financial times europe - 06 10 2020

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S&P 500 3394.68 3348.44 1.38

Nasdaq Composite 11262.39 11075.02 1.69

Dow Jones Ind 28053.27 27682.81 1.34

FTSEurofirst 300 1416.10 1405.35 0.76

Euro Stoxx 50 3221.80 3190.93 0.97

FTSE 100 5942.94 5902.12 0.69

FTSE All-Share 3326.83 3301.34 0.77

CAC 40 4871.87 4824.88 0.97

Xetra Dax 12828.31 12689.04 1.10

Nikkei 23312.14 23029.90 1.23

Hang Seng 23767.78 23459.05 1.32

MSCI World $ 2362.41 2380.02 -0.74

MSCI EM $ 1081.71 1084.83 -0.29

MSCI ACWI $ 564.11 568.00 -0.68

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Oct 5 prev

$ per € 1.179 1.172

$ per £ 1.298 1.293

£ per € 0.909 0.906

¥ per $ 105.645 105.355

¥ per £ 137.107 136.271

SFr per € 1.079 1.078

€ per $ 0.848 0.854

Oct 5 prev

£ per $ 0.771 0.773

€ per £ 1.101 1.104

¥ per € 124.581 123.419

£ index 77.426 76.959

SFr per £ 1.187 1.190

COMMODITIES

Oct 5 prev %chg

Oil WTI $ 39.34 37.05 6.18

Oil Brent $ 41.43 39.27 5.50

Gold $ 1903.05 1902.00 0.06

INTEREST RATES

price yield chg

US Gov 10 yr 107.77 0.75 0.06

UK Gov 10 yr 0.29 0.04

Ger Gov 10 yr -0.51 0.03

Jpn Gov 10 yr 101.07 0.02 0.01

US Gov 30 yr 117.93 1.56 0.09

Ger Gov 2 yr 105.36 -0.70 0.02

price prev chg

Fed Funds Eff 0.10 0.09 0.01

US 3m Bills 0.09 0.09 0.00

Euro Libor 3m -0.53 -0.53 0.00

UK 3m 0.06 0.06 0.00Prices are latest for edition Data provided by Morningstar

Olaf Storbeck — Frankfurt

The chief executive of Deutsche Börse wants to enlarge Germany’s Dax and admit only profitable companies, part of a far-reaching overhaul of the coun-try’s leading stock market index trig-gered by the Wirecard accounting scandal.

Theodor Weimer yesterday announced a series of reform proposals to revise the membership rules and improve the quality of companies listed in the blue-chip Dax index.

The overhaul comes as German regu-lators seek to avoid a repeat of the supervisory failures that allowed Wire-card to build up a €1.9bn hole in its accounts before it fell into insolvency in June, becoming the first sitting member of the Dax to do so. When the once high-flying payments company entered the

Dax in 2018, replacing German lender Commerzbank, it displayed a lack of basic corporate governance require-ments. Wirecard’s supervisory board did not have an audit committee, and it repeatedly missed the statutory dead-line for publishing its quarterly and annual results.

Deutsche Börse yesterday proposed that only profitable companies should be admitted to the index, and said that those that did not publish quarterly reports on time should be expelled. It also suggested increasing the number of constituents, making it less exposed to individual members.

“It is no secret that I personally would welcome the expansion of the Dax 30 to a Dax 40,” Mr Weimer said.

Selection criteria for the Dax focus only on quantitative elements such as a stock’s market capitalisation and liquid-

ity. With just 30 members, it is one of the smallest blue-chip indices in Europe, compared with 40 in Italy and France and 100 in the UK.

Uwe Streich, equity strategist at Ger-man public-owned lender LBBW, said that the size of a country’s blue-chip index was partly a function of the depth of its stock market.

“In 1988, when the Dax was founded, Germany had relatively few big listed companies. Back then, having 30 con-stituents was rather ambitious,” he said, adding that today 50 Dax members could be justified.

Large investors welcomed the idea. “This would lower the relative weight of the current constituents,” said Jürgen Hackenberg, head of diversified equi-ties at Union Investment, Germany’s third-largest asset manager.Lex page 20

Deutsche Börse pushes for Dax overhaul after Wirecard debacle

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Briefing

i Trump receives cocktail of medicationsDoctors have administered Donald Trump a mix of drugs to battle his Covid-19 infection that might not have been given together before to an individual patient.— REPORTS, PAGE 4; NOTEBOOK, PAGE 18

i Alibaba to take 10% stake in Dufry China’s Alibaba plans to take a stake of up to 10 per cent in Switzerland’s Dufry, the largest operator of duty-free shops, as part of an emergency SFr700m ($766m) capital raising.— PAGE 5; LEX, PAGE 20

i Disney files suit amid China trade warsDisney, Coca-Cola and Ford are among more than 3,500 groups that have filed lawsuits against Washington over its tariffs against China, showing the breadth of discontent.— PAGE 4

i BMS to acquire MyoKardia for $13bnBristol-Myers Squibb is buying the drugmaker MyoKardia for $13.1bn, at a more than 60 per cent premium to Friday closing price, as it seeks to grow its cardiovascular portfolio.— PAGE 6; LEX, PAGE 20

i Suga honeymoon ended by science spatYoshihide Suga is embroiled in his first dispute since becoming Japan’s PM after he refused to confirm the nomination of six professors to an advisory council, in apparent retaliation for their views.— PAGE 2

i Paris on ‘maximum alert’ lockdown France’s government has ordered the closure of bars and cafés in Paris for two weeks after declaring the city and its nearest suburbs to be zones of “maximum alert” for coronavirus infections.— PAGE 3

i SMIC warns on hit from US curbs Hong Kong-traded shares in China’s largest chipmaker fell more than 5 per cent after it said US curbs could hurt it, a development analysts say imperils its quest to challenge foreign rivals.— PAGE 6

Datawatch

Perceptions differ widely about each country’s handling of the virus. While 68 per cent of Germans say their government’s response has made them feel prouder of their country, only 29 per cent of people in the US said the same.

Response to CovidPeople’s views on their country’s handling of the pandemic (%)

Source: More In Common

GermanyNetherlands

ItalyPolandFrance

UKUS

60 0 60

ProudDisappointed

Westminster SpringDowning Street is facing its own revolution — ROBERT SHRIMSLEY, PAGE 19

Masked crusaderWill Trump’s illness shift perception of Covid deniers? — NOTEBOOK, PAGE 18

Chris Giles — London

The IMF has issued a rallying call to rich countries to increase public investment and spark a strong economic recovery from the coronavirus pandemic.

Advanced economies should worry less about their public debt, but instead take advantage of historically low bor-rowing costs to increase spending on infrastructure maintenance immedi-ately, the IMF said in a report published yesterday.

Rich countries should also prepare plans for subsequent new capital spend-ing on digital infrastructure and green technology, the fund said in a chapter of its twice-yearly Fiscal Monitor.

The report marked a shift away from the IMF’s normal concerns about public

finances in rich countries, although it added: “Policymakers should ensure that the amount and quality of public investment are such as not to pose risks by overly worsening debt dynamics.”

Paolo Mauro, deputy director of fiscal affairs at the IMF, told the Financial Times that the high level of uncertainty in the global economy strengthened the case for increasing public investment.

“You get a bigger bang for your buck from public investment because invest-ment by private firms is extremely low,” he said.

Many countries have already begun to increase spending in response to the economic damage caused by the pan-demic. The EU’s €750bn recovery fund is designed to revive the continent’s stricken economies, while the UK is

planning to increase public investment by close to 1 per cent of national income.

The IMF estimated that increasing public investment by 1 per cent of gross domestic product was likely to increase GDP by more than 2 per cent after two years — a larger return than it had previ-ously projected. This suggests there is the scope to generate between 2m and 3m jobs in the EU, another 2m in the US and more elsewhere, the fund said.

“The place to start is maintenance, which is very labour intensive and can address crumbling infrastructure,” Mr Mauro said.

The IMF stressed that its strong back-ing for public capital expenditure was not about increasing spending for its own sake.

Mr Mauro referred to the famous

suggestion by economist John Maynard Keynes that workers should be employed to dig holes in the ground and fill them back in, simply as a means of providing employment and thus boost-ing consumer spending.

“We are certainly not talking about digging holes,” he said.

“Investment provides an asset for the country and is not wasteful. Right now, we are not at the point of literally trying to stimulate aggregate demand.”

Mr Mauro noted that the efficiency of public investment was likely to drop if spending was increased quickly, espe-cially on new investment projects rather than improving existing assets such as roads or airports. Editorial Comment page 18Angus Deaton page 19

IMF loosens debt focus and urges rich nations to ramp up spending3 Borrowing costs at historic lows 3 Effort to spur recovery 3 Shift from previous stance

Overdue BondCineworld hit by film delayA decision by Hollywood studio MGM to pull the latest James Bond film has brought down the curtain on all of Cine-world’s British and American cinemas.

Shares in the chain, which also oper-ates the Regal brand in the US and Pic-turehouse in the UK, fell 36 per cent yes-terday as investors took fright amid fears that 45,000 jobs could be lost with the cinema group closed indefinitely.

The delayed release of No Time to Die — Daniel Craig’s final outing as James Bond, right, which was due to begin showing in cinemas on November 12 — was the final straw for the company after other expected blockbusters such as the Marvel film Black Widow were also delayed.Report page 5

MGM/Universal Pictures/Eon/Danjaq/Nicola Dove

The IMF’s Paolo Mauro said: ‘You get a bigger bang for your buck from public investment becauseinvestment by private firms is extremely low’

A new cold warGideon Rachman explores rising US-China tensions — FT SERIES, PAGE 17

OCTOBER 6 2020 Section:FrontBack Time: 5/10/2020 - 19:08 User: nick.miller Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1

2 ★ FINANCIAL TIMES Tuesday 6 October 2020

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Chloe Cornish — Tripoli

In Tripoli in Lebanon’s north, two bill-boards bear a slogan that jars with the cheery background: “We’re broke.”

It is unclear who paid for the posters but their message is broadly true, according to Riad Yumq, the city’s mayor. The municipality — the econom-ically stricken country’s poorest area — is so cash-strapped, he said, that it “can-not do its duties as it should”.

Lebanon is suffering the worst eco-nomic crisis in its modern history. The government defaulted on its foreign debt in March, a third of the workforce is jobless and the lira has lost 80 per cent of its value since mass anti-government protests erupted last year. A currency collapse has caused spiralling inflation, while a banking meltdown has blocked people from accessing savings.

Lebanon’s wealth disparities are stark. The Forbes 2020 rich list features six billionaires in a country with an esti-mated population of less than 5m.

“Lebanon has one of the highest con-centrations of wealth and one of the highest concentrations of billionaires in the world,” said Vladimir Hlasny, an economist for the UN regional economic agency ESCWA.

Some 71 per cent of the country’s wealth is owned by 10 per cent of the adult population, according to ESCWA, which last month estimated its poverty rate had rocketed from 28 per cent in 2019 to 55 per cent in 2020. Lebanon has the region’s second-highest Gini coeffi-cient score — a measure of inequality — after Saudi Arabia.

Few places symbolise the wealth gap better than Tripoli, where smart apart-ment buildings fade into stretches of rundown neighbourhoods. The dilapi-dated city, the country’s second-largest, with 600,000 inhabitants, is the home-town of the country’s two richest billion-aires: former premier and current Tripoli MP Najib Mikati and his brother Taha, who made their fortunes abroad in telecommunications.

Another son of Tripoli, Mustapha Adib, briefly took the premiership after the catastrophic explosion in Beirut in July brought the country’s mismanage-ment and misery to a head, although he

Second city Tripoli is one of

the country’s poorest areas

yet home to its richest citizens

former status is in its architecture; streets lined by fading gems, including an international exhibition complex designed by Brazilian architect Oscar Niemeyer, crumbling Ottoman build-ings and a crusader-era castle.

“Politicians from Tripoli should have been more aware to maintain Tripoli’s importance,” said Mr Yumq. “Unfortu-nately, that didn't happen.”

Data suggest the socio-economic situ-ation in Tripoli was poor long before the national crisis came to a head. A UNDP study of the city five years ago found that 57 per cent of Tripoli’s residents were “deprived”.

Tripoli’s position on the Mediterra-nean and close to Syria’s biggest cities has long made it an arena for competing interests, from Palestinian and pan-Arab activists and militants in past dec-ades to Islamist extremists more rec-ently. Such sporadic instability has deterred investment and “made capital a coward”, pointed out the mayor.

resigned last week after failing to corral squabbling politicians into agreeing on a new cabinet.

Today, business has slowed so much that Toufic Dabboussi, president of Tripoli’s chamber of commerce, said 89 per cent of its members had failed to pay renewal fees this year.

Once powerful, the ancient city sat on a key trade route stretching to Iraq. Its

Cycle of poverty: political slogans adorn a building in Tripoli, northern Lebanon. Below, boys play among rundown homes in the city Mohamed Azakir/Reuters

‘What is needed is a proper plan to be putin placeby the government’

said the Science Council received ¥1bn ($9.5m) a year in public funding and its members were public servants.

The Science Council has about 2,000 members and its main role is to advise the government on policy issues via a range of committees.

The scandal broke as the Suga admin-istration began the debate on a new fis-cal stimulus to take effect next year. Analysts suggest the package could be about ¥15tn and include the extension of coronavirus wage and rent subsidies as well as new cash handouts to house-holds.

It would be Japan’s third supplemen-tary budget for the year to March 2021.

Several of the city’s super-wealthy, including the Mikatis and Tripoli politi-cian and businessman Mohammad Safadi, have established philanthropic foundations to support social projects there, especially in education.

But an adviser to Najib Mikati, who asked not to be named, said the chari-ties could not lift Tripoli by themselves: “No matter how much the Mikatis have spent or the Safadis . . . it’s not enough. What is needed is a proper plan to be put in place by the government.”

Poverty and disillusion fuelled Tripol-itans’ energetic participation in last year’s protests, which felled the govern-ment of Saad Hariri, causing the Leba-nese to dub the city “the bride of the rev-olution”. But in a sign of growing despair, emigration is rising, with human rights groups saying Lebanese nationals have even crammed into small boats alongside refugees from Syria and elsewhere, smuggling them-selves out of Tripoli’s port to Europe.

“My friends who couldn’t find [work] already emigrated,” said Miriam Mourad, a 25-year-old neuroscience graduate. After eight months of unem-ployment she secured a job with Tripoli Entrepreneurs Club, a social enterprise-supporting start-up, but she and her col-leagues are the lucky ones, she said.

People in Tripoli say that since Leba-non’s 15-year civil conflict ended in 1990, the focus of postwar prime minis-ter Rafiq Hariri on developing the capi-tal left their city neglected.

“We feel Lebanon stops after the Chekka tunnel,” said Anas Shaar, chief executive of Tripoli-based National Flour Mills, referring to 30km south of the city. So under-developed is local infrastructure that his company had to build its own road to connect the factory to the transport network.

In the city’s old souk, furniture seller Ali Zraik blamed globalisation: his fam-ily business switched to buying cheaper goods from Malaysia 20 years ago.

But the currency collapse makes imports all but unaffordable. By August 2020, the cost of furnishings and house-hold equipment had risen 664 per cent on August 2019, according to the statis-tics office. Mr Zraik said he had seen a 95 per cent slump in business.

But he also pointed to the politicians on posters along the street. “Those pic-tures you are seeing are all lies,” he said. “You saw what happened, they [the pol-iticians] destroyed Lebanon.”See FT Opinion

INTERNATIONAL

Robin Harding — Tokyo

Yoshihide Suga has become embroiled in his first scandal since becoming Japan’s prime minister after refusing to confirm the nomination of six profes-sors to an advisory council, in apparent retaliation for their political views.

The Science Council of Japan, an inde-pendent public body that represents the country’s academic community, has demanded an explanation for the

unprecedented rejection of its candi-dates by the prime minister’s office, which has the formal power of appoint-ment.

Rejection of the professors risks an early end to the prime minister’s honey-moon period and will highlight Mr Suga’s reputation as a hard-nosed pow-erbroker, undermining recent efforts to soften his image.

Opinion polls have given Mr Suga approval ratings of greater than 70 per cent since he took over from Shinzo Abe last month. But according to a poll by the Japan News Network, the public said he was wrong to reject the nominees by a majority of 51 per cent to 24 per cent.

Appointments to a scientific body should not be politicised, said Jun Azumi, head of parliamentary affairs for the opposition Constitutional Demo-cratic party. Calling for ministers to answer questions in the Diet, he said: “Someone in the cabinet needs to explain why Mr Suga has departed from that.”

Candidates for the body are normally chosen by the academic community and waved through by the government, but the prime minister’s office unexpect-edly rejected six out of 105 candidates, without giving any reasons.

The six rejected scholars included three lawyers, two historians and one

theologian. Several were public oppo-nents of the security law passed by Mr Abe’s administration in 2015, which allows Japan to come to the defence of US forces if they are attacked.

One of the six, Takaaki Matsumiya, a Ritsumeikan University law professor, gave parliamentary testimony against a conspiracy law passed by the Abe gov-ernment in 2017. In comments to local media, he described the decision to reject appointees to the council as a threat to academic freedom.

Opposition leaders said the decision was against the law while Mr Suga’s gov-ernment insisted it was legal. Katsu-nobu Kato, the chief cabinet secretary,

Japan

Science spat ends Suga’s honeymoonPrime minister refuses to appoint six professors to advisory council

Stefania Palma — Singapore

Indonesia has passed a bill that will overhaul several dozen tax and labour market laws as south-east Asia’s largest economy strives to boost foreign investment and counter the economic impact of coronavirus.

The parliament rushed through the so-called Omnibus law yesterday, the day before a national strike begins against the reforms called by unions, which say they violate workers’ rights. The vote had been scheduled for Thursday.

Joko Widodo, the president, has made the law a priority to attract foreign investment and revive the economy.

Fallout from the pandemic has pushed Indonesia into recession. Eco-nomic growth in the second quarter fell 5.32 per cent year on year, the biggest drop since the Asian financial crisis.

The new law, the final draft of which has not yet been made public, aims to create jobs by reforming rules linked to investment, intellectual property rights and the labour market, which had offered some of the world’s most gener-ous severance payments.

Under the law, corporate income tax will gradually drop from 22 to 20 per cent by 2022 and income tax for domes-tic dividends will be eliminated.

Wellian Wiranto, an economist at lender OCBC, said the law could help change regulation that has prevented

Indonesia from capitalising on the sup-ply chain reshuffle prompted by trade tensions between China and the US, despite it being the largest market in south-east Asia, rich in natural resources and with a young population. “Indonesia should have been one of the top FDI destinations,” he said. “But that hasn’t been the case”, partially because labour laws kept competitiveness low.

But before the vote yesterday, 35 glo-bal investors with $4.1tn in assets under management wrote to the government about the law. Deregulation of environ-mental protection could have “severe environmental, human rights and labour-related repercussions that intro-duce significant uncertainty and could impact the attractiveness of Indonesian markets” they said.

Robeco, Aviva Investors, Legal & Gen-eral Investment Management and Sum-itomo Mitsui Trust Asset Management were among the signatories.

Said Iqbal, president of the Indone-sian Trade Union Confederation, said workers “refused” the law, which would slash severance pay and have an impact on the minimum wage.

“The Omnibus law is [an] attack to the welfare of labour in Indonesia . . . We will continue the struggle,” he said, adding that unions would seek a judicial review and go to the constitutional court.

The law was passed a day before 2m workers across the country were set to begin the three-day strike. Staff in sec-tors including textiles, motor, energy and pharmaceuticals will hold the strike within their workplaces to avoid risks of viral contagion, Mr Said added.

Pandemic response

Indonesia rushes labour and tax reform bill through

Middle East. Economic disparity

Billionaires and bankrupts show Lebanon divide

‘The Omnibus law is [an] attack to the welfare of labour in Indonesia . . . ’Trade Union Confederation

Primrose Riordan and Nicolle Liu Hong KongJane Croft — London

Hong Kong’s bar association has appealed to foreign judges not to aban-don the city’s highest court in protest at the national security law, saying their absence would threaten the legalsystem’s credibility in the eyes of the international community.

Philip Dykes, the head of the associa-tion, said serving on Hong Kong’s Court of Final Appeal was a personal question of conscience for foreign judges, but their “high calibre” was “an ornament to the justice system”.

Mr Dykes made the comments after James Spigelman, a retired Australian judge, resigned as a non-permanent judge (NPJ) and as political pressure builds in the UK on judges to stop serv-ing in Hong Kong.

Robert Reed, the president of the UK Supreme Court who also serves on the Hong Kong court, said the role of British judges was under review in light of the new law.

Beijing’s decision to impose the national security law on Hong Kong has

ignited concerns over whether the city’s respected judiciary would remain inde-pendent.

The law targets collusion, subversion and foreign interference with punish-ments of up to life in prison. It has been criticised for removing the legal firewall that separates Hong Kong from the rest of China by allowing suspects to face mainland courts.

There have also been fears that the security law will undermine Hong Kong’s claim to be Asia’s premier finan-cial centre.

Analysts have warned that anything that compromises the territory’s legal system will spook international compa-nies based in the city.

Mr Dykes, who sits on a committee of lawyers and government officials who recommend appointments of non-permanent judges for confirmation by the city’s chief executive, has pleaded with judges from the UK, Australia and Canada to continue serving.

“Lord Neuberger [a former president of the UK’s Supreme Court who served in Hong Kong as a non-permanent judge] made a speech saying . . . the NPJs are the canaries in the coal mine,”

Mr Dykes told the Financial Times. “You know what the canaries do, they drop dead at the first whiff of carbon monoxide gas.”

Mr Dykes said Mr Spigelman’s resig-nation and any further departures of NPJs would lead to the international community concluding that there was something “seriously amiss” in Hong Kong.

While other NPJs, such as Robert French, a former Australian High Court

chief justice, said they would not resign, one NPJ told the FT that they agreed with Lord Reed that continued service depended on how the national security law was applied.

Two of the British judges who sit on the Hong Kong Court of Final Appeal have confirmed they are still members. Nick Phillips, a former president of the UK’s Supreme Court, confirmed to

the FT that he remained a memberof the court while Lennie Hoffmann, who is a former law lord, said he wasnot aware of any other imminent resig-nations.

“I am at present scheduled to sit in the [Court of Final Appeal] in November and, Covid permitting, I shall come,” Lord Hoffmann said.

No serving UK judge has been sched-uled to sit in Hong Kong before Novem-ber this year.

Yesterday the Hong Kong govern-ment announced the appointment of Patrick Hodge, a Scottish jurist and UK Supreme Court deputy, to the city’s Court of Final Appeal.

Carrie Lam, the city’s chief executive, said NPJs helped “maintain a high degree of confidence in [Hong Kong’s] legal system”.

Pui-yin Lo, a barrister who specialises in constitutional and human rights law, said the reputation of the legal sector was at stake if the territory failed to recruit NPJs.

Foreign judges served “as the litmus test” for Hong Kong’s common lawsystem to retain the respect of common law jurisdictions, he said.

Security law

Hong Kong barristers plead with foreign judges to carry on

Their ‘high calibreis an ornament tothe justice system’Philip Dykes, HK bar association

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World Markets

STOCK MARKETS

Mar 30 prev %chg

S&P 500 2365.93 2361.13 0.20


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


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


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


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”.

Britishofficialsadmittedthat 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

OCTOBER 6 2020 Section:World Time: 5/10/2020 - 18:30 User: sanjay.gohil Page Name: WORLD1 USA, Part,Page,Edition: EUR, 2, 1

Tuesday 6 October 2020 ★ FINANCIAL TIMES 3

Lagarde and Mr Lane is working just as planned: the president is doing what she does best in building a consensus and the chief economist is supporting her with his technical expertise.

In the early days of the coronavirus crisis, when government lockdowns

froze much of the economy and sent it crashing to a record postwar recession, Ms Lagarde touted the ECB council’s unanimity over its €750bn emergency bond-buying plan.

When it subsequently expanded the emergency plan to €1.35tn a few

months later, there were the first initial mutterings of dissent in the governing council about the size of the increase.

As the worst of the economic fallout from the pandemic ebbs, and the ECB progresses with its strategic review, it looks increasingly likely that Ms Lagarde’s consensus-building skills will be more severely tested.

In recent days senior ECB policymak-ers have engaged in verbal jousting on whether weakness in the economic recovery merits further monetary eas-ing by the central bank, or whether it should rely on more fiscal stimulus from governments.

Fabio Panetta, an ECB executive board member from the “dovish” camp in favour of more easing, warned that when the eurozone was confronting a “sizeable downward skew” the risks of a “policy overreaction are much smaller than the risks of policy being too slow or too shy”.

But Yves Mersch, a fellow board member, followed this by saying that “nothing is pointing to a further deterio-ration, at least not on the front of prices and production”.

“Of course, the markets like [it] if we buy up everything that they have,” he added dismissively.

Some analysts believe the harmony Ms Lagarde has attempted to build is disintegrating. Carsten Brzeski, econo-mist at ING, said: “With this tit-for-tat war I first of all wonder what happened to Christine Lagarde’s mission to strengthen the ECB’s team spirit and keep differing views behind closed doors.”

As northern countries such as Ger-many recover faster than southern states such as Spain, the tensions could grow between the ECB’s 25 council members, made up of 19 national cen-tral bank governors and six executive directors.

Jens Weidmann, president of Ger-many’s Bundesbank and one of the ECB’s most hawkish council members, recently warned governments that rates would not stay low for ever and said monetary policy would have to “nor-malise” once the crisis ended.

However, it is hard for hawkish oppo-nents of further easing to mount serious opposition, given that the eurozone slid deeper into deflation in September. Ms Lagarde warned last week that it was likely to stay there for some months to come.

“For now there is really no point objecting much if inflation is negative,” said a second council member. “When that changes and inflation starts to rise again it will be the real test for Chris-tine’s ability to build a consensus.”

Common ground: Christine Lagarde has adopted a more consensual approach than her predecessor — Ulrich Baumgarten/Getty

Michael Stott

Nicolás Maduro, Venezuela’s president, inched closer to gaining control of $1bn of disputed gold in the Bank of Eng-land’s reserves after winning an appeal court ruling over who the UK recog-nises as the country’s legitimate leader.

Mr Maduro’s administration is desper-ately short of hard currency after US economic sanctions, imposed over human rights abuses, crippled the Latin American country’s oil exports. It says it wants to sell the gold under UN auspices to buy medicines and pay for humani-tarian aid to fight the pandemic.

Juan Guaidó, the opposition leader who the US, UK, Europe and most of Latin America recognises as the rightful leader, has named his own central bank board and is fighting to keep the res-erves at the BoE. He says the Maduro-run central bank wants to steal it.

The England and Wales Court of App-eal overturned a lower court decision in July that said the UK had “unequivo-cally” recognised only the Guaidó gov-ernment. In its judgment yesterday it said it was possible that the Foreign Off-ice accepted the authority of Mr Guaidó as head of state but also dealt with the Maduro government in practice.

“Our client is very happy with this

judgment,” said Sarosh Zaiwalla, senior partner at Zaiwalla & Co, representing Mr Maduro’s government. “The appeal has been allowed unconditionally.”

Vanessa Neumann, Mr Guaidó’s envoy to the UK, said: “It is an irony lost on no one that a regime accused of crimes against humanity is seeking to use the British court system to illicitly finance itself.”

She added that the Guaidó adminis-tration would “pursue every step in the legal process to protect the people of Venezuela”.

The legal challenge has arisen because, unlike some other nations that recognised Mr Guaidó, the UK has con-tinued to recognise the Maduro govern-ment’s ambassador in London and her tenure of the Venezuelan embassy and official residence. The UK has also maintained its embassy in Caracas.

The appeal court said that before the case could be settled the Foreign Office needed to give more detail over whether it did, in practice, recognise the Maduro government on some issues. It asked the commercial court to do this.

Mr Zaiwalla said that “the way the judges have interpreted and explained the law makes us cautiously optimistic that if this case goes before the commer-cial court, they will find in our favour”.

Venezuela

Maduro closer to $1bn of gold held at BoE after court appeal

Victor Mallet — Paris

The French government has ordered the closure of bars and cafés in Paris for two weeks from today after declaring the city and its nearest suburbs to be zones of “maximum alert” for corona-virus infections.

“Today we are entering a new phase,” said Didier Lallement, the Paris police chief, as he outlined the restrictions, including a ban on student parties,the closure of swimming pools for adults, and a reduction in the number of shoppers allowed into malls and depart-ment stores.

“We are ceaselessly adapting to the reality of the epidemic, the reality of the virus,” he said.

Marseille and Aix-en-Provence in the south of France, as well as the Caribbean island of Guadeloupe, have already been placed in the same “maximum alert” coronavirus category after a surge of infections and hospital admissions in recent weeks.

However, the government has decided to grant a reprieve to France’s restaurants — currently closed in Mar-seille — and will impose stricter meas-ures to allow them to reopen or remain open even in high-infection zones.

Emmanuel Macron, the president,

has said France must learn to “live with” the virus, adding he was determined to avoid another nationwide lockdown like the two-month closure in the spring that triggered a deep economic reces-sion.

Anne Hidalgo, mayor of Paris, said the capital’s economy was dependent on international trade and tourism and had been badly hit by the absence of vis-itors, making it essential to maintain the city’s democratic, cultural, economic and social life as far as possible.

Aurélien Rousseau, regional health director, said 3,500 coronavirus cases were being recorded each day in the Paris area, which now had more than 200 active infection clusters.

“The impact on hospitals is real and is getting more serious each day,” he said, noting that 36 per cent of intensive care beds were already taken by Covid-19 patients, which would rise to 50 per cent in two weeks. He added that 115 of the region’s 700 old people’s homes had at least one resident sick with the virus.

Olivier Véran, the health minister, said last week that Lille, Lyon, Grenoble, Toulouse and Saint-Etienne mightalso this week cross the infection and hospitalisation thresholds that would push them into the “maximum alert” category.

France

Bars and cafés in Paris shut for two weeks as new curbs begin

Clive Cookson — London

Three scientists based in North Amer-ica have been awarded the 2020 Nobel medicine prize for their work in discov-ering the hepatitis C virus.

The Nobel Assembly said yesterday that research carried out by Harvey Alter, Charles Rice and Michael Houghton in the 1970s and 1980s made a “decisive contribution to the fight against blood-borne hepatitis”, calling their work a “landmark achievement in the battle against viral diseases”.

It is not unusual for the Nobel Prize, which comes with an award of SKr10m ($1.1m), to recognise work carried out sometimes decades earlier.

“Thanks to their discovery, highly sensitive blood tests for the virus are now available and these have essentially eliminated post-transfusion hepatitis,” the Nobel announcement said.

“Their discovery also allowed the rapid development of antiviral drugs directed at hepatitis C. For the first time in history, the disease can now be cured.”

By the 1960s, the hepatitis A and hep-atitis B viruses had been discovered. But Prof Alter, working at the US National Institutes of Health, found that transfu-sion patients were still developing liver

disease from donated blood even when these two viruses were excluded. He showed that another pathogen must be causing this “non-A, non-B” hepatitis.

Then UK-born Prof Houghton and colleagues at Chiron, a US biotech com-pany, determined the genetic sequence of the virus, showing that hepatitis C, as it was called, was a previously unknown member of the flavivirus family.

Finally, Prof Rice at Washington Uni-

versity in St Louis injected a genetically modified version of the virus into chim-panzees. The apes developed liver dis-ease similar to hepatitis, proving that the virus did indeed carry the infection.

Thomas Perlmann, secretary of the Nobel Assembly, said he had managed to reach professors Alter and Rice by phone to inform them of the award. “They seemed very surprised and very, very happy,” he said.

Prof Alter said: “To see so many peo-ple get cured is astounding.” Prof Houghton has not commented.

Medicine award

Scientists who discovered hepatitis C win Nobel Prize

‘Thanks to their discovery, highly sensitive blood tests for the virus are now available’

Valentina Romei — London

The economic impact of the coronavi-rus resurgence in Europe was laid bare yesterday by data showing that fresh restrictions to control the spread of the virus had begun to choke off the recov-ery in Spain, the hardest-hit country.

The decline in Spanish business senti-ment increases the chances that the euro-zone economy will suffer a fresh down-turn in the final quarter of 2020 after rebounding from a historic recession caused by the onset of the pandemic in the first half, economists warned.

Spain’s IHS Markit purchasing man-agers’ index for the services sector, a measure of business sentiment, fell to a four-month low of 42.4 in September from 47.7 in August. A reading below 50 indicates a majority of businesses reporting deteriorating conditions com-pared with the previous month.

Spain’s performance dragged down the outlook across the single currency bloc: the final September reading for eurozone composite PMI — an average of services and manufacturing — slipped to a three-month low of 50.4. This was marginally up from the initial September estimate of 50.1 but down from August’s reading of 51.9.

“With the eurozone economy having almost stalled in September, the chances of a renewed downturn in the

fourth quarter have clearly risen,” said Chris Williamson, chief business econo-mist at IHS Markit.

Italy, the worst-hit part of the euro-zone early in the pandemic, did better than expected. Its services PMI rose to 48.8 in September from 47.1 in August and better than the 46.6 forecast by economists polled by Reuters.

Data published last week for Italy’s manufacturing PMI suggested strong growth in the export-led sector.

Across the eurozone, economic activ-ity was strongest in Germany, which reported a final composite index of 54.7, against initial estimates of 53.7, driven mainly by manufacturing.

In France, which has had the largest resurgence in infections after Spain, the final composite PMI was confirmed as 48.5, a contraction driven by deteriorat-ing conditions in the services sector.

A weakening in sentiment indicators suggests that “the idea of a sustained, strong post-virus recovery at theend of the year is now seriously chal-lenged”, said Claus Vistesen, chief euro-zone economist at Pantheon Macroeco-nomics.

The PMIs indices “point to a two-speed-economy in which the upturn in manufacturing is gathering strength, mainly due to solid data in Germany, while services activity is now reeling”, Mr Vistesen added.

PMI data

Spanish services sector poses threat toeuro bloc

‘The idea of a sustained, strong post-virus recovery at the end of the year is now seriously challenged’

INTERNATIONAL

ECB seeks to navigate the eurozone’s economic recovery Eurozone GDP (% change on previous quarter)

-15

-10

-5

0

5

10

2018 19 20

Forecast

Source: Eurostat/ECB

Martin Arnold — Frankfurt

In her debut press conference as Euro-pean Central Bank president last December, Christine Lagarde promised to bring her “own style” to the job and make decision-making among her squabbling team of policymakers “as consensual as possible”.

It is a pledge she has delivered on — but growing evidence that the consen-sus is fraying suggests that her diplo-matic skills will be needed in the coming months as the ECB seeks to steer the eurozone from a historic recession to recovery.

Nearly a year into the role, Ms Lagarde has established a much more collegial leadership approach than Mario Draghi, her predecessor. One member of the ECB’s governing council said Mr Draghi “led from the front”, while Ms Lagarde prefers to “lead from the back”.

The change seems as much a reaction to the furious outbursts from other council members that followed Mr Draghi’s final easing measures last year as a reflection of Ms Lagarde’s ability to persuade meeting rooms — often full of men — to agree on a decision.

Ms Lagarde told the European parlia-ment last week that she was “not overly concerned” by differing opinions among council members.

“I don’t encourage massive dissent but I think that dissent and discussion are healthy among members of the executive board,” she said. “But I think what is important is that once a decision has been made and once a majority has been established then it is a question of staying the course and of being together at that time.”

Lena Komileva, chief economist atG+ Economics, said: “This is an ECB president with a very cohesive, collegial leadership style who wants the others to come to a common ground. She doesn’t want to prejudge their decisions.”

Ms Lagarde’s attachment to unity can make her communication harder to read. Mr Draghi often signalled his intentions early and counted on his abil-ity to steamroller them through the council despite opposition from a few members.

In contrast, Ms Lagarde’s instinct is to stick to the middle ground. This can unsettle investors, as happened when she declared just as the coronavirus cri-sis was starting in March that the ECB was not there to “close the spread” between Italian and German bond yields — fuelling a sell-off in the debt markets of peripheral countries.

She also caused a stir among investors last month by downplaying concerns about the euro’s appreciation and the risk of deflation.

In both cases, Philip Lane, ECB chief economist, subsequently published a detailed blog post widely interpreted by economists and investors as an attempt to finesse Ms Lagarde’s comments. Some of her critics seized on it as evi-dence of her lack of monetary policy experience or economics training.

Mr Draghi has privately told friends that the partnership between Ms

Fraying consensus at ECB presents Lagarde with a diplomatic challenge President’s skills will be tested during the effort to nurture recovery in the eurozone

‘I don’t encourage massive dissent but I think that dissent and discussion are healthy among members of the executive board’Christine Lagarde

OCTOBER 6 2020 Section:World Time: 5/10/2020 - 18:24 User: sanjay.gohil Page Name: WORLD2 USA, Part,Page,Edition: USA, 3, 1


dong province, has been badly hit by the coronavirus pandemic, with many of his US clients in arrears. But orders for cam-paign merchandise, which he began receiving in February, have helped keep him afloat.

Mr Lin initially estimated that 70 per cent of his US election merchandise sales, such as a banner emblazoned with the slogan “God, Guns & Trump”, were for Trump supporters. “Market demand for Trump products is relatively better,” he said.

But although Mr Lin recognises Mr Trump’s name in English, his grasp of the language is poor and he had assumed anything he produced with the president’s name on it was pro-Trump merchandise such as a flag that says “Anyone but Trump 2020”. Other prod-ucts say “Impeach Trump: Make Amer-ica Great Again” or “Pro America, Anti Trump”.

“I did not know that,” he said when the Financial Times pointed out that these were anti-Trump products.

In Guangzhou, Wang Bei’s struggling ZCT Industry luggage factory was about to go under in May when it switched to

making campaign masks. Revenues have since doubled. “Masks are much easier than luggage — we just needed to find the right fabric,” he said.

Initially he did not have enough work-ers or sewing machines to meet soaring demand, but he was able to contract out his orders.

“This is an industrial cluster,” he said. “At peak periods more than a dozen fac-tories helped us make masks. The co-operation among factories here is fan-tastic . . . We also supported nearby printing factories. Hundreds of workers were able to keep their jobs.”

ZCT Industry had more Trump orders at first, but Biden masks are making a comeback. “We sold more Biden than Trump masks over the past two months,” Mr Wang said.

Similar economies of scale are at work in Yiwu. “It makes a difference paying your supplier one cent less per piece if you have a big enough order,” said Zhang Guolu, whose factory makes pro-Trump banners.

Xu Hongjie, another Yiwu factory owner who also made Trump banners for the 2016 campaign, said his profits

were thinning. He charges Rmb6 per piece, the same price he received four years ago, even though his production costs have risen more than 25 per cent during the course of Mr Trump’s first term in office.

“We don’t have the pricing power,” admits Mr Xu, who makes 20 cents in profit for every “Keep America Great” banner he sells. “All we can do is try to control costs.”

Another challenge is the tariffs Mr Trump imposed on Chinese exports during his 18-month trade war, which were paused in January with a “phase 1” trade deal.

Campaign-product exporters still face a punitive 25 per cent tariff. Merchants in Yiwu canvassed by the FT said they were generally willing to absorb 5-10 per cent of the extra cost.

The Chinese manufacturers also appreciate that US presidential cam-paigns that have proved such a financial boon do not last for ever. “When will the election end?” asked Mr Wang at ZCT Industry, worried he might be left with a big backlog of unsold products.See FT Big Read

Industry. White House race

US election goods lift Chinese factory profits

Sun Yu — YiwuQianer Liu — Shenzhen Tom Mitchell — Singapore

Ryan Li does not have a vote in the US presidential election. But if he did and was voting with his wallet, he would support Donald Trump rather than Joe Biden, his challenger.

Mr Li, a manufacturer at the sprawl-ing Yiwu International Trade Centre in eastern Zhejiang province, has been turning down orders to make Chinese flags for the week-long National Day holiday. He has discovered there is more money to be made manufacturingmerchandise for the US president’s sup-porters.

“I work for whoever offers the best terms,” said Mr Li, who can charge Rmb5 ($0.74) per piece of Trump para-phernalia but gets only Rmb4.5 for each Chinese flag.

Mr Li is one of a number of Chinese merchants profiting from making eve-rything from hats to wristbands for the US presidential race. Many work with wholesalers that sell the unofficial goods at Trump rallies, online or to US retail-ers. Given the rapid deterioration in Sino-US relations this year, and Mr Trump’s targeting of China throughout his presidency, the campaign boom is probably the most ironic part of China’s export renaissance.

“China’s exports are recovering faster than people think,” said Larry Hu, an economist at Macquarie Group, the Australian bank.

Chinese factories have in recent months reported a sharp rebound in orders from US buyers. Exports to the US surged 16 per cent year on year in July and August compared with an 11 per cent drop in the first six months of 2020, according to official data.

Chinese manufacturers are able to offer Trump and Biden supporters low prices. Yiwu merchants will sell the “Make America Great Again” baseball caps for as little as 88 cents, generating a generous profit margin for US retailers that can charge $12 or more for each hat. The manufacturers in Yiwu make about $2 per hat.

“We cut prices by as much as possible so we won’t lose out to the thousand other competitors who make the same product,” said Wang Fuli, a hat mer-chant in Yiwu. She has generated a third of her sales from the Trump campaign since April, when the city’s famous mar-ket reopened after a two-month lock-down.

Jimmy Lin’s factory in Dongguan, a manufacturing hub in southern Guang-

Manufacturers benefit from

making merchandise for the

campaign as exports recover

Production line: a worker makes flags for Donald Trump’s ‘Keep America Great!’ campaign ata factory in Fuyang,eastern ChinaAly Song/Reuters

‘This is an industrial cluster. Hundreds of workers were ableto keep their jobs’

Aime Williams — Washington

More than 3,500 companies have filed lawsuits against the US government over its tariffs on China in recent weeks, demonstrating the extent of unhappiness among businesses over Donald Trump’s trade wars.

Coca-Cola, Disney and Ford are among the many multinational corporations to launch legal proceedings, while US-based Abbott Laboratories, a leading manufacturer of coronavirus tests, has also filed a complaint.

Lawyers say the companies, which include household brand names along-side small US manufacturers, have cre-ated an unprecedented caseload over a short period after lodging their com-plaints with the New York-based Inter-national Trade Court.

“I am completely blown away by the number of cases being filed,” said Nasim Fussell, a lawyer with Holland & Knight, who was the top trade counsel for the Republican-controlled senate finance committee until last month.

“I just think the sheer number is very

descriptive of the pain that this has caused,” said Ms Fussell, referring to the administration’s tariffs on Chinese imports.

“Because I think one thing I’ve learned over the past few years . . . was that companies were really, really care-ful about challenging anything for fear of public shaming, either on Twitter or in a statement or whatever it is.”

Tariffs on Chinese goods have raised costs for companies that import parts, materials or products into the US by forcing them to pay extra duties.

If the companies win, the administra-tion will be forced to repay tariffs col-lected. While tariff revenue does not make up a large portion of the govern-ment’s budget, it would still need to write some “pretty big cheques”, said Todd Tucker, a fellow at the Roosevelt Institute specialising in international trade law. However, he added US trade law gave the executive branch a “lot of discretion” over any elements of trade that affected national security, allowing it to alter its tariff regime in response to retaliation from other countries.

Legal challenge

Disney among thousands of companies suing over trade tariffs

obfuscated. On Sunday, however, he acknowledged that Mr Trump’s oxygen levels had dropped on two occasions, and that he had been given oxygen at the White House on Friday morning before transferring to Walter Reed.

Dr Conley also said he had misspoken

when he said Mr Trump had taken an experimental antibody cocktail 48 hours ago, which would also have sug-gested that the president tested earlier than Thursday.

Pressed on Sunday on why he had misled the public on Saturday, Dr Conley suggested he had not wanted to upset Mr Trump. “I didn’t want to give any information that might steer the course of illness in another direction,” he said. “[It] came off like we were try-ing to hide something, which wasn’t necessarily true.”

Who else has contracted the virus?

Several people in the Trump team have developed coronavirus, including his wife Melania, and close aide Hope Hicks, whose diagnosis was reported before Mr Trump’s. The spread could be linked to an event at the White House on Saturday September 26 to celebrate the nomination of Amy Coney Barrett to the Supreme Court. See Notebook

INTERNATIONAL

Aime Williams and Demetri Sevastopulo — Washington

Much remains unknown about the severity of Donald Trump’s condition or the timeline leading up to his diagnosis.

Sean Conley, the White House physi-cian working with Mr Trump’s team of doctors, held two press conferences at the weekend but ended up sparking as many questions as he answered.

When did Mr Trump test positive?

There is some confusion around when the president received his first positive result. Mr Trump announced in the early hours of Friday that he had con-tracted the illness after a positive test late on Thursday.

However, Dr Conley said on Saturday that Mr Trump was 72 hours into his

diagnosis, which would suggest the president had tested positive on Wednesday. Dr Conley subsequently issued a statement saying he had “incor-rectly used the term ‘72 hours’ instead of day three”.

It is also unclear whether Mr Trump received a positive test result before appearing on a Fox News show on Thursday evening, when he did not dis-close his illness.

The Wall Street Journal has reported that the president received a positive test from a rapid test on Thursday evening after a fundraiser in Bedmin-ster, New Jersey, but before his Fox appearance. He received another posi-tive result from a more accurate “PCR test” later that evening.

How severe is Mr Trump’s illness?

It is unclear how serious Mr Trump’s ill-ness is after a weekend of mixed and contradictory statements from the White House medical team and Trump aides and officials.

Doctors said on Sunday that Mr Trump had suffered a “high fever” on Friday, and that his blood oxygen satu-ration levels were at times “below 94 per cent”, resulting in the use of supple-mental oxygen. His levels dropped to 93 per cent again on Saturday.

When asked if investigations showed any signs of lung damage or pneumonia, Dr Conley replied that the medical team had seen “some expected findings”, but “nothing of any major clinical concern”.

On Sunday, the White House medical team said Mr Trump was being given dexamethasone, an anti-inflammatory steroid recommended for patients with “severe” Covid-19. Its use suggests Mr Trump’s case is more serious than Dr Conley has indicated, but it is also possi-ble that his medical team has deviated from clinical guidelines.

How has Dr Conley added to confusion?When Dr Conley was asked on Saturday if Mr Trump had been given oxygen he

Pandemic

Confusion surrounds Trump’s infectionWhite House accused of lacking transparency as virus spreads to inner circle

Covid-19

President treated with cocktail of medications

White House physician Sean Conley answers questions on Sunday

Clive Cookson — London

Donald Trump has received a combi-nation of powerful drugs to battle his Covid-19 infection that might never have been prescribed together to an individual patient: the antiviral remde-sivir, a coronavirus antibody cocktail and the steroid dexamethasone.

The decision to administer such a dras-tic combination of treatments might be a sign that Mr Trump is more seriously ill than his physician Sean Conley and the White House medical team have admitted. Alternatively, Mr Trump might have demanded as many drugs as possible to speed his recovery.

Either way, the use of the experimen-tal treatments will have required a care-ful weighing of the risks, given the possi-ble side-effects and the chance of adverse interactions between the differ-ent chemicals.

Mr Trump started a five-day course of intravenous injections of remdesivir, an antiviral drug produced by the US bio-tech company Gilead Sciences, on Fri-day. It works by blocking an enzyme that some viruses need to replicate.

Remdesivir was developed to treat the Ebola virus but clinical trials have shown some effectiveness in Covid-19 patients who are moderately ill, speed-ing up their recovery.

Also on Friday, Mr Trump received an 8g dose of an experimental antibody therapy from Regeneron, another US biotech company. This cocktail, known as REGN-CoV-2, contains two antibod-ies designed to attach themselves to sites on the “spike protein” that the

virus uses to enter and infect cells.Several hundred patients with rela-

tively mild disease have received REGN-CoV-2 in phase 2 trials that have shown it does reduce the amount of virus in the body. But the studies have been too small to know whether the drug improves patient outcomes. Regeneron has not received an emergency use authorisation to supply REGN-CoV-2 outside clinical trials, but said it pro-vided the drug to Mr Trump after a “compassionate use” request.

Finally, on Saturday Mr Trump received dexamethasone — a steroid first used 60 years ago — after the oxy-gen level in his blood dipped. Dr Conley told a media briefing on Sunday: “We decided that in this case the potential benefits early on in the course probably outweighed the risks.”

In June, the UK Recovery trial found that taking dexamethasone for 10 days reduced deaths by a third among patients requiring ventilation. Last month, the World Health Organization said doctors should treat severely ill coronavirus patients with dexametha-sone or hydrocortisone — another anti-inflammatory steroid.

Steroids help by damping down an excessive immune response to Covid-19 that is causing serious damage to the lungs and other organs. But there is no evidence they help patients who are not seriously ill. Indeed, there is some con-cern that they might do more harm than good by reducing the immune system’s ability to fight viral infection.

Psychiatrists have also pointed out that dexamethasone can have a power-ful effect on mood. Paul Summergrad, chairman of Tufts Psychiatry Center in Boston and former head of the Ameri-can Psychiatry Association, wrote on Twitter: “Dexamethasone can cause frank mania or more severe depressive states. Added to the risk of Covid-related neuropsychiatric symptoms/severe delirium, the press ought to be asking the medical team how they are formally monitoring [the president’s] mental status.”

‘Dexamethasone can cause frank mania or more severe depressive states’

Contracts & Tenders

OCTOBER 6 2020 Section:World Time: 5/10/2020 - 18:56 User: sanjay.gohil Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1


Sam Jones — Zurich Thomas Hale — Hong Kong

Chinese ecommerce giant Alibaba plans to take a stake of up to 10 per cent in Dufry, the world’s largest operator of airport duty-free shops, as part of an emergency SFr700m capital raising.

Alibaba will join private equity group Advent International in underwriting a rights issue due to be presented to Dufry shareholders today.

The Swiss company is seeking to shore up its balance sheet as the pan-demic batters global travel. In an agree-ment announced last month, Advent said it would purchase up to SFr455m ($500m) of shares issued in the capital increase not taken up by existing share-holders.

Alibaba is to participate at the same price — SFr28.5 a share — up to a value of SFr250m, Dufry said yesterday. As part of the deal, Basel-based Dufry will also enter into a joint venture with Alibaba in China.

Shares in Dufry rose 19 per cent to close at SFr33.46. The company’s mar-ket value hit a 10-year low in March, dipping to just SFr1.6bn.

In June, the Swiss company announced plans for cost-cutting meas-ures, with management targeting the loss of about 10,000 jobs — one-third of the workforce. Dufry, which operates more than 2,500 retail stores in airports worldwide, said revenues could drop up to 70 per cent this year.

Dufry said yesterday it hoped the col-laboration with Alibaba would speed up Dufry’s “digital transformation” and unlock opportunities in the lucrative Chinese market.

Julián Diaz, chief executive, added: “We are convinced the joint venture will capitalise on growth opportunities and will support Dufry to become the leading digital travel retail company worldwide.”

Proceeds from the capital increase would finance the buyout of remaining shares in US travel retailer Hudson. Dufry announced a $311m deal in August to buy the 42 per cent of Hudson it did not already own and delist the company.

The new capital will also be used to shore up Dufry’s balance sheet and invest in the company’s digital efforts and new Chinese venture, it said.

Alibaba said the tie-up would “serve to meet the growing consumer demand for international brands in China”. See Lex

Alibaba to take 10% stake in duty-free group Dufry

Stephen Roach The US has squandered its exorbitant privilege and the dollar is vulnerable to a sharp correction y MARKETS INSIGHT

Murad Ahmed — LONDON

FC Barcelona, one of the world’s wealthiest football clubs, has revealed the massive impact of the coronavirus pandemic on its busi-ness, posting a €100m pre-tax loss last season while more than doubling debt to €488m.

The Catalan club, which has suffered a leadership crisis in recent weeks after its star player Lionel Messi demanded to leave, said annual revenues were €855m last season. This was a 14 per cent fall from the previous year, when it earned more than any other club in the world.

Barcelona, one of the first elite European clubs to report financial results for the year covering the 2019-20 season, said it was hit by a coronavirus-induced income short-fall of just over €200m. Net debt on June 30 was €488m, more than dou-bling from €217m a year earlier.

Commercial revenues were down 9 per cent to €297m, as some sponsor-ship deals “at an advanced stage of negotiation before the pandemic” had fallen through, with merchandise sales also dropping.

Match day revenues dropped 24 per cent to €162m as spectators have been absent since March. Broadcast-ing income fell 17 per cent to €249m, partly owing to fewer European matches because of the pandemic.

The club made €74m worth of sav-ings, including through agreed wage cuts for players.

Andrea Agnelli, president of Italy’s Juventus and chairman of the power-ful European Club Association, said last month that clubs faced a shortfall of €3.6bn over the next two years.

Barcelona said it expected revenues to fall further to €791m this season, though this projection is based on there being a gradual return of specta-tors to its Camp Nou stadium in

December. It is unclear when Spanish authorities will permit fans back into sports events, with European coun-tries taking differing approaches to the issue.

In Germany, stadiums have been partially opened to fans watching top-tier Bundesliga matches but, in Eng-land, the UK government has said big sports grounds are likely to stay closed for the next six months follow-ing a resurgence of the virus.

Barcelona has also embarked on a redevelopment of its stadium, announcing a “new financing plan” to raise €815m for the project. Goldman Sachs will manage a new vehicle that will pay investors a portion of the additional income expected to be gen-erated by the club’s expanded ground, set to open in 2024.

The club’s financial crisis comes as top executives, including president Josep Maria Bartomeu, have faced calls to resign.

Penalty spot Barcelona posts €100m loss and doubles debt as coronavirus slashes revenues

C itigroup is not the strongest of the big American banks. It is the most interesting. The job for Jane Fraser, its next chief executive, is to make it

a bit more dull.What makes Citi so fascinating and

Ms Fraser’s task so hard, is the bank’s history. For much of the 20th century, Citi was the international banking arm of corporate America — a sort of private sector state department. It is a still great global corporate and investment bank, the leader in cash management and for-eign exchange. Domestically, it was an innovator in credit cards in the 1960s and ’70s, and it is a major issuer today.

Those two areas remain Citi’s strengths. Much of the rest of the bank can be traced back to Sandy Weill, the chief executive at the turn of the cen-tury, who merged Citi with the financial conglomerate Travellers and then bought more businesses at home and abroad. The 2008 crisis revealed that this “financial supermarket” structure, far from offering stabilisation, provided conduits along which panic could pass.

Repairing the balance sheet required a multiyear yard sale, managed admira-bly by Ms Fraser’s predecessor Mike Corbat. The remains of Mr Weill’s empire are: a global investment bank, the former Salomon Brothers; a cut-down US consumer bank; and solid

Citi successor Fraser must bring an ungainly chimera to heel

in its cash management business, where rivals such as JPMorgan and Goldman Sachs are coming for Citi’s crown. And it could cut areas where it underperforms, such as equity sales and trading. Ms Fra-ser could seek changes in the credit card operation, too, doubling down on growth or running it for cash.

Ms Fraser could also change the man-agerial and financial reporting struc-tures of the bank, making them easier to understand and highlighting Citi’s strengths. It is not easy for investors to see how much of Citi’s institutional busi-ness is fee-driven and non-cyclical, and therefore worthy of a high valuation.

There is another reason to stay the course. After Citi accidentally wired $900m to creditors of the cosmetics group Revlon in August, regulators are reportedly close to censuring the bank. Some stability might be required to get regulators on the side of the new boss.

All that said, this optimisation approach would be an extension of what Mr Corbat has done since at least 2017. That has yielded a stock price only a few dollars higher than when he took the job in 2012, underperforming BofA and JPMorgan by big margins.

Should Ms Fraser have a hard look at Mexico and Asia? Mike Mayo, Wells Fargo analyst and longtime Citigroup gadfly, says he has been arguing for this for 10 years. If one or both of those busi-nesses were sold, whole or in parts, some of the proceeds could be poured into bulking up the US retail bank.

But getting this done will take luck as well as skill. While the two businesses are surely worth more to local players than to Citi, ready buyers with regula-tory leeway cannot be simply magicked up. Even if a buyer can be found, Ms Fra-ser may have to offer a bargain price.

[email protected]

Inside business

Finance

RobertArmstrong

retail operations in Mexico and Asia.Minotaur banks, with an investment

bank as the head and a retail bank the body, can work well. JPMorgan Chase and Bank of America are the prime US examples. But those banks’ retail opera-tions are all domestic, providing effi-ciencies of scale. Citi, by contrast, is an ungainly chimera: its three retail units add little to one another or to the global institutional operation. The foreign retail operations are perceived as risky, too, particularly Mexico. The domestic retail unit is undersized, with $173bn in consumer deposits, next to (for exam-ple) BofA’s more than $800bn pile, which helps provide it with a much lower cost of funding than Citi.

The net result of this structure? A return on tangible common equity of 12 per cent in 2019, well behind JPMorgan and BofA at 17 per cent and 15 per cent, respectively.

Citi executives defend the global retail operation by talking about shar-ing best practices and the power of the Citi brand. This talk is comprehen-sively debunked by Citi’s own failure, over decades, to wring strong profits from global consumer banking.

What is Ms Fraser to do? Her first option — and one not to be scoffed at — is to keep the current set-up, odd as it is, and run it leaner. The capital base could be tighter. The chief financial officer recently said Citi had high-quality equity capital that was $19bn in excess of its regulatory minimums, almost a quarter of its market capitalisation. Bringing that down, cautiously, will boost return on equity meaningfully.

The bank could press its advantages on the institutional side, investing more

An optimisation approach has yielded a stock price only a few dollars higher than when Corbat took over in 2012

On the move: star player Lionel Messi, left, demanded to leave Barcelona, before relenting — Albert Gea/Reuters

and 20,000 in the US, where Cineworld expanded with its $3.6bn acquisition of Regal Entertainment in 2017.

Cineworld, which has more than 530 Regal cinemas in the US and 127 in the UK, also has another 20,000 support staff on contracts.

In an email to Cineworld’s UK work-ers, Mr Greidinger said audiences had dwindled “to tiny and unsustainable levels and the delay of Bond has been a huge blow”. He said it was reviewing the roles of all staff.

The UK government’s unwinding of its emergency furlough scheme to sup-port wages had left Cineworld with an unsustainable burden given that it had “almost no income”, Mr Greidinger said in the email, a copy of which was seen by the Financial Times.

A source close to the business said that “substantial” job losses were likely.

Rival chain Odeon has already cut screenings at a quarter of its 120 UK and Irish venues to weekends only, while 16 of its cinemas remain closed. Vue, which operates 228 cinemas in 10 markets, said it was “exploring all options” and did not rule out site closures.

Cineworld’s expansion has left the group with $8.2bn in net debt. Analysts at Jefferies estimate that with its cine-mas shut, Cineworld burns about $60m a month. The group had roughly $150m in cash at the end of August as well as an undrawn $110m credit facility.

Last month, Cineworld warned that a prolonged or partial shutdown of cine-mas in its main markets would lead to it breaching loan covenants. It is in talks with a syndicate of 11 banks, including HSBC and Citigroup, in an attempt to waive those covenants and secure some breathing space.

The banks appointed the advisory firm FTI Consulting last week to advise on the talks, a move first reported by Sky News.

Cineworld shutdown puts thousands of jobs at risk3 Delay to Bond film forces closures3 Industry reeling from pandemic

Alice Hancock — LONDON

Cineworld’s decision to close all of its UK and US cinemas indefinitely, after the next instalment in the James Bond fran-chise became the latest film to be pulled by Hollywood studios, threatens tens of thousands of jobs.

Shares in Cineworld, which operates the Regal chain in the US alongside Cine-world and Picturehouse in the UK, closed 36 per cent down in London yes-terday as investors feared for the future of the world’s second-biggest cinema group.

Led by chief executive Mooky Grei-dinger, Cineworld had been banking on releases such as the Marvel film Black Widow, and the latest in Universal’s Fast

& Furious franchise, to persuade con-sumers to visit cinemas as Covid-19 infections climb again in the UK and parts of the US. Their release has been delayed until early 2021.

MGM last week postponed the release of No Time to Die, Daniel Craig’s final out-ing as James Bond, which was due to open in cinemas on November 12.

Cineworld’s decision to temporarily suspend its operations in the UK and the US, which make up almost 90 per cent of revenues, is the toughest blow yet to an industry reeling from the pandemic.

Nigel Parson, an analyst at Canaccord Genuity, said the move “ratchets up the pressure on the studios to commit to their slates” of releases. He expects other chains to also shut screens.

About 45,000 jobs are under threat, including 5,500 employees in the UK

‘[With audiences] at tiny and unsustainable levels . . . Bond hasbeen a huge blow’

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OCTOBER 6 2020 Section:Companies Time: 5/10/2020 - 18:52 User: andy.puttnam Page Name: COMP&MKTS1, Part,Page,Edition: USA, 5, 1


Paytm founder Vijay Sharma to publicly criticise the search giant.

Momentum against Google has accel-erated and the coalition has begun exploring a formal alliance and the potential for an independent app store.

The pushback in India is taking place just months after Google announced large investments in the country, including $4.5bn to Mukesh Ambani’s Jio Platforms and $10bn in new invest-ments over the next five to seven years.

Google is a big player in India, where the vast majority of people use Android phones. More than 265m people also use YouTube, and GooglePay is one of the biggest digital payments providers.

“I’m very surprised by Google push-ing [the fee] back until 2022,” said Jay-anth Kolla, founder of Convergence Cat-alyst, a consultancy in Bangalore. “The company doesn’t want to flirt with trou-ble at this time.”

He predicts that even with Google’s commitment in India, opposition will grow. “There is a sudden rise in muscle,” he said, “This could go anywhere.”

Stephanie Findlay — New Delhi

Google has pushed back the introduc-tion of a new Play Store billing policy in India after facing a backlash from developers and a growing drive for an alternative independent app store.

It postponed the enforcement of a 30 per cent fee on some in-app payments from September 2021 until April 2022 after an outcry from more than 150 start-ups in India, including leading dig-ital payments company Paytm.

In a statement yesterday, Google said it was “extending the time for develop-ers in India to integrate with the Play billing system” and was holding talks with app developers to clarify its policy.

Google said its move to enforce the fee, which already applies to digital goods and services sold in apps, would affect “less than 3 per cent” of apps in the store, since most were already in com-pliance with it. Companies such as Netf-lix and Paytm had previously worked around this fee by getting subscribers to pay for services via their websites.

“We are deeply committed to the suc-cess of the Indian ecosystem,” said Purnima Kochikar, a business director at Google Play. “We are setting up listening sessions with leading Indian start-ups to understand their concerns more deeply.”

The growing resistance in India to Big Tech’s supremacy comes as other com-panies around the world are working to fight against Google and Apple’s app store policies. Last month, a group of 13 app publishers launched the Coalition for App Fairness. The coalition, which includes Fortnite parent Epic Games and streaming service Spotify, is pushing for “fair competition” across the app eco-system and for the removal of Apple’s 30 per cent “app tax”.

India, the world’s second-biggest internet market, is the only country that has been granted an extension to com-ply with the billing policy, said Google.

The extension comes after Google temporarily banned Paytm, India’s most valuable start-up, worth $16bn, from its Play Store in September for vio-lating its anti-gambling policy, leading

Technology

Google delays India app store fee after outcry

“multibillion-dollar franchise in the second half of the decade”.

The acquisition is the company’s first major deal since it closed the $90bn acquisition of biotech Celgene last year, which was one of the biggest-ever take-overs in the industry. Dr Caforio said the company had integrated Celgene faster than expected and was ready to make more deals. He added that the pharma-ceutical industry had remained strong with high valuations despite the eco-nomic impact of Covid-19.

“There is a lot of compelling science that is continuing to be developed and we’ve all learned that we can develop medicines faster if we work together.”

Pharmaceutical companies have focused much of their dealmaking on

approval for mavacamten in the first quarter of next year. The drug treats obstructive hypertrophic cardiomyopa-thy, a serious condition where the heart muscle gets too thick, which is esti-mated to affect one in every 500 people but often goes undiagnosed.

The therapy did well in its phase-3 tri-als, reducing the obstruction of blood flow from the heart and showing mean-ingful improvements in symptoms.

Tassos Gianakakos, MyoKardia’s chief executive, said it had “an unparalleled pipeline of targeted therapeutics designed to change the course of disease and return the heart to normal func-tion”.

Bristol-Myers Squibb already has a significant presence in cardiovascular

Hannah Kuchler — New York

Bristol-Myers Squibb is acquiring the Californian drugmaker MyoKardia for $13.1bn to expand its portfolio of cardio-vascular drugs. The New York-based pharmaceutical company said it had agreed to pay $225 a share, a more than 60 per cent premium to MyoKardia’s closing price on Friday.

Giovanni Caforio, Bristol-Myers Squibb’s chief executive, told the Finan-cial Times that MyoKardia’s drug mavacamten had the potential to be a

Group agrees $13bn deal for California maker of cardiovascular drugs

make it might”, Mr Seidman sued, con-tending that the campaign “threatened to tarnish and devalue the how philoso-phy”.

Emails allegedly showed that Mr Sei-dman’s own talent agents at William Morris Endeavor had used his ideas when they helped plan the Chobani campaign. The lawsuits were settled. Chobani no longer uses the slogan “How Matters”.

Mr Seidman has also proved a shrewd dealmaker. In 2016, he agreed a strate-gic partnership with PwC that gave LRN an entry with some of the firm’s clients. The collaboration, which at its height accounted for 8 per cent of LRN’s reve-nue, fell apart in less than two years, according to a settlement agreement filed with a Delaware court. But Mr Sei-dman saw a way to turn that misfortune to his advantage, too.

At the time, a number of LRN share-holders were looking for a way to liqui-date their holdings. PwC paid $25m to settle disputes arising from the failed partnership, according to the settle-ment agreement, and LRN used the sur-plus cash to grant the shareholders their wish, offering to buy them out at $1.35 a

share in 2017. Among those who accepted was one of Mr Seidman’s long-time friends, Howard Marks, co-founder of the Activision video game studio behind such titles as Call of Duty.

Mr Marks, who is not related to the Howard Marks who co-founded private equity firm Oaktree Capital, received about $4m in the transaction. All told, about half of LRN’s shareholders partic-ipated, and nearly a quarter of thecompany’s shares were cancelled, according to court filings. This gave Mr Seidman a bigger stake and a larger share of the proceeds when Leeds bought the company the following year for about $255m, or $7 for each remain-ing share.

In April this year, Mr Marks received a call from Mr Seidman, according to a complaint filed on his behalf in Dela-ware Court of Chancery. A disgruntled former LRN shareholder had filed a law-suit, and according to Mr Marks, Mr Sei-dman contacted him to ask whether, “as a personal favour, he would agree to exclude himself from the lawsuit”. Mr Seidman denied this, and said he was not the one to initiate the call.

Instead, Mr Marks decided to join the

Mark Vandevelde and Sujeet Indap New York

The author of a bestselling book on moral leadership has been accused of cheating investors out of millions of dol-lars when he sold his business ethics consultancy to a private equity firm.

Dov Seidman founded LRN when he was barely 30, “with a powerful vision that the world would be a better place if more people did the right thing”.

Today, it provides ethical advice and compliance training to dozens of blue-chip businesses, which have included pharmaceuticals company Pfizer, media conglomerate Viacom, and Altria, the maker of Marlboro ciga-rettes. The New York Times Company has been a client, and the paper’s star columnist Thomas Friedman has called Mr Seidman his “teacher and friend”.

Mr Seidman sold the group to Leeds Equity Partners in 2018, cashing out 80 per cent of his shares in exchange for $128m, according to litigation filings.

It is this deal that is now under attack by former shareholders, who say they were coerced into selling their stakes at a far lower valuation a year earlier. The resulting lawsuit — parts of which have recently been unsealed by a Delaware court — threatens to tarnish the image of a corporate social responsibility pio-neer who has done exceptionally well by promoting the idea of doing good.

LRN describes itself as “a flat, self-governing environment”. According to a newspaper article Mr Seidman wrote in 2012, employees can write their own reviews, spend company money with-out approval and take unlim-ited holiday. “If business is no longer war,” he wrote in How, his 2007 book that includes a glowing fore-word by Bill Clinton, “then you need to practise skills that take the war out of business”.

All the same, Mr Sei-dman has fought hard to protect his intellectual property in court. When a television advert for US yoghurt brand Chobani asserted that “a cup of yoghurt won’t change the world, but how we

Ex-LRN shareholders claim to

have been paid artificially low

price for stakes in consultancy

Dov Seidman sold LRN, which has advised groups including The New York Times, to a private equity firm. His book ‘How’, below, espoused ‘taking the war out of business’ Neilson Barnard/Getty Images

Seidman’s lawyers say ‘the board never claimed that the tender offer price was fair’

oncology and rare diseases, where drugs can be approved quickly and fetch high prices. But the MyoKardia acquisition highlights the enduring interest in new

heart medicines, as cardiovascular dis-ease remains the number-one killer worldwide. It follows Novartis’s pur-chase of The Medicines Company, another cardiovascular-focused deal, for $9.7bn last year.

MyoKardia expects to apply for

Mavacamten could be a ‘multibillion-dollar franchise in the second half of the decade’

Bristol-Myers Squibb buys MyoKardia

COMPANIES & MARKETS

drugs, most notably with Eliquis, used to prevent blood clots.

Shares in MyoKardia jumped 58 per cent to $221 in early trading in New York yesterday, while Bristol-Myers Squibb stock declined 1 per cent.

MyoKardia, founded in 2012, also has other earlier-stage drugs in its pipeline, including two in clinical trials.

Bristol-Myers Squibb said the acquisi-tion would be “minimally dilutive” to non-GAAP earnings per share in 2021 and 2022, and start adding to earnings in 2023. It would finance the transaction using cash and debt, it said.

The deal was approved unanimously by both boards of directors and is expected to close in the fourth quarter. See Lex

litigation. The plaintiffs alleged that Mr Seidman concealed LRN’s true financial condition and coerced shareholders into accepting the $1.35-a-share offer. It was, they claim, a scheme to acquire control of the company at an unfair price before completing a sales process that Mr Seidman had already secretly begun.

Mr Seidman’s lawyers have dismissed the lawsuit as “seller’s remorse”, stating that no one was forced to sell their shares and that “the [LRN] board never claimed that the tender offer price was fair”.

The allegations have yet to be tested in court, including the plaintiffs’ asser-tion that Mr Seidman was discussing a potential sale at the time of the 2017 ten-der offer.

To Mr Seidman’s supporters, the increase in LRN’s value is not a sign of wrongdoing, but a consequence of the growing clamour for corporate ethics initiatives.

Either way, what will matter in court is not so much the price of Mr Seidman’s shares, but how he achieved it — a vindi-cation, of sorts, for the philosophy that has been his life’s work.

Kathrin Hille, Patrick McGeeand Kiran Stacey

Shares in Semiconductor Manufactur-ing International Corporation fell after China’s largest chipmaker said US curbs could hit its business, a develop-ment that analysts say imperils its quest to challenge foreign rivals.

SMIC’s Hong Kong-traded shares fell more than 5 per cent yesterday after the group confirmed that the US Depart-ment of Commerce required US compa-nies to apply for an export licence before selling it supplies.

“As the supply period of certain equipment, accessories and raw materi-als exported from the US will be extended or are subject to uncertainties, it may have potential material adverse effects on future production and opera-tions,” SMIC said in a filing to Hong Kong’s stock exchange on Sunday.

Analysts said that while Washington’s restrictions on critical exports of semi-conductor equipment to SMIC appeared highly specific at first glance, they could amount to the heaviest blow yet to China’s ambitions to build a viable, self-reliant semiconductor industry.

The sanctions are likely to halt expan-sion of SMIC’s fabrication plants and could cause foreign customers to switch orders to rivals, industry experts believe.

The impact would be “much greater compared with the adverse effects of the sanctions against [Fujian Jinhua] or even Huawei”, industry research firm TrendForce said.

TrendForce believes US-based semi-conductor equipment suppliers includ-ing Applied Materials and Lam Research will bear the brunt. Dutch rival ASML will be affected because its machines contain US-made components.

“In the absence of key semiconductor equipment from mainstream global suppliers, SMIC will suffer major road-blocks in the continued development of its advanced process technologies, por-tending the broader impact of US sanc-tions on the overall Chinese semicon-ductor industry,” TrendForce said.

The issue for SMIC is that the most advanced equipment Chinese suppliers can offer is for its 90-nanometre chips, many generations behind cutting-edge manufacturing tech and several behind what it needs to keep expanding.

Although SMIC accounts for less than 5 per cent of the market for made-to-order chips, it has long been China’sbest hope for breaking the country’s dependence on foreign manufacturers. These include Taiwan Semiconductor Manufacturing Company, which con-trols half the market for contract-manu-factured chips.

Analysts estimate that about one-third of SMIC’s customers are foreign companies fabricating chips for the Chi-nese market.

According to Mario Morales, director of semiconductor research at Interna-tional Data Corporation, US chip design houses Qualcomm and Broadcom use SMIC to make products for technologies including the internet of things, power management, and display drivers.

US technology executives said that they were uncertain what the Trump administration wanted to achieve by imposing sanctions on SMIC, and theUS commerce department has declined to comment.

While lawyers have pointed out there could be room for US companies to transact with SMIC, some in the indus-try believe the restrictions could be applied broadly.

SMIC warnsof blow fromUS equipment export curb

Support services. Dov Seidman

Ethics guru accused of cheating investors

Pharmaceuticals Technology

Simeon Kerr — DubaiMehul Srivastava — Tel Aviv

An Israeli venture capital firm is team-ing up with a Dubai merchant family to launch a funding platform to facilitate tech investments between the UAE and the Jewish state, in the first such alli-ance since normalisation of relations.

The tie-up between OurCrowd and Abdullah Al Naboodah’s business devel-opment unit, dubbed Phoenix Capital, aims to create a venture-funding corri-dor, with an initial $100m raised from Emirati and other Gulf investors.

Phoenix will act as a platform to chan-nel Gulf investment into OurCrowd’s 220 portfolio companies, building on pent-up demand in the UAE for oppor-tunities in the Israeli start-up scene.

The Israeli group, a $1.5bn fund that deploys capital on behalf of small and medium-sized investors, hopes to launch companies in the UAE, capitalis-ing on the diversified nature of the Al Naboodah Group, which spans automo-tive, construction, travel and property.

Founded by Israeli-American entre-preneur Jon Medved, OurCrowd will identify UAE-based start-ups seeking to grow in Israel by collaborating with its portfolio companies. “This is not the governments that are trying to impose things or get some window-dressing,” he said. “This is real people who want to get things moving.”

Within days of the announcement of the normalisation deal in August, talks began between the two sides. A memo-randum of understanding is expected to be announced this week.

The UAE and Israel had for years been dealing with each other secretly, with contacts especially strong in tech.

Mr Naboodah, chairman of Al Naboo-dah Group’s investment arm, said the

deal would open the path for a “two-way street” of investments, with a focus on agritech and robotics.

“This will also enhance start-ups in the Gulf, and at the same time we will with OurCrowd raise funds to invest between the UAE and Israel,” he said.

The partnership would seek to deploy the capital in 25 to 30 opportunity-driven deals within the first year.

Sabah al-Binali, an Abu Dhabi-based private equity investor, has been appointed OurCrowd’s head of the Gulf region to lead its expansion.

“The commodity-fuelled excess financial capital of the UAE fits well with Israel’s surplus technology and innova-tion,” he said. “This will accelerate investing in opportunities both in Israel and the UAE.”

Mr Medved believes the surge of money and ideas between the two nations will extend into “billions of dol-lars” of trade and investment.

Among opportunities being consid-ered were desert agriculture, logistics, smart cities, and education.

Technology

Israelis in tech push with Dubai merchants

OurCrowd founder Jon Medvedsees the potential for billions of dollars of trade with the UAE

OCTOBER 6 2020 Section:Companies Time: 5/10/2020 - 18:02 User: jon.wright Page Name: CONEWS1, Part,Page,Edition: USA, 6, 1


Walmart’s UK onslaught ends with a whimperAsda has been unable to dislodge Tesco and is left jostling with Sainsbury’s for the No 2 spot as discounters advance

* Morrisons acquired Safeway in 2003 ** Includes Aldi, Lidl, Netto Sources: Kantar; Capital IQ

Grocery market sharePer cent

Asda

TescoSainsbury’s Morrisons*

Discounters**

0

10

20

30

40

2000 05 10 15 20

Asda profitsUnderlying pre-tax profit (£m)

0

200

400

600

800

1,000

1999 2005 10 15 18

COMPANIES & MARKETS

described as “one of the most competi-tive markets”. Brett Biggs, group chief financial officer, said last year that Brexit uncertainty had contributed to a “challenging” UK market.

Emerging economies with a growing middle class hold greater appeal. In China, Walmart has about 400 physical stores and a joint venture with JD.com. The group has invested billions of dol-lars in India, where it controls Flipkart.

“You can only deploy assets in so many places and do it effectively,” said Charlie O’Shea, retail analyst at Moody’s.

Executives in Bentonville are also pre-occupied with Walmart’s battle for retail supremacy with Amazon in the US, where it generates about three-quarters of sales. The effort requires substantial investment in ecommerce.

For Sir Terry, Walmart’s mixed record with Asda is a reminder that retailers face challenges when they venture over-seas. Walmart pulled out of Germany in 2006 after it struggled to compete with Aldi and Lidl and clashed with unions. Tesco encountered transatlantic diffi-culties of a different kind with its Fresh & Easy initiative on the US west coast.

“Prices are generally lower in the US, but the costs of doing business there are also lower,” Sir Terry said. “It’s often hard to read across the pricing, and econom-ics, from one geography into another.”

Walmart is not abandoning the UK entirely and will keep a seat on Asda’s board. Ms McKenna said the interest Walmart retained was not out of kilter with its other overseas markets, where the group also has alternative owner-ship structures.

“We are starting to crack the way you do this, which is the flexibility of how you structure ownership in each mar-ket,” she said. “I think that is really the trick with international retailing.”

Rivals were rattled when the mighty Walmart acquired Asda two decades ago, but the US company has failed to realise its ambitions — Jay Williams/PA

Kana Inagaki — Tokyo

Japan’s NEC has agreed to buy Switzer-land’s largest software provider to banks for SFr2.05bn ($2.2bn) in its big-gest foray into the global fintech space.

The sale of Avaloq to the Japanese technology group ends a three-year investment by Warburg Pincus, which paid close to SFr300m for a 35 per cent stake in 2017. The private equity group now owns 45 per cent of the privately held group, with the rest in the hands of Avaloq’s founder Francisco Fernández and its employees.

NEC’s acquisition follows years of restructuring involving the loss of 3,000

jobs and the offloading of unprofitable businesses. The deal, which is expected to close by April, builds on NEC’s pur-chase last year of KMD, a Danish IT serv-ices group, for Dkr8bn ($1.2bn), and its £475m takeover of the UK’s Northgate Public Services in 2018.

Earlier this year NEC also sealed a capital tie-up with Japan’s largest tele-coms operator NTT to better compete in the global race to supply 5G equipment.

Avaloq has about 2,300 employees and serves more than 150 banks and wealth managers in financial centres including London, Frankfurt and Paris.

Takashi Niino, NEC’s chief executive, said the company planned to use its

blockchain and facial recognition tech-nologies to serve the security and pri-vacy needs of Avaloq’s clients.

The fintech deal comes as the pan-demic has accelerated the trend towards digitalisation both in the bank-ing sector and within government agen-cies.

“We can expect long-term growth in the market,” Mr Niino said.

Though richly valued at around 20 times adjusted earnings before interest, tax, depreciation and amortisation, the purchase price was justified by Avaloq’s expected annual growth rate in ebitda of 15 per cent, Takayuki Morita, NEC’s chief financial officer argued.

Technology

Japan’s NEC snaps up Swiss software specialist

duce a rival to Tesco Express and Sains-bury’s Local was a strategic error.

Neil Saunders, managing director of retail at consultancy GlobalData, said: “It missed out on a lot of those local, con-venience-type markets that other gro-ceries were able to capitalise on.”

Asda went through a succession of chief executives.

“They were all good operators. Credi-ble characters. You couldn’t accuse Asda generally of being badly run.”

Andy Bond, who ran the company for five years up to 2010, rejected the idea that Walmart was an overbearing owner.

“It’s a loosely rather than tightly held confederation of businesses,” he said. “The idea that there was an iron fist in Bentonville [where Walmart is head-quartered] is wrong. They wanted strong local management.”

Walmart took £1.8bn in dividends out of Asda and deployed some of its best executives elsewhere, though Mr Bond said it never left its subsidiary short of capital or management.

“Any suggestion they sucked Asda dry is completely wrong.”

Ms McKenna said shoppers benefited from its two decades in Britain, and not just through lower prices. Expanded ranges in UK retail were “partly the result of Walmart’s entry”.

While Walmart allowed Asda to oper-ate at arm’s length, it used its global scale to achieve better pricing, and imported initiatives such as the Scan and Go mobile-checkout technology that was first rolled out at its US ware-house business Sam’s Club.

Ms McKenna said the rest of Walmart learned from its ownership of Asda, par-ticularly online, where the UK market is much more developed than the US.

But the group has long set its sights away from the UK, which Ms McKenna

Alistair Gray and Jonathan Eley

When Walmart arrived in Britain 21 years ago, rivals were alarmed by the prospect of going up against the most formidable retailer.

The Arkansas-based group was at the time opening enough new US floorspace each year to occupy the store estate of J Sainsbury or Tesco, and its presence threatened to shake up the UK market with the cut-price efficiency deployed in its heartlands.

“It was quite sobering to have the world’s biggest retailer turning up on your lawn,” said Terry Leahy, who was running Tesco, Asda’s larger rival. “They were five times [our] size.”

On the day Walmart’s takeover of Asda was announced in 1999 — trump-ing an offer from Kingfisher — European supermarket stocks shed more than $4bn in market value, said Leigh Sparks, professor of retail studies at the University of Stirling.

Two decades on, Walmart has failed

to realise its ambitions. While Asda has hardly been a disaster for the US group — it retains a share of about 14.5 per cent of the UK grocery market — it has failed to upstage Tesco and has instead jostled with Sainsbury’s for the number-two position.

After a lengthy attempt to dispose of the UK business — including a blocked plan to merge Asda with Sainsbury’s — Walmart unveiled a £6.8bn deal on Fri-day to sell it to private equity group TDR Capital and entrepreneurs Mohsin and Zuber Issa.

Walmart will retain a minority stake of an undisclosed size. Judith McKenna, head of Walmart International, said the company would “continue to learn from Asda”, whose owners plan to keep Roger Burnley as chief executive.

“You have to accept the fact that in some markets you can be more success-ful with a smaller stake if you have the right partners alongside you,” she said.

Asda seemed like a good fit for Wal-mart in 1999. Not only did the chain cater to low and middle-income house-holds like its US cousin, it had a sizeable non-food business, including its George clothing line. While its stores were much smaller than Walmart’s US “supercenters”, they were larger than those of UK rivals.

There were cultural similarities. Asda’s top executives, Allan Leighton and Archie Norman, were admirers of Walmart and had before the acquisition copied features such as greeters.

With a toehold in Germany, Walmart was expected to use Asda as a spring-board for a pan-European assault. It was welcomed by Tony Blair’s government, which was fond of talking about “rip-off Britain” and the need to reduce prices.

But Asda has faded in comparison with Walmart’s operations in markets such as China and India. Today the UK chain, which has 630 stores, is a small contributor to the group, generating $29bn in sales in the year to the end of January 2020 compared with Walmart’s total of $520bn.

“Walmart’s core model — of blowing the competition out of the water with massive price dif-ferential and huge out-of-town stores — never really got delivered,” said an execu-tive in the sector. “They misunderstood how hard opening big out-of-town shops is in the UK.”

Prof Sparks said he believed Walmart “thought the plan-ning system would open up, so they

could expand like they did in the US. That didn’t happen, so they had to buy something instead.”

But a 2003 proposal to buy Safeway, which would have given Asda more scale and exposure to the south of England, was rejected by regulators.

“If that deal had gone through, they would have been more of a significant challenger,” said Prof Sparks.

Buying 146 Netto stores in 2010 was seen by many as expensive consolation.

With a store portfolio tilted towards the north of England and Scotland and a value-conscious customer base, Asda was exposed to the German discounters, Aldi and Lidl, which lured customers with cut-price essentials and hundreds of new stores.

Sir Terry said Asda “tended to rely on the claim that their prices were the lowest. They became a bit of a one-club golfer, and when dis-counters took that club away, they had no special proposition

to customers”.The rise of online shopping

added to pressure on Asda’s non-food business, while some analysts said its failure to pro-

Former Tesco boss Terry Leahy says Asda became ‘a bit of a one-club golfer’

‘The core model ofblowing the competition out of the water . . . never got delivered’

‘They thought the planning system would open up so they could expand like in the US. That didn’t happen’

OCTOBER 6 2020 Section:Companies Time: 5/10/2020 - 17:34 User: jon.wright Page Name: CONEWS2, Part,Page,Edition: USA, 7, 1


COMPANIES & MARKETS

Najmeh Bozorgmehr — TehranLaurence Fletcher — London

Iranian stocks have plunged more than a quarter since their August peak, threatening losses for retail investors who had flocked to the market.

Tehran Stock Exchange’s benchmark Tedpix index topped 2m points for the first time earlier this year after share sales in state-owned companies helped to encourage a new generation of Irani-ans to buy shares. But the index has since slumped about 28 per cent,trading below 1.5m points yesterday, in what analysts say is one of the mostdramatic swings on record.

Saeed Laylaz, an economist, described the sell-off as the bursting of a bubble inflated by the government’s revenue-raising initiatives and the related stock-buying frenzy. “The mar-ket is correcting itself,” he said.

Maciej Wojtal, chief investment officer at Amtelon Capital — one of the very few foreign hedge funds to invest in Iran — said positive sentiment had become “too extreme” in recent months, with anecdotes of Iranians sell-ing properties to increase their stocks

exposure. “A lot of retail investors incurred heavy losses and the sentiment changed,” he said.

More than 3m investors joined the stock market in the four months to July, according to local media, compared with a typical annual figure of about 600,000. On average, each bought stocks worth a few hundred dollars, according to one source close to the gov-ernment.

One new investor is Roghieh, a 37-year-old masseuse from Tehran, who

Jonathan Butler, co-head of global high yield at PGIM Fixed Income.

Many types of leisure business are struggling.

Low levels of attendance and delays to films forced Cineworld to announce that it would indefinitely close its US and UK screens. Cineworld has $3.4bn worth of term loans, which began the year trad-ing at face value, but are changing hands at around 60 cents on the dollar.

PureGym, the UK’s largest exercise chain with more than 260 locations, has also suffered a bond sell-off.

The company has £430m in debt trading below 90 pence on the pound, compared with highs of 105 pence at the start of the year. Last week, rating agency Fitch downgraded PureGym’s bonds from single B to single B minus, pushing it deeper into “junk” territory.

Last month, the group’s private equity owner Leonard Green & Partners agreed to a £100m cash injection to bolster the company’s balance sheet. Meanwhile, PureGym’s bankers — which include Barclays and Jefferies — are sitting on a roughly £400m hung bridge loan that financed the company's takeover of rival Fitness World in January.

said she had saved money for about eight months to buy a washing machine. But tempted by the growth in the stock exchange when the pandemic forced her to stay at home with little income, she invested 100m rials of savings in the bourse in June — then equivalent to $524. The washing machine is now more than twice as expensive in rial terms while the value of her stock bets has fallen 80 per cent.

“I should have bought dollars or gold coins instead of stocks, as I had no clue how risky the bourse was,” she said.

Since the reimposition of US sanc-tions two years ago, Iran has struggled with a drop in vital petrodollars. Infla-tion is running at more than 30 per cent year on year. The economy contracted 2.8 per cent between late March and late June, according to central bank figures. Washington is also pushing for UN sanc-tions to be reimposed on Tehran.

Hassan Rouhani, Iran’s president, said last week that the US punitive measures were “not sanctions but [an economic] war”. The privatisation pro-gramme through the bourse had to con-tinue, he said, and people should be encouraged to invest in the markets.

Equities

Iran bubble bursts after 3m investors join race to bet on rising stock prices

Nikou Asgari — London

Bonds from pubs, clubs and restau-rants have dropped in value after the latest measures to slow the spread of coronavirus, underscoring the risk to UK high-yield debt investors from the market’s heavy exposure to consumer demand.

The leisure industry is struggling under the pressure of a 10pm curfew imposed in England last month as well as the “rule of six” limit for gatherings — and similar measures in force in other parts of the UK.

Wagamama, which serves Japanese-inspired dishes and is owned by Lon-don-listed Restaurant Group, has £225m worth of debt due to mature in 2022 that is now trading at about 93 pence on the pound.

The bonds had recovered some ground after the UK’s national lock-down began to be eased in June, only to fall back following the latest measures.

Vivek Bommi, managing director at asset manager Neuberger Berman, said the debt was trading at “stressed levels”, given how close the bonds are to matu-rity — reflecting the threat to the com-

Fixed income

UK pub and restaurant bonds sink on latest round of Covid restrictions

pany’s earnings from the coronavirus measures.

Peers PizzaExpress, Ask and Zizzi have all become casualties of a collapse in footfall owing to the pandemic.

The 10pm curfew has had a detrimen-tal impact on businesses that rely on the night-time economy, with some pub groups preparing to make heavy job cuts.

Stonegate, which runs the Slug and

Lettuce and Yates bars, seized on the reopening of the leisure sector in July to sell £1.2bn of bonds financing its takeo-ver of the UK’s largest pubs operator, Ei Group. But the £950m bond, which priced at 100 pence on the pound, has since slipped to 92 pence.

“The issue for these pub companies is how to get through the liquidity gap between current trading and [the time when] we've put Covid behind us,” said

‘The issue for these pub companies is how to get through the liquidity gap’ Jonathan Butler, PGIM

Tehran’s benchmark index has fallen 28% after a record run this year

high-profile failures after the 2008 financial crisis, US Spacs are relatively low risk for investors.

Shareholders vote on whether to approve the sponsor’s target company and can get their money back whether or not the target is approved.

In the UK, investing in Spacs is abigger gamble. Typically, shareholders are not able to vote on targets or redeem their funds so easily, although sponsors can choose to include both features.

Investors generally get their money back only if an acquisition is not made within the specified timeframe, often two years.

“If you’re a UK institutional share-holder looking at that model — whether you know what the US model is or not — it doesn’t appear to be terribly attractive unless the team is led by well-recog-nised superstars,” said Paul Amiss, part-ner at law firm Winston & Strawn.

When a UK Spac buys a company, the transaction is classed as a reverse takeover and the Spac’s shares are suspended.

Under the rules set by the financial regulator, trading cannot resume until a deal prospectus is published, for which there is no deadline.

That means Spac investors who do not support the takeover, and wish to sell their shares, can have their money locked up for some time.

Several Spacs that listed in 2017 remain suspended.

That less investor-friendlyenvironment has made it difficult for all but the best-connected and most trusted sponsors to successfully raise funds and launch the vehicles inLondon.

Bringing a Spac to life in the UK is “incredibly difficult to do under thecurrent rules”, said Patrick Evans, head of UK equity capital markets at Citi.

Investors are “totally backing the management team” of the sponsor who is looking for a company to acquire and most are likely therefore to want to have good pre-existing relationships with them.

Carl Bradshaw, a partner at law firm Goodwin’s private equity practice, said there were “lots [of Spacs] that are talked about that don’t successfully launch”.

How to lure more Spacs to London is a challenge both the LSE and others are keen to address.

Carlton Nelson, co-head of corporate broking at Investec, said his clients had noted the high levels of activity in the US and were wondering “why they can’t be successful here”.

Analysts said changes to the UK’s Spac rules would help, such as removing the share-suspension requirement. The FCA declined to comment.

The LSE said: “We are in continuous dialogue with stakeholders and regula-tors about keeping the London market attractive and competitive for issuers and investors.”

Some UK investors are not yetcomfortable with Spacs. “[They] have had a really chequered history,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham.

“Generally speaking, we tend to decline the opportunity [to invest]. We like to know what we’re going to own,” he added.

A series of UK failures is “probably at the forefront of the disparity in activity in the European market as compared to the US”, said Mr Bradshaw.

Compared with the UK, the US has more Spac expertise and a deeper and less risk-averse investor base, which has helped generate interest, experts said.

Even if UK Spacs became moreinvestor-friendly, activity might not reach US levels. Mr Bradshaw added: “The jury is still out.”

Camilla Hodgson

The London Stock Exchange isconsidering how to entice “blank cheque” or shell companies to the UK while the US market booms.

So far this year, $48bn has been raised by US special purpose acquisition com-panies, or Spacs, which list on a stock exchange, raise money for an acquisi-tion, then look for a private company to buy and bring on to the stock market.

For the US, that is more than three times last year’s haul. In the UK, mean-while, the 2020 running total for Spac launches is zero.

With momentum accelerating in the US and London’s IPO market sluggish, the LSE is engaged in early-stagediscussions about how to kickstart the UK industry for lucky-dip deals.

“The banks see an enormous amount of activity going on in the US and think, ‘Could that be replicated over here?’ They’re interested in it,” said one person familiar with the LSE’s discussions.

Spacs have been gaining popularity in the US since 2017 as investors seek ways to make money in an era of low interest rates.

The deals can also look attractive to investors looking for private equity-style arrangements with the added safety and liquidity of the publicmarkets.

Despite the uncertainty inherentin backing these shell companies anda reputation tarnished by a series of

While shell group entities have

boomed in the US, the UK has

been left behind by the trend

‘Thebanks see an enormous amount of activity going on in the US’

UK investor appetite for shell companies is being investigated by the London Stock ExchangeSimon Dawson/Bloomberg

Equities. Listings momentum

London looks at hopping on the Spacs bandwagon

UK Spac market lags far behind booming US counterpart

Source: Dealogic

Value per year, $bn

0

10

20

30

40

50

2010 11 12 13 14 15 16 17 18 19 20

UK

US

Robert Smith

HPS Investments has raised $9bn for one of the largest-ever funds to supply riskier corporate loans, as struggling companies increasingly turn to private investment groups for debt.

The US specialist debt investment group, which manages $65bn in assets, has completed fundraising for its latest “mezzanine” debt fund, a term forhigher-risk corporate loans that typi-cally rank behind those that banks pro-vide, according to a statement seen by the Financial Times.

The company began raising the mez-zanine debt fund in April 2019 with a target size of $8bn and has invested about half of its capital, it said.

While the fund closed with about $9bn of commitments from investors, its total firepower will exceed $11bn, due in part to its use of a borrowing facil-ity — a common practice among private equity and debt investors.

Medium-sized businesses have for years raised debt from so-called “direct lenders” such as HPS, but a recent rush of inflows from deep-pocketed inves-tors such as Middle Eastern sovereign wealth funds has given some funds the ability to lend to larger companies.

HPS has emerged as one of a handful that can single-handedly underwrite loans as large as $1bn. While many of

these direct lenders are part of larger private equity groups, such as Apollo or Blackstone, HPS is an independent group that spun out of JPMorgan’s hedge fund unit Highbridge in 2016.

HPS notably led a $1bn loan deal for Canada’s Bombardier in July, plugging a potential funding gap for the aircraft maker as it awaited regulatory approval to sell its €7.5bn train division.

While this debt was secured on some of Bombardier’s assets, the higher-than-typical interest rate meant HPS’s mez-zanine fund provided some of the financing, according to people familiar with the matter. The investment vehicle also helped fund last year’s buyout of Montreal-based security group Garda-World, which last week began a £3bn hostile takeover of UK rival G4S.

Apollo in July unveiled a new direct lending partnership with Abu Dhabi sovereign wealth fund Mubadala, with the aim of deploying $12bn in just three years. Blackstone’s GSO Capital began fundraising on its own new mezzanine debt fund this year, which public filings show has a target size of $7.5bn.

HPS’s mezzanine fund can also pro-vide preferred equity, which ranks ahead of common stock and can pay larger annual distributions to holders. The investment firm provided $600m of such financing to Canadian waste management group GFL Environmen-tal in August, while also taking part in a $1.75bn preferred equity deal for US gro-cer Albertsons in May.

Fixed income

HPS unveils $9bn war chest for higher-risk direct lending

HPS is one of a handful of mezzanine fund groups that can underwrite loans as large as $1bn

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

OCTOBER 6 2020 Section:Markets Time: 5/10/2020 - 17:07 User: stephen.smith Page Name: MARKETS1, Part,Page,Edition: EUR, 8, 1


COMPANIES & MARKETS

MyoKardia surged on news that Bristol-Myers Squibb had agreed to buy the maker of heart drugs for $13.1bn.

Bristol-Myers Squibb said it would pay $225 per share, more than 60 per cent higher than MyoKardia’s closing priceon Friday.

Regeneron Pharmaceuticals jumped after Cantor Fitzgerald upgraded the stock to “overweight” from “neutral”.

Regeneron was in the spotlight for its experimental Covid-19 antibody cocktail, which White House doctors have used in treating Donald Trump.

Gilead Sciences also rose after White House doctors put Mr Trump on a five-day treatment of its drug, remdesivir.

DraftKings fell after it announced plans to offer 32m class-A shares, half from the company and half from selling stockholders.

DraftKings’ shares have more than tripled since its trading debut in April, buoyed by the return of professional sports following pandemic-related shutdowns.

Tesla bounced back after a sharp drop on Friday as investors took note of JPMorgan’s new price target of $75, up from $65, even as the bank maintained an “underweight” rating for the stock.

At $75, JPMorgan’s forecast remained well below Tesla’s share price of about $424. Matthew Rocco

Wall Street LondonEurozone

Scandinavia’s AAK rose after the producer of vegetable oil and fats said it expected to report higher operating profit for the third quarter, beating previous forecasts and market expectations. Cost savings, favourable product mix and slightly better than expected volumes helped to lift profits, the group said.

Forecast-beating operating profit from Hexpol helped the Swedish polymer company push higher.

Spanish banks Unicaja and Liberbank rallied after confirming they had rekindled merger talks.

A deal between the two parties, which called off negotiations last year, spurred hopes of further consolidation in the Spanish banking sector. CaixaBank last month reached an agreement to take over Bankia to form Spain’s biggest lender.

Italian digital payment provider Nexi rose after agreeing to merge with rival Sia, creating a company valued at more than €15bn. Barclays analysts were “encouraged” by the arrangement although they said “this transaction has been talked about for so long that it felt like a pending deal”.

Thyssenkrupp climbed after Morgan Stanley upgraded the German conglomerate from “underweight” to “equal weight”. Harry Dempsey

Cineworld plunged to a record low after the chain closed all its UK and US cinemas indefinitely following the postponement of the next James Bond blockbuster.

Analysts at Citi said the chain was locked in “a vicious circle”, with concerns that studios would be unwilling to release their strongest content unless audience numbers improved.

“And without decent content, audience levels are unlikely to return any time soon,” added the analysts, who said Cineworld would have to raise more funding, although this financing would probably come at a significant cost.

Other hospitality groups such as JD Wetherspoon and Rank Group fared better after data showed an improvement in service sector activity in September.

Weir Group bounced after agreeing to sell its oil and gas division to Caterpillar for $405m in an all-cash deal. The Glasgow-based engineering group said the sale would help achieve its strategy to focus on the mining sector.

Friday’s tumble in Centamin, triggered by its downward revision in its production guidance, continued with the gold miner hitting its lowest level since June.

Sandwich-maker Greencore dropped after it estimated that revenue for the year would come in at £1.265bn, slightly below consensus. Harry Dempsey

3 Yield on 10-year US Treasury at highest level since August3 Better than feared service sector data lifts UK hospitality stocks3 Oil rallies after industrial action in Norway threatens to curtail output

Renewed hopes of Washington agreeing to fresh fiscal stimulus alongside reports that President Donald Trump could soon be discharged from hospital buoyed stock markets yesterday.

Wall Street was on track for its best day in five sessions following reports that Mr Trump, who was being treated for coronavirus, could be healthy enough to leave hospital within 24 hours.

Regeneron Pharmaceuticals, which makes the experimental treatment given to the US president, was the S&P 500’s top riser at lunchtime in New York.

Expectation that the Democrats and Republicans could thrash out a deal to provide aid for the pandemic-struck economy also helped the large-cap benchmark advance 1.4 per cent.

On Sunday, the Democratic Speaker of the House, Nancy Pelosi, told the CBS television network that lawmakers were “making progress” on a support package.

Andy Maynard, a trader at China Renaissance, said hope of further stimulus was “the thing that’s boosting people’s ability to put money to work”.

The allure of riskier assets such as equities led to a “modest bear steepening in Treasuries”, said Ian Lyngen, head of US rates strategy in BMO Capital Markets’ fixed income strategy team, referring to a sell-off in US government debt.

The yield on the 10-year US Treasury

rose 6 basis points to 0.75 per cent, its highest level in five weeks.

In Europe, shares in UK companies linked to hospitality rose after purchasing managers’ data showed that the hit to the service sector from Covid-19 in September was not as severe as feared.

London’s FTSE 350 travel and leisure index gained 1.3 per cent, outperforming the 0.8 per cent rise in the broader FTSE 350 index.

Elsewhere on the continent, banks rose after Spanish lender Unicaja stated in a regulatory filing that it confirmed “preliminary contacts with Liberbank”.

account an average of inflation rather than a specific target — and promised to keep policy rates near zero for several more years. That means the interest rate channel has effectively been closed. As a result, more of the current account adjustment will now be forced through a weaker dollar.

The US dollar’s lofty value makes it especially vulnerable. Despite recent falls, a broad index of the dollar’s real effective exchange rate remains some 27 per cent above its July 2011 low. That leaves the greenback as the world’s most overvalued major currency, just as the US gets sucked into an unprecedented savings-current account vortex.

Currencies are relative prices. The dollar has always benefited from the seductive charm of TINA — that there is no alternative. Think again.

The July 21 agreement on a Next Gen-eration EU Fund of €750bn finally establishes a pan-European fiscalpolicy. That should boost the underval-ued euro. The renminbi, gold and cryptocurrencies are also alternatives to the once invincible dollar.

The US Dollar index fell 33 per cent in real terms both in the 1970s and the mid-1980s, and another 28 per cent from 2002-11. During those three peri-ods, the net domestic saving rate aver-aged 4.9 per cent (versus -1.2 per cent today) and the current account deficit was -2.5 per cent of gross domestic prod-uct (versus -3.5 per cent today).

With the US having squandered its exorbitant privilege, the dollar is now far more vulnerable to a sharpcorrection. A crash is looming.

Stephen Roach, a faculty member at Yale University and former Morgan Stanley Asia chair, is the author of ‘Unbalanced’

The possibility of a tie-up between the Spanish rivals raised hopes of further consolidation within Europe’s bruised banking sector, which is down more than 40 per cent this year.

The Stoxx Europe 600 Bank index advanced 1.5 per cent with Spanish peer Banco Sabadell the second highest riser in the pan-regional benchmark.

Brent crude, the international benchmark, rose more than 6 per cent to $41.64 a barrel. The gains came as strikes in Norway threatened to curtail output from western Europe’s largest crude producing nation. Ray Douglas

What you need to know

Sell-o� in US Treasuries sends yields to five-week high

Source: Refinitiv

10-year US government bond yield (%)

0.62

0.64

0.66

0.68

0.70

0.72

0.74

0.76

Sep Oct2020

The day in the markets

Markets update

US Eurozone Japan UK China BrazilStocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp BovespaLevel 3394.68 1416.10 23312.14 5942.94 3218.05 95614.60% change on day 1.38 0.76 1.23 0.69 -0.20 1.70Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $Level 93.593 1.179 105.645 1.298 6.811 5.620% change on day -0.267 0.597 0.275 0.387 0.000 -0.322Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bondYield 0.754 -0.510 0.021 0.287 3.148 7.254Basis point change on day 6.040 2.900 0.520 4.200 0.000 -13.400World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX)Level 376.88 41.43 39.34 1903.05 23.87 2927.10% change on day 1.38 5.93 6.38 0.06 1.04 1.88Yesterday'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

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

Aug 2020 Oct3200

3360

3520

3680

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

Aug 2020 Oct1360

1400

1440

1480

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

Aug 2020 Oct5760

6080

6400

Biggest movers% US Eurozone UK

Ups

Regeneron Pharmaceuticals 7.07Loln National 5.87Cinnati Fin 5.73Comerica 5.52Technipfmc 5.33

Thyssenkrupp 11.37Telefonica 8.32Natixis 6.93Galp Energia 5.56Klepierre 4.70

Rolls-royce Holdings 8.63Melrose Industries 5.92Vodafone 4.73Barratt Developments 4.13Wpp 3.68

%

Dow

ns

Dr Horton -3.09Norwegian Cruise Line Holdings Ltd -2.23American Tower -2.12Las Vegas Sands -2.08Lennar -1.92

Prices taken at 17:00 GMT

Seadrill -3.49Kerry Grp -1.54Rwe -1.46Adidas -1.23Air Liquide -1.22Based on the constituents of the FTSE Eurofirst 300 Eurozone

Reckitt Benckiser -2.35Mondi -1.60Severn Trent -1.35Pearson -1.11Evraz -1.03

All data provided by Morningstar unless otherwise noted.

Stephen RoachMarkets Insight

T he riddle once posed in the 1960s by former French finance minister (andeventually president) Valéry Giscard d’Estaing is

about to be solved. Giscard bemoaned a US that took

advantage of its privileged position as the world’s dominant reserve currency and drew freely on the rest of the world to support its over-extended standard of living. That privilege is about to be withdrawn. A crash in the dollar is likely and it could fall as much as 35 per cent by the end of 2021.

The reason — a lethal interplay between a collapse in domestic saving and a gaping current account deficit.

In the second quarter, net domestic saving — depreciation-adjusted saving of households, businesses and the gov-ernment sector — plunged back into negative territory for the first time since the global financial crisis.

At -1.2 per cent in the second quarter, net domestic saving as a share of national income was fully 4.1 percent-age points below the first quarter, the steepest quarterly plunge in records that go back to 1947.

Unsurprisingly, the current account deficit followed suit. Lacking in saving and wanting to grow, the US levered its exorbitant privilege to borrow surplus saving from abroad. That pushed the current account deficit to -3.5 per cent of gross domestic product in the second quarter — also the sharpest quarterly erosion on record.

While a Covid-related explosion in the federal government deficit is the immediate source of the problem, this was an accident waiting to happen.

Going into the pandemic, the net domestic saving rate averaged just 2.9

End of the USdollar’s exorbitant privilege is nigh

per cent of gross national income from 2011-19, less than half the 7 per cent average from 1960 to 2005.

This thin cushion left the US vulnera-ble to any shock, let alone Covid. As budget deficits pile up in the years ahead, downward pressure on domestic saving will intensify.

The latest estimates of the Congres-sional Budget Office put the federaldeficit at 16 per cent of gross domestic product in 2020 before receding to “just” 8.6 per cent in 2021. Assuming the US Congress eventually agrees to another round of fiscal relief, a much larger deficit for 2021 is likely.

This will take the US net saving rate

far deeper into negative territory than during the global crisis. That has omi-nous implications for America’s future.

The US is, in effect, liquidating the net saving required for the expansion of productive capacity. Without borrow-ing surplus saving from abroad, growth becomes impossible. The current account deficit will only deepen.

That’s when the dollar loses its special privilege. With its position as the world’s dominant reserve currency slowly erod-ing since 2000, foreign lenders are likely to demand concessions on the terms for such massive external financing. This normally takes two forms — an interest rate and/or a currency adjustment.

The US Federal Reserve has recently shifted to a strategy that takes into

The dollar has always benefited from TINA— that there is no alternative. Think again

OCTOBER 6 2020 Section:Markets Time: 5/10/2020 - 18:47 User: stephen.smith Page Name: MARKETS2, Part,Page,Edition: EUR, 9, 1


OCTOBER 6 2020 Section:Ad Page Time: 5/10/2020 - 16:21 User: gerry.white Page Name: AD SABIC1, Part,Page,Edition: EUR, 10, 1


OCTOBER 6 2020 Section:Ad Page Time: 5/10/2020 - 16:21 User: gerry.white Page Name: AD SABIC2, Part,Page,Edition: EUR, 11, 1


WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

1.38%

Nasdaq Composite

1.69%

Dow Jones Ind

1.34%

FTSE 100

0.69%

FTSE Eurofirst 300

0.76%

Nikkei

1.23%

Hang Seng

1.32%

FTSE All World $

1.38%

$ per €

0.597%

$ per £

0.387%

¥ per $

0.275%

£ per €

0.331%

Oil Brent $ Sep

4.30%

Gold $

0.06%

Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparisonAMERICAS EUROPE ASIASep 06 - - Index All World Sep 06 - Oct 05 Index All World Sep 06 - Oct 05 Index All World Sep 06 - Oct 05 Index All World Sep 06 - Oct 05 Index All World Sep 06 - Oct 05 Index All World

S&P 500 New York

3,455.063,394.68

Day 1.38% Month -0.94% Year 14.99%

Nasdaq Composite New York11,458.10

11,262.39

Day 1.69% Month -0.47% Year 41.06%

Dow Jones Industrial New York28,292.73 28,053.27

Day 1.34% Month -0.29% Year 5.56%

S&P/TSX COMP Toronto

16,448.90 16,338.03

Day 0.86% Month 0.72% Year -0.70%

IPC Mexico City

38,095.8836,771.96

Day 0.35% Month 0.86% Year -15.33%

Bovespa São Paulo

100,721.36

95,614.60

Day 1.70% Month -5.64% Year -6.84%

FTSE 100 London

5,799.085,942.94

Day 0.69% Month 2.58% Year -16.86%

FTSE Eurofirst 300 Europe

1,402.91 1,416.10

Day 0.76% Month 0.99% Year -5.26%

CAC 40 Paris

4,965.074,871.87

Day 0.97% Month -1.88% Year -11.23%

Xetra Dax Frankfurt

12,842.66 12,828.31

Day 1.10% Month -0.11% Year 6.79%

Ibex 35 Madrid

6,989.706,837.90

Day 1.23% Month -2.17% Year -23.70%

FTSE MIB Milan

19,391.25 19,265.51

Day 1.06% Month -0.66% Year -10.28%

Nikkei 225 Tokyo

23,247.15 23,312.14

Day 1.23% Month 0.46% Year 8.88%

Hang Seng Hong Kong

24,695.45

23,767.78

Day 1.32% Month -3.77% Year -7.97%

Shanghai Composite Shanghai

3,410.61

3,218.05

Day -0.20% Month -5.46% Year 9.75%

Kospi Seoul

2,368.25 2,358.00

Day 1.29% Month -0.43% Year 16.69%

FTSE Straits Times Singapore

2,509.64 2,517.23

Day 0.85% Month 0.24% Year -18.28%

BSE Sensex Mumbai

38,990.94 38,973.70

Day 0.71% Month 1.61% Year 3.45%

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 43867.23 43654.37Australia All Ordinaries 6135.10 5983.20

S&P/ASX 200 5941.60 5791.50S&P/ASX 200 Res 4382.40 4274.10

Austria ATX 2141.10 2100.79Belgium BEL 20 3293.89 3248.23

BEL Mid 7829.13 7778.73Brazil IBovespa 95614.60 94015.68Canada S&P/TSX 60 979.08 971.32

S&P/TSX Comp 16338.03 16199.25S&P/TSX Div Met & Min 559.84 551.87

Chile S&P/CLX IGPA Gen 18618.39 18591.26China FTSE A200 12037.52 12043.32

FTSE B35 9000.71 8988.96Shanghai A 3372.60 3379.22Shanghai B 248.10 248.39Shanghai Comp 3218.05 3224.36Shenzhen A 2249.63 2248.50Shenzhen B 935.19 934.27

Colombia COLCAP 1165.01 1162.36Croatia CROBEX 2013.05 2011.29

Cyprus CSE M&P Gen 68.46 68.68Czech Republic PX 862.93 857.72Denmark OMXC Copenahgen 20 1384.47 1365.53Egypt EGX 30 11007.69 11071.46Estonia OMX Tallinn 1169.29 1163.44Finland OMX Helsinki General 10214.78 10080.16France CAC 40 4871.87 4824.88

SBF 120 3868.18 3825.38Germany M-DAX 27706.29 27249.15

TecDAX 3123.38 3078.82XETRA Dax 12828.31 12689.04

Greece Athens Gen 633.43 625.67FTSE/ASE 20 1507.37 1486.76

Hong Kong Hang Seng 23767.78 23459.05HS China Enterprise 9447.99 9397.37HSCC Red Chip 3567.65 3589.83

Hungary Bux 33468.11 33449.84India BSE Sensex 38973.70 38697.05

Nifty 500 9516.30 9461.70Indonesia Jakarta Comp 4958.77 4926.73Ireland ISEQ Overall 6431.10 6386.07Israel Tel Aviv 125 1368.94 1355.52

Italy FTSE Italia All-Share 21093.66 20902.74FTSE Italia Mid Cap 34324.07 34056.05FTSE MIB 19265.51 19064.31

Japan 2nd Section 6255.53 6157.67Nikkei 225 23312.14 23029.90S&P Topix 150 1353.94 1332.14Topix 1637.25 1609.22

Jordan Amman SE 1576.63 1584.20Kenya NSE 20 1852.17 1855.53Kuwait KSX Market Index 6633.44 6603.51Latvia OMX Riga 1110.41 1122.87Lithuania OMX Vilnius 781.99 780.66Luxembourg LuxX 1060.53 1037.21Malaysia FTSE Bursa KLCI 1512.43 1500.30Mexico IPC 36771.96 36642.38Morocco MASI 10086.09 10012.92Netherlands AEX 557.92 553.12

AEX All Share 802.52 795.88New Zealand NZX 50 11898.26 11822.84Nigeria SE All Share 26985.77 26831.76Norway Oslo All Share 943.02 925.37Pakistan KSE 100 39072.47 40070.83

Philippines Manila Comp 5938.95 5999.40Poland Wig 50014.64 49043.26Portugal PSI 20 4135.98 4086.96

PSI General 3111.98 3084.02Romania BET Index 8869.35 8879.96Russia Micex Index 2881.98 2852.42

RTX 1157.86 1148.07Saudi-Arabia TADAWUL All Share Index 8257.67 8177.76Singapore FTSE Straits Times 2517.23 2496.11Slovakia SAX 350.12 358.06Slovenia SBI TOP 873.85 -South Africa FTSE/JSE All Share 54524.05 54219.24

FTSE/JSE Res 20 53031.38 52634.17FTSE/JSE Top 40 50183.12 49896.68

South Korea Kospi 2358.00 2327.89Kospi 200 313.51 309.44

Spain IBEX 35 6837.90 6754.50Sri Lanka CSE All Share 5587.18 6050.17Sweden OMX Stockholm 30 1839.68 1813.69

OMX Stockholm AS 735.21 725.75Switzerland SMI Index 10303.06 10252.40

Taiwan Weighted Pr 12548.28 12515.61Thailand Bangkok SET 1242.99 1237.54Turkey BIST 100 116840.94 116315.98UAE Abu Dhabi General Index 4487.74 4492.89UK FT 30 2141.80 2133.20

FTSE 100 5942.94 5902.12FTSE 4Good UK 5545.21 5510.53FTSE All Share 3326.83 3301.34FTSE techMARK 100 5752.41 5666.93

USA DJ Composite 9337.52 9217.90DJ Industrial 28053.27 27682.81DJ Transport 11430.82 11297.10DJ Utilities 843.57 832.49Nasdaq 100 11441.03 11255.69Nasdaq Cmp 11262.39 11075.02NYSE Comp 12906.28 12749.79S&P 500 3394.68 3348.44Wilshire 5000 34956.51 34470.87

Venezuela IBC 542702.31 542611.62Vietnam VNI 914.68 909.91

Cross-Border DJ Global Titans ($) 399.28 394.14Euro Stoxx 50 (Eur) 3220.22 3190.93Euronext 100 ID 975.25 965.36FTSE 4Good Global ($) 8452.25 8336.86FTSE All World ($) 376.88 371.74FTSE E300 1416.10 1405.35FTSE Eurotop 100 2649.76 2631.49FTSE Global 100 ($) 2236.82 2204.74FTSE Gold Min ($) 2610.09 2636.87FTSE Latibex Top (Eur) 4440.00 4432.20FTSE Multinationals ($) 2362.59 2391.09FTSE World ($) 669.44 659.90FTSEurofirst 100 (Eur) 3557.89 3531.14FTSEurofirst 80 (Eur) 4402.96 4359.83MSCI ACWI Fr ($) 564.11 568.00MSCI All World ($) 2362.41 2380.02MSCI Europe (Eur) 1472.64 1471.75MSCI Pacific ($) 2646.52 2666.99S&P Euro (Eur) 1484.72 1468.99S&P Europe 350 (Eur) 1450.81 1439.29S&P Global 1200 ($) 2643.52 2606.62Stoxx 50 (Eur) 2924.44 2911.13

(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 changeAmazon.com 56.4 3174.99 49.99Apple 51.5 115.18 2.16Nvidia 34.6 544.07 21.58Advanced Micro Devices 20.2 85.57 3.77Boeing 17.7 170.12 2.04Microsoft 17.2 208.87 2.68Regeneron Pharmaceuticals 17.1 604.74 39.94Facebook 12.7 263.35 3.41Netflix 8.4 514.46 11.40Alphabet 6.8 1479.43 23.83

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

UpsRegeneron Pharmaceuticals 604.74 39.94 7.07Loln National 34.56 1.92 5.87Cinnati Fin 82.24 4.46 5.73Comerica 41.50 2.17 5.52Technipfmc 6.72 0.34 5.33

DownsDr Horton 75.48 -2.41 -3.09Norwegian Cruise Line Holdings Ltd 16.89 -0.39 -2.23American Tower 238.15 -5.16 -2.12Las Vegas Sands 45.19 -0.96 -2.08Lennar 82.25 -1.61 -1.92

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

British American Tobacco 107.1 2794.00 41.50Astrazeneca 94.9 8409.00 -22.00Bp 94.3 217.80 3.40Vodafone 73.3 107.68 4.86Royal Dutch Shell 72.8 926.10 22.10Unilever 66.2 4840.00 -2.00Hsbc Holdings 60.6 309.35 1.15London Stock Exchange 57.2 9216.00 18.00Rio Tinto 56.7 4686.50 -7.50Int Consolidated Airlines S.a. 56.3 91.54 0.06


UpsWeir 1483.50 203.50 15.90Rolls-royce Holdings 123.40 9.80 8.63Network Int Holdings 275.20 21.80 8.60Tp Icap 234.60 17.40 8.01Provident Fin 211.20 15.30 7.81

DownsCineworld 25.20 -14.27 -36.15Greencore 95.00 -6.80 -6.68888 Holdings 254.00 -10.00 -3.79Watches Of Switzerland 333.50 -11.50 -3.33Dunelm 1455.00 -48.00 -3.19


Bayer Ag Na O.n. 256.8 46.77 1.83Daimler Ag Na O.n. 188.1 47.83 1.08Total 181.0 28.86 0.65Royal Dutch Shella 180.8 10.70 0.24Asml Holding 168.7 320.25 0.35Sap Se O.n. 162.8 132.40 -0.36Allianz Se Na O.n. 154.7 166.52 3.72Intesa Sanpaolo 152.4 1.63 0.04Lvmh 148.9 412.55 4.90Unilever 136.6 52.34 -0.06


UpsThyssenkrupp Ag O.n. 4.32 0.44 11.37Telefonica 3.14 0.24 8.32Natixis 2.03 0.13 6.93Galp Energia-nom 8.24 0.43 5.56Klepierre 11.81 0.53 4.70

DownsSuez 15.40 -0.67 -4.17Seadrill 0.19 -0.01 -3.49Kerry 108.60 -1.70 -1.54Rwe Ag Inh O.n. 33.00 -0.49 -1.46Adidas Ag Na O.n. 273.50 -3.40 -1.23


Softbank . 967.8 6750.00 227.00Ntt Docomo,. 662.9 3876.00 -2.00Sony 422.7 7892.00 139.00Fast Retailing Co., 326.3 66790.00 290.00Toyota Motor 278.2 6909.00 18.00Nippon Telegraph And Telephone 263.1 2226.00 41.00Kddi 241.8 2655.00 -22.00Tokyo Electron 228.6 27125.00 -440.00Daikin Industries, 194.0 19210.00 405.00Mitsubishi Ufj Fin,. 186.7 428.80 8.90


UpsHino Motors, 707.00 45.00 6.80Tokyo Electric Power ,orporated 300.00 18.00 6.38Central Japan Railway 15615.00 915.00 6.22Mitsubishi Motors 240.00 14.00 6.19Nippon Steel & Sumitomo Metal 1042.00 58.70 5.97

DownsTokyo Electron 27125.00 -440.00 -1.60Cyberagent,. 6250.00 -90.00 -1.42Kddi 2655.00 -22.00 -0.82Japan Exchange 2861.00 -20.00 -0.69M3,. 6330.00 -40.00 -0.63

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

Oct 05 %Chg %ChgFTSE 100 price(p) week ytdWinnersStandard Life Aberdeen 240.90 9.0 -28.3Rightmove 675.00 9.0 5.3Ferguson 8044.00 8.5 15.3National Grid 921.00 8.2 -3.1Sse 1285.00 8.0 -11.8Fresnillo 1263.50 7.7 96.23i 1055.50 7.7 -5.5Barratt Developments 511.40 7.5 -32.0Wpp 648.60 6.8 -39.3Informa 400.10 6.0 -53.9Gvc Holdings 1031.00 5.7 12.2Mondi 1690.00 5.5 -4.5

LosersRolls-royce Holdings 123.40 -17.3 -81.9Dcc 5546.00 -9.1 -16.1Bp 217.80 -7.1 -54.7Ocado 2668.00 -6.5 111.8Royal Dutch Shell 926.10 -5.2 -59.0Royal Dutch Shell 957.60 -4.5 -57.6Avast 521.50 -4.3 9.9Compass 1177.00 -4.3 -38.2Antofagasta 1002.50 -3.1 6.1Int Consolidated Airlines S.a. 91.54 -3.0 -64.3Homeserve 1227.00 -2.9 -4.3Bhp 1652.60 -2.5 -7.7

Oct 05 %Chg %ChgFTSE 250 price(p) week ytdWinners888 Holdings 254.00 23.9 53.6Weir 1483.50 21.2 -2.2Babcock Int 264.70 13.2 -58.1Liontrust Asset Management 1370.00 11.8 22.3Investec 153.90 11.5 -56.3Cmc Markets 354.50 10.6 140.2Ti Fluid Systems 160.06 10.3 -39.5Workspace 573.50 9.2 -52.1Itv 72.24 9.2 -52.1Mediclinic Int 289.00 8.5 -29.6Talktalk Telecom 85.85 8.4 -27.2Dunelm 1455.00 8.2 25.5

LosersCineworld 25.20 -42.5 -88.5Centamin 152.30 -23.7 20.2Tp Icap 234.60 -15.6 -43.8Greencore 95.00 -9.8 -64.4Vectura 101.00 -8.8 10.4Ssp 189.30 -7.7 -71.4Britvic 771.00 -6.8 -14.8Puretech Health 253.00 -6.5 -20.2Aston Martin Lagonda Global Holdings 50.00 -6.4 -71.64imprint 1780.00 -6.3 -48.0Helios Towers 149.60 -6.0 0.2Wh Smith 941.00 -6.0 -64.1

Oct 05 %Chg %ChgFTSE SmallCap price(p) week ytdWinnersXaar 132.00 50.0 151.9Halfords 243.00 32.8 42.7Alfa Fin Software Holdings 143.40 32.8 19.9Lamprell 27.80 25.8 -30.5888 Holdings 254.00 23.9 53.6Renewi 23.70 23.4 -33.5Asa Int 220.00 20.4 -Ted Baker 122.30 19.8 -65.3Schroder Eur Real Estate Investment Trust 70.70 19.0 -35.4Connect 21.50 15.3 -39.5Motorpoint 310.00 14.0 7.3Helical 310.00 13.8 -32.6

LosersKkv Secured Loan Fund 14.10 -25.4 -82.8Kkv Secured Loan Fund 34.35 -19.0 -59.7Amigo Holdings 9.74 -18.6 -86.2Topps Tiles 46.70 -13.5 -37.7Paypoint 536.00 -12.8 -47.7Marston's 40.08 -12.4 -69.1Mccoll's Retail 23.25 -10.6 -38.8Premier Oil 15.19 -10.3 -84.7Riverstone Energy 279.50 -10.3 -35.2Trifast 102.50 -10.1 -43.4Norcros 140.00 -9.7 -49.6Enquest 9.96 -9.1 -54.8

Oct 05 %Chg %ChgIndustry Sectors price(p) week ytdWinnersElectricity 7515.96 7.8 -Gas Water & Multiutilities 5013.60 5.6 -7.0Forestry & Paper 19025.17 5.5 -4.7Industrial Engineering 13171.84 4.0 -2.0General Industrials 5835.06 3.8 -9.0Media 7210.81 3.6 -General Financial 11253.62 3.4 -Electronic & Electrical Equip. 9393.57 3.4 8.1Mobile Telecommunications 2463.12 3.3 -Index - Technology Hardware & Equipment 2295.18 3.2 15.3Chemicals 12739.80 2.6 -4.2Health Care Equip.& Services 6468.86 2.4 -

LosersOil & Gas Producers 3514.29 -5.5 -Food & Drug Retailers 4197.57 -3.0 0.4Tobacco 28980.22 -1.6 -Software & Computer Services 2022.33 -1.1 -8.2Travel & Leisure 6520.04 -1.0 -Pharmaceuticals & Biotech. 17468.99 -0.9 -2.0Nonlife Insurance 2759.64 -0.7 -Mining 17961.87 -0.5 -5.6Oil Equipment & Services 3994.69 -0.5 -52.3Aerospace & Defense 3013.31 -0.3 -Real Estate & Investment Servic 2411.90 -0.2 -Fixed Line Telecommunication 1246.68 0.2 -

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

CURRENCIES

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

Oct 5 Currency Mid Change Mid Change Mid Change






Oct 5 Currency Mid Change Mid Change Mid ChangeArgentina Argentine Peso 77.0511 0.1070 90.8621 0.7257 99.9975 0.4747Australia Australian Dollar 1.3907 -0.0054 1.6400 0.0045 1.8049 -0.0010Bahrain Bahrainin Dinar 0.3771 0.0000 0.4447 0.0029 0.4894 0.0016Bolivia Bolivian Boliviano 6.9100 - 8.1486 0.0538 8.9679 0.0302Brazil Brazilian Real 5.6205 -0.0181 6.6279 0.0225 7.2943 0.0011Canada Canadian Dollar 1.3265 -0.0055 1.5643 0.0039 1.7215 -0.0013Chile Chilean Peso 794.6600 5.1650 937.0991 12.2420 1031.3161 10.1489China Chinese Yuan 6.8106 - 8.0314 0.0531 8.8389 0.0297Colombia Colombian Peso 3848.6800 -34.1700 4538.5395 -10.0412 4994.8478 -27.4007Costa Rica Costa Rican Colon 601.0300 -1.4500 708.7618 2.9842 780.0216 0.7477Czech Republic Czech Koruna 22.9773 -0.1552 27.0959 -0.0027 29.8201 -0.1004Denmark Danish Krone 6.3091 -0.0429 7.4400 -0.0010 8.1880 -0.0279Egypt Egyptian Pound 15.7311 0.0199 18.5508 0.1459 20.4159 0.0944Hong Kong Hong Kong Dollar 7.7500 -0.0002 9.1392 0.0601 10.0581 0.0336Hungary Hungarian Forint 305.3000 -0.4450 360.0236 1.8573 396.2208 0.7568India Indian Rupee 73.2900 0.1419 86.4269 0.7372 95.1163 0.5033

Indonesia Indonesian Rupiah 14800.0000 -60.0000 17452.8598 45.0256 19207.5724 -13.0321Israel Israeli Shekel 3.4061 -0.0247 4.0166 -0.0024 4.4204 -0.0171Japan Japanese Yen 105.6450 0.2900 124.5814 1.1628 137.1069 0.8362..One Month 105.6450 0.2899 124.5814 1.1629 137.1069 0.8361..Three Month 105.6449 0.2897 124.5815 1.1630 137.1068 0.8360..One Year 105.6445 0.2889 124.5817 1.1636 137.1069 0.8357Kenya Kenyan Shilling 108.5000 - 127.9481 0.8454 140.8122 0.4735Kuwait Kuwaiti Dinar 0.3062 - 0.3611 0.0024 0.3974 0.0013Malaysia Malaysian Ringgit 4.1525 -0.0115 4.8968 0.0189 5.3891 0.0032Mexico Mexican Peso 21.3240 -0.4090 25.1462 -0.3130 27.6745 -0.4360New Zealand New Zealand Dollar 1.5041 -0.0039 1.7737 0.0072 1.9520 0.0016Nigeria Nigerian Naira 385.5000 - 454.5991 3.0035 500.3050 1.6825Norway Norwegian Krone 9.1986 -0.1008 10.8473 -0.0464 11.9380 -0.0902Pakistan Pakistani Rupee 164.1000 -0.4000 193.5142 0.8100 212.9703 0.1988Peru Peruvian Nuevo Sol 3.6234 0.0085 4.2729 0.0382 4.7025 0.0268Philippines Philippine Peso 48.4250 -0.0600 57.1050 0.3070 62.8464 0.1337

Poland Polish Zloty 3.8075 -0.0324 4.4899 -0.0082 4.9413 -0.0252Romania Romanian Leu 4.1340 -0.0215 4.8749 0.0070 5.3651 -0.0098Russia Russian Ruble 78.2313 -0.2531 92.2538 0.3130 101.5291 0.0140Saudi Arabia Saudi Riyal 3.7509 -0.0001 4.4232 0.0291 4.8679 0.0162Singapore Singapore Dollar 1.3596 -0.0038 1.6032 0.0061 1.7644 0.0010South Africa South African Rand 16.4713 0.0088 19.4236 0.1386 21.3765 0.0832South Korea South Korean Won 1163.4500 -6.0500 1371.9930 1.9774 1509.9349 -2.7475Sweden Swedish Krona 8.8851 -0.0216 10.4777 0.0439 11.5312 0.0108Switzerland Swiss Franc 0.9149 -0.0051 1.0789 0.0012 1.1874 -0.0025Taiwan New Taiwan Dollar 28.8635 -0.0985 34.0371 0.1095 37.4593 -0.0014Thailand Thai Baht 31.3800 -0.2150 37.0047 -0.0074 40.7252 -0.1411Tunisia Tunisian Dinar 2.7550 -0.0122 3.2488 0.0072 3.5755 -0.0038Turkey Turkish Lira 7.7550 -0.0148 9.1450 0.0431 10.0645 0.0148United Arab Emirates UAE Dirham 3.6732 - 4.3315 0.0286 4.7670 0.0160United Kingdom Pound Sterling 0.7705 -0.0026 0.9086 0.0030 - -..One Month 0.7705 -0.0026 0.9086 0.0030 - -

..Three Month 0.7706 -0.0026 0.9085 0.0030 - -

..One Year 0.7708 -0.0026 0.9081 0.0030 - -United States United States Dollar - - 1.1792 0.0078 1.2978 0.0044..One Month - - 1.1792 -0.1142 1.2978 0.0044..Three Month - - 1.1790 -0.1142 1.2979 0.0044..One Year - - 1.1783 -0.1142 1.2981 0.0044Venezuela Venezuelan Bolivar Fuerte - - - - - -Vietnam Vietnamese Dong 23204.0000 12.0000 27363.2249 194.8489 30114.4046 116.8044European Union Euro 0.8480 -0.0056 - - 1.1005 -0.0036..One Month 0.8479 -0.0056 - - 1.1005 -0.0036..Three Month 0.8477 -0.0056 - - 1.1004 -0.0036..One Year 0.8470 -0.0056 - - 1.1000 -0.0036

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 TotalOct 05 chge% Index Oct 02 Oct 01 ago yield% Cover ratio adj Return

FTSE 100 (100) 5942.94 0.69 5099.06 5902.12 5879.45 7155.38 4.47 1.15 19.39 172.60 5647.71FTSE 250 (250) 17583.09 1.08 15086.35 17395.81 17383.46 19480.37 3.49 1.31 21.84 268.71 13899.72FTSE 250 ex Inv Co (182) 17757.47 1.14 15235.97 17557.22 17537.71 20469.20 3.82 1.42 18.48 241.47 14325.52FTSE 350 (350) 3359.71 0.76 2882.65 3334.40 3323.43 3987.82 4.30 1.18 19.78 89.46 6364.73FTSE 350 ex Investment Trusts (281) 3274.18 0.75 2809.26 3249.82 3238.40 3938.32 4.42 1.17 19.30 88.86 3200.84FTSE 350 Higher Yield (146) 2489.73 1.11 2136.20 2462.31 2449.31 3458.24 6.81 1.02 14.37 97.55 5168.95FTSE 350 Lower Yield (204) 4111.18 0.43 3527.40 4093.40 4087.37 4196.97 1.99 1.66 30.30 66.77 4854.95FTSE SmallCap (261) 5118.05 1.15 4391.31 5059.80 5063.30 5388.17 4.47 -0.92 -24.24 98.44 8087.49FTSE SmallCap ex Inv Co (143) 3826.97 1.24 3283.56 3779.99 3777.28 4316.63 5.56 -0.57 -31.43 56.67 6332.70FTSE All-Share (611) 3326.83 0.77 2854.43 3301.34 3290.91 3933.15 4.31 1.10 21.04 87.72 6366.44FTSE All-Share ex Inv Co (424) 3210.09 0.76 2754.27 3185.93 3174.89 3856.58 4.44 1.13 19.86 86.39 3187.33FTSE All-Share ex Multinationals (542) 1034.85 1.00 735.91 1024.59 1021.02 1144.10 3.65 0.86 32.06 18.86 2062.06FTSE Fledgling (92) 8851.56 0.67 7594.67 8792.23 8782.36 9265.10 3.22 0.89 35.11 172.17 18126.40FTSE Fledgling ex Inv Co (43) 10491.60 0.88 9001.83 10400.59 10323.44 10841.52 3.86 3.73 6.95 142.59 21013.09FTSE All-Small (353) 3554.41 1.13 3049.70 3514.86 3516.94 3741.30 4.40 -0.85 -26.69 68.46 7206.23FTSE All-Small ex Inv Co (186) 2868.26 1.23 2460.98 2833.46 2830.67 3222.18 5.49 -0.45 -40.32 42.30 6012.32FTSE AIM All-Share (719) 973.56 0.91 835.32 964.79 964.60 863.30 1.12 0.55 163.29 5.09 1115.32

FTSE Sector IndicesOil & Gas (12) 3642.05 2.18 3124.90 3564.39 3585.28 8713.26 10.62 1.29 7.28 257.00 4044.91Oil & Gas Producers (9) 3527.96 2.17 3027.01 3453.14 3473.79 8458.85 10.72 1.29 7.21 252.79 4062.01Oil Equipment Services & Distribution (3) 3899.18 2.94 3345.51 3787.98 3780.96 8045.92 4.33 1.15 20.17 11.22 3361.33Basic Materials (22) 6024.07 0.03 5168.67 6022.25 5999.31 5776.10 5.23 2.20 8.68 249.29 7234.62Chemicals (7) 13874.15 0.23 11904.07 13841.98 13737.52 12820.81 2.14 2.76 16.92 182.22 13299.30Forestry & Paper (1) 20759.96 -1.60 17812.12 21097.77 20784.53 18677.82 2.60 3.27 11.77 540.55 25289.48Industrial Metals & Mining (2) 3722.96 -0.76 3194.31 3751.64 3665.90 4214.42 12.03 1.60 5.19 453.68 5008.52Mining (12) 17193.64 0.12 14752.21 17173.53 17132.34 16568.60 5.61 2.17 8.20 759.08 10906.38Industrials (101) 5402.44 1.38 4635.31 5328.89 5313.54 5446.80 2.29 0.70 62.23 53.53 5979.27Construction & Materials (14) 6507.69 2.36 5583.62 6357.75 6326.70 6242.77 2.48 0.10 403.32 128.12 7514.34Aerospace & Defense (9) 3169.92 1.54 2719.80 3121.89 3101.05 5052.76 4.03 -1.87 -13.25 60.64 3654.93General Industrials (8) 4694.78 1.16 4028.14 4641.17 4653.16 4501.56 3.22 0.55 56.18 25.50 5815.78Electronic & Electrical Equipment (10)11088.07 1.13 9513.60 10964.63 11029.10 8988.04 1.26 1.86 42.66 59.60 10614.86Industrial Engineering (12) 14209.31 3.10 12191.63 13782.70 13706.50 12768.20 2.29 1.56 27.92 142.33 18533.09Industrial Transportation (6) 3150.38 -0.22 2703.04 3157.41 3147.38 3653.38 6.62 0.61 24.63 9.26 3197.00Support Services (42) 8922.34 0.96 7655.40 8837.77 8803.82 8423.94 1.52 2.25 29.27 64.17 9875.92Consumer Goods (42) 18215.90 0.25 15629.31 18169.78 18107.98 19268.50 4.49 1.58 14.13 558.19 15364.71Automobiles & Parts (2) 2550.64 0.86 2188.46 2528.82 2520.85 4273.33 0.87 2.98 38.48 0.00 2609.86Beverages (6) 21063.22 -0.07 18072.32 21078.09 20978.49 26108.39 2.71 1.63 22.65 528.83 16172.04Food Producers (10) 6572.07 -0.08 5638.86 6577.04 6538.59 7120.28 2.72 2.09 17.59 73.60 6087.08Household Goods & Home Construction (14)14466.70 -0.57 12412.48 14549.35 14553.19 13588.63 3.75 1.66 16.09 272.34 11615.83Leisure Goods (2) 26491.62 1.71 22729.90 26045.55 25964.02 13377.01 2.06 0.99 49.17 303.75 27688.44Personal Goods (6) 34606.95 0.15 29692.88 34554.62 34382.86 35494.57 2.99 2.85 11.73 679.19 25730.80Tobacco (2) 28980.27 1.48 24865.17 28558.86 28435.28 30615.16 8.48 1.15 10.27 1765.51 23296.61Health Care (15) 12354.80 0.08 10600.46 12344.85 12391.43 12157.73 3.41 1.22 23.99 363.07 10705.59Health Care Equipment & Services (6) 6535.47 0.64 5607.45 6494.12 6560.03 8445.96 2.07 1.00 48.47 120.44 6022.08Pharmaceuticals & Biotechnology (9) 17407.17 0.02 14935.41 17402.84 17457.38 16589.00 3.54 1.24 22.83 530.70 13546.49Consumer Services (82) 4456.37 1.04 3823.58 4410.64 4404.08 5241.38 3.13 1.38 23.16 56.89 4547.16Food & Drug Retailers (5) 4360.45 1.01 3741.28 4316.68 4348.76 4086.16 3.01 1.01 33.00 83.13 5485.79General Retailers (27) 2241.65 0.17 1923.34 2237.95 2238.25 2009.82 2.40 1.33 31.35 8.19 2800.91Media (15) 7334.24 1.50 6292.81 7225.59 7117.62 8744.72 3.16 1.71 18.48 113.07 4934.32Travel & Leisure (35) 6360.34 1.20 5457.19 6284.88 6313.10 9469.83 3.64 1.31 21.02 82.37 6527.08Telecommunications (6) 1540.55 3.81 1321.80 1484.07 1472.93 2317.91 8.78 -0.44 -26.13 43.50 2083.27Fixed Line Telecommunications (3) 1292.41 1.48 1108.90 1273.61 1274.38 2155.44 13.76 1.27 5.74 3.51 1416.21Mobile Telecommunications (3) 2459.39 4.61 2110.16 2351.04 2326.81 3555.76 7.11 -1.54 -9.15 90.67 2998.62Utilities (8) 7110.38 -0.50 6100.73 7145.78 7020.25 6786.39 5.93 0.90 18.71 275.61 9819.27Electricity (3) 7498.90 0.15 6434.08 7487.50 7310.94 7328.28 6.20 0.81 19.99 462.14 13751.30Gas Water & Multiutilities (5) 6625.99 -0.68 5685.12 6671.44 6565.78 6280.13 5.85 0.93 18.37 212.92 9020.14Financials (308) 3784.68 0.79 3247.27 3754.93 3728.36 4666.82 3.75 0.42 63.14 73.71 3935.76Banks (11) 1890.89 0.48 1622.39 1881.87 1859.18 3457.07 5.04 -0.28 -71.95 0.02 1557.36Nonlife Insurance (8) 3158.95 0.41 2710.39 3146.20 3124.35 3548.20 4.14 1.57 15.44 95.57 6244.96Life Insurance/Assurance (7) 6144.25 0.96 5271.79 6086.04 5996.18 6906.64 3.91 2.15 11.92 229.31 6957.25Real Estate Investment & Services (17) 2262.72 1.20 1941.42 2235.86 2239.33 2476.47 2.28 2.09 20.93 25.47 6485.69Real Estate Investment Trusts (39) 2215.05 0.67 1900.52 2200.25 2189.85 2671.84 4.30 -0.97 -24.04 51.35 3134.03General Financial (39) 9523.79 0.98 8171.44 9431.19 9346.88 9834.20 3.49 0.93 30.71 285.99 12285.68Equity Investment Instruments (187) 11306.69 0.96 9701.18 11199.60 11209.92 10459.41 2.52 0.39 101.58 214.83 6731.48Non Financials (303) 4055.87 0.77 3479.95 4025.07 4017.62 4724.94 4.49 1.29 17.20 116.26 6818.88Technology (15) 2134.08 1.06 1831.05 2111.79 2117.58 1921.38 3.22 0.11 280.58 30.39 2973.82Software & Computer Services (13) 2272.23 1.01 1949.58 2249.61 2260.91 2109.20 3.42 -0.01-3865.74 32.71 3349.54Technology Hardware & Equipment (2) 5653.32 1.56 4850.57 5566.65 5454.37 3543.73 1.23 3.38 23.98 69.78 7017.68

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 5972.40 5926.14 5931.07 5943.17 5948.70 5952.56 5943.27 5933.46 5951.15 5974.00 5917.02FTSE 250 17527.35 17502.97 17503.07 17529.17 17541.01 17571.15 17556.37 17558.52 17586.01 17586.01 17485.92FTSE SmallCap 5077.82 5079.44 5084.57 5089.68 5089.88 5095.95 5097.50 5103.96 5107.74 5118.05 5075.66FTSE All-Share 3337.32 3315.93 3318.24 3324.59 3327.44 3330.28 3325.68 3321.52 3330.37 3337.49 3311.70Time of FTSE 100 Day's high:07:03:45 Day's Low08:32:30 FTSE 100 2010/11 High: 7674.56(17/01/2020) Low: 4993.89(23/03/2020)Time of FTSE All-Share Day's high:07:04:00 Day's Low08:32:00 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

Oct 02 Oct 01 Sep 30 Sep 29 Sep 28 Yr Ago High LowFT 30 2141.80 2133.20 2112.70 2107.10 2130.40 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 Low2133.2 2118.1 2122.2 2081.1 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

Oct 02 Oct 01 Mnth Ago Oct 05 Oct 02 Mnth Ago

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

Sweden - - -Switzerland - - -UK 77.43 76.96 79.43USA - - -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 56.61Tech Hardware & Eq 27.94Electronic & Elec Eq 7.17Personal Goods 4.31Equity Invest Instr -0.39Food & Drug Retailer -1.02Pharmace & Biotech -1.66Chemicals -2.46Support Services -3.08Forestry & Paper -3.10Household Goods & Ho -3.36Health Care -4.10Basic Materials -5.13Mining -5.53Gas Water & Multi -6.47Industrial Eng -6.52Technology -6.69

General Retailers -7.07Utilities -7.46Industrial Metals & -7.83Software & Comp Serv -9.22Consumer Goods -9.77Electricity -10.74Industrials -11.10Financial Services -13.47Construct & Material -13.93FTSE SmallCap Index -14.97Nonlife Insurance -15.14Beverages -16.99Tobacco -17.19Food Producers -18.55NON FINANCIALS Index -19.22Industrial Transport -19.73FTSE 250 Index -20.51FTSE All{HY-}Share Index -21.33

FTSE 100 Index -21.75Media -22.19Consumer Services -22.37Health Care Eq & Srv -23.16Real Est Invest & Se -23.87Life Insurance -25.90Financials -27.03Real Est Invest & Tr -27.03Mobile Telecomms -29.49Telecommunications -34.71Travel & Leisure -37.88Aerospace & Defense -40.13Fixed Line Telecomms -46.12Banks -49.63Automobiles & Parts -54.00Oil Equipment & Serv -56.32Oil & Gas -57.33Oil & Gas Producers -57.34

FTSE GLOBAL EQUITY INDEX SERIES

Oct 3 No of US $ Day Mth YTD Total YTD Gr DivRegions & countries stocks indices % % % retn % Yield

Oct 3 No of US $ Day Mth YTD Total YTD Gr DivSectors stocks indices % % % retn % Yield

FTSE Global All Cap 9044 630.93 -0.6 -4.7 -0.9 969.18 0.9 2.1FTSE Global All Cap 8862 644.62 1.1 5.3 1.3 987.78 2.8 2.1FTSE Global Large Cap 1740 571.09 -0.9 -5.3 0.6 903.49 2.5 2.1FTSE Global Mid Cap 2236 784.27 0.2 -3.4 -5.4 1133.24 -4.0 2.2FTSE Global Small Cap 5068 823.01 0.1 -2.7 -4.8 1144.09 -3.5 1.9FTSE All-World 3976 371.74 -0.7 -5.0 -0.4 604.31 1.4 2.2FTSE World 2568 659.90 -0.7 -5.0 -0.7 1439.67 1.1 2.1FTSE Global All Cap ex UNITED KINGDOM In 8753 667.69 -0.7 -4.8 0.4 1007.27 2.1 2.0FTSE Global All Cap ex USA 7288 482.61 -0.3 -3.0 -7.0 809.46 -4.8 2.7FTSE Global All Cap ex JAPAN 7641 651.06 -0.6 -5.1 -0.7 1009.32 1.0 2.1FTSE Global All Cap ex Eurozone 8400 665.24 -0.6 -4.8 -0.1 1000.73 1.7 2.1FTSE Developed 2139 605.94 -0.7 -5.1 0.1 938.29 1.8 2.1FTSE Developed All Cap 5646 630.68 -0.6 -4.9 -0.5 962.92 1.2 2.1FTSE Developed Large Cap 835 570.47 -0.9 -5.5 1.2 899.00 3.0 2.1FTSE Developed Europe Large Cap 225 343.95 0.1 -3.5 -10.4 641.41 -8.2 3.0FTSE Developed Europe Mid Cap 345 589.06 0.2 -2.3 -6.8 960.22 -5.3 2.5FTSE Dev Europe Small Cap 697 797.54 -0.1 -2.2 -11.2 1252.82 -9.8 2.4FTSE North America Large Cap 224 741.60 -1.3 -6.6 6.4 1078.32 8.0 1.7FTSE North America Mid Cap 412 909.78 0.4 -4.5 -3.8 1220.31 -2.6 2.0FTSE North America Small Cap 1301 917.05 0.4 -3.1 -3.9 1187.66 -2.8 1.6FTSE North America 636 479.66 -1.0 -6.3 4.5 712.71 6.0 1.8FTSE Developed ex North America 1503 250.57 -0.2 -2.7 -7.9 452.75 -5.8 2.8FTSE Japan Large Cap 181 388.12 -0.7 -0.9 -2.2 544.34 0.1 2.3FTSE Japan Mid Cap 335 585.93 -0.8 1.0 -6.8 779.25 -4.8 2.2FTSE Global wi JAPAN Small Cap 887 655.21 -1.1 3.4 -5.8 902.46 -3.8 2.2FTSE Japan 516 161.98 -0.7 -0.5 -3.1 254.31 -0.9 2.3FTSE Asia Pacific Large Cap ex Japan 934 734.21 -0.4 -3.6 1.0 1267.95 3.2 2.5FTSE Asia Pacific Mid Cap ex Japan 900 849.89 -0.3 -3.4 -1.9 1407.77 0.2 3.1FTSE Asia Pacific Small Cap ex Japan 1890 554.49 -0.4 -4.2 2.1 898.51 4.3 2.7FTSE Asia Pacific Ex Japan 1834 572.70 -0.4 -3.6 0.8 1050.58 3.0 2.6FTSE Emerging All Cap 3398 758.60 -0.3 -3.7 -4.0 1245.41 -1.7 2.6FTSE Emerging Large Cap 905 733.32 -0.4 -3.8 -3.2 1211.74 -1.0 2.4FTSE Emerging Mid Cap 932 873.19 0.0 -2.7 -10.3 1431.48 -8.0 3.3FTSE Emerging Small Cap 1561 727.84 -0.1 -3.5 -3.7 1145.92 -1.4 2.9FTSE Emerging Europe 76 290.77 -2.4 -7.2 -33.9 547.07 -30.8 7.2FTSE Latin America All Cap 240 611.07 -0.7 -9.4 -38.0 1040.62 -36.7 3.0FTSE Middle East and Africa All Cap 322 578.57 0.5 0.4 -16.1 997.80 -13.8 3.5FTSE Global wi UNITED KINGDOM All Cap In 291 270.98 0.9 -3.5 -24.2 514.97 -22.3 4.5FTSE Global wi USA All Cap 1756 822.20 -0.9 -6.0 4.2 1154.20 5.6 1.7FTSE Europe All Cap 1418 406.70 0.0 -3.3 -10.6 728.96 -8.5 2.9FTSE Eurozone All Cap 644 395.01 -0.2 -4.1 -9.2 705.91 -7.2 2.4FTSE EDHEC-Risk Efficient All-World 3976 410.14 0.0 -3.0 -5.2 615.65 -3.5 2.4FTSE EDHEC-Risk Efficient Developed Europe 570 319.54 0.1 -2.1 -5.5 531.42 -3.8 2.5Oil & Gas 128 205.00 -0.1 -12.6 -43.7 379.33 -41.3 6.6Oil & Gas Producers 93 190.09 -0.2 -13.6 -46.2 359.56 -43.9 6.9

Oil Equipment & Services 24 163.00 0.8 0.8 -39.1 272.21 -36.5 6.5Basic Materials 355 511.03 0.0 0.0 -0.6 865.67 2.2 3.1Chemicals 163 752.78 0.3 0.3 0.4 1262.72 2.9 2.7Forestry & Paper 21 261.25 0.5 0.5 -6.1 495.26 -3.4 2.8Industrial Metals & Mining 93 326.04 -0.3 -0.3 -13.8 556.57 -11.2 4.0Mining 78 769.38 -0.6 -0.6 5.5 1333.31 9.1 3.6Industrials 746 448.03 0.0 0.0 -0.2 688.55 1.4 1.8Construction & Materials 147 539.32 0.4 0.4 -2.7 870.64 -0.9 2.0Aerospace & Defense 36 612.53 0.8 0.8 -31.6 925.90 -30.8 2.4General Industrials 71 206.20 0.5 0.5 -9.5 347.11 -7.6 2.7Electronic & Electrical Equipment 140 537.61 -0.2 -0.2 5.6 750.43 7.2 1.6Industrial Engineering 148 880.60 0.6 0.6 6.2 1346.59 8.0 1.7Industrial Transportation 122 837.22 0.0 0.0 10.5 1294.53 12.3 1.8Support Services 82 561.82 -0.9 -0.9 11.3 814.72 12.6 1.2Consumer Goods 532 526.41 -0.7 -0.7 3.2 847.06 5.2 2.3Automobiles & Parts 128 441.48 -2.0 -2.0 15.9 693.54 18.1 2.0Beverages 67 638.54 -0.4 -0.4 -9.8 1035.64 -8.2 2.6Food Producers 132 692.29 0.0 0.0 1.5 1137.34 3.7 2.4Household Goods & Home Construction 62 561.12 -0.3 -0.3 10.8 896.39 12.8 2.2Leisure Goods 43 275.17 -2.2 -2.2 13.6 379.03 14.9 1.1Personal Goods 87 928.75 -0.2 -0.2 3.1 1380.35 4.3 1.5Tobacco 13 833.55 0.5 0.5 -16.4 2080.19 -11.8 7.4Health Care 306 635.18 -0.8 -0.8 4.0 976.04 5.7 1.8Health Care Equipment & Services 111 1243.15 -0.4 -0.4 6.0 1496.11 6.8 0.8Pharmaceuticals & Biotechnology 195 420.69 -1.0 -1.0 2.5 686.64 4.7 2.4Consumer Services 441 628.37 -1.1 -1.1 12.7 878.95 13.6 1.1Food & Drug Retailers 69 271.67 -0.2 -0.2 -7.9 410.42 -5.8 2.7General Retailers 145 1209.72 -1.3 -1.3 33.6 1626.93 34.4 0.6Media 87 387.21 -1.7 -1.7 0.8 545.08 1.6 1.3Travel & Leisure 140 426.50 0.0 0.0 -17.7 610.04 -16.7 2.0Telecommunication 98 142.59 0.3 0.3 -11.1 308.03 -8.0 4.8Fixed Line Telecommuniations 43 111.55 0.2 0.2 -17.6 269.71 -14.4 5.9Mobile Telecommunications 55 163.78 0.3 0.3 -1.8 310.57 1.1 3.5Utilities 191 297.37 0.7 0.7 -6.4 648.94 -3.8 3.5Electricity 131 333.19 0.7 0.7 -6.4 716.86 -3.7 3.5Gas Water & Multiutilities 60 300.28 0.7 0.7 -6.5 676.27 -3.9 3.4Financials 867 213.17 0.3 0.3 -19.4 385.45 -17.4 3.2Banks 272 144.77 0.4 0.4 -32.2 287.21 -30.2 4.6Nonlife Insurance 74 260.71 0.2 0.2 -15.5 408.79 -13.6 2.3Life Insurance 54 191.19 0.7 0.7 -20.8 341.54 -18.1 3.8Financial Services 210 358.00 0.0 0.0 -3.3 524.73 -1.8 2.0Technology 312 452.03 -2.0 -2.0 25.7 578.77 26.8 1.0Software & Computer Services 164 762.41 -1.8 -1.8 25.4 911.68 26.0 0.5Technology Hardware & Equipment 148 351.36 -2.3 -2.3 26.4 479.78 28.1 1.5Alternative Energy 11 188.91 -0.4 -0.4 49.3 268.50 51.5 0.8Real Estate Investment & Services 159 326.41 0.0 0.0 -11.6 599.97 -9.0 2.9Real Estate Investment Trusts 98 436.76 1.2 1.2 -11.9 954.36 -9.5 3.8FTSE Global Large Cap 1770 585.76 1.1 1.1 3.2 924.45 4.9 2.2

The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please 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 1055.5 15.50Admiral Group PLC 2705 32.00Anglo American PLC 1879 9.00Antofagasta PLC 1002.5 1.00Ashtead Group PLC 2879 44.00Associated British Foods PLC 1921 7.00Astrazeneca PLC 8409 -22.00Auto Trader Group PLC 577.40 2.40Avast PLC 521.50 5.00Aveva Group PLC 4820 23.00Aviva PLC 291.30 3.70B&M European Value Retail S.A. 493.50 1.10Bae Systems PLC 495.10 1.90Barclays PLC 99.45 1.74Barratt Developments PLC 511.40 20.30Berkeley Group Holdings (The) PLC 4414 58.00Bhp Group PLC 1652.6 -2.00BP PLC 217.80 3.40British American Tobacco PLC 2794 41.50British Land Company PLC 352.50 3.30Bt Group PLC 100.30 1.60Bunzl PLC 2521 -2.00Burberry Group PLC 1590.5 28.00Coca-Cola Hbc AG 1969 17.00Compass Group PLC 1177 16.50Crh PLC 2864 64.00Croda International PLC 6326 4.00Dcc PLC 5546 24.00Diageo PLC 2681.5 -1.50Evraz PLC 346.40 -3.60Experian PLC 2999 48.00Ferguson PLC 8044 54.00Flutter Entertainment PLC 12480 235.00Fresnillo PLC 1263.5 15.50Glaxosmithkline PLC 1449.8 5.20Glencore PLC 163.72 1.96Gvc Holdings PLC 1031 36.00Halma PLC 2393 18.00Hargreaves Lansdown PLC 1630 12.50Hikma Pharmaceuticals PLC 2631 2.00Homeserve PLC 1227 4.00HSBC Holdings PLC 309.35 1.15Imperial Brands PLC 1383 18.00Informa PLC 400.10 13.00Intercontinental Hotels Group PLC 4078 76.00Intermediate Capital Group PLC 1245 30.00International Consolidated Airlines Group S.A. 91.54 0.06Intertek Group PLC 6406 -34.00Jd Sports Fashion PLC 794.00 -4.00Johnson Matthey PLC 2455 30.00Just Eat Takeaway.Com N.V. 8732 -26.00

Kingfisher PLC 295.80 1.20Land Securities Group PLC 539.40 2.10Legal & General Group PLC 196.95 1.15Lloyds Banking Group PLC 26.99 -0.21London Stock Exchange Group PLC 9216 18.00M&G PLC 164.00 3.10Melrose Industries PLC 123.55 6.90Mondi PLC 1690 -27.50Morrison (Wm) Supermarkets PLC 171.80 0.90National Grid PLC 921.00 -5.60Natwest Group PLC 110.90 1.05Next PLC 6166 24.00Ocado Group PLC 2668 9.00Pearson PLC 552.20 -6.20Pennon Group PLC 1060 -11.00Persimmon PLC 2597 61.00Phoenix Group Holdings PLC 714.40 14.60Polymetal International PLC 1691.5 -4.50Prudential PLC 1135.5 7.50Reckitt Benckiser Group PLC 7492 -180.00Relx PLC 1758.5 11.50Rentokil Initial PLC 542.80 -1.00Rightmove PLC 675.00 20.00Rio Tinto PLC 4686.5 -7.50Rolls-Royce Holdings PLC 123.40 9.80Royal Dutch Shell PLC 926.10 22.10Royal Dutch Shell PLC 957.60 24.50Rsa Insurance Group PLC 456.60 1.90Sage Group PLC 724.00 3.20Sainsbury (J) PLC 198.55 6.95Schroders PLC 2835 58.00Scottish Mortgage Investment Trust PLC 1003 10.50Segro PLC 957.60 1.60Severn Trent PLC 2492 -34.00Smith & Nephew PLC 1532 7.50Smith (Ds) PLC 310.00 2.40Smiths Group PLC 1403 -1.00Smurfit Kappa Group PLC 3128 -6.00Spirax-Sarco Engineering PLC 11105 55.00Sse PLC 1285 -1.50St. James's Place PLC 969.40 16.40Standard Chartered PLC 362.60 2.70Standard Life Aberdeen PLC 240.90 0.80Taylor Wimpey PLC 110.80 1.50Tesco PLC 212.60 2.60Unilever PLC 4840 -2.00United Utilities Group PLC 888.00 -8.20Vodafone Group PLC 107.68 4.86Whitbread PLC 2189 19.00Wpp PLC 648.60 23.00

UK STOCK MARKET TRADING DATA

Oct 05 Oct 02 Oct 01 Sep 30 Sep 29 Yr Ago- - - - - -

Order Book Turnover (m) 17.77 47.76 47.76 27.25 26.64 545.16Order Book Bargains 814838.00 869409.00 869409.00 903844.00 858180.00 810168.00Order Book Shares Traded (m) 1412.00 1351.00 1351.00 1462.00 1619.00 1391.00Total Equity Turnover (£m) 3812.89 4171.38 4171.38 4671.67 4662.57 4409.89Total Mkt Bargains 1029346.00 1082617.00 1082617.00 1116426.00 1067194.00 1009531.00Total Shares Traded (m) 9528.00 10645.00 10645.00 10842.00 10589.00 12269.00† 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 [email protected]

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 TotalMulberry Group Pre 149.321 166.268 47.866L 5.008L 78.900L 8.200L 0.00000 5.00000 - 0.000 5.000Mustang Energy Int 0.000 - 0.095L - 1.000L - 0.00000 - - 0.000 -Quadrise Fuels International Pre 0.000 0.022 4.990L 3.167L 0.490L 0.340L 0.00000 0.00000 - 0.000 0.000

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)09/29 5.00 CRTM Critical Metals PLC 5.03 -0.55 5.90 4.75 152.309/25 73.00 AIM VARE Various Eateries PLC 68.00 0.00 74.00 65.10 6052.609/16 500.00 THG THG Holdings PLC 600.00 2.00 658.30 565.30 582387.909/02 200.00 AIM KOO Kooth PLC 245.00 12.00 247.60 227.00 8098.7

§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

OCTOBER 6 2020 Section:Stats Time: 5/10/2020 - 18:29 User: gerry.white Page Name: MARKET DATA 1, Part,Page,Edition: USA, 12, 1


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 m

Australia (A$)ANZ 17.80 0.72 28.28 14.10 8.01 12.87 36300.6BHPBilltn 36.14 1.02 41.47 24.05 4.99 14.25 76552.49CmwBkAu 65.99 2.27 91.05 53.44 6.57 16.20 83998.29CSL 289.21 4.54 342.75 234.00 0.88 47.75 94602.99NatAusBk 18.19 0.70 29.23 13.20 8.13 18.27 43032.89Telstra 2.83 0.06 3.94 2.76 3.55 18.39 24201.91Wesfarmers 45.26 0.68 49.67 29.75 3.77 26.91 36900.03Westpc 17.29 0.72 29.39 13.47 8.97 14.57 44901.95Woolworths 37.13 0.64 43.96 32.12 2.79 40.04 33722.61Belgium (€)AnBshInBv 46.79 0.98 85.47 29.03 - - -KBC Grp 43.21 0.48 73.56 33.44 - - -Brazil (R$)Ambev 12.66 0.13 19.58 10.36 4.17 20.96 35443.2Bradesco 18.35 0.23 32.45 14.05 1.36 5.92 14480Cielo 3.90 -0.03 9.07 3.23 2.14 14.11 1885.17ItauHldFin 21.62 0.10 32.79 19.46 4.02 10.37 19072.91Petrobras♦ 19.86 0.68 33.65 10.50 2.83 - 26298.06Vale 59.52 1.20 63.88 32.45 3.49 40.33 55962.06Canada (C$)BCE♦ 55.49 0.04 65.45 46.03 5.99 19.94 37829.74BkMontrl 78.41 1.01 104.75 55.76 5.24 10.65 38008.43BkNvaS♦ 55.58 -0.51 76.75 46.38 6.34 10.10 50758.07Brookfield 45.03 -0.04 60.48 31.35 1.40-327.57 53422.99CanadPcR♦ 404.36 0.11 410.64 252.00 0.84 23.38 41313.29CanImp♦ 100.64 0.92 115.96 67.52 5.64 11.95 33799.9CanNatRs 21.28 0.48 42.57 9.80 7.69 693.11 18942.02CanNatRy 142.39 0.46 143.71 92.01 1.60 27.56 76371.72Enbridge 39.02 0.42 57.32 33.06 8.12 40.58 59572.63GtWesLif 27.03 0.42 35.60 18.88 6.44 10.03 18903.37ImpOil 15.57 0.01 35.80 10.27 5.78-380.37 8613.58Manulife 19.15 0.26 27.78 12.58 5.66 9.55 28003.81Nutrien♦ 53.87 2.39 67.37 34.80 4.66 26.48 23113.37RylBkC 94.95 0.68 109.68 72.00 4.39 12.46 101883.54Suncor En 15.96 0.01 45.12 14.02 9.71 -4.43 18350.1ThmReut 107.34 0.68 109.99 75.91 1.92 24.61 40181.11TntoDom 63.37 0.87 77.72 49.01 4.73 12.54 86172.46TrnCan♦ 55.20 -0.71 76.58 47.05 5.41 12.86 39112.96ValeantPh 30.80 -1.06 36.02 14.01 - -3.78 8158.48China (HK$)AgricBkCh 2.40 -0.02 3.50 2.40 8.73 3.79 9519.2Bk China 2.40 - 3.39 2.38 9.18 3.79 25896.15BkofComm 3.74 0.02 5.68 3.66 9.71 3.53 16896.02BOE Tech 0.65 - 0.80 0.47 - -4.48 16.69Ch Coms Cons 4.01 -0.04 6.63 3.99 6.69 3.71 2290.88Ch Evrbrght 2.44 - 3.97 2.43 10.07 3.72 3991.77Ch Rail Cons 5.33 - 9.99 5.26 4.53 3.54 1427.95Ch Rail Gp 3.58 -0.06 5.05 3.45 4.12 3.19 1943.52ChConstBk 4.98 -0.04 6.85 4.97 7.39 4.42 154487.36China Vanke 23.65 - 34.75 21.65 5.10 5.84 5778.3ChinaCitic 2.99 - 4.79 2.97 9.26 3.17 5741.54ChinaLife 18.16 0.82 22.90 11.64 4.64 8.77 17436.24ChinaMBank 36.65 0.10 43.40 29.80 3.77 8.90 21710.37ChinaMob 49.50 0.05 70.00 45.20 6.93 8.34 130778.14ChinaPcIns 22.10 0.20 32.50 17.90 6.31 6.76 7914.02ChMinsheng 3.99 -0.07 6.06 3.98 10.69 3.12 4283.62ChMrchSecs 21.61 -0.27 26.04 13.10 1.02 21.87 23550.02Chna Utd Coms 4.85 -0.01 6.25 4.82 1.25 27.99 15310.73ChShenEgy 13.70 -0.20 16.88 11.94 10.67 5.97 6007.78ChShpbldng 4.34 -0.01 5.66 3.98 0.21-154.03 11651.24ChStConEng 5.08 0.03 6.20 4.76 3.67 5.20 30771.06ChUncHK 5.09 0.04 8.76 3.84 2.93 12.62 20095.93CNNC Intl 4.39 -0.03 5.42 4.02 2.75 14.06 10033.18CSR 3.16 0.08 6.10 3.03 5.47 7.42 1782.26Daqin 6.37 -0.01 8.26 6.32 7.59 8.32 13905.06Gree Elec Apl 0.10 0.00 0.37 0.01 - -0.03 4.40GuosenSec 13.45 -0.20 16.14 10.38 1.50 22.25 16193.85HaitongSecs 6.61 0.05 9.58 5.79 - 6.92 2908.02Hngzh HikVDT 38.11 0.90 40.50 27.00 1.85 27.18 45299.3Hunng Pwr 2.96 -0.03 4.24 2.24 5.36 23.39 1795.22IM Baotou Stl 1.15 - 1.50 1.04 0.61-126.81 5348.7In&CmBkCh 4.00 -0.02 6.11 3.96 7.57 4.29 44797.01IndstrlBk 16.13 0.23 20.42 14.93 - 5.54 46456.17Kweichow 1668.5 16.20 1828 960.10 1.03 47.45 307750.62Midea 0.68 0.01 1.17 0.58 - -2.34 18.87New Ch Life Ins 29.50 0.65 37.30 20.45 3.01 6.54 3936.26PetroChina 2.24 -0.03 4.23 2.20 5.81 -28.23 6098.22PingAnIns 80.10 0.60 101.00 69.00 2.98 10.28 76973.84PngAnBnk 15.17 0.37 17.60 11.91 - 11.32 43224.57Pwr Cons Corp 3.77 -0.05 4.88 3.40 3.68 8.24 6168.98SaicMtr 19.13 - 25.39 16.90 6.59 12.09 32817.21ShenwanHong 0.04 0.00 0.13 0.03 - -0.16 45.20ShgPdgBk 9.39 -0.04 13.33 9.35 - 5.39 38747.56Sinopec Corp 3.11 - 4.85 3.05 14.28 14.02 10238.29Sinopec Oil 1.81 -0.01 2.59 1.67 - 48.60 3200.46Denmark (kr)DanskeBk 87.00 2.16 123.60 68.04 - - -MollerMrsk 10155 203.00 10555 4976 - - -NovoB 442.00 5.50 456.30 331.70 - - -

Finland (€)Nokia 3.33 0.06 4.84 2.08 - - -SampoA 35.68 1.28 42.46 21.34 - - -France (€)Airbus Grpe 65.80 1.18 139.40 48.12 - - -AirLiquide 133.50 -1.65 143.90 94.86 - - -AXA 15.92 0.26 25.62 11.84 - - -BNP Parib 31.46 0.97 54.22 24.51 - - -ChristianDior 362.80 12.00 484.60 252.40 - - -Cred Agr 7.38 0.13 13.80 5.70 - - -Danone 55.26 0.20 80.80 50.26 - - -EDF 9.70 0.00 13.61 5.98 - - -Engie SA 11.51 0.05 16.80 8.63 - - -EssilorLuxottica 117.80 -0.70 145.00 86.76 - - -Hermes Intl 752.60 6.20 788.20 516.00 - - -LOreal 280.00 -1.20 297.20 196.00 - - -LVMH 412.55 4.90 439.05 278.70 - - -Orange 9.16 0.32 15.38 8.63 - - -PernodRic 136.35 1.65 174.40 112.25 - - -Renault 21.78 0.59 56.07 12.77 - - -Safran 84.80 0.40 152.30 51.10 - - -Sanofi 86.52 0.44 95.82 67.65 - - -Sant Gbn 36.70 0.49 39.57 16.41 - - -Schneider 107.55 0.85 108.90 61.72 - - -SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81SocGen 11.39 0.35 32.23 10.77 - - -Total 28.86 0.65 50.93 21.12 - - -UnibailR 190.00 0.35 236.45 177.35 2.94 -7.05 22215.04Vinci 74.30 0.96 107.35 54.76 - - -Vivendi 24.35 0.37 26.42 16.60 - - -Germany (€)Allianz 166.52 3.72 232.60 117.10 5.77 10.39 81919.37BASF 53.34 1.31 72.17 37.36 6.19 46.47 57773.17Bayer 46.77 1.84 78.34 43.87 5.99 -6.30 54183.93BMW 64.03 1.67 77.06 36.60 5.32 8.82 45454.9Continental 98.32 2.06 133.10 51.45 - -7.19 23189.37Daimler 47.83 1.08 54.50 21.02 - -170.75 60342.36Deut Bank 7.36 0.16 10.37 4.45 - -5.79 17938.04Deut Tlkm 14.69 0.18 16.75 10.41 4.09 18.83 82483.27DeutsPost 39.52 0.29 40.12 19.11 - 22.07 57625.88E.ON 9.72 0.02 11.56 7.60 4.74 31.34 30269.28Fresenius Med 72.04 1.42 81.10 53.50 - 16.44 25862.77Fresenius SE 38.82 0.72 51.54 24.25 - 11.83 20695.97HenkelKgaA 81.25 0.65 90.30 54.65 2.25 19.96 24892Linde 199.50 -0.15 221.70 130.45 1.64 53.33 123595.9MuenchRkv 221.90 5.70 284.20 141.10 4.42 16.48 36660.32SAP 132.40 -0.36 143.32 82.13 1.19 34.65 191808.92Siemens 107.32 1.44 110.88 53.02 3.64 18.95 107573.11Volkswgn 146.80 3.30 185.00 99.16 - 14.02 51083.95Hong Kong (HK$)AIA 78.70 2.80 87.80 60.05 1.45 18.82 122806.56BOC Hold 20.60 0.20 28.90 20.05 7.84 6.88 28102.98Ch OSLnd&Inv 19.34 -0.06 31.00 19.02 4.79 4.67 27339.33ChngKng 38.05 0.30 57.20 33.40 5.80 6.57 18133.31Citic Ltd♦ 5.60 -0.09 10.74 5.57 7.66 3.11 21020.04Citic Secs 17.32 0.10 21.45 12.60 3.32 12.76 5091.65CK Hutchison 47.10 0.50 76.00 45.05 7.07 5.01 23435.84CNOOC♦ 7.36 -0.09 14.04 6.24 11.17 6.95 42400.35HangSeng 115.00 0.90 173.80 110.00 7.22 10.50 28369.09HK Exc&Clr 366.00 4.20 397.80 206.00 1.93 46.71 59874.24MTR♦ 37.90 -0.35 47.80 36.20 3.09 20.05 30212.95SandsCh 29.60 -0.25 45.45 25.15 3.50 117.67 30896.67SHK Props 99.00 0.20 124.00 87.60 4.87 7.39 37016.56Tencent 525.00 13.50 564.00 314.60 0.24 42.56 649148.71India (Rs)Bhartiartl 424.45 -7.90 612.00 325.50 - -4.82 31595.21HDFC Bk 1114.35 7.40 1305.5 738.75 - 22.05 83673.23Hind Unilevr 2111.05 16.05 2614.3 1757.3 1.21 66.77 67676.78HsngDevFin 1785.1 -5.55 2499.9 1473.45 1.00 13.88 43696.88ICICI Bk 373.10 3.90 552.20 268.30 0.27 23.64 35104.13Infosys 1048.7 31.05 1054.9 509.25 1.74 24.77 60947.3ITC 169.25 -1.60 266.30 134.60 6.11 14.10 28415.56L&T 896.95 -5.85 1491.95 661.00 3.18 15.79 17181.84OilNatGas 69.20 0.05 149.65 50.00 10.18 4.04 11878.17RelianceIn 2212.2 -13.05 2369.35 867.40 0.60 32.58 204106.7SBI NewA 188.75 -1.55 351.00 149.45 - 7.65 22984.36SunPhrmInds 523.10 16.20 564.75 312.00 1.12 169.90 17125.01Tata Cons 2705.8 182.35 2728.1 1506.05 1.24 31.90 138534.63Indonesia (Rp)Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26Israel (ILS)TevaPha 31.26 -0.58 46.45 23.05 - 870.77 9984.39Italy (€)Enel 7.39 -0.07 8.61 5.15 4.06 41.06 88646.74ENI 6.69 0.19 14.42 6.26 12.23 -6.36 28670.63Generali 12.07 0.14 19.63 10.20 4.14 10.40 22432.72IntSPaolo 1.63 0.04 2.63 1.31 - 8.61 37101.42Unicred 7.06 0.11 14.44 6.01 - -7.56 18599.18

Japan (¥)AstellasPh 1509 -4.50 1987 1406 2.73 14.64 26593.19Bridgestne 3385 69.00 4734 2861.5 3.95 13.76 22867.8Canon 1734.5 36.00 3117 1676 7.12 24.76 21897.98CntJpRwy 15615 915.00 23455 12380 0.99 15.36 30448.1Denso 4776 105.00 5174 3021 3.01 -45.48 35621.42EastJpRwy 6554 236.00 10555 5888 2.59 -49.88 23446.16Fanuc 20430 140.00 22030 12020 1.15 64.38 39048.4FastRetail 66790 290.00 70180 39910 0.74 70.17 67061Fuji Hvy Ind 2111.5 75.00 3167 1671.5 4.87 20.07 15373.33Hitachi 3650 142.00 4693 2524 2.68 17.85 33440.12HondaMtr 2561.5 64.50 3259 2120 3.81 21.59 43920.44JapanTob 1954 17.00 2555 1796.5 8.11 11.45 36991.82KDDI 2655 -22.00 3451 2604 4.46 9.04 57907.12Keyence 48290 910.00 50200 28905 0.32 60.51 111169.47MitsbCp 2526 22.50 2960.5 2094.5 5.37 9.07 35524.05MitsubEst 1646.5 48.50 2283 1291 2.06 14.37 21684.14MitsubishiEle 1435 19.00 1658 1096.5 2.87 15.20 29165.93MitsuiFud 1920 69.00 3035 1538 2.36 11.07 17799.45MitUFJFin 428.80 8.90 603.00 380.00 5.97 17.84 55127.69Mizuho Fin 1341 26.00 1731 1084 0.58 300.39 322318.42Murata Mfg 6762 12.00 6950 4602 1.48 23.93 43255.22NipponTT 2226 41.00 2908 2127 4.39 9.37 82191.85Nissan Mt 386.80 14.30 714.80 311.20 2.66 -1.53 15453.39Nomura 489.50 14.60 586.40 367.40 4.20 4.99 16187.21Nppn Stl 1042 58.70 1786.5 798.10 4.94 5.28 9373.23NTTDCMo 3876 -2.00 3895 2678 3.18 20.63 118454.89Panasonic 890.20 20.70 1264 691.70 3.47 12.16 20674.53Seven & I 3290 16.00 4485 2937.5 3.08 15.68 27605.6ShnEtsuCh 13620 130.00 14305 8751 1.66 18.40 53717.14Softbank 6750 227.00 7077 2609.5 0.67 -8.42 133524.99Sony 7892 139.00 8920 5297 0.59 14.51 94204.89SumitomoF 2997.5 56.00 4145 2507.5 6.49 18.96 38986.09Takeda Ph 3650 29.00 4562 2894.5 5.07 46.42 54463.68TokioMarine 4736 149.00 6317 4167 4.13 13.08 31470.22Toyota 6909 18.00 8026 5771 3.26 9.25 213394.39Mexico (Mex$)AmerMvl 13.37 -0.06 16.82 12.33 2.54 33.76 28422.78FEMSA UBD 121.07 -0.33 185.00 114.17 1.16 76.04 12270.39WalMrtMex 52.01 0.04 62.71 47.76 1.55 29.16 42589.06Netherlands (€)Altice 4.11 0.01 6.86 2.26 - - -ASML Hld 320.25 0.35 355.50 177.52 - - -Heineken 76.48 0.44 105.00 68.82 - - -ING 6.30 0.15 11.26 4.23 - - -Unilever 52.34 -0.06 55.39 38.42 - - -Norway (Kr)DNB 131.65 3.05 178.10 94.26 - - -Equinor 132.30 3.05 187.20 95.20 - - -Telenor 159.55 2.25 185.90 130.75 - - -Qatar (QR)QatarNtBk 17.89 - 21.25 15.71 3.52 12.62 45383.1Russia (RUB)Gzprm neft 185.71 -3.02 272.68 158.17 8.49 8.05 58976.64Lukoil 4745.5 -157.00 6810 3663 7.64 12.47 44107.51MmcNrlskNckl 20150 -66.00 23656 13352 11.57 14.96 42774.79Novatek 973.20 -3.20 1382.2 682.80 3.47 6.59 39639.58Rosneft 324.00 -11.00 489.90 229.80 10.77 12.36 46063.6Sberbank♦ 188.91 -2.03 270.80 172.15 - 5.33 54705Surgutneftegas 35.13 -0.76 54.89 24.06 1.93 2.10 16833.73Saudi Arabia (SR)AlRajhiBnk 65.70 0.70 68.90 51.00 4.80 15.84 43789.5Natnlcombnk 37.45 0.15 50.70 30.50 6.45 10.22 29952.81SaudiBasic 88.30 0.60 95.00 61.90 5.23 -82.42 70623.06SaudiTelec 102.40 2.00 106.00 72.30 4.10 18.22 54600.22Singapore (S$)DBS 20.58 0.21 26.80 16.65 6.27 11.17 38434.8JardnMt US$♦ 42.04 2.13 59.68 37.37 4.30 -76.97 30592.51JardnStr US$♦ 20.97 0.82 33.50 17.81 1.78 -25.27 23241.22OCBC♦ 8.58 - 11.23 7.80 6.32 9.63 27800.03SingTel 2.17 0.01 3.48 2.08 8.06 33.10 26062.53UOB♦ 19.44 0.03 27.02 17.28 5.79 10.85 23871.08South Africa (R)Firstrand 40.90 -0.88 69.90 31.13 8.21 6.99 13928.98MTN Grp 55.39 1.00 101.11 26.25 9.89 6.10 6336.48Naspers N 2994.51 -5.49 3367.26 1843.8 0.27 24.85 79176.88South Korea (KRW)HyundMobis 236000 6000 268500 126000 1.70 10.32 19281.37KoreaElePwr 20600 200.00 29500 15550 - -8.61 11366.59SK Hynix 83200 -800.00 106000 65800 1.20 36.51 52060.5SmsungEl 58700 500.00 62800 42300 2.41 18.72 301195.77Spain (€)BBVA 2.40 0.03 5.34 2.13 10.82 -34.33 18902.86BcoSantdr 1.61 0.03 4.04 1.50 6.22 -3.29 31531.38CaixaBnk 1.72 -0.01 2.94 1.50 4.08 9.16 12103.92Iberdrola 10.70 -0.02 11.52 7.76 1.57 18.83 80124.56Inditex 24.31 0.21 32.28 18.51 0.86 31.76 89346.47Repsol 5.72 0.20 15.67 5.37 16.01 -1.19 10974.22Telefonica 3.14 0.24 7.26 2.85 12.52-156.89 19724.01

Sweden (SKr)AtlasCpcoB 372.40 8.00 388.30 223.20 - - -Ericsson♦ 95.56 0.58 105.10 59.54 - - -H & M 160.55 -1.25 214.35 98.13 - - -Investor 579.80 6.20 591.40 370.10 - - -Nordea Bk 70.65 1.76 86.73 48.00 - - -SEB 81.42 1.26 104.90 59.80 - - -SvnskaHn 75.82 0.84 113.80 71.80 - - -Swedbank 144.46 1.56 162.70 99.14 - - -Telia Co 37.00 0.87 44.90 30.29 - - -Volvo 179.85 6.90 180.40 95.00 - - -Switzerland (SFr)ABB 23.94 0.31 24.69 14.11 3.34 37.18 56733.48CredSuisse 9.48 0.22 13.80 6.18 1.49 5.66 25357.69Nestle 109.80 -0.54 112.62 83.37 2.49 23.18 345757.8Novartis 80.70 0.31 96.38 65.09 3.63 26.74 217610.46Richemont 62.22 1.66 81.66 44.64 3.11 35.98 35499.88Roche 318.80 0.90 357.85 265.75 2.86 21.03 244810.35Swiss Re 70.04 1.14 117.05 52.68 8.31 -15.67 24305.95Swisscom 495.60 0.70 577.80 446.70 4.50 15.55 28061.04Syngent 453.40 0.90 471.20 402.50 - 28.99 43035.76UBS 10.57 0.20 13.28 7.00 3.29 8.94 44563.25Zurich Fin 326.80 1.90 439.90 248.70 6.13 15.51 53744Taiwan (NT$)Chunghwa Telecom 107.00 - 123.50 103.00 8.36 24.62 28757.63Formosa PetChem 80.50 - 107.00 66.10 3.70 870.04 26567.81HonHaiPrc 77.70 -0.50 101.50 65.70 5.29 10.23 37318.89MediaTek 611.00 -3.00 763.00 273.00 3.28 35.99 33652.46TaiwanSem 432.50 -5.50 466.50 235.50 2.26 23.54 388549.13Thailand (THB)PTT Explor 32.25 - 47.75 23.60 6.61 18.33 29354.76United Arab Emirates (Dhs)Emirtestele 16.70 0.06 16.98 11.04 6.60 15.59 39539.88United Kingdom (p)AscBrFd 1921 7.00 2730 1554 2.41 21.49 19737.14AstraZen 8409 -22.00 10120 5871 2.65 63.36 138210.94Aviva 291.30 3.70 439.40 205.70 3.26 5.31 15172.1Barclays 99.45 1.74 192.99 73.04 3.02 15.04 22023.69BP 217.80 3.40 521.50 210.80 15.28 -2.48 56336.59BrAmTob 2794 41.50 3507 2362.5 5.52 10.09 67606.39BSkyB 1727.5 1.50 1740 893.50 0.76 36.60 38843.72BT 100.30 1.60 212.25 1.02 15.35 4.60 12915.34Compass 1177 16.50 2084 865.80 3.40 18.14 25121.44Diageo♦ 2681.5 -1.50 3369.5 2050.6 2.61 44.77 87608.91GlaxoSmh♦ 1449.8 5.20 1857 1328.19 5.52 10.91 92532.5Glencore 163.72 1.96 264.12 109.76 4.88 -8.09 30649.26HSBC 309.35 1.15 617.60 281.50 5.19-191.07 80496.67Imperial Brands 1383 18.00 2072 1218 14.94 15.32 17118.32LlydsBkg 26.99 -0.21 73.66 23.59 4.15 67.46 25239.71Natl Grid 921.00 -5.60 1073.8 8.90 5.19 25.16 40120.42Natwest Group 110.90 1.05 122.05 90.54 1.80 33.61 17222.29Prudential 1135.5 7.50 1509 682.80 3.27 27.95 38127.79ReckittB 7492 -180.00 8191.3 5130 2.33 -19.37 68471.1RELX 1758.5 11.50 2109 1382.86 2.60 26.81 44090.94RioTinto 4686.5 -7.50 5175 2954 6.52 13.14 81575.21RollsRoyce 123.40 9.80 792.00 1.57 3.73 -0.41 2978.54RylDShlA 957.60 24.50 2356 905.70 13.08 -7.99 57132.33Shire# 4690 111.00 4780 2944 0.58 11.63 56567.13StandCh 362.60 2.70 740.80 334.25 1.56 10.09 15514.16Tesco 212.60 2.60 260.40 203.70 3.17 22.29 22591.06Vodafone 107.68 4.86 169.46 92.76 7.12 -38.87 37276.11WPP 648.60 23.00 1085.5 5.62 3.50 -3.49 10657.59United States of America ($)21stC Fox A 28.65 0.57 39.74 19.81 1.69 16.83 9844.683M 162.84 2.48 182.55 114.04 3.75 17.60 93796.53AbbottLb 108.13 1.63 114.20 61.61 1.32 59.85 191447.41Abbvie 87.43 1.31 101.28 62.55 5.41 18.21 154299.37Accenture 223.55 1.15 247.82 137.15 1.13 27.87 148371.2Adobe 484.54 5.55 536.88 255.13 - 60.89 232416.13AEP 86.38 1.08 104.97 65.14 3.37 21.47 42856.91Aetna - - - - - - -Aflac 37.63 0.75 55.07 23.07 3.07 8.96 26825.04AirProd♦ 300.30 4.26 310.74 167.43 1.75 33.17 66334.58Alexion 115.26 3.71 121.50 72.67 - 29.26 25261.88Allergan 193.02 0.03 202.22 114.27 1.54 -25.19 63659.11Allstate 93.95 0.93 125.92 64.13 2.33 6.73 29342.88Alphabet 1479.43 23.83 1726.1 1008.87 - 30.99 444524.84Altria♦ 39.42 0.45 51.78 30.95 8.95 -78.19 73260.81Amazon 3174.99 49.99 3552.25 1626.03 - 116.171590317.13AmerAir 12.92 -0.08 31.67 8.25 2.44 -1.51 6570.61AmerExpr 103.23 1.62 138.13 67.00 1.75 20.35 83116.78AmerIntGrp 29.19 0.97 56.42 16.07 4.61 -5.14 25145.26AmerTower 238.15 -5.16 272.20 174.32 1.83 52.61 105633.47Amgen 253.82 8.41 264.97 177.05 2.52 19.73 148660.79Anadarko 72.77 0.56 76.23 40.40 1.50 -63.37 36563.54Anthem 284.12 9.11 309.10 171.03 1.29 11.74 71458.01Aon Cp 207.44 1.92 238.19 143.93 0.89 26.26 48053.55Apple 115.18 2.16 137.98 53.15 0.71 33.251996828.13ArcherDan 47.24 0.50 48.56 28.92 3.16 14.32 26250.93

AT&T 28.62 -0.06 39.70 26.08 7.60 16.61 203917.5AutomData 140.85 2.18 182.32 103.11 2.62 23.53 60560.63Avago Tech 365.50 8.67 378.96 155.67 3.32 63.78 147846.45BakerHu 22.08 0.09 31.26 20.09 3.39 -1.35 11412.93BankAm 24.63 0.42 35.72 17.95 3.07 11.33 213353.41Baxter 80.27 1.44 95.19 69.10 1.18 42.69 40635.22BB & T 54.24 0.75 55.66 40.68 3.52 16.82 41564.3BectonDick 237.49 4.83 286.72 197.75 1.39 79.90 68840.88BerkshHat 320181.08 2701.08 347400 239440 - 22.57 210649.05Biogen 285.00 7.36 374.99 219.70 - 7.97 45119.34BkNYMeln 35.41 0.67 51.60 26.40 3.68 7.30 31368.36BlackRock 578.26 8.14 609.69 323.98 2.52 19.39 88174.38Boeing 170.12 2.04 378.70 89.00 3.81 -32.20 96023.57Booking Holdings 1683.85 -26.86 2094 1107.29 - 27.37 68951.35BrisMySq 59.11 0.39 68.34 45.76 3.13-194.06 133747.59CapOne 77.26 2.32 107.59 38.00 2.18-198.80 35279.68CardinalHlth♦ 47.06 0.76 60.69 39.05 4.31 -3.55 13760.96Carnival 14.95 -0.21 51.94 7.80 10.53 -3.43 10463.61Caterpillar 153.33 3.39 156.25 87.50 2.82 19.49 83026.5Celgene 108.24 0.11 110.70 58.59 - 12.71 77035.98CharlesSch 37.72 0.05 51.65 28.00 1.95 15.02 48601.13Charter Comms 638.21 17.98 640.00 345.67 - 58.26 130768.7Chevron Corp 71.84 0.65 122.94 51.60 7.25 -14.74 134136.87Chubb♦ 118.87 2.31 167.74 87.35 2.68 23.63 53653.86Cigna 173.17 5.94 224.64 118.50 0.02 11.73 63588.13Cisco 38.57 0.30 50.28 32.40 3.76 14.81 163262.05Citigroup 45.00 1.34 83.11 32.00 4.76 7.39 93673.51CME Grp 167.94 -0.56 225.36 131.80 2.00 24.12 60225.48Coca-Cola 49.21 -0.15 60.13 36.27 3.46 22.10 211378.55Cognizant 70.86 2.00 71.81 40.01 1.25 22.79 38423.18ColgtPlm 78.00 0.60 80.10 58.49 2.33 24.84 66877.21Comcast 45.54 0.39 47.74 31.71 2.03 17.41 207601.21ConocPhil 33.89 0.82 67.13 20.84 4.85 15.72 36345.67Corning 33.59 0.78 33.86 17.44 2.63 228.44 25588.07Costco 357.67 2.66 363.67 271.28 0.78 40.76 157919.79CrownCstl 167.09 -1.53 180.00 114.18 2.97 91.43 70122.37CSX 77.72 0.57 81.40 46.81 1.35 19.89 59459.88CVS 58.80 0.97 77.03 52.04 3.57 8.90 76951.11Danaher 217.26 4.76 218.68 119.60 0.34 52.23 154126.16Deere♦ 227.85 3.06 231.12 106.14 1.32 26.86 71402.44Delphi 17.02 0.31 18.51 5.39 - -7.42 1469.67Delta 31.76 0.01 62.48 17.51 3.99 -5.20 20258.33Devon Energy 9.89 0.29 26.98 4.70 4.04 -1.58 3783.98DiscFinServ 62.94 2.02 87.43 23.25 2.94 18.90 19284.62Disney 123.28 0.73 153.41 79.07 0.75-134.91 222774.77DominRes 80.59 0.79 90.89 57.79 4.84 118.03 67702.35DowDupont 30.52 -0.65 48.38 30.06 4.01 -8.62 68559.76DukeEner 91.82 0.24 103.79 62.13 4.32 31.00 67523.7Eaton 104.99 2.34 106.07 56.42 2.88 26.87 42006.5eBay 51.86 0.18 61.06 26.02 1.22 18.02 36292.34Ecolab♦ 199.78 1.72 231.36 124.60 0.98 40.04 57014.83Emerson 67.37 1.83 78.38 37.75 3.10 20.04 40259.77EOG Res 35.89 1.08 89.54 27.00 3.62 56.94 20893.81EquityResTP 55.40 0.31 89.55 49.62 4.44 17.47 20620.44Exelon 36.54 0.60 50.54 29.28 4.28 12.84 35608.37ExpScripts 92.33 -3.47 101.73 66.93 - 11.10 52061.19ExxonMb 33.43 0.45 73.12 30.11 10.93 18.95 141349.84Facebook 263.35 3.41 304.67 137.10 - 30.65 633163.85Fedex 258.64 3.44 260.96 88.69 1.06 50.28 67917.95FordMtr 6.99 0.10 9.58 3.96 6.77 -12.32 27294.15Franklin♦ 20.98 0.46 29.27 14.91 4.01 9.74 10392.58GenDyn 142.49 2.00 190.08 100.55 3.13 12.05 40885GenElectric 6.41 0.02 13.26 5.48 0.66 16.05 56064.82GenMills 62.73 0.21 66.14 46.59 3.28 16.78 38320.44GenMotors 31.10 0.64 38.96 14.33 3.85 28.19 44499.95GileadSci 63.88 1.71 85.97 60.89 4.31-289.59 80082.15GoldmSchs 201.68 1.78 250.46 130.85 2.60 14.58 69393.28Halliburton 11.70 0.39 25.47 4.25 5.25 -2.41 10278.1HCA Hold 129.30 2.25 151.97 58.38 1.00 12.70 43707.71Hew-Pack♦ 19.30 0.21 23.93 12.54 3.59 9.20 26509.45HiltonWwde 89.14 1.18 115.48 44.30 0.53 652.82 24718.66HomeDep 281.43 2.12 292.95 140.63 2.01 26.04 302942.14Honywell 168.36 2.75 184.06 101.08 2.20 19.72 118152.21HumanaInc♦ 416.71 8.40 431.12 208.25 0.59 15.08 55127.64IBM 121.91 1.34 158.75 90.56 5.59 13.16 108570.46IllinoisTool♦ 197.63 5.78 203.18 115.94 2.27 27.67 62483.34Illumina 319.06 10.63 404.20 196.78 - 65.05 46582.76Intcntl Exch 101.21 -0.13 106.99 63.51 1.19 24.90 54945.62Intel 51.70 0.69 69.29 43.63 2.62 9.08 219880.1Intuit 330.52 8.63 360.00 187.68 0.63 48.30 86189.49John&John 147.41 1.17 157.00 109.16 2.75 24.67 388104.51JohnsonCn 42.14 0.55 44.41 22.78 2.59 41.36 31350.44JPMrgnCh 98.73 1.74 141.10 76.91 3.83 12.65 300889.99Kimb-Clark 148.41 0.98 160.16 110.66 2.97 18.97 50614.81KinderM 12.60 0.29 22.58 9.42 8.44 171.38 28520.55Kraft Heinz 30.82 0.35 36.37 19.99 5.45-183.39 37679.87Kroger 34.41 0.34 37.22 23.71 1.85 12.81 26768.43L Brands 32.72 -0.41 33.48 8.00 3.77 -12.47 9048.17LasVegasSd 45.19 -0.96 74.29 33.30 5.42 97.78 34516.27LibertyGbl 20.59 0.47 26.40 15.24 - -35.64 3752.98Lilly (E) 146.40 1.19 170.75 101.36 1.99 22.74 140027.26

Lockheed 382.37 1.79 442.53 266.11 2.58 15.95 106888.49Lowes 167.73 1.24 171.72 60.00 1.30 22.47 126755.83Lyondell 75.21 2.97 98.91 33.71 5.87 11.80 25106.38Marathon Ptl 29.15 0.88 69.65 15.26 8.00 -2.34 18967.77Marsh&M 115.35 0.79 120.97 74.34 1.66 27.73 58428.16MasterCard 341.39 2.56 367.25 199.99 0.45 45.02 338841.79McDonald's 225.41 2.74 226.72 124.23 2.29 34.01 167724.43McKesson 149.42 2.44 172.18 112.60 1.15 26.15 24234.39Medtronic♦ 104.03 2.07 122.15 72.13 2.14 28.56 139741.32Merck♦ 81.11 0.31 92.64 65.25 3.08 18.79 205146.74Metlife 38.79 1.16 53.28 22.85 4.82 4.78 35205.41Microsoft 208.87 2.68 232.86 132.52 1.00 34.521580655.67Mnstr Bvrg 78.10 -1.46 87.05 50.06 - 35.07 41187.03MondelezInt♦ 56.88 0.02 59.96 41.19 2.11 23.24 81239.17Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29MorganStly 48.33 0.36 57.57 27.20 3.04 8.32 76204.86MylanNV 15.30 0.41 23.11 12.75 - 27.48 7906.7Netflix 514.46 11.40 575.37 257.01 - 82.74 226884.8NextEraE 287.79 6.62 299.30 174.80 1.93 37.84 140915.73Nike 128.39 1.75 130.38 60.00 0.78 76.44 159829.03NorfolkS 215.39 2.73 224.99 112.62 1.83 25.51 59324.87Northrop 312.94 -1.01 385.01 263.31 1.82 20.88 52171.5NXP 130.73 3.34 139.59 58.41 1.21-2074.37 36502.98Occid Pet 10.36 0.49 47.58 9.00 24.13 -0.76 9636.27Oracle 59.53 0.70 62.60 39.71 1.69 18.41 179223.11Pepsico 137.12 -0.94 147.20 101.42 2.98 26.64 189857.81Perrigo 45.63 0.78 63.86 40.01 2.00 24.82 6227.56Pfizer 36.82 0.44 40.97 27.88 4.22 13.85 204576.53Phillips66 53.02 1.96 119.92 40.04 7.13 -18.16 23153.66PhilMorris 75.53 1.07 90.17 56.01 6.51 15.40 117614.13PNCFin 114.14 1.98 161.79 79.41 4.23 16.90 48452.8PPG Inds 125.71 2.44 134.36 69.77 1.70 28.36 29664.71Praxair 164.50 -0.99 169.75 140.00 2.34 37.33 47306.22ProctGmbl 138.67 0.55 141.70 94.34 2.29 26.62 345235.8Prudntl 65.91 2.03 97.24 38.62 6.69-101.21 26034.45PublStor 230.00 -0.60 249.03 155.37 3.65 31.28 40203.77Qualcomm 119.27 3.80 123.93 58.00 2.21 47.91 134562.63Raytheon 116.96 -5.47 233.48 103.00 2.98 10.60 32566.46Regen Pharm 604.74 39.94 664.64 272.27 - 22.32 63221.59S&P Global 364.67 1.69 379.87 186.06 0.71 32.72 87885.47Salesforce 251.36 3.51 284.50 115.29 - 101.68 226475.36Schlmbrg♦ 15.80 0.23 41.14 11.87 10.80 -0.95 21927.57Sempra Energy 121.52 1.02 161.87 88.00 3.48 15.94 35150.84Shrwin-Will 694.70 5.72 725.91 325.43 0.75 34.68 63252.2SimonProp 68.36 0.16 158.40 42.25 9.68 11.44 20910.45SouthCpr 46.94 1.31 49.19 23.43 3.13 29.59 36284.19Starbucks 88.03 1.46 94.13 50.02 1.90 74.83 102907.07StateSt 61.28 1.60 85.89 42.10 3.57 9.33 21594.05Stryker♦ 212.59 4.29 226.30 124.54 1.11 48.08 79682.85Sychrony Fin 28.15 0.69 38.18 12.15 3.28 8.20 16432.7T-MobileUS 113.87 0.46 119.20 63.50 - 42.02 140949.3Target 161.66 2.56 162.31 90.17 1.61 23.66 80832.5TE Connect 101.20 2.84 103.20 48.62 1.93-283.38 33399.89Tesla Mtrs 423.85 8.76 502.49 44.86 - 974.71 392843.08TexasInstr 143.96 2.87 148.37 93.09 2.53 25.71 131854.69TheTrvelers 111.49 2.91 145.21 76.99 3.12 15.10 28227.02ThrmoFshr♦ 448.68 13.62 452.69 250.21 0.19 46.23 177493.05TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69TJX Cos 57.32 -0.31 64.95 32.72 1.19 103.52 68662.32UnionPac 199.72 3.37 205.78 105.08 2.04 23.62 135574.29UPS B 168.55 1.59 171.98 82.00 2.46 31.90 119178.54USBancorp 37.70 0.93 61.11 28.36 4.68 11.29 56789.87UtdHlthcre 316.98 5.00 324.57 187.72 1.49 16.96 301237.43UtdTech 86.01 -5.36 158.44 69.02 3.12 60.04 74498.84ValeroEngy 42.57 1.84 101.99 31.00 9.28 15.83 17358.23Verizon 59.59 0.35 62.22 48.84 4.34 12.28 246575.04VertexPharm 267.70 6.90 306.08 166.06 - 32.22 69727.11VF Cp 74.92 2.39 100.25 45.07 2.62 101.90 29192.48ViacomCBS 28.45 0.48 43.04 10.10 3.32 12.48 16039.3Visa Inc 202.37 0.91 217.35 133.93 0.60 36.63 341197.27Walgreen 36.56 0.79 64.50 33.88 5.25 40.97 31680.49WalMartSto 141.79 1.29 151.33 102.00 1.94 26.20 401797.83WellsFargo 24.41 0.42 54.75 22.00 8.78 25.82 100570.35Williams Cos 19.39 0.30 24.17 8.41 8.45 167.82 23530.9Yum!Brnds 93.85 -1.32 115.17 54.95 1.99 26.83 28286.36Venezuela (VEF)Bco de Vnzla 14600 -400.00 16799.99 700.00 634.42 - 121.60Bco Provncl 775000 - 787000 69000 - 38.16 190.80Mrcntl Srvcs 800000-9500.00 815000 70000 0.02 12.78 111.21

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 %

Mizuho Fin 1341.00 1315.00 26.00 1.98 1202.50 868.2 -6.69NTTDCMo 3876.00 3878.00 -2.00 -0.05 1163.50 42.9 35.10Tata Cons 2705.80 2523.45 182.35 7.23 279.50 11.5 18.22DiscFinServ 62.94 60.92 2.02 3.31 6.48 11.5 10.13DukeEner 91.82 91.58 0.24 0.26 8.95 10.8 13.42Anthem 284.12 275.01 9.11 3.31 27.06 10.5 2.91EDF 9.70 9.70 0.00 -0.04 0.90 10.2 12.22Softbank 6750.00 6523.00 227.00 3.48 586.00 9.5 6.46Sychrony Fin 28.15 27.46 0.69 2.51 2.36 9.2 7.56CapOne 77.26 74.94 2.32 3.10 5.93 8.3 4.33Natl Grid 921.00 926.60 -5.60 -0.60 69.60 8.2 -98.89Delphi 17.02 16.71 0.31 1.86 1.23 7.8 -4.22AEP 86.38 85.30 1.08 1.26 5.73 7.1 9.31WPP 648.60 625.60 23.00 3.68 41.20 6.8 -98.97HCA Hold 129.30 127.05 2.25 1.77 7.94 6.5 -5.73Nissan Mt 386.80 372.50 14.30 3.84 23.20 6.4 -8.44HyundMobis 236000.00 230000.00 6000.00 2.61 14000.00 6.3 2.61Continental 98.32 96.26 2.06 2.14 5.74 6.2 6.20HsngDevFin 1785.10 1790.65 -5.55 -0.31 103.65 6.2 0.87Telenor 159.55 157.30 2.25 1.43 8.95 5.9 7.95Based on the FT Global 500 companies in local currency

FT 500: BOTTOM 20

Close Prev Day Week Monthprice price change change % change change % change %

RollsRoyce 123.40 113.60 9.80 8.63 -25.85 -17.3 -99.46Midea 0.68 0.67 0.01 1.49 -0.14 -17.1 -1.45Bayer 46.77 44.94 1.84 4.08 -7.44 -13.7 -13.72CaixaBnk 1.72 1.72 -0.01 -0.38 -0.18 -9.4 -15.88Halliburton 11.70 11.31 0.39 3.45 -1.06 -8.3 -26.89Suncor En 15.96 15.95 0.01 0.06 -1.30 -7.5 -21.10BP 217.80 214.40 3.40 1.59 -16.65 -7.1 -99.15PetroChina 2.24 2.27 -0.03 -1.32 -0.17 -7.1 -12.84Takeda Ph 3650.00 3621.00 29.00 0.80 -275.00 -7.0 -5.15AstellasPh 1509.00 1513.50 -4.50 -0.30 -113.00 -7.0 -6.96ImpOil 15.57 15.56 0.01 0.03 -1.15 -6.9 -25.54ChMinsheng 3.99 4.06 -0.07 -1.72 -0.29 -6.8 -14.22TrnCan 55.20 55.91 -0.71 -1.27 -4.00 -6.8 -7.23MTR 37.90 38.25 -0.35 -0.92 -2.60 -6.4 -5.24Ch Rail Gp 3.58 3.64 -0.06 -1.65 -0.22 -5.8 -5.79Renault 21.78 21.19 0.59 2.78 -1.32 -5.7 -10.92Citic Ltd 5.60 5.69 -0.09 -1.58 -0.33 -5.6 -17.86CNOOC 7.36 7.45 -0.09 -1.21 -0.43 -5.5 -11.84ExxonMb 33.43 32.98 0.45 1.36 -1.88 -5.3 -14.35LasVegasSd 45.19 46.15 -0.96 -2.08 -2.43 -5.1 -13.01Based 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

Oct 05 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- 110.63 2.27 0.00 0.02 2.02Brazil 04/26 6.00 - Ba2 BB- 116.90 2.68 -0.01 -0.03 2.43Poland 04/26 3.25 - A2 A- 112.75 0.87 0.00 0.00 0.62Mexico 05/26 11.50 - Baa1 BBB- 146.50 2.55 0.00 -0.09 2.30Turkey 10/26 4.88 - B2 BB- 92.10 6.48 0.02 -0.14 6.23Turkey 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 - Baa3 BBB 171.89 2.46 0.03 0.02 -Brazil 02/47 5.63 - Ba2 BB- 108.55 5.04 -0.01 0.01 -

Emerging EuroBrazil 04/21 2.88 BB- Ba2 BB- 103.09 0.05 0.01 -0.09 -1.19Mexico 04/23 2.75 BBB+ A3 BBB+ 107.76 0.76 0.00 -0.07 -1.56Mexico 04/23 2.75 - Baa1 BBB- 105.47 0.57 0.00 -0.02 0.43Bulgaria 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

Oct 05 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- 95.95 1.84 -0.01 0.00 1.59£ Sterlinginnogy Fin B.V. 06/30 6.25 BBB Baa2 A- 128.68 3.20 0.00 -0.01 0.40innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 137.45 2.19 -0.03 0.02 -Interactive 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

Oct 05 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 OneOct 05 (Libor: Oct 02) night Day Week Month month month month yearUS$ Libor 0.08125 -0.001 -0.844 0.001 0.14000 0.23350 0.24475 0.35750Euro Libor -0.58757 0.001 -0.162 0.000 -0.57114 -0.52771 -0.49600 -0.43971£ Libor 0.04988 -0.004 -0.174 -0.001 0.04450 0.05613 0.07850 0.15100Swiss Fr Libor 0.005 -0.79800 -0.77100 -0.72400 -0.59980Yen Libor 0.003 -0.08133 -0.10417 -0.05400 0.04450Euro Euribor -0.002 -0.52800 -0.50500 -0.47300 -0.44900Sterling CDs - - - -US$ CDs - - - -Euro CDs - - - -

Short 7 Days One Three Six OneOct 05 term notice month month month yearEuro -0.74 -0.44 -0.71 -0.41 -0.68 -0.38 -0.65 -0.35 -0.65 -0.35 -0.65 -0.35Sterling 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 0.08 0.38 0.10 0.40 0.19 0.49Japanese Yen -0.20 0.00 -0.35 -0.15 -0.20 0.10 -0.20 0.10 -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 216.11 -0.03 0.15 4.11 0.35 7.54Corporates( £) 392.51 -0.13 -0.19 4.29 -0.43 4.18Corporates($) 332.29 0.11 0.11 6.65 0.11 6.65Corporates(€) 239.87 0.07 0.18 0.92 0.15 0.46Eurozone Sov(€) 260.90 0.10 0.21 3.97 0.92 1.26Gilts( £) 375.13 -0.24 -0.60 7.66 0.07 3.07Global Inflation-Lkd 301.17 0.18 0.18 7.73 -1.05 7.65Markit iBoxx £ Non-Gilts 382.19 -0.13 -0.21 4.32 -0.25 3.66Overall ($) 283.08 0.03 0.03 8.04 0.03 8.04Overall( £) 373.19 -0.21 -0.49 6.46 -0.02 3.12Overall(€) 251.28 0.07 0.17 2.97 0.65 0.89Treasuries ($) 264.80 -0.02 -0.02 9.34 -0.02 9.34

FTSESterling Corporate (£) - - - - - -Euro Corporate (€) 104.47 -0.05 - - 0.54 -1.73Euro Emerging Mkts (€) 591.49 4.52 - - 2.09 26.15Eurozone 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 332.48 -8.09 -13.87 - 370.75 312.34Europe 5Y 56.67 -1.41 -3.12 - 62.86 56.31Japan 5Y 67.77 -0.52 -0.98 - 70.25 66.90Senior Financials 5Y 74.25 -2.10 -5.07 - 82.84 74.25

Markit CDXEmerging Markets 5Y 228.08 3.54 -10.87 - 245.71 224.54Nth Amer High Yld 5Y 404.56 1.53 - - 412.45 403.03Nth Amer Inv Grade 5Y 59.81 1.38 0.69 - 60.42 52.55Websites: 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† Oct 38.60 1.59Brent Crude Oil‡ 41.43 2.32RBOB Gasoline† Oct 1.18 0.06Heating Oil† - -Natural Gas† Oct 2.55 0.09Ethanol♦ - -Uranium† Jul 33.80 -Carbon Emissions‡ - -Diesel† - -Base Metals (♠ LME 3 Months)Aluminium 1779.00 18.00Aluminium Alloy 1550.00 0.00Copper 6535.00 -10.00Lead 1761.50 -10.00Nickel 14555.00 245.00Tin 18035.00 165.00Zinc 2329.50 14.00Precious Metals (PM London Fix)Gold 1903.05 1.05Silver (US cents) 2386.50 24.50Platinum 891.00 -7.00Palladium 2312.00 -22.00Bulk CommoditiesIron Ore 123.15 0.00GlobalCOAL RB Index 61.15 -0.60Baltic Dry Index 2071.00 51.00

Agricultural & Cattle Futures Price* ChangeCorn♦ Dec 380.50 1.00Wheat♦ Dec 584.25 11.00Soybeans♦ Nov 1021.50 1.50Soybeans Meal♦ Oct 347.50 -1.20Cocoa (ICE Liffe)X Dec 1724.00 -4.00Cocoa (ICE US)♥ Dec 2479.00 3.00Coffee(Robusta)X Nov 1269.00 -33.00Coffee (Arabica)♥ Dec 106.95 -2.45White SugarX 372.00 -1.90Sugar 11♥ 13.65 0.07Cotton♥ Dec 66.48 0.63Orange Juice♥ Nov 112.25 0.80Palm Oil♣ - -Live Cattle♣ Oct 108.20 0.00Feeder Cattle♣ Oct 134.88 -Lean Hogs♣ Oct 74.48 0.00

% Chg % ChgOct 02 Month Year

S&P GSCI Spt 347.65 0.15 -12.97DJ UBS Spot 71.14 -1.72 -8.71TR/CC CRB TR 156.66 -1.49 -14.36M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05UBS Bberg CMCI TR 13.20 4.85 -4.74LEBA EUA Carbon 26.85 2.29 15.88LEBA CER Carbon 0.29 1350.00 38.10LEBA UK Power 1455.00 39.90 -54.46

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 ofOct 02 Oct 02 Prev return stock Market stocks

Can 4.25%' 21 105.05 -0.101 -0.114 -0.13 8.41 96542.95 8Fr 0.10%' 21 103.80 -0.744 -0.738 0.04 11.35 241745.93 15Swe 0.25%' 22 110.18 -0.711 -0.717 -0.01 26.51 198342.06 7UK 1.875%' 22 110.37 -2.803 -2.881 -0.25 15.74 793565.44 28UK 2.5%' 24 360.26 -2.924 -2.991 -0.24 6.82 793565.44 28UK 2%' 35 303.91 -2.704 -2.746 -0.31 9.08 793565.44 28US 0.625%' 21 - - - - - - -US 3.625%' 28 136.86 -1.062 -1.073 -0.18 16.78 1603771.34 42Representative 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 0.92 - 0.28Austria - - -Canada 0.55 - -0.09Denmark -0.42 - -1.06Finland -0.32 - -0.96Germany - - -Ireland -0.21 - -0.85Italy 0.30 - -0.34Japan -0.02 - -0.66

Netherlands -0.63 - -New Zealand 0.51 - -0.13Norway 0.62 - -0.02Portugal -0.17 - -Spain 0.12 - -0.52Sweden -1.45 - -2.09Switzerland -0.50 - -1.14United Kingdom - - -United States 0.64 - 0.00

Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

VOLATILITY INDICES

Oct 05 Day Chng Prev 52 wk high 52 wk lowVIX 28.70 1.07 27.63 85.42 11.42VXD 27.64 0.05 27.59 71.05 2.47VXN 35.87 -0.57 36.44 84.67 13.58VDAX 27.62 -0.64 28.26 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 2.25 104.39 0.18 -0.01 0.01 0.01 -0.4505/32 1.25 103.61 0.92 -0.07 -0.02 0.00 -

Austria - - - - - - -02/47 1.50 136.29 0.10 0.00 -0.01 -0.01 -0.19

Belgium 09/22 1.00 103.11 -0.61 0.00 0.00 -0.01 0.04Canada 11/22 2.00 103.75 0.22 0.01 0.01 0.01 -1.26

06/30 1.25 106.55 0.55 0.01 0.03 0.00 -0.79Denmark 11/22 0.25 101.81 -0.60 -0.01 0.01 0.00 0.21

11/29 0.50 108.55 -0.42 0.00 0.01 -0.01 0.10Finland 04/23 1.50 105.56 -0.68 0.00 0.00 -0.01 0.01

04/31 0.75 111.50 -0.32 0.00 0.00 -0.01 -0.12France 10/22 2.25 106.02 -0.65 0.00 0.00 -0.01 0.06

05/26 0.50 106.11 -0.56 0.00 -0.01 -0.02 -0.09Germany - - - - - - -

02/23 1.50 105.36 -0.74 -0.01 -0.01 -0.01 0.0702/26 0.50 106.75 -0.73 0.00 0.00 -0.01 0.0108/50 0.00 102.99 -0.10 0.01 0.00 -0.01 -0.07

Greece 02/26 3.65 117.30 0.94 -0.03 -0.06 -0.06 -0.63Ireland 10/22 0.00 101.15 -0.56 -0.01 -0.01 -0.02 -0.03

05/30 2.40 125.37 -0.21 0.00 0.00 -0.01 -0.3005/30 2.40 125.37 -0.21 0.00 0.00 -0.01 -0.30

Italy 08/22 0.90 102.13 -0.27 -0.03 -0.06 -0.05 -0.2102/25 0.35 101.10 0.09 -0.04 -0.08 -0.07 -0.2605/30 0.40 100.90 0.30 -0.06 -0.12 -0.09 -03/48 3.45 140.34 1.62 -0.05 -0.10 -0.07 -0.29

Japan 04/23 0.05 99.99 0.05 -0.01 0.01 0.00 -04/25 0.05 100.05 0.04 -0.01 0.01 0.00 -12/29 0.10 101.07 -0.02 -0.01 0.00 -0.01 -12/49 0.40 94.96 0.59 -0.01 0.00 0.00 -

Netherlands 07/22 2.25 105.22 -0.67 -0.01 -0.01 -0.01 0.1307/26 0.50 106.66 -0.63 0.00 -0.01 -0.01 -0.04

New Zealand 04/25 2.75 112.30 0.03 -0.02 0.06 0.00 -0.8105/31 1.50 110.19 0.51 -0.02 0.04 0.00 -0.6905/31 1.50 110.19 0.51 -0.02 0.04 0.00 -0.69

Norway 08/30 1.38 107.16 0.62 0.00 0.01 0.01 -08/30 1.38 107.16 0.62 0.00 0.01 0.01 -

Portugal 10/22 2.20 105.66 -0.56 -0.02 0.01 -0.01 -0.1102/26 3.30 118.79 -0.17 -0.02 -0.03 -0.02 -0.15

Spain 10/22 0.45 101.96 -0.49 -0.01 -0.02 -0.01 -0.0710/29 0.60 104.36 0.12 -0.01 -0.03 -0.03 -0.06

Sweden 06/22 0.25 110.18 -0.73 0.01 0.01 -0.01 1.2506/26 0.13 116.52 -1.28 -0.01 -0.03 -0.05 0.7706/30 0.13 116.84 -1.45 -0.02 -0.05 -0.05 -

Switzerland 05/22 2.00 104.67 -0.82 0.00 -0.01 0.00 0.0705/30 0.50 109.88 -0.50 0.01 0.00 0.00 0.17

United Kingdom - - - - - - -07/22 0.50 100.95 -0.03 0.02 0.04 0.00 -0.3407/26 1.50 108.88 -0.03 0.01 0.05 0.01 -0.3007/47 1.50 116.40 0.82 0.03 0.10 0.05 -0.17

United States 03/22 0.38 100.34 0.14 0.00 0.00 0.01 -03/25 0.50 101.10 0.25 0.01 0.02 0.01 -02/30 1.50 107.77 0.64 0.01 0.03 0.01 -02/50 0.25 117.93 - - - - -

Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

GILTS: UK CASH MARKET

Red Change in Yield 52 Week AmntOct 05 Price £ Yield Day Week Month Year High Low £m

- - - - - - - - -- - - - - - - - -- - - - - - - - -- - - - - - - - -

Tr 1.5pc '21 100.44 0.01 -200.00 -133.33 -150.00 -97.87 101.38 100.44 32.84Tr 4pc '22 105.71 -0.02 -33.33 -60.00 -75.00 -107.14 109.08 105.71 38.77Tr 5pc '25 122.43 -0.07 -12.50 -36.36 -22.22 -125.93 125.74 121.74 35.84Tr 1.25pc '27 108.01 0.07 40.00 600.00 133.33 -77.42 109.23 103.96 36.34Tr 4.25pc '32 143.77 0.41 10.81 28.13 17.14 -31.67 148.26 137.84 38.71Tr 4.25pc '36 153.54 0.61 7.02 19.61 8.93 -22.78 160.46 145.12 30.41Tr 4.5pc '42 175.00 0.80 5.26 17.65 8.11 -14.89 186.37 162.55 27.21Tr 3.75pc '52 181.44 0.83 5.06 16.90 7.79 -11.70 198.36 164.59 24.10Tr 4pc '60 207.87 0.80 5.26 19.40 8.11 -9.09 231.12 186.33 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 Oct 03 chg % Return 1 month 1 year Yield1 Up to 5 Years 89.68 -0.04 2489.90 -0.09 0.99 -0.072 5 - 10 Years 187.85 -0.12 3821.36 -0.02 2.12 0.093 10 - 15 Years 226.92 -0.20 4904.41 -0.05 2.98 0.384 5 - 15 Years 196.56 -0.16 4085.65 -0.04 2.34 0.245 Over 15 Years 397.42 -0.53 6505.28 0.16 4.04 0.767 All stocks 193.50 -0.30 4128.77 0.04 2.82 0.62

Day's Month Year's Total Return ReturnIndex Linked Oct 03 chg % chg % chg % Return 1 month 1 year1 Up to 5 Years 305.02 -0.23 -0.25 -3.02 2512.26 -0.23 -1.312 Over 5 years 833.38 -0.77 1.76 -0.20 6295.84 1.80 0.163 5-15 years 520.01 -0.50 -0.13 -1.98 4136.74 -0.08 -1.284 Over 15 years 1096.54 -0.87 2.50 0.52 8067.36 2.54 0.765 All stocks 740.87 -0.72 1.58 -0.38 5699.04 1.62 0.15

Yield Indices Oct 03 Oct 02 Yr ago Oct 03 Oct 02 Yr ago5 Yrs -0.08 -0.10 0.17 20 Yrs 0.79 0.77 0.9610 Yrs 0.30 0.28 0.48 45 Yrs 0.73 0.71 0.8615 Yrs 0.63 0.60 0.81

inflation 0% inflation 5%Real yield Oct 03 Dur yrs Previous Yr ago Oct 03 Dur yrs Previous Yr agoUp to 5 yrs -2.74 3.03 -2.81 -2.62 -3.11 3.03 -3.19 -3.10Over 5 yrs -2.27 24.25 -2.30 -2.19 -2.29 24.30 -2.32 -2.215-15 yrs -2.82 9.67 -2.87 -2.79 -2.92 9.67 -2.97 -2.85Over 15 yrs -2.20 29.37 -2.23 -2.13 -2.22 29.38 -2.25 -2.15All stocks -2.28 22.41 -2.31 -2.20 -2.30 22.48 -2.33 -2.23See 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 [email protected]

Data provided by Morningstar | www.morningstar.co.uk

OCTOBER 6 2020 Section:Stats Time: 5/10/2020 - 18:29 User: gerry.white Page Name: MARKET DATA 2, Part,Page,Edition: USA, 13, 1


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 £ 2.1060 - -0.0069 1.79

Global Equity Fund £ 2.9698 - -0.0154 1.10

Global Fixed Interest Fund £ 0.9491 - -0.0010 4.24

Income Fund £ 0.6048 - 0.0011 2.60

Sterling Fixed Interest Fund £ 0.8940 - -0.0015 3.01

UK Equity Fund £ 1.7685 - 0.0323 3.09

Aegon Asset Management UK ICVC (UK)3 Lochside Crescent, Edinburgh, EH12 9SA0800 358 3009 www.aegonam.comAuthorised FundsGlobal Equity GBP B Acc £ 2.73 - 0.01 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 1143.01 - -0.03 1.61

High Yield Global Bond A GBP Inc 487.23 - 0.05 4.49

High Yield Global Bond B GBP Inc 1041.71 - 0.16 5.23

Global Equity Income B GBP Acc 1918.27 - -4.61 0.00

Global Equity Income B GBP Inc 1455.44 - -8.32 3.19

lobal Equity Market Neutral Fund - B Acc GBP £ 11.88 - -0.06 0.00

Global Sustainable Equity B Acc GBP £ 24.11 - 0.02 0.00

Global Sustainable Equity C Acc GBP £ 24.44 - 0.03 0.00

Inv Grd Gbl Bond A Inc GBH 615.11 - -1.64 1.81

Short Dated High Yld Bd B Acc GBP £ 10.62 - 0.00 0.00

Short Dated High Yld Bd C Acc GBP (Hdg) £ 10.72 - 0.00 0.00

Strategic Global Bond A GBP Inc 1262.96 - -2.61 2.70

Strategic Global Bond B GBP Inc 717.27 - -1.43 3.45

Algebris Investments (IRL)RegulatedAlgebris Financial Credit I EUR € 178.64 - -0.25 0.00

Algebris Financial Credit R EUR € 155.63 - -0.23 0.00

Algebris Financial Credit Rd EUR € 106.02 - -0.15 4.97

Algebris Financial Income I EUR € 129.87 - 0.35 0.00

Algebris Financial Income R EUR € 120.52 - 0.33 0.00

Algebris Financial Income Rd EUR € 80.36 - 0.22 4.58

Algebris Financial Equity B EUR € 82.33 - 1.00 0.00

Algebris IG Financial Credit B EUR € 106.30 - 0.01 -

Algebris IG Financial Credit R EUR € 105.64 - 0.01 -

Algebris Global Credit Opportunities I EUR € 122.52 - -0.28 0.00

Algebris Global Credit Opportunities R EUR € 120.49 - -0.29 0.00

Algebris Global Credit Opportunities Rd EUR € 120.49 - -0.29 0.00

Algebris Core Italy I EUR € 106.40 - 0.15 0.00

Algebris Core Italy R EUR € 99.65 - 0.14 0.00

Algebris Allocation I EUR € 95.97 - 0.20 0.00

The Antares European Fund LimitedOther International

AEF Ltd Usd (Est) $ 593.88 - 5.03 0.00

AEF Ltd Eur (Est) € 556.01 - -1.54 0.00

Arisaig PartnersOther International Funds

Arisaig Asia Consumer Fund Class A (Ex-Alcohol) shares $ 116.58 - 0.65 0.00

Arisaig Asia Consumer Fund Limited $ 115.52 - 0.72 0.00

Arisaig Global Emerging Markets Consumer Fund $ 14.65 - 0.17 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 $ 22.17 - 0.39 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 £ 1.10 - 0.01 -

Artemis Target Return Bond I Acc £ 1.04 - 0.00 -


Ashmore Investment Management Limited (LUX)2 rue Albert Borschette L-1246 LuxembourgFCA RecognisedAshmore SICAV Emerging Market Debt Fund $ 87.43 - -0.34 5.35

Ashmore SICAV Emerging Market Frontier Equity Fund $ 145.89 - -0.24 1.61

Ashmore SICAV Emerging Market Total Return Fund $ 76.14 - -0.26 4.62

Ashmore SICAV Global Small Cap Equity Fund $ 174.10 - -0.53 0.03

EM Active Equity Fund Acc USD $ 134.03 - -0.66 0.00

EM Equity Fund Acc USD $ 120.78 - -0.70 0.00

EM Mkts Corp.Debt USD F $ 86.02 - -0.01 6.36

EM Mkts Loc.Ccy Bd USD F $ 72.53 - -0.19 5.09

EM Short Duration Fund Acc USD $ 114.56 - -0.54 0.00

Atlantas Sicav (LUX)RegulatedAmerican Dynamic $ 5580.62 5580.62 117.23 0.00

American One $ 5683.30 5683.30 129.73 0.00

Bond Global € 1510.42 1510.42 2.42 0.00

Eurocroissance € 1179.53 1179.53 19.72 0.00

Far East $ 1088.97 - -0.15 0.00

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 2.18

CCLA Investment Management Ltd (UK)Senator House 85 Queen Victoria Street London EC4V 4ETAuthorised Inv FundsDiversified Income 1 Units GBP Inc £ 1.51 1.51 0.00 0.03

Diversified Income 2 Units GBP Inc £ 1.46 1.46 0.00 0.03

Diversified Income 3 Units GBP Inc £ 1.47 1.47 0.01 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 £ 129.73 129.73 -0.43 1.43

Capital Gearing Portfolio GBP P £ 35089.44 35089.44 -139.44 0.52

Capital Gearing Portfolio GBP V £ 170.65 170.65 -0.68 0.20

Dollar Fund Cls D Inc £ 177.15 177.15 -1.04 1.78

Dollar Hedged GBP Inc £ 107.19 107.19 -0.08 1.77

Real Return Cls A Inc £ 214.87 214.87 -1.21 2.05

Chartered Asset Management Pte LtdOther International Funds

CAM-GTF Limited $ 291202.13 291202.13 2200.92 0.00

CAM GTi Limited $ 889.21 - 24.41 -

Raffles-Asia Investment Company $ 1.50 1.50 0.06 1.99

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 € 14.77 - 0.05 0.00

EUR Accumulating Class (H) € 11.12 - 0.00 0.00

EUR Distributing Class € 11.60 - 0.04 3.83

EUR Distributing Class (H) € 8.70 - 0.00 3.93

GBP Distributing Class £ 12.81 - -0.05 3.89

GBP Distributing Class (H) £ 9.15 - 0.00 4.26

USD Accumulating Class $ 12.48 - 0.00 0.00

Dodge & Cox Worldwide Funds plc-Global Stock Fund

USD Accumulating Share Class $ 20.14 - 0.00 0.00

GBP Accumulating Share Class £ 25.61 - -0.10 0.00

GBP Distributing Share class £ 17.68 - -0.07 1.41

EUR Accumulating Share Class € 25.82 - 0.07 0.00


Dodge & Cox Worldwide Funds plc-U.S. Stock Fund

USD Accumulating Share Class $ 25.75 - 0.01 0.00

GBP Accumulating Share Class £ 30.97 - -0.09 0.00

GBP Distributing Share Class £ 18.91 - -0.05 1.07

EUR Accumulating Share Class € 28.51 - 0.10 0.00


Dragon Capital Group1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, VietnamFund information, dealing and administration: [email protected]

Other International Funds

Vietnam Equity (UCITS) Fund A USD $ 21.26 - 0.15 0.00


Ennismore Smaller Cos Plc (IRL)5 Kensington Church St, London W8 4LD 020 7368 4220FCA RecognisedEnnismore European Smlr Cos NAV £ 121.77 - -0.16 0.00

Ennismore European Smlr Cos NAV € 133.51 - -0.91 0.00

Ennismore European Smlr Cos Hedge FdOther International Funds

NAV € 475.70 - -9.58 0.00

Equinox Fund Mgmt (Guernsey) Limited (GSY)RegulatedEquinox Russian Opportunities Fund Limited $ 179.78 - 1.60 0.00

Euronova Asset Management UK LLP (CYM)RegulatedSmaller Cos Cls One Shares € 49.81 - -0.89 0.00

Smaller Cos Cls Two Shares € 32.90 - -0.53 0.00

Smaller Cos Cls Three Shares € 16.57 - -0.26 0.00

Smaller Cos Cls Four Shares € 21.29 - -0.34 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 £ 50.80 - 0.17 0.33

Fidelity Cash Fund Y-ACC-GBP £ 1.02 - 0.00 0.66

FID Emerg Europe, Middle East and Africa Fund W-ACC-GBP £ 2.01 - 0.01 -

Fidelity Global Enhanced Income Fund W-ACC-GBP £ 1.96 - 0.02 3.82

Fidelity Global Focus Fund W-ACC-GBP £ 30.10 - 0.25 0.22

Fidelity Global High Yield Fund Y-ACC-GBP £ 14.70 - 0.01 3.83

Fidelity Japan Fund W-ACC-GBP £ 4.63 - 0.07 0.61

Fidelity Japan Smaller Companies Fund W-ACC-GBP £ 3.97 - 0.02 0.37

Fidelity Select 50 Balanced Fund PI-ACC-GBP £ 1.09 - -0.01 0.75

Fidelity Special Situations Fund W-ACC-GBP £ 29.05 - 0.49 3.95

Short Dated Corporate Bond Fund Y ACC GBP £ 10.92 - 0.00 3.91

Fidelity Sustainable Water & Waste W Acc £ 1.04 - 0.02 -

Fidelity Sustainable Water & Waste W Inc £ 1.04 - 0.02 -

Fidelity UK Growth Fund W-ACC-GBP £ 3.34 - -0.05 -

Fidelity UK Select Fund W-ACC-GBP £ 2.99 - 0.06 2.50

Institutional OEIC Funds

Europe (ex-UK) Fund ACC-GBP £ 6.63 - 0.06 -

Findlay Park Funds Plc (IRL)30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900FCA RecognisedAmerican EUR Unhedged Class € 122.89 - -1.38 -

American Fund USD Class $ 143.96 - -1.87 0.00

American Fund GBP Hedged £ 72.64 - -0.95 0.00

American Fund GBP Unhedged £ 111.28 - -2.04 0.00

Foord Asset ManagementWebsite: www.foord.com - Email: [email protected]

FCA Recognised - Luxembourg UCITS

Foord International Fund | R $ 42.22 - 0.02 -

Foord Global Equity Fund (Lux) | R $ 15.08 - -0.12 -

Regulated

Foord Global Equity Fund (Sing) | B $ 18.45 - -0.13 0.00

Foord International Trust (Gsy) $ 42.00 - 0.02 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 13.92 - 0.00 10.87

Franklin Emg Mkts Debt Opp GBP £ 9.09 - -0.02 7.72

Franklin Emg Mkts Debt Opp SGD S$ 19.94 - -0.01 5.37

Franklin Emg Mkts Debt Opp USD $ 15.75 - -0.02 7.45

[email protected], www.funds.gam.comRegulatedLAPIS GBL TOP 50 DIV.YLD-Na-D £ 95.22 - -0.43 4.82

LAPIS GBL F OWD 50 DIV.YLD-Na-D £ 95.32 - -0.56 -

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 - -0.01 0.00

Holiday Property Bond Ser 2 £ 0.62 - -0.01 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 € 22.00 - -0.02 -

IVI European Fund GBP £ 26.53 - -0.21 -

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 £ 0.85 - 0.01 -

Lloyds Investment Fund Managers Limited (1000)F (JER)PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555Other International Funds

Lloyds Investment Funds Limited

Euro High Income € 1.5360xd - 0.0010 2.33

High Income £ 0.8684xd - -0.0005 3.78

Sterling Bond £ 1.5910xd - -0.0020 2.16

Lloyds Multi Strategy Fund Limited

Conservative Strategy £ 1.2830 - -0.0030 0.00

Growth Strategy £ 1.7870 - -0.0080 0.00

Aggressive Strategy £ 2.4210 - -0.0150 0.00

Global USD Growth Strategy $ 1.7180 - -0.0070 0.00Dealing Daily

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 £ 42.53 - -0.02 -

M&G Charity Multi Asset Fund Inc £ 0.76 - 0.00 -

M&G Charity Multi Asset Fund Acc £ 83.33 - 0.95 -

MMIP Investment Management Limited (GSY)Regulated

Multi-Manager Investment Programmes PCC Limited

UK Equity Fd Cl A Series 01 £ 2198.02 2234.80 185.86 0.00

Diversified Absolute Rtn Fd USD Cl AF2 $ 1618.37 - 50.85 0.00

Diversified Absolute Return Stlg Cell AF2 £ 1524.28 - 43.83 0.00

Global Equity Fund A Lead Series £ 1494.62 1499.51 48.24 -

Marwyn Asset Management Limited (CYM)RegulatedMarwyn Value Investors £ 340.40 - -14.66 0.00

Milltrust International Managed Investments ICAV (IRL)[email protected], +44(0)20 8123 8369 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$ 98.28 - 0.99 0.00

Milltrust Global Emerging Markets Fund - Class A $ 100.98 - 0.33 0.00

The Climate Impact Asia Fund (Class A) $ 101.81 - 0.21 -

Milltrust International Managed Investments [email protected], +44(0)20 8123 8369, www.milltrust.comRegulatedMilltrust Alaska Brazil SP A $ 61.80 - 0.74 -

Milltrust Laurium Africa SP A $ 78.67 - 0.74 -

Milltrust Singular ASEAN SP Founders $ 124.12 - -1.28 -

Milltrust SPARX Korea Equity SP A $ 136.90 - 0.47 -

Milltrust Xingtai China SP A $ 135.26 - 1.42 -

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 $ 236.89 - 3.38 0.00

New Capital Dynamic European Equity Fund € 124.47 - 0.30 0.00

New Capital Dynamic UK Equity Fund £ 108.89 - 0.16 0.00

New Capital Global Alpha Fund £ 112.74 - -0.22 0.00

New Capital Global Equity Conviction Fund $ 179.57 - -0.85 0.00

New Capital Global Value Credit Fund $ 156.57 - -0.15 0.00

New Capital Japan Equity Fund ¥ 1448.22 - -12.47 0.00


New Capital US Growth Fund $ 393.00 - -7.43 0.00

New Capital US Small Cap Growth Fund $ 174.52 - -1.51 0.00

New Capital Wealthy Nations Bond Fund $ 152.01 - -0.25 0.00

Oasis Crescent Management Company LtdOther International Funds

Oasis Crescent Equity Fund R 10.64 - 0.06 0.74

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 2.16

Oasis Crescent Global Equity Fund $ 31.47 - -0.23 0.50

Oasis Crescent Variable Balanced Fund £ 8.87 - -0.02 0.00

OasisCresGl Income Class A $ 10.95 - -0.01 2.70

OasisCresGl LowBal D ($) Dist $ 11.88 - -0.03 1.05

OasisCresGl Med Eq Bal A ($) Dist $ 12.79 - -0.04 0.37

Oasis Crescent Gbl Property Eqty $ 7.46 - 0.07 1.55

Omnia Fund LtdOther International Funds

Estimated NAV $ 595.25 - 11.14 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 £ 9.89 - -0.03 0.03

Orbis OEIC Global Balanced Standard £ 13.90 - -0.10 0.00

Orbis OEIC Global Equity Standard £ 17.28 - -0.11 0.00

Orbis OEIC UK Equity Standard £ 6.43 - -0.04 0.00

Platinum Capital Management LtdOther International Funds

Platinum All Star Fund - A $ 136.11 - - -

Platinum Global Growth UCITS Fund $ 12.67 - 0.17 0.00

Platinum Essential Resources UCITS Fund SICAV USD Class E $ 6.83 - -0.03 0.00

Platinum Global Dividend UCITS Fund $ 52.65 - 0.09 0.00

Polar Capital Funds Plc (IRL)RegulatedAutomation & Artificial Intelligence CL I USD Acc $ 15.17 15.17 -0.20 0.00

Asian Financials I USD $ 381.32 381.32 2.28 0.00

Biotechnology I USD $ 34.67 34.67 -0.59 0.00

Emerging Market Stars I USD Acc $ 12.96 - -0.06 0.00

European Ex UK Inc EUR Acc € 10.47 10.47 0.01 0.00

Financial Opps I USD $ 10.92 - 0.04 2.45

GEM Income I USD $ 11.06 - -0.02 0.00

Global Convertible I USD $ 14.91 14.91 -0.02 0.00

Global Insurance I GBP £ 6.62 - 0.03 0.00

Global Technology I USD $ 76.14 - -1.28 0.00

Healthcare Blue Chip Fund I USD Acc $ 15.07 15.07 -0.15 0.00

Healthcare Opps I USD $ 56.78 - -0.31 0.00

Income Opportunities B2 I GBP Acc £ 2.05 2.05 -0.01 -

Japan Value I JPY ¥ 105.51 105.51 2.25 0.00

North American I USD $ 26.19 26.19 -0.21 0.00

UK Val Opp I GBP Acc £ 10.09 10.09 0.17 0.00


Polar Capital LLP (CYM)RegulatedEuropean Forager A EUR € 172.79 - -2.41 0.00

Private Fund Mgrs (Guernsey) Ltd (GSY)RegulatedMonument Growth 29/09/2020 £ 481.64 486.21 5.04 1.59

Prusik Investment Management LLP (IRL)Enquiries - 0207 493 1331RegulatedPrusik Asian Equity Income B Dist $ 156.24 - 1.20 4.98

Prusik Asia Emerging Opportunities Fund A Acc $ 157.49 - -0.77 0.00

Prusik Asia Fund U Dist. £ 206.64 - 0.27 0.00

Purisima Investment Fds (CI) Ltd (JER)RegulatedPCG B 268.38 - -0.52 0.00

PCG C 262.32 - -0.51 0.00

Ram Active Investments SAwww.ram-ai.comOther International FundsRAM Systematic Emerg Markets Eq $ 184.93 184.93 -0.54 -

RAM Systematic European Eq € 440.60 440.60 -0.04 -

RAM Systematic Funds Global Sustainable Income Eq $ 116.27 116.27 0.28 0.00

RAM Systematic Long/Short Emerg Markets Eq $ 105.52 105.52 0.15 -

RAM Systematic Long/Short European Eq € 142.63 142.63 0.08 -

RAM Systematic North American Eq $ 325.13 325.13 -3.38 -

RAM Tactical Global Bond Total Return € 154.28 154.28 -0.03 -

RAM Tactical II Asia Bond Total Return $ 153.48 153.48 0.05 -

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 676.40 - -6.13 0.06

LF Ruffer European C Inc 123.43 - -1.12 0.10

LF Ruffer European O Acc 660.04 - -6.03 0.00

LF Ruffer Equity & General C Acc 441.85 - -3.59 0.20

LF Ruffer Equity & General C Inc 404.10 - -3.28 0.20

LF Ruffer Equity & General O Acc 431.20 - -3.53 0.00

LF Ruffer Equity & General O Inc 399.22 - -3.27 0.00

LF Ruffer Gold C Acc 332.75 - -8.19 0.00

LF Ruffer Gold C Inc 201.39 - -4.96 0.00

LF Ruffer Gold O Acc 324.61 - -8.01 0.00

LF Ruffer Japanese C Inc 153.08 - -0.97 0.09

LF Ruffer Japanese C Acc 328.95 - -2.08 0.09

LF Ruffer Pacific & Emerging Markets C Acc 359.15 - -2.87 0.87

LF Ruffer Pacific & Emerging Markets C Inc 97.88 - -0.78 0.88

LF Ruffer Pacific & Emerging Markets O Acc 350.16 - -2.82 0.55

LF Ruffer Total Return C Acc 482.72 - -1.27 0.87

LF Ruffer Total Return C Inc 312.39 - -0.82 0.88

LF Ruffer Total Return O Acc 471.04 - -1.26 0.87

LF Ruffer Total Return O Inc 304.66 - -0.82 0.88

RobecoSAM (LUX)Tel. +41 44 653 10 10 http://www.robecosam.com/RegulatedRobecoSAM Sm.Energy/A £ 23.94 - -0.38 1.27

RobecoSAM Sm.Energy/N € 22.06 - -0.19 0.00

RobecoSAM Sm.Materials/A £ 198.85 - -1.86 1.55

RobecoSAM Sm.Materials/N € 207.75 - -0.47 0.00

RobecoSAM Sm.Materials/Na € 135.48 - -0.31 1.55

RobecoSAM S.HealthyLiv/B € 231.66 - -0.18 0.00

RobecoSAM S.HealthyLiv/N € 223.78 - -0.16 0.00

RobecoSAM S.HealthyLiv/Na £ 167.67 - -1.31 1.39

RobecoSAM S.Water/A £ 294.99 - -0.95 1.44

RobecoSAM S.Water/N € 258.00 - 0.99 0.00

Rubrics Global UCITS Funds Plc (IRL)www.rubricsam.comRegulatedRubrics Emerging Markets Fixed Income UCITS Fund $ 136.56 - 0.00 0.00

Rubrics Global Credit UCITS Fund $ 17.40 - 0.00 0.00

Rubrics Global Fixed Income UCITS Fund $ 182.61 - -0.14 0.00


SlaterInvestments

Slater Investments Ltd (UK)www.slaterinvestments.com; Tel: 0207 220 9460FCA RecognisedSlater Growth 587.87 587.87 4.85 0.00

Slater Income A Inc 111.96 111.96 1.41 5.22

Slater Recovery 273.05 273.05 2.80 0.00

Slater Artorius 237.63 237.63 1.19 0.42

Stonehage Fleming Investment Management Ltd (IRL)www.stonehagefleming.com/[email protected] Global Best Ideas Eq B USD ACC $ 223.67 - -1.86 0.00

SF Global Best Ideas Eq D GBP INC £ 262.36 - -3.56 0.10

Toscafund Asset Management LLP (UK)www.toscafund.comAuthorised FundsAptus Global Financials B Acc £ 3.23 - 0.00 5.01

Aptus Global Financials B Inc £ 2.25 - -0.01 6.42

Toscafund Asset Management LLPwww.toscafund.comTosca A USD $ 321.86 - 44.14 -

Tosca Mid Cap GBP £ 144.18 - 26.67 -

Tosca Opportunity B USD $ 217.40 - 39.74 -

Pegasus Fund Ltd A-1 GBP £ 34.40 - 6.40 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 118.12 - -0.54 0.10

Trojan Ethical O Inc 117.89 - -0.54 0.09

WA Fixed Income Fund Plc (IRL)RegulatedEuropean Multi-Sector € 122.75 - 0.04 3.26

Zadig Gestion (Memnon Fund) (LUX)FCA RecognisedMemnon European Fund - Class U2 GBP £ 188.31 - -1.47 0.00


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 [email protected] +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 [email protected] or call +44 (0)20 7873 3132 for further information.

OCTOBER 6 2020 Section:Stats Time: 5/10/2020 - 19:00 User: gerry.white Page Name: MANAGED FUNDS 4, Part,Page,Edition: EUR, 14, 1

Tuesday 6 October 2020 ★ 15

OCTOBER 6 2020 Section:Ad Page Time: 5/10/2020 - 14:33 User: william.baxter Page Name: FPA, Part,Page,Edition: EUR, 15, 1


Bass-baritone Bryn Terfel performs with the Britten Sinfonia at the BarbicanMark Allan

no more charismatic singer than Terfel and he can get an audience eating out of his hands. With no conductor, he had the spotlight to himself and also intro-duced his choice of music.

The programme took him back to his beginnings. He learnt Bach’s solo can-tata Ich habe genug when he was a stu-dent next door at the Guildhall School of Music & Drama and it was the piece he sang at his first professional engage-ment after winning the Lieder Prizeat Cardiff Singer of the World in 1989.He is now an imposing presence in it, harnessing his Wagnerian-sized bass-baritone to a grand vision of the after-life, but without losing the intimacy of this devotional music. The oboe solofell to the expert Nicholas Daniel, a founder member of the Britten Sinfonia.

Gerald Finzi’s Let us garlands bring, a

collection of five Shakespeare settings, dates from 1942 and is shadowed by wartime loss. In its version with string orchestra it offers a rich store of very English emotion for those who have the ability to unlock it. Terfel sings poetry with a clarity and naturalness that make every word touch the heart and that is a very special gift for any performer.

No Terfel programme would be com-plete without music from his Welsh homeland. This one ended with a heart-felt selection of Ivor Novello favourites, newly arranged in versions for string orchestra by Iain Farrington (at the piano), and a couple of Welsh folk songs. The concert is only available online until 8pm BST on October 6, so hurry now or miss it.

barbican.org.uk

Richard Fairman

Slowly life is returning to a semblanceof normality. One by one, London’sconcert halls have been opening forthe autumn season, mostly offering small-scale and short concerts in front of a limited live audience, but also relayed online.

A few days after the SouthbankCentre came to life, the Barbican has opened its doors. This concert with Bryn Terfel and the Britten Sinfonia marked the gradual re-emergence of a concert season which will reach a fuller schedule in November when the London Sym-phony Orchestra moves back down the road from its smaller home at LSO St Luke’s. The classical and contemporary music programmes, also some jazz and folk, are getting back into gear at the same time.

The regulations stipulate a maximum of 300 in the hall, including performers, and concerts mostly last around an hour. This “Live from the Barbican” series is available online at the Barbican website, where there is a modest fee.

Getting so much music out to an online audience anywhere in the world has been one of the few positive out-comes of the coronavirus pandemic, but this concert was a potent reminder of why live music can be special. There is

CLASSICAL MUSIC

Bryn TerfelBarbican, Londonaaaaa

Clockwise, from main: Boniface Mwangi leads demonstrators during a protest in Nairobi in 2014; Mwangi on the ground at a demonstration; film-maker Sam SokoTony Karumba/AFP via Getty Images

Four years later he was still filming and the editing process took two years. The result is an intimate portrait, cut from some 500 hours of footage, of a young man’s quest to change his country for the better, and the impact of that struggle on his family.

The film, which won a Special Jury Award at the Sundance Film Festival this year, cuts smoothly from private moments at Mwangi’s home to street battles and eventually the campaign trail. It caps a remarkable journey for Soko, too, who only moved to Nairobi in his twenties from a rural town in the Kenyan highlands. “I still see myself as a country boy,” he says.

Like many Kenyans, Mwangi, who was raised by a single mother, grew up poor and did his best to keep out of trou-ble. “It’s hard to be poor. You’re taught to be timid and avoid problems,” he says, explaining both the root of his childhood nickname, Softie, and the film’s title.

In person, he is warm and charis-matic, and any trace of that timid youth is gone. “Let us not lie to ourselves that Kenya has changed,” he told me last year, lamenting the dominance of a static political elite since independence in 1963, persistent tribalism and the lack of real economic progress for many of the country’s 50m people.

The Kenyan economy has grownat more than 5 per cent a year formost of the past two decades. Innova-tions in technology, such as theworld-leading mobile money service Mpesa, have driven a commercial dyna-mism unrivalled in the region. Yet, politically the country has lurchedfrom crisis to crisis, corruption scandal to corruption scandal.

As the film shows, Mwangi decided

that to really change Kenya, it was bet-ter to start from inside the system. We see him embark on an ambitious cam-paign to win a seat in parliament.The bear pit of Kenyan politics is adangerous place, and Mwangi soon receives death threats that force his family to flee to the US for almost a year.

“I am willing to die for my country, if it means me dying for Kenya to be better for my kids,” Mwangi tells his wife Njeri before she leaves. “What if it doesn’t?” she replies.

Soko’s camera follows Njeri and the children to Jersey City, and her role grows throughout the film. In doing that, the young director does something unusual in a political biography by giv-ing Mwangi’s wife equal importance as she works to hold the family together.

“Humanity puts heroes in such a high space and we totally forget that there is a whole legion of people in the back-ground that help you see that hero and see that hero succeed,” Soko tells me.

K enyan director Sam Soko’s debut documentary feature, Softie, opens with thefilm’s protagonist, Boniface Mwangi, sourcing 1,000 litres

of pigs’ blood. “I’ve found a van for you. When do you want it? When are you get-ting the blood?” Mwangi asks.

Later that evening, watched by his wife and three young children, Mwangi and his team work through the Nairobi night, decanting the fluid into plastic bottles to then smear it outside theKenyan parliament in the first in aseries of eye-catching protests against government corruption.

A 37-year-old photojournalist-turned-activist, Mwangi is probably Kenya’s most vocal agitator for political and social change. The east African nation is one of the continent’s most vibrant economies, celebrated by inves-tors for its entrepreneurial spirit and relative political stability — it has held four elections since 2002 and power has changed hands twice. But scratch beneath the surface, and the founda-tions are rotten, Mwangi says.

Corruption is pervasive, political dealmaking often self-serving and vio-lence all too common. In 2007, after the country’s main opposition leader chal-lenged the president’s re-election citing fraud, protests escalated into pitched battles between rival tribal groups that left more than 1,000 people dead. Mwangi, a young photographer at the time — twice named CNN Africa photo-journalist of the year — documented the killings in vivid detail. His first photo captured a man attacked at a roadblock, blood streaming from the machete wound across his forehead.

Too often his editors would decide that the images were too violent to

publish, Mwangi says, and he walked out. Abandoning journalism, he took his pictures on a national tour to remind Kenyans of the violence he says was cun-ningly fomented by the country’s politi-cal leaders and then ignored when those same leaders decided it was time to cut a deal. “I can’t stand politicians,” he says. “I can’t stand the hypocrisy.”

Soko, 35, who first met Mwangi in 2013, had never made a feature film before and did not intend to make one when he made Softie. His initial proposal was to shoot a five-minute video of one of Mwangi’s protests, a sort of “how-to video for activism”, he tells me from Berlin, where the film opened last week’s Human Rights Film Festival.

‘Softie’ in the bear pit of Kenyan politics

“In this case, Njeri is also an activist on so many levels.”

Back in Nairobi, Mwangi channels Barack Obama’s fundraising strategy from the 2008 US election campaign in crowdsourcing 1.6m Kenyan shillings (approximately $160,000) from small individual donations. It is a revolution-ary tactic in a country where candidates normally pay the voters.

On the campaign trail, Mwangi does what he does best, walking the streets of the capital charming the electorate, but faces an uphill battle against the politi-cally untested but financially flush pop star Jaguar, who is running as the ruling party’s candidate.

“We may sound like the lone voice in the wilderness, but we are here to stay and to reclaim our country,” Mwangi says, though one always feels the odds are against him. The now-disgraced British data analytics and lobbying firm Cambridge Analytica makes an appear-ance as the ruling party’s strategist, and eight days before the vote the head of Kenya’s digital voting system, Chris Msando, is brutally murdered.

The film is political but not politi-cised. “I am not pointing fingers at any-one, I’m not accusing anyone, I am say-ing this is our reality,” Soko tells me. As a result, Softie feels optimistic. It is that rare thing: an African story about an African protagonist told by an African director — and the world is watching.

‘Softie’ is released in the US on October 12 and in Kenya on October 16. It is available in the UK on BBC iPlayer under the title ‘The Underdog and the Battle for Kenya’

arts

Every word touched the heart

A new documentary recordshow photojournalist-turned-activist Boniface Mwangi took on his country’s establishment. Tom Wilson reports

Kenyan activist Boniface Mwangi on the campaign trail with his wife, Njeri

‘We may sound like the lone voice in the wilderness, but we are here to stay and to reclaim our country’

OCTOBER 6 2020 Section:Features Time: 5/10/2020 - 17:59 User: david.cheal Page Name: ARTS LON, Part,Page,Edition: EUR, 16, 1


FT BIG READ. NEW COLD WAR

FT series The US and China are competing for military superiority of the western Pacific and over vital technologies — contests that are often framed as a struggle between freedom and dictatorship.

Gideon Rachman explores how the rivalry between the two superpowers is starting to feel eerily familiar.

before nuclear weapons. By contrast, the threat of nuclear annihilation defined the cold war. Yan Xuetong, a prominent scholar at Tsinghua Univer-sity in Beijing, has argued that fear of nuclear conflict makes it unlikely that China and America will ever go to war — which would make the current US-Chinese confrontation more like the cold war than the run-up to the two world wars.

Strength of systems

But perhaps the most intriguing com-parison is about how the cold war ended, rather than how it began. The contest was not settled on the battlefield or in space. It was determined by the rel-ative resilience and success of the two societies — the US and the USSR.

Ultimately, the Soviet system simply collapsed under the weight of its own internal problems. (Ironically, this was the fate that communists had long pre-dicted for the capitalist system.) The USSR’s fate vindicated the strategy first sketched out by the American diplomat George Kennan, who in 1946 had advo-cated the patient containment of Soviet power while awaiting the system’s demise. Kennan also argued that the vitality of America’s own system would be crucial in any contest with the USSR.

It is this last comparison which should disquiet the Americans and their allies most. The presidential election threat-ens to provoke a crisis in the American democratic system of a sort that has not been seen since the 19th century. Even if the US achieves the peaceful transition of power that Mr Trump has failed to guarantee, the Trump era has revealed social and economic divisions that have turned America inwards and damaged the country’s international prestige.

The spectacle of the Trump-Biden contest has strengthened the sense in China that the US is in decline. Eric Li, a trustee of the China Institute at Shang-hai’s Fudan University, inverts the cold war analogy — by casting the US as the USSR, in the grip of an “existential brawl between two near octogenarians”, refer-ring to Mr Trump and Mr Biden. “Remember [former Soviet rulers] Brezhnev, Andropov and Chernenko?” By contrast, according to Mr Li, “China today is the opposite of what the USSR was decades ago. It is practical, ascend-ant and globally connected.”

For all the confidence of pro-govern-ment intellectuals, such as Mr Li, there is no doubt Mr Xi’s China also has signif-icant internal problems. As Mr Westad notes, it is “a de facto empire that tries to behave as if it were a nation-state” and the strains are showing from Hong Kong to Tibet to Xinjiang. But the PRC has also demonstrated an economic prow-ess that the USSR never possessed.

If the US and China are indeed embarking on a new cold war to deter-mine which country will dominate the 21st century, the vitality of their domes-tic systems may determine who prevails.

A 21st-century confrontation

F rom Stettin in the Baltic to Trieste in the Adriatic, an ‘iron curtain’ has descended across the continent.” Winston Churchill’s speech in Fulton,

Missouri, in March 1946 is remembered as a key moment in the outbreak of the cold war.

If future historians are ever looking for a speech that marked the beginning of a second cold war — this time between America and China — they may point to an address by Mike Pence delivered at Washington’s Hudson Institute in Octo-ber 2018. “China wants nothing less than to push the United States of Amer-ica from the western Pacific . . . But they will fail,” the vice-president declared. “We will not be intimidated and we will not stand down.” Pointing to China’s political system, Mr Pence argued: “A country that oppresses its own people rarely stops there.”

For students of the first cold war between the US and the USSR, some of this sounded eerily and worryingly familiar. Once again, the US is facing off against a rival superpower. Once again, a military rivalry is taking shape — although this time, the main theatre is the western Pacific rather than central Europe. And once again, the conflict is being framed as one between the free world and a dictatorship. To add to the sense of symmetry, the People’s Repub-lic of China, like the Soviet Union, is run by a Communist party.

Even in the past few months, the dete-rioration in relations between the US and China has rapidly gathered pace, against the backdrop of a feverish US election campaign. Military tensions in the Pacific are rising. Taiwanese officials say the September exercises by the Chi-nese military within its air defence buffer zone were the most significant threat to its security since Beijing launched missiles into the seas around the island in 1996. The US has a commit-ment to help the country defend itself.

The US has moved aggressively to block Chinese technology firms, such as TikTok and Huawei, from expanding their international operations, or buy-ing US-made computer chips. China and America are even indulging in tit-for-tat expulsions of journalists.

And coronavirus, which originated in China, has devastated the global econ-omy and led to more than 200,000 deaths in America. President Donald Trump, who is currently in hospital after testing positive for the virus, has made it clear that he holds China directly responsible for the pandemic.

In another confrontational speech that will probably be remembered by historians, secretary of state MikePompeo warned in July that five decades of engagement with China had been a failure.

“If we don’t act now, ultimately, the [Chinese Communist party] will erode our freedoms and subvert the rules-based order that our free societies have worked so hard to build,” he said, speak-ing at the Californian library of Richard Nixon, the president who reopened ties with Beijing during the cold war. “The old paradigm of blind engagement with China simply won’t get it done. We must not continue it. We must not return to it.”

New uncertainty

For Joseph Nye, a professor at Harvard University and former senior Pentagon official, US-China relations are now “at their lowest point in 50 years”.

There is even a fear that, as in the cold war, the world could increasingly divide into two blocs — one that looks to Wash-ington and one that looks to Beijing. That may sound implausible in a world of globalised supply chains. But, espe-cially in the tech sector, there are signs that this is already starting to happen.

As the Huawei case illustrates, the US is now clearly leaning on its allies to cut tech ties with China — and, in some cases, such as in Britain and, to an extent, Germany, the pressure is work-ing. China, however, is also building its own global network of influence through trade and its Belt and Road Ini-tiative — which could involve loans and investment of up to $1tn in infrastruc-ture development outside China.

Henry Kissinger, the former US secre-tary of state who helped bring about the rapprochement between the US and China in the 1970s, said last year that Beijing and Washington were now in the “foothills of a cold war”.

If China’s growing technological prow-ess has captured US attention this year, its defence capabilities are also driving the growing anxiety. China’s rapid mili-tary build-up has altered the balance of power between Beijing and Washington. The Chinese navy now has more ships than the US navy — and they can all be concentrated in the western Pacific. China has also developed a formidable range of missile and satellite weaponry that could threaten American aircraft carriers and disrupt the US military’s communications.

military bases across the South China Sea has been perceived in Washington as a direct challenge to American power in the Pacific. Constitutional changes that would allow Mr Xi to rule for life, the crackdown in Hong Kong and the mass imprisonment of the Uighur minority have all driven home the mes-sage that China is becoming more dicta-torial — dashing any remaining hopes in Washington that economic modernisa-tion in China would lead to politicalliberalisation.

An increasingly wealthy, illiberal and aggressive China is much easier to see as a dangerous rival that needs to be con-fronted. In public, the Chinese leader-ship continues to decry the “zero-sum thinking” of the Americans. In private, however, the Xi leadership seems to regard the US as a dangerous rival, intent on overthrowing Communist party rule. As long ago as 2014, Wang Jisi, a well-connected Beijing academic, wrote that China’s leadership was preoc-cupied by “alleged US schemes to sub-vert the Chinese government”.

Integrated rivals

But while the parallels between the cur-rent US-China rivalry and the start of the cold war are striking, there are also some important differences. The most obvious is that the economies of the US and China are deeply integrated with each other. Trade between China and the US amounts to more than half a tril-lion dollars a year. China owns more than $1tn of US debt. Important Ameri-can companies rely on making and sell-ing their products in China. Manufac-ture of the Apple iPhone is built around a supply chain based in southern China. There are more Kentucky Fried Chicken restaurants in the PRC than in the US.

This intertwining has also created a degree of social convergence. China may be run by a Communist party, but its major cities throb with commercial life, private enterprise and western brands, and could never be mistaken for Soviet Russia’s grey uniformity. “Chinese soci-ety is more similar to American society than Soviet society ever was,” Yale Uni-versity historian Odd Arne Westad noted in Foreign Affairs magazine.

There are also strong scientific and educational ties between China and the US. Mr Xi’s daughter was educated at Harvard. Stalin’s daughter was not sent to Yale.

Given the levels of economic and social integration between the US and China, some scholars argue that the cold war may not be the best historical anal-ogy — although some of the other poten-tial comparisons are no less alarming. Historian Margaret Macmillan thinks the “more important parallel is the UK and Germany before 1914”. This was a classic great power rivalry between an established and a rising power. At the time, some said the extent of economic integration between Germany and Brit-ain made war both irrational and

In a recent article, Michèle Flournoy, who is tipped as a possible US defence secretary if Joe Biden wins the presiden-tial election, worried that “dangerous new uncertainty about the US ability to check various Chinese moves . . . could invite risk-taking by Chinese leaders”, adding: “They could conclude that they should move on Taiwan sooner rather than later.”

Ms Flournoy’s recommendation is that America should strengthen its mili-tary capacity, so as to restore deter-rence. The fact that a prominent Demo-crat is taking this position points to an important aspect of the new US-China rivalry: it will not disappear if Mr Trump loses the White House in the presidential election.

There is no doubt that the current US president uses much more confronta-tional language with China (and indeed most countries) than any of his prede-cessors. Mr Trump’s single-minded focus on the US trade deficit with China and his protectionist policies are also distinctive. But Mr Trump may have helped to bring about a permanent shift in orthodox opinion in Washington. Daniel Yergin, an economic historian,

As with Harry Truman and Joseph Stalin, the emerging dispute pits the American system under Donald Trump against a Communist-run society under Xi Jinping — FT montage

The US is leaning on its allies to cut tech ties with China — and, in some cases, such as in Britain, the pressure is working

notes that “while Democrats and Republicans hardly agree on anything today in Washington, one thing they do agree on is that China is a global compet-itor and that the two countries are in a technology race”.

A Biden approach to China would place more emphasis on American alli-ances than the Trump administration, and would probably make less use of tariffs. The Democrats would also look to work with China on climate change. But a Biden administration would not alter the basic premise of the Trump policy — which is that China is now an adversary.

In Beijing, this move towards a “cold war mentality” is decried — and is often attributed solely to America’s supposed refusal to accept a multipolar world. It probably is the case that there is a bipar-tisan determination in Washington to retain America’s status as “number one”. But the Chinese view skates over the extent to which Beijing itself has contributed to the emergence of a sec-ond cold war.

Since President Xi Jinping came to power in 2012, China has become more assertive overseas and more authoritar-ian at home. Beijing’s construction of

The Chinese have enjoyed 40 years of peace and

prosperity, but there is a yearning to test and demonstrate national strength

unlikely. But that did not prevent the two nations sliding into hostilities.

Mr Westad, an expert both on China and the cold war, points out that, unlike the Soviet people in 1946, the Chinese have enjoyed 40 years of peace and prosperity. Therefore, “in a crisis, the Chinese are more likely to resemble the Germans in 1914 than the Russians after the second world war — excitable, rather than exhausted,” he says.

A yearning to demonstrate national strength is visible in nationalist circles in China. Hu Xijin, editor of the Global Times newspaper, tweeted in July that China “is fully capable of destroying all of Taiwan’s military installations within a few hours, before seizing the island shortly after. Chinese army & people have such self-confidence.”

Another historical analogy is the clash between Imperial Japan and the US that reached an endpoint in the second world war. As a senior Japanese diplo-mat sees it: “The Chinese are making the same mistake we made, which is to challenge American hegemony in the Pacific.” But at the time of Pearl Harbor, the Japanese economy was just 10 per cent the size of America’s. China, by con-trast, now has an economy that is two-thirds the size of America’s — and larger when measured by purchasing power.

There is one further aspect in which the comparison between modern China and the Japan of the 1930s is suggestive. Imperial Japan argued that it was liber-ating Asia from western imperialism (countries invaded by the Japanese, such as China and Korea, did not see it that way). There is a similar hint of a “clash of civilisations” in some Chinese nationalist discourse — in which the rise of China is portrayed as ending centu-ries of domination of the global order by white, western nations.

The Anglo-German rivalry and the US-Japanese confrontation culminated in war. But they broke out in an age

Michelle Flournoy, a potential defence secretary in a Biden administration, has called for America to strengthen its military capacity

FT seriesAnalysis of the growing Sino-US rivalry, and the key faultlines in defence, tech and diplomacy

ft.com/bigread

OCTOBER 6 2020 Section:Features Time: 5/10/2020 - 18:14 User: alistair.hayes Page Name: BIGPAGE, Part,Page,Edition: EUR, 17, 1


TUESDAY 6 OCTOBER 2020

The name Rolls-Royce is synonymous with British engineering excellence. The aero-engine group is one of thefew UK companies that can claim to be a world-class manufacturer. It has a storied past, having built the engines for aircraft that became part of Brit-ain’s heritage and it now dominates the market for large commercial jets. But its fate is harnessed to that of the wider aviation market; as the pandemic has forced the grounding of airline fleets it has suffered a collapse in revenues and significant cash outflow.

The Financial Times’ revelation that Rolls-Royce’s leading advisers on a deeply discounted £2bn rights issue chose to cut back their underwriting commitments, amid fears over the pandemic and market volatility linked to the US election, has only helped to underline the fragility of the company’s finances. The crisis has raised ques-tions over its future and what, if any, role the UK government should play.

The coronavirus crisis is not of Rolls-Royce’s making but it went into it already battling on multiple fronts. Operational issues, notably durability problems on the Trent 1000 engine, had heaped extra costs on to the company, raising questions over its profitability. A pledge by chief executive Warren East to return at least £1bn in free cash flow in 2020 looked challenging even before Covid-19, despite the good progress made. Like other engine makers, Rolls-Royce loses money on the sale of its power plants and makes profits on the servicing and maintenance when they are flying. The crisis has exposed the fragility of that model. Rolls-Royce has been hit especially hard given its focus on big engines that power widebody air-craft for international traffic — the mar-ket that remains the most depressed. Current management could not have foreseen Covid-19. Nor is it to blame for the bet on big engines; aerospace is an

industry where decisions are made based on predictions that may or may not pay off decades hence.

Unfortunately for Rolls-Royce share-holders there is no quick strategic fix. Mr East and chairman Ian Davis should arguably have launched the rights issue sooner; investors are being offered 10 shares for every three they own at 32p each, a steep discount to a theoretical ex-rights price and far below the £11 level they were at when Sir Ian took the chair in 2013. The problem for manage-ment is it cannot control when things will return to normal. If aviation does not recover as hoped, questions over Rolls-Royce’s future will return and with it the role of the government, which retains a golden share. Ministers have so far resisted a direct taxpayer handout, offering instead to backstop the rights issue via a loan guarantee from the Export Finance agency.

In the meantime, there is more the government could do to help stimulate demand. Barring new restrictions, securing agreement on the testing of passengers before and after boarding would help to get people flying.

Given the government’s poor record on testing this will not be easy but it would be a start. Ministers could also offer research and development incen-tives towards developing less polluting engines. France has promised its indus-try support towards a green aircraft. Rolls-Royce is developing a more effi-cient engine that will need funding. An alternative revenue stream beckons in small modular nuclear reactors.

None of this may prove sufficient to help Rolls-Royce survive the next 100 years. The government has said it will publish a new industrial strategy this autumn. Ministers should beware of allowing Covid-19 to dictate long-term industrial policy. But it is high time they started thinking about the future of British industry.

Aero-engine maker’s troubles show need for proper industrial policy

Rolls-Royce requiresa clearer flight path

Nearly 20 years ago, Anne Krueger, then deputy managing director at the IMF, proposed an institutional mecha-nism for sovereign debt restructuring — a global bankruptcy regime for over-indebted governments. The controver-sial initiative was a response to acascade of financial collapses in emerg-ing economies in Asia, Mexico, and Argentina.

While the proposal died a quiet death, the problems it aimed to address have only grown in importance. It is timely that the fund has revived the idea. In the run-up to its annual meet-ings next week, its current head Krista-lina Georgieva has called for a new “international debt architecture” to allow orderly sovereign restructurings.

Rightly so. The magnitude of the eco-nomic shock from the Covid-19 pan-demic has badly weakened the often already fragile public finances of many poor and emerging countries. While welcome steps have been taken to avoid immediate liquidity crises, including emergency IMF lending and debt service suspension by creditors, the pandemic’s drawn-out nature means we are only at the start of the financial problems it will leave behind.

In all but the most resilient debtors, liquidity problems tend to turn into solvency problems. For poor and emerging economies, weak public finances all too easily trigger balance of payments crises that add damage to the economy, in turn dragging tax reve-nues down further. Nor is the problem confined to poor and middle-income countries. As the eurozone debt crisis showed, even advanced economies can be at risk. Many entered this crisis with greater debt than the last time around.

Previous efforts at multilateral reforms of sovereign debt management foundered on opposition, including from the US, to a supranational author-ity. Until such resistance is overcome,

there are other ways. Much progress has been made since the global finan-cial crisis on designing debt contracts with “collective action clauses” — pro-visions to make it easier for creditors themselves to agree lighter terms for a debtor that would otherwise struggle to honour the original ones.

The rationale for all bankruptcy arrangements, after all, is precisely this: it can be in the interest of credi-tors, too, to restructure payment obli-gations when changed economic cir-cumstances make these more onerous than expected. When debts are unpay-able in full, insisting on full repayment only diminishes debtors’ ability to recover — and their chance to give creditors the best realistic return.

The functioning of financial markets also benefits from the certainty a well-designed restructuring regime pro-vides. IMF research suggests “pre-emptive” restructuring is cheaper, in terms of lost output, investment, and capital availability, than waiting until a default makes it unavoidable.

Building on the advantages of mod-ern CACs offers a route for reform. The eurozone should complete the pending update of its CACs to make it harder for “holdouts” to paralyse a majority of creditors willing to restructure. The IMF, meanwhile, rightly highlights the risk of sovereign debt that takes alter-native forms to standard bond con-tracts and so eludes the reach of CACs. Much government-to-government debt is also hidden or owed to coun-tries, such as China, that are outside traditional debt negotiation groups. All debt should be brought into the open and all official creditors join multilat-eral forums for debt negotiations.

Ms Georgieva has set a worthwhile agenda for finance ministers to solve these problems. Using next week’s meetings to make progress could soon look like time well spent.

Action is vital to prevent a more serious crisis in emerging economies

Time is right for a new global debt architecture

humanitarian crisis and will need to flee their homes.

Mr Aliyev would add more credibility to his case by engaging in dialogue with locals rather than threatening their lives.Suren GomtsianAssociate Professor, School of Law, University of LeedsLeeds, UK

Caucasus crisis is an opportunity for EuropeRegarding your article “Clashes escalate in Caucasus border dispute” (Report, October 3), the latest tension in Nagorno-Karabakh is an opportunity for Europe to restore credibility on its eastern borders and broader Middle East.

The common narrative largely ignores the fact that both Nagorno-Karabakh and seven surrounding Azerbaijani regions were ethnically cleansed from over 600,000 Azerbaijanis in the early 1990s.

It also omits that the UN Security Council called for Armenian troops to withdraw from occupied lands four times. The conflict has remained unresolved for nearly 30 years.

This should concern all of us. As Azerbaijan is having to enforce

international law by force, the Armenian leadership is doing everything to draw Russia and Turkey into a wider conflict.

Equally important is that one-sided statements of President Emmanuel Macron of France entrench the narrative that international law only matters when the west decides so, especially in the Middle East.

It is crucial for Europe to take a balanced position.

It must ensure that international law is upheld or risk more countries moving further in the orbit of the other regional powers.Mukhtar GaradaghiLondon KT3, UK

This is no moment for real estate borrowers’ workout Regarding Joe Rennison’s article “Destruction of value in US real estate revealed” (FT.com, September 27) I have been in the real estate “workout” business through multiple cycles since 1975. Most of the “value destruction” came as a result of overbuilding, overleveraging, greed or sheer owner incompetence. When you had several of these ingredients combined, the value destruction was immense.

I am thinking that this time it is actually different. The properties you cited are victims of the Covid-19 virus, not the above listed problems of the past.

It’s great that there is a “special servicer” system to take over these troubled assets but I am not sure what any special servicer, no matter how highly skilled, is going to do to fill up hotel rooms, retail spaces and offices.

For the first time in my long career we may have a situation where the solution is to “help out” the borrowers, not put them through a tough “workout”.Ted LearyFounder and President, Crosswater AdvisorsLos Angeles, CA, US

A ditty from Punch makes apt point on slavery tiesRegarding your article “How UK heritage is coming to terms with its links to slavery” (House & Home, FT Weekend, September 26) can there be many bodies, corporate or individual, who did not benefit, directly or indirectly, from the slave trade?

I am reminded of a rhyme which appeared in the now defunct Punch magazine: Though with the north we sympathise/ It must not be forgotten/ That with the south we have stronger ties/ Which are comprised of cotton.

This was at the time of the American civil war when I believe that half a million people relied on the Lancashire mills for their livelihood.Michael FieldingWinchester, Hampshire, UK

Extracting silver from lead is as old as the hills Merryn Somerset Webb derides the possibility of extracting silver from lead (“Now is a time of bubble companies, not of market bubbles”, Opinion, FT Weekend, September 26). But silver has been extracted from lead ore from about 500BC and is now achieved using the Parkes process which was patented in 1850. Astonishingly, a little gold can sometimes be extracted using the same process. So, not as silly as it sounds.Alistair GibbCoupar Angus, Perthshire, UK

The video clip begins innocently enough. The scene is the White House Rose Garden. The occasion: US president Donald Trump’s announcement of Amy Coney Barrett’s nomination to the Supreme Court. As Mr Trump and Ms Barrett prepare to take the stage, the event’s nearly 200-guests mingle, the vast majority of them mask-less.

In this particular clip, a news camera chronicling the scene follows one of the guests, Mike Lee, Republican senator from Utah. Mask clasped in his left fist, Mr Lee reaches out and repeatedly grasps another man’s arm, before spotting a female acquaintance and pulling her into a tight embrace. When he spies the man she is with, he extends the embrace to pull all three of them into a bear hug.

Within a week, Mr Lee announced he had tested positive for coronavirus — one of at least half a dozen guests who have said after attending the event that they were infected.

Watching the video is like watching a slow-motion car crash in a world where most of us have spent the past six months travelling by foot. Online, people posting the clip reflected on how many such embraces they had shared since the pandemic began. Five, one wrote. Zero, said another.

Since the US first locked down in March, the country has been living in two split universes. One group has spent months bleaching their groceries, going without seeing friends and family, and are yet to enjoy a meal inside a restaurant; another has taken

to heart the Trump White House’s proclamations that concerns about the virus were overblown and the economy should fully reopen with no extra precautions taken.

For the first group, mask wearing has become a form of virtue signalling — the absence of one in public is enough to garner a dirty look. For the second, the mask draws scorn — a feeling Mr Trump has tapped as he mocked his Democratic opponent Joe Biden for frequently wearing one at last week’s presidential debate.

Nowhere have those worlds collided more than in Washington, where some White House and congressional staffers reported feeing pressured not to wear masks, because their bosses either did not believe in them or thought they made them look scared or weak.

“You were looked down upon when you would walk by with a mask,” Olivia Troye, a former top aide on the coronavirus task force who resigned in August and endorsed Mr Biden, told the New York Times.

At a Trump campaign rally in Michigan last month, attendees were asked by a CNN news crew why they had chosen to stand in the tightly packed event without a mask.

“Because there's no Covid — it's a fake pandemic created to destroy the United States of America,” answered one. “If I die, I die,” replied another. “What are you going to do, wear a mask and stay inside for another year? Where’ll that get us?”

A 2016 Trump voter I spoke to in

Virginia, who is still not sure which candidate she will vote for in November, recalled the consternation she felt in her own community — with no one wearing masks at gas stations and the grocery store cashier’s mask left dangling around her chin. The first time she saw that she didn’t speak up, she says, but the next time she asked: why wasn’t she wearing her mask? “This is America,” the cashier responded indignantly.

Will Mr Trump’s diagnosis and hospitalisation bring these two worlds closer together? It is too soon to say. A speedy recovery for Mr Trump could make those at risk of the virus feel more emboldened.

On Saturday, the president proclaimed that new, experimental treatments, including those prescribed by his doctors, were already working: “We have things happening that look like they’re miracles coming down from God.”

At the same time, across the country, the number of coronavirus infections is starting to rise again.

On Sunday, Mr Trump’s senior campaign adviser Jason Miller appeared on television to strike a different tone from the president’s previous messages. Mr Trump, he added, had told him to remind the American people to “wash their hands, use hand sanitiser, make sure that if you can’t socially distance, to wear a mask”.

We’ll see who listens this time.

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Include daytime telephone number and full addressCorrections: [email protected]

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Hong Kong business must be on right side of history Tony SK Li (“Another business view of the Hong Kong unrest”, Letters, October 2) suggests that businesses operate in a moral and political vacuum without consequences.

Joshua Wong and his fellow protesters (Opinion, September 30) are leading a fight for freedom inHong Kong. This is one of the key pillars that helped the city emerge in the last century as a leading global metropolis and centre for business investment.

For decades, businesses have valued Hong Kong as an innovative financial hub, underpinned by values that provide stability such as respect for human rights and the rule of law. The national security law that targets protesters like Mr Wong is a clear and present threat to these values and businesses are starting to notice.

It is no longer enough for businesses to have a corporate social responsibility function that pays lip service to values such as respect for democracy and human rights; they have to actually live it.

That is why partners, politicians and other external stakeholders are criticising firms like HSBC and Standard Chartered which stand with the brutal authorities in Hong Kong rather than with Hongkongers themselves. These companies are now beginning to feel the pinch in both their reputations and their flagging share prices.

Businesses are rightly focused on returning profits but they won’t be able to do so if they choose to stand on the wrong side of history. Lord Hunt of Kings HeathLabour peerAlyn Smith MPScottish National PartyLord Alton of Liverpool Crossbench peerStewart McDonald MPScottish National PartyHouses of Parliament, London SW1, UK

Dialogue should be the first step in Nagorno-Karabakh After your report of violence away from the Nagorno-Karabakh conflict front line and of artillery and drone attack threats against civilians in Stepanakert, Nagorno-Karabakh’s capital (“Clashes escalate in Caucasus border dispute”, FT Weekend, October 3), it’s beyond comprehension how President Ilham Aliyev’s regime in Azerbaijan can claim that ethnic Armenians of the region will live safely in Azerbaijan.

This just reinforces the fears of locals that the moment Azeri forces regain control over Nagorno-Karabakh, the ethnic Armenian population will face a

Nostalgia for an era before drinking laws were relaxed Des Brown (Letters, September 30) asks how pubs survived prior to 1988 when they were only allowed to open between midday and 3.00pm and 7pm and 10.30pm (11.00pm weekends).

My memory is that most of the pubs, long gone, doubled up as family homes as well as a business. Many of the landlords and landladies I remember. I can also remember their children.

A food menu, if you were lucky, might have included both cheese and ham sandwiches (lunchtimes only). A different business model and one, with a few exceptions, that has gone as breweries and pub companies put pressure on managers to advertise and provide a full-range menu and service to fill their pubs all the hours they are open.

At the time of the relaxation in drinking laws I looked forward to the more relaxed lifestyle.

Now I look back and think, be careful what you wish for.Stephen WattsCambridge, UK

Why are restrictions on wedding venues so harsh?Claer Barrett (Opinion, FT Money, September 26) notes that the 15-person limit at weddings includes the couple, but does not mention that it also includes two registry officials, leaving room for just 11 guests, including parents, siblings, best man etc.

The couples who have booked their weddings with us at Athelhampton House understand that, like everyone, they have to adapt to Covid. But as they reduce their guest lists to comply with this “rule of 11”, and as we explain to them the risk controls like masks during the ceremony and socially distanced tables, they ask why weddings are allowed only a fraction of the numbers allowed in a pub.

The answer seems to hinge on just a few issues such as stand-up mingling, and (now) the 10pm curfew.

We and many of our clients would willingly accept restrictions on such areas, if in return a more manageable number of guests was allowed, and as a venue our licence would be at stake in enforcing them. But no one has asked the couples, or us, or parliament.Giles KeatingPuddletown, Dorset, UK

An idea for MPs to take finance exams on holidayBefore introducing financial education for all (Opinion, FT Money, September 19) perhaps you should insist that MPs — during their lovely long holidays perhaps — take a mandatory, examined (marks published) course in the basic principles of risk and finance.Peter KrijgsmanHuish Champflower, Somerset, UK

The FT’s editorial “The ECB begins its shift to a new inflation goal” (FT View, October 2) is correct in pointing out that the European Central Bank failed to meet its policy goal of “below but close to 2 per cent”.

But measures of inflation and inflationary expectations over the past decade suggest that the ECB achieved its constitutional price stability mandate. Measures of price stability

have been relatively stable at a low level and, as importantly, so have measures of inflationary expectations.

The inflationary experience of the 1980s and 90s indicates that not only does the actual behaviour of prices have important economic and financial implications, but so does the behaviour of inflationary expectations. For example, shifts in inflationary expectations can have a major impact

on the levels and stability of interest rates and exchange rates.

Thus, before moving to a new policy regime, the ECB should explain how it will monitor and take into account any movements in inflationary expectations.Richard ErbFormer Deputy Managing Director of the IMF, 1984-94Moiese, MT, US

ECB has more to do on inflation expectations

Washington Notebook by Courtney Weaver

Corrections

c South Africa’s ruling African National Congress party received 57.5 per cent of the vote in the last election, not 54 per cent as incorrectly stated in an article on October 5.c The bar chart for Huawei and Ericsson’s share of the global telecoms equipment market was transposed in a graphic on October 5.

OCTOBER 6 2020 Section:Features Time: 5/10/2020 - 18:54 User: alistair.hayes Page Name: LEADER USA, Part,Page,Edition: EUR, 18, 1


government to be able to get its business through” says one. But the two sides have common cause on the issue of accountability. The overuse of second-ary legislation, which limits scrutiny and amendment, is a key battleground.

Last week, in the face of certain defeat, the government agreed to more scrutiny of coronavirus restrictions and was rebuked by the Speaker for treating the House with contempt. That the rebellion was led by Graham Brady, the chairman of Tory backbenchers, was a sign of how badly the government has mismanaged its own MPs.

Last month, they forced a similar con-cession over the threat to break a treaty obligation. The next revolt is over plan-ning reforms which would see new local housing targets set centrally by an algo-rithm. For ministers, this is the only way to force through projects against the Nimby instincts of MPs.

The underlying trend to all the dispa-rate rebellions is a government that does not wish to be constrained by MPs. It respects only force. But MPs arerecognising this and responding in kind.

“unwillingness of ministers to accept modern international standards of par-liamentary scrutiny on treaties” while keeping more powers for themselves. “The UK now has less opportunity to scrutinise negotiations of new treaties than when we were in the EU, which is a strange way to take back control.”

The last parliament’s Brexit paralysis hardened Downing Street hearts and bolstered its already visible contempt for MPs. Planned changes to the scope of judicial reviews show a broader plan to weaken checks on its freedom to act. It all means MPs can no longer count on others to curb government excess.

Some realism is needed about this Westminster Spring. Unlike opposition MPs, Tories do not want to frustratelegislation. “We do need the elected

P ower is not given away; it must always be taken. Over decades, UK MPs have slowly given ground to the execu-tive. The rigidities of the

party system limit revolts, and MPs have even lost the final say in determin-ing their party leaders. But a unique set of circumstances means that maybe, just maybe, the House of Commons is approaching one of those inflection points which shifts the balance.

“Almost entirely by accident, Boris [Johnson] has reminded us what we were put here to do,” says one usually loyal ex-minister. “All governments think parliament gets in the way but this lot are Maoists. They don't respect any institution.” The haughty hand of the UK prime minister’s Downing Street team is forcing even his MPs to examine parliament’s role in holding the execu-tive to account.

The conditions are almost perfect. The feeling that the sweeping coronavi-rus powers which parliament voted to give to the government are being used to restrict personal liberties without mod-eration or scrutiny has emboldened MPs to demand more say in their use. In addition, there are a large number of

Tory MPs who are past caring about patronage or punishment, and some tal-ented organisers.

Then there is Brexit. Having pro-claimed the restoration of parliamen-tary sovereignty, Mr Johnson finds that his MPs are ready to take him at his word. Before Brexit, ministers could force through orders saying that EU law demanded it. One cabinet minister notes: “I don’t think it has dawned on some departments yet that they are going to have to win support for their regulations. This is a turning point.”

One rebel says even ministers are pri-vately encouraging MPs. Much of the cabinet has been disempowered by a centralising Downing Street operation. One significant shift was the move to make ministerial political aides answer-able not to their notional boss, but to Downing Street. The one person a min-ister could trust is now seen by some as a snitch. Sovereignty of parliament looks more like sovereignty of a clique around the prime minister.

One unremarked example of the potential new terrain is treaties. Prior parliamentary approval is not needed before a treaty can be signed (though ratification can be delayed afterwards). Before Brexit, the European parliament scrutinised trade treaties, but MPs will not have the same right. In the Com-mons this week, ministers will seek to restore a power, struck out by the Lords, to push through orders under other future treaties with only minimal scru-tiny. Jonathan Djanogly, a former Tory justice minister, sees a pattern in the

‘Maoist’ executive faces

a revolution

Today, the sovereignty of parliament looks more like

sovereignty of a clique around the prime minister

Paul Salem

Angus Deaton

I n March, just as the world was reel-ing from the onset of the pandemic, the International Comparison Pro-gram completed its most recent computations. This dry-sounding

statistical exercise collected prices in 176 countries, using them to calculate purchasing power parity exchange rates. The lack of media attention on the results is a reminder that measures of economic activity come second — unless they relate directly to threats to health.

Yet even in a time of plague, compara-ble international accounts are required for essential measurements, including cross-country comparisons of gross domestic product, living standards and global measures of poverty and inequal-ity. And here the latest computations have important things to say.

The new accounts bring good news and not so good news. The good news

is that the new 2017 data are notparticularly newsworthy. For example, the economies of China and the US were of similar size in 2017, as they were in 2011. (The former is only two-thirds the size of the latter measured at current exchange rates.)

The not so good news is that globalisa-tion and transfers of intellectual prop-erty have driven GDP even further from the common (mis) understanding that GDP measures people’s material well-being, adding to its many shortcomings aired in recent years.

Good news first. The 2017 results are a recognisable update of the 2011 update, and not a radical remapping of the world’s economic geography.

This is important because previous updates sometimes changed the relative size of countries and continents. The 2005 estimates, for example, made the world look much more unequal than previously believed; they also sharply increased some measures of poverty.

These apparent increases were reversed in 2011, a reversal maintained for 2017. This stability increases the sta-tistics’ credibility, helps their usefulness

GDP to grow by 26 per cent in one year.By contrast, per capita disposable

income of Irish households grew at “only” 4.6 per cent in real terms. The lat-ter is clearly a better estimate of the change in Irish living standards.

Why the discrepancy? Eleven of the 12 countries in the list are either invest-ment hubs or resource-based countries. In both cases, consumption is arelatively low share of total GDP,often because profits account for a larger part of national income than wages and salaries.

Over time, profits will contribute to the income of at least some households and, in turn, their consumption. But at any given moment, GDP per capita includes amounts that are not part of people’s current wellbeing, or their own income.

Furthermore, the income from for-eign-owned capital is part of GDP, because it originates within the country, but not part of gross national income, because it is not owned by nationals.

This is a reminder that, absent strong redistributive channels, rich resource-based economies are often internally

and will be especially important when, post Covid-19, the ICP moves to higher frequency measurement.

The not so good news comes from the list of the world’s richest countries, as measured by per capita GDP: Luxem-bourg, Qatar, Singapore, Ireland, Ber-muda, Cayman Islands, Switzerland, UAE, Norway, Brunei, the US and Hong Kong. Whatever this list tells us, it is

hardly an exact list of countries where people enjoy the world’s highest mate-rial living standards.

Ireland is a good example. Attracted by low corporation tax rates, several large multinationals relocated their intellectual property assets to Ireland, so that income generated from that property now contributes to Irish GDP. In 2015, such transfers caused Irish

A recent international price comparison shows a widening gap between

material wellbeing and GDP

I expected that coming back to my homeland would be heart-wrench-ing. As I stood amid Beirut’s devas-tation, I watched shell-shocked citi-zens sweep up the remains of their

homes and businesses. The cataclysm of the August 4 blast that destroyed the port, took or ruined the lives of multi-tudes and laid waste to much of the city, coincided almost exactly with the 100th anniversary of modern Lebanon’s founding in 1920. I wondered if history was now conspiring to bury Lebanon, or if there was still a path forward beyond survival, towards revival and renewal.

Like most Middle East states, modern Lebanon was engineered by colonial powers after the defeat of the Ottoman Empire. Le Grand Liban was established by the French, amalgamating the auton-omous Ottoman province of Mount Leb-anon with four Ottoman provinces on

the coast and inner Bekaa Valley. As the country’s first century came to a close, French president Emmanuel Macron shuttled between Paris and Beirut in a bid to stave off complete collapse.

From where many Lebanese stand today, it has been a tragic 100 years. Sec-tarian jealousies at the country’s crea-tion still dominate parties and politics. Dependence on foreign intervention or influence, which gave birth to the new state, is still the modus operandi of Leb-anon’s leaders. And the country is still the playground of regional conflicts. After 1948, Lebanon hosted Palestinian refugees fleeing Israel’s establishment, and eventually became a battleground for the Israeli-Palestinian and Israeli-Arab conflict. More recently, it has become a proxy battleground between Iran and Israel.

But Lebanon also has an alternate his-tory. Over the past century, different communities lived and governed together, a pluralist society thrived in a region dominated by authoritarianism and repression, and civic and national identities gained traction. Beirut emerged as a cultural capital of the Arab

state that governs in transparency and according to the rule of law; and a state that insists on full sovereignty over its territory rather than negotiate its dominion in bits and pieces with Hizbol-lah, a group armed and financed by a foreign power.

Sadly, Lebanon is unlikely to get that. Mr Macron’s initiative started out with high hopes of convincing the oligarchy to stand aside, at least temporarily, and allow an emergency government of capable independents to undertake the urgent reforms needed to stem eco-nomic collapse and start a recovery. But the initiative was stymied from the start, and collapsed on September 26 as parties failed to agree on the distribu-tion of ministerial portfolios.

Hizbollah, the dominant party, apparently concluded that its ruling coalition can muddle through the eco-nomic and political crisis, without a deal with France and a bailout from the international community — help that would force the reforms and transpar-ency that none of the oligarchy wants. The Hizbollah coalition seems unboth-ered that its decision not to grasp

world — an Athens in a sea of Spartas. Indeed, the October 2019 protests rep-resent this other Lebanon: a spontane-ous movement brought thousands on to the streets to demand the downfall of the ruling oligarchy and an end to sec-tarian and corrupt government.

Yet the oligarchy cares little for the cries of its people. Even before the August explosion, the national currency

had collapsed, people’s savings had been wiped out and unemployment and pov-erty was skyrocketing. Returning this month, I also saw how Covid-19 had spread its own brand of misery.

Lebanon needs profound change: a new form of politics, where citizens take charge of their fate and choose their own leaders rather than follow in sectarian herds. It needs a civic and meritocratic

The challenge is how to provide assistance to a state

whose leaders insist on driving it into the ground

britain

RobertShrimsley

Opinion

These battles will shape not only this government but the powers of the post-Brexit parliament. As economic times get harder, Mr Johnson will need his MPs on side and giving ground on proc-ess may seem a small price.

A number of ideas are proposed, from forcing ministers to dial down the aggressive use of secondary legislation, to giving select committees powers to summon ministers and their aides. Some Tories suggest reinvigorating backbench policy groups. Others sug-gest arming parliament with a powerful research and analytical body which goes beyond the remit of the existing Office for Budget Responsibility. This last may be a fond hope, but MPs are encouraging each other to think big.

Governments do not lightly give away power and, in the end, MPs have to want it. “A lot depends on how confident par-liament feels,” said one rebel. Parlia-ment has the numbers, the mood and an opportunity to reset the balance. These moments do not come often.

[email protected]

R oman roads, Chinese gun-powder, British steamships, repeating firearms: great power competition has always been defined by tech-

nological edge. Today China, Russia, Iran and others recognise that technol-ogy can nullify the military and eco-nomic supremacy that the UK, US and their allies have long enjoyed.

China is singularly focused on catch-ing up. It does so legally by investing bil-lions in key technologies; fomenting sci-ence, technology, engineering and maths education; and by mining open-source databases. It also does so illicitly via cybertheft and industrial espionage.

How the world reacts will decide whether the west continues to lead and reap the benefits of technological inno-vation. Europe and the US have been unable so far to shape China’s behav-iour. But the time for complacency is over. We need a strategy to remain com-petitive. Crucially, this requires deeper mutual engagement.

After the second world war, Europe and the US created an international order. They established norms for peaceful economic relations, and inter-national standards governing every-thing from telecommunications to sat-ellites and safe flight paths. This enor-mous effort paid off. It is now time to do the same for tech development: a pro-posal I call the “Technology 10”.

This would build on a recent UK initia-tive to create a “Democracy 10” that aims to group G7 countries with South Korea, India and Australia to co-ordinate

on global 5G standards, and securesupply chains. So far, no country has engaged meaningfully. The UK and US must double down on the effort.

If Joe Biden is elected US presidentin November, UK Prime Minister Boris Johnson will have a real partner in such an endeavour. Mr Biden has said he would “build a united front of friends and partners to challenge China’s abu-sive behaviour” in stealing “technology and intellectual property”; confront its “high-tech authoritarianism”; and build a safe 5G infrastructure and the “rules, norms and institutions” to govern the global use of new technologies.

How the initiative is organised is important. Creating a new, standing organisation would be a mistake. Such government-led institutions are slow and bureaucratic. Far better is a flexible, informal structure of working groups.

These would convene senior officials, technology leaders and academics in closed-door meetings to drive concrete outcomes. Engaging industry fromthe start would also help it see why “business as usual” with China may be infeasible.

A flexible structure is also key to accommodate allies who view China’s threat differently, and may lead in one technology but not another. A working group on semiconductors might, for example, involve the US, UK, South Korea, Japan, the Netherlands and Tai-wan. A working group on AI standards might instead emphasise the UK, US, Canada, Israel and India.

The Tech 10 should begin with a few narrow issues and then create additional groups as needed. Topics might include: ensuring that Tech 10 countries main-tain their lead in semiconductor design and production; co-ordinating on invest-ment screening and export controls; regaining the lead in fintech innovation; and defining norms to govern safe uses of AI and other advanced technologies. Future groups might co-ordinate resources for research on advanced bio-technology and quantum computing.

Coordinating among allies is the most effective way to counterbalance China. Initiatives such as Made in China 2025 and China Standards 2035 aim to end the technological lead of the west andits allies by dominating market share, controlling international standards, and hollowing out industrial capacity. It is time for like-minded nations to unite.It is time for a Tech 10.

The writer is co-founder and principalof Rice, Hadley, Gates & Manuel LLC,a consulting firm

The US, UK and allies must unite to keep Chinese

tech at bay

If Biden is elected president, Johnson

will have a real partner in such an endeavour

unequal, because the ownership of resources — especially mineral resources — is confined to a few. That GDP tells us nothing about who gets what is another of GDP’s most familiar criticisms. Nor does GDP speak to the sustainability of natural resources or the use of the environment. The prob-lem is not the accounting, but the defini-tion of GDP.

These arguments call not for the abo-lition of the GDP numbers, which are essential, but for a more intelligent use of the accounts and for measuring what it does not include.

Continuing efforts to integrate envi-ronment-economy accounts or to make GDP less oblivious to distributional questions need support. For policymak-ers, an exclusive focus on GDP per capita or its growth rate makes little sense. To put it bluntly, the top 12 list is not always where a country would want to be.

The writer is co-chair of the technicaladvisory group of the InternationalComparison Program. Paul Schreyer, OECD acting chief statistician and co-chair of the group, contributed

Why the world’s richest countries are not all rich

Heart-wrenching Lebanon may yet have better days

France’s lifeline will also drive millions deeper into misery.

The international community is rightly concerned about Lebanon. Its stability is key to the stability of the Middle East and the eastern Mediterra-nean. The challenge is how to provide urgent assistance to a state whose incumbents insist on driving it into the ground; how to press for necessaryeconomic and social reforms; and how to encourage an open political process where domestic forces for changecan grow. The next serious attempt at government formation is likely toawait the outcome of November’s US election.

As I boarded my plane at the end of my visit, I couldn’t help but weep for my homeland, and gape at the abyss between the aspirations of its people and the cravenness of its political bosses. But I also knew that Lebanon was worth saving, and that there should be brighter days ahead in the country’s second century.

The writer is president of the Middle East Institute

AnjaManuel

OCTOBER 6 2020 Section:Features Time: 5/10/2020 - 18:04 User: alistair.hayes Page Name: COMMENT USA, Part,Page,Edition: EUR, 19, 1


CROSSWORDNo 16,600 Set by GURNEY

JOTTER PAD

ACROSS 1 Rewritten, after resistance suppressed,

it’s antiracist, this guy figures? (12) 8 One’s pragmatic about celebrities (7) 9 No way to have prepared drink for

James in prison, Communist (7)11 Have people to enforce law, sedulous, at

borders (7)12 What might hobble horse, or dog when

current’s cold (7)13 Examine temperature – not adequate

(5)14 Genuine gold article, not piece regularly

seen (9)16 Away in Europe on vacation, exotic

Welsh ruler (9)19 Revolutionary path, centrepiece of work,

was effective (5)21 Born too long ago – heading away from

media reporting (7)23 Race heats OK after review (3,4)24 Player newly engaged by club, Leo for

one is not good initially (7)25 Garden tent erected, keeping agreement

(7)26 Time worker on vessel, extremely hazy

about program, gets bellicose (7-5)DOWN 1 City flier’s direction to avoid street (7) 2 Article, easy to see, going over soldiers’

food item (7) 3 Home match – worried when Will’s not

available (9) 4 Duties ultimately – not requests (5) 5 Calvin at intervals with partner –

prevailing trend (7) 6 Fruit bed after month not quite finished

(7) 7 Absurd, our sprees – opt to change (12)10 The Italian, moving north, put in month

at German city food shop (12)15 Score at finish in such a position? (9)17 On field one might insult winter traveller

(7)18 Our group getting over a call, tiresome

(7)19 Work supporting old retreat, providing

everything needed (3-4)20 Flatter by including NI port? (7)22 Dog ignores black bird (5)

Solution 16,599

Fortunately for Bristol-Myers Squibb, there will be no need for its investors to vote this time. Yesterday it announced it would acquire heart disease specialist MyoKardia for $13.1bn in cash. That is small change for an acquirer valued at $157bn, which means it can avoid shareholder involvement. An increment in the endless consolidation of US pharmaceuticals should proceed without serious challenge.

Early in 2019, Bristol said it would acquire biotech juggernaut Celgene for a price approaching $100bn. Because the acquisition required a heavy payment in stock, Bristol needed shareholder approval. This was forthcoming — but only after a couple of big investors lobbied against the acquisition. They argued Celgene was not worth the price or the headache, increasing the latter for Bristol.

As its name indicates, the California company’s focus is heart disease, one of Bristol’s four main therapeutic areas. MyoKardia’s key product mavacamten treats a thickening of the heart muscle called obstructive hypertrophic cardiomyopathy. The drug could be ready to market as soon as next year.

Bristol will use cash and new debt to fund the far smaller MyoKardia purchase so shareholders will not get a vote this time. In trading yesterday, Bristol’s shares were essentially flat so there is little evidence of any backlash. Bristol shares are up about a quarter since Celgene was first announced.

For companies like MyoKardia, it is a great time to sell. Emerging therapeutics for rare diseases are highly sought after by Big Pharma worried about patent cliffs. This has pushed up prices, as Bristol’s expensive purchase of Celgene illustrated. Now Bristol has made the calculation it needs to diversify further.

It is paying a premium of more than 60 per cent for MyoKardia. Bristol has $22bn in cash and net debt of just $25bn. With an A credit rating, paying a steep price is easy when debt is cheap and cash is plentiful. Bristol has earned the right to make this decision for itself.

Bristol-Myers Squibb: what the heart wants

foreign companies to sell goods online to Chinese consumers at lower tax rates even when they are staying at home. Demand has been strong since the pandemic started.

Recently, regulations in the Chinese duty-free market have been relaxed at an unprecedented scale, including the tripling of purchase quotas in some provinces. The government expects the market to quadruple to $29bn in the next three years. But online luxury goods platforms, which include Alibaba’s Tmall Global and Kaola, have struggled with unreliable goods and vendors. Alibaba aims to remedy that through a joint venture with Dufry. Access to Alibaba’s payment services should help Dufry’s physical stores, as air travel slowly recovers. This looks like a great deal for both businesses.

target proceeds from a share offering from SFr500m to SFr700m ($763m). That will provide handy extra finance after Dufry has bought out and delisted $311m US subsidiary Hudson.

A joint venture with Alibaba is the other reason Dufry shares jumped 17 per cent yesterday. This could help Dufry reach a customer base of 720m.

Chinese travellers have been avid buyers of duty-free goods. They can avoid local taxes of up to 56 per cent on products deemed to be luxury goods. Watches and perfumes, for example, are taxed at more than 30 per cent.

But the pandemic has curbed travel — and airport shopping sprees. China, meanwhile, wants shoppers to go on spending. The retail sector accounts for more than a tenth of gross domestic product. Helpfully, China allows

the pandemic. An enlarged and stronger Nexi offers a decent opportunity for exposure to that trend.

A tie-in between Alibaba, the world’s largest ecommerce platform and Dufry, the biggest duty-free operator, could not have come at a better time.

The Switzerland-based airport retailer has been knocked sideways by the slump in air travel. The deal with the Chinese ecommerce giant offers Dufry a new channel to a large segment of missing demand.

Alibaba is to buy a stake of up to 10 per cent in Dufry. That should increase

Alibaba/Dufry: line of duty

Cash is king in Italy and that is a problem for the republic. Government efforts to promote digital payments have aligned with investors’ interests in a deal to combine Nexi and Sia. The all-share merger will create a €15bn payments giant in which state fund Cassa Depositi e Prestiti will be the largest shareholder. It will push up bigger barriers to entry in the Italian payments market while giving Nexi shareholders greater foreign exposure.

As the Italian state creaks under the pressure of Europe’s largest debt pile, digital payments growth has become more urgent. Italy combines more transactions in cash than any other European country with some of the highest levels of tax evasion. Recent measures to encourage card payments aim to reduce both. Digital payments would also cut banks’ costs.

Nexi shareholders will keep a 70 per cent holding in the combined group, in what is, in effect, a takeover. Sia’s investors will hold the remainder, with 25 per cent of shares in the hands of CDP. The deal values Sia’s equity at €4.5bn. Including €700m of net debt, a valuation of 19 times next year’s expected ebitda is in line with where Nexi shares currently trade.

Processing payments for physical and online merchants in Italy will remain the bulk of business. Sia’s greater focus on services to financial intermediaries complements Nexi. Plenty of overlap means annual cost savings estimated at €100m, or one-fifth of Sia’s cost base last year.

A combined 70 per cent market share will make Italy less attractive to other payment groups. The contenders include Worldline of France, which agreed to buy local rival Ingenico earlier this year. Worldline claims to be “European payment champion”. Nexi looks set to challenge that as the pair seek further acquisitions. Attempts to shift Italy away from cash transactions may now make headway as a result of

Nexi/Sia: state of pay

Throwing a ball at a wall is easy; catching it on the rebound is harder. The UK Treasury’s loan scheme for small businesses — the £38bn Bounce Back Loan Scheme — chucks taxpayer money at a towering threat, the loss of income because of the pandemic. While there are echoes of earlier programmes, this one is fully guaranteed by the Treasury. When delinquencies begin, banks will risk their reputations rather than their capital as they try to collect debts.

Many small businesses have struggled to make ends meet as consumers have reined in spending. Despite some recovery, almost a sixth of them remained shut in September, according to the Office for National Statistics. Some lenders have been slow to dole out the government’s largesse.

Banks should be keen to be seen as agents for good in this crisis. The last one shredded their reputation. As the financial system tottered, high-street lenders tightened terms or yanked credit from small businesses. A government prodded by angry voters “encouraged” the Project Merlin loan scheme. Banks promised to lend about £76bn while curbing executive pay. Most pundits saw it as a flop.

This time is different. Banks did not cause the crisis and have remained functional during it. Bounce back loan terms are attractive, with rates of 2.5 per cent fixed, interest-free for the first year, set well below market levels.

Even so, banks will attract criticism again. First of all, the new scheme may not achieve its aims. A recession depresses the appetite for credit. Second, default rates will be high, perhaps up to 50 per cent. Third, borrowers that banks turn away as unviable will angrily dispute that judgment. Fourth, a proportion of successful borrowers will prove to be zombies, fraudsters or companies with wealthy backers.

Banks can limit the damage. They can handle applications as a priority rather than a chore. They can avoid pillaging weaker small businesses as a couple of lenders did last time. And they can forget big payouts to the chief executive, even if the bond-trading desk has been doing nicely.

Bounce back loans are part of a

Bounce back loans: having a ball

broader stimulus package. The state has implicitly recognised that moral hazard is worth tolerating in return for protecting thousands of decent businesses from collapse.

It is right to do so.

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

Twitter: @FTLex

Exclusive clubs often have permissive rules. The collapse of Wirecard, a fintech company riddled with fraud, showed up the quirks of those governing the Dax, the index of the corporate elite of Germany. A revamp of the rule book — and a possible enlargement — proposed by exchange operator Deutsche Börse is necessary and welcome.

The overhaul would make it harder for risky businesses to join the index. A company could be booted out if it delayed filing accounts. Proven profitability would be necessary. There has been unease over Wirecard’s replacement in the index with lossmaking food delivery company Delivery Hero.

The change would be in line with

international standards. Last month, the S&P snubbed carmaker Tesla in its reshuffle of the S&P 500, probably over doubts about the quality of its profits.

A proposed expansion of the number of constituents from 30 to 40 would also move the Dax closer to international norms, matching blue-chip indices in France and Italy. Stocks included in flagship indices are guaranteed support from fast-growing passive funds. An index compiler that runs a stock exchange has an obvious incentive to widen the gene pool.

Strength in depth has not traditionally been a feature of the German stock market. The Dax represents 80 per cent of the aggregate market capitalisation of listed German companies. By contrast, the broader

S&P 500 is estimated to account for, at most, 70 per cent of US listed companies. The low weightings of the 10 likely newcomers mean the impact on performance is likely to be modest. A backtest shows that over the past year, the Dax 40 would have posted the same return — 6.1 per cent — as the Dax 30.

But enlargement is worthwhile. There has been a steady trickle of IPOs this year. Moreover, some of the big industrial conglomerates are breaking up. Siemens’ listing of its energy business last month was Germany’s largest-ever spin-off. The universe of quoted companies in Germany is becoming larger and less top heavy. That trend justifies a broader index.

FT graphic Sources: Qontigo; Refinitiv

-2 20 4 6 8 10 12 14 16Chemicals

Pharma & healthcareInsuranceSoftwareIndustrial

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UtilitiesTransport & logistics

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ConstructionMedia

Expansion would change sector weightings

Dax 40Dax 30

Dax 30 v Dax 40 (%) Total returns

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Dax 30 (Current)Dax 40

Impact on performance is small

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‘Dot com’ bust

Volkswagen briefly becomesworld’s largest company

Wirecard deleted from the Dax;Delivery Hero installed

Deutsche Börse/Dax: wider, deeper, stricterDeutsche Börse has proposed changing the rules of Dax, Germany’s blue-chip stock market index. It is also looking to increase constituents from 30 to 40. The expansion would reduce the weighting of car and consumer industries, and boost healthcare. But a backtest showed little impact on performance.

OCTOBER 6 2020 Section:FrontBack Time: 5/10/2020 - 18:52 User: andy.puttnam Page Name: 1BACK, Part,Page,Edition: EUR, 20, 1

I f it was not before, China is now the world’s most important market for Swiss watches. Figures from the Federation of the Swiss Watch Industry (FHS) show exports of

Swiss watches to China in August were up by almost half year-on-year and accounted for 15.7 per cent of the global total, relegating the US to second place.

But while the Chinese continue to lap up Swiss watches, they have little love for their own watchmaking culture. China is by a distance the world’s largest watch producer in terms of volume. According to the FHS, China exported 664.3m watches last year, compared with Switzerland’s 20.6m. But while the average export price of a Swiss watch was just under $1,000, Chinese watches left the country at a paltry $4 a piece.

Chinese watch industry insiders admit there are problems with the qual-ity and perception of their products. “Our watches, especially luxury watches, lag behind the old watch pow-ers in many aspects, such as design, manufacturing and brand influence,” says Zhang Hongguang, chairman of the China Horologe Association.

The CHA, based in Beijing and founded in 1985, says there are more than 200 “major active brands” in China, including Fiyta, which supplied Chinese astronaut Zhai Zhigang with the watch he wore on the country’s first successful spacewalk in 2008. The asso-ciation also says Seagull, a company based in Tianjin and founded in 1955, makes 5.2m mechanical movements a year, the biggest total globally.

Chinese collectors show little interest in these brands. “Modern Chinese watches are not something that inter-ests me,” says Daniel Sum, who in 2017 co-founded the Shanghai Watch Gang, a watch enthusiast group. But there are signs that is changing. During the pan-demic, guochao, the Chinese trend for products designed in China, has gath-ered pace. “There’s a fatigue with west-

ern brands,” says Robin Tallendier, a French Sinophile whose Hong Kong-based watch company Atelier Wen openly makes mechanical watches in China and decorates them with Chinese cultural symbols.

“The crisis has accelerated the trend of national pride and the trend of domestic consumption. Growing local pride and growing local consumption of local goods are going to help the emer-gence of local high-end luxury brands with a domestic identity.”

Mr Zhang agrees. “The added value of high-end imported watches is mainly in the brand,” he says. “And the pursuit of those watches is a manifestation of the immaturity of consumer behaviour. I am convinced that this is a temporary phenomenon and that rational con-sumption will become the mainstream.”

But there is still a long way to go. Mr Tallendier admits it has been hard to find customers in China. “Our results were not as good as outside mainland China,” he says, adding that most of the 600 sales he has made since Atelier Wen’s 2018 launch were to non-Chi-nese. “Chinese people do still crave

Continued on page 2

‘Made in China’ gains toehold as sign of qualityChinese watch brands are winning fans at home, writes Robin Swithinbank

If Bertrand Mak had not stopped off in London in 2009 on his way to see Finnish watchmaker Kari Voutilainen, he would not have come across British shoemaker Rupert Sanderson and

eventually gone into business with him. The founder of luxury label Sauvereign shows the custom piece that started it all, along with other highlights from his collection. Page 2

My Favourite Pieces Bertrand Mak‘Most Chinese are willing to believe in Chinese brands’

Tuesday October 6 2020 www.ft.com/watches | @ftreports

Watches JewelleryFT SPECIAL REPORT

Creative twistsJapan’s female designers win over the worldGALLERY PIECES Page 5

Show timeBrands rediscover their sparkle in ShanghaiWATCH FAIRS Page 3

Fusion flairCindy Chao’s sculptural wonders woo investorsART JEWELS Page 4

Asia

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Watches & Jewellery

‘Vintage is about scholarship and rarity, not money’

My Favourite Pieces Bertrand Mak cured his greed for all kind of watches and instead focused on ones that carried real meaning, he tells Kate Youde

Clockwise from main image: Bertrand Mak at his Sauvereign store in Hong Kong; a unique platinum Voutilainen Observatoire; custom Voutilainen Chronograph Masterpiece; a 1951 Universal Genève Medico-Compax; a 1943 Omega; and a 2003 Patek Philippe Nautilus Berton Chang

‘I could go outthere and pay a premium and buy the exact same watch, but it wouldn’t be the same’

T he seed of Bertrand Mak’s interest in watches was planted when, as a toddler, he “mucked about” in the Hong Kong watch boutique founded by the father of his godfather.

But it was at boarding school in the UK that the luxury brand owner’s head was turned. “A mate of mine had a Rolex GMT and it caught my attention, not because of the merit of the watch but because it was a Rolex and it was quite flashy,” he says.

His parents did not oblige, instead giving him the “sensible choice” of an Omega Seamaster for his 18th birthday. At university, he began “lurking” in online watch forums and saved his allowance to buy a like-new Panerai behind his parents’ back. From then, there was “no turning back”.

Mr Mak, 38, applies the “obsessive attention to detail” he has learnt from scrutinising watches through a loupe to his working life producing accessories incorporating 24-carat gold leaf. He founded his company Sauvereign in June as a vehicle for the expansion of R Sanderson, the business he launched with UK shoemaker Rupert Sanderson, into objects beyond footwear.

Mr Mak’s watch collecting has evolved too. He once experienced a “greed” to own everything but over the years has narrowed his selection to about a dozen pieces that “really resonate” with him.

Patek Philippe Nautilus (2003)Mr Mak’s father, a hospital doctor and fellow watch enthusiast, bought this stainless steel Nautilus to mark his survival of the Sars outbreak in Hong Kong in 2003. “It was a very painful process,” says Mr Mak, who was living in the UK at the time. “He had to quarantine himself from my mother and it was a very lonely few months.”

Mr Mak and his father, who is now involved in the fight against coronavirus, share the sports watch. Mr Mak feels an “emotional attachment” to the piece, which was bought from his godfather’s store. “I could go out there and pay a premium and buy the exact same watch, but it wouldn’t be the same,” he says.

Omega (1943)Thanks to his father, Mr Mak has a “soft spot” for watches with pulsation dials, which allow the wearer to measure their heart rate. “I’m not a physician myself, but this is something that to my dad is deeply personal — and it’s functional,” he says.

He bought this stainless steel chronograph, one of four Omegas in his collection, at auction and admires

Interest in the manufacture has grown since Mr Mak bought the rare piece four years ago as prices for the “usual suspects”, such as Rolex, have risen. “I haven’t really acquired any more vintage watches because the prices are completely unjustifiable,” he says.

Mr Mak, who worked in his godfather’s shop upon graduation and later as a watch specialist for auction house Christie’s, likes the idea that every vintage piece is unique because of its ownership and care history. “Why I have an affinity with vintage is because it’s about scholarship, it’s about rarity, it’s about knowledge, it’s about luck; it’s not about money,” he says.

Voutilainen Observatoire piece unique (2009-10)Alongside his interest in vintage pieces, Mr Mak is a “great champion” of the Finnish independent watchmaker Kari Voutilainen.

He wears his unique platinum Observatoire every day “because it’s the genesis of everything”. If he had not stopped off in London in 2009 on his way to meet Mr Voutilainen to deliver the Peseux movement he had sourced for this watch, Mr Mak would not have come across Rupert Sanderson.

Mr Mak says the unique piece, which has Arabic numerals, apart from a “lucky” Roman numeral “IV” coinciding with his birth in April, is “more than just a watch”. “Every time I look at it I discover something new . . . It’s really a journey of exploration,” he says.

Customised Voutilainen Chronograph Masterpiece (2010-11)Mr Mak bought this white gold chronograph, one of 10 made, from a dealer at Helsinki airport, then asked Mr Voutilainen to customise it. Changes included replacing the deployment clasp with a tang buckle.

Mr Mak, who has been working with Mr Voutilainen on another watch — yet to be delivered — for more than six years, says their relationship is a “meeting of minds”.

“He really understands why I have a particular request and . . . for him it’s also a technical challenge that he has to resolve with his team,” Mr Mak says.

As Mr Mak is motivated by the concept of legacy and what he will leave behind for the next generation, these pieces through which he can influence and inform the maker are his ideal watches. “My dream is to be able to have my own contribution towards a particular object,” he says.

its “unorthodox” multi-scale display. “I don’t want something that is easily understood by everybody,” he says. He wears the watch on a nylon Nato strap.

Universal Genève Medico-Compax (1951)This is another watch with a pulsometric scale that Mr Mak found at auction. He was attracted by the “completely understated” stainless steel and Universal’s small size: its case diameter is 34.5mm.

brands are slowly developing,” says Mr Sum of the Shanghai Watch Gang. “I’ve seen quality significantly improve over the years and I would consider a piece in the future.”

No one is expecting the shift to hap-pen quickly, though. “It will take time to

change people’s perception of Chinese watches,” says Mr Li of the CHA. “But with the improvement of the quality of Chinese manufacturing

and the research and pro-motion of history, I believe that there will be major changes in the future.”

Mr Zhang of the CHA believes the Chinese will one day

think of Chinese watches as being in the same league as

Swiss pieces. “The Chinese watch industry

continues to work hard to improve craftsmanship,

upgrade manufacturing, cre-ate original designs, accelerate

equipment updates and pro-vide consumers with high-end

watches,” he says. “Chinese people will love Chinese-made watches like

Swiss watches, and domestic high-end brand-name watches will sooner

or later become mainstream in the watch market in my country.”

Atelier Wen’s Robin Tallendier sees a growing domestic consumption of Chinese watch brands, such as Peacock Watch Factory (right) and Fiyta (left)

western watches, but ‘Made in China’ is getting a foothold.”

Age plays a part. Guochao is particu-larly pronounced among younger Chi-nese. “More and more young Chinese people like watches made in China, especially those with Chinese cultural connotations or Chinese craftsman-ship,” says Li Wei, head of the domestic horologe department at the CHA.

“The current goal is to develop the domestic market,” says GuiLin Hou, general manager of the Dandong Pea-cock Watch Factory, which is part of the Fosun group and one of China’s largest watch manufacturers. “The Chinese market is large enough that there are enough opportunities. Chinese young people work hard and have a strong pur-suit of a happy life. This is an inexhaustible driving force for China’s development.”

China’s independent scene is also on the march. Shenzhen-based Lin Yong Hua taught himself watchmaking and produced his first watch in 2006. In 2019, he was invited to become a member of Swit-zerland’s prestig-ious Académie Horlogère des Créa-teurs Indépendants, or AHCI, which counts celebrated watchmakers François-Paul Journe and Philippe Dufour among its 29 members.

“Most Chinese are willing to believe in Chinese brands, so I have confidence in the develop-ment of Chinese watchmaking,” says Mr Lin, who hand-crafts about 20 watches a year under the dial name LYH. “Once, we only looked at production numbers, but now Chinese brands are turning their eyes to the improvement of technology, together with the promotion of the brands themselves.”

Domestic appreciation of China’s independents is growing. “These

Continued from page 1

‘Made in China’ on rise as sign of quality

A group of 200 watches made by Japan’s Seiko brand has fetched almost HK$1m ($130,000) at a Bonhams auction in Hong Kong. The sale represented just half of the hoard amassed by a Seiko enthusiast during a 15-year collecting spree and was led by an ultra-rare chronograph made to mark the 1964 Tokyo Olympic Games. Bought directly from the Olympic village — the only place where the special model was sold — the well-used watch features a date display that doubles as a lap counter and a dial marked with a tachymetric scale for speed calculations. Only the second example of its type to appear at auction, it went for HK$138,125.

Other highlights included one of the rare Reference 6215 dive watches made in 1967-68 (HK$69,375) and a Spring Drive Diver Blue, one of 200 produced in 2012 featuring special blue dials and cases finished with a Katana sword polishing technique. It sold for HK$56,875.

Camo-motoIn light of the Asian fashion world’s ongoing love affair with the military look, Hublot has teamed up with Japanese clothes designer Yohji Yamamoto to create a 200-piece limited edition camouflage watch (pictured above). The 45mm Big Bang Camo has a matt black ceramic case and a camouflage dial pattern that is matched by a vulcanised rubber strap. The watch, which costs ¥2.4m ($23,000) is the second Hublot that the 76-year-old designer has created, the previous model being entirely finished in his signature black.

East-west mash-upChinese brand Krons Stone’s inaugural Original and Original S moon phase calendar watches may feature Swiss-made Sellita movements but they are assembled in Shenzhen using additional parts made in China. Krons Stone was set up by a team of six young Asian

Olympic special takes gold in Seiko sell-off

The £149 G-Shock 5610 has highlights in BWD’s aqua blue colour but otherwise closely resembles the original G-Shock from

1983. The cult LCD timepiece was invented by Casio electronics designer Kikuo Ibe after he dropped and broke a much-loved wristwatch given to

him by his father. Mr Ibe created 200 prototypes

before perfecting the original, ultra-tough G-

Shock, which had a rugged plastic case that allows the

mechanism to survive a minimum 10-metre drop on to a

solid surface.

Lord of the springsThe Jaquet Droz name came to prominence in Asia in the late 18th century when automaton maker Pierre Jaquet-Droz first beguiled the emperors of China and Japan with his mechanical automata — including a mechanical figure of a boy which wrote using a quill pen and real ink. Mr Jaquet-Droz later exported large numbers of enamelled pocket watches to Asia and the region remains the modern, Swatch Group-owned brand’s most important market. Now the dial name has formed a partnership with fantasy artist John Howe, the Canadian-born, Swiss-based illustrator who was chief conceptual designer for Peter Jackson’s Lord of the Rings movies and created the illustrations for board games. A series of Jaquet Droz watches decorated with Mr Howe’s work will be unveiled soon.

Dream teamZenith has looked to the east for ambassadors to promote its first women-only collection, Defy Midnight (pictured left).

A marketing campaign under the title DreamHers will feature Chinese movie star Song Jia, who has become one of Asia’s most

successful performers, having appeared in more than 35 films,

more than 30 television series and having recorded

four albums. Ms Song, who is a celebrity partner of the

UN Environment Programme, will appear in the campaign

along with former rhythmic gymnast Airi Hatakeyama, who

represented Japan in the 2012 London Olympics and is now a TV

sports reporter. Simon de Burton

entrepreneurs with backgrounds in design, marketing and ecommerce. The business was launched with Kickstarter crowdfunding and offered investors the chance to buy the Original S model for $1,048, about half the full retail price.

Time and tideSwiss watchmaker Oris is backing a series of clean-up days instigated by the Korea Foundation for Environmental Movements as part of a mission to restore the heavily polluted Hangang river, the fourth-longest river on the Korean peninsula. The Hangang supplies water to the 12m people who live in South Korea’s capital, Seoul, but the river itself has long been a dumping ground for waste. To mark its collaboration with KFEM, Oris has produced a 2,000-piece Hangang limited edition watch based on its Aquis dive model. A deep green dial is inspired

by the creek waters at the river’s source, and the back of the

£2,100 watch is engraved with a map of its path

across the country.

Late to the partyA rare Patek

Philippe wristwatch made to

commemorate the 10th anniversary of the brand’s

arrival in China fetched HK$300,000 ($38,000) at Phillips

Hong Kong. Just 25 pieces of the white gold Calatrava model were made in 2016, each with case backs engraved with a map of China highlighting the cities of Shanghai and Beijing. Those were where Patek opened its first Chinese stores in 2006 and 2008 respectively — decades after rival brands such as Rolex and Omega. Patek Philippe watches are now available in more than 80 locations throughout Asia.

Shocking pink? No, blueBamford Watch Department, the London-based watch customisation service, has teamed up with Japanese maker Casio to create a special edition of its celebrated G-Shock digital sports watch (pictured top).



Watches & Jewellery

Contributors

Nicholas Foulkes, Simon de BurtonContributing editors, How to Spend it

Liza Foreman, Ming Liu, Robin Swithinbank, Kate YoudeFreelance journalists

George Kyriakos Commissioning editor

Steven BirdDesigner

Alan KnoxPicture editor

For advertising details, contact:Shobnom Dasgupta, +44 (0)20 78734114, [email protected], oryour usual FT representative.

All editorial content in this report isproduced by the FT. Our advertisershave no influence over or prior sight ofthe articles.

Piaget chief executive Chabi Nouri describes China as “the best market for pieces like that right now”. “For such watches, you need to see the piece in reality, you need to be able to engage with the people who have worked on it, you need to be talking to the maison; so that is why it was the

best place to launch these pieces world-wide,” she says.

For Jaeger-LeCoultre the physical fair is more about “craftsmanship, know-how and watchmaking education”, says chief executive Catherine Rénier. “From a social standpoint is a fantastic platform; it is a place where someone

Craftsmanship on show: luxury house chief executives extol the benefits of allowing visitors to see products in reality

than a decade ago. In 2019, 34.7 per cent (just over SFr7.5bn, or $8.1bn) of Swiss watch exports went to the Far East, with the next largest market being the EU at 28.5 per cent (almost SFr6.2bn).

The figures do not account for those Chinese consumers who before the pandemic used to travel to countries where watches were considerably cheaper. For example, Bucherer capi-talised on this market by opening a 2,200-square metre store in Paris where business hours were co-ordi-nated with morning flight arrival times from China, and staff were on hand to handle large tourist groups.

“China today is not particularly diffi-cult,” says Cartier chief executive Cyrille Vigneron, describing the mood as “quite bullish, so the market is very, very vibrant”. “What is difficult in organising a [watch fair] there, is that basically none of the central team can travel.”

Plans for the remote operation of Watches & Wonders began in April in secret — the fair itself was not officially announced until late July.

The benefits of a physical fair in China were immediately apparent to Davide Traxler, chief executive of Parmigiani, one of only two non-Richemont brands to participate. “The Chinese domestic market is not immense for us, but the impact the Chinese consumers have on our sales is very important because our biggest clients were buying in Hong Kong. Obviously the Chinese aren’t trav-elling at the moment and are unlikely to

for at least the next six to 12 months — and Hong Kong is obviously not at its most stable.”

Mr Traxler is anxious to find out whether consumers will resume travel-ling when the pandemic is over. “The risk is of a definite reshoring, as we saw with the Japanese consumer who in the 1980s was buying abroad and today is buying 95 per cent of their luxury at home,” he says.

In the past, it has been significantly cheaper for Chinese consumers to buy abroad but, according to Mr Vigneron, “what we see is that the Chinese govern-ment has been more proactive to reduce import duties to try to encourage retail-ing at the same price”. He believes the proportion of domestic sales will soon exceed those made overseas.

The overwhelming importance of the domestic market in mainland China is no doubt why Roger Dubuis chose to unveil its swaggering gem-smothered one-off double tourbillon Excalibur Superbia, while out of a total of 80 watches shown by Piaget in Shanghai, 25 were priced above €100,000.

The most expensive watch was a Piaget Polo Emperador Tourbillon Skel-eton fully set with diamonds and sap-phires for €1,750,000.

“The Chinese market is very, very vibrant. What is difficult in organising a watch fair there, is that none of the central team can travel

Cyrille Vigneron, Cartier chief executive

‘Carson really took a bullet for the cause of fine watch-making,” says a senior watch industry figure in a tone of awed respect.

“Carson” is Carson Chan, head of Greater China at the Fondation de la Haute Horlogerie (FHH), and the pro-verbial bullet he took was organising last month’s Watches & Wonders event in Shanghai. It was not so much the event itself that was the bullet, as endur-ing the 28 days of rigidly enforced quar-antine on either side of Mr Chan’s trip from his Hong Kong base to Shanghai.

The last time the fair took place the world was a little different. Watches & Wonders spin-off events began in Hong Kong in 2013, then one of the most important markets for luxury watches. “When the region was hard hit in 2016 by a decrease in business and the

Umbrella revolution [protests in Hong Kong], it was paused and rethought,” says an FHH spokesman.

While Covid-19 put a stop to other glo-bal watch fairs such as Baselworld, a relaxation of Chinese health restrictions allowed the organisers to restart the Watches & Wonders event and relocate it to mainland China. The move made sense: Richemont, the Swiss luxury goods group which is the main exhibitor of the event, reported a 49 per cent increase in sales in mainland China for the quarter to June while sales fell signif-icantly across all other regions.

The European version of Watches & Wonders — the annual Geneva fair pre-viously known as SIHH — was switched to an all-digital format in April for the first time.

However, the experience was cer-tainly not the same. Meeting the experts, collectors and retailers in per-son, as well as being able to handle and try on the watches, reaffirmed Mr Chan’s faith in the multi-brand physical fair model. “Some things can’t be described — you have to feel the ambi-ence and the energy; it’s so addictive. It was tough to sit through the 14 days of quarantine but that energy and that buzz it made it all worthwhile.”

Despite most being unable to travel to Shanghai because of the pandemic, sev-eral chief executives of the exhibiting brands swear by the value of the physi-cal fair. “It’s an event where several strong maisons put their forces together, so we create a momentum and it’s a great platform to communicate about craftsmanship,” says Louis Ferla of Vacheron Constantin, adding: “We are stronger together.”

China has long driven the watch mar-ket. It was a growing Chinese economy that sheltered the industry from the worst of the global economic crisis more

with an interest in watchmaking but maybe doesn’t know which door to push or how to go about it, can come and really discover the world of heritage and the craftsmanship.”

Ms Rénier, who talks of China as “a very educated” market, has extensive experience in East Asia, as does Vach-eron Constantin’s Mr Ferla. “We want to ensure that we provide the same service in China that we do in New York, in Paris, in London,” he says, “and we have made a lot of investment: today we have 29 boutiques in China.” That is an increase of 50 per cent since Mr Ferla took over in 2017.

There is certainly an appetite for more events of this kind as the Chinese government continues to encourage domestic consumption. After Shanghai, Watches & Wonders moved to the resort city of Sanya on Hainan island, where it will remain until the end of the month to take advantage of the Golden week holi-day. The annual eight-day holiday, which began on October 1, is the coun-try’s busiest one for domestic tourism.

The event itself opened on September 29, but did not benefit from the presence of Mr Chan. He was still in quarantine in Hong Kong.

Shanghai show brings back the buzz for brandsFairs The Watches & Wonders event proved a welcome respite, writes Nicholas Foulkes

“There is a risk of reshoring, as we saw with the Japanese who in the 1980s were buying abroad and today are buying 95% of their luxury at home

Davide Traxler, Parmigiani chief executive

“You need to see the piece in reality, you need to be able to engage with the people who have worked on it

Chabi Nouri, Piaget chief executive



Watches & Jewellery

J ewellery designer Cindy Chao’s eponymous business may be turning 15 this year, but a celeb-rity-studded bash to mark the occasion was always unlikely,

regardless of the pandemic. Ms Chao’s designs may be glamorous

and statement-making, with gobstop-per-sized stones surrounded by thou-sands more in pavé settings, set in impressive, sculptural forms, but her clients are notably private and discreet. From Thai royals to Russian and Asian tycoons, these collectors seek out Ms Chao’s so-called art jewels for some-thing unique: wearable sculptures that sit between the rarefied worlds of high jewellery and fine art.

Ms Chao’s designs are influenced by her upbringing as the descendant of a Taiwanese sculptor and architect, but are crafted in Geneva and Paris. That east-west fusion has attracted a discern-ing clientele, for pieces that start at $100,000 (or $1m for her high-end Black Label collection). According to the company, turnover has increased 500 per cent since the business’s 2004 launch in Taipei, with profits up 150 per cent in the past five years.

Nevertheless, Ms Chao still refers to her brand as a “start-up”, especially compared with the large, storied houses, but she does admit the interna-tional interest has been a surprise. “I didn’t think that in 15 years’ time our reach would be so wide,” she says. “I would have never dreamt that sheikhs from the Middle East would fly to Hong Kong for 36 hours on a private jet with bodyguards, just for a chance to view my masterpieces.”

Today, international clients represent 40 per cent of her collectors, with the remainder coming from Asia. But that mix could soon change. The pandemic forced her to scrap plans for a London showroom this year and focus instead on Shanghai, adding to two others in Taipei and Hong Kong. “I think we’re making the right decision by going back to China,” she says.

This regrouping reflects a broader trend. Lockdowns around the world have kept Asian consumers at home, hitting luxury houses particularly hard. Luxury spending is heavily linked to tourism, which represents 40-45 per cent of sales of hard luxury (watches and jewellery), compared with 30-35 per cent for soft luxury (fashion and leather goods), according to Citi analyst Thomas Chauvet. Globally, flights were down 53 per cent year-on-year in July and August combined.

The large jewellery houses responded by announcing they would tour their

high-jewellery collections around Asia, banking on China’s buoyancy. Consult-ants Bain & Co, which estimates the lux-ury industry will contract by 20-35 per cent this year, forecasts Chinese con-sumers will drive a global recovery, making nearly half of all purchases by 2025. Mainland China, says Bain, will account for 28 per cent of the market in 2020, up from 11 per cent last year.

Ms Chao is well acquainted with the growing sophistication and changing tastes of Chinese high-jewellery collec-tors. Today, she says, they know precisely want they want, noting that while her

prime collectors outside Asia are aged between 40 and 55, those from China are in the 30-40 age group. “They’re able to spend the same amount of money as those in my other regions,” says Ms Chao. Moreover, this younger generation of wealthy Chinese are increasingly looking for something different. “This is not to say they’re tired of the big houses, but they will want something unique where you [the buyer] need to make an effort to find,” says Ms Chao.

Such a mentality bodes well for small, independent houses. Ms Chao’s pieces can take years to complete and attract

waiting lists — new orders for her signa-ture bespoke butterfly brooches are on hold until 2025 — prompting her to be increasingly selective with clients.

Meanwhile, the pandemic has brought out customers’ shrewder side. “They’re not just looking at my pieces as luxury accessories but as an invest-ment,” says Ms Chao. “People with cash in hand are very conscious about what’s coming. Jewellery is a much more porta-ble asset and [clients want to] invest in something solid but portable.”

Citi’s Mr Chauvet agrees. “In uncer-tain times, high jewellery can be more resilient than lower-priced fine jewel-lery price points, thanks to its strong artistic dimension and store of value characteristics,” he says. At auction, Ms Chao’s pieces historically have per-formed well, with many fetching double or more their estimates.

That was not always the case. Ms Chao recalls her first five years as a “struggle” to make her designs a reality, trying to combine her eastern architecture with western craftsmanship. A break came in 2010, when her Royal Butterfly brooch — set with 2,328 gems totalling 77 carats — went into the Smithsonian National Museum of Natural History’s collection. It was the US museum’s first piece by a Taiwanese designer.

More international recognition fol-lowed, including exhibitions at the pres-tigious Biennale des Antiquaires in Paris and Masterpiece London fairs. And this January, Ms Chao’s Ruby Butterfly brooch — set with two intense rubies of 12.89 carats and surrounded by fancy coloured diamonds and colour-chang-ing sapphires — joined the collection at the Musée des Arts Décoratifs in Paris, again the museum’s first jewel designed by a Taiwanese artist.

It was a notable way to mark 15 years. “Making money was never my purpose to build this brand, but I have to say the first 15 years were ‘create to survive’,” reflects Ms Chao. “As we enter the next 15, my status and mindset will very much be ‘create for creation’.”

Asian demand for Cindy Chao’s east-west fusions augurs well

Art jewels Chinese clients see investment potential in designer’s sculptural pieces, reports Ming Liu

Statement-making: the blend of the Taiwanese heritage of Cindy Chao, main image, with French and Swiss craft skills has produced pieces that attract a discerning clientele, who are also looking at jewellery as an investment

‘In uncertain times, high jewellery can be more resilient than lower-priced fine jewellery, thanks to its strong artistic dimension’

Sotheby’s was due to offer for sale an important 102.39-carat D colour flawless oval diamond in a single-lot live auction in Hong Kong yesterday. The gem (pictured above right) is the eighth D colour internally flawless or flawless white diamond weighing more than 100 carats to appear at auction, but the first to be offered without reserve. It is also the second-largest oval diamond of its kind to be offered for sale at auction. Bidding opened online on September 15, with previews of the diamond held by appointment in Beijing, Shanghai, New York, Taipei and Hong Kong.

Diamond debutMessika will open its first boutique in Japan, in the Nihonbashi branch of the Mitsukoshi department store in Tokyo, next month. The launch follows the opening last month of the French diamond jeweller’s first three stores in Asia — at the Wynn Palace resort in Macau, Harbour City shopping centre in Hong Kong and SKP Beijing. The brand is targeting expansion in Asia, with a focus on growing in China. The Japanese boutique will be Messika’s 25th worldwide.

Sure Kwan do Boghossian has collaborated with former Hong Kong actor turned fashion brand founder Rosamund Kwan on a limited collection. The Merveilles Rosamour Collection, launched in the jeweller’s Hong Kong boutique, features three 18-carat rose gold pieces: pink sapphire and diamond earrings with 472 stones; an eternity ring with 74 pink sapphires (pictured above); and a 102-stone pink sapphire and diamond pendant. Ms Kwan launched her fashion brand Rosamour last year.

Hong Kong headBonhams has appointed Leslie Roskind as its head of jewellery in Hong Kong. The auction house has promoted Ms

Serious bids only: 100+ carats with no reserve

brands featured in three new pop-up shops launched by

Jewelria in the Chinese cities of Shijiazhuang, Jinan and Taiyuan between now and December. The UK jeweller, which has previously been involved in eight Jewelria pop-ups in cities including Shanghai, Shenzhen and

Wuhan, will use the Chinese chain’s events to

show exclusive products from its Dream Catcher

collection. Annoushka has nine “brand zones” in permanent

Jewelria stores, with plans to open a further 11 by next April.

Balancing actThe Japanese jeweller Tasaki will introduce a new collection to the UK next week to mark the 10th anniversary of its pearl Balance series. The five new Balance 10 styles for rings and necklaces include a diamond pavéd bar holding four South Sea pearls and a white gold sphere embellished with pavé-set diamonds. Tasaki launched the new collection in its flagship store in Tokyo in June, with selected pieces available in China from August. One of the five new styles, Balance Neo, will be available in South Korea in December.

Prepare for fireworksA new selection of jewellery by Suzanne Kalan will be available at Lane Crawford in Hong Kong from the middle of this month. The offering will include pieces from the US jeweller’s 18-carat gold Rainbow Fireworks and Pastel Fireworks collections, and showcase how the brand has recently incorporated new palettes of gems such as orange sapphires and pink rubies into its designs. The luxury Hong Kong retailer approached the jeweller, which launched its counter in the store in February, after noticing an uptick in sales of coloured stones.

Taste of ParisBoucheron has opened its first

Jardin d’Hiver café outside Paris at its new boutique in Beijing’s SKP mall. Aiming to

provide a French lifestyle experience, the tree-filled tea

salon serves pastries inspired by the jeweller’s signature motifs,

including the emerald cut, cabochon and Wladimir, the

Boucheron family cat. Boucheron launched its

first Jardin d’Hiver café at its flagship boutique

in Place Vendôme in January this year. Kate Youde

Roskind, who starts in her new role on October 12, from her previous position as senior specialist for its jewellery department in New York. Prior to joining Bonhams last year, she worked as director of acquisitions for the jeweller Fred Leighton and previously spent 17 years with Christie’s in the US and Geneva. The first auction of her tenure is expected to be the Hong Kong Jewels and Jadeite sale, scheduled for late November.

Victorian valueGarrard’s annual exhibition at the Imperial Springs hotel in Guangzhou, China, returns in mid-December with the theme of declarations of love. The selling event, scheduled to run until

mid-February, will showcase 200 pieces of jewellery, including

one-of-a-kind Jewelled Vault creations made for the exhibition. The design team took inspiration for the new pieces from the sapphire and diamond

cluster brooch Garrard made for Prince Albert to

give to Queen Victoria on their wedding in 1840. The

jeweller will also launch its latest collection, Aloria, on the

Chinese market.

Fairy-tale journeyVan Cleef & Arpels is touring seven one-off fairy clips, launched last month, round its boutiques in China. Inspired by nature and literature, the Feminine Figures pieces include the white and rose gold Fée des fleurs clip. This fairy, which has the power to transform into any flower, sits atop an oval 9.98-carat rubellite. The clip (pictured below) also features emeralds, sapphires, tsavorite garnets and diamonds. The French house created its first fairy clip, originally called Little Winged Fairy but later renamed Spirit of Beauty, in 1941. It was acquired by the late jewellery collector Barbara Hutton.

Pop-up plansAnnoushka will be one of five international

The story of Sam Hines’s career trajec-tory should be taken by those starting out as a lesson in seizing opportunities.

Back in 1997 as a teenager, he was working as a postboy, scuttling round the labyrinthine corridors of Sotheby’s in London. Today, he generates tens of millions of dollars’ worth of sales for the auction house as the Hong Kong-based head of its global watch division.

“The most interesting aspect of being in this business for the past 20-plus years is seeing how dramatically it has changed, not least during the past six months,” says Mr Hines. Sotheby’s has become the market leader in watches in 2020, with sales of $48m for the first six months of the year.

“The coronavirus pandemic meant we had to pivot our business to include more online sales, and that has further encouraged the number of younger buyers, who were already the fastest-growing part of our client base, espe-cially here in Asia. They appreciate the quick turnaround offered by the inter-net, and that is altering the way auction houses are operating.

“It seems likely that traditional watch auctions will increasingly become mar-quee events for relatively small num-bers of exceptional lots, with mid-range, contemporary pieces being offered either online or through our private sales platform. I think the retail side of an auction house will become as impor-tant as its traditional side,” he says.

Mr Hines, 41, has been based in Asia since 2011, initially as an employee of rival house Christie’s at a time when watch auctions were entering a boom period in the region.

He could never have dreamt of find-ing himself in his current job as he rushed to present post to the late Alfred Taubman, daunting doyen of US shop-ping mall developers and Sotheby’s one-time owner and chairman. “I was always amazed he would usually be smoking a large Cuban cigar at eight in the morn-ing,” recalls Mr Hines, who landed a

transfer to the company’s bids depart-ment in 1998.

“Little did I know it, but that is when I was given the first clue to my future — one of our responsibilities in the bids department was to train prospective auctioneers in how to understand the ‘book’ so that they knew where to open the bidding, how much increments should be and so on. One of the first peo-ple I had to work with was a young Swiss called Aurel Bacs.” Mr Bacs is now an associate of Phillips whose flamboyant performances at the rostrum have led to him being dubbed the “rock star” of the watch auction world.

It was Mr Hines’s next move, however, that cemented his future. “I got a posi-tion as an administrator and by pure

chance was sent to work in the clocks and watches department, where I immediately became obsessed with horology. After a year I applied to become a junior cataloguer and found myself working with some of the most highly respected people in the field, including Tina Millar [who founded the department in the 1960s], antique clock expert Michael Turner and even the leg-endary watchmaker George Daniels,

who was then a Sotheby’s consultant,” he recalls.

At the time, prospective vendors were expected to turn up at a Sotheby’s coun-ter to have their items assessed. Being the most junior member of the team, it fell to Mr Hines to make the walk along New Bond Street from the watch depart-ment in a satellite building to the nearby mothership to offer a first opinion.

“It was an odd system. If I thought the watch was of interest, I would have to place it beneath a camera that transmit-ted images to my more experienced col-leagues back in the office, who would decide whether it should be consigned.”

Back then, says Mr Hines, values were a fraction of what they are now. A Rolex Cosmograph Daytona with a “Paul New-man” dial, for example, was worth about £10,000. Now, the best realise hundreds of thousands.

Marriage to a colleague in the US watch department led to Mr Hines transferring to New York. But company policy did not allow spouses to work in the same field, so he returned temporar-ily to the role of business manager.

“I missed being involved in the watch world, so I took a job with the Henry Stern Watch Agency, the New York-based Patek Philippe distributor,” he says. “It took me all around the country, training sales staff about the history [of the watchmaker] and organising events and exhibitions — it was a superb oppor-tunity to learn about Patek and why its watches are so coveted by collectors.”

But, missing the variety of the auction world, in 2008 Mr Hines joined Chris-tie’s in New York before moving to Hong Kong three years later. “It was a time when clients from mainland China were simply buying everything available.”

Mr Hines was then given the opportu-nity to help re-establish a watch depart-ment at Phillips (alongside his former colleague Mr Bacs) and he served as its Hong Kong-based global head for two and a half years before returning to Sotheby’s in 2018, where he built a new team from scratch.

One watch that will not be for sale, however, is the Rolex Submariner Mr Hines was given by his father on his 18th birthday. “When I was earning £9,000 a year as a junior cataloguer, there were several occasions when I thought of sell-ing it,” he says of a watch that would have tripled in value during that time. “But it has stayed with me all the way.”

The postboy who delivered Sotheby’s to the top of the pileProfile Becoming a market leader is about flexibility, the auction house’s watches chief tells Simon de Burton

Sam Hines: seizing opportunities

‘Younger buyers appreciate the quick turnaround offered by the internet, and that is altering the way auction houses operate’



has a smartphone and [messaging app] WeChat, so we can communicate and build out production across the villages.”

Ms Chang’s involvement with tribal designs is not the first time the Miao and Dong craftspeople have attracted out-side attention. Dutch collector Mieke Gorter has assembled a rich array of jewellery, accessories and costumes from both tribes and organises tours of the area with her local partner, Wu Zeng Ou. Ms Gorter’s collection has been exhibited in Rijswijk in the Netherlands.

“All the villages have different styles and different jewellery to match. Some wear simple costumes but with a lot of jewellery,” she says. The jewellery designs include head crowns, hairpins, bracelets, earrings, necklaces (they wear many at the same time), silver combs, apron weights that are worn on the back as a buckle, silver ornaments on children’s hats, and ornaments on

girls aprons, and jackets, she adds. “Now people make new jewellery for the Chi-nese and foreign tourists — earrings, brooches, bracelets, alpaca with embroidery,” says Ms Gorter.

But as a clothing designer, Ms Chang’s main focus has been textiles and cloth-ing. By collaborating with the Tang’an Dong Ethnic Eco-Museum in Guizhou, she has benefited from an artisan work-shop and dye facility the museum built for her to use in the village. “They are our local non-profit partner and liaison with the artisans,” she says.

“In 2017, I received a grant from the Smithsonian Institution [in Washington DC] to create a training programme for the artisans to begin hand-sewing the clothes, so they could be made from seed to button without electricity or fos-sil fuels.”

As for the jewellery part: “Who knows what the future holds?” says Ms Chang.

jewellery, opened her gallery in Italy last year specialising in artistic jewellery. It hosts Japanese star jewellers, including Kazumi Nagano. “I’m fascinated by the artists that work with antique, ancient and traditional techniques, but exploring their infinite possibilities and with unexpected and absolutely contemporary results,” Ms Pedrosa says.

“That’s the case with Nagano. She was a Japanese painter for many years before moving into artistic jewellery. She uses origami to give shape to her pieces, but in a new and unexpected way.” The artist’s work is in the permanent

A n exhibition this summer at The Scottish Gallery in Edinburgh, provided a showcase for art jewellery by some of Japan’s leading female jewellers. A Japanese Design helped draw attention to this exotic jewellery niche. To this

day, it remains more popular overseas than in Japan.The style of the pieces on show was as wide-ranging as the

designers’ skills. As gallery director Kirsty Sumerling explains, the exhibition included “Miki Asai’s delicate seashell and lacquer work, to Yoko Izawa’s feather-light, hand-dyed nylon constructions, to the structural jewellery from Etsuko Sonobe”.

International clients are drawn to Japanese designs because of their use of “surprising” materials. “The hand-dyed nylon used by Yoko Izawa allows her to create larger, petal-like constructions that remain light and extremely wearable,” says Ms Sumerling.

These designers each have a different starting point for their work. “My work starts with a single line,” says Eriko Unno, who is best-known for her cassette tape designs which sell for between ¥50,000 and ¥300,000 ($475-$2,850).

“To give shape to the inspired image, I knit, twist, entangle, and fold a single round wire, a thin ribbon-shaped plate, or cassette tapes and threads to create a three-dimensional object. These times are like a meditation for me to ponder what I want to express,” she says.

“One day, I found old cassette tapes in the closet. Cassettes I loved when I was young. I wanted to listen to the music with nostalgia, but realised I had no device at home. I felt the speed of change in our life. By creating works with cassette tapes that contain impressive songs, I want to connect those memories and industrial technology and life into my works.”

Ms Unno thinks of her pieces as jewellery rather than art, despite their hybrid nature. “I would say it is jewellery, because I think my work will only be completed when it meets the wearer. People do sometimes collect my pieces just to display,” she says.

From her base near Mount Fuji, she says: “In Japan, there are still few people who think of jewellery as art. Most think of jewellery as precious stones and metals. Some cannot accept paying a lot for jewellery that does not use precious metals and gems. I think this is due to the short history of Japanese jewellery culture. The custom of wearing jewellery began with the [late 19th-century] Meiji era. In Japan’s jewellery world, it seems more difficult for females to be independent and recognised than males,” she says.

Living in Denmark has helped Ms Unno’s contemporary, Kaori Juzu, find her feet. “My pieces are art in a jewellery form that people collect to both wear and display,” she says.

Based on the Baltic island of Bornholm, Ms Juzu sells pieces through contemporary art jewellery galleries and markets in Europe and the US for between €250 and €2,800. She has upcoming exhibitions in Paris, Ireland, the UK, Poland, the US and Japan.

“I have gained recognition in Denmark, even though I’m not Danish,” she says. “The system to support artists in Scandinavia is far better than Japan. I can’t find anything that I can compare with the Danish system in Japan. In Denmark and Europe, contemporary art jewellery has gained recognition. In Japan, if it is not commercial, it is difficult. Contemporary jewelleries are not yet ‘art’ enough.”

Several Japanese artists feature in galleries worldwide. Thereza Pedrosa, who studied contemporary art and

Watches & Jewellery

collection at the Alice and Louis Koch Collection in Zurich and in London’s Victoria and Albert Museum.

Equally original are the sculptural pieces by Kazuko Nishibaya. “I describe my work as plain three-dimensional sculptures in metal. In my design, the shape is important, but just as important are the voids, the emerging interspaces throughout the process of creation,” she says.

She does, however, have a problem with the term “art jeweller”. “The word jewellery doesn’t translate into my work,” she says. “For me, art and jewellery do not reside in the same category, even though they share a similar process of creation. Contemporary jewellery needs a new name, a name of its own. ‘Wearable objects’ maybe.

“In my line of work you will find many more female than male jewellers. I’d even say we are the majority. My teacher, Minato Nakamura, is among them. Well known in Europe is Etsuko Sonobe. Whereas in the academic world, you mainly find male jewellers in prominent positions.”

Perhaps that explains why Yoshimi Kawabuchi from Tokyo’s Gallery Deux Poissons is one of the few galleries in Japan selling these pieces. Mr Kawabuchi works with designers such as Kazuko Mitsushima (also on show in Edinburgh) and opened the gallery in 2003. “Contemporary jewellery is more popular in Europe, especially in Germany,” he says. “Unfortunately, contemporary jewellery collectors have hardly grown up in Japan.” Some of the artists he says

are popular in Japan, include Mitsushima, Sonobe, Nagano and Môko Kobayashi.

Their works are among those sold by New York gallery Charon Kransen Arts in the US and beyond. Mr Kransen says “people are attracted to the je ne sais quoi that makes Japanese work so unique”. “Makers in Japan take their time on whatever they

make. They understand that every process deserves its specific rhythm and time. It shows

respect. In a way, there is a certain absence of time in the work.”

Iowa-based Satomi Kawai is a Kransen artist. “My work is not commercial jewellery using precious stones and metal but contemporary art jewellery,” she says. Her pieces are in permanent collections like the Alice and Louis Koch Collection. A necklace belongs to the Olnick Spanu Collection in New York. Another is with the Cominelli Foundation Permanent Collection in San Felice del Benaco, Italy.

“My background as a contemporary jewellery artist is not common in Japan. My art education started in the US after I moved there in 1999,” Ms Kawai says. “Art jewellery is not highly recognised or appreciated in Japanese culture, compared to western culture. Not

many art jewellery galleries are available, even in Tokyo.”As to the jewellery versus art question, for Mariko

Sumioka, what is important is that her pieces are worn. “My jewellery is inspired by architectural forms, texture and structures, and I often make them into box shapes inspired by architecture, treasure or jewellery boxes,” she says. “The stories told inside these miniature precious compositions are unfinished — the wearer has to invent the rest. My work is art jewellery. And I would like people to wear them. Jewellery has to become part of someone’s fashion, lifestyle and personality. I don’t like it sitting in the cabinet.”

Her materials include antique kimonos from her grandmother’s house. (Prices range from £90 to £3,000). She is currently participating in a virtual group exhibition at the Mobilia Gallery in Massachusetts.

“I think it is much harder than in any other western country to survive as an art jeweller in Japan because there is not an established contemporary jewellery market here. People prefer more commercial pieces to unique designs,” she says.

Female designers take Japan to the worldArt jewellery Their unusual works are proving more popular overseas than at home, reports Liza Foreman

these elaborate handmade costumes and jewellery, used for festivities, are replaced by cheap imitations. “We try to pay the villagers 20 per cent more than the average living wage in the region,” Ms Chang says. “They are self-sufficient farmers and grow everything they need to survive, so the amount they earn from the collection is supplemental income.”

Alongside creating her clothing col-lections, Ms Chang has worked for the past few years to help the villagers sus-tain and export some of their textile skills and to stop the exodus of young people to factories in China’s cities. In return, she uses their traditional proc-esses to find the most sustainable way of making clothing — without using elec-tricity, chemicals or fossil fuels. “We use just three ingredients: sun, plants and mountain water.”

While the traditional design processes are unchanged for years, the creep of modernity has happened in other ways. “The government has built highways, high-speed rail, a regional airport, inter-net to the village, and running water into every home,” says Ms Chang. “This has allowed me to build a network of arti-sans and a local economy to create a ver-tical supply chain. Every villager now

For the past nine years, US womenswear designer Angel Chang has been a part-time resident of Guizhou province in rural south-west China. It was there in villages that she uncovered long-forgot-ten artisans who now work with her on the designer’s locally made contempo-rary collections, which incorporate tra-ditional tribal jewellery.

It all started in 2008, when the alum-nus of luxury fashion brands Donna Karan and Chloé visited an exhibition at the Shanghai Museum featuring bejew-elled ethnic costumes from the Miao and Dong minorities.

Ms Chang set out to find the people behind the pieces and travelled with an interpreter down dirt roads to villages — some did not even have a name — to find men and women working in huts with no electricity or light-ing on exquisitely crafted designs destined primarily for their relatives.

“I found a Miao grandfather in the village of Zhaoxing,” she says. “He had a shop selling metal jewellery to local villag-ers and Chinese tourists. After speaking to him, I realised he had made all the pieces himself in his workshop.” He was not the only one. More metalworkers and jewellers were scattered across the villages of Guizhou.

Working with the grandfather she met

in Zhaoxing, Ms Chang started repur-posing local designs. “I first used a Miao necklace [he had created], engraved with mythological creatures, for my pleated necklace gown included in Tho-mas Erber’s exhibition Le Cabinet de Curiosités in 2014,” she says.

The traditional costumes of Guizhou make elaborate use of jewellery, with big necklaces and silver headpieces adorn-ing rich costumes. Ms Chang simplified these for her collections. “The girls in their traditional costume would wear layers of chunky real silver necklaces to show how much money their family had,” says Ms Chang. “It was like adver-tising her dowry to find a suitor during village festivals.”

Another of Ms Chang’s bejewelled cre-ations — which retail for between $400 and $1,500 — is a handmade cotton top featuring shimmering medallions with traditional imagery. “The medallions are hand-pounded tin with mythologi-cal creatures, dragons, lions, phoenixes and dogs to protect the wearer from evil

spirits,” she

says. “I saw them in a museum in Kaili, Guizhou province, and asked the curator to find villagers in Qian-dongnan [Miao and Dong autono-mous prefecture] who could make them for me,” she recalls.

For the villagers, these pieces are more than decoration. “The Miao believe there are spirits every-where around them in nature — in the rocks, trees, rivers,” says Ms Chang.

Embedding jewellery in clothing is a complicated process and effec-tively makes the garments impossible to clean. “I used jewellery as embroidery to mimic the way they are used on their traditional jackets,” says Ms Chang. “This, however, was not very practical as it was impossible to clean the garment because the metal pieces were not removable. “I learnt afterwards that the traditional costumes are never cleaned or washed in water. They are [coloured] in indigo dye, a natural antiseptic, so the costumes are able to survive decades without ever needing to be washed.”

While the regional designs have long intrigued Ms Chang, some local mining practices worry her. “I have stopped

using metal because it is too heavy and not prac-tical for clothing,” she

says. “I saw the mining in the mountains and did not want

to contribute to harming the natural ecosystem.

“It is important for me to be able to trace all the raw materials used in my collection, so now we make all our trims

(buttons, closures) out of native-seed organic cotton

that we plant ourselves. There is no plastic or metal used in the

latest collection.”Her efforts to keep local traditions

alive are important. Artisanal skills such as jewellery-making are under threat as

Tribal traditions embedded in a contemporary lookArtisanal jewellery Fashion designer Angel Chang is helping keep the skills of rural Chinese minorities alive. By Liza Foreman

Reinvention: Angel Chang, right, has simplified the elaborate tribal designs in her jewel dresses

Clockwise from left: brooch by Kaori Juzu; Satomi Kawai; Miki Asai in her studio; Eriko Unno necklace; dark brooch by Kazumi Nagano — Kaori Juzu; The Scottish Gallery; Eriko Unno; Kazumi Nagano



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