloc.

Controversy over the budget has focused on the support for it from the Republican Catalan Left, a party that seeks Catalonia’s independence, and EH Bildu, a Basque secessionist party.

Finance bill

Spain set to raise taxes and spending in first budget since 2018

María Jesús Montero: finance minister says plans are sustainable

Valentina Romei — London

The cost of many goods and services that have become popular with euro-zone consumers during the pandemic is rising far faster than the bloc’s over-all depressed level of inflation, an anal-ysis of official data by the Financial Times has found.

The single currency area entered defla-tion territory in August, according to its headline measure of price change, and European Central Bank president Chris-tine Lagarde has warned she does not expect to see it return to expansion in the early months of next year.

Economists polled by Reuters expect the headline inflation rate for Novem-ber to come in at minus 0.2 per cent when it is published today. But this downward price trend is partly driven by a drop in the cost of goods and serv-ices, of which consumers are buying less or have stopped purchasing altogether, because of changes in lifestyle due to the pandemic, FT analysis suggests.

For example, the price of motor fuel fell 12 per cent year on year in October, air tickets were down 15 per cent and

train fares dropped 4.5 per cent. Hotel rooms and package holidays also became cheaper than last year. But peo-ple stuck at home because of restric-tions and social-distancing measures cannot take advantage of these savings.

Meanwhile, the prices of key budget items such as food are increasing by ab­-out the ECB target inflation rate of just below 2 per cent and annual prices of ed­-ucation, medical services, bicycles and care home services are also rising.

The analysis suggests the overall fig-ure which policymakers use to shape their decisions does not fully reflect the way in which many are experiencing price changes in the real economy.

Marchel Alexandrovich, European economist at Jefferies, said the changes in consumption patterns were “an issue for sure” when it came to measuring the rate of price growth. The region’s main inflation measure is based on what peo-ple bought in 2018, so does not ref­lect changes in consumer habits forced by coronavirus restrictions this year.

Florian Hense, an economist at Ber-enberg, said: “This year has greatly added to the challenges statistical

offices and central banks had before the pandemic, as price collection was impaired at some points and consump-tion patterns have changed.”

To try to take into account the shift in spending patterns, the ECB has calcu-lated an experimental inflation index. It has recorded a reading of at least 0.2 per­centage points higher than the head-line figure in every month since April. In August, the latest month available, this would have prevented eurozone infla-tion from falling into negative territory.

The experimental measure “by des­-ign . . . comes closer to the rate of change in the prices of items actually purchased by consumers during this period”, the ECB said. The alternative inflation mea­s­ure “intuitively reflects consumers switching from lower-than-average inf­la­tion categories, such as fuel for transport, to higher-than-average inflation categories, such as food items”.

The headline rate of inflation is also being held down by the German cut in value added tax, which pushed the country’s core inflation, the rate of change in prices excluding energy, food, alcohol and tobacco, down to 0.7 per

cent in July, when it was introduced, from 1.5 per cent in the previous month. The effect, which feeds into the overall eurozone average, is expected to reverse when the measure is lifted in January.

Frederik Ducrozet, a strategist at Pict­-et Wealth Management, said there was “no doubt” that “a number of statistical factors” were pushing the headline rate of inflation lower during the pandemic. The ECB’s alternative index “should pro­vide a better assessment of the act­-ual trend in consumer prices”, he said.

Even so, most analysts agree that the overall impact of the pandemic is defla-tionary. Among the worst-hit parts of the eurozone are Italy and Spain, where the headline inflation rate is contracting at double the pace of the bloc’s average.

The unprecedented shock to output caused by the pandemic has hit demand via job losses, higher precautionary sav-ings and lower growth in pay. Lower commodities prices, particularly oil, have also reduced price pressures.

Mr Alexandrovich said that beyond the measurement problems, the pande­-mic was “clearly deflationary” and the ECB is “very worried”.

Cost of living

Virus stokes twin-track eurozone inflation

Javier Espinoza — Brussels

The EU is seeking to pass laws to stop online platforms becoming powerful enough to crush rivals, the bloc’s com-petition chief has said.

Margrethe Vestager described competi-tion law enforcement as “backward looking”, with regulators limited to investigating past behaviour, imposing fines and asking companies to stop “ille-gal” actions.

Rivals to large players often complain it takes too long to spot and sanction anti-competitive behaviour, by which time the damage to their businesses is often irreparable.

Brussels will publish proposals next week to allow regulators to go after fast-growing companies before they are able to achieve the kind of market domi-nance enjoyed by Google and Facebook, she added. The EU has yet to reveal how it plans to measure company growth.

Speaking to the Financial Times, Ms Vestager, the EU’s executive vice-presi-dent in charge of the EU’s digital policy, said that as well as pursuing Big Tech, those with strong growth potential would need to comply with tougher rules. She said: “Here we have a mecha-nism [in which we say]: ‘Well, it is too heavy on you to fulfil all the dos and don’ts, but some of them will be applica-ble to you because otherwise there is a risk that you will transform [into a com-pany that’s too big]’.”

This means that companies such as Booking.com, which has global reve-nues of $15bn, and Airbnb, which is planning a public listing in the US, are likely to be subject to a tougher list of obligations than their smaller rivals, according to people with direct knowl-edge of the plans. New obligations may include a requirement to share data with their competitors or restrictions on so-called gatekeeping, whereby opera-tors dictate the rules of digital platforms shared with rivals.

Glenn Fogel, chief executive of the Netherlands-based Booking.com, told the FT last month the regulator was seeking to “handcuff” one of the “very, very, very few tech successes in Europe”. Airbnb said it did not believe the com-pany raised any competition concerns.

Competition rules

EU aims to stop online platforms getting too big

Eurozone goods and serviceswith rising pricesAnnual % change in prices, October

Sources: Eurostat; Refinitiv; ECB

Shift in spending stops prices from falling further

Sectors su�ering low demandand falling prices

Selected items

0 2 4 6 8

Fruit

Jewellery

Cigarettes

Bank fees

Plants

Care homes

-15 -10 -5 0

Airfares

Car fuel

Telephones

Hotels

Electricity and gas

Train fares

Annual % change in prices, October

Annual % change

-0.5

0

0.5

1.0

1.5

2.0

Jan 2020 Oct2019

ECB alternative measureof price changesHeadline inflation rate

Shoppers in Milan: most analysts say the overall impact of the pandemic is deflationary, with Italy one of the worst hit countries — Paolo Salmoirago/EPA-EFE

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Nasdaq Composite 5902.74 5897.55 0.09

Dow Jones Ind 20703.38 20659.32 0.21

FTSEuro�rst 300 1500.72 1493.75 0.47

Euro Stoxx 50 3481.67 3475.27 0.18

FTSE 100 7369.52 7373.72 -0.06

FTSE All-Share 4011.01 4011.80 -0.02

CAC 40 5089.64 5069.04 0.41

Xetra Dax 12256.43 12203.00 0.44

Nikkei 19063.22 19217.48 -0.80

Hang Seng 24301.09 24392.05 -0.37

FTSE All World $ 297.99 297.73 0.09

CURRENCIES

Mar 30 prev

$ per € 1.074 1.075

$ per £ 1.249 1.241

£ per € 0.859 0.866

¥ per $ 111.295 111.035

¥ per £ 139.035 137.822

€ index 89.046 89.372

SFr per € 1.069 1.072

Mar 30 prev

€ per $ 0.932 0.930

£ per $ 0.801 0.806

€ per £ 1.164 1.155

¥ per € 119.476 119.363

£ index 76.705 76.951

$ index 104.636 103.930

SFr per £ 1.244 1.238COMMODITIES

Mar 30 prev %chg

Oil WTI $ 50.22 49.51 1.43

Oil Brent $ 52.98 52.54 0.84

Gold $ 1248.80 1251.10 -0.18

INTEREST RATES

price yield chg

US Gov 10 yr 98.87 2.38 0.00

UK Gov 10 yr 100.46 1.21 -0.03

Ger Gov 10 yr 98.68 0.39 -0.01

Jpn Gov 10 yr 100.45 0.06 0.00

US Gov 30 yr 100.14 2.99 0.01

Ger Gov 2 yr 102.58 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00

UK 3m 0.34 0.34 0.00Prices are latest for edition Data provided by Morningstar

LAURA NOONAN — DUBLINJENNIFER THOMPSON — LONDON

AboastfulWhatsAppmessagehas costa London investment banker his joband a £37,000 fine in the first case ofregulators cracking down on commu-nications over Facebook’s popularchatapp.

The fine by the Financial ConductAuthority highlights the increasingproblem new media pose for companiesthat need to monitor and archive theirstaff’scommunication.

Several large investment banks havebanned employees from sending clientinformation over messaging servicesincluding WhatsApp, which uses anencryption system that cannot beaccessed without permission from theuser. Deutsche Bank last year bannedWhatsApp from work-issued Black-

Berrys after discussions with regulators.Christopher Niehaus, a former Jeffer-

ies banker, passed confidential clientinformation to a “personal acquaint-ance and a friend” using WhatsApp,according to the FCA. The regulator saidMr Niehaus had turned over his devicetohisemployervoluntarily.

The FCA said Mr Niehaus had sharedconfidential informationonthemessag-ing system “on a number of occasions”lastyearto“impress”people.

Several banks have banned the use ofnew media from work-issued devices,but the situation has become trickier asbanks move towards a “bring your owndevice” policy. Goldman Sachs hasclamped down on its staff’s phone billsas iPhone-loving staff spurn their work-issuedBlackBerrys.

Bankers at two institutions said staffare typically trained in how to use new

media at work, but banks are unable toban people from installing apps on theirprivatephones.

Andrew Bodnar, a barrister at MatrixChambers, saidthecaseset“aprecedentin that it shows the FCA sees these mes-saging apps as the same as everythingelse”.

Information shared by Mr Niehausincluded the identity and details of aclient and information about a rival ofJefferies. In one instance the bankerboasted how he might be able to pay offhismortgage ifadealwassuccessful.

Mr Niehaus was suspended from Jef-feries and resigned before the comple-tionofadisciplinaryprocess.

Jefferies declined to comment whileFacebook did not respond to a requestforcomment.Additional reportingbyChloeCornishLombard page 20

Citywatchdog sends a clearmessage asbanker loses joboverWhatsAppboast

Congressional Republicans seeking toavert a US government shutdown afterApril 28 have resisted Donald Trump’sattempt to tack funds to pay for a wallon the US-Mexico border on tostopgap spending plans. They fearthat his planned $33bn increase indefence and border spending couldforce a federal shutdown for the firsttime since 2013, as Democrats refuseto accept the proposals.US budget Q&A andTrump attack over health bill i PAGE 8

Shutdown risk as borderwall bid goes over the top

FRIDAY 31 MARCH 2017

Briefing

iUSbargain-hunters fuel EuropeM&AEurope has become the big target for cross-borderdealmaking, as US companies ride a Trump-fuelledequity market rally to hunt for bargains across theAtlantic.— PAGE 15; CHINA CURBS HIT DEALS, PAGE 17

iReport outlines longerNHSwaiting timesA report on how the health service can survivemore austerity has said patients will wait longer fornon-urgent operations and for A&E treatment whilesome surgical procedures will be scrapped.— PAGE 4

iEmerging nations in record debt salesDeveloping countries have sold record levels ofgovernment debt in the first quarter of this year,taking advantage of a surge in optimism towardemerging markets as trade booms.— PAGE 15

i London tower plans break recordsA survey has revealed that arecord 455 tall buildings areplanned or under constructionin London. Work began onalmost one tower a weekduring 2016.— PAGE 4

iTillerson fails to ease Turkey tensionsThe US secretary of state has failed to reconciletensions after talks in Ankara with President RecepTayyip Erdogan on issues including Syria and theextradition of cleric Fethullah Gulen.— PAGE 9

iToshiba investors doubt revival planIn a stormy three-hour meeting, investors accusedmanagers o�aving an entrenched secrecy cultureand cast doubt on a revival plan after Westinghousefiled for Chapter 11 bankruptcy protection.— PAGE 16

iHSBCwoos transgender customersThe bank has unveiled a range of gender-neutraltitles such as “Mx”, in addition to Mr, Mrs, Miss orMs, in a move to embrace diversity and cater to theneeds of transgender customers.— PAGE 20

Datawatch

UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00

© THE FINANCIAL TIMES LTD 2017No: 39,435 ★

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For the latest news go towww.ft.com

Recent attacks —notably the 2011massacre byAnders Breivik inNorway, theattacks in Parisand Nice, and theBrussels suicidebombings — havebucked the trendof generally lowfatalities fromterror incidents inwestern Europe

Sources: Jane’s Terrorism and Insurgency Centre

Terror attacks in western Europe

Highlighted attack Others

NorwayParis Nice

Brussels

A Five Star plan?Italy’s populists are trying to woothe poor — BIG READ, PAGE 11

WORLDBUSINESSNEWSPAPER

Trump vs the ValleyTech titans need to minimisepolitical risk — GILLIAN TETT, PAGE 13

Dear Don...May’s first stab at the break-upletter — ROBERT SHRIMSLEY, PAGE 12

Lloyd’s of London chose Brus-sels over “five or six” othercities in its decision to set up anEU base to help deal with the expected loss of passportingrightsafterBrexit.

John Nelson, chairman of thecenturies-old insurance mar-ket, said he expected other

insurers to follow. Most of thebusiness written in Brusselswill be reinsured back to thesyndicates at its City of Londonheadquarters,picturedabove.

The Belgian capital had notbeen seen as the first choice forLondon’s specialist insurancegroups after the UK leaves the

EU, with Dublin and Luxem-bourg thought to be more likelyhomes for the industry. ButMr Nelson said the city won onits transport links, talent pooland “extremely good regula-toryreputation”.Lex page 14Insurers set to follow page 18

Lloyd’s of Brussels Insurancemarketto tapnew talent poolwithEUbase

AFP

JAMES BLITZ — WHITEHALL EDITOR

A computer system acquired to collectduties and clear imports into the UKmay not be able to handle the hugesurge inworkloadexpectedonceBritainleaves the EU, customs authorities haveadmittedtoMPs.

HM Revenue & Customs told a parlia-mentary inquiry that the new systemneeded urgent action to be ready byMarch 2019, when Brexit is due to becompleted, and the chair of the probesaid confidence it would be operationalintime“hascollapsed”.

Setting up a digital customs systemhas been at the heart of Whitehall’sBrexit planning because of the fivefoldincrease in declarations expected atBritishportswhentheUKleavestheEU.

About 53 per cent of British importscome from the EU, and do not requirechecks because they arrive through thesingle market and customs union. ButTheresa May announced in January thatBrexit would include departure fromboth trading blocs. HMRC handles 60mdeclarations a year but, once outside thecustoms union, the number is expectedtohit300m.

The revelations about the system,called Customs Declaration Service, arelikely to throw a sharper spotlight onwhether Whitehall can implement ahost of regulatory regimes — in areasranging from customs and immigrationto agriculture and fisheries — by thetimeBritain leavestheEU.

Problems with CDS and other projectsessential toBrexit could force London to

adjust its negotiation position with theEU, a Whitehall official said. “If runningour own customs system is provingmuch harder than we anticipated, thatought to have an impact on how wepress forcertainoptions inBrussels.”

In a letter to Andrew Tyrie, chairmanof the Commons treasury select com-mittee, HMRC said the timetable fordelivering CDS was “challenging butachievable”. But, it added, CDS was “acomplex programme” that needed to belinked to dozens of other computer sys-tems to work properly. In November,HMRC assigned a “green traffic light” toCDS, indicating it would be deliveredontime. But last month, it wrote to thecommittee saying the programme hadbeen relegated to “amber/red,” whichmeans there are “major risks or issuesapparent inanumbero£eyareas”.

HMRC said last night: “[CDS] is ontrack to be delivered by January 2019,and it will be able to support frictionlessinternational trade once the UK leavesthe EU . . . Internal ratings are designedto make sure that each project gets thefocus and resource it requires for suc-cessfuldelivery.”

HMRC’s letters to the select commit-tee, which will be published today, pro-vide no explanation for the ratingchange, but some MPs believe it wascaused by Mrs May’s unexpected deci-sionto leavetheEUcustomsunion.Timetable & Great Repeal Bill page 2Scheme to import EU laws page 3Editorial Comment & Notebook page 12Philip Stephens & Chris Giles page 13JPMorgan eye options page 18

HMRCwarnscustoms risksbeing swampedbyBrexit surge3Confidence in IT plans ‘has collapsed’3Fivefold rise in declarations expected

World Markets

STOCK MARKETS

Mar 31 prev %chg

S&P 500 2367.10 2368.06 -0.04

Nasdaq Composite 5918.69 5914.34 0.07

Dow Jones Ind 20689.64 20728.49 -0.19

FTSEuro�rst 300 1503.03 1500.72 0.15

Euro Stoxx 50 3495.59 3481.58 0.40

FTSE 100 7322.92 7369.52 -0.63

FTSE All-Share 3990.00 4011.01 -0.52

CAC 40 5122.51 5089.64 0.65

Xetra Dax 12312.87 12256.43 0.46

Nikkei 18909.26 19063.22 -0.81

Hang Seng 24111.59 24301.09 -0.78

FTSE All World $ 297.38 298.11 -0.24

CURRENCIES

Mar 31 prev

$ per € 1.070 1.074

$ per £ 1.251 1.249

£ per € 0.855 0.859

¥ per $ 111.430 111.295

¥ per £ 139.338 139.035

€ index 88.767 89.046

SFr per € 1.071 1.069

Mar 31 prev

€ per $ 0.935 0.932

£ per $ 0.800 0.801

€ per £ 1.169 1.164

¥ per € 119.180 119.476

£ index 77.226 76.705

$ index 104.536 104.636

SFr per £ 1.252 1.244COMMODITIES

Mar 31 prev %chg

Oil WTI $ 50.46 50.35 0.22

Oil Brent $ 53.35 53.13 0.41

Gold $ 1244.85 1248.80 -0.32

INTEREST RATES

price yield chg

US Gov 10 yr 98.63 2.41 -0.01

UK Gov 10 yr 100.35 1.22 0.02

Ger Gov 10 yr 99.27 0.33 -0.01

Jpn Gov 10 yr 100.36 0.07 0.00

US Gov 30 yr 99.27 3.04 0.01

Ger Gov 2 yr 102.57 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00

UK 3m 0.34 0.34 0.00Prices are latest for edition Data provided by Morningstar

ALEX BARKER — BRUSSELSGEORGE PARKER — LONDONSTEFAN WAGSTYL — BERLIN

TheEUyesterdaytookatoughopeningstance in Brexit negotiations, rejectingBritain’s plea for early trade talks andexplicitly giving Spain a veto over anyarrangementsthatapplytoGibraltar.

European Council president DonaldTusk’s first draft of the guidelines,which are an important milestone onthe road to Brexit, sought to damp Brit-ain’s expectations by setting out a“phased approach” to the divorce proc-ess that prioritises progress on with-drawal terms.

The decision to add the clause givingSpain the right to veto any EU-UK tradedeals covering Gibraltar could make the300-year territorial dispute betweenMadrid and London an obstacle to

ambitioustradeandairlineaccessdeals.Gibraltar yesterday hit back at the

clause, saying the territory had “shame-fully been singled out for unfavourabletreatment by the council at the behest ofSpain”. Madrid defended the draftclause,pointingoutthat itonlyreflected“thetraditionalSpanishposition”.

Senior EU diplomats noted thatMr Tusk’s text left room for negotiatorsto work with in coming months. Primeminister Theresa May’s allies insistedthat the EU negotiating stance waslargely “constructive”, with one saying itwas “within the parameters of what wewere expecting, perhaps more on theupside”.

British officialsadmittedthat theEU’sinsistence on a continuing role for theEuropean Court of Justice in any transi-tiondealcouldbeproblematic.

Brussels sees little room for compro-

mise. If Britain wants to prolong itsstatus within the single market afterBrexit, the guidelines state it wouldrequire “existing regulatory, budgetary,supervisory and enforcement instru-mentsandstructures toapply”.

Mr Tusk wants talks on future tradeto begin only once “sufficient progress”has been made on Britain’s exit bill andcitizen rights, which Whitehall officialsbelieve means simultaneous talks arepossible if certainconditionsaremet.

Boris Johnson, the foreign secretary,reassured European colleagues at aNato summit in Brussels that Mrs Mayhad not intended to “threaten” the EUwhen she linked security co-operationafterBrexitwithatradedeal.Reports & analysis page 3Jonathan Powell, Tim Harford &Man in the News: David Davis page 11Henry Mance page 12

Brussels takes tough stance onBrexitwith Spainhandedveto overGibraltar

About 2.3m people will benefit fromtoday’s increase in the national livingwage to £7.50 per hour. But the risewill pile pressure on English councils,which will have to pay care workers alot more. Some 43 per cent of caresta� — amounting to 341,000 peopleaged 25 and over — earn less than thenew living wage and the increase isexpected to cost councils’ care services£360m in the coming financial year.Analysis i PAGE 4

Living wage rise to pilepressure on care services

SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80

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For the latest news go towww.ft.com

Censors and sensitivityWarning: this article may be upsetting — LIFE & ARTS

HOW DRIVERLESS TECHNOLOGY IS CHANGING AN AMERICAN WAY OF LIFE

THE END OF THE ROAD FT WEEKEND MAGAZINE

Escape the taper trapHow high earners can evade a pension headache — FT MONEY

The lure of the exoticRobin Lane Fox on the flair of foreign flora — HOUSE & HOME

How To Spend It

Chic new lodgings in ScotlandMAGAZINE

Art of persuasionMystery deepensover disputed painting of JaneAusten

Austen’s descendants insist the Rice portrait depicts her as a girl — seemagazine Bridgeman Art Library

RALPH ATKINS — ZURICHDUNCAN ROBINSON — BRUSSELS

Credit Suisse has been targeted bysweeping tax investigations in the UK,France and the Netherlands, settingback Switzerland’s attempts to clean upits imageasataxhaven.

The Swiss bank said yesterday it wasco-operating with authorities after itsoffices inLondon,ParisandAmsterdamwere contacted by local officials“concerningclient taxmatters”.

Dutch authorities said their counter-parts in Germany were also involved,while Australia’s revenue departmentsaid itwas investigatingaSwissbank.

The inquiries threaten to undermineefforts by the country’s banking sectorto overhaul business models and ensurecustomers meet international taxrequirements following a US-led clamp-down on evaders, which resulted inbillionsofdollars infines.

The probes risk sparking an interna-tional dispute after the Swiss attorney-general’s office expressed “astonish-ment” that it had been left out of theactions co-ordinated by Eurojust, theEU’s judicial liaisonbody.

Credit Suisse, whose shares fell 1.2 percent yesterday, identified itself as thesubject ofinvestigations in the Nether-lands, France and the UK. The bank said

it followed “a strategy offull client taxcompliance” but was still trying togather informationabouttheprobes.

HM Revenue & Customs said it hadlaunched a criminal investigation intosuspected tax evasion and money laun-dering by “a global financial institutionand certain ofits employees”. The UKtax authority added: “The internationalreach of this investigation sends a clearmessage that there is no hiding place forthoseseekingtoevadetax.”

Dutch prosecutors, who initiated theaction, said they seized jewellery, paint-ings and gold ingots as part of theirprobe; while French officials said theirinvestigation had revealed “severalthousand” bank accounts opened inSwitzerland and not declared to Frenchtaxauthorities.

The Swiss attorney-general’s officesaid it was “astonished at the way thisoperation has been organised with thedeliberate exclusion of Switzerland”. Itdemanded a written explanation fromDutchauthorities.

In 2014, Credit Suisse pleaded guiltyin the US to an “extensive and wide-ranging conspiracy” to help clientsevadetax. Itagreedtofinesof$2.6bn.Additional reportingbyLauraNoonan inDublin, Caroline Binham and VanessaHoulder in London, andMichael StothardinParis

Credit Suisseengulfed infresh taxprobe3UK, France and Netherlands swoop3Blow for bid to clean up Swiss image

FEBR

UARY

4 2017

THE RISE OF ECO-GLAM

390_Cover_PRESS.indd 1 19/01/2017 13:57

DECEMBER 1 2020 Section:World Time: 30/11/2020 - 18:03 User: john.conlon Page Name: WORLD1 USA, Part,Page,Edition: EUR, 2, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 3

them into making mistakes,” Mr Kuper-wasser added.

The economic crisis, as well as the presence of dissident ethnic and politi-cal groups, makes it easy for Israel to recruit people to carry out assassina-tions in Iran, said a regime insider close to hardline forces. He added that while “Israel pays no price internationally when it kills Iranian scientists . . . we cannot afford to retaliate for which we will be condemned by the whole world”.

While he was influential, Fakhriza-deh’s death is not expected to hurt what is a long-established programme, Ira-nian insiders said. “This operation will make no change in Iran’s strategic plans because Iran has passed that stage of having one individual as ‘the father’ of our nuclear or missile programmes. These sectors are institutionalised now,” said the regime insider. “This was more about Israel sending a clear message to Biden that he could not return to the nuclear accord with Iran.”

Nonetheless, the killing has shocked many in Iran. Within hours, Fakhriza-deh had been taken by helicopter to a hospital in Tehran, run by the Islamic republic’s elite Revolutionary Guard, where he died later that day. His wife survived the assault.

Many have voiced horror and anger at Israel’s apparent ability to act so freely inside Iran.

“If 12 assailants were present at the scene, how many others were involved in the operation? They have not come from the moon. They must be part of the system with huge access to the most sensitive information,” said Ali, a 62-year-old artist. “Where were our intelli-gence agents? Why was Fakhrizadeh not in a bulletproof car?”

Najmeh Bozorgmehr — TehranMehul Srivastava — Tel Aviv

The hit squad behind last week’s deadly attack on the man long thought to be the mastermind of Iran’s alleged military nuclear programme left nothing to chance.

As nuclear scientist Mohsen Fakhri-zadeh’s black Nissan sedan approached a boulevard in the Damavand region, about 60km from the capital Tehran, an automatic machine gun, installed inside a blue pick-up truck parked under an electric transmitter, began firing.

The pick-up truck, packed with explosives, was then detonated by remote control. Assailants then opened fire, according to Fereydoon Abbasi-Da-vani, a nuclear scientist who survived an attempt on his life in 2010, and domestic media. Javad Mogouei, a docu-mentary maker close to hardliners, said there were as many as 12 attackers, including on motorbikes and in a Hyundai SUV, as well as hidden snipers.

Iran has blamed Israel for the assassi-nation of Fakhrizadeh. The dramatic attack at the heart of the regime has escalated tensions in a fraught period as US president Donald Trump begins to cede power to Joe Biden. The president-elect is keen to restart talks over the 2015 nuclear deal between Iran and glo-bal powers.

Mr Trump abandoned the historic accord in 2018 and imposed crippling sanctions on the Islamic republic. Tehran then ramped up its nuclear activity, increasing its stockpile of enriched uranium by 12 times more than the levels permitted under the accord. Iran has always denied it has a military nuclear programme but suc-cessive Israeli governments have accused Tehran of trying to develop atomic weapons capability.

Israel vehemently opposes the resumption of talks between the Islamic republic and the US. Iran has promised revenge for what it called a state act of terror.

Iran has never taken direct action against Israel and President Hassan Rouhani said this revenge would hap-pen “at the right time and appropri-ately” but that Iran was “intelligent and wise enough not to be trapped in the Zionists’ plot”. This is the second high-profile assassination this year after an American drone killed Iran’s most pow-erful military commander, Qassem Soleimani, in Baghdad. In the wake of that attack, Iran fired missiles at an Iraqi base hosting US troops but there were no deaths.

The head of the Iranian defence min-istry’s Organization of Defensive Inno-vation and Research, Fakhrizadeh was a shadowy figure.

Few pictures of him are available in domestic media and there are hardly any records of public speeches. Most Iranians first heard of him when the US put him on the sanctions list in 2008.

In May 2018, after Israeli intelligence agency Mossad made public it had spir-ited away Iran’s nuclear archives from a warehouse in Tehran, Prime Minister Benjamin Netanyahu publicly pointed to Fakhrizadeh as a key operator in Iran’s nuclear weapons programme, later telling journalists to “remember this name — don’t forget it”.

When Recep Tayyip Erdogan was deri­-ded by Turkey’s opposition for floating the idea of judicial reform, the Turkish president was publicly defended by an uncomfortable supporter: a mafia boss.

“Watch your step,” Alaattin Cakici, a man convicted of murder and involve-ment with organised crime, warned Kemal Kilicdaroglu, the opposition leader, on social media last month, after he questioned the president’s sincerity.

The 67-year-old Mr Cakici, who was sentenced to 19 years in jail in 2006 for ordering the killing of his former wife, is an important figure for the rightwing ultranationalists who are propping up Mr Erdogan’s government.

The Nationalist Movement party (MHP) successfully lobbied for the con-vict’s release from prison earlier this year as part of a coronavirus amnesty. Following his threat to Mr Kilicdaroglu,

MHP leader Devlet Bahceli praised the mobster as a “comrade” and “patriot”.

The importance of the MHP is often under-appreciated outside Turkey: Mr Erdogan dominates the headlines. But the president, in power for the past 18 years, has always ruled through infor-mal coalitions.

In the past, his allies were liberals, Kurds and the Gulen movement, an opaque network of followers of an exiled cleric who helped Mr Erdogan gain con-trol of the state.

Today, his key partner is the MHP, which is hardline on national security, supports the death penalty and has faced claims of links to street violence. Its ideology used to be loathed by Mr Er­-dogan, but the MHP has delivered him votes.

It has also filled a void left by the implosion of his relationship with the Gulenists, which culminated in a violent 2016 coup attempt (the group’s leader denies ordering the putsch).

“Their power within the system is far bigger than the electoral support that they’re bringing to the table,” said Asli Aydintasbas, a senior policy fellow at the European Council of Foreign Rela-tions. “They’re providing the human resources within the security services

scepticism by many, the MHP could veto anything that crossed its red lines.

Mr Erdogan could face the same prob-lem on any attempt to reset relations with Europe, especially if it required concessions in a continuing dispute with Cyprus, which is so important to the MHP that the party’s first headquarters featured a pool shaped like the island.

“He’s a bit stuck in terms of how to keep the AKP together while also guar-anteeing 50 per cent or more of the vote,” said Yaprak Gursoy, a senior lec-turer in politics and international rela-tions at Aston University in the UK. “How does he reconcile the interests of these two groups?”

Ms Aydintasbas believes that the Turkish president, an arch-pragmatist, may be testing the water for a change of coalition partner. But, having alienated most other groups, it is not clear whom he could find to replace the MHP.

For now, Mr Erdogan is maintaining a united front. On Sunday, he lashed out at those fomenting “sedition” in the rul-ing alliance and thanked the ultrana-tionalists for “standing by our side in every matter that is in the interest of our country and our nation”.

laura.pitel@ft.com

Erdogan’s ultranationalist allies pose dilemma for Turkish president

Siddharth Venkataramakrishnan London

DeepMind, the UK-based artificial intelligence company owned by Alpha-bet, has said it can predict the structure of proteins, a breakthrough that could greatly speed up the discovery of drugs.

Scientists have spent decades trying to work out how proteins, which begin as strings of chemical compounds, fold into three-dimensional shapes, which then define their behaviour.

Identifying the shape of even a single protein can take years, but DeepMind said its AlphaFold system was able to provide accurate results, to within the width of an atom, within days.

“This advance is our first major breakthrough in a longstanding grand challenge in science,” said Demis Hassa-bis, founder and chief executive of DeepMind, adding that he hoped it would have “a big impact on our ability to understand disease and the biology of life”. DeepMind was acquired by Google in 2014 for £400m.

An understanding of proteins and the

ways in which they behave could help researchers with their work on almost all diseases, including Covid-19.

“Even tiny rearrangements of these vital molecules can have catastrophic effects on our health, so one of the most efficient ways to understand disease and find new treatments is to study the proteins involved,” said John Moult, the organiser of a global competition to solve protein folding.

There are also practical uses for Deep-Mind’s programme in other scientific fields, such as finding enzymes that can be used to break down waste. AlphaFold was trained on around 170,000 known structures over a few weeks.

“To see DeepMind produce a solution for this, having worked personally on this problem for so long and after so many stops and starts wondering if we would ever get there, is a very special moment,” said Mr Moult.

“It will be exciting to see the many ways in which it will fundamentally change biological research,” said Profes-sor Venki Ramakrishnan, Nobel laure-ate and president of the Royal Society.

‘Biology of life’

AI company unfolds the mystery of protein structure

Hit squad killing of Iranian nuclear mastermind strikes at heart of regimeIsrael blamed for attack by up to 12 assassins that threatens Biden plan to rejoin atomic pact

INTERNATIONAL

Mehul Srivastava — Tel Aviv

Palestinian president Mahmoud Abbas is pushing back elections in the occu-pied West Bank and the Gaza Strip, dashing Palestinian hopes they would get to vote for the first time since 2006 and fuelling Israeli fears of fur-ther conflict with the Islamist group Hamas.

Two months ago, the unpopular 85-year-old made a rare concession to the international community when, enfee-bled by US president Donald Trump’s pro-Israel stance, he agreed to talk to Hamas about holding polls in the Pales-tinian territories.

He had refused to share power with Hamas in 2006 after his secular,left-leaning Fatah party was surpris-ingly trounced by his Islamist rivals, triggering a short war in which he lost control of the Gaza Strip to the Islamist group.

Now, emboldened by Joe Biden’s vic-tory in the US presidential elections and worried that he would lose another elec-tion to Hamas, Mr Abbas is backing away from a commitment to the UN and the EU to hold elections, Palestinian and Israeli officials briefed on the discus-sions told the Financial Times.

No date for the poll had been set. “Whether he was ever serious or not about holding these elections is still debatable,” said Ghassan Khatib, a member of the Palestinian People’s party, and a lecturer at Birzeit Univer-sity in the West Bank. “But it doesn’t matter — reconciling Hamas and Fatah did not seem like it was on the cards, given that the forces [Iran and Israel] behind the split prefer to maintain the current reality.”

Iran, which has some sway over Hamas, prefers it to retain a belligerent posture against Israel, while Israel pre-fers a divided Palestinian leadership consumed by infighting.

Hamas is considered a terrorist group by the US, EU and Israel. Mr Abbas’ stated goal is to allow himself, the west’s preferred interlocutor, one final chance to negotiate a peace agreement with Israel within the parameters of the nearly defunct 1993 Oslo Accords, which he helped to negotiate.

He has also told aides that he feels best suited to blunt the impact of the Saudi Arabia-Israeli rapprochement, which included an unconfirmed meet-ing between Saudi crown prince Mohammed bin Salman and Israeli prime minister Benjamin Netanyahu last week. Mr Abbas is close to Prince Mohammed’s father, King Salman, who is more sympathetic to the Palestinian cause.

As head of the Palestinian Authority, the governing body in the West Bank, Mr Abbas negotiates on behalf of the Palestine Liberation Organization with world leaders. His critics say he simply wants to hold on to power.

“We have already lost more than 10 years to these delays,” said Mustafa Barghouti, a rival of Mr Abbas who has assailed the PA for corruption. “The sys-tem has lost all its democratic structures — the national assembly has been dis-solved, the judiciary has lost its inde-pendence and there’s no separation of powers.”

West Bank

Palestinian leader Abbas backs away from talkson elections

In shock: mourners gather for the funeral of Mohsen Fakhrizadeh in Tehran. Below, the scientist’s bullet-riddled carHamed Malekpour/Wana/Reuters

ularly brief US publications to take indi-rect credit for the assassinations, adding to what one retired intelligence officer told the FT was a “box them in strategy, so that Iran (in this instance) is publicly humiliated for failing to protect its most valued assets”.

Whoever carried out the attack “had a short period of time to take action to weaken the Iranian nuclear programme and to convince Biden that once he becomes president he should not return to the agreement and create a condition that it’s going to be more difficult for him to rejoin the plan”, said Yossi Kuperwasser, a retired brigadier general who ran Israel’s strategic affairs minis-try.

“These are things that are designed to embarrass the Iranians, but while Israel has to be well prepared for any eventu-ality, we have to realise that the Iranians are smart, and they understand this might be a move that’s intended to lead

Israel, which has maintained an unde-clared nuclear weapons stockpile since at least the 1970s, has regularly been involved in the murder and assassina-tion of government officials and inde-pendent actors it considers hostile to the Jewish state’s interests.

Between 2010 and 2012, at least four Iranian nuclear scientists were killed in Tehran. In July, an assembly plant for centrifuges in Natanz, the country’s main nuclear site, exploded in an attack widely believed to have been carried out by Israel.

Ronen Bergman, the author of a book on Israeli assassinations, Rise and Kill First, has estimated that Mossad and other agencies have murdered at least 2,700 people around the world, a number that the government has not denied.

Israel never claims official responsi-bility for the illegal acts, except when its spies are caught. But Israeli officials reg-

and other parts of the bureaucracy that Erdogan needs.”

As a result, she said, breaking up the coalition would be difficult. Yet the alli-ance causes discomfort for some AKP factions, who see it as a factor in the ero-sion of their party’s public support.

Tensions have risen to the surface. In a striking intervention last month, AKP

veteran Bulent Arinc called for the release of Turkey’s two well-known political prisoners: philanthropist Os­-man Kavala and Kurdish politician Sela-hattin Demirtas.

But the MHP hit back and Mr Erdogan made clear he had no intention of releasing either detainee. Mr Arinc last week resigned from one of the presi-dent’s advisory committees.

The episode highlights the dilemma for the Turkish leader. Even if he were genuine in his calls for judicial and dem-ocratic reform, a premise viewed with

‘Their power within the system is far bigger thanthe electoral support that they’re bringing to the table’

‘The Iranians are smart, and they understand this might be a move that’s intended to lead them into making mistakes’Yossi Kuperwasser

Global insight

LauraPitel

DECEMBER 1 2020 Section:World Time: 30/11/2020 - 18:18 User: john.conlon Page Name: WORLD2 USA, Part,Page,Edition: USA, 3, 1

4 ★ FINANCIAL TIMES Tuesday 1 December 2020

Jamie Smyth — SydneyChristian Shepherd — Beijing

Canberra has accused Beijing of shar-ing a “repugnant” and fake image of an Australian soldier holding a blood-stained knife to the throat of an Afghan child in a considerable escalation of diplomatic tensions.

Scott Morrison, Australia’s prime minis-ter, said yesterday his government had protested to Beijing over the “deeply offensive” post on Twitter by a spokes-person for China’s foreign ministry and demanded it be taken down.

“The Chinese government should be totally ashamed of this post. It dimin-ishes them in the world’s eyes,” said Mr Morrison. “Australia is seeking an apol-ogy from the Ministry of Foreign Affairs and we are seeking it be removed from Twitter.”

Zhao Lijian, a regular critic of Aus-tralia, tweeted a computer-generated image of an Australian soldier holding a knife to an Afghan child’s throat, which has its head wrapped in the country’s flag. “Don’t be afraid we are coming to bring you peace,” text below it stated.

China castigated Australia this month after Canberra published a war crimes report, which alleged 39 Afghan civil-ians had been murdered by the coun-try’s special forces. “Shocked by murder of Afghan civilians & prisoners by Aus-tralian soldiers. We strongly condemn such acts, & call for holding them accountable,” Mr Zhao wrote.

China’s foreign ministry rejected calls for an apology, saying Canberra should “feel ashamed” and “offer an official apology to Afghan people” for killing innocent civilians.

The tweet was the latest salvo in a dip-lomatic and trade dispute that erupted after Canberra demanded an independ-ent inquiry into the pandemic’s origins.

Mr Zhao has said the war crimes report exposed Australia’s “hypocrisy” in relation to its regular promotion of “human rights” and “freedom”. He has spearheaded a newly aggressive tone adopted by Chinese diplomats, known as “wolf warrior” diplomacy.

He was labelled a “racist disgrace” last year by Susan Rice, a former national security adviser to President Barack Obama, after he tweeted about race

relations in Washington neighbour-hoods. “There’s a saying ‘black in & white out’, which means that as long as a black family enters, white people will quit, & price of the apartment will fall sharply,” he wrote in July 2019.

Mr Zhao was promoted to foreign ministry spokesperson the next month.

He also uses his Twitter account, with more than 776,000 followers, to peddle disinformation. In March, he lent cre-dence to a conspiracy theory that claimed Covid-19 may have been brought to China by the US military.

The image tweeted yesterday was cre-ated by a Beijing-based artist who goes by the name Wuheqilin, a self-described “wolf warrior” political painter who aims to “make people extremely angry”.

Past works have often targeted the US or other perceived enemies of Beijing. In one image, he created a caricature of the Statue of Liberty surrounded by Hong Kong protesters with the caption “You believe in a Pretender God”.

ABC, Australia’s national broadcaster, said yesterday Russia had also criticised Canberra over what it described as a “truly shocking” war crimes report.

Diplomatic tensions

Australia hits out at ‘repugnant’ China tweet

depends on what he can do politically in the next two years,” said Marcos Nogue-ira, a political analyst at the São Paulo State University. “But it is also impor-tant to recognise that the parties that support him in Congress did not do badly in these elections. We have to see what they will do next year. The centre of Brazil politics is home to all sorts.”

But few analysts see Sunday’s results as a mortal blow to the president, judg-ing that his popularity is attributable to his personal charisma. Mr Bolsonaro is riding high in national polls, with an app­roval rating of almost 38 per cent, a strong level for Brazilian presidents.

His popularity jumped this year after his government began giving out monthly coronavirus payouts of about $120 to the country’s poorest citizens.

The election results are, however, likely to shake the foundations of the once powerful Workers’ party (PT), which has struggled in opposition since the election of Mr Bolsonaro in 2018.

The party has been lambasted by crit-ics for failing to promote new blood and focusing incessantly on Mr Lula, himself a controversial character for his involvement in a long-running corrup-tion scandal.

“A new younger left is getting

stronger. With no doubt the main lefty figure after today in Brazil is Guilherme Boulos, and for the first time in years this leadership does not belong to PT,” said Prof Solano, referring to the São Paulo candidate who ran with the far-left PSOL party. “The PT is at serious risk of becoming just a bureaucratic party without any strength.”

With a record number of women, peo-ple of mixed race and military officials contesting seats, the election was char-acterised by an increased mobilisation of voters from across the political spec-trum.Additional reporting by Carolina Pulice

Latin America

Brazil polls hurt Bolsonaro allies and Workers’ party

John Reed — Bangkok

Amnesty International has accused Facebook and Google of complicity in “industrial-scale repression” in Viet-nam, underscoring the social media companies’ awkward position in one of Asia’s fastest-growing online markets.

In a report published today, the human rights group accused the companies of being too amenable in complying with requests made by Vietnam’s communist authorities to take down content.

Ming Yu Hah, Amnesty’s deputy regional director for campaigns, said Facebook and Google’s YouTube were “hunting grounds for censors, military troops, and state-sponsored trolls”.

The allegations followed long-run-ning accusations that Facebook, which recently launched an independent over-sight board, lent itself to manipula-tion by political campaigns or those that spread hate speech in countries from the US to Myanmar and the Philippines.

“Vietnam is the only country we have seen where Facebook has complied with such a degree to a government’s exces-sive demands,” Ms Hah told the Finan-

cial Times. Facebook, in particular, has played a central role in allowing people to share information unreported on state-controlled media, and to organise protests.

However, in April it acknowledged it had agreed to increase significantly its censorship of “anti-state” posts in Viet-

nam, saying authorities had slowed traf-fic to the platform to pile pressure on it.

YouTube won praise from Nguyen Manh Hung, Vietnam’s information minister, in October for removing “bad information propaganda against the party and state”. He was quoted in state media as saying Facebook and Google had complied with 95 per cent and 90 per cent of its censorship requests respectively.

“Facebook provides a free flow of information into a very repressive coun-

try, and it’s where people connect with each other,” Long Trinh, co-founder of Legal Initiatives for Vietnam, an online magazine focused on political and social issues, told the Financial Times.

“However, I have changed my views of Facebook . . . because of how it co-operates with the Vietnamese govern-ment to limit the flow of information.”

Facebook’s most recent transparency report says it restricted content at the government’s request 834 times in the first half of this year, up from 77 such incidents in the second half of 2019.

Facebook said it had been restricting content after it became clear that failing to do so would lead to being shut down. “Over the past few months, we’ve faced additional pressure from the govern-ment of Vietnam to restrict more con-tent. However, we will do everything we can to ensure that our services remain available so people can continue to express themselves,” the company said.

Google said: “We rely on governments to notify us of content that they believe is illegal through official processes and will restrict as appropriate after a thor-ough review.”

Freedom of speech

Big Tech duo accused over Vietnam censorship

A Facebook user reads messages on his mobile phone in a Hanoi café. The group has increased content restriction

Setback: Jair Bolsonaro talks to the press in Rio de Janeiro on Sunday. Despite his allies performing badly in local elections, he is riding high in national polls — Luis Alvarenga

Bryan Harris — SAo Paulo

Traditional centre and centre-right parties won the big prizes in Brazil’s municipal elections on Sunday, while candidates supported by populist pres-ident Jair Bolsonaro floundered.

“Let’s say the ‘old politics’ is back,” said Esther Solano, a professor of politics at the Federal University of São Paulo.

The leftwing Workers’ party, which governed Brazil for 13 years between 2003 and 2016, was also routed, raising questions about its long-term political prospects. The party of the once popular former president Luiz Inácio Lula da Silva failed to win the mayorships of any of Brazil’s most important cities.

The elections in more than 5,000 municipalities are viewed as an impor-tant bellwether of the political climate in Latin America’s largest country ahead of presidential polls in two years.

They are also a crucial opportunity for parties to gain control over the local

political machinery, which can be har-nessed for the federal election cam-paigns in 2022.

In São Paulo, Brazil’s biggest and wealthiest city, the incumbent centre-right mayor Bruno Covas fended off a challenge from Guilherme Boulos, a leftwing former land activist, who rode a groundswell of support from the city’s youth. The victory will be a boon to the political ambitions of ally João Doria, the state governor of São Paulo, who has emerged in the past year as one of Mr Bolsonaro’s fiercest critics.

In Rio de Janeiro, incumbent mayor Marcelo Crivella, an important ally of Mr Bolsonaro, was firmly defeated by Eduardo Paes, a centrist former mayor of the seaside city, who claimed 64 per cent of the vote.

Only in Vitória, the capital city of the state of Espírito Santo, and Rio Branco, the capital of Acre, did candidates sup-ported by the Brazilian president win.

“Bolsonarismo was defeated this year, and he could be in jeopardy in 2022. It

‘Bolsonarismo was beaten this year, and he could be in jeopardy in 2022’Marcos Nogueira, political analyst

INTERNATIONAL

James Politi — Washington

Joe Biden, the US president-elect, yes-terday unveiled an economic team that sought to balance experienced Demo-cratic policymakers who will be well-re-ceived by markets and business with more progressive economists.

The nominees included Janet Yellen, the former Fed chair, as Treasury secre-tary, and Neera Tanden, a former senior aide to Hillary Clinton and president of the Center for American Progress think-tank, as budget director. Wally Adey­-emo, president of the Obama Founda-tion and a former international eco-nomic official, was tapped to be deputy Treasury secretary by Mr Biden.

Combined with the expected selec-

tion of Brian Deese, a BlackRock execu-tive, to be director of the National Eco-nomic Council, the picks signalled Mr Biden’s preference for pragmatic centre-left policymakers to spur the US recov-ery amid the pandemic shock, at a time when his ambitions will be limited by a closely divided Congress.

However, Mr Biden also chose a trio of progressive economists led by Cecilia Rouse of Princeton University to lead the White House’s Council of Economic Advisers, which serves as the presi-dent’s think-tank on economic matters. Ms Rouse will be flanked by Jared Bern-stein, Mr Biden’s former chief econo-mist while he was vice-president, and Heather Boushey, an economist special-ising in income inequality.

“This is the team that will deliver immediate economic relief for the American people during this economic crisis and help us build our economy back better than ever,” Mr Biden said.

“This team is comprised of respected and tested groundbreaking public serv-ants who will help the communities hardest hit by Covid-19 and address the structural inequities in our economy.”

Ms Tanden is most at risk of being

blocked in the confirmation process. Senior Republicans have indicated their opposition to her nomination, and even some progressive Democrats believe she is too centrist, pointing to her sup-port for deficit reduction measures dur-ing the Obama administration.

But the calculations surrounding the Senate confirmation of Mr Biden’s appointments will hinge on the out-

come of the two run-off races for upper chamber seats in Georgia, which will be decided in early January.

Jen Psaki, Mr Biden’s White House press secretary, signalled Ms Tanden’s aptitude in a tweet yesterday, calling her a “brilliant policy expert and she knows how vital funding for government pro-grammes is”.

Ms Yellen is expected to face a much smoother ride to confirmation.

“Janet Yellen demonstrated her intel-lect, foresight and independence during the financial crisis, and throughout her term as Fed chair,” said Patrick McHenry, top Republican on the finan-cial services committee of the House of Representatives. “It’s important we have credible and experienced people to serve at the highest levels.”

After Mr Biden’s announcement, Ms Yellen tweeted with a call to confront the “great challenges” facing America.

“To recover, we must restore the

American dream — a society where each person can rise to their potential and dream even bigger for their children.”

Ms Yellen emerged as the leading can-didate for the Treasury because she was more palatable to the leftwing of the Democratic party than another con-tender, Lael Brainard, the Fed governor.

Progressive activists will be pleased by the advisers, hoping Mr Biden can deliver on his campaign’s economic platform, which called for an aggressive spending plan funded partially by tax increases on the wealthy, to help the economy recover from the pandemic while redressing systemic income and racial disparities.

“This job is about advising the presi-dent on how to rebuild and revive our economy,” Ms Rouse tweeted yesterday.

Mr Biden is expected to present the first appointments including Ms Yellen, Ms Tanden and Ms Rouse today. See FT Big Read, Notebook & Opinion

Hannah Kuchler — New York

Moderna has submitted its Covid-19 shot for regulatory approval in the US and the EU yesterday, making it the second western vaccine maker on track to start distribution in Decem-ber.

The Boston-based biotech’s new trial data showed its vaccine’s efficacy rate was 94.1 per cent and there were no seri-ous safety concerns.

Stéphane Bancel, Moderna chief exec-utive, said the company was “most excited” about the vaccine’s ability to prevent severe disease. In the trial of 30,000, none of the participants who were vaccinated developed severe Cov-id-19.

“So 94 per cent of people we have no disease, no symptoms . . . Those who get it will be very, very mild and so you will almost stop, if not entirely stop, hos-pitalisation, and death,” he said.

Among participants who received a placebo, there were 30 cases of severe disease and one death. Moderna’s trial included high proportions of ethnic minorities, the elderly and those with underlying conditions, so the number of participants on the placebo who devel-oped severe disease was three times higher than in the placebo arm of the Pfizer-BioNTech trial.

In addition to filing for approval in the US and the EU, Moderna will send the same trial data to regulators where it is already under rolling review, including in the UK, the company said.

The US Food and Drug Administra-tion’s advisory group is likely to discuss the Moderna vaccine on December 17, a week after the advisers analyse the vac-cine from Pfizer and its German partner BioNTech.

In the UK, vaccines are regulated by the EU’s European Medicines Agency until the end of the Brexit transition on December 31. However, the UK’s Medi-cines and Healthcare products Regula-tory Agency also has the power to authorise products temporarily in cases of urgent public need.

The UK is set to become the first west-ern country to roll out a Covid-19 vac-cine, with the first Pfizer-BioNTech shots expected to be given as early as December 7.

Mr Bancel said it was “highly possi-ble” that another developed country would approve the Moderna vaccine before the US, suggesting the UK or Can-ada may be the first to issue an emer-gency approval.

But he said the US was ahead in its ability to distribute an approved vac-cine within 24 hours. In Europe, Mod-erna vaccines are being made in Swit-zerland and put into vials in Spain. The UK regulator would need to approve the vaccine before it leaves the Spanish fac-tory.

“The US has done extremely well. This has been months and months of preparation and planning,” he said. He added others would still be able to move fast, just not as quickly. “I don’t think the other countries are as ready.”

Following FDA guidelines, Moderna has tracked the average trial participant for at least two months to checkfor safety. There were no serious safety concerns, with side-effects including joint and muscle pain, headaches and fatigue.

US politics

Biden unveils line-up to steer recoveryPragmatic policymakers and progressive economists on president-elect’s team

Drug regulation

Moderna requests approval for Covid vaccine in US and EU

‘Janet Yellen demonstrated her intellect, foresight and independence during the financial crisis’

DECEMBER 1 2020 Section:World Time: 30/11/2020 - 18:36 User: john.conlon Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 5

DECEMBER 1 2020 Section:Ad Page Time: 30/11/2020 - 12:02 User: william.baxter Page Name: AD LOMBARD, Part,Page,Edition: LON, 5, 1

6 ★ FINANCIAL TIMES Tuesday 1 December 2020

Joe Rennison — London Colby Smith — New York

Financial groups that rely on US dollar Libor will have longer to break away from the scandal-tainted interest rate that underpins $200tn in contracts under a plan announced yesterday by its administrator.

IBA, which compiles and oversees Libor, said it intended to cease publication of one-week and two-month US dollar Libor at the end of 2021. It will, however, extend the publication of the other more widely used US dollar Libor benchmarks until June 30 2023, subject to consultation.

The administrator had announced already it would consult the market on ending publication of all Libor rates in sterling, Swiss franc, euro and yen at the end of next year, with the US dollar rate conspicuously absent from the list.

It marks a shift in the approach to end use of the benchmark that was central to rate-rigging scandals a decade ago.

The transition away from US dollar Libor had raised concerns over a sudden end to the crucial lending rate once banks are no longer compelled by regu-lators to submit it after next year, poten-tially jeopardising financial stability.

Rather than switching existing con-tracts to a new rate, policymakers hope, the extension will allow the bulk of con-tracts to simply come to an end.

“Today’s plan ensures that the transi-tion away from Libor will be orderly and fair for everyone — market participants, businesses, and consumers,” said Ran-dal Quarles, vice-chair for supervision at the Federal Reserve.

US regulators urged banks not to enter into new Libor transactions after 2021 to ensure that the scale of the chal-lenge to transition contracts would be sufficiently reduced by June 2023.

“Given consumer protection, litiga-tion, and reputation risks, the agencies believe entering into new contracts that use [Libor] as a reference rate after December 31, 2021 would create safety and soundness risks,” wrote the Fed Board of Governors in a joint statement with the Office of the Comptroller of the Currency and the Federal Deposit Insur-ance Corporation.

Plans had previously focused on introducing “fallback language” to assign a new interest rate to contracts that currently refer to Libor but con-cerns had been raised over the slow progress of the transition.

Banks to gain extra time for switchover as US Libor ends

as the retail bank boss Vim Maru, or someone with more experience running a public company.

However, supporters pointed out that although Mr Nunn has a smaller public profile than some rivals, he is well known in the banking world after more than 15 years as a partner at manage-ment consultancies Accenture and McKinsey. Moreover, the business for which he is responsible inside HSBC has significantly higher revenues and prof-its than Lloyds.

Andrew Coombs, analyst at Citigroup, described the decision as a “surprise”, but noted that Mr Nunn “has strong expertise in wealth and digital, two areas which Lloyds has made a priority”.

Lloyds is planning to extend a recent push into wealth management and insurance to help offset the pressures caused by prolonged low interest rates. A person close to the bank said Mr Nunn’s appointment would provide a further boost to its plans.

“We have had sustained investment, have a clear path and a clear level of ambition,” he said.

Former colleagues said Mr Nunn was popular inside HSBC, and several high-lighted his “impressive intellect”.

The appointment reflects a trend among Europe’s top banks to seek bosses who can bring technological expertise and avoid controversy.

“Lloyds are the UK’s community bank. You don’t want a gunslinger here, you want someone with good values,” said one former colleague of Mr Nunn’s. “Tech knowledge is his primary gift to Lloyds, but he’s also a great leader and will make sure it sticks to its mission.”

Shares in Lloyds rose slightly, while the broader FTSE 100 dropped 0.7 per cent. However, its shares are still down about 40 per cent so far in 2020. Additional reporting by Oliver RalphSee Lex

Lloyds poaches HSBC’s Nunn as successor to Horta-Osório3 UK bank picks rival’s head of wealth 3 Changing of guard for recovery push

Nicholas Megaw and Stephen Morris

Lloyds Bank has poached HSBC banker Charlie Nunn to be its new chief execu-tive, replacing António Horta-Osório in the top job.

Mr Nunn’s appointment comes at a crucial time for Lloyds, which is work-ing on a plan to deal with the pressures of low interest rates, Brexit and recov-ery from the coronavirus pandemic.

The move will also complete a broader changing of the guard at the top of Lloyds, with Robin Budenberg set to take over as chairman on January 1 and William Chalmers having joined as chief financial officer last year.

Norman Blackwell, Lloyds’ outgoing chairman, said: “I am delighted that we

have now completed the leadership suc-cession by appointing Charlie as CEO to work alongside Robin Budenberg as the incoming chairman. I am confident that together they will provide the strong leadership required to carry forward the strategic transformation that will ena-ble Lloyds Banking Group to succeed.”

Mr Nunn is global head of wealth and personal banking at HSBC, where he has worked since 2011. A keen cyclist and father of four, he was a protégé of John Flint, who previously ran the division before going on to a shortlived stint as chief executive.

Yesterday’s announcement was broadly welcomed by analysts and investors, despite the fact that Mr Nunn had not been considered a frontrunner for the job. Many analysts had expected the company to appoint an insider such

Charlie Nunn ‘has strong expertise in wealth and digital, two areas which Lloyds has made a priority’

Robin Wigglesworth Contrarian suggestions for investors that might upset the consensus on next year y MARKETS INSIGHT

Peter Campbell — LondonOrtenca Aliaj — New York Claire Bushey — Chicago

General Motors has abandoned plans to take a stake in Nikola under a scaled-back tie-up that sent shares in the hydrogen start-up tumbling.

The non-binding agreement annou­-nced yesterday between the two com-panies downgrades the start-up from a technology and manufacturing partner to a customer of the car-maker’s hydrogen fuel cell system.

The news prompted Nikola’s shares to fall 21 per cent to $22.17.

Under the revised deal, Nikola has killed off plans for its Badger pick-up truck, which drove the rise in its share price when they were unveiled over the summer. It means the company will have to reimburse millions of dol-lars in refundable customer deposits.

The group began collecting deposits of up to $5,000 for the vehicle in the

summer and had $6.9m in deposits that were “primarily related to the Badger” at the end of September, according to its most recent results.

An earlier deal in which GM would have taken a $2bn stake in the busi-ness and build Nikola’s pick-up truck on its behalf was torn up after the start-up was accused of an “intricate fraud” by a short seller.

“This went from a game-changer deal for Nikola to a good supply part-nership but nothing to write home about,” wrote Daniel Ives, an analyst at Wedbush. “The signing of GM as a partner is a positive but, ultimately, no ownership/equity stake in Nikola and the billions of R&D potentially now off the table is a major negative blow to the Nikola story.”

The announcement comes the day before a big lock-up ends on Nikola’s shares, allowing investors to sell out of the company that floated through a reverse merger over the summer.

Mark Russell, Nikola’s chief execu-tive, played down the importance of the Badger in an interview in October. He said yesterday: “Heavy trucks remain our core business and we are 100 per cent focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market.”

Doug Parks, GM’s executive vice-president of global product develop-ment, purchasing and supply chain, said: “This supply agreement recog-nises our leading fuel cell technology expertise and development.”

Nikola and GM announced a deal in early September in which the Detroit carmaker would own a near 11 per cent stake of the group in exchange for manufacturing the Badger truck. But talks over terms drag­ged on after Hindenburg Research rel­eased a rep­-ort that included alleged misrepre-sentations by Nikola.See Lex

U-turn Nikola slides after GM ditches plan to acquire stake in hydrogen truck start-up

A few years ago I asked a Wall Street chief executive known for his frankness what the banking industry needed to do to rebuild its

reputation with the public. “Simple,” he said. “We need to stop

messing up.” He did not use that verb. It has worked against Wells Fargo that

Wall Street, over the past four years or so, has mostly followed that advice. At any given moment, at least one big US bank has to be in the doghouse with the regulators, according to finance lore. Wells got into it in 2016 with its horrify-ing fake accounts scandal. Since then, none of Wells’ peers have messed up badly enough to take its place.

And so, two chief executives later, the bank has staggered on, rebuilding its control, risk and compliance infrastruc-ture while operating under a regulatory asset cap that prevents it from growing its balance sheet above the current $2tn.

Wells shares took a much worse hit from Covid and the decline in interest rates than any of its peers. The stock lost half of its value between February and October, ending up trading at a deep dis-count to the book value of assets.

The few brave bulls on the shares pointed out that there would be lots of upside if the bank could do something about its badly bloated cost base and

Wells Fargo’s struggle to escape the doghouse is not over yet

relief — still have to materialise. Wells’ efficiency ratio (expense base as a pro-portion of revenue) is 78 per cent over the last four quarters. The ratio of its big peers is closer to 60 per cent. This would seem to indicate that huge amounts can be taken out of Wells’ $60bn cost base in the coming years.

“People are hoping for $10bn. That’s a huge number,” says Anton Schutz of Mendon Capital.

He is optimistic, but the total amount to be saved may not be as important as how long it takes to get to the target.

Wells’ quarterly call in January, when the market is expecting Mr Scharf to lay out the cost-cutting plan, will be nerve-racking for investors.

One thing we have learnt in recent years is that operational overhauls take time. Everyone in the industry knew10 years ago that Citi had a dysfunc-tional patchwork of computer systems that needed rationalisation. Just last month that bank received a $400m fine for its failure to address the problem.

On the regulatory front, the timing remains unknown. Regulators work at their own pace, and the asset cap, in place since early 2018, could remain for years to come.

“Three years is not that long to be under the regulator’s thumb. Most regu-latory overhangs last longer,” Mr Kaser says, noting how long Citi and BofA stayed under the regulatory microscope after the financial crisis. “What is not rational is the expectation that the asset cap will come off in the spring and expenses will magically disappear.”

Wells is the most beat-up of the bank stocks. It makes sense that it should rebound now that the group is back in favour. But Wells’ comeback will take longer than a single market cycle.

robert.armstrong@ft.com

INSIDE BUSINESS

FINANCE

RobertArmstrong

shed the asset cap. But on the bank’s third-quarter results call with analysts, chief executive Charlie Scharf, already in the job a year, tossed little red meat to investors. The forecast for 2021 expenses was pushed off another three months; no update on regulatory progress either. You could almost hear shareholders sighing in the background.

But in recent weeks, the market has begun to see the bulls’ logic. After news about a vaccine, the shares have risen a third in the last month, outperforming a resurgent banking sector. Several sell-side analysts have upgraded the shares, which are close to being a consensus “buy”.

Part of the bounce makes perfect sense. The decline in the stock was “insane”, says Patrick Kaser, who runs the large-cap value strategy at Brandy-wine Global Invest-ment Manage-ment, which owns Wells shares. “Any bounce off those lows as people look ahead six months is only rational.”

Government support of individuals and businesses has stopped the nightmare scenario of widespread credit defaults from materi-alising. The vaccine will come, and it did not hurt that Janet Yellen appears set to get the nod to be Treasury secretary.

In other words, says Dave Ellison, who runs the Hennessy Large Cap Financial Fund, nothing has changed except the passing of time. “The turnround story has been the story for quite some time, [but] investors now believe the time is right to pay attention.”

This is no one-way bet, though. The discount to book value has all but dis-solved. The two hoped-for pieces of news — big expense cuts and regulatory

Bulls spotted lots of upside if something could be done about costs, and in recent weeks investors have begun to see their logic

The Badger: killing off its planned pick-up truck means Nikola will have to refund millions of dollars in deposits

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Tuesday 1 December 2020 ★ FINANCIAL TIMES 7

trading. Some see bitcoin as a potential inflation hedge.

Ledger, which was founded in 2013, sells hardware security products to pro-tect users of cryptocurrencies and blockchain applications to secure their digital assets. It has sold about 2m dig-ital wallets across 165 countries.

Ledger has raised $87m from venture investors including Draper Esprit and Samsung Ventures. The valuation implied in its last funding round in 2018 has not been disclosed.

Most of the start-up’s sales come from consumers, but in 2018 it began market-ing a product called Ledger Vault to institutional investors such as hedge funds.

Leila Abboud — Paris

Ian Rogers, LVMH chief digital officer, has left the group to join a French start-up called Ledger that is a leader in making hardware-based digital wallets to hold cryptocurrencies.

The California native has spent much of his career at the intersection of music and tech as an entrepreneur.

LVMH recruited him in 2015 from Apple where he helped roll out its streaming service, and enlisted him to expand its ecommerce operations and inject brands such as Louis Vuitton and Dior with more digital knowhow.

His mission as Ledger’s chief experi-ence officer will be to expand its

consumer business and help bring cryptocurrency ownership to the masses as opposed to the relatively niche activity it remains today.

“When I look at cryptocurrency, pri-vacy and security, I have a similar feel-ing I did about music in the early 2000s at the beginning of the streaming era,” Mr Rogers said. “There is an inevitable change coming, but it’s the very begin-ning, so not everything will be easily predictable . . . these are very fast-growing markets.”

Mr Roger’s move to Ledger comes amid a rally in bitcoin this year. Many investors have flocked to the asset, helped by improvements to the tools and trading platforms that facilitate

Financial services

LVMH digital boss joins crypto wallet groupJamie Smyth — Sydney

Australia’s biggest listed winemaker will diversify away from China as it said Beijing’s move to slap tariffs on imports from the country threatens almost a third of its earnings.

Treasury Wine Estates said yesterday that Chinese demand for its luxury brands, such as Penfolds, would be “extremely limited” because of duties worth 169 per cent applied to its prod-ucts from Saturday.

TWE said it would reallocate its exports of the Penfolds Bin and Icon ranges from China — which represent a quarter of the brand’s global volume — to markets including the US, Europe,

Australia and elsewhere in Asia.The group said it would also cut costs

and production, as well as source more of the wine it sells in China from its vine-yards in France, to avoid trade sanctions linked to tensions between Beijing and Canberra. The company could also potentially sell more of the wine it makes in China.

The shares fell almost 10 per cent yes-terday, adding to an 11 per cent drop on Friday, when tariffs were announced.

Tim Ford, TWE’s chief executive, said the company would continue to engage with China’s ministry of commerce on the matter. “We are extremely disap-pointed to find our business, our part-ners’ businesses and the Australian

wine industry in this position,” he said. “We call for strong leadership from gov-ernments to find a pathway forward.”

Tariffs worth up to 212 per cent on Australian wine threaten up to A$1.2bn ($890m) in annual exports to China, the nation’s largest overseas market. It has forced winemakers to delay shipments to China and seek alternative markets.

Industry groups warn the disruption will also cause job losses and hurt a recovery from the drought and bush-fires that caused many winemakers to abandon their 2020 vintage.

TWE said it had A$1.5bn of liquidity on hand and was not at any immediate risk of breaching the financial cove-nants on its debt.

Food & beverage

Australia winemaker TWE turns sour on China

staff numbers by about 15 per cent over the next few years.

The job losses are part of an effort to cut €700m of costs by 2024, which will also include branch closures, digitisa-tion, and a previously announced wind-down of part of its investment bank.

ABN said that “rigorously simplify-ing” its operations would help to “future-proof” the bank, but it warned that returns would not return to pre-pandemic levels for the foreseeable future.

The bank has reported a return on equity of above 10 per cent every year since it was partially reprivatised in

the cuts] to be executed against natural attrition, and we have a long history of reskilling our own workforce to ensure people are ready for the future,” said Robert Swaak, chief executive. “We don’t expect this to significantly impact 2021. We wanted to be transparent about the effects of digitisation as we continue to watch the trends in the industry.”

Johan Ekblom, an analyst at UBS, said that he expected shareholders to wel-come the announcements on cost reduction, but “we think the market is likely to be less generous when it comes to factoring in improvements to the top-

Nicholas Megaw and Owen WalkerLondon

ABN Amro said it would cut more than 2,500 jobs and abandon its short-term profit target as the Dutch bank prepares for a prolonged period of record-low interest rates even after the impact of the pandemic eases.

The bank, which is majority-control-led by the Dutch state, plans to reduce

Bank ditches short-term profit target as it prepares for prolonged low rates

Jonathan Eley

The expected collapse of Arcadia into administration last night brings down the curtain on three decades during which owner Philip Green attracted both admiration and opprobrium for his combative approach to business.

The group, whose brands include Topshop, Burton and Wallis, said on Fri-day it was “working on a number of con-tingency options” after the pandemic hit its already struggling business hard.

Sir Philip’s career, which started with selling surplus stock from a store called Bond Street Bandit, will be remembered chiefly for its dealmaking, often auda-cious and ruthless in equal measure. He made big decisions quickly and often persuaded backers — ranging from the secretive Barclay twins to leading high street banks — to lend huge amounts of money at short notice.

In his early days, his bold moves were rewarded with often spectacular returns. The break-up of Sears, which he took over in 1999, resulted in a profit of almost £300m, while the refinancing of Arcadia in 2005 resulted in a £1.2bn tax-free dividend to the Green family.

Sir Philip’s retailing ability is more hotly debated. “This idea that he had a Midas touch is nonsense,” said one per-son who has worked with him. “He is not strategic at all, there is no long-term plan.” This person added: “He’s a rag trader. He buys things cheap and sells them more expensively. He’s very good at it and it made him very successful.”

Another person who has locked horns with the tycoon over the years said he appeared to “sit back and milk the cow” after his second attempt to acquire Marks and Spencer, in 2004, failed.

Retail commentators say there was little in the way of investment in Arca-dia’s main brands of Topshop, Burton and Wallis, whose market share has shrunk since the early 2000s. Sir Philip was put off ecommerce by the heavy investment required, allowing rivals such as Asos and Boohoo to flourish.

Meanwhile on the high street, Arca-dia’s brands were undercut on price by the likes of Primark and faced an onslaught of competition as H&M and Zara expanded. His own attempts to open stores overseas had mixed results.

As Arcadia’s decline gathered pace, executives and potential recruits became less willing to indulge his abrasive per-sonality. Sir Philip’s attitude towards bankers, suppliers, staff, analysts and journalists “definitely had an effect” on recruitment, the former associate said, adding that he was increasingly reliant on longtime associates such as Ian Grabiner, Arcadia’s CEO since 2009.

“[Those people] might be prepared to put up with the shit but that doesn’t

Green attracted both

admiration and opprobrium

for his approach to business

In his early days, Philip Green’s bold moves were rewarded with often spectacular returns

‘He’s a rag trader. He buys things cheap and sells them more expensively. He’s very good at it and it made him very successful’

Influential: Green’s wife, Tina

3 May 1990 Fashion chain Amber Day, of which Philip Green is chief executive, buys discount store What Every Woman Wants for £47m

3 Jan 1992 Sir Philip is forced out of Amber Day after failing to meet profit forecasts. He would never run a listed company again.

3 Jan 1999 £550m takeover of retail group Sears marks Sir Philip’s arrival as a major retail player

3 Dec 1999 Abandons bid for Marks and Spencer after press coverage of wife Tina Green’s pre-bid share purchases

3 Mar 2000 Acquires BHS for £200m, saying he can turn the ailing business round

3 Oct 2002 Takes over Arcadia for £850m and immediately sells the group to his wife, who lives in the tax haven of Monaco

3 July 2004 M&S board blocks his second attempt at a purchase, this time for £9.1bn

3 Oct 2005 Ms Green receives tax-free £1.2bn dividend from Arcadia

3 Apr 2009 Topshop opens first US store on New York’s Broadway

3 Dec 2012 Leonard Green & Partners, a

Los Angeles private equity firm, buys 25% stake in Topshop, valuing brand at £1.4bn

3 Mar 2015 BHS sold for £1 to UK-based investment vehicle Retail Acquisitions, owned by former bankrupt Dominic Chappell

3 Apr 2016 88-year-old retailer BHS goes bust, affecting 11,000 jobs across 164 stores

3 Feb 2017 Sir Philip agrees to pay £363m to make good BHS pension fund

3 Apr 2019 Buys back stake inTopshop for $1 from US investorLeonard Green, enabling the“Arcadia board to focus on the restructuring options currently being considered”

3 Jun 2019 Arcadia CVA approved, cutting rents on stores

3 Jan 2020 Assault charges against Sir Philip in US dismissed

3 Mar 2020 UK Covid-19 lockdown shuts all Arcadia stores

3 Nov 2020 Administrators appointed to Arcadia

Key moments in dealmaker’s career

Selling points

2015, but yesterday said it would be unable to return to those levels until interest rates “normalise”.

It set a new ROE target of about 8 per cent by 2024.

Shares in ABN Amro fell 6.7 per cent, having dropped more than 45 per cent this year.

“We expect more than 50 per cent [of

€700mTargeted savings by 2024, including branch closures and digitisation

8%Goal for returnon equity, versus 10% every year since 2015

line outlook where we continue to see material challenges.”

Negative rates have been weighing on bank profitability across the eurozone, as income from lending has fallen faster than the cost of deposits. Banks have been reluctant to pass on negative rates, but from January ABN will begin charg-ing 0.5 per cent interest on deposits above €500,000. It will aim to offset the pressure by lifting fees it earns from services such as private banking, credit card lending and payments services. The bank noted that it would consider acquisitions to support such growth.See Lex

mean they’re the best people to run those brands,” the person said.

Sir Philip’s reputation was also dented by the bitter recriminations that fol-lowed the collapse of BHS in 2016. He acquired the group in 2000, but sold it to Dominic Chappell for £1 just 13 months before it collapsed. He later agreed to pay £363m to shore up its underfunded pension scheme after facing allegations that he had sold the company to avoid addressing the pension obligations.

Few believe he would have the appe-tite for another stint in a retail industry that has changed fundamentally. “Obvi-ously I don’t know for sure, but I get the feeling this is it,” said the former associ-ate. “He feels terribly got at over the BHS failure and just wants out.”

Trying to regain control of brands such as Topshop would also be contro-versial given the impact that any admin-istration would have on suppliers, land-lords and Arcadia’s pension scheme, which has a substantial funding deficit.

Sir Philip, who is 68, now spends most of his time in Monaco and has rarely been seen in the UK since allegations — which he has denied — about his con-duct towards employees became public.

Another retail figure who has worked with Sir Philip believes the opinion of his wife Tina, the ultimate owner of Arcadia, will shape his next move. “She will be pushing him in one direction or another. She is very influential behind the scenes and very measured,” he said. “Whatever he does now he cannot win.”

Sir Philip declined to comment.

Retail. Arcadia

Curtain falls on combative tycoon’s empire The Greens diminishedSunday Times rich list

Sources: Sunday Times; company filings

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Profitability declines at Taveta*Operating profit (£m)

* Overall holding company for the Arcadia group

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COMPANIES & MARKETS

ABN Amro takes axe to 2,500 jobsFinancials

Lauren Indvik — London

Cartier owner Richemont has pro-moted Geoffroy Lefebvre to the role of chief executive of the Yoox Net-a-Por-ter Group, replacing Federico Mar-chetti after a nine-month search.

Mr Marchetti, who founded online lux-ury discounter Yoox in 2000 and became chief executive of Yoox Net-a-Porter shortly after its merger in 2015, will stay on as chairman of the group.

It includes multi-brand luxury retail-ers Net-a-Porter and Mr Porter, online discounters Yoox and the Outnet, and a service that handles ecommerce opera-tions for brands such as Giorgio Armani.

Mr Lefebvre’s promotion comes at a critical time for YNAP. It faces stiffening competition from luxury brands’ own websites, as well as online marketplaces such as Farfetch and the nascent Ama-zon Luxury Stores, which offer brands greater control over assortment, pricing and discounting than multi-brand retailers.

Richemont announced a $550m investment in YNAP’s rival Farfetch earlier this month, with Alibaba invest-ing another $550m.

Amid months of store closures this year, online luxury sales have acceler-ated. Some analysts say ecommerce will account for nearly half of luxury sales by 2025 when the industry is expected to have recovered from the virus crisis.

The management change at YNAP also comes amid increased speculation about its own future within Richemont.

The Swiss group acquired fullcontrol of YNAP in 2018 at a valuationof €5.3bn. At that point it was twoyears into a costly, delayed and error-fraught tech overhaul, resulting in hun-dreds of millions of euros in losses for Richemont.

YNAP’s margins slid to 13.9 per cent in the fiscal 2019 year, the lowest in a dec-ade. They slid further in fiscal 2020, to 10.7 per cent, which Richemont attrib-uted partly to online discounting.

In a note to investors, Bernstein ana-lyst Luca Solca suggested that Richem-ont’s recent investment in Farfetch could mean the group planned to spin off YNAP in a merger with Farfetch, or perhaps sell it to Alibaba.

A shuffling of YNAP’s top ranks has already commenced.

Net-a-Porter managing director Nicola Brandolese exited earlier in November after only 15 months at the company. And rival MatchesFash-ion.com announced yesterday that it had poached Elizabeth von der Goltz, Net-a-Porter’s global buying director and one of its best-known executives, to become chief commercial officer. Her responsibilities will be at least partly assumed by Lea Cranfield, a Matches-Fashion.com executive who was hired last week to fill the newly created role of chief buying and merchandise officer.

Mr Lefebvre joined Richemont from McKinsey seven years ago, climbing the ranks to become deputy chief executive of Jaeger-LeCoultre and then chief exec-utive of Baume & Mercier, according to his LinkedIn profile. He became group digital distribution director of Richem-ont in April 2019.

Retail & consumer

Richemont picks Lefebvre to lead Yoox Net-a-Porter

Federico Marchetti will stay on as chairman of the luxury group

DECEMBER 1 2020 Section:Companies Time: 30/11/2020 - 18:56 User: timothy.digby Page Name: CONEWS1, Part,Page,Edition: EUR, 7, 1

8 ★ FINANCIAL TIMES Tuesday 1 December 2020

tional prowess, reach and knowhow will support their ability to stake a claim over the future energy system, they have relatively little expertise in the renewables business.

Some investors and executives believe the sector should stick with what it knows best. One analyst warned that if companies “get woke”, they would “go broke”. Morgan Stanley ana-lysts calculate that per unit of energy produced, renewables require up to five times as much capital expenditure as oil and gas projects.

With finances under pressure in the short and medium term, companies embarking on the long transition are deploying new strategies to persuade investors to hang on for the ride.

Anders Opedal, the new chief execu-tive of Norway’s Equinor, said the com-pany would report results in its renewa-bles division separately from the first quarter of 2021. “This is to increase transparency around how we are build-ing renewables over time and how soci-ety and investors can follow how we develop our renewables strategy.”

Spain’s Repsol recently suggested that a wind and solar joint venture in Chile could serve as a blueprint for its future renewables business. Chief executive Josu Jon Imaz pointed to “a potential IPO”. At the same time, industry execu-

tives point to inconsistencies in the posi-tions of some investors.

Equinor, whose share price fall this year of about 17 per cent is a lot less than some peers at more than 40 per cent, is being lauded for being ahead of the game on renewables. But the company, like US majors ExxonMobil and Chev-ron, still plans to increase production in the coming years even as others plan to hold steady or decrease theirs.

Investment houses are split inter-nally. While some parts of the business are keen to keep investing in oil compa-nies, others will not. Amanda O’Toole, portfolio manager of the AXA WF Framlington Clean Economy fund, does not hold these stocks because the vast majority of their capital is “tied up in oil”. But majors were held elsewhere in the business because they had a role in the shift to a lower-carbon world. “I don’t think it is time to wash our hands of these players.”

Oil groups are held in some portfolios with environmental, social and govern-ance considerations but shunned from others, making it hard to gauge howfar groups need to go to placate share-holders. “Everyone has a different view,” said Iain Pyle, investment direc-tor at Aberdeen Standard Investments. “If a company makes most of itsmoney from generating oil, that’s not

A power plant and refinery operate beside a wind turbine in Germany. Oil groups say their reach and knowhow give them a large claim on the future of energy, but they have relatively little expertise in renewablesMartin Meissner/AP

Some analysts say that the industry should stick with what it knows. Get woke and go broke, warns one

d e l i v e r y b y M e i t u a n r i d e r s .Its newest venture, launched this

summer, brings next-day shipping of cheap fruit to far-flung cities and towns.

“We are trying to figure out how to make it work. We are not a first mover in this market, actually I would say we’re one of the late movers,” said Mr Wang. “It’s not going to be a quick win.”

The spending to build warehouses, hire workers and build supply chains hurt the company’s earnings in the third quarter. Adjusted for a fair value gain on its shares in a listed electric carmaker, Meituan’s net profit in the third quarter rose 6 per cent from a year earlier, but fell from the June quarter.

“All this investment will lead to signif-icant expansion of the operating loss of our new initiative segment for the next few quarters,” said Mr Wang. The seg-ment holds the grocery business.

“Everyone is going into grocery deliv-ery but almost no one is earning profit,” said Lu Ming of Aequitas Research. “They are gathering users but there is no profit.”

Meituan reported strong sales growth of 29 per cent year-on-year to Rmb35.4bn ($5.4bn) in the third quar-ter, led by strong demand for food deliv-eries and ahead of analysts’ forecasts.

utilities are under pressure to clean up their generation fleets. Vistra emitted 106m tonnes of carbon dioxide in 2019, with 36 per cent of its electricity gener-ated from coal and 54 per cent from nat-ural gas. Solar power was 0.2 per cent.

Energy Future Holdings — formerly TXU — filed for bankruptcy in 2014, after growth in natural gas supplies cut electricity prices. The company’s gener-ation and retail businesses were spun out to create Vistra in 2016. Vistra bought rival Dynegy in 2018, expanding outside Texas and increasing its gas-fired portfolio. In September it said it would retire all Dynegy’s coal plants in Illinois and Ohio by 2027. In California, Vistra is constructing 400MW of batter-ies to help the state balance surging renewable output with demand.

Yet Mr Morgan said that completely

decarbonising power by 2035, as Mr Biden seeks to do, would be aggressive. The Electric Reliability Council of Texas has relied on gas and coal for 65 per cent of its energy this year. “We built the cur-rent electric grid over 70 years, and it took substantial amounts of money. You can do it. I just don’t think it would be in the best interests of the American people and the US economy to do it.”

Mr Biden’s vision entails new solar panels, new wind turbines and contin-ued reliance on nuclear and hydroelec-tric power. A study by the UC Berkeley concluded that the US could reach 90 per cent carbon-free electricity by 2035 at no extra cost to consumers. Vistra cited different estimates suggesting that it would cost about $7tn to achieve 90 per cent decarbonisation over 30 years.

Shares of Vistra have trailed the US

Ryan McMorrow — Beijing

Food delivery group Meituan is expanding its logistics network to take more groceries to consumers, as the pandemic-induced shift to online shop-ping pushes China’s big tech companies to rapidly build out their delivery oper-ations.

This autumn, Alibaba spent $3.6bn to take over a top supermarket operator, while Pinduoduo is raising as much as $6.1bn in new financing as it refocuses on selling produce online.

Meituan said yesterday it would increase its warehouse network and logistics capabilities as it expands to more than 1,000 cities and counties before the end of the year.

“Grocery retail is an enormous mar-ket opportunity,” said Meituan chief executive Wang Xing. We aim to “deliver everything to customers’ homes”, he added.

Meituan has three different models aiming to get produce to consumers as quickly and cheaply as possible. In large cities, the company is building its own supply chain for drivers to ferry its goods to shoppers within 30 minutes. Its app also holds a marketplace where gro-cery stores can advertise their goods for

Technology

Meituan boosts warehouse network in deliveries push

stock market this year. Mr Morgan said this was due in part to being avoided by green-conscious investors. “I think it’s now probably the predominant impact on our stock.” Shares of tech and clean-energy companies have soared. Mr Mor-gan, who drives a Tesla Model X, said the rally “feels very dotcom-ish to me”.

Vistra is one of more than two dozen US utilities and power producers to have pledged net zero emissions in the past two years. By 2030, renewable energy would rise to 18 per cent of Vistra’s capacity. While it will retire coal plants and build solar and battery projects in Texas, it intends to keep a majority of capacity fuelled by gas. Gas-fired plants were “critical resources to maintain the reliability and affordability of electricity in the US for the next several dec-ades,” Vistra’s climate report said.

Holly Bender at the Sierra Club cred-ited Vistra’s decision to close Midwest-ern coal plants, but said its current gas plants had significant emissions of their own. “It’s not something we can just wait another 20 or 30 years for. It needs to be part of the plan today.”

Mr Morgan said he did not foresee future investment in gas, instead shift-ing capital to renewables, batteries and Vistra’s retail electricity business. But gas was necessary to back up intermit-tent output from solar and wind farms.

Energy. Emissions

Vistra boss hits at Biden’s green power deadline

Gregory Meyer — New York

Joe Biden’s goal to eliminate carbon from the electricity sector in 15 years would imperil his presidency, according to the head of Vistra, the leading inde-pendent power producer in the US.

Texas-based Vistra, formed from parts of TXU after the biggest-ever lev-eraged buyout fell into bankruptcy, in September pledged to reduce its carbon emissions to net zero by 2050.

Chief executive Curt Morgan said the plan to reach the same goal for the nation’s electricity by 2035 would be “prohibitively expensive” for consum-ers. “He won’t be in office long if he does that. I think reality will set in when he has serious people sit around the table talking about what is achievable and what’s not.”

The participation of independent power producers will be critical to greening the sector. The companies accounted for two of every five mega-watt hours generated in the US last year, according to the Energy Information Administration. Power producers and

Goal of banishing carbon from

sector in 15 years ‘prohibitively

expensive’ for consumers

Vistra cites estimates suggesting that it will cost $7tn to achieve 90% decarbonisation over 30 yearsStuart Conway/Shell

COMPANIES & MARKETS

Anjli Raval and Attracta MooneyLondon

European oil stocks have been battered this year, with the pandemic-induced price crash adding to companies’ chal-lenges of reversing historical underper-formance while navigating the tricky transition to cleaner fuels.

Faced with this “triple whammy”, as Shell’s Ben van Beurden has called it, the crisis-hit sector’s battle to win back investors has become much tougher.

“What is it going to take for investors to take that leap of faith?” said Luke Parker at consultancy WoodMackenzie. “These companies are all on a journey and they need to strike the right balance between their traditional businesses and new ones. Can they bring investors along with them?”

While the region’s oil majors have set out their goals to achieve net zero emis-sions and shift towards cleaner forms of energy, their ambitions are yet to be matched with investment. As their share prices have dropped this year — notwithstanding a bounce after vaccine developments — specialist renewable energy stocks have surged.

Colin Baines, investment engagement manager at Friends Provident Founda-tion, said that “to be taken seriously and receive a climate premium”, the Euro-pean majors “need to adopt meaningful low-carbon transition plans. Whilst they have done more than their US counterparts, none are transitioning away from oil in any meaningful sense . . . capital expenditure is still overwhelmingly in oil and gas.”

Behind this is the realisation that even if oil executives manage to transform their businesses, they cannot guarantee significant earnings and returns in the next decade.

Despite new climate pledges, compa-nies from Shell and BP to Italy’s Eni and France’s Total used the most recent earnings season to emphasise share-holder handouts and improvements in hydrocarbon businesses as they reiter-ated their focus on lowering costs and more disciplined capital spending.

BP chief executive Bernard Looney, who in August said the company would cut oil production by 40 per cent by 2030 and increase low-carbon invest-ment 10-fold by 2030, tried to convince investors the group was focused above all else on “value creation”. He said: “This is not about altruism or charity.”

Eni and Total said they would defend investor returns, while Shell — after slashing its payout in April for the first time since the war — announced a “new era” of dividend growth.

Mirza Baig, global head of governance and stewardship at Aviva Investors, said this year’s share price falls were “a reflection of the depressed oil price and the shedding of income investors”.

Companies spoke during the most recent quarterly earnings season about divestments of non-core assets and focused oil and gas businesses that would throw off more cash, while emphasising other parts of the business such as petrol stations that have been overlooked for years.

Even as oil companies say their opera-

Europe’s oil majors struggle to bring investors along on renewables ride Big ambitions over clean fuel have yet to be matched with cash while share prices take a battering

Derek Brower — London Myles McCormick — New York

ExxonMobil slashed its spending plans, postponed an earnings growth target and will write off up to $20bn of assets in the fourth quarter as it reviews its portfolio in the wake of this year’s oil price crash.

The biggest US oil producer by volume said yesterday it would spend $16bn-$19bn next year and then $20bn-$25bn annually until 2025, down from an original plan of $30bn-$35bn.

The company said it would write off $17bn-$20bn worth of natural gas assets in western Canada, the US and Argen-tina — all of which will be removed from its development plan.

The latest cuts follow a brutal six months for the US oil industry and Exxon, a company that in the past embodied American corporate power. Once the most valuable company in the world, it is now worth less than local rival Chevron and has reported losses in every quarter this year.

Darren Woods, chief executive, said the “high-grading” of the company’s asset base — getting rid of underper-forming assets and focusing on better ones — would improve profits “and rebuild balance sheet capacity tomanage future commodity price cycles while working to maintain a reliable dividend”.

A target to double earnings by 2025 has been postponed until 2027.

Exxon said the moves would allow it to focus on core growth projects in the Permian Basin of New Mexico and Texas, deepwater developments in Guy-ana and Brazil, and some chemicals developments.

The potential writedowns come little more than a decade after Exxon bought US natural gas producer XTO Energy for $41bn — a deal in which Exxon is consid-ered to have vastly overpaid.

Unlike European rivals such as Royal Dutch Shell and BP, Exxon has refused to cut its dividend payment, which was raised earlier in 2020 for the 37th straight year.

The company is convinced a strategy to continue increasing oil and gas pro-duction will be rewarded by a recovery in the fuels’ prices as demand recovers and other supply growth slows because of under-investment in exploration and production activity.

Exxon has not officially changed its plans to increase production from less than 4m barrels a day now to 5m b/d by 2025, although growth in Permian out-put will probably be slower than had been envisaged.

The oil group reported a net loss of $680m in the three months to the end of September, down from a $3.2bn profit in the same period last year — its third con-secutive quarterly loss.

The company is in the process of sack-ing 14,000 workers globally, or 15 per cent of its headcount, as part of its effort to cut operating costs and protect its dividend.

Exxon’s share price is down by almost half since the start of the year.

Oil & gas

Exxon slashes capex plans and will write off assets of up to $20bn

usually going to fit. But companiesthat are making positive changes in their business model . . . That deserves some merit.”

Some shareholders champion the divestment movement but also believe they have a responsibility to stay invested in the biggest corporate pollut-ers to help clean them up. They acknowledge that traditional oil and gas groups will be vital for the energy sys-tem for a long time to come.

Diandra Soobiah, head of responsible investment at UK pension fund Nest, said big energy companies had an “important role” to play in the energy transition. But investing in oil stocks could become even less attractive for asset managers under the EU’s green finance rules that from next year will impose tougher disclosure require-ments on investors in oil companies.

Some environmental activists and investors, meanwhile, do not believe an oil company can ever be a truly ethical investment, particularly when a string of other options exist, from Danish off-shore wind producer Orsted to Spanish utility Iberdrola. “Why should I wait around until they can prove they are able to make money from all the cleaner energy stuff?” one asset manager said. “There are plenty of other ways I can generate returns for my clients.”

Big Oil targets low-carbon energy

Sources: Bloomberg; Lazard Levelised Cost of Energy Analysis 2020

Stocks indices rebased to Jan 2020 Oil production (m barrels of oil equivalent per day) Cost of renewable power falls ($WMh)

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* Orsted, Equinor, Siemens Gamesa Renewable, Vestas and VereinigteBioEnergie ** Shell, Total, Eni and BP

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GeothermalGas peaking

A good time to be bullishA Biden victory, a Republican senate and a coronavirus vaccine cheer investors

ft.com/video

DECEMBER 1 2020 Section:Companies Time: 30/11/2020 - 18:55 User: jon.wright Page Name: CONEWS2, Part,Page,Edition: EUR, 8, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 9

COMPANIES & MARKETS

Leo Lewis — Tokyo

The head of the Tokyo Stock Exchange has resigned over a debacle that closed the $6tn bourse for a day in earlyOctober and earned its operator the humiliation of a business improvement order from the financial regulator.

The resignation of Koichiro Miyahara as TSE president and chief executive was announced almost two months after the shutdown, the worst outage the exchange has suffered since making the jump to a fully electronic trading system in 1999.

Akira Kiyota, chief executive of the TSE’s owner Japan Exchange Group, told a press conference yesterday that he would take over from Mr Miyahara and also take a 50 per cent cut in salary for the next four months.

Other senior executives will take smaller pay cuts or have been issued with warnings.

“The entire group will do its verybest to prevent a recurrence and restore market trust,” said Mr Kiyota, whose apology echoed the language usedearlier yesterday by the FinancialServices Agency, which issued several

sanctions against JPX and said theincident had risked causing “significant damage” to investor confidence.

After a series of investigations, the outage was traced to a single faulty piece of equipment that was part of theFujitsu-built “Arrowhead” system that handles trading on the TSE.

Although Mr Kiyota said JPX wasnot seeking financial damages from Fujitsu, he added that the Japanese technology group should feel “a

George Saravelos, head of currency strategy at Deutsche Bank, who said conditions were in place for the euro to strengthen against the slipping dollar.

There has been strong gains this past month for riskier currencies. Emerging markets currencies and those with strong links to commodities have also powered higher against the dollar as the more optimistic growth outlook is set to benefit such economies most.

JPMorgan economists expect global growth to gather pace as mass vaccina-tion begins around the middle of 2021.

The Norwegian krone and the Brazil-ian real have both strengthened 8 per cent against the dollar, the South Afri-can rand has gained 5.6 per cent while the New Zealand currency has rallied 6.4 per cent in the last four weeks. Ster-ling, still mired in Brexit uncertainty, crept more than 3 per cent higher.

“For many . . . emerging market cur-rencies, it has been a November to remember,” Goldman Sachs analysts said in a note. “While some pause would not be unreasonable after the move, espe-cially as we head into year-end, a longer run perspective suggests that there is still room for further appreciation.”

strong sense of responsibility”. Theoriginal technical fault spiralled intothe full closure of the TSE and othermarkets operated by JPX in part because of a discrepancy between the manual supplied by Fujitsu and settings that had changed during an update to Arrowhead in 2015.

In its statement announcing thebusiness improvement order, the FSA referred to the exchange’s assurances that it had taken countermeasures in the wake of a previous outage at the TSE in 2018.

The regulator also said that, while the October shutdown had been technical in origin, the exchange’s rules regarding the resumption of trading were inade-quate.

The October closure, which came as Tokyo was building a campaign tolure investors from Hong Kong and establish itself as Asia’s main financial hub, was described at the time by Japan’s finance minister Taro Aso as “deeply deplorable”.

Mr Kiyota’s apology included areference to the terrible timing of the outage given the importance of the Tokyo campaign.

Equities

Tokyo Stock Exchange chief steps down over ‘deeply deplorable’ October outage

Eva Szalay

The dollar was set to post its worst month since July after vaccine break-throughs boosted investor confidence and the global economic outlook, pushing the haven currency to itslowest level since April 2018.

On the final day of November, the US currency has fallen 2.6 per cent against a basket of six major developed market peers since the end of the previous month, deepening its 2020 loss to about 5 per cent.

Investors turned negative on thedollar earlier this year because of aggressive easing policies launched by the US Federal Reserve and due to improved confidence about thetrajectory for the global economy.

After the announcement of successful coronavirus vaccine trials in November, institutional investors have turned even more bearish on the US currency’sprospects on expectations that the Fed will keep its policy extremely loose even as global growth gathers pace.

The dollar is considered a shelter and often rises during times of turbulence in the global economy and in other

Currencies

Dollar set for worst month since Julyas global economic outlook brightens

financial markets. “The improving out-look for global growth combined with strong signals from the Fed that it will maintain loose monetary policy well into the economic recovery have been encouraging a weaker US dollar,” said Lee Hardman, a currency analyst at MUFG Bank in London.

Central bank decisions to makemonetary policy more accommodative

typically weigh on the interest rates in the country’s bond market.

This fall in yields often causesdownward pressure on a currency such as the dollar since it makes it less appealing compared with others.

The euro has nudged about 3 per cent higher, climbing above $1.20 yesterday for the first time since September, when the currency was unable to find asustained foothold above that rate.

This time it is different, according to

‘For many EM currencies, it has been a November to remember. There is room for further appreciation’

Akira Kiyota is taking over as head of the Tokyo Stock Exchange

and Ireland. The UK, meanwhile, announced only in November that it would start its own green giltsprogramme.

Meanwhile, UK-domiciled companies account for a small slice of green bond indices. French companies make up 24 per cent of an iShares exchange traded fund that tracks the green bonds of top-rated borrowers with the US and Ger-many making up about 11 per cent and the UK less than 2 per cent of the debt.

Plans for the UK’s first greensovereign bonds should be a boon to Britain’s market, given the country is a leading issuer and its debt is considered to be among the safest in the world,analysts said.

“Issuers will be inclined to align them-selves with these developments by transforming their entities into climate compatible operations and investors will be encouraged to commit funds to green investment strategies if there is a steady supply of available paper,” said the Climate Bonds Initiative’s latest green bond market report.

Matthew Kuchtyak, an analyst at Moody’s, said Mr Johnson’s 10-point plan made the direction of travel much

clearer by outlining priority areas such as renewable energy and zero-emissions vehicles.

Prior to the announcement, there had been some uncertainty about “the level of commitment,” which had held issuers back, he added.

There are also policy hurdles toovercome. Although London is home to an array of bankers and investorsdedicated to green finance, it is the EU — from which the UK will be fully cut adrift at the end of this year — that sets the standards for the region.

The UK government has said itplans to implement its own “greentaxonomy”, a framework for determin-ing what can be classed as environmen-tally sustainable finance, which will be based on the scientific metrics in the EU’s version.

More “robust” environmental disclo-sure standards will also be mandatory from 2025 to enable investors andbusinesses to better understand and price climate-related risks, the details of which were published last month.

The UK is also set to leave the EU’s system for trading regulatory allow-ances for carbon emissions in January

and is planning to launch its own system linked to the EU’s — if agreed — or else pursue a carbon tax.

There is already substantial expertise in green finance in the City and experts will welcome the greater clarity that new sustainable investing frameworks will bring, said Mr Allen.

While London-based investors have tended to look to mainland Europe for green products, “I would not say that green investors [in the UK] are behind” or less sophisticated than their Euro-pean counterparts, he added.

The euro has to date been the most popular currency for sustainable debt with 42 per cent of all outstandinggreen and sustainability bondsglobally denominated in the currency, compared with just 2 per cent insterling, according to the International Capital Market Association.

The dominance of the euro in part reflects its greater popularity among borrowers from a range of countries for all types of debt issuance but has also been helped by strong policy support for the transition to a greener economy in mainland Europe, said Emre Tiftik, director of sustainability research at the Institute of International Finance.

But the incoming Biden administra-tion in the US could help shift the tide in favour of the UK.

The president-elect is set to focus more resources than his predecessor on making the economy more environ-mentally sustainable.

This could boost the green finance sectors on both sides of the Atlantic, said Mr Tiftik, as London grabs a share of that dollar-denominated issuance.

“Once the dollar starts to become much more dominant, which I foresee, London will benefit,” he added, noting the city’s status as “a great financial intermediary”.

Camilla Hodgson — London

Boris Johnson has injected enthusiasm into the UK’s green bond market but analysts say the country has a challenge ahead to catch up with rivals across the English channel.

Transforming the City of London into the global centre for green finance is a key tenet of the prime minister’s vision for rebuilding the pandemic-stricken economy in a more sustainable way.

His 10-point economic plan unveiled in the Financial Times last month included vows to boost the City’s role in green bonds and carbon trading and to introduce new corporate disclosure requirements.

Analysts said that should help institu-tions in London increase their focus on sustainable finance but added that the UK still had a long way to go.

“There’s no doubt about it, continen-tal Europe is far, far ahead of the UK in terms of green bond issuance,” said Trevor Allen, sustainability research analyst at BNP Paribas.

Still, the prime minister’s plans tell investors that “this is going to be a growth market”, said Mr Allen.

In the context of Brexit, it also signals to European policymakers that the UK is “an ally in climate change,” he added.

The UK is keen to present itself as a green leader ahead of hosting next year’s COP26 climate change summit. But the EU is leading the way in terms of green government bond issuance.

This year, the continent’s benchmark bond issuer, Germany, launched its first green sovereign bonds, following the likes of Poland, France, the Netherlands

London is playing catch-up

with EU on sustainable debt

issuance, warn analysts

‘Once the dollar starts to become muchmore dominant, London will benefit’

Boris Johnson wants to transform the City of London into the global centre for green finance — Alamy

Fixed income. Climate change

Johnson backing gives UK’s lagging green bonds a boost

Green bond sales have explodedCumulative global issuance of green bonds ($bn)

0

200

400

600

800

1,000

2011 14 151312 16 18 19 20*17

Source: Climate Bonds Initiative* Data up to Q3

Anjli Raval and David Sheppard

Members of the Opec cartel and other big oil producers including Russia are trying to bridge a gap over whether to ease their output cuts in January with key members of the alliance urgingcaution as the pandemic still rages, while others are pushing to gradually raise production in 2021.

Ministers from Opec nations began a virtual two-day meeting yesterday,having been buoyed by a rally in oil prices that has lifted Brent crude — the international benchmark — by more than a quarter in a month to nearly $50 a barrel.

The group will be joined by Russia and other non-cartel members as part of the 23-member Opec+ group today.

Positive news around vaccine devel-opments has raised hopes among oil producers that demand will eventually return to normal in 2021 but newlockdowns in Europe and rising case numbers in the US still pose a threat in the coming months for some delegates.

“These market conditions of 2020 are likely to continue in the first quarter of 2021 and therefore we should be cau-tious,” Algeria’s energy minister Abdel-madjid Attar told journalists ahead of the private ministerial talks. “The road to recovery is long and bumpy.”

Opec has worked with Russia and

other oil producing countries outside of the cartel since 2016 to stabilise crude prices and bring supply and demand into balance in times of crisis.

The Opec+ group, which produces more than half the world’s crude oil, agreed in April to record cuts of more than 10 per cent of output or just under 10m barrels a day with plans to gradu-ally return barrels back to the market as the global economy improved.

Producers have already eased the cuts to 7.7m barrels a day but the scheduled return of a further 2m barrels a day in January has been seen as a step too far for some with global oil inventories still swollen and prices stuck between $40 and $45 a barrel. This compares with $60-$70 a barrel before the pandemic.

Saudi Arabia, Opec’s de facto leader, has favoured an extension of theexisting 7.7m barrels a day of cuts by at least three months.

Iran’s oil minister Bijan NamdarZanganeh warned that he did not expect discussions to go smoothly, indicating there may be a split between SaudiArabia and Russia, the two largest pro-ducers in the group. Tensions are also simmering between the kingdom and its Gulf ally, United Arab Emirates.

“Some are against extending the pre-vious decision and this makes the work difficult,” he told a local reporter in Tehran, adding that these countries included UAE, Russia and Kazakhstan. Additional reporting by Najmeh Bozorg-mehr

Commodities

Opec and allies seek agreement on output cuts

The scheduled return of a further 2m barrels a day in January has been seen as a step too far for some

Our globalteam gives you market-moving news and views, 24 hours a dayft.com/markets

DECEMBER 1 2020 Section:Markets Time: 30/11/2020 - 18:24 User: stephen.smith Page Name: MARKETS1, Part,Page,Edition: EUR, 9, 1

10 ★ FINANCIAL TIMES Tuesday 1 December 2020

COMPANIES & MARKETS

S&P Global climbed after agreeing to buy analytics group IHS Markit in an all-stock deal for $44bn.

“Strategically, we think the deal would enhance S&P’s position as a proprietary data and solutions provider, while also reducing the company’s sensitivity to the ratings business,” said UBS analysts, who maintained a “buy” rating and price target of $424.

“Additionally, the timing of the deal may be a positive as we expect organic growth at IHS Markit to accelerate next year while S&P Global faces a softer issuance outlook,” said the bank.

IHS Markit also rose.News that Moderna planned to submit

its Covid-19 vaccine for regulatory approval in the US and the EU sent the Boston-based biotech group higher.

The US Food and Drug Administration’s advisory group is likely to discuss the Moderna jab on December 17, paving the way for distribution in the same month.

Chipmaker Advanced Micro Devices rose following a Reuters report that the US administration was set to add Chinese rival SMIC to a blacklist of alleged military companies.

Ecommerce group Shopify gained after announcing record-setting Black Friday sales of $2.4bn globally, a 75 per cent rise on sales from last year. Ray Douglas

Wall Street LondonEurozone

Kion Group dropped after announcing a capital raising “to accelerate growth after the Covid-19 pandemic”.

The German manufacturer of forklift trucks and warehouse equipment will issue equity equivalent to approximately 11 per cent of the current share capital at a ratio of one new share for every nine existing shares.

Proceeds from this capital increase would be used to reduce the group’s level of debt and end a syndicated revolving credit facility that had been set up in May to bridge “exceptional circumstances”.

Citi analyst Martin Wilkie said: “While the [capital] increase has come as a surprise, we think it will be welcomed in the longer run if it enables Kion to capitalise on the secular growth that we still see in its end markets.”

Plans to reduce staff by about 15 per cent over the next few years helped to send ABN Amro lower.

The Dutch bank said it would cut more than 2,500 jobs and abandon its short-term return-on-equity target of 10 per cent — instead, RoE would be about 8 per cent by 2024.

Banco de Sabadell extended last week’s falls following a regulatory confirmation by Spanish lender BBVA that a potential merger with Sabadell had “come to an end without any agreement”. Ray Douglas

JD Sports rallied on reports that the sports retailer was backing away from rescuing Debenhams.

The department store, which entered administration in April, had already closed some stores and cut thousands of jobs.

A rush to buy homes before the end of a stamp duty holiday helped to push Rightmove higher.

Approvals for mortgages for home purchases jumped to 97,500 in October, the highest since September 2007, Bank of England statistics showed.

HSBC slipped after a Financial Times report that the lender was contemplating a complete exit from US retail banking.

The division made a pre-tax loss of $518m in the first three quarters of this year, following losses of $279m last year and $182m in 2018.

Dunelm rose after RBC Europe upgraded the home furnishings retailer to “outperform” with a target price of £14.50 a share.

After a 20 per cent tumble since mid-October, it represented “a more attractive entry point to buy a growing, well-managed retailer with a range advantage and which is well placed to make further enhanced cash returns to shareholders”, said analyst Richard Chamberlain.

Energy groups tracked oil prices lower with BP and Royal Dutch Shell both down. Ray Douglas

3 London’s FTSE 100 has best month since 19893 Worst month in four years for haven asset gold3 Oil sinks as Opec sets about discussing productions levels

UK stocks had the best month in more than three decades after a dramatic rally powered by Covid-19 vaccine breakthroughs.

In the final day of the month, the blue-chip FTSE 100 index, which fell 1.6 per cent, was up 12.4 per cent in November for its best performance since 1989.

The FTSE was just one of the global stock benchmarks heading for record gains, despite equities drifting lower throughout the day as investors took some profits.

“Time to turn positive on the UK,” said Sebastien Galy, macro strategist at Nordea Asset Management, noting that the country’s stocks were lagging behind expected earnings.

London’s blue-chip benchmark had been swept up in a global surge in stocks.

The FTSE All-World index lost 1 per cent yesterday but was up 12.1 per cent this month, having touched an all-time high on Friday. Europe’s benchmark Stoxx 600 index sank 1 per cent yesterday, having risen 13.7 per cent in November.

Global investor sentiment had been lifted by optimism following Joe Biden’s victory in the US presidential election and a string of positive announcements regarding coronavirus jabs.

On Wall Street, the S&P 500 was down 0.7 per cent at lunchtime in New York but was also heading for a strong month, up

more than 10 per cent in November — its best monthly performance since April.

Markets were “taking a breather . . . after a hard and fast rally showed some signals that equities were becoming overbought”, said Supriya Menon, senior multi-asset strategist at Pictet Asset Management.

Such signs, Ms Menon said, included the breakneck pace of investment flows into equity funds, amounting to a record $89bn across three weeks this month, according to Bank of America data.

But there may be more to come, she added. Pictet calculates that about $1.2tn

Inflation would remain quiescent and low rates globally would help keep long-term Treasury yields capped.

In this scenario, inflation-protected US government debt could once again prove disappointing.

The burst of investor love for emerg-ing markets is harder to argue with.

Although the MSCI EM index is up over 10 per cent since summer — almost twice the S&P 500’s gain — it still trades at nearly half the p/e ratio. This discount seems excessive by historical standards. But EMs do have a nasty way of disap-pointing when optimism is this high.

One of the most contrarian invest-ment themes of 2021 could be to short volatility. In other words, sellderivatives contracts that provide other investors with insurance against stock market turbulence.

Although risky, the severity of the market mayhem of 2020 means that many volatility sellers have been carted out and investors are still paying a healthy premium for protection.

Finally, sentiment around the dollar is already so bleak that it might betempting to think the US currency will actually strengthen slightly in 2021.

But perhaps the biggest immediate uncertainty for financial markets is the upcoming Senate races in Georgia. If the Democrats triumph and win control of both houses of Congress and the White House, they could pursue a far more ambitious policy agenda.

That is likely to mean a greater fiscal stimulus coupled with sweeping tax increases and a re-regulation drive.

Given how much this is at odds with current expectations, this would almost certainly lead to market upheaval.

robin.wigglesworth@ft.com

rushed into the relative safety of money market funds between March and May as the virus spread across the globe.

Haven assets continued to fall out of favour with gold slipping 0.6 per cent to $1,778 an ounce. The metal’s price has fallen more than 5 per cent in November, heading for its worst month in four years.

Brent crude, the international oil benchmark, fell 1.4 per cent to $47.52 a barrel after leading oil-producing nations failed to agree on whether to delay a planned supply increase ahead of a crucial two-day Opec meeting. Naomi Rovnick and Hudson Lockett

What you need to know

Worst month for gold in four years

Source: Refinitiv

Gold price ($ per troy oz, monthly % change)

Nove 2020 is month-to-date move

-10

-5

0

5

10

15

2015 16 17 18 19 20

The day in the markets

Markets update

US Eurozone Japan UK China BrazilStocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp BovespaLevel 3605.52 1503.63 26433.62 6266.19 3391.76 109611.10% change on day -0.90 -0.95 -0.79 -1.59 -0.49 -0.87Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $Level 91.652 1.195 104.005 1.335 6.583 5.328% change on day -0.150 0.000 0.000 0.000 0.000 0.000Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bondYield 0.848 -0.573 0.025 0.304 3.263 7.385Basis point change on day 0.000 1.600 0.050 2.200 -5.000 -11.300World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX)Level 406.79 47.37 44.80 1779.30 23.14 3354.60% change on day -1.07 -1.86 -1.71 -1.55 -0.96 1.33Yesterday'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 FTSE 100 index

| | | | | | | | | | | | | | | | | | | |

Sep 2020 Nov3200

3360

3520

3680

| | | | | | | | | | | | | | | | | | | |

Sep 2020 Nov1280

1360

1440

1520

| | | | | | | | | | | | | | | | | | | |

Sep 2020 Nov5440

5760

6080

6400

6720

Biggest movers% US Eurozone UK

Ups

Ihs Markit Ltd 7.92Coty 6.97Advanced Micro Devices 3.89Xilinx 3.75Qorvo 2.66

Aegon 4.12Seadrill 2.93Randstad 2.53A.p. Moller - Maersk B 2.22Orkla 1.97

Jd Sports Fashion 5.86Spirax-sarco Eng 2.63Experian 2.36London Stock Exchange 2.35Auto Trader 2.26

%

Dow

ns

Pioneer Natural Resource Co -5.19Eog Resources -5.13Hollyfrontier -4.65Dxc Technology -4.64Gap (the) -4.60

Prices taken at 17:00 GMT

B. Sabadell -6.36Repsol -5.04Unicredit -4.96Amadeus It -4.77Raiffeisen Bank Internat -4.18Based on the constituents of the FTSE Eurofirst 300 Eurozone

Phoenix Holdings -8.83Compass -6.63Bp -5.80Royal Dutch Shell -5.35Fresnillo -5.35

All data provided by Morningstar unless otherwise noted.

Robin WigglesworthMarkets Insight

T his is the time of year when financial analysts figura-tively gut the global econ-omy and examine the entrails to divine what the

next year might hold. Whatis always a difficult exercise looksparticularly hopeless right now.

It is tempting to mock the tsunamiof year-ahead outlook that gushes outof investment banks’ research depart-ments this time every year. When some-one turns out to have nailed a prediction for where bond yields or the stockmarket are heading, it is often more down to luck than forecasting ability.

It is safe to say no one saw how 2020 would shape up, for example. But truth-fully, even if an analyst had enjoyed a spell of divine revelation and been told by the sellside gods that the world would suffer from its worst pandemic in acentury, it is likely they would still have struggled to predict where markets have ended up this year.

Nonetheless, although most analysts will admit to the fruitlessness andfrustration of having to pump out year-ahead forecasts, the exercise itself isvaluable. It helps to construct a mental framework and the value is in the thoughtfulness of the analysis, not the price level targets or yield forecasts.

Moreover, it gives analysts an excuse to spend quality time with theirinvestment manager clients, even if it will have to be over the Skype, Zoom, Teams or BlueJeans apps this year.

Unfortunately, there is a relatively bland consensus about what the current year holds with nary a single analyst diverging meaningfully from the central scenario. That is, a testing few months as the second wave takes its economic toll but then a strong economic recovery in

Contrarian moves for investors that threaten to upset the consensus

2021 powered by vaccines and ultra-easy monetary policy. This is expected to lead to higher stock markets, somewhat higher long-term bond yields, a weaker dollar and another good year forcorporate credit. Plus ça change.

The only disagreements surround just how strong the equity rally will be, whether value or growth stocks will dominate, how high the 10-year US Treasury yield might venture, whether the dollar will slump or merely slink lower, and whether junk bonds or emerging market debt will do best.

So for the record, here are somedeliberately (if only slightly) contrarian

suggestions for where financial markets could surprise the consensus in the coming year.

Equities are likely to climb higher but pricey growth stocks could continue to outpace cheaper value stocks. This is partly because the Democrats will prob-ably eschew a full-on assault on fast-growing Big Tech companies. Growth stocks will also benefit if Treasury yields do not climb much more. These arevalued at a premium because of future earnings rises. If yields increase, these earnings are discounted by higher rates.

For sure, the shape of the Treasury curve will fluctuate as investors wrestle with the ebb and flow of economic data.

But under a contrarian scenario, it will not end the year meaningfully steeper and could easily flatten.

But perhaps the biggest immediate uncertainty for financial markets is the Senate races in Georgia

DECEMBER 1 2020 Section:Markets Time: 30/11/2020 - 19:02 User: stephen.smith Page Name: MARKETS2, Part,Page,Edition: EUR, 10, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 11

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.90%

Nasdaq Composite

-0.60%

Dow Jones Ind

-1.30%

FTSE 100

-1.59%

FTSE Eurofirst 300

-0.95%

Nikkei

-0.79%

Hang Seng

-2.06%

FTSE All World $

-1.16%

$ per €

No change

$ per £

No change

¥ per $

No change

£ per €

No change

Oil Brent $ Sep

-0.66%

Gold $

-1.55%

Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparisonAMERICAS EUROPE ASIAOct 31 - - Index All World Oct 31 - Nov 30 Index All World Oct 31 - Nov 30 Index All World Oct 31 - Nov 30 Index All World Oct 31 - Nov 30 Index All World Oct 31 - Nov 30 Index All World

S&P 500 New York

3,269.96

3,614.29

Day -0.90% Month 10.29% Year 14.82%

Nasdaq Composite New York

11,185.59

12,143.43

Day -0.60% Month 11.23% Year 40.06%

Dow Jones Industrial New York

26,659.11

29,590.49

Day -1.30% Month 11.47% Year 5.31%

S&P/TSX COMP Toronto

15,580.64

17,297.14

Day -0.57% Month 11.00% Year 1.49%

IPC Mexico City

37,393.71

41,630.94

Day -0.10% Month 12.67% Year -2.67%

Bovespa São Paulo

96,582.16

110,307.98

Day -0.24% Month 17.38% Year 1.89%

FTSE 100 London

5,577.27

6,341.88

Day -1.59% Month 12.93% Year -14.27%

FTSE Eurofirst 300 Europe

1,325.47

1,514.61

Day -0.95% Month 13.91% Year -5.26%

CAC 40 Paris

4,594.24

5,579.24

Day -0.34% Month 21.44% Year -5.52%

Xetra Dax Frankfurt

11,556.48

13,421.60

Day 0.32% Month 1.98% Year NaN%

Ibex 35 Madrid

6,452.20

8,137.10

Day -1.39% Month 25.18% Year -13.63%

FTSE MIB Milan

17,943.11

22,289.82

Day -1.30% Month 23.50% Year -4.72%

Nikkei 225 Tokyo

23,418.51

26,433.62

Day -0.79% Month 13.29% Year 13.48%

Hang Seng Hong Kong

24,107.42

26,341.49

Day -2.06% Month 7.22% Year 0.06%

Shanghai Composite Shanghai

3,224.53

3,391.76

Day -0.49% Month 3.64% Year 18.10%

Kospi Seoul

2,267.15

2,591.34

Day -1.60% Month 11.38% Year 24.11%

FTSE Straits Times Singapore

2,423.84

2,805.95

Day -1.75% Month 14.18% Year -12.39%

BSE Sensex Mumbai

39,749.85

44,149.72

Day -0.25% Month 9.97% Year 8.15%

Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous

Argentina Merval 55070.91 55427.26Australia All Ordinaries 6742.10 6816.80

S&P/ASX 200 6517.80 6601.10S&P/ASX 200 Res 4711.80 4777.30

Austria ATX 2553.78 2598.96Belgium BEL 20 3690.66 3719.36

BEL Mid 8171.52 8221.08Brazil IBovespa 110307.98 110575.47Canada S&P/TSX 60 1031.48 1038.07

S&P/TSX Comp 17297.14 17396.56S&P/TSX Div Met & Min 616.57 604.16

Chile S&P/CLX IGPA Gen 20641.73 20593.35China FTSE A200 13160.07 13228.28

FTSE B35 9000.71 8988.96Shanghai A 3555.23 3572.44Shanghai B 238.00 244.68Shanghai Comp 3391.76 3408.31Shenzhen A 2354.22 2357.88Shenzhen B 1033.11 1025.42

Colombia COLCAP 1261.74 1263.04Croatia CROBEX 2013.05 2011.29

Cyprus CSE M&P Gen 68.46 68.68Czech Republic PX 966.44 968.32Denmark OMXC Copenahgen 20 1405.93 1401.59Egypt EGX 30 10943.35 11009.27Estonia OMX Tallinn 1284.33 1256.97Finland OMX Helsinki General 10732.68 10833.32France CAC 40 5579.01 5598.18

SBF 120 4411.76 4428.16Germany M-DAX 29470.77 29374.63

TecDAX 3166.97 3128.52XETRA Dax 13377.71 13335.68

Greece Athens Gen 736.92 736.60FTSE/ASE 20 1753.54 1753.75

Hong Kong Hang Seng 26341.49 26894.68HS China Enterprise 10546.47 10790.30HSCC Red Chip 3747.19 3882.81

Hungary Bux 38782.16 39308.90India BSE Sensex 44149.72 44259.74

Nifty 500 10719.05 10674.05Indonesia Jakarta Comp 5612.42 5783.34Ireland ISEQ Overall 7184.75 7224.70Israel Tel Aviv 125 1530.76 1538.52

Italy FTSE Italia All-Share 23962.70 24270.63FTSE Italia Mid Cap 36836.63 37168.43FTSE MIB 22060.98 22352.46

Japan 2nd Section 6502.23 6500.22Nikkei 225 26433.62 26644.71S&P Topix 150 1479.61 1504.58Topix 1754.92 1786.52

Jordan Amman SE 1573.46 1570.28Kenya NSE 20 1758.05 1781.09Kuwait KSX Market Index 6633.44 6603.51Latvia OMX Riga 1114.11 1117.66Lithuania OMX Vilnius 774.12 769.63Luxembourg LuxX 1249.63 1255.22Malaysia FTSE Bursa KLCI 1562.71 1607.59Mexico IPC 41630.94 41674.30Morocco MASI 10888.99 11032.39Netherlands AEX 610.80 611.67

AEX All Share 883.91 888.09New Zealand NZX 50 12768.52 12639.83Nigeria SE All Share 34885.51 34803.00Norway Oslo All Share 1017.37 1006.88Pakistan KSE 100 41068.82 40807.09

Philippines Manila Comp 6791.46 6927.75Poland Wig 52579.07 53302.48Portugal PSI 20 4637.63 4651.82

PSI General 3443.31 3454.87Romania BET Index 9286.11 9252.68Russia Micex Index 3107.58 3142.68

RTX 1281.97 1302.43Saudi-Arabia TADAWUL All Share Index 8747.09 8708.59Singapore FTSE Straits Times 2805.95 2855.82Slovakia SAX 343.80 341.83Slovenia SBI TOP - -South Africa FTSE/JSE All Share 57091.89 57822.50

FTSE/JSE Res 20 52703.42 52804.55FTSE/JSE Top 40 52375.50 53021.58

South Korea Kospi 2591.34 2633.45Kospi 200 346.05 352.73

Spain IBEX 35 8076.90 8190.70Sri Lanka CSE All Share 6243.76 6180.86Sweden OMX Stockholm 30 1918.58 1937.09

OMX Stockholm AS 759.05 762.42Switzerland SMI Index 10476.43 10501.18

Taiwan Weighted Pr 13722.89 13867.09Thailand Bangkok SET 1408.31 1437.78Turkey BIST 100 116840.94 116315.98UAE Abu Dhabi General Index 4964.93 4985.87UK FT 30 2439.40 2451.70

FTSE 100 6266.19 6367.58FTSE 4Good UK 5877.35 5968.16FTSE All Share 3542.87 3593.68FTSE techMARK 100 5934.80 5981.83

USA DJ Composite 9880.52 9997.83DJ Industrial 29522.83 29910.37DJ Transport 12454.77 12561.43DJ Utilities 862.07 873.18Nasdaq 100 12193.49 12258.21Nasdaq Cmp 12132.71 12205.85NYSE Comp 14001.46 14198.50S&P 500 3605.52 3638.35Wilshire 5000 37714.71 38057.37

Venezuela IBC 891463.60 800859.90Vietnam VNI 1003.08 1010.22

Cross-Border DJ Global Titans ($) 417.09 421.31Euro Stoxx 50 (Eur) 3507.48 3527.79Euronext 100 ID 1098.84 1103.08FTSE 4Good Global ($) 8853.49 8928.41FTSE All World ($) 406.42 411.17FTSE E300 1503.63 1518.10FTSE Eurotop 100 2825.34 2859.65FTSE Global 100 ($) 2353.09 2372.89FTSE Gold Min ($) 2266.27 2234.08FTSE Latibex Top (Eur) 4440.00 4432.20FTSE Multinationals ($) 2576.90 2575.34FTSE World ($) 721.54 729.49FTSEurofirst 100 (Eur) 3845.89 3895.23FTSEurofirst 80 (Eur) 4784.05 4832.56MSCI ACWI Fr ($) 623.76 621.32MSCI All World ($) 2601.45 2590.15MSCI Europe (Eur) 1594.45 1587.16MSCI Pacific ($) 3025.94 3012.22S&P Euro (Eur) 1619.77 1636.01S&P Europe 350 (Eur) 1550.05 1564.98S&P Global 1200 ($) 2842.90 2875.23Stoxx 50 (Eur) 3068.64 3090.22

(c) Closed. (u) Unavaliable. † Correction. ♥ Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERSAMERICA LONDON EURO MARKETS TOKYOACTIVE STOCKS stock close Day's

traded m's price changeApple 70.1 118.86 2.27Amazon.com 62.7 3141.47 -53.87Advanced Micro Devices 36.3 90.58 3.39Microsoft 27.1 211.57 -3.66Salesforce.com 21.9 239.17 -8.46Boeing 18.5 212.60 -3.90Facebook 17.9 273.15 -4.67Nvidia 16.5 525.57 -4.88Pfizer 11.6 38.12 0.89Alphabet 10.1 1759.02 -34.18

BIGGEST MOVERS Close Day's Day'sprice change chng%

UpsIhs Markit Ltd 99.91 7.33 7.92Coty 7.37 0.48 6.97Advanced Micro Devices 90.58 3.39 3.89Xilinx 142.65 5.16 3.75Qorvo 154.10 3.99 2.66

DownsPioneer Natural Resource Co 104.36 -5.71 -5.19Eog Resources 48.79 -2.64 -5.13Hollyfrontier 23.77 -1.16 -4.65Dxc Technology 22.20 -1.08 -4.64Gap (the) 20.75 -1.00 -4.60

ACTIVE STOCKS stock close Day'straded m's price change

Unilever 624.4 4571.00 -15.00Astrazeneca 340.4 7805.00 35.00Diageo 326.9 2880.00 -53.00Phoenix Holdings 235.0 716.80 -69.40Fresnillo 201.7 1052.50 -59.50Bp 199.6 247.65 -15.25Rio Tinto 186.6 4834.00 -88.50National Grid 180.0 848.40 -25.40Glaxosmithkline 175.5 1370.00 -13.60British American Tobacco 175.3 2639.50 -37.50

BIGGEST MOVERS Close Day's Day'sprice change chng%

UpsJd Sports Fashion 776.20 43.00 5.86Hipgnosis Songs Fund 109.50 5.00 4.78Aj Bell 423.00 18.00 4.44Gcp Student Living 146.60 5.60 3.97Henderson Smaller Companies Investment Trust 972.00 35.00 3.74

DownsPhoenix Holdings 716.80 -69.40 -8.83Compass 1324.00 -94.00 -6.63Ninety One 211.60 -14.00 -6.21Carnival 1327.50 -85.50 -6.05Bp 247.65 -15.25 -5.80

ACTIVE STOCKS stock close Day'straded m's price change

Unicredit 292.4 8.64 -0.45Intesa Sanpaolo 287.2 1.93 -0.02Iberdrola 284.4 11.45 -0.03Enel 279.4 8.37 -0.13Unilever 275.1 57.16 1.03Repsol 269.6 8.06 -0.43Total 238.6 36.70 -1.00Eni 217.8 8.30 -0.28Asml Holding 210.7 364.95 -1.40Generali Ass 205.2 14.32 -0.15

BIGGEST MOVERS Close Day's Day'sprice change chng%

UpsAegon 3.18 0.13 4.12Kinnevik Ab Ser. B 41.74 1.38 3.43A.p. M__ller - M__rsk A A/s 1595.18 47.04 3.04Seadrill 0.21 0.01 2.93Randstad Nv 52.72 1.30 2.53

DownsB. Sabadell 0.33 -0.02 -6.36Repsol 8.06 -0.43 -5.04Unicredit 8.64 -0.45 -4.96Amadeus It 57.46 -2.88 -4.77Raiffeisen Bank Internat. Ag 16.06 -0.70 -4.18

ACTIVE STOCKS stock close Day'straded m's price change

Softbank . 1390.5 7272.00 22.00Sony 872.5 9704.00 -108.00Softbank 687.6 1284.50 -2.50Toyota Motor 654.7 6999.00 -253.00Fast Retailing Co., 606.5 85940.00 1810.00M3,. 501.7 9622.00 466.00Sumco 427.1 2114.00 166.00Mitsubishi Ufj Fin,. 420.9 448.50 -14.80Itochu 404.0 2758.50 -70.50Sumitomo Mitsui Fin,. 366.5 3032.00 -113.00

BIGGEST MOVERS Close Day's Day'sprice change chng%

UpsSumco 2114.00 166.00 8.52M3,. 9622.00 466.00 5.09Chugai Pharmaceutical Co., 5044.00 193.00 3.98Cyberagent,. 7150.00 220.00 3.17Fast Retailing Co., 85940.00 1810.00 2.15

DownsMitsui Eng & Shipbuilding Co., 341.00 -30.00 -8.09Tokai Carbon Co., 1146.00 -98.00 -7.88Daiwa House Industry Co., 3200.00 -241.00 -7.00Tobu Railway Co., 3130.00 -230.00 -6.85Ntn 218.00 -16.00 -6.84

Based on the constituents of the S&P500 Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index

Nov 30 %Chg %ChgFTSE 100 price(p) week ytdWinnersAntofagasta 1253.50 9.8 32.6Flutter Entertainment 13705.00 9.2 47.5Avast 508.00 6.7 7.0Gvc Holdings 1035.50 6.6 12.7Glencore 211.85 6.1 -12.1Schroders 3219.00 5.6 -5.0Unilever 4571.00 4.7 5.2Associated British Foods 2110.00 4.5 -18.2Sage 605.00 4.4 -19.1Burberry 1729.00 3.9 -21.4Pearson 647.00 3.3 -0.5Scottish Mortgage Investment Trust 1096.00 2.9 87.0

LosersAveva 3392.00 -20.0 -10.3Intertek 5522.00 -9.1 -5.2Phoenix Holdings 716.80 -8.6 -5.0Taylor Wimpey 153.95 -8.2 -21.9Imperial Brands 1361.00 -7.9 -27.5National Grid 848.40 -7.7 -10.7Persimmon 2656.00 -7.7 -2.7Prudential 1169.50 -7.5 -20.1Experian 2646.00 -7.5 3.8Int Consolidated Airlines S.a. 154.20 -7.4 -39.8Homeserve 1045.00 -7.4 -18.5Informa 530.20 -5.9 -38.9

Nov 30 %Chg %ChgFTSE 250 price(p) week ytdWinnersCarnival 1327.50 10.1 -63.6Pershing Square Holdings Ltd 2455.00 8.4 65.7Micro Focus Int 352.70 6.8 -68.3Baillie Gifford Us Growth Trust 285.00 6.7 102.1Petropavlovsk 27.45 6.6 116.1Tui Ag 500.80 6.1 -49.5Hipgnosis Songs Fund 109.50 5.8 5.8Udg Healthcare 791.00 5.5 -1.9Playtech 384.00 5.5 -5.3Wood (john) 298.00 5.4 -23.0Ssp 330.00 5.0 -50.2Rhi Magnesita N.v. 3258.00 4.8 -14.7

LosersIndivior 101.10 -23.1 155.9Ao World 348.50 -16.9 306.2Future 1688.00 -15.5 15.5Virgin Money Uk 126.50 -15.1 -33.8Frasers 421.80 -10.9 -8.2Mitchells & Butlers 211.00 -9.6 -53.8Iwg 322.80 -9.1 -26.6Capita 42.45 -9.0 -74.8Marshalls 708.00 -8.9 -19.2Bellway 2831.00 -8.5 -26.5Cmc Markets 387.50 -8.2 162.5Provident Fin 277.20 -7.5 -40.3

Nov 30 %Chg %ChgFTSE SmallCap price(p) week ytdWinnersMccoll's Retail 30.90 29.6 -18.7Pharos Energy 16.70 20.2 -68.9Gulf Marine Services 8.35 11.9 13.6Lsl Property Services 232.00 11.5 -14.1Amigo Holdings 9.74 10.7 -86.2Elementis 120.00 10.5 -35.0Goco 122.00 9.9 17.3Mcbride 66.80 9.5 -24.1Hansa Investment 197.00 9.1 4.3Palace Capital 224.00 8.7 -31.3Town Centre Securities 115.00 7.5 -47.2Norcros 205.00 7.3 -26.3

LosersIndivior 101.10 -23.1 155.9Ao World 348.50 -16.9 306.2Reach 137.00 -16.5 3.4Saga 247.40 -14.7 -66.4Marston's 60.85 -13.5 -53.0Go-ahead 807.00 -12.1 -63.5Hyve 83.05 -11.4 -71.2Arrow Global 171.60 -10.4 -35.5De La Rue 160.00 -10.2 26.6Bank Of Georgia 1120.00 -9.7 -32.6Mckay Securities 192.00 -9.0 -31.1Cmc Markets 387.50 -8.2 162.5

Nov 30 %Chg %ChgIndustry Sectors price(p) week ytdWinnersPersonal Goods 38541.88 4.7 1.4Oil Equipment & Services 5496.03 4.5 -Travel & Leisure 7767.82 2.5 -Mining 19427.47 2.3 3.0Software & Computer Services 1870.47 2.0 -Industrial Metals 3927.48 2.0 5.2Food Producers 6639.54 1.8 -Mobile Telecommunications 2825.40 1.3 -15.3Equity Investment Instruments 12128.78 1.2 10.7Health Care Equip.& Services 6410.75 1.1 -Industrial Transportation 2265.01 0.9 -6.9Index - Technology Hardware & Equipment 2038.84 0.4 4.2

LosersGas Water & Multiutilities 4717.85 -4.8 -Life Insurance 6590.74 -4.5 -Automobiles & Parts 3589.32 -3.7 -Tobacco 27571.36 -3.5 -Real Estate & Investment Servic 2534.95 -3.0 -Support Services 9427.90 -2.8 -0.1Aerospace & Defense 3604.35 -2.5 -Household Goods 17158.50 -2.5 -4.3Fixed Line Telecommunication 1437.97 -2.3 -General Retailers 2404.30 -2.3 -4.0Chemicals 12354.30 -2.3 -7.3General Industrials 6133.51 -1.8 -4.0

Based on last week's performance. †Price at suspension.

CURRENCIES

DOLLAR EURO POUNDClosing Day's Closing Day's Closing Day's

Nov 30 Currency Mid Change Mid Change Mid Change

DOLLAR EURO POUNDClosing Day's Closing Day's Closing Day's

Nov 30 Currency Mid Change Mid Change Mid Change

DOLLAR EURO POUNDClosing Day's Closing Day's Closing Day's

Nov 30 Currency Mid Change Mid Change Mid Change

DOLLAR EURO POUNDClosing Day's Closing Day's Closing Day's

Nov 30 Currency Mid Change Mid Change Mid ChangeArgentina Argentine Peso 81.0398 - 96.8298 - 108.1482 -Australia Australian Dollar 1.3517 - 1.6151 - 1.8039 -Bahrain Bahrainin Dinar 0.3771 - 0.4505 - 0.5032 -Bolivia Bolivian Boliviano 6.9100 - 8.2564 - 9.2214 -Brazil Brazilian Real 5.3278 - 6.3659 - 7.1100 -Canada Canadian Dollar 1.2976 - 1.5504 - 1.7316 -Chile Chilean Peso 766.4200 - 915.7517 - 1022.7935 -China Chinese Yuan 6.5825 - 7.8651 - 8.7844 -Colombia Colombian Peso 3611.6700 - 4315.3801 - 4819.8021 -Costa Rica Costa Rican Colon 605.4450 - 723.4118 - 807.9711 -Czech Republic Czech Koruna 21.9107 - 26.1798 - 29.2400 -Denmark Danish Krone 6.2277 - 7.4412 - 8.3110 -Egypt Egyptian Pound 15.6755 0.0662 18.7298 0.0791 20.9191 0.0884Hong Kong Hong Kong Dollar 7.7508 - 9.2609 - 10.3434 -Hungary Hungarian Forint 302.4062 - 361.3280 - 403.5634 -India Indian Rupee 74.0563 - 88.4856 - 98.8286 -

Indonesia Indonesian Rupiah 14090.0000 - 16835.3569 - 18803.2484 -Israel Israeli Shekel 3.3155 - 3.9615 - 4.4246 -Japan Japanese Yen 104.0050 - 124.2697 - 138.7955 -..One Month 104.0049 -0.0002 124.2697 0.0001 138.7954 -0.0001..Three Month 104.0048 -0.0003 124.2698 0.0002 138.7954 -0.0002..One Year 104.0044 -0.0011 124.2701 0.0008 138.7954 -0.0005Kenya Kenyan Shilling 110.0500 - 131.4925 - 146.8626 -Kuwait Kuwaiti Dinar 0.3055 - 0.3650 - 0.4077 -Malaysia Malaysian Ringgit 4.0690 - 4.8618 - 5.4301 -Mexico Mexican Peso 20.0820 - 23.9948 - 26.7996 -New Zealand New Zealand Dollar 1.4213 - 1.6982 - 1.8967 -Nigeria Nigerian Naira 386.4300 - 461.7232 - 515.6938 -Norway Norwegian Krone 8.8250 - 10.5444 - 11.7770 -Pakistan Pakistani Rupee 159.3500 - 190.3982 - 212.6538 -Peru Peruvian Nuevo Sol 3.6055 - 4.3080 - 4.8116 -Philippines Philippine Peso 48.0800 - 57.4481 - 64.1631 -

Poland Polish Zloty 3.7530 - 4.4842 - 5.0084 -Romania Romanian Leu 4.0790 - 4.8737 - 5.4434 -Russia Russian Ruble 76.0650 - 90.8857 - 101.5093 -Saudi Arabia Saudi Riyal 3.7505 - 4.4813 - 5.0051 -Singapore Singapore Dollar 1.3379 - 1.5985 - 1.7854 -South Africa South African Rand 15.2682 - 18.2430 - 20.3755 -South Korea South Korean Won 1103.3500 - 1318.3302 - 1472.4292 -Sweden Swedish Krona 8.4967 - 10.1522 - 11.3388 -Switzerland Swiss Franc 0.9048 - 1.0811 - 1.2075 -Taiwan New Taiwan Dollar 28.5005 - 34.0536 - 38.0341 -Thailand Thai Baht 30.3000 - 36.2037 - 40.4356 -Tunisia Tunisian Dinar 2.7268 - 3.2581 - 3.6389 -Turkey Turkish Lira 7.8265 - 9.3514 - 10.4445 -United Arab Emirates UAE Dirham 3.6732 - 4.3888 - 4.9018 -United Kingdom Pound Sterling 0.7493 - 0.8953 - - -..One Month 0.7494 0.0000 0.8953 0.0000 - -

..Three Month 0.7495 0.0000 0.8952 0.0000 - -

..One Year 0.7496 0.0000 0.8948 0.0000 - -United States United States Dollar - - 1.1948 - 1.3345 -..One Month - - 1.1947 -0.1397 1.3346 0.0000..Three Month - - 1.1946 -0.1397 1.3346 0.0000..One Year - - 1.1938 -0.1397 1.3348 0.0000Venezuela Venezuelan Bolivar Fuerte - - - - - -Vietnam Vietnamese Dong 23161.5000 - 27674.3832 - 30909.2258 -European Union Euro 0.8369 - - - 1.1169 -..One Month 0.8368 0.0000 - - 1.1168 0.0000..Three Month 0.8366 0.0000 - - 1.1168 0.0000..One Year 0.8359 0.0000 - - 1.1163 0.0000

Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata

FTSE ACTUARIES SHARE INDICES UK SERIESwww.ft.com/equities

Produced in conjunction with the Institute and Faculty of Actuaries£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D TotalNov 28 chge% Index Nov 27 Nov 26 ago yield% Cover ratio adj Return

FTSE 100 (100) 6367.58 0.07 5532.14 6362.93 6391.09 7416.43 3.85 1.54 16.87 197.02 6075.26FTSE 250 (250) 19462.71 0.34 16909.14 19396.34 19569.39 21023.55 2.84 1.23 28.53 323.29 15430.60FTSE 250 ex Inv Co (181) 19854.97 0.21 17249.94 19813.61 20049.93 22312.44 3.01 1.29 25.86 288.49 16057.26FTSE 350 (350) 3620.72 0.12 3145.67 3616.32 3635.25 4161.67 3.67 1.50 18.22 102.67 6885.12FTSE 350 ex Investment Trusts (280) 3528.06 0.07 3065.17 3525.42 3545.41 4110.30 3.76 1.41 18.83 101.74 3462.07FTSE 350 Higher Yield (145) 2840.17 0.05 2467.54 2838.66 2863.36 3582.14 5.35 1.37 13.62 113.44 5931.56FTSE 350 Lower Yield (205) 4192.19 0.19 3642.16 4184.18 4191.17 4413.60 1.95 1.85 27.85 73.69 4958.92FTSE SmallCap (257) 5912.50 0.35 5136.76 5892.02 5922.42 5621.21 3.50 -1.24 -23.08 121.59 9383.50FTSE SmallCap ex Inv Co (142) 4633.10 -0.21 4025.22 4642.84 4674.87 4541.12 3.80 -1.00 -26.38 68.77 7688.77FTSE All-Share (607) 3593.68 0.13 3122.18 3589.04 3607.81 4104.54 3.66 1.41 19.40 100.87 6903.23FTSE All-Share ex Inv Co (422) 3466.39 0.07 3011.59 3463.99 3483.71 4025.61 3.76 1.37 19.47 98.97 3454.76FTSE All-Share ex Multinationals (538) 1141.97 0.12 822.30 1140.61 1147.08 1236.20 3.13 1.22 26.21 21.98 2282.02FTSE Fledgling (91) 9892.09 0.51 8594.22 9841.86 9818.44 9523.15 2.78 0.00 97722.7

3199.41 20318.30

FTSE Fledgling ex Inv Co (43) 12025.08 1.42 10447.36 11856.21 11810.78 11250.59 3.08 3.74 8.68 163.45 24131.48FTSE All-Small (348) 4098.91 0.36 3561.12 4084.35 4103.76 3899.87 3.46 -1.19 -24.40 84.26 8345.68FTSE All-Small ex Inv Co (185) 3465.10 -0.15 3010.47 3470.20 3492.70 3388.33 3.77 -0.85 -31.34 51.23 7284.09FTSE AIM All-Share (713) 1039.01 0.09 902.69 1038.03 1031.76 923.81 0.98 0.29 351.26 6.93 1192.53

FTSE Sector IndicesOil & Gas (12) 4838.93 -0.04 4204.05 4840.69 4883.53 8443.74 6.39 1.19 13.11 308.86 5443.64Oil & Gas Producers (9) 4684.30 -0.02 4069.71 4685.17 4726.07 8189.24 6.49 1.19 12.99 303.82 5464.26Oil Equipment Services & Distribution (3) 5392.18 -1.11 4684.71 5452.49 5539.78 8347.60 0.21 17.16 27.89 11.22 4648.39Basic Materials (22) 6541.70 0.43 5683.41 6513.94 6563.34 6163.76 3.83 2.71 9.62 251.00 7858.34Chemicals (7) 13775.30 0.59 11967.94 13694.18 13769.19 13706.58 1.69 2.24 26.45 222.25 13242.98Forestry & Paper (1) 20753.82 1.08 18030.85 20532.70 20465.14 20852.09 2.60 3.27 11.77 540.55 25282.00Industrial Metals & Mining (2) 4267.21 0.21 3707.34 4258.42 4287.46 3737.12 10.50 1.60 5.95 453.68 5740.70Mining (12) 18925.04 0.38 16442.02 18853.64 19011.76 17693.30 4.00 2.77 9.02 759.08 12004.66Industrials (101) 5679.48 -0.12 4934.31 5686.56 5745.60 5893.82 2.04 0.69 71.43 80.08 6315.83Construction & Materials (14) 7065.48 -0.95 6138.47 7133.15 7300.25 7122.62 2.19 0.11 416.69 131.95 8162.78Aerospace & Defense (9) 3847.63 -0.31 3342.81 3859.64 3911.99 5258.20 3.10 -1.94 -16.63 99.51 4490.00General Industrials (8) 4988.00 0.23 4333.56 4976.48 4988.80 5024.46 2.63 0.63 60.75 71.59 6239.03Electronic & Electrical Equipment (10)10947.20 1.83 9510.90 10750.89 10875.46 10203.15 1.07 2.15 43.64 79.53 10498.33Industrial Engineering (12) 15154.45 -0.07 13166.14 15165.28 15317.76 14360.89 2.10 1.58 30.00 162.54 19793.52Industrial Transportation (6) 3490.07 0.06 3032.16 3488.01 3474.94 3828.14 4.24 0.67 35.29 12.73 3545.26Support Services (42) 8947.31 -0.25 7773.39 8969.52 9048.64 8959.22 1.51 2.17 30.60 102.58 9944.60Consumer Goods (42) 18348.11 -0.11 15940.78 18367.98 18405.11 19718.02 4.45 1.59 14.11 630.15 15538.91Automobiles & Parts (2) 3753.22 2.28 3260.79 3669.48 3729.35 5269.14 0.59 1.78 94.63 0.00 3840.36Beverages (6) 23028.41 0.07 20007.01 23012.67 23115.03 25393.50 2.48 1.60 25.29 528.83 17680.88Food Producers (10) 6763.03 -0.62 5875.70 6805.36 6857.78 7855.23 2.59 1.87 20.63 94.77 6283.84Household Goods & Home Construction (14)14408.71 -0.59 12518.24 14494.65 14497.41 14467.39 4.05 1.44 17.14 324.68 11611.18Leisure Goods (2) 24347.40 2.21 21152.95 23821.87 23429.46 15869.07 2.24 0.99 45.19 303.75 25447.35Personal Goods (6) 33466.45 0.10 29075.55 33434.21 33257.64 34241.57 3.12 2.85 11.26 917.13 25067.64Tobacco (2) 28079.24 0.03 24395.16 28069.67 28257.47 32562.40 8.44 1.29 9.18 1936.14 22709.42Health Care (15) 11703.59 0.19 10168.04 11680.85 11682.78 12717.64 3.60 1.12 24.80 419.30 10186.26Health Care Equipment & Services (6) 6549.03 2.03 5689.77 6419.00 6376.67 8398.41 2.06 0.96 50.57 120.44 6034.58Pharmaceuticals & Biotechnology (9) 16393.56 0.00 14242.68 16393.20 16407.55 17470.27 3.76 1.13 23.51 617.91 12820.01Consumer Services (82) 4901.51 0.38 4258.42 4882.89 4887.16 5458.24 2.51 1.17 34.21 68.99 5014.53Food & Drug Retailers (5) 4394.11 0.27 3817.59 4382.42 4389.94 4116.43 3.00 1.33 25.01 133.29 5592.60General Retailers (27) 2272.51 0.41 1974.35 2263.16 2274.43 2262.62 2.43 1.12 36.88 10.18 2841.86Media (15) 7777.82 0.39 6757.35 7747.73 7770.82 8957.71 2.13 2.38 19.73 125.77 5242.03Travel & Leisure (35) 7873.86 0.41 6840.78 7841.78 7816.69 9834.34 2.62 0.37 104.29 82.90 8080.93Telecommunications (6) 1799.77 -0.58 1563.63 1810.18 1808.82 2341.08 7.49 0.58 22.87 44.59 2435.30Fixed Line Telecommunications (3) 1546.04 -0.58 1343.20 1554.99 1593.27 2354.79 11.50 1.04 8.34 5.68 1696.45Mobile Telecommunications (3) 2850.19 -0.58 2476.23 2866.68 2839.43 3482.82 6.10 0.29 57.43 91.62 3476.32Utilities (8) 7032.32 -0.82 6109.66 7090.49 7211.02 7184.54 6.02 0.98 16.94 339.88 9798.81Electricity (3) 8127.74 0.15 7061.36 8115.83 8150.83 7699.33 5.72 1.04 16.83 462.14 14904.45Gas Water & Multiutilities (5) 6371.26 -1.13 5535.33 6444.22 6580.11 6663.51 6.12 0.96 16.98 290.15 8776.40Financials (305) 4309.44 0.32 3744.03 4295.70 4322.16 4976.94 3.18 1.60 19.72 81.99 4490.72Banks (11) 2533.36 0.76 2200.97 2514.31 2541.96 3666.24 3.74 2.20 12.18 0.99 2087.59Nonlife Insurance (7) 3716.89 0.16 3229.23 3710.84 3737.31 3597.47 2.96 1.86 18.13 107.44 7371.88Life Insurance/Assurance (7) 6884.50 -0.77 5981.24 6938.27 6962.30 7878.02 3.49 2.15 13.35 230.43 7796.87Real Estate Investment & Services (17) 2439.59 -0.04 2119.51 2440.57 2464.33 2723.41 1.83 1.87 29.18 25.63 6993.16Real Estate Investment Trusts (39) 2359.73 -0.99 2050.12 2383.42 2415.75 2917.52 3.26 -2.05 -14.95 62.00 3353.81General Financial (39) 9491.25 0.26 8245.97 9466.28 9526.41 10297.85 3.46 1.10 26.38 294.39 12254.88Equity Investment Instruments (185) 12268.98 0.94 10659.26 12155.11 12143.04 10868.58 2.32 2.32 18.59 264.60 7335.45Non Financials (302) 4301.96 0.06 3737.53 4299.33 4320.39 4893.57 3.84 1.35 19.29 134.68 7264.51Technology (14) 1982.38 1.28 1722.29 1957.37 1948.09 2227.43 1.97 0.04 1404.23 33.33 2766.41Software & Computer Services (12) 2122.77 1.22 1844.26 2097.19 2090.19 2455.27 2.02 -0.18 -278.28 36.15 3134.20Technology Hardware & Equipment (2) 4977.98 1.91 4324.85 4884.63 4786.63 3842.34 1.40 3.38 21.11 69.78 6179.35

Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/dayFTSE 100 6335.45 6324.07 6314.22 6333.37 6340.46 6333.39 6334.69 6368.79 6360.50 6375.73 6302.29FTSE 250 19382.58 19255.82 19198.13 19225.56 19232.28 19231.68 19226.15 19258.86 19215.30 19462.71 19170.42FTSE SmallCap 5894.55 5880.74 5870.63 5870.65 5868.56 5867.17 5864.82 5844.54 5824.77 5912.50 5818.04FTSE All-Share 3576.37 3566.92 3560.45 3569.89 3573.23 3570.03 3570.38 3586.25 3580.73 3593.68 3555.63Time of FTSE 100 Day's high:15:09:30 Day's Low08:39:15 FTSE 100 2010/11 High: 7674.56(17/01/2020) Low: 4993.89(23/03/2020)Time of FTSE All-Share Day's high:16:46:16 Day's Low08:46:00 FTSE 100 2010/11 High: 4257.93(17/01/2020) Low: 2727.86(23/03/2020)Further information is available on http://www.ftse.com © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of theLondon 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.

FT 30 INDEX

Nov 27 Nov 26 Nov 25 Nov 24 Nov 23 Yr Ago High LowFT 30 2439.40 2451.70 2479.90 2500.00 2453.40 0.00 3314.70 1337.80FT 30 Div Yield - - - - - 0.00 3.93 2.74P/E Ratio net - - - - - 0.00 19.44 14.26FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 18/02/1900Base Date: 1/7/35FT 30 hourly changes

8 9 10 11 12 13 14 15 16 High Low2451.7 2426.5 2423.3 2164.9 2399.1 2395.8 2394.3 2414 2426.7 2439.2 2366.1

FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30

FX: EFFECTIVE INDICES

Nov 27 Nov 26 Mnth Ago Nov 30 Nov 27 Mnth Ago

Australia - - -Canada - - -Denmark - - -Japan - - -New Zealand - - -Norway - - -

Sweden - - -Switzerland - - -UK 78.62 78.94 77.54USA - - -Euro - - -

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

FTSE SECTORS: LEADERS & LAGGARDS

Year to date percentage changesLeisure Goods 46.40Tech Hardware & Eq 14.41Equity Invest Instr 9.12Electronic & Elec Eq 7.00Industrial Metals & 4.84Mining 4.10Basic Materials 3.05Industrial Eng 2.78Personal Goods 1.02Food & Drug Retailer 0.75Nonlife Insurance 0.25FTSE SmallCap Index -0.64Support Services -1.87Chemicals -2.93Electricity -3.10Household Goods & Ho -4.30Construct & Material -4.34

Forestry & Paper -4.68Industrials -5.25General Retailers -5.64Pharmace & Biotech -7.36Consumer Goods -8.88Utilities -8.93Health Care -9.08Beverages -9.30Gas Water & Multi -10.68FTSE 250 Index -11.06Industrial Transport -11.28Technology -12.41Financial Services -12.91NON FINANCIALS Index -13.66Consumer Services -13.73Software & Comp Serv -14.33FTSE All{HY-}Share Index -14.36Mobile Telecomms -14.52

FTSE 100 Index -15.58Life Insurance -16.18Media -16.24Food Producers -16.24Financials -16.25Real Est Invest & Se -16.93Tobacco -18.58Telecommunications -20.83Real Est Invest & Tr -21.74Travel & Leisure -22.18Health Care Eq & Srv -22.51Aerospace & Defense -26.21Automobiles & Parts -31.73Banks -32.19Fixed Line Telecomms -34.60Oil Equipment & Serv -37.81Oil & Gas -42.07Oil & Gas Producers -42.13

FTSE GLOBAL EQUITY INDEX SERIES

Nov 28 No of US $ Day Mth YTD Total YTD Gr DivRegions & countries stocks indices % % % retn % Yield

Nov 28 No of US $ Day Mth YTD Total YTD Gr DivSectors stocks indices % % % retn % Yield

FTSE Global All Cap 9017 697.98 0.1 8.8 9.7 1074.24 11.8 1.9FTSE Global All Cap 9017 697.98 0.1 8.8 9.7 1074.24 11.8 1.9FTSE Global Large Cap 1741 626.51 0.2 8.1 10.4 993.13 12.7 2.0FTSE Global Mid Cap 2234 880.18 0.1 10.1 6.1 1274.19 8.0 2.0FTSE Global Small Cap 5042 944.28 0.1 11.7 9.2 1314.54 10.9 1.7FTSE All-World 3975 409.51 0.1 8.5 9.7 667.01 11.9 2.0FTSE World 2565 726.48 0.1 8.7 9.4 1588.16 11.5 2.0FTSE Global All Cap ex UNITED KINGDOM In 8727 738.34 0.2 8.7 11.0 1115.90 13.1 1.9FTSE Global All Cap ex USA 7270 539.68 0.3 10.3 4.0 906.52 6.6 2.5FTSE Global All Cap ex JAPAN 7621 719.61 0.1 8.7 9.8 1117.88 11.9 1.9FTSE Global All Cap ex Eurozone 8376 735.12 0.2 8.4 10.4 1108.06 12.6 1.9FTSE Developed 2137 665.52 0.0 8.5 9.9 1032.70 12.0 1.9FTSE Developed All Cap 5623 696.23 0.1 8.9 9.8 1065.15 11.9 1.9FTSE Developed Large Cap 834 623.36 0.1 8.2 10.6 984.46 12.8 1.9FTSE Developed Europe Large Cap 227 376.76 -0.1 10.8 -1.9 703.69 0.7 2.7FTSE Developed Europe Mid Cap 344 656.79 -0.1 11.8 3.9 1073.30 5.9 2.3FTSE Dev Europe Small Cap 692 892.76 -0.4 13.0 -0.6 1405.32 1.2 2.0FTSE North America Large Cap 224 800.22 0.0 6.5 14.8 1166.55 16.8 1.6FTSE North America Mid Cap 411 1024.32 0.0 9.8 8.3 1376.61 9.9 1.8FTSE North America Small Cap 1292 1073.47 0.0 12.8 12.5 1392.28 13.9 1.4FTSE North America 635 521.89 0.0 7.2 13.7 777.35 15.7 1.6FTSE Developed ex North America 1502 280.38 0.1 11.3 3.1 507.31 5.6 2.5FTSE Japan Large Cap 179 440.11 0.8 12.0 10.9 617.44 13.5 2.1FTSE Japan Mid Cap 335 637.13 0.5 7.8 1.4 847.09 3.4 2.0FTSE Global wi JAPAN Small Cap 882 692.73 0.8 4.9 -0.4 954.08 1.7 2.1FTSE Japan 514 182.22 0.7 11.2 9.0 286.12 11.5 2.1FTSE Asia Pacific Large Cap ex Japan 936 837.29 0.7 8.9 15.2 1447.53 17.8 2.2FTSE Asia Pacific Mid Cap ex Japan 900 967.53 0.6 9.7 11.7 1604.40 14.2 2.7FTSE Asia Pacific Small Cap ex Japan 1884 610.87 0.8 7.8 12.5 990.79 15.0 2.5FTSE Asia Pacific Ex Japan 1836 653.01 0.7 8.9 14.9 1199.19 17.6 2.2FTSE Emerging All Cap 3394 853.57 0.9 8.0 8.0 1402.80 10.7 2.3FTSE Emerging Large Cap 907 827.32 0.8 7.8 9.2 1368.34 11.8 2.2FTSE Emerging Mid Cap 931 977.94 1.0 9.4 0.5 1606.20 3.2 3.1FTSE Emerging Small Cap 1556 802.58 0.9 7.7 6.2 1265.33 8.9 2.7FTSE Emerging Europe 76 339.96 0.5 17.0 -22.8 642.30 -18.8 5.7FTSE Latin America All Cap 239 753.32 0.6 14.8 -23.5 1286.74 -21.7 2.7FTSE Middle East and Africa All Cap 321 635.51 0.6 8.2 -7.9 1097.49 -5.2 3.3FTSE Global wi UNITED KINGDOM All Cap In 290 302.90 -0.9 12.5 -15.3 577.80 -12.8 3.8FTSE Global wi USA All Cap 1747 902.18 0.0 7.7 14.3 1269.30 16.1 1.5FTSE Europe All Cap 1414 448.40 -0.1 11.3 -1.4 805.19 1.1 2.6FTSE Eurozone All Cap 641 442.37 -0.1 13.0 1.7 791.34 4.0 2.2FTSE EDHEC-Risk Efficient All-World 3975 453.84 0.1 8.9 4.9 682.62 7.0 2.2FTSE EDHEC-Risk Efficient Developed Europe 571 352.42 -0.1 10.3 4.3 587.43 6.4 2.3Oil & Gas 128 257.33 -0.3 26.4 -29.3 480.31 -25.7 5.1Oil & Gas Producers 93 242.31 -0.4 28.8 -31.4 462.39 -27.9 5.2

Oil Equipment & Services 24 194.50 0.0 0.0 -27.4 328.07 -23.5 5.6Basic Materials 356 570.57 0.4 0.4 11.0 967.44 14.3 2.8Chemicals 163 838.71 0.4 0.4 11.8 1407.53 14.7 2.4Forestry & Paper 21 291.88 1.0 1.0 5.0 554.56 8.2 2.5Industrial Metals & Mining 93 417.56 0.8 0.8 10.4 714.75 14.0 3.3Mining 79 803.02 0.2 0.2 10.2 1392.52 14.0 3.2Industrials 746 509.26 0.1 0.1 13.4 783.77 15.4 1.6Construction & Materials 147 607.38 -0.1 -0.1 9.5 981.61 11.7 1.8Aerospace & Defense 36 739.08 -0.4 -0.4 -17.4 1119.80 -16.2 2.0General Industrials 70 244.88 -0.2 -0.2 7.4 413.42 10.1 2.3Electronic & Electrical Equipment 140 628.97 1.1 1.1 23.6 878.62 25.5 1.4Industrial Engineering 148 995.92 0.1 0.1 20.1 1524.78 22.3 1.5Industrial Transportation 122 912.69 0.0 0.0 20.5 1412.67 22.5 1.7Support Services 83 617.98 0.0 0.0 22.5 897.27 24.0 1.1Consumer Goods 533 580.19 0.0 0.0 13.7 935.03 16.1 2.1Automobiles & Parts 128 558.52 -0.5 -0.5 46.7 877.68 49.5 1.6Beverages 67 708.68 0.0 0.0 0.1 1150.08 2.0 2.4Food Producers 132 694.54 0.4 0.4 1.8 1142.94 4.2 2.4Household Goods & Home Construction 62 571.08 0.0 0.0 12.7 916.04 15.3 2.2Leisure Goods 43 302.32 0.8 0.8 24.8 416.82 26.3 1.1Personal Goods 88 1013.34 0.2 0.2 12.4 1508.98 14.0 1.4Tobacco 13 870.69 -0.3 -0.3 -12.6 2177.16 -7.7 7.1Health Care 306 654.69 0.3 0.3 7.2 1007.75 9.1 1.8Health Care Equipment & Services 111 1319.85 0.3 0.3 12.6 1588.63 13.4 0.7Pharmaceuticals & Biotechnology 195 425.80 0.3 0.3 3.7 696.88 6.2 2.4Consumer Services 440 676.06 0.1 0.1 21.2 946.48 22.4 1.0Food & Drug Retailers 68 291.51 0.3 0.3 -1.1 441.98 1.4 2.5General Retailers 145 1268.95 0.2 0.2 40.2 1707.47 41.1 0.6Media 87 433.23 0.0 0.0 12.8 610.56 13.8 1.1Travel & Leisure 140 483.45 -0.1 -0.1 -6.7 691.89 -5.5 1.7Telecommunication 96 152.84 0.5 0.5 -4.7 332.16 -0.8 4.6Fixed Line Telecommuniations 42 117.53 0.2 0.2 -13.2 286.89 -9.0 5.7Mobile Telecommunications 54 178.96 0.9 0.9 7.3 340.09 10.8 3.3Utilities 191 318.29 -0.1 -0.1 0.1 697.14 3.4 3.3Electricity 131 357.19 0.0 0.0 0.3 771.17 3.6 3.3Gas Water & Multiutilities 60 320.34 -0.4 -0.4 -0.3 724.36 2.9 3.2Financials 867 245.33 -0.1 -0.1 -7.3 444.79 -4.7 2.8Banks 272 179.22 -0.2 -0.2 -16.1 356.68 -13.3 3.6Nonlife Insurance 74 294.88 -0.2 -0.2 -4.5 462.71 -2.2 2.1Life Insurance 54 225.69 0.4 0.4 -6.5 404.57 -2.9 3.3Financial Services 209 401.81 0.0 0.0 8.5 590.74 10.5 1.8Technology 312 488.50 0.3 0.3 35.8 626.25 37.2 0.9Software & Computer Services 164 814.25 0.3 0.3 34.0 974.77 34.7 0.5Technology Hardware & Equipment 148 385.39 0.4 0.4 38.6 527.01 40.7 1.4Alternative Energy 11 218.04 0.0 0.0 72.3 309.89 74.8 0.7Real Estate Investment & Services 161 352.57 0.0 0.0 -4.5 649.43 -1.5 2.7Real Estate Investment Trusts 97 450.48 -0.1 -0.1 -9.1 987.16 -6.4 3.7FTSE Global Large Cap 1741 626.51 0.2 0.2 10.4 993.13 12.7 2.0

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 seewww.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 ExchangeGroup companies and is used by FTSE International Limited under licence.

FTSE 100 SUMMARY

Closing Day'sFTSE 100 Price Change

Closing Day'sFTSE 100 Price Change

3I Group PLC 1070.5 -5.50Admiral Group PLC 2857 10.00Anglo American PLC 2213.5 -52.00Antofagasta PLC 1253.5 16.50Ashtead Group PLC 3181 31.00Associated British Foods PLC 2110 -16.00Astrazeneca PLC 7805 35.00Auto Trader Group PLC 560.60 12.40Avast PLC 508.00 9.60Aveva Group PLC 3392 17.00Aviva PLC 321.20 -2.90B&M European Value Retail S.A. 477.90 2.90Bae Systems PLC 504.00 -0.20Barclays PLC 134.56 -4.94Barratt Developments PLC 620.00 -9.00Berkeley Group Holdings (The) PLC 4624 -61.00Bhp Group PLC 1698.6 -39.20BP PLC 247.65 -15.25British American Tobacco PLC 2639.5 -37.50British Land Company PLC 471.70 1.60Bt Group PLC 116.80 -4.50Bunzl PLC 2359 43.00Burberry Group PLC 1729 7.50Coca-Cola Hbc AG 2162 -21.00Compass Group PLC 1324 -94.00Crh PLC 2937 -106.00Croda International PLC 5956 6.00Dcc PLC 5682 -4.00Diageo PLC 2880 -53.00Evraz PLC 386.30 -5.90Experian PLC 2646 61.00Ferguson PLC 8424 100.00Flutter Entertainment PLC 13705 -Fresnillo PLC 1052.5 -59.50Glaxosmithkline PLC 1370 -13.60Glencore PLC 211.85 -1.70Gvc Holdings PLC 1035.5 -7.00Halma PLC 2216 -4.00Hargreaves Lansdown PLC 1430 -3.50Hikma Pharmaceuticals PLC 2608 -24.00Homeserve PLC 1045 -8.00HSBC Holdings PLC 388.25 -16.60Imperial Brands PLC 1361 -52.00Informa PLC 530.20 -10.00Intercontinental Hotels Group PLC 4643 -130.00Intermediate Capital Group PLC 1636 -25.00International Consolidated Airlines Group S.A. 154.20 -6.65Intertek Group PLC 5522 20.00Jd Sports Fashion PLC 776.20 43.00Johnson Matthey PLC 2224 -25.00Just Eat Takeaway.Com N.V. 7960 40.00

Kingfisher PLC 273.60 2.70Land Securities Group PLC 657.60 -7.50Legal & General Group PLC 252.70 -3.60Lloyds Banking Group PLC 35.62 -1.68London Stock Exchange Group PLC 8106 186.00M&G PLC 187.50 -5.95Melrose Industries PLC 153.50 -5.80Mondi PLC 1658 -31.50Morrison (Wm) Supermarkets PLC 179.85 -3.75National Grid PLC 848.40 -25.40Natwest Group PLC 154.60 -6.05Next PLC 6552 34.00Ocado Group PLC 2207 -11.00Pearson PLC 647.00 -3.00Pennon Group PLC 945.80 -18.00Persimmon PLC 2656 -40.00Phoenix Group Holdings PLC 716.80 -69.40Polymetal International PLC 1562 -25.00Prudential PLC 1169.5 -42.50Reckitt Benckiser Group PLC 6584 68.00Relx PLC 1747.5 5.50Rentokil Initial PLC 497.30 6.50Rightmove PLC 625.00 1.00Rio Tinto PLC 4834 -88.50Rolls-Royce Holdings PLC 105.70 -1.95Royal Dutch Shell PLC 1271.2 -68.20Royal Dutch Shell PLC 1234.2 -69.80Rsa Insurance Group PLC 674.00 -0.40Sage Group PLC 605.00 -4.80Sainsbury (J) PLC 211.10 -5.40Schroders PLC 3219 -15.00Scottish Mortgage Investment Trust PLC 1096 -13.00Segro PLC 912.00 10.60Severn Trent PLC 2389 1.00Smith & Nephew PLC 1451 -1.50Smith (Ds) PLC 332.00 -5.50Smiths Group PLC 1459 -8.50Smurfit Kappa Group PLC 3180 -34.00Spirax-Sarco Engineering PLC 11135 285.00Sse PLC 1341 -39.00St. James's Place PLC 1020 0.50Standard Chartered PLC 452.20 -11.50Standard Life Aberdeen PLC 270.90 -0.10Taylor Wimpey PLC 153.95 -3.25Tesco PLC 227.00 -0.80Unilever PLC 4571 -15.00United Utilities Group PLC 900.40 1.20Vodafone Group PLC 123.68 -1.22Whitbread PLC 3031 -131.00Wpp PLC 725.60 -23.80

UK STOCK MARKET TRADING DATA

Nov 30 Nov 27 Nov 26 Nov 25 Nov 24 Yr Ago- - - - - -

Order Book Turnover (m) 179.90 89.64 188.50 90.84 123.10 123.10Order Book Bargains 1145090.00 1256365.00 1469009.00 999945.00 903740.00 903740.00Order Book Shares Traded (m) 2379.00 2221.00 2473.00 1901.00 1580.00 1580.00Total Equity Turnover (£m) 4352.07 6478.34 6781.39 5084.39 4170.85 4170.85Total Mkt Bargains 1378835.00 1571922.00 1764616.00 1256711.00 1111571.00 1111571.00Total Shares Traded (m) 10788.00 9077.00 9732.00 8199.00 8596.00 8596.00† 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 believedaccurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant norguarantee that the information is reliable or complete. The FT does not accept responsibility and will not beliable 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 RIGHTS OFFERS

Amount LatestIssue paid renun. closingprice up date High Low Stock Price p +or-There are currently no rights offers by any companies listed on the LSE.

UK COMPANY RESULTS

Company Turnover Pre-tax EPS(p) Div(p) Pay day TotalAltus Strategies 3rd 0.256 0.028 0.155L 1.378L 0.240L 3.880L 0.00000 0.00000 - 0.000 0.000Aquila Services Group Int 3.509 3.891 0.202 0.254 0.450 0.550 0.15000 0.30000 Dec 21 0.150 0.900Baillie Gifford UK Growth Fund Int 27.953 10.825L 18.570 7.190L 0.00000 3.10000 - 3.083 6.050Benchmark Holdings Pre 105.565 124.006 22.571L 58.481L 5.260L 15.030L 0.00000 0.00000 - 0.000 0.000Caffyns Int 85.352 98.978 1.414 0.056 52.300 1.000 0.00000 7.50000 - 0.000 22.500Carclo Int 49.950 56.115 0.865L 0.157 1.800L 8.300L 0.00000 0.00000 - 0.000 0.000Morses Club Pre 125.273 115.058 11.451 20.217 7.260 12.480 0.00000 5.20000 - 2.600 7.800Puma Alpha VCT Int - 0.451 - 8.150 - 0.00000 - - 0.000 -Puma VCT 11 Int 0.607L 0.133L 1.990L 0.430L 5.00000 0.00000 Jan 7 10.967 5.000PUMA VCT 13 Int 1.764 0.258L 11.320 1.650L 0.00000 0.00000 - 0.000 0.000Scholium Group Int 3.118 3.595 0.158L 0.064 1.160L 0.380 0.00000 0.00000 - 0.000 0.000TR Property Investment Trust Int 168.891 113.398 52.930 35.170 0.00000 5.20000 - 8.752 13.800Triad Group Int 8.727 9.027 0.001 0.284L 0.310 2.440L 0.00000 1.00000 - 0.000 3.000Walker Crips Group Int 14.350 15.581 0.451L 0.620 0.860L 1.180 0.15000 0.60000 Dec 23 0.150 0.930

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

UK RECENT EQUITY ISSUES

Issue Issue Stock Close Mktdate price(p) Sector code Stock price(p) +/- High Low Cap (£m)11/03 20.00 AIM VRCI Verici Dx PLC 47.00 0.00 56.00 29.97 6662.110/29 162.00 AIM SBI SourceBio International PLC 177.00 -3.86 193.20 160.00 13130.410/26 4.00 AMOI Anemoi International Ltd 2.50 -0.94 4.80 1.06 75.0

§Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/irFor a full explanation of all the other symbols please refer to London Share Service notes.

MARKET DATA

DECEMBER 1 2020 Section:Stats Time: 30/11/2020 - 18:50 User: keith.allen Page Name: MARKET DATA 1, Part,Page,Edition: EUR, 11, 1

12 ★ FINANCIAL TIMES Tuesday 1 December 2020

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week

Stock Price Day Chg High Low Yld P/E MCap m

Australia (A$)ANZ♦ 22.64 -0.45 27.29 14.10 6.29 15.96 47573.45BHPBilltn 38.07 -0.65 41.47 24.05 5.41 16.61 82967.31CmwBkAu 79.07 -1.64 91.05 53.44 5.48 19.43 103777.26CSL 297.38 -5.62 342.75 242.67 0.99 44.00 100094.9NatAusBk 22.89 -0.43 27.49 13.20 6.46 23.01 55717.5Telstra 3.07 -0.04 3.94 2.66 3.27 19.96 27011.82Wesfarmers 49.45 -0.44 50.67 29.75 3.11 34.33 41479.3Westpc♦ 20.13 -0.30 25.96 13.47 7.70 16.97 53785.72Woolworths 36.98 -0.58 43.96 32.12 2.80 39.90 34617.43Belgium (€)AnBshInBv 56.51 -0.74 75.26 29.03 2.31-113.67 114328.69KBC Grp 58.82 -0.86 73.56 33.44 1.73 16.41 29264.49Brazil (R$)Ambev 14.27 -0.05 19.58 10.36 3.60 24.24 42144.94Bradesco 21.94 -0.08 32.45 14.05 1.11 7.26 18263.86Cielo 3.71 -0.05 9.07 3.23 2.19 13.77 1891.85ItauHldFin 26.09 -0.03 32.79 19.46 3.25 12.83 24280.55Petrobras♦ 26.10 0.20 33.23 10.50 1.97 -7.42 36459.32Vale 77.76 -0.68 79.36 32.45 5.51 28.28 77127.65Canada (C$)BCE 56.77 -0.26 65.28 46.03 5.89 20.28 39565.87BkMontrl 95.96 -0.81 104.75 55.76 4.32 14.00 47814.21BkNvaS 64.33 -0.56 75.59 46.38 5.51 11.62 60061.83Brookfield 52.91 -0.38 60.48 31.35 1.20-382.66 64223.71CanadPcR 423.01 1.21 444.49 252.00 0.82 25.02 43845.45CanImp 110.48 -0.66 115.96 67.52 5.17 13.04 38017.12CanNatRs 30.53 -0.84 42.57 9.80 5.39 988.85 27788.99CanNatRy 141.32 -0.26 149.11 92.01 1.61 29.55 77498.28Enbridge 41.43 -0.26 57.32 33.06 7.69 42.84 64664.05GtWesLif 30.39 -0.12 35.60 18.88 5.76 11.21 21727.36ImpOil 23.80 -0.43 35.80 10.27 3.80-578.23 13464.63Manulife 22.24 -0.18 27.78 12.58 4.90 11.03 33248.65Nutrien 63.60 -0.70 64.60 34.80 3.97 31.08 27896.94RylBkC 107.65 -0.51 109.42 72.00 3.90 14.05 118129.3Suncor En 21.97 -0.44 45.12 14.02 5.96 -5.22 25823.72ThmReut 103.56 -0.14 115.66 75.91 2.00 23.61 39663.97TntoDom 70.35 -0.55 77.08 49.01 4.28 13.84 98354.65TrnCan 58.65 -0.66 76.58 47.05 5.12 13.59 42487.3ValeantPh 30.80 -1.06 36.02 14.01 - -3.78 8158.48China (HK$)AgricBkCh 2.94 -0.05 3.50 2.38 7.28 4.72 11659.85Bk China 2.74 -0.04 3.39 2.33 8.21 4.24 29561.31BkofComm 4.29 -0.06 5.68 3.66 8.64 4.15 19378.72BOE Tech 0.67 0.04 0.80 0.47 - -4.50 17.20Ch Coms Cons 4.02 -0.11 6.63 3.97 6.81 3.60 2291.69Ch Evrbrght 3.02 -0.15 3.97 2.40 8.30 4.43 4940.14Ch Rail Cons 5.12 -0.20 9.99 4.90 4.77 3.33 1371.56Ch Rail Gp 3.83 -0.07 5.05 3.45 5.14 3.17 2079.08ChConstBk 6.08 -0.02 6.85 4.93 6.18 5.34 188592.96China Vanke 29.45 -0.25 34.75 21.65 4.03 7.00 7194.74ChinaCitic 3.35 -0.10 4.78 2.93 8.44 3.52 6432.37ChinaLife 17.58 -0.92 22.90 11.64 4.92 8.25 16877.85ChinaMBank 49.05 -2.25 53.25 29.80 2.88 11.63 29053.15ChinaMob 46.40 -1.15 70.00 45.20 7.60 7.60 122576.89ChinaPcIns 29.50 -0.80 32.50 17.90 4.82 9.48 10563.01ChMinsheng 4.28 -0.19 6.06 3.85 10.17 3.76 4594.47ChMrchSecs 22.00 0.60 26.04 13.10 - 19.96 24805.83Chna Utd Coms 4.90 -0.02 6.24 4.66 1.23 27.90 22731.94ChShenEgy 14.98 -0.38 16.88 11.94 9.97 6.39 6568.51ChShpbldng 4.34 -0.03 5.60 3.98 - -114.37 12054.95ChStConEng 5.43 -0.07 6.20 4.76 3.40 5.39 34030.51ChUncHK 4.66 -0.14 7.37 3.84 3.76 9.85 18396.51CNNC Intl 4.91 0.06 5.19 4.02 2.46 15.76 11610.59CSR 3.11 -0.10 6.10 2.95 5.67 7.79 1753.89Daqin 6.78 -0.07 8.26 6.32 7.06 9.57 15312.8Gree Elec Apl 0.11 0.00 0.28 0.07 - -0.04 4.62GuosenSec 13.74 0.04 16.14 10.38 1.45 18.61 17116.27HaitongSecs 6.67 -0.13 9.58 5.79 - 6.17 2934.14Hngzh HikVDT 45.67 -1.33 50.07 27.00 1.53 32.88 56166.56Hunng Pwr 3.04 -0.03 4.24 2.24 5.37 23.36 1843.58IM Baotou Stl 1.21 - 1.39 1.04 - -116.73 5822.91In&CmBkCh 4.92 0.05 6.11 3.96 6.28 5.30 55095.12IndstrlBk 21.02 0.41 22.07 14.93 3.62 7.27 62637.77Kweichow 1713.91 -23.99 1828 960.10 0.99 48.40 327080.95Midea 0.82 - 1.17 0.58 - -2.11 22.75New Ch Life Ins 32.55 -1.25 37.30 20.45 5.04 6.82 4342.83PetroChina 2.47 -0.16 4.23 2.16 6.12 20.82 6723.8PingAnIns 91.00 -0.70 101.00 69.00 2.71 11.21 87440.51PngAnBnk 19.74 0.04 20.88 11.91 - 15.96 58195.14Pwr Cons Corp 4.22 0.15 4.88 3.40 0.94 9.17 7144.56SaicMtr 26.51 -0.57 28.80 16.90 3.31 14.46 47053.39ShenwanHong 0.06 0.00 0.10 0.03 - -0.21 67.79ShgPdgBk 10.06 -0.14 12.69 9.22 5.95 6.19 44858.57Sinopec Corp 3.51 -0.26 4.85 2.95 6.41 9.43 11554.02Sinopec Oil 1.94 -0.01 2.59 1.67 - 88.34 3549.21Denmark (kr)DanskeBk 102.60 -1.40 123.60 68.04 - 9.57 14204.19MollerMrsk 12690 275.00 12850 4976 1.17 36.28 19220.27NovoB 420.60 1.35 467.90 331.70 2.07 23.46 122414.1

Finland (€)Nokia 3.35 -0.07 4.35 2.08 - 24.94 22610.68SampoA 36.06 0.03 42.46 21.34 4.22 24.00 23876.21France (€)Airbus Grpe 88.68 -1.32 139.40 48.12 - -15.22 83087.42AirLiquide 138.70 0.60 144.45 94.86 1.98 28.64 78486.14AXA 19.86 0.12 25.62 11.84 3.73 16.89 57361.3BNP Parib 43.67 -0.16 54.22 24.51 - 7.75 65205.52ChristianDior 431.60 - 484.60 252.40 1.13 42.09 93086.69Cred Agr 9.81 -0.06 13.80 5.70 - 7.09 33798.83Danone 53.72 0.94 75.16 46.03 - 18.18 44072.67EDF 12.83 -0.17 13.61 5.98 1.19 23.83 47502.79Engie SA 12.52 -0.01 16.80 8.63 - -27.39 36415.94EssilorLuxottica 122.05 1.10 145.00 86.76 - -4007.21 63962.96Hermes Intl 822.40 -1.00 865.00 516.00 0.56 76.71 103736.61LOreal 308.10 -1.20 321.40 196.00 1.27 52.50 206100.65LVMH 496.10 0.10 499.50 278.70 0.98 55.59 299200.79Orange 10.68 -0.02 15.06 8.63 4.76 10.73 33928.89PernodRic 160.30 0.60 171.10 112.25 1.98 125.31 50158.09Renault 33.49 -0.63 44.47 12.77 - -1.06 11831.65Safran 122.95 -0.05 152.30 51.10 - 77.63 62763.5Sanofi 85.22 0.01 95.82 67.65 3.75 9.48 128193.49Sant Gbn 40.09 -0.21 40.80 16.41 3.14 16.42 25659.92Schneider 117.70 0.25 121.80 61.72 2.20 29.35 79748.57SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81SocGen 16.98 -0.35 32.23 10.77 - -18.79 17313.58Total 36.70 -1.00 50.93 21.12 7.13 -18.88 116341.45UnibailR 190.00 0.35 236.45 177.35 2.94 -7.05 22215.04Vinci 87.40 -0.58 107.35 54.76 2.37 30.10 64069.37Vivendi 25.31 -0.08 26.65 16.60 2.41 16.42 35861.62Germany (€)Allianz 199.10 0.96 232.60 117.10 4.90 12.24 99242.61BASF 61.97 1.05 69.80 37.36 5.39 -28.45 68008.22Bayer 49.10 -0.42 78.34 39.91 5.79 -6.52 57629.8BMW 73.44 0.35 77.31 36.60 3.46 14.77 52824.64Continental 116.00 -0.95 122.90 51.45 - -8.36 27721.19Daimler 56.99 0.40 58.17 21.02 - -200.48 72849.63Deut Bank 9.47 -0.01 10.37 4.45 - -12.63 23390.81Deut Tlkm 15.28 0.12 16.75 10.41 3.99 19.29 86902.48DeutsPost 40.74 0.16 43.50 19.11 - 22.42 60190.56E.ON 9.14 0.00 11.56 7.60 5.11 29.05 28858.1Fresenius Med 71.16 0.34 81.10 53.50 - 16.00 25884.75Fresenius SE 38.07 - 51.54 24.25 - 11.43 20564.58HenkelKgaA 81.35 1.20 89.10 54.65 2.28 19.69 25252.28Linde 215.50 - 226.40 130.45 1.54 56.76 135144.66MuenchRkv 236.70 0.90 284.20 141.10 4.20 17.32 39622.69SAP 100.74 0.60 143.32 82.13 1.59 24.31 147873.2Siemens 112.26 -0.42 119.30 53.02 3.53 19.54 114013.12Volkswgn 156.70 -4.20 185.00 99.16 - 14.74 55250.23Hong Kong (HK$)AIA 84.95 -3.55 90.90 60.05 1.60 22.52 132551.53BOC Hold 25.25 0.05 28.90 20.05 6.57 8.20 34443.47Ch OSLnd&Inv 18.86 -0.54 31.00 17.56 5.84 4.28 26657.12ChngKng 42.45 -1.30 57.20 33.40 5.34 7.13 20228.35Citic Ltd 6.06 -0.10 10.60 5.51 8.29 3.44 22744.51Citic Secs 17.44 -0.10 21.45 12.60 3.37 13.14 5126.47CK Hutchison 56.25 -1.25 76.00 45.05 6.09 5.82 27986.13CNOOC 8.13 -1.32 14.04 6.24 10.40 7.47 46832.06HangSeng 135.10 -2.50 173.80 110.00 6.32 11.99 33324.51HK Exc&Clr 385.40 -0.80 398.40 206.00 1.88 47.83 63042.21MTR 42.05 -0.80 47.80 36.20 3.16 39.32 33530.03SandsCh 31.80 -1.30 45.45 25.15 3.35 122.93 33191.41SHK Props 103.50 -1.80 124.00 87.60 5.17 11.80 38695.65Tencent 563.00 -20.00 633.00 325.20 0.23 44.38 696216.65India (Rs)Bhartiartl 463.25 -5.15 612.00 361.75 0.45 -10.91 34126.58HDFC Bk 1440.85 14.20 1464.4 738.75 - 27.07 107137.38Hind Unilevr 2138.2 -16.00 2614.3 1757.3 1.24 65.09 67837.92HsngDevFin 2256.25 17.85 2499.9 1473.45 0.82 16.89 54791.24ICICI Bk 473.35 -1.95 552.20 268.30 0.22 28.87 44100.22Infosys 1100 -13.20 1186 509.25 1.65 24.81 63268.77ITC 193.65 -1.15 247.95 134.60 5.55 15.53 32176.44L&T 1122.4 3.55 1383.7 661.00 1.66 52.61 21281.43OilNatGas 78.50 -1.70 133.55 50.00 7.76 21.86 13335.22RelianceIn 1929.8 -22.80 2369.35 867.40 0.71 27.36 176209.81SBI NewA 244.25 -1.20 351.00 149.45 - 9.53 29434.89SunPhrmInds 511.65 -0.05 564.75 312.00 1.19 159.94 16576.86Tata Cons 2679.65 -40.95 2885 1506.05 1.28 31.66 135776.21Indonesia (Rp)Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26Israel (ILS)TevaPha 32.51 0.01 46.45 24.30 - 908.23 10746.51Italy (€)Enel 8.37 -0.13 8.61 5.15 3.64 45.80 101675.34ENI 8.30 -0.28 14.42 5.73 10.52 -3.37 35770.31Generali 14.32 -0.15 19.00 10.20 3.54 12.16 26966.49IntSPaolo 1.93 -0.02 2.63 1.31 - 10.00 44700.75Unicred 8.64 -0.45 14.44 6.01 - -9.12 23064.15

Japan (¥)AstellasPh 1483.5 -96.50 1987 0.00 2.81 14.22 26556.05Bridgestne 3644 -160.00 4435 2861.5 3.71 14.63 25005.69Canon 1853.5 -70.00 3117 0.00 6.74 26.14 23769.35CntJpRwy 13300 -685.00 22570 0.00 1.17 12.93 26342.96Denso 4929 -241.00 5370 0.00 2.96 -46.36 37342.25EastJpRwy 6488 -233.00 10165 0.00 2.65 -48.77 23576.04Fanuc♦ 25365 -430.00 26320 0.00 0.94 78.96 49245.27FastRetail 85940 1810 88630 0.00 0.58 89.19 87649.34Fuji Hvy Ind 2073 -53.50 2945 1671.5 5.02 19.47 15331.01Hitachi 3966 -121.00 4693 0.00 2.49 19.16 36908.16HondaMtr 2871.5 -105.50 3259 0.00 3.44 23.90 50012.18JapanTob 2120 -56.50 2555 0.00 7.39 12.75 40767.28KDDI 2982.5 -77.50 3451 2604 4.01 10.03 66075.83Keyence 53290 -250.00 54160 28905 0.29 65.96 124614.56MitsbCp 2433 -62.00 2960.5 0.00 5.65 8.63 34755.69MitsubEst 1804 -58.00 2283 0.00 1.90 15.55 24133.03MitsubishiEle♦ 1533.5 -28.00 1658 0.00 2.72 16.04 31659.37MitsuiFud 2181.5 -120.50 3035 1538 2.10 12.43 20246.74MitUFJFin 448.50 -14.80 603.00 380.00 5.78 18.43 58569.5Mizuho Fin 1327.5 -51.50 1716 1084 5.88 29.38 32410.5Murata Mfg 9129 67.00 9293 0.00 1.11 31.91 59317.29NipponTT 2465 -55.50 2908 2127 4.01 10.25 92451.74Nissan Mt 492.50 -24.70 689.50 311.20 2.11 -1.92 19986.56Nomura♦ 524.00 -12.80 586.40 367.40 4.85 6.81 17601.34Nppn Stl 1276.5 -51.00 1786.5 0.00 6.23 4.19 11663.72NTTDCMo 3873 - 3928 2678 3.23 20.37 120229.61Panasonic 1112.5 -9.50 1264 691.70 2.81 15.02 26244.79Seven & I 3313 -110.00 4419 2937.5 2.91 16.62 28236.94ShnEtsuCh 17135 190.00 17830 8751 1.34 22.87 68645.9Softbank 7272 22.00 7412 2609.5 0.63 -8.96 146119.23Sony♦ 9704 -108.00 9860 0.00 0.52 12.75 117660.83SumitomoF 3032 -113.00 4145 2507.5 6.50 18.94 40056.62Takeda Ph 3745 13.00 4526 2894.5 5.00 47.05 56762.39TokioMarine 5190 -275.00 6317 4167 3.81 14.16 35030.82Toyota 6999 -253.00 8026 0.00 3.27 11.79 219582.89Mexico (Mex$)AmerMvl 14.61 -0.13 16.82 12.33 2.31 14.56 33375.38FEMSA UBD 147.30 1.95 185.00 112.72 1.91 305.01 15852.09WalMrtMex 52.53 -0.35 62.71 47.76 0.98 30.57 45675.19Netherlands (€)Altice 4.47 -0.03 6.86 2.26 - -3.98 5721.5ASML Hld 364.95 -1.40 370.35 177.52 0.67 45.31 185612.31Heineken 89.12 -0.12 105.00 68.82 1.91 54.52 61335.3ING 8.29 -0.12 11.26 4.23 2.94 11.50 38646.2Unilever 51.18 0.92 55.39 38.42 2.92 25.13 99766.97Norway (Kr)DNB 163.55 1.05 178.10 94.26 - 13.60 28732.42Equinor 146.85 3.10 187.20 95.20 5.47 -15.96 54024.17Telenor 153.40 1.55 171.90 130.75 5.33 20.23 24326.12Qatar (QR)QatarNtBk 17.72 -0.34 21.25 15.71 3.50 13.51 44942.52Russia (RUB)Gzprm neft 185.71 -3.02 272.68 158.17 9.34 10.45 58976.64Lukoil 4745.5 -157.00 6810 3663 7.64 12.47 44107.51MmcNrlskNckl 20150 -66.00 23656 13352 11.57 14.96 42774.79Novatek 973.20 -3.20 1382.2 682.80 3.05 46.54 39639.58Rosneft 324.00 -11.00 489.90 229.80 10.77 12.36 46063.6Sberbank 188.91 -2.03 270.80 172.15 9.07 5.92 54705Surgutneftegas 35.13 -0.76 54.89 24.06 1.93 2.10 16833.73Saudi Arabia (SR)AlRajhiBnk 74.80 0.80 74.80 51.00 2.07 18.53 49860.03Natnlcombnk 42.25 -0.40 50.70 30.50 5.88 11.21 33795.48SaudiBasic 96.90 0.40 100.00 61.90 3.94-103.17 77509.68SaudiTelec 107.80 0.40 109.40 72.30 3.83 19.49 57485.66Singapore (S$)DBS 25.20 -0.48 26.47 16.65 5.18 13.52 47868.83JardnMt US$ 53.07 0.17 58.95 37.37 3.50 -94.49 38531.04JardnStr US$ 23.89 -0.01 33.50 17.81 1.60 -28.00 26479.88OCBC 10.08 -0.07 11.23 7.80 5.45 11.19 33699.82SingTel 2.39 -0.03 3.48 2.00 7.40 36.02 29171.22UOB 22.51 -0.55 27.00 17.28 5.06 12.42 28145.95South Africa (R)Firstrand 45.47 -1.90 66.19 31.13 6.22 15.79 16705.56MTN Grp 66.24 -2.89 92.99 26.25 7.88 7.65 8174.79Naspers N 3128.95 -35.16 3499.45 1843.8 0.25 27.24 89250.65South Korea (KRW)HyundMobis 244000-4500.00 268500 126000 1.22 13.25 21020.84KoreaElePwr 21450 -450.00 29500 15550 - -15.09 12480.29SK Hynix 97500-1300.00 106000 65800 1.02 29.46 64331.57SmsungEl 66700-1500.00 69500 42300 2.10 21.06 360886.85Spain (€)BBVA 3.93 -0.03 5.34 2.13 6.70 -43.10 31310.6BcoSantdr 2.42 -0.05 3.96 1.50 4.20 -4.87 48001.92CaixaBnk 2.15 -0.06 2.94 1.50 3.30 12.49 15344.36Iberdrola 11.45 -0.03 11.57 7.76 3.54 20.44 86836.96Inditex 27.85 -0.43 32.28 18.51 0.79 47.34 103710.9Repsol 8.06 -0.43 14.69 5.04 11.52 -1.57 15658.86Telefonica 3.66 -0.08 7.01 2.71 10.89 72.20 23282.82

Sweden (SKr)AtlasCpcoB♦ 377.10 -4.90 393.30 223.20 1.73 31.41 17318.78Ericsson 104.65 -1.50 110.15 59.54 1.40 24.61 37841.53H & M 181.15 -1.50 214.35 98.13 2.63 103.07 31141.78Investor 593.00 -2.00 604.60 370.10 2.15 5.88 31789.25Nordea Bk 73.13 -1.40 86.73 48.00 - 12.70 34857.61SEB 91.46 -1.94 104.90 59.80 - 12.35 23358.61SvnskaHn 87.44 -0.78 113.80 71.70 - 11.32 20013.92Swedbank 156.08 -0.24 162.70 99.14 - 13.92 20794.48Telia Co 36.45 -0.37 42.41 30.29 5.59 49.59 17544.23Volvo 195.90 -4.00 207.90 95.00 - 24.23 36482.86Switzerland (SFr)ABB 23.97 -0.18 25.50 14.11 3.25 111.58 57438.67CredSuisse 11.48 -0.24 13.80 6.18 1.23 7.38 31056.75Nestle 101.18 -1.12 112.62 83.37 2.75 21.01 322170.19Novartis 82.27 1.21 96.38 65.09 3.46 28.51 224320.4Richemont 75.48 -1.30 78.86 14.88 2.61 42.92 43546.15Roche 299.05 -3.45 357.85 265.75 3.10 19.40 232207.53Swiss Re 83.02 -0.72 117.05 52.68 7.13 -18.27 29131.99Swisscom 480.00 -1.10 577.80 446.70 4.66 14.75 27481.14Syngent 453.40 0.90 471.20 402.50 - 28.99 43035.76UBS 12.89 -0.27 13.50 7.00 2.62 9.08 54977.03Zurich Fin 368.90 -3.40 439.90 248.70 5.52 17.22 61344.78Taiwan (NT$)Chunghwa Telecom 108.50 -1.00 120.00 103.00 8.37 24.59 29532.21Formosa PetChem 90.50 -4.00 104.50 66.10 3.34 963.34 30248.54HonHaiPrc 82.30 -0.40 101.50 65.70 5.07 10.67 40031.74MediaTek 704.00 -8.00 763.00 273.00 2.89 40.85 39277.57TaiwanSem 480.50 -12.50 506.00 235.50 2.06 25.76 437169.37Thailand (THB)PTT Explor 40.00 -1.75 47.75 23.60 5.29 22.89 37706.87United Arab Emirates (Dhs)Emirtestele 17.32 0.22 17.32 11.04 4.77 16.29 41007.8United Kingdom (p)AscBrFd 2110 -16.00 2730 1554 2.20 23.60 22292.05AstraZen 7805 35.00 10120 5871 2.85 58.80 131911.19Aviva 321.20 -2.90 430.20 205.70 2.96 5.85 17202.51Barclays 134.56 -4.94 192.99 73.04 - 11.71 30641.57BP 247.65 -15.25 508.43 188.52 11.35 -2.99 65869.03BrAmTob 2639.5 -37.50 3507 2362.5 5.84 9.53 65674.02BSkyB 1727.5 1.50 1740 893.50 0.76 36.60 38843.72BT 116.80 -4.50 209.20 1.02 3.96 7.68 15465.27Compass 1324 -94.00 1995.5 865.80 3.02 20.40 29058.06Diageo 2880 -53.00 3297 2050.6 2.43 48.08 96755.04GlaxoSmh♦ 1370 -13.60 1857 1284 5.84 10.84 89911.98Glencore 211.85 -1.70 249.90 109.76 3.77 -10.47 40780.91HSBC 388.25 -16.60 602.90 281.50 2.00 -45.63 103884.35Imperial Brands 1361 -52.00 2072 1203 15.18 15.07 17322.39LlydsBkg 35.62 -1.68 73.66 23.59 3.14 89.05 34258.57Natl Grid 848.40 -25.40 1073.8 789.13 5.64 23.18 38002.93Natwest Group 154.60 -6.05 265.00 90.54 - 24.16 24687.63Prudential 1169.5 -42.50 1509 682.80 3.17 28.79 40379.92ReckittB 6584 68.00 8191.3 5130 2.65 -17.03 61874.25RELX 1747.5 5.50 1613685 1382.86 2.62 26.64 45054.92RioTinto 4834 -88.50 5175 2954 6.32 13.55 86522.06RollsRoyce 105.70 -1.95 249.14 0.54 1.49 -1.02 2623.44RylDShlA 1271.2 -68.20 2338.59 878.10 7.58 -7.64 77987.01Shire# 4690 111.00 4780 2944 0.58 11.63 56567.13StandCh 452.20 -11.50 739.40 334.25 - 22.57 19894.89Tesco 227.00 -0.80 260.40 202.00 4.03 21.46 24803.3Vodafone 123.68 -1.22 158.50 92.76 6.20 -44.65 44025.65WPP 725.60 -23.80 1085.5 450.00 3.13 -3.90 12259.99United States of America ($)21stC Fox A 28.90 -0.26 39.74 19.81 1.72 16.52 9790.883M 174.09 -2.80 182.55 114.04 3.47 19.77 100418.92AbbottLb 107.46 -0.16 115.14 61.61 1.37 57.85 190457.98Abbvie 103.84 -1.05 105.80 62.55 4.68 21.04 183329.46Accenture 246.86 -3.26 250.91 137.15 1.29 31.39 162651.86Adobe 472.95 -4.09 536.88 255.13 - 59.76 226880.69AEP♦ 84.12 -0.80 104.97 65.14 3.44 21.11 41756.1Aetna - - - - - - -Aflac 44.42 -0.87 55.07 23.07 2.58 6.75 31199.11AirProd 277.47 -0.36 327.89 167.43 1.95 29.80 61328.25Alexion 121.17 -2.66 128.57 72.67 - 27.43 26517.5Allergan 193.02 0.03 202.22 114.27 1.54 -25.19 63659.11Allstate 102.40 -1.75 125.92 64.13 2.19 7.13 31135.05Alphabet 1751.46 -35.56 1816.89 1008.87 - 32.81 526565.64Altria 39.87 -0.50 51.78 30.95 9.10 -76.91 74095.17Amazon 3141.47 -53.87 3552.25 1626.03 - 88.991576236.29AmerAir 14.37 -0.61 30.78 8.25 1.44 -1.01 7308.12AmerExpr 119.67 -0.92 138.13 67.00 1.11 28.70 96358.52AmerIntGrp 38.96 -0.75 56.42 16.07 3.55 -6.67 33565.04AmerTower 229.10 -4.99 272.20 174.32 1.95 52.47 101769.28Amgen♦ 220.00 -4.81 264.97 177.05 2.93 17.17 128077.09Anadarko 72.77 0.56 76.23 40.40 1.50 -63.37 36563.54Anthem 310.61 -2.19 338.20 171.03 1.21 15.52 77250.05Aon Cp 205.72 -0.86 238.19 143.93 0.92 25.33 47030.96Apple 118.86 2.27 137.98 53.15 0.69 35.112020834.19ArcherDan 49.67 -0.78 52.05 28.92 3.09 14.65 27635.84

AT&T 28.89 -0.14 39.55 26.08 7.74 16.31 205870.14AutomData 171.49 -3.76 182.32 103.11 2.22 27.86 73537.31Avago Tech 395.14 0.19 399.17 155.67 3.19 72.91 159834.66BakerHu 22.08 0.09 31.26 20.09 3.24 -1.40 11412.93BankAm 28.49 -0.50 35.72 17.95 2.61 13.66 246461Baxter 76.16 0.19 95.19 69.10 1.26 41.68 38903.93BectonDick 232.06 3.10 286.72 197.75 1.46 75.92 67265.45BerkshHat 343909.41-3491.59 352500 239440 - 23.58 223260.49Biogen 240.92 -2.86 374.99 223.25 - 7.70 37073.15BkNYMeln 39.41 -0.55 51.60 26.40 3.40 7.90 34918.18BlackRock 701.57 -13.54 718.85 323.98 2.13 22.87 106996.94Boeing 212.60 -3.90 368.30 89.00 2.00 -26.14 120019.01Booking Holdings 2031.14 -21.53 2128.02 1107.29 - 32.10 83185.16BrisMySq 62.34 -0.71 68.34 45.76 3.05-199.04 141056.08CapOne 87.11 -0.65 107.59 38.00 1.98-217.98 39843.86CardinalHlth 54.32 0.54 60.69 39.05 3.84 -3.99 15937.14Carnival 20.84 -0.74 51.94 7.80 4.78 -2.01 15015.85Caterpillar 173.36 -1.72 178.32 87.50 2.57 21.43 94179.26Celgene 108.24 0.11 110.70 58.59 - 12.71 77035.98CharlesSch 49.00 -0.70 51.65 28.00 1.54 18.98 88063.4Charter Comms 654.49 11.69 663.70 345.67 - 50.44 130816.27Chevron Corp♦ 88.40 -2.91 122.72 51.60 6.06 -17.64 165071.39Chubb 148.37 -3.06 167.74 87.35 2.13 28.52 66967.59Cigna 210.48 -2.02 224.96 118.50 0.02 13.86 76039.54Cisco 42.49 -0.21 50.28 32.40 3.40 15.83 179542.11Citigroup 55.57 -1.11 83.11 32.00 3.97 8.87 115684.09CME Grp 173.38 -1.40 225.36 131.80 1.99 24.21 62239.45Coca-Cola♦ 51.39 -0.91 60.13 36.27 3.27 25.79 220823.68Cognizant 77.44 -0.97 79.00 40.01 1.15 27.79 41402.6ColgtPlm 84.37 -0.53 86.41 58.49 2.13 26.11 72319.33Comcast 51.10 -0.65 52.49 31.71 1.82 22.20 233316.41ConocPhil♦ 40.92 -1.86 67.13 20.84 4.13 18.46 43896.59Corning♦ 36.92 -0.18 37.60 17.44 2.46 244.15 28203.43Costco 386.56 -1.83 391.90 271.28 0.70 43.00 170560.14CrownCstl 164.45 -2.73 180.00 114.18 3.01 99.57 70924.77CSX♦ 90.66 -0.64 93.71 46.81 1.16 24.40 69330.67CVS 67.36 -0.51 76.44 52.04 3.21 9.92 88166.06Danaher 220.40 3.62 248.32 119.60 0.33 49.89 156567.19Deere 259.40 -2.55 265.87 106.14 1.19 29.73 81289.41Delphi 17.02 0.31 18.51 5.39 - -7.42 1469.67Delta 40.37 -0.69 62.48 17.51 2.06 -2.36 25745.33Devon Energy 14.34 -0.44 26.98 4.70 2.86 -2.23 5485.05DiscFinServ♦ 77.54 -1.33 87.43 23.25 2.34 23.04 23765.73Disney 147.58 0.45 152.97 79.07 0.64-157.06 266693.64DominRes 79.07 0.03 90.89 57.79 5.07 112.63 64506.82DowDupont♦ 30.52 -0.65 48.38 30.06 3.83 -7.69 68559.76DukeEner♦ 92.89 -1.71 103.79 62.13 4.40 30.50 68363.19Eaton 120.75 -1.15 123.67 56.42 2.58 30.05 48130.95eBay♦ 50.12 -1.22 61.06 26.02 1.28 14.58 34549.65Ecolab 220.82 -3.99 231.36 124.60 0.88 52.18 63032.01Emerson 76.49 -1.67 80.20 37.75 2.81 22.13 45709.81EOG Res 48.79 -2.64 89.54 27.00 2.74 75.29 28463.03EquityResTP 58.04 -1.16 87.53 45.43 4.22 22.05 21605.58Exelon 41.05 -0.69 50.54 29.28 3.92 14.02 40047.25ExpScripts 92.33 -3.47 101.73 66.93 - 11.10 52061.19ExxonMb♦ 38.51 -1.68 71.37 30.11 9.76 21.22 162829.3Facebook 273.15 -4.67 304.67 137.10 - 30.14 656632.1Fedex 283.43 -3.98 296.08 88.69 0.99 53.59 74426.45FordMtr 9.13 0.04 9.58 3.96 3.39-221.00 35656.62Franklin 22.04 -0.23 27.86 14.91 3.92 9.95 11121.2GenDyn 150.23 -1.84 190.08 100.55 2.91 13.19 43110.39GenElectric 10.25 -0.16 13.26 5.48 0.40 25.45 89744.9GenMills 60.00 -0.13 66.14 46.59 3.26 16.10 36680.03GenMotors 44.04 -1.02 46.71 14.33 2.80 38.83 63034.79GileadSci 59.89 -0.15 85.97 57.04 4.73-264.03 75067.53GoldmSchs 231.80 -3.60 250.46 130.85 2.33 16.30 79754.91Halliburton 17.09 -0.48 25.47 4.25 2.72 -3.33 15103.26HCA Hold 150.38 -2.67 155.84 58.38 0.57 14.75 50884.79Hew-Pack 22.00 -0.28 23.93 12.54 3.18 12.15 30210.06HiltonWwde 103.44 -0.97 116.73 44.30 0.47 736.73 28699.05HomeDep 273.31 -2.68 292.95 140.63 2.13 24.59 294206.06Honywell♦ 204.88 -4.53 210.00 101.08 1.81 28.48 143761.38HumanaInc 397.60 -8.89 474.70 208.25 0.64 13.99 52618.96IBM♦ 123.98 -0.38 158.75 90.56 5.41 13.60 110468.81IllinoisTool 208.87 -3.36 224.69 115.94 2.15 30.70 66111.59Illumina 318.27 1.24 404.20 196.78 - 71.54 46467.42Intcntl Exch 105.02 0.03 106.99 63.51 1.15 28.03 58946.02Intel♦ 47.78 0.33 69.29 43.61 2.82 9.09 195802.44Intuit 348.95 -5.30 377.15 187.68 0.62 49.59 91681.99John&John♦ 143.48 -0.53 157.00 109.16 2.82 21.85 377704.06JohnsonCn 46.27 0.30 47.58 22.78 2.43 44.16 33491.59JPMrgnCh 118.87 -2.35 141.10 76.91 3.27 14.81 362339.9Kimb-Clark 139.17 -2.20 160.16 110.66 3.14 19.57 47336.83KinderM 14.35 -0.40 22.58 9.42 7.37 278.00 32485.44Kraft Heinz 32.54 -0.30 36.37 19.99 5.31-188.30 39784.23Kroger♦ 32.78 0.35 37.22 26.25 1.99 9.83 25378.5L Brands 38.35 -0.49 40.82 8.00 2.39 -13.19 10605.05LasVegasSd 55.80 -0.80 74.29 33.30 2.89 -54.60 42617.79LibertyGbl 22.19 -0.49 24.13 15.24 - -37.36 4023.33Lilly (E)♦ 145.63 -1.81 170.75 115.92 2.03 23.13 139306.98Lockheed♦ 367.18 -4.57 442.53 266.11 2.70 15.19 102729.6

Lowes 152.18 -2.49 180.67 60.00 1.47 19.82 115010.86Lyondell 85.14 -2.73 95.82 33.71 5.09 23.23 28428.2Marathon Ptl♦ 40.30 -1.12 62.14 15.26 5.95 -3.14 26221.23Marsh&M 114.00 -0.36 120.97 74.34 1.66 27.75 57819.72MasterCard 334.32 -4.75 367.25 199.99 0.47 48.63 330465.44McDonald's♦ 215.04 -2.00 231.91 124.23 2.47 31.55 160228.67McKesson♦ 180.28 0.70 187.67 112.60 0.98 30.68 28946.55Medtronic 114.08 -0.51 122.15 72.13 1.96 34.42 153348.08Merck 79.76 -0.10 92.64 65.25 3.22 17.97 201795.55Metlife♦ 46.54 -0.92 53.28 22.85 4.13 5.57 41879.1Microsoft♦ 211.57 -3.66 232.86 132.52 1.00 33.061599574.13Mnstr Bvrg 83.84 -0.31 88.41 50.06 - 36.62 44260.54MondelezInt 57.00 -0.46 59.96 41.19 2.16 22.65 81519.28Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29MorganStly 62.19 -1.66 63.96 27.20 2.43 10.41 112504.99MylanNV 15.86 0.31 23.11 12.75 - 27.88 8586.21Netflix 485.93 -5.43 575.37 290.25 - 76.05 214681.45NextEraE♦ 73.52 -1.61 83.34 43.70 1.91 35.97 36007.78Nike 134.81 0.56 136.35 60.00 0.72 80.03 169160.84NorfolkS♦ 240.35 -2.37 247.98 112.62 1.61 30.01 65929.47Northrop 302.49 -3.54 385.01 263.31 1.89 19.98 50429.92NXP 158.06 -0.88 161.84 58.41 0.98-294.46 44217.22Occid Pet 16.11 -0.45 47.58 8.52 15.96 -1.15 15001.78Oracle 57.56 -0.20 62.60 39.71 1.66 18.22 173306.72Pepsico 143.09 -1.51 147.20 101.42 2.85 27.45 197744.15Perrigo♦ 47.95 -0.09 63.86 40.01 1.96 25.37 6544.08Pfizer♦ 38.12 0.89 39.78 26.41 4.19 13.95 211864.4Phillips66♦ 62.60 -2.63 116.06 40.04 5.94 -9.80 27343.69PhilMorris 75.63 -0.28 90.17 56.01 6.43 14.83 117772.02PNCFin 138.55 -1.24 161.79 79.41 3.59 19.95 58703.78PPG Inds♦ 145.07 -2.71 149.34 69.77 1.47 30.96 34266.17Praxair 164.50 -0.99 169.75 140.00 2.34 37.33 47306.22ProctGmbl 136.92 -1.69 146.92 94.34 2.32 25.36 339507.64Prudntl 76.54 -1.55 97.24 38.62 5.93-114.30 30309.84PublStor 221.93 1.90 240.75 155.37 3.89 29.35 38798.28Qualcomm 145.90 2.07 153.33 58.00 1.86 57.00 165012.9Raytheon 116.96 -5.47 233.48 103.00 2.98 10.60 32566.46Regen Pharm 512.27 -1.78 664.64 328.13 - 18.38 53715.53S&P Global♦ 349.87 8.30 379.87 186.06 0.76 33.96 84178.72Salesforce 239.17 -8.46 284.50 115.29 - 94.09 217644.7Schlmbrg 21.41 -0.47 41.14 11.87 6.03 -2.73 29803.36Sempra Energy 128.79 -1.68 161.87 88.00 3.38 16.42 37150.64Shrwin-Will♦ 740.14 4.33 758.00 325.43 0.72 34.86 67222.85SimonProp 84.05 -1.50 151.59 42.25 8.10 13.68 27579.15SouthCpr 60.00 -0.85 61.28 23.43 2.41 35.02 46384.4Starbucks 97.31 -1.35 99.33 50.02 1.76 80.44 113755.39StateSt 71.27 -0.32 85.89 42.10 3.01 10.99 25143.89Stryker 233.97 1.16 242.51 124.54 1.04 51.46 87923.74Sychrony Fin 31.05 -0.05 38.18 12.15 2.93 13.67 18123.83T-MobileUS 130.28 -1.62 132.47 63.50 - 46.75 161701.81Target♦ 177.47 -2.31 181.11 90.17 1.51 25.26 88842.15TE Connect 113.65 -1.66 117.00 48.62 1.77-309.49 37588.89Tesla Mtrs 586.84 1.08 607.80 65.45 - 1080.79 556266.07TexasInstr 159.04 0.05 164.63 93.09 2.34 29.12 145989.52TheTrvelers 131.58 -2.86 141.87 76.99 2.62 14.58 33330.37ThrmoFshr 460.77 7.37 532.57 250.21 0.19 36.59 182619.37TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69TJX Cos 62.76 -0.46 65.14 32.72 1.12 110.22 75178.77Truist Financial Corp 47.27 -1.23 56.92 24.01 4.11 14.40 63725.55UnionPac 203.56 -2.08 211.14 105.08 1.97 25.12 137172.75UPS B 168.83 -0.06 178.01 82.00 2.52 31.08 120750USBancorp 43.44 -0.78 61.11 28.36 4.18 12.65 65432.15UtdHlthcre 334.25 -3.69 367.95 187.72 1.45 17.40 317143.32UtdTech♦ 86.01 -5.36 158.44 69.02 2.69 144.88 74498.84ValeroEngy♦ 54.85 -1.77 98.03 31.00 7.23-885.61 22367.24Verizon 60.27 -0.32 62.22 48.84 4.24 13.21 249382.26VertexPharm 225.29 -1.42 306.08 197.47 - 21.38 58583.94VF Cp 83.79 -1.93 100.25 45.07 2.37-338.22 32678.45ViacomCBS 35.28 0.22 43.04 10.10 2.76 15.05 19932.48Visa Inc♦ 208.29 -2.71 217.65 133.93 0.60 36.66 352506.61Walgreen 38.77 -0.23 59.99 33.36 4.73 74.81 33571.55WalMartSto 150.26 -1.34 153.40 102.00 1.45 23.57 425799.72WellsFargo♦ 27.80 -0.67 54.75 20.76 7.93 28.59 114918.14Williams Cos 21.12 -0.34 24.17 8.41 7.98 177.76 25630.93Yum!Brnds 105.48 -1.71 107.70 54.95 1.82 29.33 31818.45Venezuela (VEF)Bco de Vnzla 36287.97 6047.98 36287.97 875.00 316.35 - 251.21Bco Provncl 980000 10000 980000 94000 - -18.78 200.58Mrcntl Srvcs 1000000 - 1000000 99999.93 0.02 12.88 115.56

Closing prices and highs & lows are in traded currency (with variations for thatcountry indicated by stock), market capitalisation is in USD. Highs & lows arebased on intraday trading over a rolling 52 week period.♦ ex-dividend■ ex-capital redistribution# price at time of suspension

FT 500: TOP 20

Close Prev Day Week Monthprice price change change % change change % change %

ShenwanHong 0.06 0.06 0.00 5.26 0.01 22.4 20.00Occid Pet 16.20 16.56 -0.36 -2.17 2.71 20.1 77.55Carnival 20.33 21.58 -1.25 -5.79 2.96 17.0 49.29Tesla Mtrs 569.90 585.76 -15.86 -2.71 80.29 16.4 49.23Vale 77.76 78.44 -0.68 -0.87 9.32 13.6 28.77AmerAir 14.17 14.98 -0.81 -5.42 1.64 13.1 25.94ShnEtsuCh 17135.00 16945.00 190.00 1.12 1975.00 13.0 19.92IndstrlBk 21.02 20.61 0.41 1.99 2.00 10.5 18.09Murata Mfg 9129.00 9062.00 67.00 0.74 847.00 10.2 21.14BBVA 3.95 3.96 -0.01 -0.25 0.35 9.7 60.28Cred Agr 9.80 9.86 -0.06 -0.61 0.86 9.6 44.56OilNatGas 78.50 80.20 -1.70 -2.12 6.85 9.6 15.10Glencore 213.55 213.55 0.00 0.00 18.49 9.5 37.75EOG Res 49.45 51.43 -1.98 -3.85 4.06 8.9 44.85Suncor En 21.97 22.41 -0.44 -1.96 1.80 8.9 46.04Devon Energy 14.33 14.78 -0.45 -3.04 1.17 8.9 60.86WellsFargo 27.73 28.46 -0.73 -2.57 2.25 8.8 29.46Renault 33.48 34.12 -0.64 -1.88 2.63 8.5 57.66ChinaPcIns 29.50 30.30 -0.80 -2.64 2.25 8.3 19.19RollsRoyce 107.65 107.65 0.00 0.00 8.21 8.3 48.98Based on the FT Global 500 companies in local currency

FT 500: BOTTOM 20

Close Prev Day Week Monthprice price change change % change change % change %

WalMrtMex 52.53 52.88 -0.35 -0.66 -4.85 -8.5 2.65CntJpRwy 13300.00 13985.00 -685.00 -4.90 -1055.00 -7.3 2.69CNOOC 8.13 9.45 -1.32 -13.97 -0.62 -7.1 10.35SandsCh 31.80 33.10 -1.30 -3.93 -2.40 -7.0 15.41Salesforce 240.56 247.63 -7.08 -2.86 -17.49 -6.8 3.60AstraZen 7770.00 7770.00 0.00 0.00 -547.00 -6.6 1.98AstellasPh 1483.50 1580.00 -96.50 -6.11 -102.00 -6.4 2.57Mizuho Fin 1327.50 1379.00 -51.50 -3.73 -87.00 -6.2 3.78Natl Grid 873.80 873.80 0.00 0.00 -56.20 -6.0 -5.64MediaTek 704.00 712.00 -8.00 -1.12 -43.00 -5.8 2.92Imperial Brands 1413.00 1413.00 0.00 0.00 -84.50 -5.6 13.36CSL 297.38 303.00 -5.62 -1.85 -16.15 -5.2 3.95Prudential 1212.00 1212.00 0.00 0.00 -65.00 -5.1 27.07AIA 84.95 88.50 -3.55 -4.01 -4.55 -5.1 13.56Cielo 3.71 3.76 -0.05 -1.33 -0.19 -4.9 10.39TokioMarine 5190.00 5465.00 -275.00 -5.03 -263.00 -4.8 10.86Toyota 6999.00 7252.00 -253.00 -3.49 -353.00 -4.8 1.83JardnStr US$ 23.89 23.90 -0.01 -0.04 -1.16 -4.6 8.69L Brands 38.20 38.84 -0.64 -1.65 -1.77 -4.4 19.40Tencent 563.00 583.00 -20.00 -3.43 -25.00 -4.3 -8.26Based on the FT Global 500 companies in local currency

BONDS: HIGH YIELD & EMERGING MARKET

Day's Mth's SpreadRed Ratings Bid Bid chge chge vs

Nov 30 date Coupon S* M* F* price yield yield yield USHigh Yield US$HCA Inc. 04/24 8.36 BB- Ba2 BB 113.75 4.24 0.00 0.12 -

High Yield EuroAldesa Financial Services S.A. 04/21 7.25 - - B 71.10 28.23 0.00 0.64 25.98

Emerging US$Peru 03/19 7.13 BBB+ A3 BBB+ 104.40 2.60 - - 0.34Colombia 01/26 4.50 - Baa2 BBB- 111.88 1.95 -0.03 -0.16 1.64Brazil 04/26 6.00 - Ba2 BB- 118.65 2.28 -0.03 -0.31 1.97Poland 04/26 3.25 - A2 A- 112.82 0.80 -0.01 -0.03 0.49Mexico 05/26 11.50 - Baa1 BBB- 148.00 2.13 0.00 -0.26 1.82Turkey 10/26 4.88 - B2 BB- 97.63 5.35 -0.11 -1.31 5.04Turkey 03/27 6.00 - Ba2 BB+ 101.26 5.82 0.00 0.17 3.07Peru 08/27 4.13 BBB+ A3 BBB+ 103.50 3.66 0.01 -0.02 0.80Russia 06/28 12.75 - Ba1 BBB 171.13 2.41 0.00 -0.05 -Brazil 02/47 5.63 - Ba2 BB- 118.00 4.45 -0.04 -0.39 -

Emerging EuroBrazil 04/21 2.88 BB- Ba2 BB- 103.09 0.05 0.01 -0.09 -1.19Mexico 04/23 2.75 - Baa1 BBB- 106.02 0.22 -0.01 -0.15 0.09Mexico 04/23 2.75 BBB+ A3 BBB+ 107.76 0.76 0.00 -0.07 -1.56Bulgaria 03/28 3.00 BBB- Baa2 BBB 117.04 1.00 0.02 -0.15 -1.42Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; allother London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

BONDS: GLOBAL INVESTMENT GRADE

Day's Mth's SpreadRed Ratings Bid Bid chge chge vs

Nov 30 date Coupon S* M* F* price yield yield yield USUS$FleetBoston Financial Corp. 01/28 6.88 BBB+ Baa1 A- 129.00 2.54 -0.01 -0.05 -The Goldman Sachs Group, Inc. 02/28 5.00 BBB+ A3 A 117.21 2.47 0.00 0.32 -NationsBank Corp. 03/28 6.80 BBB+ Baa1 A- 127.69 2.72 -0.01 0.06 -GTE LLC 04/28 6.94 BBB+ Baa2 A- 128.27 2.80 0.00 -0.11 -United Utilities PLC 08/28 6.88 BBB Baa1 A- 130.43 2.62 -0.07 -0.22 -Barclays Bank plc 01/29 4.50 A A1 A+ 96.46 5.02 0.00 0.02 -EuroElectricite de France (EDF) 04/30 4.63 A- A3 A- 137.45 0.82 -0.01 0.10 -The Goldman Sachs Group, Inc. 02/31 3.00 BBB+ A3 A 124.42 0.68 0.00 -0.11 -The Goldman Sachs Group, Inc. 02/31 3.00 BBB+ A3 A 121.70 0.93 0.00 0.02 -Finland 04/31 0.75 AA+ Aa1 AA+ 111.08 -0.27 0.00 -0.05 -0.87YenMexico 06/26 1.09 - Baa1 BBB- 96.83 1.69 0.01 -0.14 1.39£ Sterlinginnogy Fin B.V. 06/30 6.25 BBB Baa2 A- 137.45 2.19 -0.03 0.02 -innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 128.68 3.20 0.00 -0.01 0.40Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other Londonclose. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL

Nov 30 Rate Current Since Last Mnth Ago Year AgoUS Fed Funds 0.00-0.25 15-03-2020 1.00-1.25 1.50-1.75 1.25-1.50US Prime 4.75 30-10-2019 5.25 5.25 4.25US Discount 2.65 30-09-2019 2.75 2.75 1.75Euro Repo 0.00 16-03-2016 0.00 0.00 0.00UK Repo 0.10 19-03-2020 0.25 0.75 0.25Japan O'night Call 0.00-0.10 01-02-2016 0.00 0.00--0.10 0.00--0.10Switzerland Libor Target -1.25-0.25 15-01-2015 -0.75--0.25 -1.25--0.25 -1.25--0.25

INTEREST RATES: MARKET

Over Change One Three Six OneNov 30 (Libor: Nov 27) night Day Week Month month month month yearUS$ Libor 0.08025 0.000 -0.845 0.008 0.15475 0.22538 0.25738 0.33038Euro Libor -0.59014 -0.003 -0.165 -0.002 -0.58114 -0.54529 -0.51514 -0.47743£ Libor 0.04450 -0.001 -0.179 -0.002 0.04100 0.04150 0.06288 0.13313Swiss Fr Libor -0.024 -0.83520 -0.77480 -0.72720 -0.61120Yen Libor -0.010 -0.11167 -0.11500 -0.06417 0.05100Euro Euribor 0.000 -0.54600 -0.52800 -0.50700 -0.48700Sterling CDs - - - -US$ CDs - - - -Euro CDs - - - -

Short 7 Days One Three Six OneNov 30 term notice month month month yearEuro -0.74 -0.44 -0.75 -0.45 -0.77 -0.47 -0.68 -0.38 -0.66 -0.36 -0.66 -0.36Sterling 0.45 0.55 0.70 0.80 0.78 0.88 0.82 0.97 0.89 1.04Swiss Franc - - - - - - - - - - - -Canadian Dollar - - - - - - - - - - - -US Dollar 0.07 0.37 -0.03 0.27 0.01 0.31 0.09 0.39 0.13 0.43 0.19 0.49Japanese Yen -0.25 -0.10 -0.25 -0.10 -0.40 -0.10 -0.30 0.00 -0.25 0.05 -0.20 0.10Libor 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.

BOND INDICES

Day's Month's Year Return ReturnIndex change change change 1 month 1 year

Markit IBoxxABF Pan-Asia unhedged 223.59 0.03 2.05 7.72 1.94 9.63Corporates( £) 402.38 -0.10 2.12 6.91 1.40 7.06Corporates($) - - - - - -Corporates(€) 243.92 0.00 1.07 2.63 0.91 2.51Eurozone Sov(€) 263.49 0.00 0.24 5.01 0.34 3.88Gilts( £) 374.09 -0.15 -0.27 7.36 -0.71 5.96Global Inflation-Lkd 306.99 0.32 2.10 9.81 1.47 10.83Markit iBoxx £ Non-Gilts 389.32 -0.09 1.53 6.27 0.99 6.18Overall ($) - - - - - -Overall( £) 374.35 -0.13 0.23 6.79 -0.24 5.81Overall(€) 253.87 0.00 0.36 4.04 0.39 3.17Treasuries ($) - - - - - -

FTSESterling Corporate (£) - - - - - -Euro Corporate (€) 104.47 -0.05 - - 0.54 -1.73Euro Emerging Mkts (€) 633.58 -6.00 - - 11.67 21.18Eurozone Govt Bond 110.04 -0.19 - - -0.34 -0.64

CREDIT INDICES Day's Week's Month's Series SeriesIndex change change change high low

Markit iTraxxCrossover 5Y 268.66 -1.00 -14.03 -73.55 377.90 263.79Europe 5Y 49.22 0.16 -1.83 -9.74 66.97 48.45Japan 5Y 57.38 0.19 -2.50 -8.96 70.43 57.06Senior Financials 5Y 60.77 0.60 -3.41 -15.23 86.20 59.18

Markit CDXEmerging Markets 5Y 165.14 -3.13 -4.74 -52.14 245.71 164.33Nth Amer High Yld 5Y 306.51 -4.02 -33.67 -114.75 421.26 306.51Nth Amer Inv Grade 5Y 51.12 -1.11 -5.15 -14.50 65.62 51.12Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names.

COMMODITIES www.ft.com/commodities

Energy Price* ChangeCrude Oil† Dec 45.22 -0.30Brent Crude Oil‡ 47.77 -0.50RBOB Gasoline† Dec 1.25 -0.03Heating Oil† - -Natural Gas† Dec 2.95 0.09Ethanol♦ - -Uranium† - -Carbon Emissions‡ - -Diesel† - -Base Metals (♠ LME 3 Months)Aluminium 2030.00 32.50Aluminium Alloy 1665.00 0.00Copper 7658.00 152.50Lead 2094.00 -13.00Nickel 16365.00 -55.00Tin 18890.00 -85.00Zinc 2822.50 14.00Precious Metals (PM London Fix)Gold 1779.30 -28.10Silver (US cents) 2313.50 -22.50Platinum 949.00 -9.00Palladium 2362.00 -2.00Bulk CommoditiesIron Ore 132.30 1.35GlobalCOAL RB Index 82.00 0.00Baltic Dry Index 1227.00 -3.00

Agricultural & Cattle Futures Price* ChangeCorn♦ Dec 425.50 -0.75Wheat♦ Dec 595.00 -0.75Soybeans♦ Jan 1181.00 -12.25Soybeans Meal♦ Dec 396.80 -1.20Cocoa (ICE Liffe)X Dec 1837.00 -38.00Cocoa (ICE US)♥ Dec 2638.00 0.00Coffee(Robusta)X Jan 1392.00 -18.00Coffee (Arabica)♥ Dec 119.70 0.00White SugarX 397.60 -7.90Sugar 11♥ 14.64 -0.18Cotton♥ Dec 71.53 0.00Orange Juice♥ Jan 128.80 0.00Palm Oil♣ - -Live Cattle♣ Dec 110.55 0.00Feeder Cattle♣ Jan 134.88 -Lean Hogs♣ Dec 65.95 0.00

% Chg % ChgNov 27 Month Year

S&P GSCI Spt 386.27 13.38 -5.58DJ UBS Spot 74.70 4.02 -3.09TR/CC CRB TR 170.23 10.76 -8.79M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05UBS Bberg CMCI TR 13.20 4.85 -4.74LEBA EUA Carbon 28.34 19.68 14.78LEBA CER Carbon 0.29 0.00 52.63LEBA UK Power 1435.00 -23.67 -33.99

Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $unless otherwise stated.

BONDS: INDEX-LINKED

Price Yield Month Value No ofNov 27 Nov 27 Prev return stock Market stocks

Can 4.25%' 21 105.12 -0.806 -0.787 0.49 8.41 97567.83 8Fr 0.10%' 21 104.91 -1.022 -1.015 0.31 11.35 247509.17 15Swe 0.25%' 22 109.58 -0.500 -0.493 -0.17 26.51 200410.97 7UK 1.875%' 22 110.00 -2.983 -2.999 0.08 15.74 799681.60 28UK 2.5%' 24 358.48 -2.916 -2.847 -0.11 6.82 799681.60 28UK 2%' 35 301.27 -2.660 -2.653 -1.19 9.08 799681.60 28US 0.625%' 21 - - - - - - -US 3.625%' 28 135.97 -1.050 -1.022 0.63 16.78 1626419.83 43Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total marketvalue. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to paramount.

BONDS: TEN YEAR GOVT SPREADS

Spread SpreadBid vs vs

Yield Bund T-Bonds

Spread SpreadBid vs vs

Yield Bund T-Bonds

Australia 1.02 - 0.23Austria - - -Canada 0.69 - -0.10Denmark -0.47 - -1.26Finland -0.39 - -1.18Germany - - -Ireland -0.32 - -1.11Italy -0.14 - -0.93Japan -0.01 - -0.80

Netherlands -0.68 - -New Zealand 0.90 - 0.11Norway 0.84 - 0.05Portugal -0.37 - -Spain -0.87 - -1.66Sweden -1.46 - -2.25Switzerland -0.51 - -1.30United Kingdom - - -United States 0.79 - 0.00

Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

VOLATILITY INDICES

Nov 30 Day Chng Prev 52 wk high 52 wk lowVIX 21.77 0.93 20.84 85.42 11.71VXD 23.76 1.49 22.27 71.05 2.47VXN 27.49 1.37 26.12 84.67 13.58VDAX 24.08 2.05 22.02 93.30 -† 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 YearDate Coupon Price Yield yield yield chg yld chg yld

Australia 11/22 2.25 104.25 0.09 0.00 0.00 -0.02 -0.5605/32 1.25 102.50 1.02 -0.01 0.04 0.11 -

Austria - - - - - - -02/47 1.50 138.92 0.01 0.00 0.00 -0.02 -0.43

Belgium 09/22 1.00 102.91 -0.64 0.00 -0.01 0.03 -0.10Canada 11/22 2.00 103.48 0.21 -0.01 -0.02 0.01 -1.47

06/30 1.25 105.18 0.69 -0.01 0.01 0.08 -0.80Denmark 11/22 0.25 101.75 -0.64 0.01 0.00 0.00 0.03

11/29 0.50 108.86 -0.47 0.00 0.00 0.02 -0.14Finland 04/23 1.50 105.37 -0.74 0.01 0.00 0.00 -0.16

04/31 0.75 112.13 -0.39 0.01 0.01 0.01 -0.38France 05/23 1.75 106.18 -0.71 0.00 -0.01 0.01 -0.14

11/26 0.25 105.16 -0.59 0.00 0.01 0.00 -0.31Germany - - - - - - -

05/23 1.50 105.67 -0.78 0.00 0.00 0.03 -0.1302/26 0.50 106.78 -0.77 0.00 0.00 0.04 -0.2108/50 0.00 105.48 -0.18 0.00 0.00 0.02 -0.32

Greece 02/26 3.65 119.08 0.56 -0.01 -0.04 -0.36 -0.94Ireland 10/22 0.00 101.24 -0.66 0.00 -0.02 -0.01 -0.22

05/30 2.40 126.14 -0.32 0.00 -0.01 -0.03 -0.4405/30 2.40 126.14 -0.32 0.00 -0.01 -0.03 -0.44

Italy 08/22 0.90 102.27 -0.45 -0.01 -0.01 -0.08 -0.5802/25 0.35 102.07 -0.14 -0.01 -0.04 -0.14 -0.8205/30 0.40 105.11 -0.14 -0.03 -0.11 -0.23 -0.8003/48 3.45 146.43 1.40 -0.01 -0.04 -0.13 -0.87

Japan 04/23 0.05 99.99 0.06 0.00 0.01 -0.01 -04/25 0.05 100.01 0.05 0.01 0.02 -0.01 -12/29 0.10 100.99 -0.01 0.01 0.02 -0.01 -12/49 0.40 93.85 0.63 0.00 0.02 0.02 -

Netherlands 07/22 2.25 104.87 -0.73 0.01 0.01 0.00 -0.0807/26 0.50 106.79 -0.68 0.00 0.01 0.01 -0.26

New Zealand 04/25 2.75 110.48 0.33 0.00 0.07 0.29 -0.7805/31 1.50 105.97 0.90 -0.01 0.08 0.34 -0.5405/31 1.50 105.97 0.90 -0.01 0.08 0.34 -0.54

Norway 08/30 1.38 105.01 0.84 0.00 0.04 0.14 -08/30 1.38 105.01 0.84 0.00 0.04 0.14 -

Portugal 10/22 2.20 105.45 -0.68 0.00 -0.02 -0.12 -0.3402/26 3.30 119.47 -0.37 0.00 -0.02 -0.10 -0.52

Spain 10/22 0.45 102.01 -0.59 0.00 0.00 -0.04 -0.2911/30 1.00 119.67 -0.87 -0.01 -0.06 -0.21 -0.33

Sweden 06/22 0.25 109.58 -0.50 -0.01 0.01 0.08 1.4806/26 0.13 116.54 -1.34 0.00 -0.03 -0.03 0.5606/30 0.13 116.59 -1.46 0.03 0.00 -0.01 -

Switzerland 05/22 2.00 104.18 -0.79 -0.02 -0.02 0.04 0.0005/30 0.50 109.87 -0.51 -0.01 -0.03 0.01 0.08

United Kingdom - - - - - - -07/22 0.50 100.88 -0.03 0.01 0.00 0.01 -0.5007/26 1.50 108.28 0.03 0.01 0.01 0.05 -0.4407/47 1.50 115.80 0.84 0.01 -0.05 0.06 -0.39

United States 03/22 0.38 100.33 0.13 -0.01 -0.02 -0.02 -03/25 0.50 100.81 0.31 -0.02 -0.02 0.02 -02/30 1.50 106.32 0.79 -0.03 0.01 0.06 -02/50 0.25 117.64 - - - - -

Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

GILTS: UK CASH MARKET

Red Change in Yield 52 Week AmntNov 30 Price £ Yield Day Week Month Year High Low £m

- - - - - - - - -- - - - - - - - -- - - - - - - - -- - - - - - - - -

Tr 1.5pc '21 100.22 -0.04 0.00 -33.33 33.33 -106.25 101.22 100.22 32.84Tr 4pc '22 105.12 -0.04 0.00 0.00 -33.33 -108.51 107.91 105.12 38.77Tr 5pc '25 121.47 -0.03 -25.00 -25.00 -70.00 -106.38 124.55 121.42 35.84Tr 1.25pc '27 107.58 0.10 11.11 0.00 400.00 -80.39 109.23 103.96 39.34Tr 4.25pc '32 143.21 0.41 5.13 -2.38 24.24 -49.38 148.26 137.84 38.71Tr 4.25pc '36 153.25 0.60 3.45 -3.23 15.38 -40.00 160.46 145.12 30.41Tr 4.5pc '42 175.10 0.78 1.30 -4.88 11.43 -33.33 186.37 162.55 27.21Tr 3.75pc '52 181.91 0.81 1.25 -5.81 10.96 -30.77 198.36 164.59 24.10Tr 4pc '60 208.80 0.77 1.32 -7.23 11.59 -31.25 231.12 186.33 24.12Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.

GILTS: UK FTSE ACTUARIES INDICES

Price Indices Day's Total Return ReturnFixed Coupon Nov 28 chg % Return 1 month 1 year Yield1 Up to 5 Years 89.34 -0.03 2486.91 -0.12 1.20 -0.022 5 - 10 Years 186.18 -0.11 3808.24 -0.40 2.98 0.173 10 - 15 Years 224.05 -0.15 4890.95 -0.57 4.81 0.444 5 - 15 Years 194.58 -0.12 4072.74 -0.46 3.59 0.295 Over 15 Years 394.72 -0.20 6489.63 -1.13 9.22 0.787 All stocks 192.17 -0.13 4119.34 -0.68 5.57 0.65

Day's Month Year's Total Return ReturnIndex Linked Nov 28 chg % chg % chg % Return 1 month 1 year1 Up to 5 Years 303.75 0.01 -0.32 -1.13 2509.35 -0.02 0.442 Over 5 years 836.59 -0.16 -0.71 10.69 6325.59 -0.62 11.093 5-15 years 515.72 -0.06 -0.99 2.51 4107.94 -0.86 3.224 Over 15 years 1105.77 -0.19 -0.60 13.61 8140.88 -0.54 13.895 All stocks 743.22 -0.14 -0.67 9.27 5723.14 -0.57 9.81

Yield Indices Nov 28 Nov 27 Yr ago Nov 28 Nov 27 Yr ago5 Yrs -0.01 -0.03 0.36 20 Yrs 0.81 0.80 1.1910 Yrs 0.35 0.33 0.69 45 Yrs 0.74 0.73 1.1315 Yrs 0.66 0.64 1.03

inflation 0% inflation 5%Real yield Nov 28 Dur yrs Previous Yr ago Nov 28 Dur yrs Previous Yr agoUp to 5 yrs -2.73 2.89 -2.72 -2.22 -3.14 2.89 -3.14 -2.75Over 5 yrs -2.29 24.10 -2.30 -1.83 -2.31 24.15 -2.32 -1.855-15 yrs -2.76 9.54 -2.77 -2.36 -2.86 9.54 -2.87 -2.44Over 15 yrs -2.24 29.21 -2.24 -1.77 -2.25 29.22 -2.26 -1.79All stocks -2.30 22.28 -2.30 -1.84 -2.32 22.35 -2.33 -1.87See FTSE website for more details www.ftse.com/products/indices/gilts©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSEGilt Closing Prices information contained herein is proprietary toTradeweb; may not be copied or re-distributed; is not warranted to beaccurate, 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.

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurateat the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, norMorningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT norMorningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on theuse of the listed information. For all queries e-mail ft.reader.enquiries@morningstar.com

Data provided by Morningstar | www.morningstar.co.uk

DECEMBER 1 2020 Section:Stats Time: 30/11/2020 - 18:51 User: keith.allen Page Name: MARKET DATA 2, Part,Page,Edition: EUR, 12, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 13

MANAGED FUNDS SERVICE

Fund Bid Offer D+/- Yield

Aberdeen Standard Capital (JER)PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130FCA Recognised

Aberdeen Standard Capital Offshore Strategy Fund Limited

Bridge Fund £ 2.1874 - 0.0075 1.72

Global Equity Fund £ 3.0871 - 0.0041 1.06

Global Fixed Interest Fund £ 0.9869 - 0.0012 4.18

Income Fund £ 0.6335 - 0.0024 2.66

Sterling Fixed Interest Fund £ 0.9194 - 0.0008 2.90

UK Equity Fund £ 1.9176 - 0.0180 2.85

Aegon Asset Management UK ICVC (UK)3 Lochside Crescent, Edinburgh, EH12 9SA0800 358 3009 www.aegonam.comAuthorised FundsGlobal Equity GBP B Acc £ 3.08 - 0.03 0.00

Aegon Asset Management Investment Company (Ireland) (IRL)1 North Wall Quay Dublin 1, Ireland +35 3162 24493FCA RecognisedAbsolute Return Bond B GBP Acc 1153.81 - 0.18 1.61

High Yield Global Bond A GBP Inc 507.30 - 0.46 4.49

High Yield Global Bond B GBP Inc 1085.74 - 1.04 5.23

Global Equity Income B GBP Acc 2048.12 - 0.40 0.00

Global Equity Income B GBP Inc 1455.44 - -8.32 3.19

lobal Equity Market Neutral Fund - B Acc GBP £ 12.30 - 0.05 0.00

Global Sustainable Equity B Acc GBP £ 27.05 - 0.30 0.00

Global Sustainable Equity C Acc GBP £ 27.43 - 0.31 0.00

Inv Grd Gbl Bond A Inc GBH 628.89 - 0.60 1.81

Short Dated High Yld Bd B Acc GBP £ 10.98 - 0.01 0.00

Short Dated High Yld Bd C Acc GBP (Hdg) £ 11.08 - 0.00 0.00

Strategic Global Bond A GBP Inc 1314.69 - 0.67 2.70

Strategic Global Bond B GBP Inc 745.96 - 0.43 3.45

Algebris Investments (IRL)RegulatedAlgebris Financial Credit I EUR € 186.71 - 0.00 -

Algebris Financial Credit R EUR € 162.53 - -0.01 -

Algebris Financial Credit Rd EUR € 109.40 - 0.00 5.01

Algebris Financial Income I EUR € 154.73 - -0.06 0.00

Algebris Financial Income R EUR € 143.38 - -0.06 0.00

Algebris Financial Income Rd EUR € 94.72 - -0.04 4.27

Algebris Financial Equity B EUR € 111.08 - -0.29 -

Algebris IG Financial Credit B EUR € 110.17 - 0.02 -

Algebris IG Financial Credit R EUR € 109.40 - 0.03 -

Algebris Global Credit Opportunities I EUR € 128.42 - 0.02 0.00

Algebris Global Credit Opportunities R EUR € 126.35 - 0.02 0.00

Algebris Global Credit Opportunities Rd EUR € 126.35 - 0.02 0.00

Algebris Core Italy I EUR € 116.54 - 0.30 -

Algebris Core Italy R EUR € 109.08 - 0.28 -

Algebris Allocation I EUR € 103.10 - 0.10 -

The Antares European Fund LimitedOther International

AEF Ltd Usd (Est) $ 551.15 - 5.03 0.00

AEF Ltd Eur (Est) € 515.92 - 4.70 0.00

Arisaig PartnersOther International Funds

Arisaig Asia Consumer Fund Class A (Ex-Alcohol) shares $ 122.17 - -0.05 0.00

Arisaig Asia Consumer Fund Limited $ 121.38 - -0.06 0.00

Arisaig Global Emerging Markets Consumer Fund $ 15.99 - 0.04 0.00

Arisaig Global Emerging Markets Consumer UCITS € 12.85 - -0.01 -

Arisaig Global Emerging Markets Consumer UCITS STG £ 14.50 - -0.10 -

Arisaig Latin America Consumer Fund $ 25.25 - 0.04 0.00

Artemis Fund Managers Ltd (1200)F (UK)57 St. James's Street, London SW1A 1LD 0800 092 2051Authorised Inv FundsArtemis Corporate Bond I Acc £ 1.13 - 0.01 1.72

Artemis Target Return Bond I Acc £ 1.06 - 0.00 -

Fund Bid Offer D+/- Yield

Ashmore Investment Management Limited (LUX)2 rue Albert Borschette L-1246 LuxembourgFCA RecognisedAshmore SICAV Emerging Market Debt Fund $ 91.60 - 0.09 5.27

Ashmore SICAV Emerging Market Frontier Equity Fund $ 159.31 - 0.72 1.61

Ashmore SICAV Emerging Market Total Return Fund $ 80.58 - 0.01 4.49

Ashmore SICAV Global Small Cap Equity Fund $ 197.64 - 2.67 0.03

EM Active Equity Fund Acc USD $ 154.54 - 1.92 0.00

EM Equity Fund Acc USD $ 138.38 - 0.17 0.00

EM Mkts Corp.Debt USD F $ 90.28 - 0.08 6.17

EM Mkts Loc.Ccy Bd USD F $ 77.59 - -0.10 4.94

EM Short Duration Fund Acc USD $ 117.29 - 0.21 0.00

Atlantas Sicav (LUX)RegulatedAmerican Dynamic $ 6330.02 6330.02 30.04 0.00

American One $ 6162.46 6162.46 -70.77 0.00

Bond Global € 1516.73 1516.73 2.47 0.00

Eurocroissance € 1214.57 1214.57 -10.03 0.00

Far East $ 1206.40 - 19.58 -

Barclays Investment Funds (CI) Ltd (JER)39/41 Broad Street, St Helier, Jersey, JE2 3RR Channel Islands 01534 812800FCA Recognised

Bond Funds

Sterling Bond F £ 0.50 - 0.00 2.20

Brooks Macdonald International Fund Managers Limited (JER)5 Anley Street, St Helier, Jersey, JE2 3QE+44 (0) 1534 700 104 (Int.) +44 (0) 800 735 8000 (UK)

Brooks Macdonald International Investment Funds Limited

Euro High Income € 1.5620 - 0.0010 2.50

High Income £ 0.8827 - 0.0015 3.77

Sterling Bond £ 1.6300 - 0.0040 2.06

Brooks Macdonald International Multi Strategy Fund Limited

Cautious Balanced Strategy £ 1.3340 - 0.0010 0.00

Growth Strategy £ 1.9180 - 0.0020 0.00

High Growth Strategy £ 2.6270 - 0.0060 0.00

US$ Growth Strategy $ 1.8620 - 0.0030 0.00Dealing Daily. Initial charge up to 2%

CCLA Investment Management Ltd (UK)Senator House 85 Queen Victoria Street London EC4V 4ETAuthorised Inv FundsDiversified Income 1 Units GBP Inc £ 1.54 1.54 0.00 0.04

Diversified Income 2 Units GBP Inc £ 1.48 1.48 0.00 0.04

Diversified Income 3 Units GBP Inc £ 1.49 1.49 0.00 0.03

CG Asset Management Limited (IRL)25 Moorgate, London, EC2R 6AYDealing: Tel. +353 1434 5098 Fax. +353 1542 2859FCA Recognised

CG Portfolio Fund Plc

Absolute Return Cls M Inc £ 130.75 130.75 0.23 1.46

Capital Gearing Portfolio GBP P £ 35683.99 35683.99 74.78 0.52

Capital Gearing Portfolio GBP V £ 173.54 173.54 0.36 0.21

Dollar Fund Cls D Inc £ 169.82 169.82 0.95 1.80

Dollar Hedged GBP Inc £ 106.13 106.13 0.33 1.79

Real Return Cls A Inc £ 207.14 207.14 1.26 2.06

Chartered Asset Management Pte LtdOther International Funds

CAM-GTF Limited $ 308198.70 308198.70 6184.54 0.00

CAM GTi Limited $ 846.51 - -8.59 0.00

Raffles-Asia Investment Company $ 1.45 1.45 0.00 2.06

Dodge & Cox Worldwide Funds (IRL)6 Duke Street,St.James,London SW1Y 6BNwww.dodgeandcox.worldwide.com 020 3713 7664FCA Recognised

Dodge & Cox Worldwide Funds plc - Global Bond Fund

EUR Accumulating Class € 15.05 - -0.03 0.00

EUR Accumulating Class (H) € 11.56 - 0.02 0.00

EUR Distributing Class € 11.82 - -0.02 3.78

EUR Distributing Class (H) € 9.04 - 0.01 3.91

GBP Distributing Class £ 12.95 - 0.09 3.87

GBP Distributing Class (H) £ 9.52 - 0.01 4.23

USD Accumulating Class $ 12.98 - 0.01 0.00

Dodge & Cox Worldwide Funds plc-Global Stock Fund

USD Accumulating Share Class $ 24.28 - -0.02 0.00

Fund Bid Offer D+/- Yield

GBP Accumulating Share Class £ 30.01 - 0.16 0.00

GBP Distributing Share class £ 20.71 - 0.11 1.44

EUR Accumulating Share Class € 30.50 - -0.10 0.00

GBP Distributing Class (H) £ 11.83 - 0.00 1.18

Dodge & Cox Worldwide Funds plc-U.S. Stock Fund

USD Accumulating Share Class $ 30.25 - -0.02 0.00

GBP Accumulating Share Class £ 35.35 - 0.19 0.00

GBP Distributing Share Class £ 21.58 - 0.11 1.09

EUR Accumulating Share Class € 32.81 - -0.11 0.00

GBP Distributing Class (H) £ 12.54 - 0.00 1.15

Dragon Capitalwww.dragoncapital.comFund information:info@dragoncapital.com

Other International Funds

Vietnam Equity (UCITS) Fund A USD $ 23.79 - -0.10 0.00

Ennismore Smaller Cos Plc (IRL)5 Kensington Church St, London W8 4LD 020 7368 4220FCA RecognisedEnnismore European Smlr Cos NAV £ 129.36 - 0.53 0.00

Ennismore European Smlr Cos NAV € 144.48 - 0.20 0.00

Ennismore European Smlr Cos Hedge FdOther International Funds

NAV € 509.29 - 9.63 0.00

Equinox Fund Mgmt (Guernsey) Limited (GSY)RegulatedEquinox Russian Opportunities Fund Limited $ 172.98 - -6.80 0.00

Euronova Asset Management UK LLP (CYM)RegulatedSmaller Cos Cls One Shares € 51.58 - 0.56 0.00

Smaller Cos Cls Two Shares € 33.91 - 0.32 0.00

Smaller Cos Cls Three Shares € 17.08 - 0.16 0.00

Smaller Cos Cls Four Shares € 21.96 - 0.22 0.00

FIL Investment Services (UK) Limited (1200)F (UK)130, Tonbridge Rd, Tonbridge TN11 9DZCallfree: Private Clients 0800 414161Broker Dealings: 0800 414 181

OEIC Funds

Fidelity American Fund W-ACC-GBP £ 52.99 - -0.13 0.34

Fidelity Cash Fund Y-ACC-GBP £ 1.02 - 0.00 0.66

FID Emerg Europe, Middle East and Africa Fund W-ACC-GBP £ 2.22 - -0.04 -

Fidelity Global Enhanced Income Fund W-ACC-GBP £ 2.03 - 0.00 4.01

Fidelity Global Focus Fund W-ACC-GBP £ 32.65 - 0.05 0.22

Fidelity Global High Yield Fund Y-ACC-GBP £ 15.36 - 0.02 -

Fidelity Japan Fund W-ACC-GBP £ 4.84 - -0.12 -

Fidelity Japan Smaller Companies Fund W-ACC-GBP £ 4.25 - -0.06 -

Fidelity Select 50 Balanced Fund PI-ACC-GBP £ 1.14 - 0.01 -

Fidelity Special Situations Fund W-ACC-GBP £ 32.88 - 0.28 4.08

Short Dated Corporate Bond Fund Y ACC GBP £ 11.05 - 0.01 -

Fidelity Sustainable Water & Waste W Acc £ 1.10 - -0.01 -

Fidelity Sustainable Water & Waste W Inc £ 1.10 - -0.01 -

Fidelity UK Growth Fund W-ACC-GBP £ 3.34 - -0.05 1.14

Fidelity UK Select Fund W-ACC-GBP £ 3.09 - 0.05 2.60

Institutional OEIC Funds

Europe (ex-UK) Fund ACC-GBP £ 6.98 - 0.06 -

Findlay Park Funds Plc (IRL)30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900FCA RecognisedAmerican EUR Unhedged Class € 129.67 - -0.09 -

American Fund USD Class $ 154.93 - 0.52 -

American Fund GBP Hedged £ 78.10 - 0.27 0.00

American Fund GBP Unhedged £ 116.08 - 0.70 0.00

Foord Asset ManagementWebsite: www.foord.com - Email: info@foord.com

FCA Recognised - Luxembourg UCITS

Foord International Fund | R $ 44.85 - 0.11 -

Foord Global Equity Fund (Lux) | R $ 16.85 - 0.10 -

Regulated

Foord Global Equity Fund (Sing) | B $ 20.62 - 0.11 0.00

Foord International Trust (Gsy) $ 44.64 - 0.11 0.00

Franklin Templeton International Services Sarl (IRL)JPMorgan House - International Financial Services Centre,Dublin 1, IrelandOther International Funds

Franklin Emerging Market Debt Opportunities Fund Plc

Franklin Emg Mkts Debt Opp CHFSFr 14.01 - 0.00 9.80

Franklin Emg Mkts Debt Opp GBP £ 9.16 - 0.03 6.46

Franklin Emg Mkts Debt Opp SGD S$ 20.06 - 0.01 4.70

Fund Bid Offer D+/- Yield

Franklin Emg Mkts Debt Opp USD $ 15.95 - 0.02 6.75

GAMfunds@gam.com, www.funds.gam.comRegulatedLAPIS GBL TOP 50 DIV.YLD-Na-D £ 99.63 - 0.54 5.00

LAPIS GBL F OWD 50 DIV.YLD-Na-D £ 100.07 - 0.61 -

Genesis Investment Management LLPOther International Funds

Emerging Mkts NAV £ 7.21 - -0.16 0.00

HPB Assurance LtdAnglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490

International Insurances

Holiday Property Bond Ser 1 £ 0.49 - 0.00 0.00

Holiday Property Bond Ser 2 £ 0.62 - 0.00 0.00

Intrinsic Value Investors (IVI) LLP (IRL)1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210FCA RecognisedIVI European Fund EUR € 23.88 - 0.09 0.00

IVI European Fund GBP £ 28.47 - 0.18 0.37

Janus Henderson Investors (UK)PO Box 9023, Chelmsford, CM99 2WB Enquiries: 0800 832 832www.janushenderson.comAuthorised Inv FundsJanus Henderson Instl UK Idx Opps A Acc £ 0.92 - 0.00 -

M & G Securities (1200)F (UK)PO Box 9038, Chelmsford, CM99 2XFwww.mandg.co.uk/charities Enq./Dealing: 0800 917 4472Authorised Inv FundsM&G Charibond Charities Fixed Interest Fund (Charibond) Inc £ 1.25 - 0.00 -

M&G Charibond Charities Fixed Interest Fund (Charibond) Acc £ 42.80 - 0.01 -

M&G Charity Multi Asset Fund Inc £ 0.82 - 0.00 -

M&G Charity Multi Asset Fund Acc £ 90.40 - 0.11 -

MMIP Investment Management Limited (GSY)Regulated

Multi-Manager Investment Programmes PCC Limited

UK Equity Fd Cl A Series 01 £ 2121.55 2155.20 31.89 0.00

Diversified Absolute Rtn Fd USD Cl AF2 $ 1560.95 - -30.80 0.00

Diversified Absolute Return Stlg Cell AF2 £ 1471.35 - -29.07 0.00

Global Equity Fund A Lead Series £ 1484.91 1489.79 -23.47 0.00

Marwyn Asset Management Limited (CYM)RegulatedMarwyn Value Investors £ 340.40 - -14.66 0.00

Milltrust International Managed Investments ICAV (IRL)mimi@milltrust.com, +44(0)20 8123 8316 www.milltrust.comRegulatedBritish Innovation Fund £ 123.94 - 23.92 0.00

MAI - Buy & Lease (Australia) A$ 123.94 - 21.42 0.00

MAI - Buy & Lease (New Zealand)NZ$ 97.28 - -1.00 0.00

Milltrust Global Emerging Markets Fund - Class A $ 108.47 - -1.16 0.00

The Climate Impact Asia Fund (Class A) $ 107.42 - 5.61 -

Milltrust International Managed Investments SPCem@milltrust.com, +44(0)20 8123 8316, www.milltrust.comRegulatedMilltrust Alaska Brazil SP A $ 72.32 - 0.96 -

Milltrust Laurium Africa SP A $ 92.65 - -0.54 -

Milltrust Singular ASEAN SP Founders $ 147.31 - 1.75 -

Milltrust SPARX Korea Equity SP A $ 151.46 - 1.01 -

Milltrust Xingtai China SP A $ 138.57 - 1.83 -

Fund Bid Offer D+/- Yield

New Capital UCITS Fund PLC (IRL)Leconfield House, Curzon Street, London, W1J 5JBwww.newcapitalfunds.comFCA Recognised

New Capital UCITS Funds

New Capital China Equity Fund $ 265.28 - 2.20 0.00

New Capital Dynamic European Equity Fund € 129.43 - 0.68 0.00

New Capital Dynamic UK Equity Fund £ 112.58 - 0.28 0.00

New Capital Global Alpha Fund £ 116.16 - 0.07 0.00

New Capital Global Equity Conviction Fund $ 196.95 - 1.13 -

New Capital Global Value Credit Fund $ 160.37 - 0.14 -

New Capital Japan Equity Fund ¥ 1621.63 - 7.82 0.00

New Capital US Growth Fund $ 427.18 - 3.51 0.00

New Capital US Small Cap Growth Fund $ 211.61 - 2.59 0.00

New Capital Wealthy Nations Bond Fund $ 155.39 - 0.19 0.00

Oasis Crescent Management Company LtdOther International Funds

Oasis Crescent Equity Fund R 10.91 - -0.02 0.22

Oasis Global Mgmt Co (Ireland) Ltd (IRL)Regulated

Oasis Crescent Global Investment Fund (Ireland) plc

Oasis Crescent Global Short Term Income Fund I - Class A Dist $ 0.99 - 0.00 2.05

Oasis Crescent Global Equity Fund $ 34.20 - 0.14 0.27

Oasis Crescent Variable Balanced Fund £ 9.38 - 0.02 0.00

OasisCresGl Income Class A $ 11.09 - 0.01 2.66

OasisCresGl LowBal D ($) Dist $ 12.51 - 0.01 0.85

OasisCresGl Med Eq Bal A ($) Dist $ 13.56 - 0.02 0.34

Oasis Crescent Gbl Property Eqty $ 7.94 - -0.04 1.25

Omnia Fund LtdOther International Funds

Estimated NAV $ 561.34 - -23.75 0.00

Oryx International Growth Fund LtdOther International Funds

NAV (Fully Diluted) £ 9.10 - -0.52 0.00

Orbis Investments (U.K.) Limited (GBR)28 Dorset Square, London, NW1 6QGwww.orbis.com 0800 358 2030RegulatedOrbis OEIC Global Cautious Standard £ 10.26 - 0.01 0.03

Orbis OEIC Global Balanced Standard £ 15.20 - 0.03 0.00

Orbis OEIC Global Equity Standard £ 19.29 - 0.13 0.00

Orbis OEIC UK Equity Standard £ 7.78 - 0.03 0.00

Platinum Capital Management LtdOther International Funds

Platinum All Star Fund - A $ 132.45 - - -

Platinum Global Growth UCITS Fund $ 13.07 - -0.01 0.00

Platinum Essential Resources UCITS Fund SICAV USD Class E $ 7.54 - -0.04 0.00

Platinum Global Dividend UCITS Fund $ 55.36 - -0.01 0.00

Fund Bid Offer D+/- Yield

Polar Capital Funds Plc (IRL)RegulatedAutomation & Artificial Intelligence CL I USD Acc $ 17.02 17.02 0.23 0.00

Asian Financials I USD $ 434.44 434.44 -6.32 0.00

Biotechnology I USD $ 36.49 36.49 0.97 0.00

Emerging Market Stars I USD Acc $ 14.41 - 0.06 0.00

European Ex UK Inc EUR Acc € 11.64 11.64 0.04 -

Financial Opps I USD $ 13.11 - -0.04 2.42

GEM Income I USD $ 12.52 - 0.02 0.00

Global Convertible I USD $ 16.61 16.61 0.15 0.00

Global Insurance I GBP £ 7.10 - -0.04 0.00

Global Technology I USD $ 83.66 - 1.07 0.00

Healthcare Blue Chip Fund I USD Acc $ 15.55 15.55 0.19 0.00

Healthcare Opps I USD $ 61.63 - 0.80 0.00

Income Opportunities B2 I GBP Acc £ 2.31 2.31 0.00 -

Japan Value I JPY ¥ 106.31 106.31 -3.01 0.00

North American I USD $ 29.98 29.98 0.18 0.00

UK Val Opp I GBP Acc £ 11.56 11.56 0.17 0.00

Polar Capital LLP (CYM)RegulatedEuropean Forager A EUR € 168.11 - -3.75 0.00

Private Fund Mgrs (Guernsey) Ltd (GSY)RegulatedMonument Growth 24/11/2020 £ 500.73 505.57 -4.92 -

Prusik Investment Management LLP (IRL)Enquiries - 0207 493 1331RegulatedPrusik Asian Equity Income B Dist $ 175.74 - -3.31 4.98

Prusik Asia Emerging Opportunities Fund A Acc $ 177.23 - -0.95 0.00

Prusik Asia Fund U Dist. £ 224.85 - -3.44 0.00

Purisima Investment Fds (CI) Ltd (JER)RegulatedPCG B 284.81 - 0.06 0.00

PCG C 278.28 - 0.05 0.00

Ram Active Investments SAwww.ram-ai.comOther International FundsRAM Systematic Emerg Markets Eq $ 204.13 204.13 0.71 -

RAM Systematic European Eq € 459.54 459.54 3.99 -

RAM Systematic Funds Global Sustainable Income Eq $ 128.58 128.58 0.41 0.00

RAM Systematic Long/Short Emerg Markets Eq $ 103.94 103.94 0.29 -

RAM Systematic Long/Short European Eq € 128.90 128.90 0.63 -

RAM Systematic North American Eq $ 345.66 345.66 1.87 -

RAM Tactical Global Bond Total Return € 156.05 156.05 0.18 -

RAM Tactical II Asia Bond Total Return $ 155.81 155.81 0.28 -

Ruffer LLP (1000)F (UK)65 Gresham Street, London, EC2V 7NQOrder Desk and Enquiries: 0345 601 9610Authorised Inv Funds

Authorised Corporate Director - Link Fund Solutions

LF Ruffer European C Acc 777.27 - 13.09 0.05

LF Ruffer European C Inc 141.84 - 2.39 0.11

LF Ruffer European O Acc 758.11 - 12.75 0.00

LF Ruffer Equity & General C Acc 484.33 - 0.71 0.18

LF Ruffer Equity & General C Inc 442.95 - 0.66 0.19

LF Ruffer Equity & General O Acc 472.42 - 0.68 0.00

LF Ruffer Equity & General O Inc 437.39 - 0.63 0.00

LF Ruffer Gold C Acc 279.47 - 7.75 0.00

LF Ruffer Gold C Inc 169.14 - 4.69 0.00

LF Ruffer Gold O Acc 272.50 - 7.55 0.00

LF Ruffer Japanese C Inc 168.41 - 2.84 0.09

LF Ruffer Japanese C Acc 361.89 - 6.09 0.08

LF Ruffer Pacific & Emerging Markets C Acc 383.46 - 1.40 0.82

LF Ruffer Pacific & Emerging Markets C Inc 104.50 - 0.38 -

LF Ruffer Pacific & Emerging Markets O Acc 373.67 - 1.35 0.52

LF Ruffer Total Return C Acc 496.86 - 2.35 0.85

LF Ruffer Total Return C Inc 321.54 - 1.52 0.85

LF Ruffer Total Return O Acc 484.60 - 2.28 0.85

LF Ruffer Total Return O Inc 313.42 - 1.47 0.86

Rubrics Global UCITS Funds Plc (IRL)www.rubricsam.comRegulatedRubrics Emerging Markets Fixed Income UCITS Fund $ 140.68 - -0.16 0.00

Rubrics Global Credit UCITS Fund $ 17.70 - 0.02 0.00

Fund Bid Offer D+/- Yield

Rubrics Global Fixed Income UCITS Fund $ 182.02 - 0.09 0.00

SlaterInvestments

Slater Investments Ltd (UK)www.slaterinvestments.com; Tel: 0207 220 9460FCA RecognisedSlater Growth 631.53 631.53 3.83 0.00

Slater Income A Inc 124.79 124.79 -0.37 5.22

Slater Recovery 296.17 296.17 0.73 0.00

Slater Artorius 261.91 261.91 0.03 0.42

Stonehage Fleming Investment Management Ltd (IRL)www.stonehagefleming.com/gbienquiries@stonehagefleming.comRegulatedSF Global Best Ideas Eq B USD ACC $ 236.73 - 0.26 -

SF Global Best Ideas Eq D GBP INC £ 269.13 - -0.02 -

Toscafund Asset Management LLP (UK)www.toscafund.comAuthorised FundsAptus Global Financials B Acc £ 3.70 - 0.01 4.35

Aptus Global Financials B Inc £ 2.58 - 0.01 5.58

Toscafund Asset Management LLPwww.toscafund.comTosca A USD $ 306.77 - -23.55 -

Tosca Mid Cap GBP £ 153.39 - 15.22 -

Tosca Opportunity B USD $ 233.01 - 23.03 -

Pegasus Fund Ltd A-1 GBP £ 36.61 - 3.62 0.00

Troy Asset Mgt (1200) (UK)65 Gresham Street, London, EC2V 7NQOrder Desk and Enquiries: 0345 608 0950Authorised Inv Funds

Authorised Corporate Director - Link Fund Solutions

Trojan Investment Funds

Trojan Ethical O Acc 118.21 - -0.19 0.10

Trojan Ethical O Inc 117.98 - -0.19 0.09

WA Fixed Income Fund Plc (IRL)RegulatedEuropean Multi-Sector € 126.54 - 0.18 3.23

Zadig Gestion (Memnon Fund) (LUX)FCA RecognisedMemnon European Fund - Class U2 GBP £ 195.13 - 1.09 0.00

Fund Bid Offer D+/- Yield

Data Provided by

www.morningstar.co.ukData as shown is for information purposes only. Nooffer is made by Morningstar or this publication.

Guide to Data

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. 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. 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. 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.

DECEMBER 1 2020 Section:Stats Time: 30/11/2020 - 18:52 User: keith.allen Page Name: MANAGED FUNDS 4, Part,Page,Edition: EUR, 13, 1

14 ★ FINANCIAL TIMES Tuesday 1 December 2020

Fernand Léger’s ‘The Red Gear’ (1939) ADAGP, Paris and DACS, London 2020

M ichael Woodford, dust-man and caretaker of Cranbrook Primary School in east London, filled his former council

maisonette with late, enraged works on paper by Picasso: grotesque decrepitold men, flamboyant exhibitionistic women, painters and models, circus fig-ures, from the “156” and “347” series. The titles refer to the number of etch-ings made in short, obsessive, virtuoso bursts; of the 347 made in 1968, Picasso explained: “I spend hour after hour while I draw, observing my creatures and thinking about the mad things they’re up to; basically it’s my way of writing fiction.”

Elizabeth Burney was a criminal psy-chologist who collected works express-ing, she felt, pathos and empathy with suffering humanity: Käthe Kollwitz’s sombre “Woman with her Head Bent”, Georges Rouault’s skeletal prisoner “The Convict” from his “Miserere” series — but also Marc Chagall’s bright, fairytale “Red Rooster”, painted in exile in yearning for the rural life and folklore of his Russian childhood.

Then there was George Dannatt, char-tered surveyor by day, music critic by night, and his wife Ann, founder of the Association of Women Housing Manag-ers: their flair, informed by the pleas-ures of musical harmony and composi-tion, was for abstraction — Juan Gris, Hans Arp, Jean Hélion, Pierre Soulages.

What these collectors shared were modest means, distinctive personal taste and the generosity to leave their works to Pallant House Gallery, Chich-ester, in West Sussex. Their bequests are among several in the past decade which continue to transform the modern hold-ings of this enticing gallery, and build on key legacies from architect Colin St John Wilson in 2006 and property developer Charles Kearley in 1989.

Tilting Pallant from its usual British focus, Degas to Picasso: International Modern Masters, opening on December 5

(with Friends’ previews December 3-4), is an illuminating collection of collec-tions. It features some fabulous paint-ings: Vuillard’s intensely textured,patterned, intimiste “Model Seatedin a Chair”, the girl in a white petticoatin the home of the artist’s corset-maker mother; Gino Severini’s futurist masterpiece, the high-kicking, yellow-stockinged, fractured “Danseuse No.5”. But, leading with Degas’s outstanding large charcoal nude “Woman Combing Her Hair”, with red chalk highlights — scarlet slippers — it is mostly works on paper, and mostly those acquired by the gallery this century.

It tells two upbeat stories: of Euro-pean modernism seen through the less familiar lens of drawings and prints,and of the marvels possible to acquire

Clockwise, from above: Nick Holt films ‘Surviving Covid’; Covid survivor Sama with daughters Majidah, left, Samarah, centre, and Kalisha, right; Gill with a photo of her husband, David — Zora Kuettner/Sandpaper Films

It is surprising that people would allow themselves to be filmed at all dur-ing a time of such turmoil. “Sometimes when the worst thing has happened to a family, they feel like they have lost total control. Somehow the filming process tethers them to the real world. It gives their anguish an outlet,” says Holt. The patients, families and staff all gave con-sent beforehand, and have approved the edited film too. “Two of the families wanted to prove to friends that [the pandemic] wasn’t a conspiracy theory,” says Zora Kuettner, a producer.

Surviving Covid is a humane depiction of hospitals. There is no shouting and no

arguments. “Intensive care units are the quietest units in any hospital,” says Holt. We cannot hear the body fighting the disease, we cannot even see it. But we can understand the process.

“It’s not a case of one big thing. It’s a question of lots and lots of little hurdles which we’re not quite clearing,” Tom Hurst, a consultant at King’s, explains to Gill at one point.

There was often a physical barrier between the documentary-makers and their subjects: protective equipment interfered with the process of capturing facial expressions. “Having a dialogue with a patient or a doctor was quite

A s spring broke, many Brit-ish film-makers had a choice — to sit at home as their projects were put on hold indefinitely, or to fly

into the storm and cover the coronavi-rus pandemic, in the hospitals where it was playing out. “As soon as Covid hit, we thought, where did we want to be?” says Susannah Price, creative director at Sandpaper Films.

Doctors and nurses, meanwhile, faced a different predicament. They were already overwhelmed, without the added pressure of cameras. “One half of me was saying: I can’t even think of hav-ing a film crew in intensive care,” says Tom Best, clinical director of critical care at King’s College Hospital in south London. “But there was another littlebit of me thinking: this has got to beone of the most important moments of our time.”

King’s had previously been the setting for 24 Hours in A&E, a well-received series, and a Louis Theroux documen-tary about alcoholism. Perhaps this sof-tened the medics’ perspective. So, for more than three months, the critical care centre allowed in a small team from Sandpaper Films. The result is a moving documentary, Surviving Covid, that cuts out the statistics and the politics and focuses instead on the patients andtheir families.

The film tells the story of four corona-virus sufferers between May and August. It brings home the thin line between life and death, and the link between intense suffering and intense love. Coronavirus is a disease that doesn’t affect just the lungs, but the whole body and soul.

“The luckiest man is a man with a

good wife, and I am lucky to have this woman,” says Sama, as his wife spoon-feeds him fruit, shortly after he has woken from a coma and survived multi-ple organ failure. Another patient, Joaquín, is accompanied through months in a coma by Beatríz, the daugh-ter of his late wife. “Today is better than yesterday,” she smiles at one point.

Childhood sweethearts David and Gill find that his admission to intensive care begins the longest period they have been apart for 48 years. “Hope you get from yourself, you get from within, you get from your family,” Gill says, bracing herself, as his condition worsens. “He’s got plans.”

Tobi, a joyful pastor, begins to suffer delirium as a result of the virus. When a nurse asks where he is, after three months in the critical care unit, he replies: “Buckingham Palace.” His son reflects how much he has learnt from his father’s resilience in just staying alive.

Their stories are sensitively, patiently told, a testament to delicate film-making. Unlike in 24 Hours in A&E, it was not possible to place cameras in all parts of the hospital or even to scope out the area beforehand. The film-makers had to procure their own personalprotective equipment, and improvise the narrative.

There was one director inside the unit, Nick Holt, who did his own film-ing, and another director and a pro-ducer outside speaking to the families. Holt had previously filmed a documen-tary at an intensive care unit in Adden-brooke’s Hospital in Cambridge — spending “six months there before I pressed record”.

At King’s, he had to start filming inti-mate scenes almost as soon as he had

arts

Life and death, body and soulThe makers of documentary ‘Surviving Covid’ tell Henry Mance about the challenges of filming in a hospital during a pandemic

as, in Michael Woodford’s words,“a minor collector (not a rich rock star!) collect[ing] through love and when finance permitted!”

Pallant House was founded, in 1982, on the mainly British collection of Wal-ter Hussey, dean of Chichester Cathe-dral. Kearley’s bequest then swelled European names: he had bought since the 1930s, with decorative intentions, to cheer up a bare modern penthouse. On an annual £700 budget, he netted an 1898 lithograph of Cézanne’s “The Large Bathers”, obscure or late cubist paint-ings — Czech Emil Filla’s multicoloured linear puzzle “Seated Man Holding a Newspaper”, Fernand Léger’s dynamic 1939 “The Red Gear” — and jewel-like semi-abstractions including Paul Klee’s inky watercolour “Clouds” and Joan Miró’s floating black forms from 1959’s etching/aquatint series “We Have”.Wilson’s choices, architectural, concep-tual, art-historical, are a counterpoint: an 1867 etching of Manet’s seminal shocker “Olympia”, Josef Albers’ geo-metric abstractions, Le Corbusier’s pas-tel “Table, Bottle and Book” — a still life resembling an architectural diagram.

This is a carefully chosen, carefully programmed show. In the context of Pallant’s British holdings, it insists, as Brexit looms, on inescapable French connections and influences — Vuillard on Hodgkin, Degas on Sickert, Cézanne on everyone. More broadly, for British audiences, what a welcome window on European art when travel is difficult:a celebration that culturally we are not an island.

December 5-April 18, pallant.org.uk

Artistic wealth of modest collectors

ON SHOW

Jackie Wullschläger

Edgar Degas’s ‘Woman Combing Her Hair’ (c.1887-90)

met the patients and their families. There was no detailed recce beforehand to understand the precise stories being told. “My brief was just to follow my nose. It was quite liberating and quite daunting,” says Holt, who resorted to renting a flat to isolate himself from his pregnant girlfriend during filming.

difficult,” says Holt. “You were always reaching for a contact that was never fully there.” Wearing PPE in families’ homes also meant that it took“longer and more work to build trust”, says Kuettner.

For the medical teams, the disconnect was even starker. King’s prides itself on its ability to understand patients as indi-viduals with distinct case histories and personalities. Typically, patients spend days or a few weeks on a ventilator, but Covid-19 sufferers could spend months in comas. Their families were largely cut off. In total, King’s has handled more than 2,500 coronavirus patients so far. Hundreds have ended up in critical care.

“We were seeing people die who we didn’t know, and whose families we didn’t know. You might think that made it easier. Actually I think it makes it harder,” says Best. “I probably underes-timated how important it is for our mental health and our nurses’ mental health [to get to know patients].”

The pandemic has underlined Best’s belief that the quality of NHS care

depends on small “marginal gains” that begin with the right levels of staffing and equipment. This has been chipped away over years, and the NHS’s procurement processes have at times been exposed by the pandemic. “In January I knew there wasn’t really time to prepare prop-erly. It was like being on a very small desert island with one palm tree and seeing this big wave on the horizon,” Best says. Even as the disease became understood, patients’ progress was “really unpredictable”, he adds.

There is a particularly powerful scene in Surviving Covid when David’s body is given the last offices. The nurse insists on talking to the body, as if David were still alive. “Even death is a privilege to be there,” he explains.

David’s widow, Gill, was able to be there when the machines were switched off. But she still cannot believe that he has gone. “It never crossed my mind that he wouldn’t make it. He was only 62.” She admits that when coronavirus emerged, she and David “thought it was a made-up story”. As viewers, we now know that the pandemic is not a made-up story. But it is easy forget just how poignant and how personal it has been. Films such as Surviving Covid sharpen our focus.

On Channel 4, December 2 at 9pm

‘Two of the families wanted to prove to friends that [the pandemic] wasn’t a conspiracy theory’

DECEMBER 1 2020 Section:Features Time: 30/11/2020 - 18:05 User: david.cheal Page Name: ARTS LON, Part,Page,Edition: EUR, 14, 1

Tuesday 1 December 2020 ★ FINANCIAL TIMES 15

FT BIG READ. US POLITICS

The state gave Joe Biden his closest and most surprising victory in the November election. Now its two Senate races will determine which party controls the upper house — and the nature of his presidency.

By Lauren Fedor

“Today, we are the last line of defence against this country making a change to the left that we won’t get to undo for maybe two, three, four, five generations. We can’t let that happen,” said Mr Per-due, who, like Ms Loeffler, is among the wealthiest members of Congress and has come under scrutiny in recent weeks for stock trades at the start of the Covid-19 pandemic. “Let’s make darn sure that the road to socialism never runs through the state of Georgia,” he added. What all three failed to say, how-ever, was something on the minds of vir-tually everyone in the crowd: Mr Trump has not conceded in Georgia, or nation-wide, to Mr Biden, continuing to argue, without evidence, that the election was “rigged” amid widespread fraud.

Given the close nature of the race, every ballot in Georgia was manually reviewed in an unprecedented statewide audit ordered by Brad Raffensperger, Georgia’s Republican secretary of state who has come under attack from several members of his own party, including the president. On Thursday, Mr Trump called his fellow Republican an “enemy of the people”.

Mr Trump’s supporters are not back-ing down, and at the Cherokee County rally, voters across the board were repeating his unsubstantiated claims.

Susan Maguire, 62, says she is “posi-tive” that votes were cast illegally in Democratic areas. “I believe for sure that there are things that were done ille-gally in the voting systems in many of these Democratic cities. I am positive of it,” she says. “Why can anybody think they wouldn’t try to rig the election?”

Such sentiments underscore the divi-sions within a Republican party that is grappling with how to handle Mr Trump’s refusal to acknowledge defeat.

Like many of their colleagues on Capi-tol Hill, Mr Perdue and Ms Loeffler are wary of going against Mr Trump, given his purported desire to run for president again in 2024.

In Georgia, the senators also need Mr Trump’s most ardent supporters to turn out again for them in January — but they also risk alienating more moderate Republicans if they lurch too far to the right. The president is to hold a rally in the state on Saturday.

“This is not the type of environment that either of the Republicans want to be running in. It is a strategy that they are left with because of the president,” says Mr Buck, the former Republican con-gressional aide, of Mr Perdue and Ms Loeffler’s dilemma. “They know that if he were to turn on them, he could abso-lutely tank Republican turnout.”

Mr Buck points out that Mr Trump’s antics risked not only suppressing mod-erate turnout, but could also have the unintended consequence of discourag-ing the conservative base: “How long can you tell people that the election is rigged before they decide not to partici-pate any more?”

The battle for Georgia

change in the Atlanta suburbs, includ-ing one-time Republican strongholds such as Cobb and Gwinnett counties.

Cobb County, just north of Atlanta, has long been associated with the GOP. Newt Gingrich, former Republican Speaker of the House, represented the area in Congress for two decades.

But the suburban sprawl has trans-formed in recent years, in part due to an influx of younger, college-educated peo-ple, many from more liberal areas in the North-east or Midwest, drawn to a booming jobs market in greater Atlanta. They have made the suburbs more racially and ethnically diverse, and once open spaces are now dotted with con-struction sites for apartment buildings.

Mrs Clinton edged out Mr Trump in Cobb and neighbouring Gwinnett County in 2016. Mr Biden defeated Mr Trump by a 14-point margin in Cobb, and 18 points in Gwinnett. Turnout in Cobb was up by a fifth compared with 2016; in Gwinnett, by a quarter. “We used to build statewide Republican vic-tories on massive Republican margins in Cobb and Gwinnett counties,” says Whit Ayres, a Republican pollster. “When I saw Clinton had won both Cobb and Gwinnett in 2016, I thought, oh the times, they are a changin’.”

Jacquelyn Bettadapur, chair of the Cobb County Democratic party, first got involved in local politics in the run-up to the 2016 election. She was invited to join a secret Facebook group for mothers who supported Democratic candidates, and recalls being “floored” by the group’s existence, saying: “I had spent so many years thinking I was the only pro-gressive within 15 square miles.”

“I think there were a lot of disaffected Republicans,” she adds. “The ranks of these women’s groups are full of former Republicans.”

Jason Shepherd, who chairs the Cobb County Republicans, acknowledges the demographic changes in the area have favoured Democrats, but adds that in most cases, the Trump campaign acted independently of local candidates, many of whom are more popular in the area than the president.

“ I have never met Donald Trump . . . I have never shaken his hand or been in a picture with him or anything,” he says. “Rallies are still fun, even with masks, but rallies do not engage the concern of a voter who is still trying to decide, well, I like Donald Trump’s policies, but I really do not care for him as a person.”

Brendan Buck, a Georgia native who was a top aide to Republican House speakers Paul Ryan and John Boehner, says the Atlanta suburbs were the “pur-est example in the country of where educated voters, particularly women, have just had enough of this president”.

“There is only so long you can put up with pure incompetence if you are a smart, educated person following the news. It is only so long you can have

Georgia: key counties

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they return to the polls on January 5 to elect Mr Warnock and Mr Ossoff.

“There are hundreds of thousands of lives hanging in the balance, y’all,” said Mr Ossoff as he campaigned alongside Mr Warnock in Jonesboro.

Registration drive

As recently as four years ago, few would have believed that a Democratic presi-dential candidate could win in Georgia, a conservative southern state with high levels of church attendance and a his-tory of racial division.

But the electoral landscape has changed, due in part to the organising efforts of people such as Stacey Abrams, the former lawmaker who narrowly lost the state’s governor race in 2018. Ms Abrams is widely credited as the archi-tect behind grassroots efforts to engage African-Americans, who make up nearly a third of the state’s population and are overwhelmingly more likely to vote for Democrats.

In 2014, she set up the New Georgia Project to register and mobilise black voters. Two years ago, after she came up short in the governor’s race, she launched another organisation, Fair Fight Action, to tackle voter suppres-sion tactics. Since then, some 800,000 new voters have been registered in the state, many of them African-American.

After election day, countless Demo-crats praised Ms Abrams for her efforts. At the event in Jonesboro, many carried paraphernalia bearing her name. One woman had altered her “Stacey Abrams Governor” T-shirt from 2018 so the slo-gan read, “Stacey Abrams Goddess”.

LeWanna Heard-Tucker, the Demo-cratic party chair in Fulton county, which includes most of Atlanta, says the 2018 governor’s race galvanised black voters for 2020. “We worked really hard to get Stacey elected, and we know that election was stolen from her. We know what voter suppression looks like, and people were fed up, particularly black voters,” she says.

But it was not only black voters in urban areas that propelled Mr Biden to victory in Georgia. The former vice-president also benefited from a sea

Democrats Jon Ossoff and Raphael Warnock, left, are lined up against Republicans David Perdue and Kelly Loeffler in run-offs for Georgia’s two senate seats. Above left, Trump rallies in Atlanta suburbs. Below right, Stacey Abrams is credited as the architect of a successful effort to engage African-American voters in the state — FT montage

‘When I saw that Hillary Clinton had won both Cobb and Gwinnett [counties] in 2016, I thought, oh the times, they are a changin’

someone talk down to and alienate women before they decide to come out in huge numbers,” he says.

But Mr Buck added that just because the voters had turned on Mr Trump did not mean they were forever aligned with the Democratic party. “Those suburbs just wanted to send a message to Trump,” says Mr Buck. “The question for the run-off now is: do those voters feel like they sent their message? Or do they feel like they have more workto do?”

‘Last line of defence’

On January 5, turnout will be critical. Run-offs, like midterms and special elections, have attracted fewer voters than presidential contests. In Georgia, that has often translated into Republi-can candidates triumphing over Demo-cratic challengers. But this time around, Republican leaders acknowledge Dem-ocrats are fired up, and the two run-offs are likely to be tight. The few polls that have been conducted in recent weeks

suggest both races are tight. “We are running as if we are behind,” says David Shafer, a former state legislator who now chairs the state Republican party.

While Democrats are looking to Afri-can-American communities in places such as Clayton County, and suburban supporters outside Atlanta, Republi-cans are hoping to run up their numbers in more rural parts of the state.

US vice-president Mike Pence earlier this month joined Ms Loeffler and Mr Perdue for two “Defend the Majority” rallies in Cherokee and Hall counties, exurbs of Atlanta where Mr Trump received more than twice as many votes as Mr Biden on November 3.

In Cherokee County, at the foothills of the Blue Ridge Mountains, they addressed an outdoor crowd of several hundred people, many wearing red “Make America Great Again” caps.

They argued that a Democrat-con-trolled White House and Congress would push through “socialist” policies, like Bernie Sanders’s Medicare for All, which would effectively eliminate pri-vate health insurance, or the Green New Deal, a climate package associated with the progressive New York congress-woman Alexandria Ocasio-Cortez.

‘Those suburbs just wanted to send a message to Trump. The question for the run-off now is: do those voters feel like they sent their message?’

J ohn Lewis looms large in Clay-ton County. The civil rights activist and longtime congress-man, who died in July at the age of 80, first came on to the

national stage at the March on Washing-ton in 1963, speaking alongside Martin Luther King, Jr. He went on to represent Clayton, a heavily African-American county just south of Atlanta, Georgia, in Congress for more than three decades.

Lewis spent the final years of his life locking horns with US President Donald Trump, who claimed his congressional district was “in horrible shape and fall-ing apart”.

So there was a certain poetic justice for voters there when the county’s dec-laration tipped Joe Biden ahead of Mr Trump in Georgia as ballots were still being counted in early November. With some 5m votes cast, Mr Biden ended up winning the state by a margin of just under 13,000, becoming the first Demo-cratic presidential candidate to win there since Bill Clinton in 1992.

Two weeks later, in the car park of Divine Faith Ministries International, a church in Jonesboro, the county seat, hundreds of Democrats were still cele-brating. Many wore face masks embla-zoned with Lewis’s catchphrase “good trouble”, a reference to his commitment to non-violent protest. Others wore blue T-shirts reading: “Clayton County saved America”.

Raphael Warnock, senior pastor of Ebenezer Baptist Church in Atlanta, addressed the crowd as the sun began to set. “Clayton County, do you know how powerful you are?” he asked, with the cadence of a practised preacher. “You were the county that pushed us over the finish line and flipped Georgia blue.”

Not only was Georgia the narrowest of swing states in the presidential election, but in January it will also determine which party controls the US Senate — and with it, the nature of the Biden presidency.

“You have power, and it would be a shame if come January 5 you did not exercise that power,” Rev Warnock added. “Are you ready to stand up one more time?”

Thanks to a rare set of circumstances, both of Georgia’s US Senate seats have run-off elections on January 5. Rev War-nock, who is pastor of the Atlanta church once led by King, faces Kelly Loeffler, a 50-year-old former Wall Street executive. In the other race, incumbent Republican senator David Perdue, a 70-year-old former chief exec-utive of Dollar General, the discount variety store chain, is running against Democrat Jon Ossoff, a 33-year-old doc-umentary film producer.

Democrats had hoped to not only win the White House, but also reclaim con-trol of the Senate on November 3. But after fending off several well-funded Democratic challengers, the Republi-cans will have at least 50 seats in the 100-member upper chamber of Con-gress, while Democrats currently have 48. If Democrats are able to pick up the two remaining Senate seats in Georgia, that will leave the chamber split, with Kamala Harris, the vice-president-elect, able to cast a tiebreaking vote.

With even the slimmest Democratic Senate majority, a Biden administration would be able to press ahead with its leg-islative agenda on everything from Cov-id-19-related economic stimulus to healthcare reform. Without it, Mitch McConnell, the Senate’s most-senior Republican, would likely stand in the way of Mr Biden’s best-laid plans, forc-ing Washington into gridlock.

Georgia has become one of the most politically competitive states in the country, mirroring the dynamics of the wider US electorate. An aggressive effort to register and mobilise black vot-ers has benefited Democrats, while the state’s rural population, which is over-whelmingly white, remains loyal to Mr Trump, even in defeat.

At the same time, the fast-growing Atlanta suburbs have become more diverse and more disillusioned with Mr Trump and Republicans — a sentiment that some party officials worry will spill over into the January run-off, particu-larly if the president continues to refuse to concede to Mr Biden.

For Democrats, the message is clear: voters can only fully reject Mr Trump if

DECEMBER 1 2020 Section:Features Time: 30/11/2020 - 18:27 User: charlotte.middlehurst Page Name: BIGPAGE, Part,Page,Edition: EUR, 15, 1

16 ★ FINANCIAL TIMES Tuesday 1 December 2020

TUESDAY 1 DECEMBER 2020

Many will sympathise with the 13,000 staff whose livelihoods are thrown into question by Arcadia’s expected col-lapse into administration — and the thousands of pension scheme mem-bers wondering if they will still receive their full pensions. Fewer will shed a tear for Philip Green, the pugnacious billionaire who built and lost a retail empire, consoling himself on his superyacht in Monaco. Arcadia had specific weaknesses and almost failed last year. But its downfall

— which also puts at risk a rescue of Debenhams, with 12,000 staff — high-lights the scale of the crisis the pan-demic has catalysed in UK retail.

Sir Philip was, in truth, always a bet-ter dealmaker than retailer. After start-ing out selling excess stock in London’s rag trade — he claimed he could “price a garment at 20 paces” — he proved adept at assembling loan packages for acquisitions, then selling property and cost-cutting to improve profitability. The formula initially worked well at Arcadia, bought for £850m of mostly borrowed money in 2002, where he raised profits quickly enough to refi-nance the debt by 2005 and generate a £1.2bn dividend paid to his wife.

But Sir Philip failed to reinvent chains such as Topshop, Burton and Miss Selfridge as fashion retail was dis-rupted by cheaper rivals such as Zara, H&M and Primark. Crucially, he invested too little in an online presence to fend off internet upstarts such as Boohoo. His reputation was waning even before he had to pay £363m in 2017 to refinance the pension scheme of BHS — which he had sold for £1 to a serial bankrupt — and employees made sexual harassment allegations, which he has denied.

If some of Arcadia’s problems were homegrown, the model of debt-fuelled expansion coupled with an underesti-mation of how the smartphone would

reshape retail has played a large part in the predicament of the high street today. Debenhams, the struggling department store chain in which Arca-dia is the biggest concession operator, is another example. The result is too much space — by some estimates, an excess of 40 per cent — chasing not enough sales. A shakeout was inevita-ble. But by keeping many shops closed for large parts of this year and acceler-ating the shift to online, the pandemic is bringing about in months what might otherwise have taken years.

Retailers must take their share of blame for problems on the high street. They cannot expect blanket bailouts. But a chaotic implosion will seriously damage the fabric of towns and cities — an issue, as chancellor Rishi Sunak con-ceded last week, that the public cares deeply about. It will also hit property owners, which include banks, pension funds and insurers. As it weighs com-peting demands for support, the gov-ernment must consider how it can ease the transition for high streets.

Extending the current “holiday” on business rates beyond next April, and reducing the level once they are rein-stated, would relieve some pressure on retailers. Mr Sunak announced last week a £4bn “levelling up fund” to sup-port local improvement projects. More will be needed, and such projects must be part of comprehensive regeneration strategies developed jointly by local authorities, business and Whitehall.

The post-internet, post-Covid high street may one day look more like it did before the postwar retail boom, with fewer shops — but more space given to housing, leisure, health and wellbeing, and flexible working. The rapid loss of Arcadia and other chains this year will require financial support, bold and cre-ative thinking, and complex co-ordina-tion if such transformations are to stand any chance of becoming a reality.

Pandemic is bringing about in months what might have taken years

Shakeout of Arcadia and high street was inevitable

A succession of defaults has rattled China’s $15tn bond market and is rais-ing concerns about the country’s finan-cial health following a sharp slowdown in economic growth this year. For for-eign investors who have snapped up Chinese paper in 2020, the burning question is whether the liquidity crunch will spread. For more general observers, the risk is that bond market defaults may signal deeper structural weaknesses.

Such concerns are important. But from a policy perspective, the defaults are to be welcomed. They show that Beijing is seeking to impose a measure of financial discipline after a record debt splurge in the first two quarters. Such discipline is sorely needed: total debt to GDP was approaching 335 per cent at the end of June, up from 302 per cent at the end of last year, according to the Institute of International Finance.

Beijing’s main message appears fairly straightforward. It is warning state-owned enterprises and their local government backers that some of the easy credit that was deployed to com-bat the pandemic is being reined in as China’s economy recovers. It is also making clear that the type of sustained liquidity splurge that Beijing unleashed in the aftermath of the 2008 financial crisis will not be repeated.

Nevertheless, a course of bitter medi-cine also appears unlikely. The People’s Bank of China, the central bank, said in a report last week that “normal” mone-tary policy will be maintained, suggest-ing that Beijing is not about to adminis-ter a sharp tightening in policy.

Thus the recent bond defaults of Yongcheng Coal and Electricity Hold-ing, Tsinghua Unigroup, and Huachen Automotive Group — all at least partly state-owned — should be seen as salu-tary lessons. Liu He, China’s top finan-cial official, was serious when he warned of “zero tolerance” towards

misconduct in financing deals or attempts by companies to evade their debts. Implicit in Mr Liu’s remarks was that the focus of Beijing’s increased scrutiny is the frothy $4tn corporate bond market, rather than the market for Chinese government and policy bank bonds. This will come as a relief to foreign investors, who have almost completely eschewed the riskier corpo-rate bond market as they increased their holdings of Chinese debt this year.

So far, Beijing’s strategy appears to be bearing fruit. Not only have the defaults pushed up the average coupon rate for new bonds from state-owned enterprises since October, they also seem to be changing a longstanding culture of complacency. A belief that the bonds of state-owned companies enjoy effective government guarantees has now crumbled, fund managers say.

But such progress, while welcome, represents only baby steps. Though China has the world’s second largest bond market after the US, governance standards are weak. One reason why foreign investors have been so reluc-tant to enter the corporate bond mar-ket — in spite of coupons often in excess of 5 per cent — is because they do not trust the statements issued by state-owned enterprises. With more than 70 per cent of all outstanding Chinese cor-porate and government debt rated at triple-A, it can be hard for investors to identify where the real weaknesses lie.

China’s step towards inculcating greater financial discipline is welcome. But Beijing should realise that govern-ance standards for its big companies are, increasingly, set by its huge bond market. If it allows the bond market to be riven with fraud, pretence, evasion and wishful thinking, companies will remain prey to the same culture. China’s route to corporate efficiency and investor protection lies through an Augean overhaul of its capital markets.

A string of bond defaults changes assumptions on state guarantees

China edges towards financial discipline

of totalitarianism, he lists the various atrocities that would be set in train, were such an attitude to take hold. However he exaggerates.

First, smoking is criminalised in enclosed areas and has been for over a decade; and we are all the better for it, not least because the proportion of adult smokers is now down to 14 per cent.

Second, compulsory exercise for the obese has been proposed by this government — hardly totalitarian — as a way of reducing strain on the NHS.

Third, the speed limit is 20mph in the vicinity of schools and residential areas, for the safety of our children. I happen to think that’s a good thing.

Finally, if you talk to any member of a mountain rescue team in an unguarded moment, they will tell you that mountaineering should be banned, at least in winter months when the chances of fatal accidents go through the roof, due to too many idiots setting out without taking adequate precautions.

Mr Pryke’s libertarian paradise is long gone. And I, for one, don’t want it back.Ian MacKillopIlminster, Somerset, UK

Does the Anglo-Norman invasion not count?Sir Edward Clay states in his letter (November 28) “I cannot think of a British colony that was 500 years old by the time it got independence.” The Anglo-Norman invasion of Ireland in 1169 contradicts his version of history. Independence was granted to Ireland in 1947.John O McDonaldAthy, County Kildare, Ireland

Austria should learn lessons of last ski seasonIt is quite presumptuous of Sebastian Kurz, the Austrian chancellor, to dismiss his German counterpart’s appeal for ski resorts in the EU to close during the year-end holidays, proclaiming it “is not a matter in which the EU should interfere” (“Merkel calls for ski resorts across EU to close”, Report, November 28).

Given that an Austrian ski resort may have served as a superspreader during Europe’s first coronavirus wave, it is a matter of urgency that Chancellor Kurz, and indeed all EU leaders, neutralise potential hotspots. Public health considerations should take precedence over tourism, a lesson the Austrian government ought to have learnt from the last ski season.Timothy SpenceVienna, Austria

The mark of a gentleman has health benefits tooWhy this weekly onslaught against ties (Magazine, FT Weekend, November 21)? A well-chosen tie is a trusted mark of a gentleman. It stops him unravelling at the top of his suit. It gently conveys mood, lifts the spirits on a dull day, shows purpose and dignity, quietly asserts status in negotiation. It can also be a warning signal as to character: the lengthy, somewhat phallic, ties of US president Donald Trump and Boris Johnson, British prime minister, were a clue to their autocratic leanings.

Ties bring health benefits in these inactive locked-down times. I have about 100 of them and can testify that the daily effort of choice has proved a powerful mode of daily exercise.Keith SalwayLechlade, Gloucestershire, UK

With Brexit and pandemic Britain’s aid is already lessProminent people from the Archbishop of Canterbury to Bill Gates, and the eminent development economists writing to the FT (Letters, November 23) rightly urge the UK government not to cut overseas aid. But unlike most government expenditure, it’s not a set sum but a percentage of gross domestic product. If UK GDP is down by some 20 per cent, as a mix of coronavirus and Brexit appears to suggest, the amount of aid will also drop by 20 per cent. Cutting even that percentage adds insult to injury.Judith MartinWinchester, Hampshire, UK

Don’t forget hydropower in green energy transition Your article on batteries (“The race to find a storage solution for a green energy future”, November 23) acknowledges that 97 per cent of the world’s energy storage is provided by pumped storage hydropower. It is a shame therefore that the article ignores its huge potential role in the clean energy transition.

Think of pumped storage hydropower as a giant clean water battery that never degrades. It is a proven, adaptable and cost-effective technology which can be deployed at scale, with minimal need for imported raw materials.

Contrary to your assertion about a lack of sites worldwide, the Australian National University has identified over 600,000 potential locations globally. In addition, we can renovate disused mines, retrofit existing reservoirs and develop innovative seawater sites for pumped storage.

In the UK, there is currently over 4 gigawatts of pumped storage in the pipeline. These projects could double existing UK energy storage capacity, create over 10,000 jobs and inject over £3bn into the economy as the country comes out of the pandemic.Eddie RichChief executive, International Hydropower Association, London, UK

A debased currency is not what Keynes had in mind Using the retail prices index as a measure of inflation, I reckon the pound has lost about 98.5 per cent of its purchasing power since I was born in 1940 (Report, FT.com. November 25).

I wonder if anyone in government, responsible for debasing the currency, or in the Office for National Statistics, responsible for measuring it, is able to provide a more accurate estimate? It is salutary to reflect that John Maynard Keynes, who was in favour of inflation (what he called “flexible money”), asserted in 1913 that “a preference for a gold currency is no longer more than a relic of a time when governments were less trustworthy in these matters than they are now”.

I can think of many adjectives to describe the financial performance of British governments in my lifetime, but “trustworthy” would not be one of them.DR MyddeltonEmeritus Professor of Finance and Accounting, Cranfield School of Management, Bedford, Bedfordshire, UK

In the end, it is likely to finish right where it began — just west of the Delaware River.

In 1856, a nascent Republican party levelled accusations of voting fraud at Democrats in Philadelphia, accusing their political rivals of stealing the state and congressional elections that year with the help of thousands of illegal votes.

Now, 164 years later, US President Donald Trump, aided by his personal lawyer Rudy Giuliani, has been attempting to repeat history, alleging in the weeks before this year’s presidential election that “bad things happen in Philadelphia”, as he put it in one of the debates, and continuing those claims, after voting concluded.

In 1856, Republicans’ concerns of fraud were well-founded. In those state elections, at least 4,000 votes were cast illegally, subsequent congressional testimony showed.

In 2020, Mr Trump and his legal team have struggled, thus far, to produce any evidence of fraud in Pennsylvania. Not that this has stopped them. Last week in a hotel ballroom in Gettysburg, Pennsylvania, Mr Giuliani told gathered Republican state lawmakers that their election was “a sham”, adding: “I know crooks really well. You give them an inch and they take a mile. You give them a mile and they take your whole country.”

A second member of Mr Trump’s legal team held up her cell phone so Mr Trump could appear as a “witness”. “This was an election that we won easily. We won it by a lot,” the

president told the room, saying he was “very sad” to report that the vote had been “rigged”. “We can’t let it happen for our country. This election has to be turned around,” he added.

For the past three weeks, the country has had a taste of how Mr Trump would like to do that with the legal challenges, Mr Giuliani’s press appearances and the president’s tweets all offering a through-the-looking-glass version of reality.

President-elect Joe Biden has begun naming top members of his cabinet. Almost every major world leader has recognised Mr Biden as the next president, and a formal transition process between the two administrations has begun.

Nevertheless, Mr Giuliani and Mr Trump have persisted. Their legal quest travelled from Pennsylvania’s Four Seasons Total Landscaping, the site of Mr Giuliani’s post-election press conference, to the Republican National Committee’s headquarters where Mr Giuliani — hair dye streaming down his cheeks — and other members of Mr Trump’s legal team alleged that George Soros and the late Hugo Chávez had conspired on election software to rig the vote for Mr Biden.

On Thanksgiving, Mr Trump said it was too soon to call the day his last celebration of the holiday in the White House, even though he has conceded that he would leave if Mr Biden was confirmed as winner. But his potential legal paths are closing. On Saturday, the Pennsylvania Supreme Court

threw out a GOP lawsuit seeking to invalidate more than 2.5m votes cast by mail in the state. A day earlier, a federal appeals court rejected a separate lawsuit from Mr Trump seeking to overturn the certification of Mr Biden’s victory in Pennsylvania.

Mr Trump’s legal team says the next step is the US Supreme Court. However, even the president has expressed doubt that the cases will actually make it there, as he acknowledged in a television interview with Fox News’ Maria Bartiromo on Sunday.

Some Democrats and scholars have cheered Mr Trump’s legal losses as evidence of the resilience of the US legal system and democratic process. “We operate under the rule of law, and not the rule of the soapbox from the driveway of Four Seasons Total Landscaping,” Mark Aronchick, a lawyer who has argued against Mr Giuliani, told ABC News.

The reality, however, may be more bleak. Polling shows roughly half of Republican voters believe the election was “rigged” — and Mr Trump continues to stoke the fire. In his interview with Ms Bartiromo, Mr Trump said his complaints were likely to continue past the December 14 vote of the electoral college and January 20 inauguration. “My mind,” he warned, “will not change in six months.”

That much is certain. The question is how many other minds he can continue to convince in the meantime.

courtney.weaver@ft.com

Trump fights on with fraud claims as legal paths close

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Washington Notebook

by Courtney Weaver

North Italy’s first wave is what haunts politicians In his letter on Martin Wolf’s piece “What can the world learn from Covid” (Opinion, November 25) Jamie Sandison advances the view that politicians have overreacted to the pandemic. He considers that their overriding concern to minimise the death toll has been at the expense of excessive damage to economic activity and constraints on individual freedom.

The extent to which lockdown measures have been followed in most European countries shows that, on the whole, people have accepted them as necessary; the constraints on our liberty and the economic damage an acceptable price to pay for controlling the virus until vaccination has made a return to a normal way of life possible. These policies are surely informed by the fear of a repeat, on a larger scale, of what we saw in northern Italy in the spring. The scenario of hospitals overwhelmed by Covid-19 cases, so that patients are dying untreated on hospital trolleys, in ambulances, or in their homes, is the spectre that haunts our politicians and their advisers. They are probably right in their belief that their electorates would not forgive them for policies that allowed this to happen.

The speed of the surge of cases in the UK and elsewhere in the autumn showed how easy it is to lose control of infection rates. The rate of growth in infections in parts of the US, as described in your article on the Dakotas (FT Weekend, Report, November 28) makes the same point.

Richard Pryke’s letter, on this topic, argues that the pandemic should have been dealt with by measures to protect the vulnerable. Apart from the question of how practical identifying and quarantining the vulnerable would be, it too would constitute an assault on the liberties of a sizeable proportion of the population. He seems to imply that those who are prepared to run the risk of infection should be allowed to do so, ignoring the externalities of individual infections.Henry BroughamKidlington, Oxfordshire, UK

A libertarian paradise we could well do withoutJudging from your letters page on Friday, Martin Wolf seems to have rattled a few cages with his article (“What can the world learn from Covid”, Opinion, November 25). I was particularly taken with Richard Pryke’s riposte. In accusing Mr Wolf (I think)

In his column on the Office for National Statistics’ report finding that Britons understand little about economics (Report, FT.com, November 25) Chris Giles quotes lead author Johnny Runge as saying that teaching economics in school is not the solution.

I strongly disagree. That is precisely where understanding should start, not at a technical level but by introduction to basic concepts.

For instance, “value” is the bedrock of economics yet, astonishingly, hardly ever addressed explicitly. Older school students can surely comprehend that value and price are not identical. Simply ask them to think what they

would be willing to pay for a given good as opposed to what they do pay. Get them to discuss why different people give different answers, what it is that shapes preferences. Ideas of getting a bargain or something being too expensive suffice to show why financial and economic values are not the same.

It is only a short step to an intuitive grasp of a demand curve, easily contrasted with how producers respond to price changes.

From that foundation it is possible to introduce policy analysis, and why the financial consequences of interventions are different from the economic welfare outcomes. Give them

international agricultural policy reform as an example of where economic analysis made a real difference. Link that to current environmental issues, and which components people value can be estimated in monetary units and what cannot, at least not yet.

The limits of economic analysis and where political judgments about whose dollar gets more weight in decision making is another dimension. The key point is that everyone can grasp the crucial ideas if they are communicated clearly and built on everyday experience.

Economics is about the wellbeing of

people, but most people think it is all about money. I suggest a major part of the problem is that proper economics has become confused with finance. Finance should be to the economy what lubricants are to a car: a means of enabling the parts that matter to function, namely the real economy of resources, goods and services.

It is to be hoped that the new Financial Times charitable foundation to support financial literacy will help its beneficiaries understand that.Keith HoweSenior Research Fellow, Centre for Rural Policy Research, University of Exeter, Exeter, Devon, UK

School pupils must see economics as an everyday experience

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nearly 1.4bn people. But many BJP lead-ers have promoted the idea that Mus-lims enjoy unfair privileges and that India’s religious balance is threatened.

The question of how to handle ethnic and cultural tensions within a demo-cratic structure has been handled in dif-ferent ways all over the world. Some countries have gone for very pro-nounced forms of group rights. Malaysia has entrenched educational and employment privileges for the Malay majority. In Lebanon, the settlement that ended the civil war allocated seats in parliament and public-sector jobs by religion and sect. But in both countries, group preferences have become associ-ated with cronyism and corruption.

At the other end of the spectrum, France prioritises common citizenship above group rights. Many French intellectuals remain adamant intheir rejection of communitarianism — arguing that it is an American idea, alien to France. This emphasis on indi-vidual over group rights has clear attractions to any classical liberal. Butit is open to the accusation that it ig-

ous threats to their democracies. They include Canada, Australia and the UK.

So what is the difference? One possi-bility is that in the US, India and Brazil, the largest ethnic or religious group has come to fear that its position in society and privileges are under threat in a way that is not (yet) apparent elsewhere.

In Brazil, the 2010 census showed that white Brazilians were less than 50 per cent of the population. In the US, projec-tions that the country will be minority white by 2045 have led to gloomy specu-lation among some Republicans that the party may never win another national election — and intensified efforts at ger-rymandering and voter suppression. In India, majority paranoia is less easy to explain, since Hindus account for just under 80 per cent of the population of

A mid the plethora of book interviews conducted by former US president Barack Obama, two sen-tences jumped out at me:

“America is the first real experiment in building a large, multi-ethnic, multicul-tural democracy. And we don’t know yet if that can hold.”

That is a startlingly bleak view. When white leaders of apartheid South Africa suggested democracy would not work in a multiracial society, they were denounced as racists. But that is the pos-sibility Mr Obama seemed to be raising.

He was not wrong to pose the ques-tion. His successor Donald Trump’s efforts to overturn the result of the 2020 presidential election were built around the false claim there had been voter fraud, especially in heavily-black cities such as Detroit and Philadelphia. A recent poll shows that a majority of Mr Trump’s voters believe fraud took place. Although Mr Trump’s efforts look likely to fail, racial tensions were central to his attempt to subvert democracy.

If anything, Mr Obama’s mistake was to suggest that such challenges are unique to the US. India and Brazil are also large multiracial, multicultural

countries, where democracy is under increasing strain.

The founding fathers of independent India insisted that the country must be secular in outlook and that all citizens were equal regardless of religion. But India’s current prime minister, Naren-dra Modi, is a Hindu nationalist and aggressively majoritarian in outlook. His ruling Bharatiya Janata Party returned no Muslim MPs at the last elec-tion. The rise of Hindu nationalism has coincided with an increasingly auto-cratic style of government that many liberals believe threaten the civil liber-ties of Muslims — as well as the inde-pendence of the courts and the media.

In Brazil, Jair Bolsonaro has used arguments that are reminiscent of the US Republican party. The Brazilian president has argued that he is the vic-tim of voter fraud. Mr Bolsonaro has also denounced affirmative action poli-cies for black, mixed race and indige-nous Brazilians remarking, “I would not board a plane piloted by a quota benefi-ciary.” The Brazilian leader is equivocal in his attitude to democracy and has often praised the 21-year period of mili-tary rule in Brazil.

The experiences of the US, India and Brazil all suggest that racial, cultural or religious tensions can rise to levels where some politicians and voters begin to reject the basic principles and under-standings that underpin a democracy.

However, there are counter-examples of countries that have become much more multi-ethnic and multicultural in recent decades without fearing for seri-

Multiracial democracies

take hard work

Ethnic tensions within a political structure have

been handled in different ways all over the world

I n the seven years since Claire Smith finished her PhD in modern lan-guages in the UK, she has won four prizes, published two books and secured a prestigious fellowship

that drew 900 applicants for 40 places. What she hasn’t got is a job. She has

worked a nine-month contract, a two-year contract, a three-year contract and another nine-month contract. For the last one, which was far from home, she would leave at 5am to start teaching at 10am, then stay in a cheap B&B or sofa-surf for three days a week. Now, having just had a baby, she doesn’t know when — or if — the next contract will come along. (She asked for a pseudonym for fear of damaging her prospects.)

In the public imagination, academia is synonymous with secure, even life-

long, jobs. But in a number of countries, universities are perfect microcosms of what economists call dualised labour markets. Secure insiders work along-side a periphery of insecure outsiders who are jostling desperately to get in.

Official data from the UK’s Higher Education Statistics Agency show that about a third of academic staff were on fixed-term contracts last year. A survey by the University and College Union found 97 per cent of members on fixed-term contracts would prefer a perma-nent post. In January, the Wellcome Trust (a major research funder in the UK) published a survey of 4,000 researchers which found only 29 per cent felt secure pursuing a research career, while 78 per cent said high levels of competition had created “unkind and aggressive conditions”.

In March, the Russell Group, which represents the UK’s 24 leading universi-ties, acknowledged that “over-reliance on some forms of employment models and associated contractual arrange-ments may not serve the best interests of staff . . . [and] may also impact on the wider academic mission”.

this deep pool of outsiders. It means that academics who win big research grants can be “bought out” of their teaching obligations — outsourcing them to someone like Ms Smith for the duration of the funding so they can focus on research, which is what brings them prestige and promotion.

The number of fixed-term, part-time, teaching-only roles at Russell Group universities has increased 127 per cent since 2012/13, according to minutes of one of the group’s meetings. But people on a series of teaching-only contracts struggle to find time to do research of their own, damaging their best hope of ever securing an open-ended job.

Reform to the way grants are struc-tured and an increase in stable long-term funding would help. The Russell Group plans to “engage with key funders” on this. But university manag-ers also need to see that part of their role as employers is to shoulder some risk and manage it as best they can, rather than pass it reflexively on to individuals.

There is a hard-headed case for tack-ling the insecurity problem. High staff turnover is not the best way to attract

University managers say their use of insecure employment contracts is a con-sequence of the unpredictability of their income: stable government block grants have been replaced by a reliance on tui-tion fees from international students and winning research grants. Many have also splurged on capital expendi-ture in recent years to attract students, which has left them with debt to service.

Covid-19 has only exacerbated financial pressure and uncertainty. “Everybody is in a market situation, every bit of funding is short-term. In those circum-stances you just can’t overcommit to stable careers,” one vice-chancellor told me. There is also a constant supply of PhD holders who are committed to academia as their vocation.

Insiders benefit in some ways from

Universities have to shoulder some risk and manage it, rather than

pass it on to individuals

GusO’Donnell

A fter winning an impressive parliamentary majority last December, Boris John-son, the UK prime minister, vowed that his “people’s

government” would make 2020 “a year of prosperity and growth and hope”. That hasn’t happened. He wanted to level up but inequalities have increased both between generations and across the country. So there is a real need for a reset to “build back better”.

The Covid-19 crisis has shown us there is more to life than money. What really matters is the wellbeing of the people, particularly those who are least satisfied with their lives. This should be the basis for the government to reset its vision for a post-Covid world.

What would this mean in terms of practical policy changes? First, we know that mental health has deteriorated as a

result of measures to control the virus. Reversing this is essential. There is a danger that the diversion of resources to Covid treatments and vaccines will pri-oritise tackling physical, visible prob-lems, while again making mental health a matter of secondary importance.

This makes no sense. Physical and mental health problems need to be tack-led together. In education we have come to understand that our children gain much from school that is not directly related to passing exams. Parents and teachers want children to be kind, resil-ient and enterprising. It will help them throughout life in many ways, including passing exams.

Various pilot schemes are being set up to assess how an approach around enhancing children’s wellbeing could become the explicit focus of all schools. On the economy, a focus on wellbeing would mean trying hard to keep people attached to the labour market.

This is one of the main reasons why furlough schemes make a lot of sense. Being out of a job not only means a loss of income. It reduces self-esteem and leads to loss of skills. This shows up in

social capital and, more generally, to spend a much greater proportion of tax-payers’ money on prevention rather than cure. We need people out of prison and in jobs, as keeping them incarcer-ated or unemployed is very expensive. The emphasis should be on reducing crime and the fear of crime, not on increasing police numbers by some arbitrary amount.

This means spending more now on education and reskilling in both schools and prisons. It should be seen as an investment, even if the national accounts don’t measure it that way. Sim-ilarly in health, the key is to spend more on prevention promoting healthy life-styles, leaving hospitals for “repairs”, as Nigel Crisp, the former chief executive of the English NHS, has put it.

At the micro level, the Treasury’s bible on investment appraisal, the Green Book, now allows for more sophisticated analyses that measure costs and benefits in terms of their impact on social wellbeing. This sug-gests a need to focus on left-behind areas where average wellbeing is low. Such an approach is long overdue. The

detailed analysis of what causes low wellbeing.

There may be a need to increase spending on infrastructure to help less prosperous parts of the UK, but social capital matters as well as physical capi-tal. Encouraging community organisa-tions and helping the civic sector to reach its potential would enhance well-

being. During the crisis the demands on charities have increased and their fund-ing has gone down. But communities have discovered how much they can help each other. I am chairing the Law Family Commission on Civil Society to investigate how to make the most of this neglected sector of the economy.

At the macro level, the Treasury should redirect resources to enhance

We need people out of prison and in jobs, as

keeping them incarcerated is very expensive

Opinion

nores realities of entrenched inequality. Looking around the world, there is no

doubt that Mr Obama is on to some-thing. Multicultural and multiracial democracies are often fraught with ten-sions, and no country has hit upon a for-mula that clearly works. But, in a world of mass migration, attempting to enforce monoculturalism, looks increasingly like a recipe for stagnation or tyranny. Both Japan and Hungary have adopted highly restrictive atti-tudes to immigration for explicitly cul-tural reasons. But both countries’ popu-lations are shrinking.

Elsewhere, extreme efforts at main-taining the dominance of one ethnic group have led to “ethnic cleansing”, as in Myanmar, or to the mass imprison-ment and re-education camps that China has constructed for Muslim minorities in Xinjiang. Making multi-ethnic democracies work is hard and uncertain work. But the alternatives look unattractive, unworkable — and sometimes horrifying.

gideon.rachman@ft.com

fee-paying students, for a start. It also drives away talented academics who don’t have the “socio-economic privi-lege to be able to wait it out” as Jo Grady, UCU’s general secretary, puts it. The same goes for those who have children and can’t support the chaotic lifestyle any more.

Ms Smith and her husband delayed starting a family for four years, until they dared not wait any longer. Now, at home with a newborn, she has no idea if she will find another job in academia. She can’t travel cross-country for half the week with a baby, but they cannot justify uprooting her husband’s stable job for a short-term post. “You’re going into [parenthood] consciously knowing this might be the end of [a] career, which is so sad, because I like it, I’m good at it, I make a difference to my stu-dents, and it’s the 21st century.”

Her mother was in the military and had to leave when she had children. “There was an assumption that would no longer be the case for our generation, but — well — here we are.”

sarah.oconnor@ft.com

The academic precariat deserves better

Wellbeing is a good basis for resetting UK government policies

government has struggled to explain how it has balanced the direct health advantages of lockdown measures against the economic and indirect health costs. An approach based on wellbeing would allow a more straight-forward comparison of these different factors. The practical tools exist. Of course, measurement is hard, but roughly measuring the right concepts is a better way to make policy choices than using more precise measures of the wrong concepts.

Governments around the world are realising that a wellbeing framework helps them to deliver what people really want. It is also good politics. Research shows that incumbent governments tend to be thrown out when overall well-being has declined during their term.

Prime ministers from New Zealand to Iceland and many countries in between have adopted this agenda successfully. It would provide the ideal framework for Mr Johnson to build back better and level up the UK economy. It might also extend his tenure.

The writer is a former UK cabinet secretary

T he G20 summit ended last weekend with a call for “immediate and vigorous measures” to address the effects of the Covid-19 pan-

demic. Among these is a looming sover-eign debt crisis, particularly in Africa. Urgent and collective action is needed there to stave off that crisis and to main-tain the invaluable social gains that the continent has made.

In the early 2000s, multilateraldebt relief provided a much needed reprieve for heavily indebted, poor countries around the world. Many African nations took the opportunity. Their economies grew and their devel-opment indicators improved. Neverthe-less, some countries’ debt became unsustainable as ultra-low interest rates allowed them to increase borrowing.

Indeed, based on the latest IMF and World Bank analysis, six sub-Saharan African countries are now in debt dis-tress, while 11 are at high risk of distress. Before the pandemic, sub-Saharan Africa’s debt load was forecast at 56.4 per cent of gross domestic product for this year; the current projection is for 65.6 per cent. To stop this rising level of debt turning into a crisis, several steps need to be taken now.

The first has partly been made through the G20 debt service suspen-sion initiative. This has benefited 46 countries, and deferred $5.7bn of debt payments. It has also recently been extended by six months until the end of June 2021, and may be extended further to the end of 2021. Africa accounts for 38 of the 73 eligible countries.

Unfortunately, there are several obstacles to the region taking full advan-tage of the initiative. There remains a risk that major credit rating agencies will put countries on negative credit review if they seek relief from private creditors under the scheme. This possi-bility has deterred some countries from requesting debt service suspension from private creditors — even though that would support economic recovery and future creditworthiness.

Furthermore, the lack of participa-tion by the private sector and multilat-eral development banks have con-strained the initiative, currently limited to official government-to-government loans. Private and multilateral creditors account for about $18bn and $7bn, respectively, of the $49bn of payments due from eligible countries from May to the end of the year.

The second step is an allocation of the IMF’s special drawing rights. This is a low-cost way of adding to countries’ international reserves, allowing them to reduce their reliance on more expensive domestic or external debt. However, neither this proposal nor an alternative solution — the reallocation of existing SDRs to countries that need them most — have received the necessary support.

The third step is a sovereign debt restructuring framework. The G20’s new common framework is a move in the right direction in that it seeks to facilitate orderly treatment for DSSI-eli-gible countries via broad creditor par-ticipation. But its success will depend on whether there is appropriate burden sharing by private lenders. Currently, the DSSI lays the burden of repayment on official bilateral creditors.

Lastly, countries need continued technical assistance to improve debt transparency and their debt manage-ment offices.

Implementing these steps would give substance to the sentiments recently expressed by the G20. The pandemic “marks a defining moment in our his-tory,” it declared. “Building on the bene-fits of our interconnectedness, we will address the vulnerabilities revealed by this crisis, take the necessary steps to recover stronger, and work to ensure that future generations are safer.”

For three decades, Africa has worked strenuously towards a more sustainable future. The world cannot allow short-term debt dynamics to derail its march towards a green, digitally enabled and globally connected future.

The writer is president of South Africa and chair of the African Union

Global response is needed to

prevent a debt crisis in Africa

Urgent action is required to maintain the invaluable

social gains that the continent has made

CyrilRamaphosa

global affairs

Gideon Rachman

EMPLOYMENT

SarahO’Connor

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18 ★ FINANCIAL TIMES Tuesday 1 December 2020

CROSSWORDNo 16,648 Set by SLEUTH

JOTTER PAD

ACROSS 1 Storm is uncovered about tabloid (7) 5 Like time in Washington DC in summary

(6) 8 English county beginning to promote

study in retirement coverage? (9) 9 Temperature adopted in Asian island for

Indian food (5)11 Highly specialised hotel in

Mediterranean resort (5)12 Slim shape is constructed as element in

a painter? (5,4)13 Young athlete rushed close to fine

Scottish actor (8)15 Story made up about European that’s

often in bed? (6)17 Spot couple at ground, not at college (6)19 Noted Florentine loves Puccini

essentially (8)22 Punter’s doing role playing (9)23 Offensive weapon in manner of speaking

not normal (5)24 Musical relatively free of trappings on

reflection (5)25 Paper replaced such leading chaps in

part (9)26 Obstruct young devil facing garden no

end (6)27 Talk about special seasoning (7)DOWN 1 A couple in GB upset about topless pub

in terrible disorder? (7,6) 2 No defender of the status quo spoke

about Cuba (7) 3 Well-built model deprived of sun (5) 4 Service still no good (8) 5 Useless type with desire uncovered to

be like a dandy (6) 6 Game trailed by inventor certainly has

come to an end (2,5,2) 7 Note opening above water? (7)10 Imply internet is faulty in a cheeky way

(13)14 Reasoning in temperance movement’s

slogan? (9)16 By the sound of it, couple fall for sweet

(4,4)18 Establish first of cricketers in form after

knock (7)20 Hide a line put under chapter previously

(7)21 Politician engaged in awful lies is easily

understood (6)23 Composer, tragic figure capturing hearts

(5)

Solution 16,647

Nikola became the source of endless jokes in September when a short-selling firm revealed that the start-up’s first truck, the Nikola One, had trouble moving unaided. A promotional video of the truck “in motion” was of a powerless vehicle rolling down a hill.

It was a prescient image of the trouble to come. Since the report, the stock price has more than halved. Founder Trevor Milton has stepped down. The US Department of Justice has subpoenaed both the company and Mr Milton.

Yesterday General Motors decided to hop out too. The two companies said they would scrap a tentative deal, first announced in September, in which GM was to take an 11 per cent stake in Nikola and help the company to build its electric Badger pick-up truck.

In place is a watered-down partnership. Under the terms of the non-binding agreement, GM will still supply Nikola with hydrogen-fuel technology. But it will no longer take a stake in the business. Nikola also said it was abandoning plans for the Badger and refunding customer deposits.

It is an embarrassing U-turn for both companies. More so for GM boss Mary Barra, who defended the original agreement with Nikola even after short seller Hindenburg Research came out with its scathing report. Investors should ask what sort of due diligence GM executives was conducted.

For Nikola, losing GM as an investor will take another sledgehammer to its prospects. The 25 per cent collapse in its share price suggests as much. Nikola’s market value, worth as much as $28bn in July, now stands at $8bn. Yet there may be a sliver of a silver lining. Abandoning the Badger will allow it to refocus on its core commercial truck and hydrogen fuel business. That said, Nikola is a small, niche company and some way off from producing a functional, marketable vehicle. Without a partner to shoulder some of the production risk, its uphill struggle to prove its commercial viability just became steeper.

GM/Nikola: crash and burn

each for its domestic mortgage and small business lending — up from 18 per cent. Achieving these goals will not be easy when low interest rates weigh heavily on profits. Even with additional cost cuts it offers a lowball return on equity of just 8 per cent for 2024, compared with the previous 10 per cent minimum. Negative rates on deposits over €500,000 may help prop up dwindling interest margins.

True, lower risk means lower capital requirements. Though ABN has pared back its common equity tier 1 target to 13 per cent, investors are unlikely to see any of the excess soon. The bank will maintain its 15 per cent CET1 ratio as a buffer.

ABN gives new meaning to the term safety in numbers. But that hardly makes it a good investment.

The corporate and investment banking business is already being scaled down. Capital freed up by that process will shift to expanding its stolid domestic lending. Lower risk and a domestic focus will appeal to ABN’s state backers, but not to others.

At 0.5 times book value, ABN trades in line with European peers. High-profile loan problems caused steep losses at the start of the year. One, tied to the collapsed Singaporean oil trader Hin Leong, probably motivated ABN’s decision to exit commodity trade finance this year. Total non-core investment banking exposures fell to €14bn in the third quarter from €19bn at the start of the year.

By 2024, about 35 per cent of the division’s risk-weighted assets will go.

ABN targets one-fifth market shares

largest mark on trade. For now, no Chinese sector should be considered safe from the US blacklist.

Inside Dutch state-owned lender ABN Amro a good bank is battling to get out. Chief executive Robert Swaak stepped up plans to support this struggle yesterday. But an unconventional combination of steep cost cuts and diminished expected returns failed to convince investors. Shares fell 7 per cent on the day.

Smaller, simpler and more customer friendly: that is Mr Swaak’s vision of the new ABN.

ABN Amro: shrink fit

The US blacklist of Chinese companies is a work in progress. President Donald Trump wants to block US investment in any Chinese company with military links. Definitions seem to be widening. Reports that semiconductor and oil companies may soon join the list should not come as a surprise.

China’s state-controlled oil company China National Offshore Oil Corporation (Cnooc) has been heading for trouble for some time. Some of its operations in the South China Sea were already controversial with rivals. It is a crucial passageway for shipping lanes and a potentially large source of oil, expected to yield more than 10bn barrels.

The addition of Cnooc to the US blacklist would be immediately damaging. Cnooc relies on US technology and on partners such as ExxonMobil for oil discoveries and projects. Earnings are already suffering. As oil prices and sales fell in the first half, net profit at Cnooc fell by two-thirds. Restrictions would mean difficulty sourcing equipment and a possible sell-off by US investors. More than one-tenth of the shares of its Hong Kong-listed unit are held by US investors. Shares fell 14 per cent yesterday. By contrast, shares in the Hong Kong-listed unit of Semiconductor Manufacturing International Corporation (SMIC), China’s biggest chipmaker and another potential for the blacklist, dipped just 3 per cent. Investors and executives have long expected sanctions following the high-profile crackdown on Huawei. Investors have had more time to price in the worst. Shares of SMIC are down 50 per cent from a July peak.

Other sectors could be surprised too. Industries that might fall under a looser interpretation of military links include Chinese makers of drones or high-voltage transmission lines. In the worst case for China, banks could also be included. Any restrictions on US dollar transfers would leave by far the

US/China investment: blackout

Lloyds Bank’s black stallion logo suggests rebellious vitality. It is an ill fit for the dowdy UK institution.

After a decade as chief executive, António Horta-Osório has done little to alter that perception. His replacement, Charlie Nunn from HSBC, was announced yesterday. Like Mr Horta-Osório, he has a broad international background. But do not expect Lloyds to break into a gallop.

Mr Nunn is leaving behind the title of global head of wealth and personal banking at HSBC. But not just yet. Mr Horta-Osório will step down next summer. But Lloyds cannot say when Mr Nunn might take over. Detaching him from HSBC sounds tricky. Lloyds’ newish chief financial officer, William Chalmers, could find himself in the saddle for a time. The share price, trailing rivals over one year by at least 10 percentage points, hints at market concern.

Lloyds is set to offer the outcome of its latest three-year strategic review early next year. But it is hard to provide a long-term view when the new jockey has yet to weigh in.

Shareholders should expect targets for 2021 only, thinks Jason Napier at UBS. Mr Nunn will surely want to stamp his own print on any outlook further out. What the bank desperately needs is more top-line growth. That is tough when the income equivalent of 40 per cent of the past year’s cost base has disappeared. A recovery to pre-pandemic levels of business would suffice, frankly.

Hope comes in the form of residential mortgages, where the bank has about a fifth of the local market. Business is suddenly brisk. Spreads against funding costs have widened substantially towards 140 basis points, up from as low as 90 points late last year. This probably is due to the release of pent-up demand in the housing market plus a stamp-duty holiday. All helpful but it will not last for ever.

Lloyds wants to expand in wealth management, achieving a top three position locally. Tough, given the structural decline in fees at a time when top client handlers remain costly. Still Mr Nunn, given his background, should have form. Even better, he may be available a bit sooner

Lloyds Bank: out to pasture

than the bank cautiously opined. After all, HSBC has already announced his replacement.

Until he can get started shareholders should not expect a rapid recovery in the shares.

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

Twitter: @FTLex

Even after the pandemic comes to an end, your boss may yet cancel the annual Vegas convention junket or superfluous trip to the Tokyo office. But will subscriptions to data providers really make the chopping block? Wall Street does not think so. Shares of two players, S&P Global and IHS Markit, have rallied sharply since their respective lows in March. Prices are up between 78 and 100 per cent.

On Monday, S&P confirmed that it would snatch IHS Markit in an all-stock acquisition at an enterprise value of $44bn — the latest in a wave of consolidation among information services companies. Shrinkage in the market should concern both customers and regulators.

The data business can be a juicy

one. S&P — whose units include credit ratings, financial markets data, Platts energy data and its famed indices — has an operating margin of 56 per cent. Data revenue tends to be sticky in the form of subscriptions. Any investment analyst with a data terminal will tell you that switching costs can be high.

IHS is a less profitable business, though its ebitda margin is still a healthy 40 per cent. In addition to securities pricing in the Markit unit, it sells oil and gas data as well as information on automobiles and auto components. During the course of 2020, organic growth fell sharply in the auto business. Low oil prices and consolidation among drillers has hurt IHS’s energy business.

The two companies, in addition to

cross-selling opportunities, estimate they can slash about a fifth of their combined overheads — at the cost of competition. Refinitiv, the former Thomson Reuters financial data service, has passed from Blackstone to the London Stock Exchange. ICE, another stock market group, bought Ellie Mae and Interactive Data Corporation together at a price of more than $15bn. Bloomberg remains private, controlled by the former New York City mayor and estimated to be worth more than $50bn.

Wall Street houses and hedge funds are not the most sympathetic consumers. But the rapid creation of data supergroups should raise the alert levels of competition regulators around the world.

FT graphic Source: S&P Capital IQ *12 months to Nov 2020 **12 months to Dec 2020

S&P GlobalRevenue, 12 months to Sep 2020 ($bn)

IHS MarkitRevenue, 12 months to Nov 2020 ($bn)

Financialservices

Transportation

Resources

Consolidatedmarkets and

solutions

Totalrevenues

0 2 4 6 8

Ratings

MarketIntelligence

Platts

Indices

Intersegmentelimination

Totalrevenues

0 2 4 6 8

Profit margins on the riseEbitda margin (%)

0

10

20

30

40

50

60

2015 1716 18 19 20

IHS Markit* S&P Global**

Estimate

S&P Global/IHS Markit: data planBanks, asset managers and insurance companies are spending more on specialist data as they try to beat rivals with detailed financial information. The industry is becoming more concentrated. Share prices and ebitda margins are rising at the data providers IHS and S&P.

DECEMBER 1 2020 Section:FrontBack Time: 30/11/2020 - 18:28 User: andy.puttnam Page Name: 1BACK, Part,Page,Edition: EUR, 18, 1

Inside

What the future holds for Hong KongA hub less cosmopolitan than before but with a still important role Page 2

Clearing plans cloudySplit picture on the EU’s drive to shift vital work out of LondonPage 2

FX data wars heat upDo dominant platforms’ information fees stand up to scrutiny as their trading volumes fall?Page 4

F or the exchanges that run the world’s biggest and most criti-cal financial markets, it has sometimes seemed this year’s pandemic has had little effect.

In August, Intercontinental Exchange, the US trading, clearing and data pro-vider, announced the $11bn purchase of mortgage software group Ellie Mae.

The deal was not only the largest in ICE’s 20-year history but also signalled that mergers and acquisitions, the indus-try’s biggest preoccupation of recent years, were back on the table. That was underlined in November when Deutsche Börse bought a majority stake in Institu-tional Investor Services for €1.9bn and Nasdaq paid $2.8bn for financial crime detection software maker Verafin.

The ICE deal was one Jeffrey Sprecher, its chief executive, had been working on in the background for more than a dec-ade, he told a virtual conference for the futures industry in mid-November. He had long sought a business reliant on US interest rates, the benchmark for vast quantities of daily trading, and the deal slotted into the company’s long-term strategy of turning musty financial serv-ices into lucrative high-tech operations.

It would allow ICE to ride the transfor-mation of the vast US mortgage market

from cumbersome paper-based systems to digital ones. “It’s very much akin to what we do in futures trading in terms of the underlying technology,” he said.

That bullishness was born of a confi-dence that the pandemic that left many

businesses in limbo had not extended to the industry that owns the main exchanges, clearing houses, benchmarks and data providers behind trading on markets. The industry sailed through the crisis. Exchanges stayed open and

largely withstood the deluge of deals as markets convulsed in March and April. Margin calls to meet derivatives trades were met in all but a few cases.

For many executives and regulators, this resilience justified the push after

Risk ManagementExchanges, Trading & Clearing

FT Special Report

www.ft.com/reports | @ftreportsTuesday December 1 2020

M&A returns as owners diversifyHolding companies seek scale and breadth as they ride out Covid-19, writes Philip Stafford

the 2008 financial crisis to hand exchanges more responsibility for mar-ket stability. Exchanges have expanded beyond their traditional role as the host for trading, looking to take a sliver of all

Continued on page 3

Slow burner: Jeffrey Sprecher, CEO of NYSE owner ICE, says he had been working on the Ellie Mae deal for more than a decade — FT Montage/Getty Images

Equivalence row looms over City’s ETF roleDelayed post-Brexit decision is raising frustrationPage 3

DECEMBER 1 2020 Section:Reports Time: 27/11/2020 - 17:44 User: jerry.andrews Page Name: RMZ1, Part,Page,Edition: RMZ, 1, 1

2 ★ FINANCIAL TIMES Tuesday 1 December 2020

Since the Brexit referendum four years ago, politicians and policymakers in Europe have worried that responsibility for market stability of the eurozone would lie outside the bloc.

After the 2008 financial crisis, their concerns about market moves destabil-ising the euro and sovereign govern-ments have focused on clearing, an unglamorous activity that prevents a default from spreading through the mar-ket like wildfire.

The industry has become one of the pillars of global regulators’ efforts to bol-ster markets after the near-meltdown of 2008. They sit between two sides of a trade in the securities and derivatives markets and manage the risk that a counterparty will be left out of pocket if one side defaults on payment.

For the EU, that critical business had been handled in the City of London. On the eve of the referendum, London Stock Exchange Group’s LCH handled 95 per cent of all euro-denominated interest rate derivatives, and more than a third of euro-denominated repurchase agree-ments, in which banks lend out assets in return for short-term financing.

The UK’s impending departure from the single market posed two questions: would the EU be happy to leave the busi-ness in London and would it be possible to move the business?

The answer to the first is comprehen-sive. Michel Barnier, EU chief Brexit negotiator, has publicly questioned whether it is in the bloc’s long-term eco-nomic interest to allow the City of Lon-don to retain “such a prominent posi-tion” in serving European customers.

Mairead McGuinness, the EU’s new financial regulation chief, is also ada-mant. “It is clear that the EU is heavily reliant on UK central counterparties

and it will be important to reduce EU clearing members’ exposures to [them],” she said, talking about euro-denominated derivatives at the Euro-pean Parliament in October.

But those exhortations have had mixed results. There has been no regu-latory mandate demanding that the business move and it has relied on the market to resolve the problem itself.

The EU’s greatest success has been in the shift of eurozone sovereign debt clearing to Paris, alongside related busi-ness in repurchase, or repo, markets.

Eurozone debt and its 2011-12 crisis is a sensitive topic for the EU, epito-mised when LCH UK raised the mar-gins on sovereign debt clearing for Spain, Ireland and Portugal, arguably increasing jitters over the euro cur-rency. The repo market is little known but acts as a vital oil in movements of billions of dollars and euros. Banks and investors use the market to find cash for the short-term, offering high-qual-ity collateral like government bonds in return. Those assets are deposited in clearing houses every day.

The European Central Bank also sees the repo market as its conduit to

increase liquidity and funds into the market in times of crisis, because move-ments in short-term repo rates affect financing conditions for banks, and ulti-mately for companies and households.

Although its plans predated the refer-endum, LCH began managing eurozone government debt from Paris from 2017. Now the French capital is now the main hub, clearing 80 per cent of the €200tn a year business, compared with two-fifths in 2016. In a sign of its growing influence, this year it also began clearing bonds

European vision of shifting clearing from UK still cloudyEurope

Pressure to relocate critical work from London has had only partial success, writes Philip Stafford

Michel Barnier has questioned whether it is in the bloc’s interest to allow the City to retain ‘such a prominent position’

issued as part of the EU’s programme to finance employment schemes.

However authorities have had less success in shifting euro-denominated derivatives. The UK was the hub of most derivative trading in Europe in 2019. Four-fifths of the €681tn market involved a UK-domiciled counterparty, unchanged from 2018, according to data from Esma, the markets regulator.

Executives running banks’ clearing operations have resisted moving their portfolios of thousands of derivatives contracts out of London, because it is a long and costly operation, and disadvan-tages them compared with US and UK rivals which can use London. Some also argue that interest rate derivatives have little impact on the stability of the euro.

Faced with deeply entrenched posi-tions, the EU issued a temporary permit that will avoid disruption as the UK leaves the transition period.

Deutsche Börse has tried to persuade the market to move euro business to Frankfurt, with limited success. More than 500 banks and fund managers have connected to its Eurex clearing house to clear derivatives, but less than half of the €18tn business is the more consequential, longer-dated, interest rate swaps. That latter business remains in London, where €84tn is cleared.

In early November Eurex made a fresh push, offering users discounts for the next three years. “We want to make it easier for market participants to comply with the demands of the regulators and transfer swap business into the Euro-pean Union,” says Matthias Graulich, member of the board at Eurex Clearing.

Brussels has given the market until mid-2022 to move their portfolios and reduce exposure. The more pressing question will come if it does not respond.

Change call: Mairead McGuiness

EU regulators risk pushing currency trading abroad and saddling local mar-ket participants with costly new burdens if they press ahead with proposals to reg-ulate cash foreign exchange markets, according to some industry veterans.

In late September, the European Secu-rities and Markets Authority (Esma), the EU watchdog, left the door open to bringing the $2tn daily market under European Market Abuse Regulation (MAR) rules. The proposals, first floated in October 2019, face strong resistance from banks and investors.

Some market participants fear that European regulators could break ranks with peers abroad and impose strict new rules on cash currency trading, which they say would cause costly disruption but achieve little.

Spot foreign exchange markets have never been directly regulated because currencies trade 24 hours a day around the world, with more dollars traded in London than in the US. Unlike equity markets, cash currency trading is pri-vately negotiated among a mix of inter-national participants. Deals are settled instantly and central banks are also active in the market.

However, following the global curren-cy-rigging scandal that led to $12bn in fines, major central banks endorsed a set of voluntary standards that sit within a broader and sanctionable regulatory framework, the Global Code of Conduct, rather than push for more detailed and specific regulation in the field.

Esma could yet decide to extend MAR to cover the previously exempt cash currency market, in a move that would require changes to the Europe-wide reg-ulatory regime, Mifid II. Esma appears reluctant to move forward, but political pressure from some European countries is forcing the watchdog to explore the option, lawyers say.

Without co-ordination with other regulators, Esma’s efforts could trigger an exodus from EU currency trading

hubs to the UK, some participants fear. Centres such as Frankfurt, Paris and Amsterdam handle a small portion of daily volumes but these are cities in which many trading firms and banks created new outposts because of Brexit.

“The market would just move but those that are left behind and have to trade in Europe would face enormous costs. It would be a disaster,” says Vikas Srivastava, chief revenue officer at Inte-gral, a technology company.

According to the Bank for Interna-tional Settlements, 43 per cent of daily flows were traded in the UK, with five large trading hubs — all outside Europe — responsible for 79 per cent of transac-tions. Germany, France and the Nether-lands together accounted for less than 5 per cent of the $6.6tn market.

Esma said in September that it would conduct more analysis of extending MAR to the previously unsupervised global market next year, when an inter-national committee led by central banks finishes its review of the code.

Esma says it “keeps monitoring the progress made in the context of the [code’s] review” and it is ready to pro-vide “additional assistance to the Euro-pean Commission”.

The Commission will report to the European parliament on the application of MAR and it can propose amendments if policymakers find it appropriate. No

date is set for the EU executive body’s report.

Investors and banks want to continue using the voluntary standards and to give more teeth to enforcement of the principles.

The UK’s Financial Conduct Authority and the Australian Securities and Invest-ments Commission have argued that any breach of these principles would ulti-mately become punishable under broader regulatory regimes, providing

enforceable protection for customers who find themselves damaged by wrongdoing in the marketplace.

Both regulators have embraced the Global Code of Conduct more closely than their peers and said they would use the standards to clamp down on mis-conduct in the market.

Guy Debelle, deputy governor of the Reserve Bank of Australia and chair of the body in charge of the code, says cen-tral banks are comfortable with its principles and that co-ordination between national regulators would be difficult.

“I doubt that the market wants regu-lation and because [it] is global, it would be very difficult to arrive at a way of reg-ulating activity that would be consistent across jurisdictions,” Mr Debelle adds.

More national regulators could follow the UK and Australia in officially enforc-ing the code, he says, which “would offer a global alternative to local regulation”.

Many, like Integral’s Mr Srivastava, also question what Esma is trying to achieve through its review. Banks and investors trading in foreign exchange markets are heavily regulated already and the clampdown in the wake of the trading scandal demonstrated regula-tors’ ability to act.

“Regulators need to tell the industry what problem they are trying to solve and see if there is an easier way to do this than Mifid II,” Mr Srivastava says.

Central banks are conducting a review of the principles in the code, three years after they were published. The review was to finish in late 2020, but the deadline has been pushed back to mid-next year by coronavirus.

According to some lawyers, Esma had anyway appeared to lack enthusiasm for including currency markets in the regulations. They note that the regula-tor highlighted the difficulties involved in bringing spot trading under the rule from the start. It also flagged up poten-tially significant costs for both national regulators and market participants.

“Esma is reluctant [to extend MAR],” says Rob Moulton, a partner at law firm Latham & Watkins, noting that the regu-lator is aware of the enormous task that faces them if they press ahead. “I think there is a political will to do something because of the issue in the past. But it’s Esma that has to pull this off and in real-ity it’s not as simple as it sounds.”

Dispute brews between EU and currency traders on Mifid reformRegulation

FX professionals warn of an exodus of trading from European centres if rules are tightened, says Eva Szalay

‘Regulators need to tell the industry what problem they are trying to solve and see if there is an easier way to do this than Mifid II’Vikas Srivastava, Integral

crown — already a challenge thanks to the tens of billions of dollars in issuance from special-purpose acquisition com-panies, or Spacs, on Wall Street.

But for standard-issue IPOs, Hong Kong is still going toe-to-toe with its US rivals. In terms of funds raised by non-Spac IPOs, Hong Kong’s nearly $39bn from primary and secondary listings this year puts it just behind the $41bn raised from IPOs on the Nasdaq, the US front-runner, according to data from Dealogic.

That puts it in striking distance of sur-passing last year’s record $40bn made possible by a nearly $13bn secondary “homecoming” listing from Alibaba a

year ago, which set the stage for more Chinese tech giants to raise billions of dollars closer to home in 2020.

Alicia García Herrero, chief econo-mist for Asia Pacific at Natixis, says it has been a “magnificent year” for deal flow in Hong Kong’s capital markets. But she added that the city was shifting further away from its position as a global financial centre towards a role primarily as an offshore hub for Chinese finance: “In Hong Kong the concentration of mainland companies is humongous.”

That is borne out by Financial Times analysis of data from Hong Kong’s financial regulator, which shows that

mainland Chinese companies in the city now employ more than 2,100 licensed investment bankers. This is only a few hundred lower than the number work-ing for Wall Street bulge-bracket invest-ment banks such as Goldman Sachs and Morgan Stanley.

Meanwhile, rival Shanghai is gaining more traction as a destination for inter-national investment banks’ China teams. Its tech-focused Star market has enjoyed a banner year as Beijing has pushed companies to tap local markets as it seeks to wean the country off its dependence on US capital markets.

Indeed, the majority of listings in

Risk Management Exchanges, Trading & Clearing

I n the weeks leading up to the planned public offering from Ant, the Chinese fintech group control-led by billionaire and Alibaba founder Jack Ma, bankers in Hong

Kong radiated confidence. Here, the argument went, was undeniable proof that the city’s future as a financial hub was secure.

After more than a year of social upheaval, disruption from the coronavi-rus pandemic and a national security law that raised fundamental questions about the city’s legal system, they appeared to have a point. Then, early last month, the dual Hong Kong-Shang-hai IPO was suddenly suspended by Bei-jing, days before shares were set to begin trading, as China pushed ahead with reg-ulations targeting online lenders and monopolistic practices in its tech sector.

Yet following this eleventh-hour tumult, few believe the city’s status as a major financial hub is in jeopardy, even as much of its financial sector continues to shift towards an even greater reliance on Hong Kong’s role as the primary con-duit between Chinese and global finance.

“Hong Kong’s financial stature is big-ger than any one deal, and much broader even than just equity capital markets,” says Jason Elder, a partner at Mayer Brown, the global law firm. He adds that issuance in both equities and debt capi-tal markets has been resilient despite a year of unprecedented disruption. “The city’s status as an international financial centre remains strong,” he says.

Investors and traders admit that the delay for Ant had startled the city’s financial sector and forced a reshuf-fle for markets that had been using the planned listing — and the vast funds flowing into Hong Kong ahead of it — as a focal point.

“[Ant] was really going to bring in a bunch of money flow by year-end,” says one local hedge fund manager. “Every-thing was lining up around this.”

The delay for the city’s headline IPO of 2020 will make it harder to surpass rival bourses in New York and retain its listing

Shanghai this year have been on Star, founded in July 2019. While the pause in Ant’s IPO may deprive China’s top onshore bourse of its crown jewel for a time, the deal is more a sign of the times than catalyst for change in its own right.

“We’re seeing Shanghai begin to tran-sition from being primarily a hub for domestic banks to being a location where the international banks now see it as crucial to have feet the ground if they’re going to win significant roles in some of these onshore deals,” says Alex-ander Owen, research manager at investment banking intelligence group Coalition.

Mr Owen says foreign banks’ focus on capturing more of the fee pool in Shang-hai has intensified as China pushed ahead this year with an effort to make Star a “flagship destination” for Chinese technology listings and “a direct chal-lenger to Nasdaq”.

“We see increasing participation from international banks in some of these onshore deals moving forward, which reflects the demand coming through from international investors to have a piece of this pie,” he says.

But while Star has drawn more busi-ness onshore, Hong Kong remains of vital importance to the biggest and most powerful Chinese tech groups — even as they face regulatory pressure at home.

Investors were given serious pause this month when Beijing announced new regulations curbing monopoly power in the sector. This prompted a sell-off that erased almost $290bn in value from Hong Kong’s stock market as shares in the likes of Alibaba, Tencent and JD.com tumbled. Yet after these losses the Hang Seng Tech index tracking these and other top tech groups listed in the city was still up almost 70 per cent in 2020, reflecting the high concentration of China’s largest and fastest-growing tech groups listed in Hong Kong.

Ms García Herrero at Natixis says the city’s edge over Shanghai would remain, thanks to capital controls pre-venting the latter from rising to true global financial prominence. However, she adds that does not guarantee Hong Kong’s future will be as cosmopolitan as its past. “I don’t know what the future of Hong Kong is going to be but I am pretty certain that it won’t be a global financial centre. Hong Kong is now China’s financial centre, which is differ-ent,” she says.

Hong Kong will emerge from turmoil changedBourses Pandemic, protest and paused IPO hit hard but the hub has a — refashioned — future, Hudson Lockett reports

Hong Kong stock exchange: some economists say the territory is moving towards a role primarily as an offshore hub for Chinese finance — Shutterstock

‘Hong Kong will retain its edge over Shanghai but this does not guarantee Hong Kong’s future will be as cosmopolitan as before’

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Tuesday 1 December 2020 ★ FINANCIAL TIMES 3

L ondon’s role as the most important hub in Europe’s rapidly expanding $1tn exchange traded fund indus-try is clouded by uncertainty

by the absence of a post-Brexit agree-ment over financial services between the UK and EU.

Under the Brexit withdrawal agree-ment, the UK gave up its rights to sell financial products and services freely across the entire EU, a system known as “passporting”. Instead UK access to the EU’s financial markets from January onwards will rely on arrangements known as “equivalence”, based on mutual recognition of regulatory stand-ards by both sides.

Brexit supporters argued that a judg-ment that the UK’s financial regulatory system was equivalent should be straightforward as the entirety of EU

law, the acquis communautaire, has been transposed on to the UK statute book.

However, the EU has yet to grant many equivalence decisions to the UK, with the European Commission insisting that it will take account of British plans to diverge from EU rules in the future.

The UK government has unilaterally granted market access rights to the EU but there has been no quid pro quo agreement by Brussels. Some analysts believe this is a ploy by the EU to force the UK to come to an agreement as the clock runs down in trade negotiations. Other observers think that the EU views Brexit as an opportunity to drag business away from London and that withholding equivalence will accelerate that process.

Worries about the City’s future have been fuelled by a European ruling that investment managers and banks based in Europe should execute trades of stocks listed on EU venues from Janu-ary, even if there is more liquidity avail-able in London. This could lead to an increase in trading costs for pan-Euro-pean ETFs which own these stocks.

European regulators have also yet to rule on where derivatives must be traded from January, a decision that could affect swap-based (derivative-linked) ETFs that are listed in London.

BlackRock, the world’s largest asset manager and the biggest ETF provider, says the steps already taken by the UK government should ensure European investors can still access ETF liquidity in London after the end of the Brexit tran-sition period.

Sander Van Nugteren, a managing director in BlackRock’s iShares global markets team, says that market partici-pants have already done a massive amount of preparatory work.

“We are confident that ETF trading will continue without interruption and that trading venues will be able to main-tain liquidity as before,” he says.

More than 1,500 ETF share classes are listed on the London Stock Exchange, where activity levels have been rising strongly. Almost 6.4m ETF trades worth £126bn have been completed in the first 10 months of the year, up from 4m trades worth £103bn in the whole of 2019, according to LSE. About 8.6 per cent of all European ETF trading in the third quarter of 2020 was on the LSE, up from 5.9 per cent in the first quarter.

Big institutional investors and spe-cialist ETF traders tend to gravitate to where liquidity is most plentiful because this helps them to conduct business more efficiently.

Ivan Gilmore, the LSE’s head of exchange traded products, says the deep liquidity of ETF trading in London will continue to attract investors from around the world despite uncertainty about an equivalence decision by the EU.

“The LSE will remain open to all. We have assured ETF issuers and our trad-ing members that we don’t see any

Risk Management Exchanges, Trading & Clearing

Equivalence row looms over London ETF role

impediment to their open access contin-uing after the end of December,” says Mr Gilmore.

Even if the EU does grant equivalence to the UK, Brussels will retain the power to withdraw this at short notice.

“Equivalence is a tool for the EU to gain greater oversight of cross-border financial services from third countries,

Central: London is the most important hub in Europe’s $1tn ETF industry — Reuters

suppress volatility and while there may be periods of high volatility, those peri-ods will burst through longer stretches of lower-than-average volumes, he adds.

Law firm White & Case in August fore-cast that M&A levels in Europe would remain high as the largest businesses sought scale, volume and diversifica-tion. “Competition between market participants for the same high-value targets is likely to intensify,” it said. Most executives and advisers accept that buying national stock exchanges is politically fraught, even as the LSE aims to sell Borsa Italiana to Euronext for €4.3bn to satisfy European competition concerns over its Refinitiv deal.

Mr Watts forecasts a steady flow of deals, large and small, in tech and data, or less technologically-advanced areas of financial institutions such as back- and middle-offices, where deals are checked and settled. “Success in weathering a major real-world stress-test in the first half of 2020 will support [exchanges’] dealings with regulators and other capi-tal market participants,” he says.

Big-ticket deals will further concen-trate the business of running capital markets among a handful of actors. At the end of 2019 total global exchange revenues were $35.6bn, according to Burton Taylor International Consulting.

The five largest exchange holding companies — ICE, CME, LSE, Deutsche Börse, Nasdaq — had strengthened their grip on the market, accounting for 53 per cent of the total and up from 50.8 per cent in 2015, the consultancy found.

For now many antitrust regulators around the world seem to be comforta-ble with the trend. US watchdogs approved the LSE’s purchase of Refini-tiv by arguing that rivals and customers had significant bargaining power that would limit price rises or competition.

But the biggest hurdle for completing the LSE deal will be securing approval from authorities in Brussels. Alongside the coronavirus, that ruling, due in mid-January, may set the tone for M&A for many years to come.

Exchanges M&A returns as owners diversify

ContributorsChris FloodFTfm reporter

Richard HendersonUS capital markets correspondent

Hudson LockettAsia capital markets correspondent

Philip StaffordEditor, FT Trading Room

Eva SzalayCurrencies correspondent

Jerry AndrewsCommissioning editor

Steven BirdDesigner

Esan SwanPicture editor

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aspects of a trade, from supplying data and analytics to managing the risk and settling it. Electronic trading has mush-roomed, as have demands for data, boosting industry profits for the last decade. Competitors find it difficult to fully replicate the complicated network of buying and selling on an exchange.

The valuations of the biggest compa-nies rebounded to, or even surpassed, pre-pandemic levels. Companies such as ICE, MarketAxess and S&P Global, the index provider, have more than doubled in the past decade, outstrip-ping the S&P 500 financial index and well-known financial services stalwarts such as JPMorgan, BlackRock and Gold-man Sachs.

The annual value of M&A deals in the industry is the second highest on record at $21bn so far this year, behind only 2019’s total of $28bn, according to data from FactSet. Last year’s number was swelled by London Stock Exchange Group’s planned $27bn deal to purchase data and trading group Refinitiv. The 30 deals this year have surpassed last year’s total of 24, said Factset.

Even so, the pandemic may yet have a significant impact on executives’ think-ing. Trading volumes have shrunk dra-matically since the market panic around the coronavirus subsided. It has exposed the stark difference in business

models between those that rely on activ-ity from trading and more diversified rivals who have extensive revenues from indices and technology.

The share prices of CME and Cboe, reliant on market volatility, have fallen by 13 per cent and 23 per cent respec-tively this year. In contrast the more diversified Nasdaq has risen 18 per cent and ICE has risen 12.3 per cent, in line with the benchmark S&P 500 index.

Central banks now have near-unlim-ited firepower to curtail sudden price movements and eruptions on markets, which has “significant potential ramifi-cations”, says Nicholas Watts, an analyst at Redburn in London. The banks can

Continued from page 1

30 deals in the industry in 2020, surpassing last year’s 19

$27bn LSE Group’s planned purchase of Refinitiv

but it is also fundamentally a political and international trade tool,” said PwC, the professional services provider.

Switzerland, a non-EU country, had the equivalent status for its stock exchanges revoked by Brussels last year after negotiations about a broad eco-nomic agreement stalled due to disa-greements over issues including state subsidies, wage protection and freedom of movement. Switzerland retaliated with its own ban on trading Swiss equi-ties on exchanges in the EU.

The dispute, which remains unre-solved, shows how the equivalence process can become politicised. Some observers fear the problems in Switzer-land could be repeated in the UK, given its determination to assert sovereignty as an independent trading nation out-side the bloc.

Keshava Shastry, head of capital mar-kets at DWS, the German investment manager, says EU-based ETF providers have continued to list new products in Switzerland after the withdrawal of equivalence by Brussels.

“I would expect European ETF issu-ers to continue to list on UK venues even without equivalence. I don’t think there will be any major problems,” adds Mr Shastry.

Exchange traded funds Delayed EU decision is raising frustration rather than fear in the City, writes Chris Flood

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4 ★ FINANCIAL TIMES Tuesday 1 December 2020

I nfluential foreign exchange trading venues that act as the reference price for currencies are facing a bat-tle to maintain lucrative charges for their market data feeds, as growing

competition and declining trading vol-umes threaten their position.

Regulators in both the US and Europe have been closely scrutinising the amounts charged by stock exchanges for market data in recent years and the cost has sparked a fierce struggle between cli-ents and trading platforms. Data charges in currency markets have received much less attention, partly because prof-its have been big enough to distract from this cost and because of less stringent regulatory requirements.

However now some FX trading cus-tomers are pushing back against these high costs and many are voting with their feet. This presents a challenge for the “Big Two” incumbent platforms, CME-owned EBS Market and Refinitiv’s Matching, which currently act as key market data providers for currencies. Both face an uncomfortable problem: how to keep charging top prices for information about exchange rates if the majority of the market trades elsewhere.

Traders say the cost of top-quality FX market data, about $50,000 per month, has not changed in a decade, but its quality and usefulness have declined.

“Ten years ago you couldn’t be in the trading business without having access to those two data feeds. Now there are other ways to get information about prices,” says Phil Weisberg, head of stra-tegic planning at tech company OneZero.

For now, both platforms retain their crowns as the preferred inputs into the pricing models of the top echelons of market makers. However, over the past five years, average daily trading vol-umes have declined by a quarter on both platforms. As trading activity has inexorably shifted from the venues, the

data feed becomes more critical and val-uable. It carries the prices that flow through the market. EBS and Refinitiv declined to comment.

In the three months to September, transaction revenues from the EBS busi-ness fell 15 per cent compared with that period last year, according to a regula-tory filing from CME. Average daily vol-umes were 19 per cent lower at $63.3bn than in the same quarter last year.

Growing competition means equity market operators have had to reduce the fees they charge for facilitating transactions, says Ken Monahan, an analyst at financial consultancy Green-wich Associates. “This meant they have had to cut fees where they directly com-pete, in transaction fees, but are still able to charge for things they can uniquely provide, like market data spe-cifically from their platforms,” he says.

Exchanges in equity markets have benefited from being able to raise mar-ket data costs because of legal require-ments that force large banks and inves-tors to shell out for price information from all relevant markets to prove best execution.

But now US regulators are scrutinis-ing the level of these growing charges in equity market data. In June, the US Securities and Exchange Commission and the US Department of Justice joined forces to act on equity market concerns.

Brett Redfearn, the director of the trading and markets division at the SEC, said in a speech at the time that the seven largest equity exchanges saw their market data revenues rise five times as much as their income from trading between 2013 and 2018. “These changes raise questions about whether the current level of various exchange

fees for market data and connectivity are reasonable,” he said. In currency trading such obligations to demonstrate best execution do not exist in the same way, but market data is still a lucrative source of revenue for platforms viewed as “the price”. While costs have not increased, they have not fallen.

“Compared to the equities markets, the FX markets are much more decen-tralised,” says Chris Purves, co-head of global markets execution and platforms at UBS. “[This] has kept in check the price of FX market data.”

Currency trading takes place on doz-ens of platforms and the majority of deals are privately negotiated, meaning there is no clear “central price” accessi-ble to all. Instead, investors use exchange rates supplied by EBS and Ref-initiv as a reference to price deals in major currencies. Both were originally

set up for the largest dealers to trade with each other, and by doing so to deter-mine the real exchange rate.

But these deals now account for a “small fraction of the entire market”, according to analysis from the Bank for International Settlements.

“The two legacy venues can’t afford their volumes to drop much more because their market data will lose its value,” says David Mercer, chief execu-tive of LMAX Exchange, a rival platform.

Currently, subscribers pay as much as $50,000 per month for access to EBS’s fastest and most granular data feed. Large banks and high-frequency trading companies need to spend about $1m a year just on getting access to price data in the highly fragmented market, accord-ing to people familiar with the matter.

“There is nothing wrong with mone-tising market data but we feel that com-

Risk Management Exchanges, Trading & Clearing

FX data wars heat up as rivals take on ‘Big Two’Market information As competition grows and trading volumes fall, do incumbents’ fees add up? By Eva Szalay

Doing the maths: (left) a computer server room; (right) Phil Weisberg of OneZero says ‘now there are other ways to get information’; (bottom) Chris Purves of UBS says the relatively decentralised nature of currency markets has kept data prices in checkGetty

petition is important and that fees should reflect the value of the data,” says Jonathan Weinberg, head of Cboe FX, which aims to compete with the dominant incumbents.

The costs mean that the majority of end investors such as pension funds can-not afford to directly access this infor-mation and instead rely on being sup-plied with the day’s highs and lows from the banks they trade with.

The head of trading at a large sover-eign wealth fund says that, despite trad-ing billions of dollars of currencies a year, the cost of accessing top quality data feeds from the two main markets is still prohibitive for most investors.

“It would be great to have but I just can’t make the business case for it,” the trading head says. “Yes, volumes have declined, but they’re still what people view as the reference price.”

LTSE offers dual listings, which means companies that select the exchange must also list on either NYSE or Nasdaq.

Miax and MEMX focus on competing for a slice of the equity trading market and have attracted big name supporters from the brokerage industry.

Miax is aiming to gain 5 per cent share of the market and has attracted 40 member firms, with 25 trading daily, according to the exchange. It has also raised $22m by selling prepaid blocks of fees to a group of market makers that includes Citadel Securities and UBS. These investments will convert into equity stakes in its parent company — Miami International Holdings — if the market share target is reached.

The three options exchanges run by Miax, which account for about 15 per cent of the US options market, mean it may be able to offer preferential pricing for customers of its stock and options exchanges, which may bolster its appeal.

“Miax has made its name in the options market — they’ve been very successful,” says Mehmet Kinak, the global head of systematic trading and market structure for fund manager T Rowe Price. “People give them credit to see if they can make that model work in equities.”

Miax has waived fees for market data and offers a rebate of 32 cents per 100 shares for market makers to display orders on the platform — a level that sits toward the higher end of what the incumbent exchanges offer.

MEMX, which launched with the backing of leading brokerages including Citadel Securities, Morgan Stanley, Gold-man Sachs, Fidelity and BlackRock, is

initially offering a lower rebate of 28 cents per 100 shares and will charge 25 cents on the other side of the trade, resulting in a 4 cent loss.

Richard Repetto, an analyst with Piper Sandler, described this approach as “inverted pricing in order to gain market share”. This was the playbook employed by Bats Global Markets, an exchange operator that was launched more than a decade ago and swiftly built market share before selling to Cboe in 2016.

The exchange has waived market data fees and is hoping to attract 2 per cent to 4 per cent market share by the end of next year. MEMX will also give brokers supporting the exchange a chance to press their views on market structure topics with regulators — a factor that helped it amass the support of some of Wall Street’s biggest players.

“As a matter of basic fairness, we think market participants paying sub-stantial market data fees should have a voice during deliberations among US stock exchanges behind closed doors,” Mr Khandros says.

The effects of a group of brokers hav-ing a bigger say in developing the rules that govern the market may ultimately be the biggest legacy from this new crop of exchanges, which have little in the way of differentiated offerings com-pared with the existing exchanges, says Mr Kinak of T Rowe Price.

“MEMX will be the most vocal of the group,” says Mr Kinak. “It allows a con-sortium of brokers to have a vote about, potentially, how information is dissemi-nated and priced. From that standpoint, I see the benefits.”

Three new stock exchanges launched in September have begun to alter the shape of the world’s biggest equity mar-ket, challenging the trio of incumbents that dominate US share trading.

Long Term Stock Exchange in San Francisco, Miax Pearl Equities in Miami and New Jersey-based Members Exchange, known as MEMX, all debuted in the same month and bring the number of US stock markets to 16.

The new bourses have yet to attract significant volumes, accounting for less than 1 per cent of the shares that changed hands in October. But together they threaten to loosen the grip of the New York Stock Exchange, Nasdaq and Cboe Global Markets, which account for more than one in two shares traded in the US across the 12 public exchanges they operate.

The injection of competition has been largely welcomed by fund managers and brokers, which often spar with the established exchanges over their fees, including the price of market data — a flashpoint of debate in recent years.

“Three exchange platforms account for most of the US equity exchange vol-ume right now,” says Vlad Khandros, head of market structure for UBS. “We’d like to see more competition and less concentration.”

The new players have very different aims. LTSE is targeting the listings mar-ket, Miax Pearl is hoping to gain market share and build upon its options exchange business and MEMX wants to put pressure on market data fees and give a voice to the brokerage industry in regulatory discussions reserved for reg-istered exchanges.

The new entrants are already having an impact on the market. LTSE has begun approaching companies about potential listings, according to the exchange, challenging NYSE and Nas-daq, which fight to list the world’s big-gest companies. The new exchange is hoping its listing criteria, which has a strong focus on corporate governance, will attract companies by acting as a prized stamp of approval for investors.

New contenders bring ambition to reshape US equity marketCompetition

Three new rivals take on dominant stock exchanges and aim to amplify industry voice on regulation, writes Richard Henderson

Three exchange groups represent more than halfof the US marketMarket share (%)

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FT Special Report

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Arab WorldBanking & Finance

A region in flux Inside3 Twin shocks force states to look inward Page 23 Regulators must clarify cross-border role Page 4

3 Lenders on frontline of business recovery Page 6

8 | FTReports FINANCIAL TIMES Tuesday 1 December 2020

2 | FTReports FINANCIAL TIMES Tuesday 1 December 2020

Arab World Banking & Finance

Prince Mohammed said that if the government had not increased non-oil revenues to about $96bn this year from about $27bn in 2015, Riyadh would have been forced to reduce public sector salaries by more than 30 per cent, “cancel allowances and bonuses completely” and halt capital spending.

The break-even oil price for Riy-adh, Abu Dhabi and Kuwait last year ranged from $83 per barrel to $53, according to the IMF. Qatar, the world’s richest nation in per capita terms, had the lowest break-even price at $45. For Oman and Bahrain,

it was $93 and $106 respectively. Gulf states were touting ambitious

economic reform programmes prior to the coronavirus outbreak such as Prince Mohammed’s “Vision 2030”.

But progress has been uneven across the region and attempts to diversify away from oil have mostly been slow.

All governments are now expected to have to raise non-oil revenue through taxes of some form, increase borrowing and trim wage bills in the public sector — the main source of employment for locals across the Gulf.

id-19 crisis and a price war between key producers, also create challenges for Gulf sov-ereigns, which in turn bring opportunities for the invest-ment banks who help them tap funding markets.

“Overall (GCC) issuance for the year to date has been higher in 2020,” says Karim Tannir, co-head of JPMorgan for the Middle East and north Africa. “That’s driven by the need for capital to shore up the governments’ balances.”

Mr Tannir says investor appetite for sovereign debt has been “very strong”, thanks to stable currencies and credit profiles, and the absence of capital controls. A $5bn bond offering by Abu Dhabi was

Fees are falling, oil prices are low and the region’s economies are under threat. But top glo-bal investment banks say they have no intention of pulling back from the Gulf.

Regional fees from M&A, loans, debt and equity issu-ance fell 7 per cent in the 10 months to the end of October, Refinitiv data show. Globally, meanwhile, fees rose 17 per cent in the same period as companies in the US and

Europe raised cash to deal with the impact of the pandemic.

Comparisons with the rest of the world are likely to be worse for the full year, because last December’s Saudi Aramco IPO — the world’s highest-value listing — drove a one-off fees bonanza for the Gulf in the final months of 2019.

The outlook for 2021 is less clear, as the pandemic spurs activity in certain areas, such as cash raises for relatively healthy companies and restructuring of balance sheets for struggling ones, while sti-fling other activities, such as fundraising as investors fret that economies could worsen so much they will not get their money back.

But despite uncertainty, top regional executives from JPMorgan Chase, Citigroup, Deutsche Bank and HSBC — among the most active global banks in the region — remain committed to the Gulf, with some even adding resources.

“Total investment banking fees in the Gulf region are on course to top $1bn for only the second time in a decade and that’s happening despite the uncertainty,” says Abdulfattah Sharaf, United Arab Emirates chief executive for HSBC.

M&A fees in the Gulf are out-performing, up 17 per cent in the year to October versus a 10 per cent fall globally, Refini-tiv’s data show. But the Gulf’s loans fees are down 39 per

cent, versus a 9 per cent decline globally, while fees for issuing bonds are down 6 per cent in the Gulf and up 29 per cent across the world.

As for the business of advis-ing clients on raising equity, Refinitiv’s data show a 43 per cent rise in fees in the Gulf, to $74.6m for the year to date, versus a 76 per cent rise glo-bally. Mr Sharaf argues that the difference is “unsurpris-ing . . . particularly given the record-breaking run we’ve seen for US equities, which is a very different marketplace”.

Miguel Azevedo, Citi’s head of investment banking for the Middle East and Africa, says the pandemic has “significant opportunities” for investment

banks in the region. “Covid brought the world to

a halt,” says Mr Azevedo. “Some industries that are very oil dependent like travel, those will probably never go back. This sudden drop in oil prices is a wake-up call . . . It becomes unsustainable to be 100 per cent dependent on oil because other things can affect you just like this.”

That means the pandemic will be an “accelerator” of trends already in progress, most notably a push by Gulf countries to diversify away from the oil industry.

That process will generate a significant pipeline of work for investment banks. Falling oil prices, a result of both the Cov-

‘Significant opportunities’ for expensive adviceInvestment banking

Diversification and new debt spark hope, says Laura Noonan

I n the early weeks of the coronavi-rus pandemic, Saudi Arabia’s ambitious sovereign wealth fund scented an opportunity.

As global markets plummeted, the Public Investment Fund went on a spending spree, buying stakes in a host of US and European blue-chip stocks in the first three months of the year, worth collectively at least $7.7bn.

But Crown Prince Mohammed bin Salman, the kingdom’s de facto leader and the PIF’s chair, last month sig-nalled a potential shift in focus as Saudi Arabia, like other Gulf coun-tries, grapples with a rising fiscal defi-cit and an economy battered by the pandemic and the fall in oil prices.

In a November speech to the Shura Council, an advisory body, Prince Mohammed said the $347bn fund would pump about $40bn into the Saudi economy annually in 2021 and 2022, up from $15.5bn last year.

“This liquidity will be provided through monetisation and recycling of the fund's investments to enter into new opportunities, [and] create a local economic cycle that enables

the emergence of new sectors,” he said.

His comments were interpreted as an attempt to address concerns about the PIF spending money overseas at a time of recession at home, and an acknowledgment that the govern-ment needs to redirect funds if it is to push ahead with state-backed projects.

It also hints at a trend that econo-mists and bankers expect to be has-tened by the coronavirus: a more inward focus by the oil-rich Gulf states that have garnered reputations as exporters of capital through sover-eign wealth funds (SWFs) and wealthy merchant families.

It is not just SWFs that are likely to be affected, as governments grapple with diminishing resources and the need to accelerate the reform of rent-ier economies.

Even senior Gulf officials have acknowledged the coronavirus crisis has underscored the need for change.

“The region, like all regions of the world, will be financially and politi-cally weaker and we would be wise to think about our development mod-els,” Anwar Gargash, the United Arab Emirates’ state minister for foreign affairs, was quoted as saying by Abu Dhabi’s National newspaper, in May.

Days later, Saudi Arabia announced it would triple VAT to 15 per cent, just two years after it was first introduced, and suspend civil servant benefits as part of austerity

measures. Governments across the region have been forced to delay or halt projects as they cut state spend-ing.

The IMF forecasts that all the Gulf states, except Qatar, will run double-digit budget deficits this year. Even before the pandemic, the fund warned that at the current fiscal stance, the region’s financial wealth could be depleted by 2034.

But if the oil price was $20 a barrel, the Gulf states would endure “wealth exhaustion” in seven years — the point when governments’ financial wealth, including central bank reserves and sovereign wealth funds’ net assets is less than debt, it said in a February report.

That would turn the Gulf from a net creditor to a net borrower vis-à-vis the rest of the world.

Prices of Brent crude, the interna-tional benchmark, briefly fell below $20 a barrel in April and are currently trading around $40 a barrel, well beneath what most Gulf states need to balance budgets.

An executive at an international asset manager says he has not yet seen redemptions from the region, but he expects that to happen and predicts that “wealth exhaustion” will occur faster than the IMF pre-dicts.

“There will have to be more focus internally,” he says. “These [SWFs] are rainy day funds and it’s pretty much pouring at the moment.”

Twin shocks force states to look inward Halts and delays hit projects across the region as leaders cut public spending. By Andrew England

FINANCIAL TIMES Tuesday 1 December 2020 FTReports | 3

Arab World Banking & Finance

oversubscribed 4.8 times. Bond offerings are good

news for another part of investment banks’ businesses.

Ahmed Beydoun, Deutsche Bank’s regional head of fixed-income sales, says credit mar-kets are having a “very strong” 2020, “aided by the boom in issuance”. Yet not all the region’s dynamics work in

banks’ favour. State ownership can blunt the need for raising money in public markets.

Aviation is an example: US-based airlines raised $10bn in a single week in June; Gulf air-lines have been active but not to the same extent because they have other funding sources.

When Emirates was in diffi-culties in late March, Dubai’s government said it would inject equity to support the airline “in the current critical period”.

“Each market has its own characteristics,” says JPMor-gan’s Mr Tannir. “The MENA region has seen an abundant level of activity, both in deploying capital globally and in the monetisation aspect and the privatisation aspect (of the government’s plans) which has seen some good successes.”

In Saudi Arabia, public sector sala-ries account for about 45 per cent of expenditure; in Kuwait state wages and subsidies account for more than 70 per cent of outlays.

John Sfakianakis, a Gulf expert at Cambridge university, said across the region there would “be a combination of more taxes, less spending and an awareness that the entitlement years are way behind us”.

“The social contract is in flux and the perception of global investors is one of uncertainty and concern,” he said.

Experts say that while it is unlikely that any of the Gulf states would introduce income tax, corporate tax could become a reality.

“These conversations have been happening for five to six years, but the willingness to make these deci-sions is higher now,” said an executive in the region.

The UAE, Qatar, Kuwait and Saudi Arabia all have large sovereign wealth funds — and Riyadh’s has foreign reserves of more than $430bn — to act as buffers.

State investment vehicles are expected to continue seeking foreign opportunities, but not necessarily on the same scale as in the past.

The PIF has a dual mandate to invest in foreign assets and develop the domestic economy. It has sold

Saudi citizens buy gold at a market the day before VAT increased from5 to 15 per centAP

‘The social contract is in flux and the perception of global investors is one of uncertainty and concern’

Wake-up call: oil price drop

down about $3bn of its US stocks, while pumping a similar amount into stakes in units of India’s Reliance Industries this year. But Saudi Arabia and the Gulf’s other wealthier states all face their own pressures.

Saudi Arabia has by far the Gulf’s largest population is blighted by record unemployment. It also needs to preserve its reserves to avoid spec-ulation on its riyal-dollar peg.

Abu Dhabi has to be ready to sup-port poorer emirates in the UAE.

Kuwait boasts the region’s second-largest sovereign wealth fund, with an estimated $600bn of assets, but it relies on petrodollars for almost 90 per cent of state revenues and is often criticised as being one of the slowest to drive reforms.

S&P Global Ratings downgraded Kuwait’s credit rating to AA- from AA in March and changed its outlook to negative in July as it estimated that Kuwait’s budget deficit would widen to 40 per cent of GDP this year.

A senior banker, who at the begin-ning of the year was fielding calls from Gulf sovereign investment funds hunting opportunities, says: “I just don’t see them being active”.

The exception, he added, was the Abu Dhabi Investment Authority, the region’s biggest fund, which has been “super-active” in private equity.

More broadly, the banker says, “the phones aren’t ringing”. He believes Gulf funds “are more inward looking. They’ve definitely cooled off”.

Emerging markets’ spending on Covid-19 responseMacro-financial support package (% of GDP)

Sources: Elgin, Basbug, and Yalaman (2020); IMF

0 5 20 251510 30

World

UAEBahrain

OmanQatar

TunisiaJordan

MoroccoEgypt

Saudi ArabiaIraq

PakistanUzbekistan

TajikistanIran

Kuwait Emerging markets and developing economies

4 | FTReports FINANCIAL TIMES Tuesday 1 December 2020

Arab World Banking & Finance

Kamal Mokdad, chief executive of Groupe Banque Centrale Populaire, a leading lender, says the measures taken by the government and central bank “have avoided a flood of bad debts and should help companies withstand this violent economic shock without excessive risk taking by banks, given the state guarantee”.

Mr Mokdad says GBCP revenues rose by 11.2 per cent to $1.5bn over the first nine months of 2020. He notes the increase reflects in part a “scope effect” related to the acquisi-tion in the last quarter of 2019 of three subsidiaries in Cameroon, Congo and Madagascar. Profits for the same period fell by 36.3 per cent to $153m.

Research by Moody’s in September found banking-sector results for the first half of 2020 show the four big-gest lenders in the country — includ-ing GBCP and Attijariwafa, which col-lectively account for 88 per cent of loans — reported an aggregate net

profit of $357m down from $771m a year earlier. “The first-half profit declines reflect a pandemic-related 138 per cent year-on-year, provision-ing increase in anticipation of higher credit losses this year,” says Moody’s.

Morocco’s lenders have expanded across sub-Saharan Africa over the past decade. According to Moody's, sub-Saharan African countries account for about 18 per cent of the combined lending of the four biggest banks. These markets have “more vulnerable operating environments than Morocco [and] will also contrib-ute to asset quality deterioration amid the pandemic,” says Moody’s.

Moroccan bankers say the impact varies across African markets. “In West Africa [economies] should show a certain resilience with a slow in growth in 2020, while oil-exporting countries, essentially Congo and Cameroon, are expected to experi-ence a recession in 2020 given... the oil shock,” says Mr Mokdad.

Banque Al-Maghrib has moved to shore up the economy — Alamy

In the past three years, some of the Gulf’s leading companies, including Abraaj, Drake & Scull, Arabtec, Al Mojel, and most recently NMC Healthcare, have been stung by problems that highlighted unaddressed governance risks.

These occurred after an increase in corporate governance regulations, introduced after a domestic equity-market crisis in 2005. Market manipulation had been prevalent and capital market regulators were brought in to repair confidence.Foreign investors are surprised that, in some

respects, corporate governance regulations now are tougher here than in emerging-market peers. In some countries, regulators have unusual powers that include attending board meetings of listed companies. Combining the roles of chair and CEO is allowed in listed companies in the US, but not the Gulf.

But following these bold corporate governance reforms, the spirit of these regulations and corporate practice differ. The resulting gap has implications for economic stability and even the delivery of essential services. NMC, the largest private healthcare provider in the UAE, became embroiled in a governance scandal just as the coronavirus pandemic was taking off.

As regulators examine the lessons of these events, they

must clarify and enforce the rules for companies operating across jurisdictions. They must also agree on their respective oversight and enforcement obligations. This is critical for companies such as NMC, which is listed in London but regulated in the UAE, as well for those offering cross-border financial services, as Abraaj did before the private equity firm’s collapse in 2018.

While the finger of blame has been pointed at local regulators for some of these failings, foreign securities authorities must assume greater responsibility for overseeing companies in their jurisdiction, such as London-listed NMC.

At the same time local regulators should enhance their credibility with investors. Gulf regulators have tools, but few are making full

use of them. The Saudi Capital Market Authority is active, investigating more than 2,500 governance-related investor complaints a year regarding some 200 listed companies. The recent class action suit against Al Mojel, the manufacturing group, the first such action in the region, shows change is afoot.

Local investors also need to play a more prominent role. In the Abraaj and NMC cases, investigations began at the prompt of foreign investors. Regulatory enforcement started in the US and the UK, respectively. With NMC, the

alarm was raised by Muddy Waters, a US-based short seller, not the company’s largest local investors and creditors.

Investors’ and regulators’ interventions must be risk-based and focus on critical issues such as related-party transactions. For example, in 2015 one NMC subsidiary authorised payments to a company controlled by the founder’s daughter. Recent scandals have also underlined problems with gatekeepers including Big Four auditors.

KPMG, which gave Abraaj a clean bill of health before its collapse, appears to have had conflicts of interest. Further separation between audit and consulting activities such as that currently being pushed through in the UK, is needed in the Gulf.

Banks also have a role to play. The regulator’s

investigation into Abraaj concluded that “funds were systematically moved in and out of bank accounts around reporting dates” to give the appearance of solvency. The continuing fallout from the pandemic on businesses makes better due diligence by lenders even more important.

Finally, given that foreign investors tend to take a single view of Gulf markets that are in reality diverse, building market credibility will require coordinated action by Gulf regulators to enforce the rules and encourage active stewardship by institutional shareholders in the region. There is no better place to start than focusing on domestic sovereign investors that are the largest in local equity markets.

The writer is founder and director of Govern Center

Regulators must clarify cross-border responsibilities comment

Alissa Kole

‘Building market credibility requires coordinated action by Gulf regulators’

Coronavirus struck at a tough time for Morocco: it aggravated the impact of a second year of drought, in a coun-try where economic growth is vulner-able to fluctuations in rainfall.

Agriculture, which accounts for about 10 per cent of gross domestic product and employs almost 30 per cent of the workforce, was already suffering as a result of two years of poor rains. The pandemic was another disaster, leading to the col-lapse of the tourism sector and dis-rupting exports to Europe, the coun-try’s foremost economic partner.

The IMF said in November the kingdom’s GDP was expected to con-tract in 2020 between 6 to 7 per cent, “depending on the evolution of the health crisis, as well as a spike in unemployment rate”. The fund expects a rebound of 4.5 per cent next year, but warns that “considerable downside risks remain”.

The tough conditions are straining profits of Moroccan banks and

increasing the risk of bad loans, ana-lysts and bankers say. But they also note that the banks enjoy high levels of liquidity, and that measures by the Banque Al-Maghrib, the central bank, to support the economy and to reduce the adverse effects on lenders are helping shore up resilience.

“I wouldn't say Moroccan banks have been badly hit by the crisis,” says Vincent Martin, analyst at Fitch Rat-ings. “Nonetheless, the trends are negative. We have observed the dete-riorating economic environment and we have seen private-sector growth decelerating. [The contraction of the economy] affects corporate and household balance sheets and that will result in a deterioration of asset quality in 2021.”

He describes the measures taken by the government and the central bank to ease the impact as “efficient, timely and well-targeted”. These include cutting the benchmark inter-est rate by 75 basis points down to a record 1.5 per cent; guaranteeing

bank loans to save companies and jobs; deferring loan repayments and providing liquidity support to banks by wider access to refinancing through regulatory changes.

Mohamed El Kettani, chief execu-tive officer of Attijariwafa, Morocco’s biggest bank, says the most impor-tant effect of the pandemic on the bank’s financials has been the increase in net additional provisions, the extra funds set aside to cover potential non-performing loans, which have risen by 239 per cent by the end of September year on year to reach 4.6bn dirhams ($506m).

“This is not so much because we have seen delinquency increase, but because we revised our risk models and expect in the future probabilities of default to increase, and collection of bad loans to be slower and less pro-ductive in several markets,” he says.

Attijariwafa has seen its rate of non-performing loans increase to 7.3 per cent in the first nine months, from 6.7 per cent at the end of 2019, according to figures supplied by the bank. Loans have increased by 4.8 per cent and revenue by 3.3 per cent in the same period, but profits have fallen by 55.2 per cent as a result of extra provisioning as well as the bank’s contribution to the govern-ment’s Pandemic Fund, established to combat the impact of the virus.

Profits strained at Morocco’s banksNorth Africa The institutions hit hard by the pandemic show signs of toughing it out, writes Heba Saleh

Lenders have expanded across sub-Saharan Africa over a decade in search of growth

FINANCIAL TIMES Tuesday 1 December 2020 FTReports | 5

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Arab World Banking & Finance

Kamal Mokdad, chief executive of Groupe Banque Centrale Populaire, a leading lender, says the measures taken by the government and central bank “have avoided a flood of bad debts and should help companies withstand this violent economic shock without excessive risk taking by banks, given the state guarantee”.

Mr Mokdad says GBCP revenues rose by 11.2 per cent to $1.5bn over the first nine months of 2020. He notes the increase reflects in part a “scope effect” related to the acquisi-tion in the last quarter of 2019 of three subsidiaries in Cameroon, Congo and Madagascar. Profits for the same period fell by 36.3 per cent to $153m.

Research by Moody’s in September found banking-sector results for the first half of 2020 show the four big-gest lenders in the country — includ-ing GBCP and Attijariwafa, which col-lectively account for 88 per cent of loans — reported an aggregate net

profit of $357m down from $771m a year earlier. “The first-half profit declines reflect a pandemic-related 138 per cent year-on-year, provision-ing increase in anticipation of higher credit losses this year,” says Moody’s.

Morocco’s lenders have expanded across sub-Saharan Africa over the past decade. According to Moody's, sub-Saharan African countries account for about 18 per cent of the combined lending of the four biggest banks. These markets have “more vulnerable operating environments than Morocco [and] will also contrib-ute to asset quality deterioration amid the pandemic,” says Moody’s.

Moroccan bankers say the impact varies across African markets. “In West Africa [economies] should show a certain resilience with a slow in growth in 2020, while oil-exporting countries, essentially Congo and Cameroon, are expected to experi-ence a recession in 2020 given... the oil shock,” says Mr Mokdad.

Banque Al-Maghrib has moved to shore up the economy — Alamy

In the past three years, some of the Gulf’s leading companies, including Abraaj, Drake & Scull, Arabtec, Al Mojel, and most recently NMC Healthcare, have been stung by problems that highlighted unaddressed governance risks.

These occurred after an increase in corporate governance regulations, introduced after a domestic equity-market crisis in 2005. Market manipulation had been prevalent and capital market regulators were brought in to repair confidence.Foreign investors are surprised that, in some

respects, corporate governance regulations now are tougher here than in emerging-market peers. In some countries, regulators have unusual powers that include attending board meetings of listed companies. Combining the roles of chair and CEO is allowed in listed companies in the US, but not the Gulf.

But following these bold corporate governance reforms, the spirit of these regulations and corporate practice differ. The resulting gap has implications for economic stability and even the delivery of essential services. NMC, the largest private healthcare provider in the UAE, became embroiled in a governance scandal just as the coronavirus pandemic was taking off.

As regulators examine the lessons of these events, they

must clarify and enforce the rules for companies operating across jurisdictions. They must also agree on their respective oversight and enforcement obligations. This is critical for companies such as NMC, which is listed in London but regulated in the UAE, as well for those offering cross-border financial services, as Abraaj did before the private equity firm’s collapse in 2018.

While the finger of blame has been pointed at local regulators for some of these failings, foreign securities authorities must assume greater responsibility for overseeing companies in their jurisdiction, such as London-listed NMC.

At the same time local regulators should enhance their credibility with investors. Gulf regulators have tools, but few are making full

use of them. The Saudi Capital Market Authority is active, investigating more than 2,500 governance-related investor complaints a year regarding some 200 listed companies. The recent class action suit against Al Mojel, the manufacturing group, the first such action in the region, shows change is afoot.

Local investors also need to play a more prominent role. In the Abraaj and NMC cases, investigations began at the prompt of foreign investors. Regulatory enforcement started in the US and the UK, respectively. With NMC, the

alarm was raised by Muddy Waters, a US-based short seller, not the company’s largest local investors and creditors.

Investors’ and regulators’ interventions must be risk-based and focus on critical issues such as related-party transactions. For example, in 2015 one NMC subsidiary authorised payments to a company controlled by the founder’s daughter. Recent scandals have also underlined problems with gatekeepers including Big Four auditors.

KPMG, which gave Abraaj a clean bill of health before its collapse, appears to have had conflicts of interest. Further separation between audit and consulting activities such as that currently being pushed through in the UK, is needed in the Gulf.

Banks also have a role to play. The regulator’s

investigation into Abraaj concluded that “funds were systematically moved in and out of bank accounts around reporting dates” to give the appearance of solvency. The continuing fallout from the pandemic on businesses makes better due diligence by lenders even more important.

Finally, given that foreign investors tend to take a single view of Gulf markets that are in reality diverse, building market credibility will require coordinated action by Gulf regulators to enforce the rules and encourage active stewardship by institutional shareholders in the region. There is no better place to start than focusing on domestic sovereign investors that are the largest in local equity markets.

The writer is founder and director of Govern Center

Regulators must clarify cross-border responsibilities comment

Alissa Kole

‘Building market credibility requires coordinated action by Gulf regulators’

Coronavirus struck at a tough time for Morocco: it aggravated the impact of a second year of drought, in a coun-try where economic growth is vulner-able to fluctuations in rainfall.

Agriculture, which accounts for about 10 per cent of gross domestic product and employs almost 30 per cent of the workforce, was already suffering as a result of two years of poor rains. The pandemic was another disaster, leading to the col-lapse of the tourism sector and dis-rupting exports to Europe, the coun-try’s foremost economic partner.

The IMF said in November the kingdom’s GDP was expected to con-tract in 2020 between 6 to 7 per cent, “depending on the evolution of the health crisis, as well as a spike in unemployment rate”. The fund expects a rebound of 4.5 per cent next year, but warns that “considerable downside risks remain”.

The tough conditions are straining profits of Moroccan banks and

increasing the risk of bad loans, ana-lysts and bankers say. But they also note that the banks enjoy high levels of liquidity, and that measures by the Banque Al-Maghrib, the central bank, to support the economy and to reduce the adverse effects on lenders are helping shore up resilience.

“I wouldn't say Moroccan banks have been badly hit by the crisis,” says Vincent Martin, analyst at Fitch Rat-ings. “Nonetheless, the trends are negative. We have observed the dete-riorating economic environment and we have seen private-sector growth decelerating. [The contraction of the economy] affects corporate and household balance sheets and that will result in a deterioration of asset quality in 2021.”

He describes the measures taken by the government and the central bank to ease the impact as “efficient, timely and well-targeted”. These include cutting the benchmark inter-est rate by 75 basis points down to a record 1.5 per cent; guaranteeing

bank loans to save companies and jobs; deferring loan repayments and providing liquidity support to banks by wider access to refinancing through regulatory changes.

Mohamed El Kettani, chief execu-tive officer of Attijariwafa, Morocco’s biggest bank, says the most impor-tant effect of the pandemic on the bank’s financials has been the increase in net additional provisions, the extra funds set aside to cover potential non-performing loans, which have risen by 239 per cent by the end of September year on year to reach 4.6bn dirhams ($506m).

“This is not so much because we have seen delinquency increase, but because we revised our risk models and expect in the future probabilities of default to increase, and collection of bad loans to be slower and less pro-ductive in several markets,” he says.

Attijariwafa has seen its rate of non-performing loans increase to 7.3 per cent in the first nine months, from 6.7 per cent at the end of 2019, according to figures supplied by the bank. Loans have increased by 4.8 per cent and revenue by 3.3 per cent in the same period, but profits have fallen by 55.2 per cent as a result of extra provisioning as well as the bank’s contribution to the govern-ment’s Pandemic Fund, established to combat the impact of the virus.

Profits strained at Morocco’s banksNorth Africa The institutions hit hard by the pandemic show signs of toughing it out, writes Heba Saleh

Lenders have expanded across sub-Saharan Africa over a decade in search of growth

FINANCIAL TIMES Tuesday 1 December 2020 FTReports | 5

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Arab World Banking & Finance

A s coronavirus swept the world, governments injected money into direct financial support for workers and busi-

nesses. But Gulf states were already struggling with budgets tightened by falling crude prices. In April, oil futures turned negative for the first time in history.

“The rest of the world has been eas-ing fiscal policy through capital spending or via the private sector, but the scale of the fiscal strain means that has not really happened here, and certainly not to the same degree,” says Simon Williams, chief economist for the region at HSBC.

Indeed, Saudi authorities this year hiked sales tax from 5 per cent to 15 per cent. “It’s had to be a pretty defen-sive response,” says Williams.

The response has largely come from monetary policy, channelled through the region’s commercial banks, with only limited fiscal sup-port. Liquidity injections and easing capital requirements have put lend-ers on the front line of mitigating the blow for regional companies dealing with the coronavirus fallout. Mr Wil-liams says the effectiveness of the transmission has varied.

Data show credit growth in both private and public sectors in Saudi Arabia, but new funding in the UAE has been dominated by the govern-ment and state-related companies.

For example, Dubai’s Emirates, a leading long-haul airline hit by the pandemic, has borrowed billions from banks while also relying on $2bn direct support from its governmental owner, according to Dubai’s sover-eign bond prospectus.

Mohamed Damak of S&P Global Ratings says central banks’ monetary assistance has cushioned the blow across the Gulf. “The combination of regulatory forbearance and deferral of loans, as well as regulators provid-

ratio for the region’s top 45 banks reached 3.6 per cent at the end of the first half, compared with 3.1 per cent at the end of 2019. “NPLs are going to increase, but to a large extent this will depend on the speed of the recovery,” he says.

In the UAE, overall problematic loans have risen to 15.4 per cent in the first half from 14.9 per cent in 2019. Standard & Poor’s forecasts that they will rise to around 20 per cent of loans in the next 12 months.

The central bank has asked banks not to classify loans as non-perform-ing if the business is viable and merely going through Covid-related turbulence. “So when forbearance is lifted, we should see a deterioration in quality,” says Mr Damak.

Banking balance sheets were already under pressure owing to large-scale corporate collapses. Unre-lated to coronavirus, many regional banks and international lenders are exposed to the implosion of Indian tycoon BR Shetty’s empire. He has blamed claims of fraud on executives within NMC, the healthcare com-pany, and fintech Finablr, his two main businesses that had failed to report debt of around $4.5bn.

State-related companies and fami-ly-owned conglomerates have been able to access debt relief, but smaller

Gulf lenders on front line of business recovery

Economic recovery Stimuli come from monetary policy channelled through commercial banks By Simeon Kerr

Shopping in the Dubai Gold Souk during the pandemic. The economic impact of lockdowns are likely to continue to find their way through banking systems until next year – AFP via Getty Images

ing liquidity, has helped banks navi-gate these uncertain times,” he said.

Gulf states, most of whose curren-cies are tied to the US dollar, followed federal reserve rate cuts and reduced banks’ reserve requirements. They also put billions of dollars in addi-tional liquidity into the system.

Saudi Arabia, for example, pumped $13.3bn into the banking system and earmarked another $19bn for direct support to the pri-vate sector.

“This allowed banks to defer loans and give breathing space to compa-nies and SMEs with the ultimate objective of avoiding any permanent destruction of productive capacity,” says Mr Damak.

But the economic impact of lock-downs and lower oil prices are likely to find their way through the banking system, with companies’ ability to maintain debt repayments deterio-rating later this year and in 2021.

“Asset quality will inevitably dete-riorate,” says Mr Damak. “Depending on when (central bank) forbearance comes to end or whether it is extended — and that depends on the shape of recovery and how things look for the real estate sector, where pressure is expected to continue for one or two years.”

Banks are starting to take more provisions to prepare for the forth-coming deterioration in asset quality, leading returns on assets to halve to 0.8 per cent in the first half of this year compared with 1.5 per cent in the same period last year.

The average non-performing loan

Many small companies are unable to persuade lenders that they pose a sufficiently small risk

ContributorsAndrew EnglandMiddle East editor

Laura NoonanUS banking editor

Heba SalehCairo and North Africa correspondent

Simeon KerrGulf correspondent

Commissioning editorHelen Barrett

Steven BirdDesigner

Esan SwanPicture editor

For advertising details, contact:Luke McGreevy,+971 508763027 and luke.mcgreevy@ft.com, or your usual FT representative.

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companies have been less lucky, worsening the expatriate exodus as businesses fail.

“The SME sector is vulnerable in the wake of the pandemic and is still a nascent one, says Mazen Najjar, leader of McKinsey’s Kuwait office.

Massimo Falcioni, chief executive of the UAE’s credit export agency Eti-had Credit Insurance, says the federal government’s $4.4bn direct stimulus package was targeted to help SMEs with costs such as rent and licensing.

Gulf governments have also put in place stimulus programmes to sup-port smaller businesses, such as sub-sidising utilities and cutting fees. “This is a commitment to facilitating the national economy and to ensure business continuity,” he says.

The UAE central bank says its loan deferral scheme, which has been extended until the end of June 2021, has provided support for 10,000 SMEs and 1,500 private sector com-panies.

But many small companies are either unwilling to take on new liabili-ties or unable to persuade lenders that they pose a sufficiently small risk.

“I have no income now, but still there is no rent relief — not one penny,” says one small business owner.

FINANCIAL TIMES Tuesday 1 December 2020 FTReports | 7

Arab World Banking & Finance

“We have adopted a cautious approach towards provisions,” says Hussein Abaza, chief executive of Commercial International Bank, a listed lender and the biggest private-sector bank in Egypt.

“The last thing you want is to realise that you have under-provided for non-performing loans. I can confidently say that we have not had a single customer default, because of the debt standstill.”

After running models with likely scenarios of the pan-demic’s impact on various sec-tors, CIB nearly quadrupled provisions, says Mr Abaza. “We want to be prepared for anything. We won’t be able to say if we over provided or underprovided until the mid-dle of next year.”

“Most banks took very pru-dent provisions during the first half of the year in anticipation of potential credit quality stress after loan deferrals, which ended in mid-Septem-ber,” says Ms Sanchez.

“The most important con-sideration is that they have enough capital to absorb higher provisions and to con-tinue to provide credit to the economy; most banks are well-capitalised.”

She points out that despite the reduction of interest rates, Egyptian banks make a tidy profit lending to the govern-ment. “It is still an attractive rate and entails no credit risk nor consumption of capital,” says Ms Sanchez.

According to a Moody’s report in May, 36 per cent of banking sector loans were in government securities. The pandemic has brought Egypt’s tourism industry which accounts for almost 5 per cent of GDP, to a near-halt.

Industries that rely on exports, such as textiles, were also damaged by the pan-demic, bankers say. Private-sector borrowing has been weak and most of it has been for operating expenses rather

than capital expenditure, they say. Nevertheless, some sec-tors have benefited, Mr Fayed argues. “Pharma, food and beverage and technology com-panies have done well,” he says.

Banque du Caire, one of Egypt’s state-owned banks, was days from announcing its long-anticipated initial public offering in March. Then coro-navirus scuttled the plan to float up to a quarter of its shares on the Egyptian Exchange.

Tarek Fayed, chairman of the bank, which has under-gone extensive restructuring in recent years, says a new date will depend on improvements in markets: “Hopefully it can be in 2021.”

The pandemic may have delayed the IPO which aimed to raise some $500m, but Mr Fayed remains upbeat about the performance of the bank, despite the slowing economy as a result of Covid-19.

“Our net operating revenue has increased by 24 and 25 per cent in the first six months of the year, which reassures us that we are able to meet our targets, but of course we have had to be cautious and set aside [extra] provisions,” he says.

Analysts and bankers say Egyptian lenders, which are generally cash-rich with low loans-to-deposit ratios, may find profits fall and bad loans rise.

But they expect banks to remain financially stable.

“We expect banks to increase provisions and for profits to be pressured, but we expect them to remain profita-ble,” says Constantinos Kypreos, lead analyst for Egyp-tian banks at Moody’s Inves-tors Service, the rating agency.

“Banks have entered this crisis in relatively good shape following a multiyear restruc-turing, especially state-owned banks, which have good liquid-ity especially in local cur-rency.”

Research published in Sep-tember by EFG Hermes, the Cairo-based regional invest-ment bank, says the seven listed banks it covers reported “solid and better than expected revenue and pre-provisions earnings” in the second quarter of 2020.

Elena Sanchez, managing director and head of banking research at EFG Hermes, says

Cash-rich Egyptian banks brace for impactEgypt

Heba Saleh reports on lenders’ provisions for pandemic’s fallout

bank profits were down 14 per cent in the second quarter year on year, but that it was “a very decent performance”. She attributes the decline to higher provisions and a tax change introduced last year.

Unlike most economies in the region, which are forecast to contract in 2020, the Egyp-tian economy has been grow-ing, though at a slower pace than predicted before the pan-demic. GDP grew by 3.5 per cent in the fiscal year ending in June — below the 5.8 per cent predicted before the pan-demic, the government said in September.

Mohamed Maait, the finance minister, says he expects growth to be between 2.8 and 3.5 per cent in the cur-rent fiscal year.

The Central Bank of Egypt launched in March a package of measures aimed at support-

ing business. These included a 3 per cent cut in interest rates and the postponement of cor-porate and personal loan repayments for six months.

The CBE also waived fees on some bank transactions and increased credit limits for companies to fund operating expenses. It cut rates again twice later in the year by a total of 100 basis points.

Bankers and analysts say the deferral of repayments makes it difficult to estimate the size of non-performing loans.

‘We have not had a single customer default, because of the debt standstill’Hussein Abaza, CIB

Banque du Caire has delayed its IPO in response to the pandemic — Reuters

Egypt banks pre-provisions profitYear-on-year, Q2 2020 (%)

-20 20 40 60 80

Egyptian Gulf BankCIB

Al-BarakaAggregate

QNBAADIB-EHDBFaisal Islamic BankCredit Agricole Egypt

Source: EFG Hermes0

“ We have not stopped fund-ing our clients, but we have been very cautious when we extend new loans. We have supported customers in sec-tors that have not been impacted by Covid.”

FT Special Report

Tuesday December 1 2020 www.ft.com/reports | @ftreports

Arab WorldBanking & Finance

A region in flux Inside3 Twin shocks force states to look inward Page 23 Regulators must clarify cross-border role Page 4

3 Lenders on frontline of business recovery Page 6

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