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WEDNESDAY 8 JULY 2020 WORLD BUSINESS NEWSPAPER EUROPE

East meets west Picking up the tab Water fight

An incompetent US cannot live up to Tax reckoning looms for big business Nile neighbours lock horns over
China’s challenge — MARTIN WOLF, PAGE 17 THE NEW SOCIAL CONTRACT, PAGE 15 Africa’s biggest dam project — PAGE 2

Proof positive Briefing

Bolsonaro falls i Deutsche Bank fine for Epstein failings

victim to virus Germany’s biggest lender has agreed to pay $150m

for failures in its dealings with Jeffrey Epstein, the
late sex offender. It marks the first action against a
bank for dealings with the financier.— PAGE 6
Jair Bolsonaro, president of Brazil and
one of the world’s most powerful leaders i TikTok, Zoom and Microsoft rethink HK
to play down the coronavirus pandemic, The tech groups have become the latest companies
has tested positive for Covid-19. to rethink operations after Beijing’s imposition of a
The populist leader, pictured right in security law. Chinese-owned video app TikTok has
May, has described the disease, which chosen to exit the city entirely.— PAGE 9; LEX, PAGE 18
has officially been responsible for more
than 65,000 deaths in Brazil, as a mere i Journalist arrested in Moscow for treason
“sniffle”, claiming people die from fear The FSB, the KGB’s successor, has arrested Ivan
of the virus rather than the virus itself. Safronov, a veteran defence reporter, saying he had
Like Donald Trump, his US counter- passed on state secrets. He faces a closed trial and
part, Mr Bolsonaro resisted early calls to up to 20 years in prison if convicted.— PAGE 2
lock down his country and has been a
vocal proponent of the controversial i Iraqi president’s adviser shot dead
antimalarial drug chloroquine. He yes- Hisham al-Hashemi, who was a
terday credited his use of the unproven prominent critic of Iran-backed
remedy for coronavirus as the reason he militias, has been assassinated
was not contaminating others. weeks after a police raid on the
Report page 4 most dangerous Tehran-linked
Adriano Machado/Reuters
Shia group in Iraq.— PAGE 2

i New six-week lockdown in Melbourne

Cut wage subsidies to shift workers

Australia’s second-biggest city has been forced back
into coronavirus restrictions, reversing recent
measures to relax restrictions in a country that was
seen as a leader in managing the pandemic.— PAGE 4

from shrinking sectors, says OECD

i Fed official fears effect of virus spike
Raphael Bostic, head of the central bank’s Atlanta
office, has said the surge could stall the US rebound.
Meanwhile, a poll shows Americans are pessimistic
for prospects of a quick economic recovery.— PAGE 4

i Longer Covid curbs hit EU growth hopes

3 Call to phase out support 3 Record unemployment looms 3 Recruitment help urged
Delphine Strauss — London
The OECD has told governments to scale
back emergency wage subsidy schemes
introduced to cushion economies from
the coronavirus pandemic, in order to
encourage workers to move out of
shrinking sectors.
The coronavirus crisis has pushed up
unemployment across the organisa-
tion’s member countries to 8.4 per cent,
with 54.5m people out of work, figures
for May showed.
Even in an optimistic scenario in
which the virus recedes and remains
under control, unemployment across
OECD members will reach 9.4 per cent
in the fourth quarter of 2020, exceeding
all peaks since the Great Depression, the
Paris-based group said yesterday.
Brussels has warned that extended coronavirus
lockdowns in many states will cause a much deeper
recession than predicted. It said EU gross domestic
Average employment is set to be as “We have to allow [labour force] unemployment benefit duration to pre- product would shrink 8.3 per cent this year.— PAGE 3
much as 5 per cent lower than in 2019, mobility. Some companies will not be vent jobseekers from sliding too quickly
and will remain below pre-crisis levels viable in the short term and the medium into much less generous minimum
by the end of 2021, it forecast in its term. We have to allow workers to move income benefits”. Datawatch
annual employment outlook. “In three into new jobs,” Mr Scarpetta said. The crisis has exposed gaps in social
months, Covid-19 wiped out 10 years of Employers in sectors in which activity protection — particularly for the self-
[job] gains,” said Stefano Scarpetta, had resumed should carry some of the The OECD says employed — that governments should Lost progress The Covid-19
OECD director for employment. cost of the subsidy schemes, he argued, that even in tackle by allowing people to build up Real per capita GDP in sub-Saharan pandemic is
Governments face tough decisions on while support should be more clearly an optimistic rights to the same kind of out-of-work Africa (2000=100) poised to wipe out
how to phase out job retention schemes targeted in sectors that are still shut. scenario support available to standard employ- 160 several years of
income gains in
and other support measures introduced The winding-down of job retention unemployment ees, the OECD said. 150
sub-Saharan
as lockdowns began, without triggering schemes should be coupled with new across member The pandemic has accelerated the 140 Africa, with real
a surge in long-term unemployment support to help people into work and states will top polarisation of the labour market 130 per capita gross
that would hit the young, women and support recruitment, the OECD added. all peaks since between high-skilled and low-skilled domestic product
low-paid hardest. In a thinly veiled reference to the US — the Great jobs, with opportunities declining for 120
in the region
But the OECD said it was now time to where there is fierce debate on whether Depression those with a moderate level of skills. Mr 110 projected to
phase out “massive, generalised sup- to extend a $600 top-up to unemploy- Scarpetta said a long-term shift towards 100 contract by
port” so that labour markets could ment benefits that is set to expire at the home working could accentuate this 2000 05 10 15 20 5.4 per cent
adjust to the changing shape of the glo- end of this month — Mr Scarpetta trend if it reduced demand for office Source: IMF in 2020
bal economy. said “some countries should extend support staff.

Bonds backed by Italian mafia profits

sold to range of international investors
Miles Johnson — Rome feared criminal groups in the west, This makes them attractive for special
engaging in crimes ranging from purpose vehicles, which place them into
International investors bought bonds
cocaine trafficking to money launder- a large pool of assets and issue bonds
backed by the crime proceeds of Italy’s
ing, extortion and arms smuggling. backed by the expected cash flows from
most powerful mafia, according to doc-
Europol, the EU’s law enforcement the future settlement of the invoices.
uments seen by the Financial Times.
UK’s post-Brexit residence agency, has estimated that the activities Most of the assets securitised in the
scheme baffled by numbers In one case, the bonds — backed in part of the ’Ndrangheta, which is not made deals were legitimate but some were
by front companies working for the up of a centralised organisation but hun- from companies later revealed to be
Analysis i PAGE 3 Calabrian ’Ndrangheta mafia group — dreds of autonomous clans, generate a controlled by certain ’Ndrangheta clans.
were purchased by Banca Generali, one combined turnover of €44bn a year. CFE, a Geneva-based boutique bank,
of Europe’s largest private banks, in a Other investors in the bonds included constructed the vehicle that sold bonds
Austria €3.90 Malta €3.70
Bahrain Din1.8 Morocco Dh45 transaction where consulting services pension funds, hedge funds and family to investors including Banca Generali.
Belgium
Bulgaria
€3.90
Lev7.50
Netherlands
Norway
€3.90
NKr40 were provided by accountancy firm EY. offices, all looking for exotic ways of When contacted by the FT, Banca
Croatia Kn29 Oman OR1.60 An estimated €1bn of these private earning high returns at a time of record- Generali said it was unaware of prob-
Cyprus €3.70 Pakistan Rupee350
Czech Rep Kc105 Poland Zl 20 bonds were sold to investors between low interest rates, according to people lems with the assets that backed the
Denmark
Egypt
DKr38
E£45
Portugal
Qatar
€3.70
QR15
2015 and 2019, according to market par- involved in the deals. bonds it had purchased for its clients.
Finland €4.70 Romania Ron17 ticipants. Some were linked to assets cre- The bonds were created out of unpaid CFE said it had never knowingly pur-
France €3.90 Russia €5.00
Germany €3.90 Serbia NewD420 ated by ’Ndrangheta front companies. invoices to Italian public health authori- chased any assets linked to criminal
Gibraltar
Greece
£2.90
€3.70
Slovak Rep
Slovenia
€3.70
€3.70
The ’Ndrangheta is less well-known ties from companies providing medical activity. EY declined to comment.
Hungary Ft1200 Spain €3.70 outside Italy than the Sicilian mafia but services. Overdue invoices owed by This article is part of an FT Weekend
India Rup220 Sweden SKr39
Italy €3.70 Switzerland SFr6.20 has risen over the past two decades to state-connected entities incur a guaran- Magazine investigation that will appear in
Latvia
Lithuania
€6.99
€4.30
Tunisia
Turkey
Din7.50
TL19
become one of the wealthiest and most teed penalty interest rate under EU law. full this Saturday.
Luxembourg €3.90 UAE Dh20.00
North Macedonia Den220

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 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
2 ★ FINANCIAL TIMES Wednesday 8 July 2020

INTERNATIONAL

Assassination Espionage claim

Iraq’s top counter-terror adviser shot dead Russian

ex-journalist
Suspicion for killing of tions have become a rare occurrence in
Baghdad and no group has claimed
As Iraq’s best-known security analyst,
Hashemi’s killing by unidentified gun-
al-Abadi tried to rein in these fighters,
while also using them in the fight against
Soleimani was Abu Mahdi al-Mohandis,
Iraq’s feared paramilitary chief, leaving
arrested on
government expert falls
on Iran-backed militias
responsibility for Monday’s killing.
The attack on Hisham al-Hashemi
men has sent shockwaves through the
country. Mr Kadhimi has vowed to
Isis from 2014. By 2016, the government
had given them a formal role within the
a dangerous control vacuum that has
yet to be filled.
treason
Chloe Cornish — Beirut
could “be seen as a retaliation for that
raid,” said Renad Mansour, director of
the Iraq Initiative at London-based
“pursue the killers”.
The expert’s vast network, from
Islamist militia leaders to generals,
state security apparatus. But as tensions
between Washington and Tehran rose,
Iran-backed paramilitaries started a
The former intelligence chief turned
premier has vowed to crack down on
militants acting outside the control of
charges
A close adviser to Iraq’s president and think-tank Chatham House. “This is an made him the go-to source on terrorism cycle of escalatory attacks against US the state. The raid on Kita’ib Hizbollah
prime minister was shot dead outside attack on [the president and prime min- for Iraqi officials, western diplomats forces in Iraq, killing American and (KH) late last month was seen as an Max Seddon — Moscow
his home in Baghdad on Monday night, ister] and all those people who were and journalists. As Hashemi’s profile Iraqi troops and bringing the region to opening salvo. But the 14 arrested men
Russian security services have arrested
the most prominent critic of rogue Iran- working with Hisham.” rose, he became a regular television the brink of war last year. were later released, underscoring the
a respected former journalist for
backed militias assassinated in the Hashemi was informally advising guest, built a huge social media follow- A nationalist, Hashemi had repeat- challenge of bringing the entrenched
alleged treason, charges his colleagues
country. both the president, Barham Salih, and ing and wrote books on jihadism. edly warned that rogue militias threat- militants in line and signalling the
say are reprisals for his work.
The murder comes less than two new prime minister, Mustafa al-Ka- Although Hashemi gained recogni- ened the state, a criticism that earned weakness of Iraq’s judicial process.
weeks after Iraqi security forces raided dhimi on counter terrorism. “They are tion for his research on Isis, his focus him death threats on social media. Hashemi had praised the raid, denounc- The FSB, the KGB’s successor agency,
the country’s most dangerous Tehran- targeting us [associates of the prime had recently shifted to the Shia militia These fragmented militias were over- ing “those who would take arms against said yesterday that Ivan Safronov, a
linked Shia militia, heralded at the time minister and president] now directly, groups that gained power in their fight seen by Qassem Soleimani, the Iranian the Iraqi people and Iraqi armed forces”. longtime defence industry reporter who
as an unprecedented challenge to the and very obvious[ly],” said an official against the Sunni jihadis from 2014. general assassinated by the US in Bagh- Additional reporting by Asmaa al-Omar in recently took up a job as public relations
powerful group. Targeted assassina- serving with one of the executive offices. Former Iraqi prime minister Haider dad early this year. Killed alongside Erbil adviser to Russia’s space agency, “col-
lected and passed on state secrets about
Russia’s military technology, defence,
and security” while “on assignment for
Nato [member’s] secret services”, refer-
Natural resource. River dispute ring to the western military alliance.
No further details were given about

Nile nations in last-ditch bid to ease dam tension the charges against Mr Safronov, who
denies any wrongdoing. He faces a
closed trial and up to 20 years in prison
if convicted.
Police detained 15 people who pro-
tested outside the FSB’s headquarters
Cairo and Khartoum worry yesterday demanding his release.
that Ethiopian project Mr Safronov’s arrest shocked his
former colleagues at Kommersant, Rus-
will create water shortages sia’s leading business newspaper, where
he built a reputation as the country’s top
defence reporter through a series of
Heba Saleh — Cairo
scoops on topics ranging from subma-
Egypt, Ethiopia and Sudan are trying to rine accidents to fighter jet crashes.
resolve a dispute over construction of Last year, the FSB questioned Mr
what is expected to be Africa’s biggest Safronov in a civil proceeding about an
dam on the river Nile that Cairo fears article he co-wrote revealing a $2bn deal
could lead to damaging water shortages. to sell Su-35 fighter jets to Egypt,
This month, Ethiopia is set to start according to Russian media. Mike Pom-
storing water in the reservoir of the peo, US secretary of state, threatened
$4.8bn dam, which it sees as a pathway Egypt with sanctions if the deal went
to wider electrification and prosperity. ahead.
But after almost 10 years of failed “Ivan is a real Russian patriot who
talks with Egypt and Sudan, with which wrote about the army and space
it shares the Blue Nile, tensions are ris- because he really loved them. The accu-
ing and mistrust prevails. Addis Ababa sations that he betrayed his motherland
has said it will start to fill the Grand look absurd,” Kommersant said.
Ethiopian Renaissance Dam whether a Mr Safronov’s work, some of which
deal is agreed or not. required special security clearance to
Abdel Fattah al-Sisi, the Egyptian shadow President Vladimir Putin, won
president, said previously that Cairo him praise from Kremlin spokesman
would take all necessary measures to Dmitry Peskov, who called him “one of
protect its rights to Nile water, and Abiy the most talented and professional jour-
Ahmed, the Ethiopian prime minister, nalists we have” last year.
has said his country was ready to “mobi- Yesterday, Mr Peskov said the case
lise millions” to defend the dam. “had nothing to do with Ivan Safronov’s
In May, Egypt called on the UN Secu- journalistic activity”, adding: “We know
rity Council to press Addis Ababa to that our counter-intelligence colleagues
come to a deal. “The unilateral filling have a lot of work and worries, and they
and operation of this dam, without an Contentious: But in Egypt, a country with a popula- drought mitigation protocols. In Febru- ‘Ethiopia is “Egypt and Sudan, on the other side, do their job very well.”
agreement that includes the necessary the Blue Nile tion of 100m that is wholly reliant on the ary, Ethiopia rejected an agreement want something that is as detailed and The charges against Mr Safronov are
precautions to protect downstream passes through Nile for water, there is deep alarm about drafted by the US and the World Bank not asking as binding and long-lasting as possible.” the latest in a series of treason cases
communities . . . would heighten ten- the site of the future shortages as unfettered control of after talks in Washington. Ethiopian too much; it Addis Ababa says it has been frus- brought by the FSB, mostly targeted
sions and could provoke crises and con- Grand Ethiopian the flow of water passes to Ethiopia. officials said the deal was biased trated in previous attempts to exploit against elderly scientists.
flicts that further destabilise an already Renaissance Cairo wants to seal a comprehensive towards Egypt. is seeking to the river because of colonial-era agree- But reporters have felt pressure build-
troubled region,” Sameh Shoukry, the Dam last month deal to govern the filling and operation Egypt also fears that without agree- correct past ments requiring Egyptian consent. It ing from the security services over their
Egyptian foreign minister, told the Secu- Eduardo Soteras/AFP/Getty
of the dam that would include agreed ment on a binding dispute resolution has long been angry about a 1959 agree- work.
rity Council in a speech in late June. mechanism — something that Ethiopia injustices ment between Egypt and Sudan on the Last year, the Kremlin performed a
Both governments say the issue is of IRAQ has refused — it will be at the mercy of and share Nile from which it was excluded. rare U-turn after a public outcry over
“existential” importance but despite JORDAN IRAN its upstream neighbour. It is concerned “Ethiopia is not asking too much; it is fabricated drug charges against Meduza
Cairo
sometimes aggressive rhetoric, conflict that shortages of water will damage its this seeking to correct past injustices and investigative reporter Ivan Golunov,
on the ground is thought unlikely. “I Nile economy and destroy the livelihoods of share this precious resource in an equi- who claimed his work had angered the
don’t think there is any consideration of L I BYA
millions of farmers. About 86 per cent of
precious table and reasonable manner,” said Taye security services. Prosecutors were
EGYPT
military action being taken seriously”, SAUDI the water that reaches Egypt comes resource’ Atske-Selassie, Ethiopia’s representa- ordered to drop the charges.
said Hafsa Halawa, non-resident at the ARABIA from the Blue Nile in the Ethiopian tive, addressing the Security Council On Monday, a court gave Svetlana
Middle East Institute, a US think-tank. highlands. last week in response to Egypt’s Prokopeva, a radio journalist in the
The hydropower project, which will For its part, Addis Ababa insists it will complaint. western city of Pskov, a suspended sen-
have the capacity to generate 6,000 adhere to commitments to “cause no Egypt is concerned that if Ethiopia tence and fine for “justifying terrorism”
megawatts, making it Africa’s largest, is SUDAN significant harm” but will not be bound fills and operates the dam without an in a 2018 opinion column about a bomb-
ERITREA
considered by Ethiopia to be central to Blue
YEMEN by agreements that could tie its hands in agreement, other Nile basin states could ing attack on an FSB building.
its development plans, extending power Grand Ethiopian Nile operating the facility or building more follow suit. The White Nile, another Mr Safronov was fired from Kommer-
to tens of millions of people. Renaissance Dam dams upstream. tributary of the river, is shared by sant last year after he refused to reveal
Ethiopia has rejected the notion that “Ethiopia feels no compulsion to sign almost a dozen countries. “Egypt wants his sources for a story on the chair of
Egypt has “historic water rights” or that White Addis Ababa anything that could potentially disad- to prevent being put in this situation Russia’s Senate. He went to work for
“current use” can be used as a guide to S O U T H Nile ETHIOPIA vantage it in the future,” said William again to stop unilateral actions and Vedomosti, the FT’s former sister paper
SUDAN
how much water the downstream coun- Davison, Ethiopia analyst at the Inter- developments upstream without a con- but quit in April after its new editor said
try should receive. 250 km national Crisis Group, a think-tank. sultation process,” Ms Halawa added. he would censor news stories.

Belarus
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription Lukashenko east-west balancing act upset by crackdown
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00
James Shotter — Warsaw botched handling of the coronavirus ton planning to restore ambassadorial Minsk. “They got some alternative to
Max Seddon — Moscow
Trump vs the Valley
Tech titans need to minimise
political risk — GILLIAN TETT, PAGE 13
A Five Star plan?
Italy’s populists are trying to woo
the poor — BIG READ, PAGE 11
Dear Don...
May’s first stab at the break-up
letter — ROBERT SHRIMSLEY, PAGE 12
pandemic before a presidential election relations with Minsk. In February, just Russian oil, they got some loans, but
HMRC warns Lloyd’s of Brussels Insurance market
to tap new talent pool with EU base
UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80
Briefing
SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017

When Alexander Lukashenko, the on August 9, Mr Lukashenko has before the pandemic crisis took hold, now there are two things in the way: the
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

cracked down hard on his opponents. Mike Pompeo became the first US secre- unexpectedly repressive election and
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE
Belarusian leader, visited Russia last
Atlantic.— PAGE 15; CHINA CURBS HIT DEALS, PAGE 17
TECHNOLOGY IS
being swamped i Report outlines longer NHS waiting times
A report on how the health service can survive CHANGING AN
ROAD
more austerity has said patients will wait longer for
non-urgent operations and for A&E treatment while AMERICAN WAY OF LIFE Censors and sensitivity
by Brexit surge
some surgical procedures will be scrapped.— PAGE 4

Two opposition leaders and scores of tary of state to visit Belarus in a quarter the increased state support for the econ-
i Emerging nations in record debt sales Warning: this article may be

week to commemorate a series of sec-

FT WEEKEND MAGAZINE
FEBRUARY 4 2017

Developing countries have sold record levels of

government debt in the first quarter of this year,
upsetting — LIFE & ARTS
taking advantage of a surge in optimism toward
emerging markets as trade booms.— PAGE 15

3 Confidence in IT plans ‘has collapsed’

Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
activists have been detained. Analysts of a century, pledging to help it cut its omy, which is completely at odds with
A survey has revealed that a
3 Fivefold rise in declarations expected record 455 tall buildings are
planned or under construction over disputed painting of Jane Austen

ond world war battles, he reminded

JAMES BLITZ — WHITEHALL EDITOR adjust its negotiation position with the in London. Work began on

A computer system acquired to collect
duties and clear imports into the UK
may not be able to handle the huge
surge in workload expected once Britain
engulfed in
EU, a Whitehall official said. “If running almost one tower a week
our own customs system is proving during 2016.— PAGE 4
much harder than we anticipated, that
ought to have an impact on how we i Tillerson fails to ease Turkey tensions
press for certain options in Brussels.” The US secretary of state has failed to reconcile

fresh tax probe

say that if the crackdown continues, Mr dependence on Russian oil. what the IMF wants.”
leaves the EU, customs authorities have In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
admitted to MPs.
HM Revenue & Customs told a parlia-
of the Commons treasury select com-
mittee, HMRC said the timetable for
Tayyip Erdogan on issues including Syria and the
extradition of cleric Fethullah Gulen.— PAGE 9
Chic new lodgings

Vladimir Putin how much Moscow

mentary inquiry that the new system
needed urgent action to be ready by
March 2019, when Brexit is due to be
completed, and the chair of the probe
said confidence it would be operational
in time “has collapsed”.
delivering CDS was “challenging but
achievable”. But, it added, CDS was “a i Toshiba investors doubt revival plan
in Scotland
complex programme” that needed to be In a stormy three-hour meeting, investors accused MAGAZINE
linked to dozens of other computer sys- managers ofhaving an entrenched secrecy culture
tems to work properly. In November, 3 UK, France and Netherlands swoop
and cast doubt on a revival plan after Westinghouse
HMRC assigned a “green traffic light” to filed for Chapter 11 bankruptcy protection.— PAGE 16
3 Blow for bid to clean up Swiss image

Lukashenko’s efforts to improve rela- But analysts say the clampdown could Mr Lukashenko’s move against rivals
Setting up a digital customs system CDS, indicating it would be delivered on
has been at the heart of Whitehall’s time. But last month, it wrote to the i HSBC woos transgender customers
Brexit planning because of the fivefold committee saying the programme had The bank has unveiled a range of gender-neutral it followed “a strategy offull client tax

needed its smaller western neighbour.

RALPH ATKINS — ZURICH
increase in declarations expected at been relegated to “amber/red,” which DUNCAN
titles such asROBINSON — BRUSSELS
“Mx”, in addition to Mr, Mrs, Misscompliance”
or but was still trying to
British ports when the UK leaves the EU. means there are “major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

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

(Deposito Legal) M-32596-1995;

Theresa May announced in January that
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
to hit 300m.
tions with the west, which has long pres- leave Mr Lukashenko even more began in May with the detention of Ser-
international trade once the UK leaves its image as a tax haven. and certain ofits employees”. The UK
the EU . . . Internal ratings are designed The Swiss bank said yesterday it was tax authority added: “The international
to make sure that each project gets the
focus and resource it requires for suc-
Terror attacks inwith
co-operating western Europe after
authorities
offices in London, Paris and Amsterdam
Recent reach
itsattacks
notably the message
2011
— of this investigation sends a clear
that there is no hiding place for
The lure of the exotic
cessful delivery.” were contacted
Highlighted attack byOthers massacre bythose seeking to evade tax.”
local officials Robin Lane Fox on the flair
“concerning client tax matters”. Anders BreivikDutch in prosecutors, who initiated the
HMRC’s letters to the select commit- of foreign flora — HOUSE & HOME

Bracken House, 1 Friday Street, London EC4M 9BT.

The revelations about the system,
called Customs Declaration Service, are
likely to throw a sharper spotlight on
tee, which will be published today, pro-
vide no explanation for the rating
change, but some MPs believe it was
Lloyd’s of London chose Brus-
sels over “five or six” other
insurers to follow. Most of the
business written in Brussels
EU, with Dublin and Luxem-
bourg thought to be more likely
AFP
parts in Germany wereBrussels
while Australia’s revenue department
Norway
said it was investigating a Swiss
Publishing Director, Roula Khalaf;
Norway, the
Dutch authorities said their counter- action, said they seized jewellery, paint-
attacks in Paris
also involved,
and Nice, and
ings and gold ingots as part of their
Brussels suicide
Nice bank.
the while French officials said their
probe;
investigation had revealed “several

whether Whitehall can implement a
host of regulatory regimes — in areas
ranging from customs and immigration
to agriculture and fisheries — by the
time Britain leaves the EU.
Problems with CDS and other projects
essential to Brexit could force London to
caused by Mrs May’s unexpected deci-
sion to leave the EU customs union.
Timetable & Great Repeal Bill page 2
Scheme to import EU laws page 3
Editorial Comment & Notebook page 12
Philip Stephens & Chris Giles page 13
JPMorgan eye options page 18
cities in its decision to set up an
EU base to help deal with the
expected loss of passporting
rights after Brexit.
John Nelson, chairman of the
centuries-old insurance mar-
ket, said he expected other
will be reinsured back to the
syndicates at its City of London
headquarters, pictured above.
The Belgian capital had not
been seen as the first choice for
London’s specialist insurance
groups after the UK leaves the
“If before, Russia had room to manoeu- sured the autocratic leader over his dependent on the Russian president. gei Tikhanovsky, a blogger. Last month,
homes for the industry. But Paris bombings — have
Mr Nelson said the city won on The inquiries threaten to undermine thousand” bank accounts opened in
bucked the trend
efforts by the country’s banking sector Switzerland and not declared to French
its transport links, talent pool
and “extremely good regula-
tory reputation”.
Lex page 14
Insurers set to follow page 18
to overhaul business models and ensure
customers meet international tax
requirements following a US-led clamp- Publishing Company, The Financial Times Limited,
of generally low

western Europe
tax authorities.
fatalities from
The Swiss attorney-general’s office
Sources: Jane’s Terrorism and Insurgency Centre terror incidents in
said it was “astonished at the way this
down on evaders, which resulted in operation has been organised with the
billions of dollars in fines. deliberate exclusion of Switzerland”. It

registered office as above. Local Representative office;

The probes risk sparking an interna- demanded a written explanation from

Subscriptions & Customer service tional dispute after the Swiss attorney- Dutch authorities.

City watchdog sends a clear message as

vre in the west — in Ukraine, the Baltics human rights record, could be set back. “[Lukashenko] tried to diversify his Viktor Babariko, seen as his main rival,
general’s office expressed “astonish- In 2014, Credit Suisse pleaded guilty
ment” that it had been left out of the in the US to an “extensive and wide-
actions co-ordinated by Eurojust, the ranging conspiracy” to help clients THE RISE
Escape OF
the taper ECO-GLAM
trap
EU’s judicial liaison body. evade tax. It agreed to fines of $2.6bn.

banker loses job over WhatsApp boast How high earners can evade

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Credit Suisse, whose shares fell 1.2 per

subject ofinvestigations in the Nether-

lands, France and the UK. The bank said in Paris C/ Infanta Maria Teresa 4, bajo 2, 28016, Madrid. ISSN
Additional reporting by Laura Noonan in
cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
Houlder in London, and Michael Stothard
Austen’s descendants insist the Rice portrait depicts her as a girl — see magazine Bridgeman Art Library
a pension headache — FT MONEY

— they do not any more. Russia only has “I think the EU will try to maintain relations with the west but it did not was detained. Last week, Valery Tsep-
LAURA NOONAN — DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to
JENNIFER THOMPSON — LONDON

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Shutdown risk as border
A boastful WhatsApp message has cost
a London investment banker his job
and a £37,000 fine in the first case of
Christopher Niehaus, a former Jeffer-
ies banker, passed confidential client
information to a “personal acquaint-
ance and a friend” using WhatsApp,
according to the FCA. The regulator said
ban people from installing apps on their
private phones.
Andrew Bodnar, a barrister at Matrix
Chambers, said the case set “a precedent
in that it shows the FCA sees these mes-
1135-8262.
Brussels takes tough stance on Brexit
with Spain handed veto over Gibraltar
regulators cracking down on commu- 390_Cover_PRESS.indd 1 19/01/2017 13:57

wall bid goes over the top nications over Facebook’s popular Mr Niehaus had turned over his device saging apps as the same as everything

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Congressional Republicans seeking to
avert a US government shutdown after
April 28 have resisted Donald Trump’s
attempt to tack funds to pay for a wall
on the US-Mexico border on to
chat app.
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
to his employer voluntarily.
The FCA said Mr Niehaus had shared
confidential information on the messag-
ing system “on a number of occasions”
last year to “impress” people.
Several banks have banned the use of
else”.
Information shared by Mr Niehaus
UAE: Masar Printing & Publishing, P.O. Box 485100,
one window left to co-operate with relations but it will be hard for them,” really work as much as he hoped,” said kalo, another candidate, was barred
included the identity and details of a
client and information about a rival of ALEX BARKER — BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
Jefferies. In one instance the banker GEORGE PARKER — LONDON Gibraltar yesterday hit back at the status within the single market after
boasted how he might be able to pay off STEFAN WAGSTYL — BERLIN clause, saying the territory had “shame- Brexit, the guidelines state it would

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stopgap spending plans. They fear
that his planned $33bn increase in
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force a federal shutdown for the first
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Several large investment banks have
banned employees from sending client
information over messaging services
including WhatsApp, which uses an
new media from work-issued devices,
but the situation has become trickier as
banks move towards a “bring your own
device” policy. Goldman Sachs has
clamped down on its staff’s phone bills
his mortgage if a deal was successful.
Mr Niehaus was suspended from Jef-
feries and resigned before the comple-
tion of a disciplinary process.
Jefferies declined to comment while
Living wage rise to pile
pressure on care services
Dubai. Editor in Chief: Roula Khalaf.
The EU yesterday took a tough opening
stance in Brexit negotiations, rejecting
Britain’s plea for early trade talks and
explicitly giving Spain a veto over any
arrangements that apply to Gibraltar.
fully been singled out for unfavourable
treatment by the council at the behest of
Spain”. Madrid defended the draft
clause, pointing out that it only reflected
“the traditional Spanish position”.
require “existing regulatory, budgetary,
supervisory and enforcement instru-
ments and structures to apply”.
Mr Tusk wants talks on future trade
to begin only once “sufficient progress”

Qatar: Dar Al Sharq, PO Box 3488, Doha-Qatar. Tel: +97 Europe,” he said, referring to Belarus. said Veronica Laputska of the German Artyom Shraibman, founder of Sense from the ballot after it was deemed he
to accept the proposals. encryption system that cannot be as iPhone-loving staff spurn their work- Facebook did not respond to a request Senior EU diplomats noted that has been made on Britain’s exit bill and

Tel: +44 20 7873 4000 asiaads@ft.com,

US budget Q&A and
Trump attack over health bill i PAGE 8
accessed without permission from the
user. Deutsche Bank last year banned
WhatsApp from work-issued Black-
issued BlackBerrys.
Bankers at two institutions said staff
are typically trained in how to use new
for comment.
Additional reporting by Chloe Cornish
Lombard page 20
About 2.3m people will benefit from
today’s increase in the national living
wage to £7.50 per hour. But the rise
will pile pressure on English councils,
which will have to pay care workers a
European Council president Donald
Tusk’s first draft of the guidelines,
which are an important milestone on
the road to Brexit, sought to damp Brit-
ain’s expectations by setting out a
Mr Tusk’s text left room for negotiators
to work with in coming months. Prime
minister Theresa May’s allies insisted
that the EU negotiating stance was
largely “constructive”, with one saying it
citizen rights, which Whitehall officials
believe means simultaneous talks are
possible if certain conditions are met.
Boris Johnson, the foreign secretary,
reassured European colleagues at a

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lot more. Some 43 per cent of care
staff — amounting to 341,000 people
aged 25 and over — earn less than the
44557825
“phased approach” to the divorce proc-
ess that prioritises progress on with-
drawal terms.
was “within the parameters of what we
were expecting, perhaps more on the
upside”.
Nato summit in Brussels that Mrs May
had not intended to “threaten” the EU
when she linked security co-operation

“That is to our advantage,” he contin- Marshall Fund of the US, a think-tank. Analytics, a political consultancy in lacked enough signatures.
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EU’s after Brexit with a trade deal.
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Analysis i PAGE 4 300-year territorial dispute between tion deal could be problematic. Man in the News: David Davis page 11

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50.22
52.98
1248.80
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52.54
1251.10
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53.35
1244.85
50.35
53.13
1248.80
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INTERNATIONAL

Merkel accused of going soft

Growth forecasts

Longer lockdowns point

on China over Hong Kong law
Political hawks urge chancellor to condemn security legislation in territory
Guy Chazan — Berlin
Angela Merkel is facing criticism in Ger-
many for failing to take a tough line on
China over the new national security
law it has imposed on Hong Kong, with
politicians from both opposition and
government parties accusing the chan-
cellor of being too soft on Beijing.
“What the German government said
about Hong Kong was the absolute min-
imum, and it just wasn’t enough,” said
Norbert Röttgen, head of the Bun-
destag’s foreign affairs committee and a
leading figure in Ms Merkel’s Christian
Democratic Union.
He was speaking after the German
foreign ministry warned people to be
“particularly careful” about posting
China-critical comments on
social media, saying it “can’t be fully
excluded” that the new law will be used
against German citizens in Hong Kong.
Mr Röttgen condemned the new travel
advice as encouraging “self-censorship”.
EU countries this month expressed
“grave concerns” at China’s imposition
of the national security law, saying it
“risks seriously undermining the high
degree of autonomy of Hong Kong” and
“having a detrimental effect on the
independence of the judiciary and the
rule of law”.
Speaking at a press conference last
week, Ms Merkel echoed that message
while emphasising the need to “seek
dialogue” with China, on the basis of
“mutual respect” and a “relationship of
trust”.
She also said it was in Europe’s inter-
est to continue to work together with
Beijing on fighting climate change and
developing relations with Africa,
“where both we and China are very
actively engaged”.
However, China hawks from across
the German political spectrum said that
instead of stressing the need for co-op-
eration, she should have condemned
Beijing outright over the law.
They compared her comments to the
tough reaction of the UK, which vowed
to open a path to citizenship for almost
3m residents of Hong Kong, and of the
US, which said it would bar companies
from exporting weapons and sensitive
technology to the territory and revoke
the special trade status it has enjoyed
since Britain returned it to China in
1997.
Canada, too, has reacted forcefully,
suspending its extradition treaty with
Hong Kong and saying it would treat
sensitive goods being exported to the
territory as if they were being sent to
mainland China.
“Merkel’s China policy is behind the
times,” said Nils Schmid, foreign policy
spokesman for the Social Democrats,
the junior partner in Germany’s grand
coalition government.
“She still sticks to this idea of conver-
gence, that as we deepen our economic
ties with China, it will become more lib-
eral and western-oriented,” he said.
“But that’s just out of date.”
Throughout much of her 15 years in
office, Ms Merkel has laid great store in
Germany’s “strategic partnership” with
China, frequently praising the coun-
tries’ ever more complex economic rela-
Immigration
Close ties: tionship. China is easily Germany’s big-
Angela Merkel gest trading partner: trade volume
with Xi Jinping, between the two countries reached
China president, €200bn in 2018.
at Berlin’s In an interview with the Financial
Brandenburg Times in January, Ms Merkel, who has
Gate in 2017. visited China 12 times as chancellor,
Below, Hong defended Germany’s close ties to Bei-
Kong protesters jing, saying she would “advise against
demand regarding China as a threat simply
independence because it is economically successful”.
this month But some campaigners and opposi-
Guido Bergmann/EPA;
Roy Liu/Bloomberg
tion MPs accuse Ms Merkel of failing to
speak out forcefully enough about
human rights abuses in China — its mass
internment of Muslim Uighurs in Xin-
jiang, for example — for fear of harming
the economic relationship with Beijing.
“For all the benefits that Merkel’s
China policy delivered in the past,
these days it is behind the curve,”
said Reinhard Bütikofer, a Green MEP.
“She doesn’t understand that dia-
logue with a systemic rival that com-
‘Merkel’s bines an increasingly totalitarian
regime with a claim to hegemony is
China inevitably going to be a lot different to
policy is the dialogue we pursued with China 10
years ago,” he added.
behind the Mr Röttgen, an old rival of Ms Merkel
times’ who is running as a candidate for the
leadership of the CDU, said Germany
should follow the UK in offering asylum
to residents of Hong Kong and also push
for the creation of a UN special envoy to
Hong Kong.
“This is a test of Germany’s credibility
in forging a European strategy towards
China,” he said. “It’s a test of how we
counter China’s increasingly assertive
stance in the world. We need to signal
that China’s Hong Kong policy will hurt
its international image.”
That point was echoed by another
leading CDU politician, David McAl-
lister, head of the European parlia-
ment’s committee on foreign affairs.
“The EU should use its economic influ-
ence to react to China’s massive human
rights abuses with economic measures,”
he told Die Welt. “There should be a co-
ordinated reaction with other interna-
tional partners to exert pressure on
Beijing.”
Meanwhile Manfred Weber, a close
ally of Ms Merkel’s and leader of the cen-
tre-right European People’s party in the
European parliament, compared Hong
Kong to Berlin’s status during the cold
war. “John F Kennedy said ‘I am a Ber-
liner’. I say today: ‘I stand alongside the
citizens of Hong Kong’.”
See Opinion and Lex
to deeper EU recession
Mehreen Khan — Brussels
Martin Arnold — Frankfurt
The European Commission has slashed
its growth forecasts for the EU econ-
omy this year, warning that longer than
anticipated coronavirus lockdowns in
many countries would cause a “signifi-
cantly” deeper recession than previ-
ously predicted.
In its first updated economic projec-
tions since early May, Brussels said EU
gross domestic product would shrink
8.3 per cent this year — a steeper drop
than the 7.4 per cent it previously fore-
cast and the worst on record.
The commission also lowered its fore-
cast for an economic rebound in 2021,
estimating growth of 5.8 per cent, down
from a previous forecast of 6.1 per cent.
The calculations had worsened, it
said, as the lifting of containment meas-
ures had been more “gradual” than
expected at the start of the pandemic.
While large economies such as Ger-
many were among the first to ease
restrictions on economic activity in late
May, recurrent outbreaks of Covid-19
have led to the reintroduction of local-
ised lockdowns in some member states.
“The economic impact of the lock-
down is more severe than we initially
expected,” said Valdis Dombrovskis, the
EU commission’s executive vice-presi-
dent in charge of economic policy.
“Looking forward to this year and next,
we can expect a rebound but we will
need to be vigilant about the differing
pace of the recovery.”
Risks to the forecast were “exception-
ally high and mainly to the downside”,
said the commission, warning that it
assumed that “no major second wave of
infections will trigger new generalised
restrictions”. The possible failure of the
EU-UK talks on a future relationship
also “remains an important risk” to the
outlook, the commission said.
Brussels highlighted the risk of an
uneven recovery across the continent as
some economies are in line to reach
their pre-crisis GDP levels much faster
than others, as it slashed its growth fore-
casts for Italy, Spain and France while
raising that for Germany.
Of all the bloc’s 27 member states,
Italy will be the worst-hit this year, regis-
tering an estimated GDP contraction of
11.2 per cent, followed by Spain at
10.9 per cent, Croatia 10.8 per cent and
France 10.6 per cent. Poland is set to
have the smallest recession with a
downturn of 4.6 per cent in 2020.
The commission expects Germany,
Europe’s largest economy, to suffer a
recession of 6.3 per cent this year, before
bouncing back to growth of 5.3 per cent
in 2021.
Weapons trade
UK to resume Saudi arms
sales despite Yemen concerns
Helen Warrell — London
Britain is to resume arms sales to Saudi
Arabia, despite concerns from cam-
paigners that its weapons could be
deployed to commit war crimes against
civilians in Yemen.
The UK government suspended arms
sales to Riyadh last year, after London’s
Court of Appeal ruled that it needed to
assess whether the Saudi government
had violated international human rights
France is on course to experience the
strongest rebound of any EU country,
with growth of 7.6 per cent next year,
according to the forecasts.
The French central bank on Monday
slightly revised up its forecast for the
second-quarter decline in its economy
and said it could also raise its forecast
for a 10 per cent annual contraction in
GDP if data and containment of the pan-
demic continued to improve.
The risk of a two-speed recovery in
the bloc was underlined by separate
data published yesterday.
German industrial production
rebounded a record 7.8 per cent
between April and May, although it
undershot many economists’ forecasts.
German factory output was still nearly
20 per cent below its level in May last
year, but in Spain it was almost 25 per
cent below last year’s level, suggesting a
slower recovery.
Meanwhile, Italian retail sales shot up
a record 24.3 per cent in May. But Italian
consumer spending remained 10 per
cent below last year, although in several
northern European countries — includ-
ing Germany and the Netherlands — it
rose above pre-pandemic levels in May.
To help reduce divergence between
countries, the commission has pre-
sented a €750bn “Next Generation EU”
spending plan designed to give aid to the
worst-hit economies, including hun-
dreds of billions of euros in grants that
would not need to be repaid. EU leaders
are scheduled to hold talks on the plan
next Friday. The potential impact of the
proposals is not factored into the fore-
casts, the commission said.
“This remains a story of increasing
divergence, inequality and insecurity,”
said Paolo Gentiloni, EU economy com-
missioner. “This is why it is so impor-
tant to reach a swift agreement on the
recovery plan.”
Morgan Stanley said the cut in fore-
casts increased pressure on political
leaders to agree on the recovery fund,
which, they said, would be instrumental
in “significantly boosting the prospects
for a synchronised recovery”.
Retail sales are up in Italy but
consumer spending is subdued
and market places. “The government
claims that these are isolated incidents,
but how many hundreds of isolated inci-
dents would it take for the government
to stop supplying the weaponry?” he
said, adding he would be exploring
options to challenge the move.
For the past five years, Saudi Arabia
has led a military coalition against Iran-
aligned Houthi rebels in Yemen. Coali-
tion air strikes have been responsible
for about two-thirds of the approxi-

EU applicants for settled status in UK exceed official tally
Andy Bounds — Manchester
Bethan Staton — London
The number of EU migrants who have
applied for the right to stay in the UK
after Brexit exceeds official estimates
of the Europeans who are eligible to
remain, raising further questions over
the effectiveness of the government’s
settled status scheme.
Figures released last month revealed
that at the end of May there had been
3.6m applications to the EU settled sta-
tus scheme, more than the 3.4m official
estimate of how many EU citizens are
living in the UK produced by the Office
for National Statistics.
The mismatch is echoed by a Finan-
cial Times survey of EU embassies,
whose estimates of their citizens in the
UK indicate that the British govern-
ment has underestimated its EU-born
population by more than 500,000.
The confusion over the real number
of EU citizens living in the UK makes it
almost impossible to assess how many
eligible people will have failed to secure
settled status in Britain by the time the
process closes on June 30 2021, experts
and campaigners warn.
And with no clarity on the numbers,
they said there was a real risk that peo-
ple with a rightful claim to British resi-
dence could lose their legal status over-
night leaving them vulnerable to depor-
tation when the deadline passed next
year. “Once the number of applications
is above the estimated number the gov-
ernment can say the scheme has been a
success — and wash its hands of any
future responsibility — despite the fact
that many people will have slipped
through the net,” said Maike Bohn, co-
founder of the3million, a group cam-
paigning for EU citizens.
The prospect of eligible EU citizens
falling through the cracks has only been
increased by the UK’s coronavirus lock-
down, which has closed embassies and
document scanning centres.
Oxford university’s Migration
Observatory in April warned that unless
the government improved its data, any
discussion of extending the scheme
would take place without accurate
information on the number of people
who had not applied.
“For a host of reasons, it’s possible
that the number of EU citizens granted
status through the scheme could greatly
exceed the current official estimate of
3.4m but that wouldn’t necessarily
mean the task is finished,” wrote the
Observatory’s director Madeleine
Sumption. Based on a rolling poll of
households, the ONS estimates that
there are 3.4m citizens from the EU and
European Economic Area in the UK.
The figure is considered the most
accurate picture available but it leaves
out some groups, such as students, peo-
ple who are living in temporary accom-
modation or bedsits, and the family
members of EU and EEA citizens who
are also eligible to apply for EUSS.
The ONS has admitted that its own
figures had “statistical uncertainty”. It
‘Many people will
have slipped
through the net’
Maike Bohn, the3million
has also noted that the EUSS numbers
included Europeans who had left the UK
but could apply to the scheme to pre-
serve their right to return.
The Home Office acknowledged that
settled status scheme figures cannot be
directly compared with ONS estimates,
in part because EUSS numbers include
non-EU family members of European
citizens and people who are eligible but
not presently in the UK.
Foreign ministries contacted by the
FT estimated there were about 4m EU
nationals in the UK — more than
500,000 over the ONS estimate, with
the majority of ministries giving differ-
ent numbers to the UK’s statistical body.
For example, while the most recent
ONS estimate said there were 88,000
Dutch nationals in the UK, the Dutch
embassy estimated the number at about
150,000 for the same period. Mean-
while, the ONS estimate of 37,000
Czechs and 109,000 Hungarians in the
UK is far outstripped by the embassy
estimates of 100,000, and of 150,000-
200,000, respectively.
The numbers deviate so wildly
because of differences in methodolo-
gies, between the ONS and different
embassies. The Dutch estimate, for
example, is extrapolated from census
data and passport registrations, while
the Czechs track the numbers using
their consular services.
The Migration Observatory urged the
government to consider different ways
of measuring data for how many EU citi-
zens are in the UK, including through
linking different data sets, a possibility
also being explored by the ONS.
The Home Office said it would take a
“flexible and pragmatic” approach and
that anyone with “reasonable grounds”
for missing next year’s deadline would
be given a further opportunity in which
to apply.
law in its military campaign in Yemen.
But the ban has been reversed after a
government report found there had
been no “pattern” of Saudi air strikes
which breach international law. Liz
Truss, UK international trade secretary,
said yesterday there had been only “iso-
lated incidents” of violations.
“The incidents which have been
assessed to be possible violations of [the
law] occurred at different times, in dif-
ferent circumstances and for different
reasons,” she said. “I have concluded
that, notwithstanding the isolated inci-
dents . . . Saudi Arabia has a genuine
intent and the capacity to comply with
[international law].”
Officials will now start work on clear-
ing the backlog of licence requests that
have accumulated since the suspension
in June last year.
The Campaign Against Arms Trade,
which bought the legal action resulting
in last year’s suspension, said the deci-
sion was “morally bankrupt”.
“The Saudi-led bombardment of
Yemen has created the world’s worst
humanitarian crisis, and the govern-
ment itself admits that UK-made arms
have played a central role on the bomb-
ing,” said Andrew Smith, media co-ordi-
nator of the group.
He said there was clear evidence of
“heinous and appalling” breaches of
international humanitarian law by a
coalition, which had targeted civilian
gatherings such as weddings, funerals,
mately 11,700 civilian deaths, according
to the independent Armed Conflict
Location & Event Data Project.
Saudi Arabia remains the biggest
buyer of British weapons, purchasing
11,700 £5.3 bn
Estimated Value of arms
number of civilian licensed to Saudis
deaths in Yemen by UK since 2015,
in past five years according to Caat
equipment including Typhoon and Tor-
nado fighter jets and precision-guided
bombs.
According to Caat, the UK has
licensed £5.3bn of arms to Saudi Arabia
since the war began in 2015.
The decision comes only a day after
Britain announced new sanctions
against human rights abusers, including
20 Saudi nationals allegedly involved in
the murder of journalist Jamal
Khashoggi in 2018. The inclusion of
Saudi nationals pits the kingdom along-
side rights abusers in Russia, North
Korea and Myanmar.
Denisa Delic, head of children and
armed conflict at UK charity Save the
Children, described the resumption of
arms exports as “indefensible”.
“Our government say they want to be
a ‘global force for good’. But today they
decided that killing and injuring thou-
sands of children in Yemen does not
constitute a ‘pattern of harm’, ” she said.
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4 ★ FINANCIAL TIMES Wednesday 8 July 2020

INTERNATIONAL

South America ‘Levelling-off’

Bolsonaro tests positive for Covid-19 Atlanta Fed

Brazilian president who
dismissed virus diagnosed
after meal with US envoy
Bryan Harris and Andres Schipani
Sao Paulo
Jair Bolsonaro has tested positive for
coronavirus days after he celebrated the
July 4 weekend with the US ambassador
and senior ministers in Brasília.
The Brazilian president said he
started feeling weak on Sunday, and “it
worsened on Monday, with malaise,
tiredness, muscle pain, and fever of 38
degrees”. He said doctors treated him
with the antimalarial drug chloroquine.
“If I hadn’t done the tests and hadn’t
been taking chloroquine, I could be
contaminating people. Now I have to
avoid infecting others,” he said. “You
had no alternative [to chloroquine].”
The positive diagnosis means the
former army captain joins Boris John-
son of the UK among the few world lead-
ers to contract the illness.
Mr Bolsonaro, 65, has long denied the
seriousness of the pandemic and has
attended numerous rallies and events
often without any precautions, such as
wearing a mask. He has described the
disease as a mere “sniffle” and once said:
“The virus is there. We need to face it
like a man.”
Yesterday he said: “The number of
deaths has increased not because of the
virus but because of the fear of the virus.
The virus is like the rain, it will hit you.”
He concluded his press conference by
Crime. High-level probes
taking off his mask and giving a
thumbs-up.
Like Donald Trump, his ally, Mr Bol-
sonaro has defended the use of chloro-
quine and hydroxychloroquine to fight
‘The number of deaths has
increased not because of
the virus but because of
the fear of the virus’
the disease. On a request from Brasília,
the US dispatched 2m doses of the drugs
to Brazil, although some state governors
said they refused to distribute them.
On Saturday, the Brazilian leader was
photographed celebrating the US
national holiday alongside his foreign
minister, his chief of staff and the US
ambassador, raising the prospect that a
number of members of his cabinet could
also have the disease.
In March, several close aides to the
Brazilian leader were diagnosed with
Covid-19 soon after a summit between
Mr Bolsonaro and Mr Trump in the US
president’s Mar-a-Lago resort in Flor-
ida.
The diagnoses sparked a frenzy of
speculation that Mr Bolsonaro had been
exposed to the disease. A court eventu-
ally ordered him to publish test results,
which showed he was not ill.
Mr Bolsonaro’s health has been a
source of concern since he was stabbed
while campaigning for the presidency
in 2018. That attack resulted in the Bra-
zilian leader undergoing multiple
chief warns of
surgeries. Brazil is in the midst of one of
the world’s largest coronavirus crises,
flare-up risk
with more than 65,000 deaths from the
disease.
to nascent
Despite the escalating situation, how-
ever, city and state officials across the
nation have begun to reopen their econ-
recovery
omies with limitations on working
hours and crowd density. In São Paulo, James Politi — Washington
Brazil’s largest city, which was hit hard
at the beginning of the outbreak, bars
A senior Federal Reserve official has
warned that the rebound in the world’s
and restaurants on Monday opened for
largest economy is in danger of stalling
the first time in four months.
as a result of the recent spike in corona-
Throughout the crisis, Mr Bolsonaro
virus infections across several large US
opposed shutdowns and sparred con-
southern and western states.
stantly with state governors over how to
handle the pandemic. In an interview with the Financial
“Life goes on. Brazil has to produce, Times, Raphael Bostic, the president of
the economy has to move,” he said. the Federal Reserve Bank of Atlanta,
Additional reporting by Carolina Pulice whose district covers some of the
regions hardest hit by the current out-
breaks, including Florida, said high-fre-
quency data had shown a “levelling off”
of economic activity both in terms of
business openings and mobility.
“There are a couple of things that we

Latin America virus corruption claims rise
Officials and politicians across
the region investigated for
misdirecting Covid-19 funds
Bryan Harris and Andres Schipani
Sao Paulo
Gideon Long — Bogota
Dozens of high-profile officials and poli-
ticians across Latin America are being
swept up in investigations into whether
they used their positions to siphon
funds intended to tackle the coronavi-
rus pandemic.
The probes, which have gathered pace
alongside a soaring number of Covid-19
cases in the region, are a stark reminder
of the pervasive presence of corruption
years after the “Car Wash” probe sent
shockwaves across the continent.
“Corruption is so deep-rooted that
without a doubt many countries still
carry these corrupt practices through
pandemic times,” said Sérgio Lazzarini,
an expert on corruption and crony capi-
talism at Insper business school in São
Paulo.
“In the case of Covid-19, seeking to
speed up the procurement processes,
governments ended up making bids and
rules more flexible and this opened
space for opportunists.”
In Brazil, where the number of Cov-
id-19 deaths has surpassed 65,000, fed-
eral police have launched multiple
investigations, ensnaring dozens of state
and city-level officials and at least three
state governors.
Since the end of April, authorities
have begun a probe on average every
three days into allegations of financial
irregularities involving public budgets
intended for coronavirus relief.
The various probes run a gamut, with
most focused on whether officials either
embezzled money or worked in con-
junction with suppliers of medical
equipment to artificially inflate prices,
the profits of which could then be used
to pay kickbacks. s of June, the total
price of contracts and purchases
under investigation
amounted to more than
R$1bn ($200m), although
police say they are still
determining how much
reached the suspects.
The governors of
three Brazilian states
— Amazonas, Pará
and Rio de Janeiro —
Health scheme: have been implicated in various investi-
indigenous gations and all three deny wrongdoing.
children are Wilson Witzel, the rightwing governor
tested for the of Rio, is facing an impeachment proc-
virus in Rio de ess that could see him removed from
Janeiro, a state office in the coming weeks. The gover-
implicated in nor is accused of embezzling money
wrongdoing. through field hospitals, which allegedly
Below, Bolivia’s overcharged for supplies.
Marcelo Navajas “The recent scandals related to frauds
Mauro Pimentel/AFP/Getty
on managing the Covid crisis show that
corruption is not an episode in our his-
tory but a systemic problem,” said
Raquel Pimenta at the law school of the
Getúlio Vargas Foundation in São Paulo.
“Enforcement by legal institutions
can go a long way, but we fundamentally
have to calibrate public-private rela-
tions in the country.”
More than 90,000 people have
died in South America as a result
of Covid-19 as poverty and
creaking healthcare systems
combine to fuel the pandemic.
Schemes similar to those
alleged in Brazil are being
investigated across the
region. In Mexico, the son of
a key ally of President
Andrés Manuel López Obrador was
reported to have tried to sell ventilators
to the state social security institute at a
vastly inflated price. The son’s company
was fined 2m pesos ($89,376) by the
government’s anti-corruption ministry,
which said it had “identified practices
that are far from the new public ethics”.
Abdalá Bucaram, who served as Ecua-
dor’s president for a brief stint in
1996-97 before being forced to quit amid
mass protests, was arrested last month
as part of an investigation into alleged
corruption involving the purchase of
medical supplies in the hard-hit port
city of Guayaquil. A raid on his premises
found 5,000 masks, 2,000 coronavirus
test kits and one unlicensed gun.
“What is the crime?” he tweeted this
week, denying wrongdoing.
Weeks earlier, Bolivia’s health minis-
ter had also been detained following
claims his government paid grossly
inflated prices for ventilators to treat
coronavirus patients. At the time of his
arrest, Marcelo Navajas had only been
in the job six weeks. His lawyer called
the arrest an “infamy”.
The allegations of overpricing echo
‘There was elements of the sprawling Lava Jato, or
Car Wash, corruption investigation,
corruption which rocked the continent for much of
before the the past decade. In that scheme, investi-
gators accused politicians of colluding
pandemic with construction groups to extract
and it kickbacks in exchange for approving
new projects at grossly inflated prices.
continues At its centre was Brazilian construc-
now with tion company Odebrecht, which admit-
ted paying bribes in 12 Latin American
no pause’ countries to secure contracts.
“There was corruption before the
pandemic and it continues now with no
pause and no sense of remorse whatso-
ever,” said Carlos Barsallo, president of
the local chapter of Transparency Inter-
national in Panama, where a deputy
minister stepped down over the alleged
purchase of overpriced ventilators.
“It is very sad, and we are not sure if
the judicial systems, which were already
carrying a backlog of cases of traditional
political corruption, can now cope with
these new corruption cases that arose in
the midst of the pandemic. Corruption
does not rest in Latin America.”
Additional reporting by Jude Webber in
Mexico City
are seeing and some of them are trou-
bling and might suggest that the trajec-
tory of this recovery is going to be a bit
bumpier than it might otherwise,” Mr
Bostic said. “And so we’re watching this
very closely, trying to understand
exactly what’s happening.”
US jobs data released for the last two
months have shown that employers
have added back 7.5m of the 22.2m posi-
tions lost since the outset of the corona-
virus crisis, sparking hopes of a faster
rebound in the labour market.
But the June figures were collected
before a surge of infections in several
large US states, including Florida, Texas,
Arizona and California, which have
caused local officials to reimpose some
restrictions introduced during the ini-
tial lockdowns.
Jefferies, the investment bank, said
that its index of US economic activity
had “clearly flatlined” after two months
of improvement. “The loss of momen-
tum is broad-based, spanning small
business activity, discretionary footfall,
restaurant bookings, traffic congestion
and web traffic to state unemployment
portals,” it said, referring to data sources
that update with greater frequency than
official statistics.
“Regional data show particular weak-
ness in virus-hit states, where V-shaped
recoveries are morphing into Ws,”
Aneta Markowska and Thomas Simons,
Jefferies economists, wrote in a note.
Mr Bostic said the Atlanta Fed was
“trying to figure out whether this level-
ling off is something that is a more sus-
tained pattern, or just a pause”.
His “biggest concern in this whole
period”, he said, “is to what extent are
business losses permanent, are job
losses permanent?”
Mr Bostic’s comments were accompa-
nied by a call for Congress to offer more
fiscal support for the US economy, since
a big chunk of the $3tn in aid to busi-
nesses and households approved earlier
in the year to fight the coronavirus
shock is now fading or expiring.
Unemployment benefits are set to run
out for millions of Americans at the end
of the month — but Democratic and
Republican lawmakers are still heavily
divided on the scale and details of any
further stimulus and are on recess until
the week of July 20.
“When the relief was passed initially,
there was a thought about how long this
was going to last, and as more informa-
tion has come in, there’s reason to sug-
gest this is going to last longer than
that,” said Mr Bostic, “which means it’s
only natural, given that possibility, to
start thinking about what the next relief
package should look like.”

Australia FT-Peterson poll

Melbourne reimposes lockdown restrictions US voters more pessimistic on rapid rebound

Richard Henderson — Sydney
Alice Woodhouse — Hong Kong
Australian authorities will reimpose a
lockdown on Melbourne to contain a
rise in coronavirus cases, reversing
recent measures to relax restrictions in
a country that was seen a leader in
managing the pandemic.
The six-week lockdown on Australia’s
second-biggest city will take effect from
midnight today and apply to the metro-
politan region, with a population of 5m,
and Mitchell Shire, a region north of the
city. People will be allowed to leave their
homes to buy essential items, such as
groceries, or for exercise, medical care
or work. Restaurants and cafés, which
had begun to reopen with social-dis-
tancing measures, will only be allowed
to service takeaway food and drinks.
Daniel Andrews, Victoria state pre-
mier, said the new restrictions had been
imposed after an “unsustainably high”
number of new coronavirus cases. He
reported that there had been 191 new
cases in the state in the past 24 hours, up
from 134 the previous day, levels not
seen since the outbreak hit in March.
“I think a sense of complacency has Philip Lowe, governor of the central
crept into us as we let our frustrations bank said: “The Australian economy is
get the better of us,” Mr Andrews told going through a very difficult period and
reporters. “I think each of us know that is experiencing the biggest contraction
we’ve got no choice but to take these since the 1930s.”
very, very difficult steps.” Victoria imposed restrictions in
The new measures will probably add March that were more advanced than
pressure on the country’s economic other parts of Australia and helped the
recovery. The Reserve Bank of Australia country attract a reputation for good
announced yesterday it would keep management of the health crisis. Meas-
interest rates on hold at 0.25 per cent. ures included shutting the international
border, instituting quarantines and
social-distancing measures, and rolling
Victoria cases surge out large-scale testing.
New daily cases by source of infection,
7-day rolling average The premier has also put nine apart-
ment blocks in Melbourne that house
Local Overseas
80 3,000 residents into a “hard” lockdown,
barring people from leaving their flats.
Michael Toole, a professor at the Bur-
60 net Institute, a medical research group
in Melbourne, said the measures were
40 superior to the approach in recent
weeks of locking down a few suburbs.
20 “A lot of the new cases are community
transmission of an unknown source,
from people with no known contact,”
0 Mr Toole said. “That’s the worry
Mar Apr May Jun Jul
Source: Department of Health and Human because it makes contact tracing almost
Services Victoria impossible.”
Lauren Fedor — Washington
Christine Zhang — New York
Americans have become more pessi-
mistic about the prospects for a quick
pandemic recovery, especially in the
states of the south and west where
coronavirus cases have risen sharply,
according to a poll for the Financial
Times.
Almost half of likely voters, about
49 per cent, believed the outbreak
would get worse over the next month, a
big increase from the 35 per cent who
said the pandemic would worsen when
asked a month ago. Only 24 per cent
said they believed it would improve.
The monthly survey of likely voters
for the FT and Peter G Peterson Founda-
tion found that the share of Americans
who believed the US economy would
“fully recover” in a year dropped from
42 per cent to 37 per cent. Those saying
a recovery would take a year or more
rose from 58 per cent to 63 per cent.
The FT-Peterson poll, conducted at
the end of June, showed the rise in pessi-
mism was particularly pronounced in
the south and west, where coronavirus
cases have increased sharply after econ-
omies reopened in May.
In the south, 56 per cent of likely vot-
ers said coronavirus would get worse in
the next month, as did 59 per cent in the
west, compared with just 29 per cent in
the north-east, which bore the early
brunt of the US outbreak but been
spared the recent rise.
More wary: almost
half likely voters,
49%, believed the
outbreak would
get worse over
the next month
The north-east was also the only
region that showed little change in its
economic outlook; the portion of voters
in the south who think a recovery will
take longer than a year rose 6 percent-
age points over a month ago while the
increase in the west was 8 points.
The results underscore the challenge
facing President Donald Trump, who
had hoped his handling of the economy
would serve as the linchpin for his re-
election campaign.
Most national opinion polls show the
Democrat Joe Biden with a double-digit
lead over the incumbent, whose
approval ratings have suffered due to
his handling of the pandemic and civil
unrest after the killing of George Floyd.
The trends have been very noticeable
in the south and west, where states such
as Florida, Texas, Georgia and Arizona
— all of which Mr Trump won four years
ago — have been particularly hard hit by
the new outbreak and seen support for
the president drop below 2016 levels.
Mr Trump has continued to tout signs
of an economic rebound, saying the US
economy was “roaring back” last week
after official figures showed employers
added 4.8m new jobs in June and the
unemployment rate fell to 11.1 per cent.
He noted that economic data for the
third quarter, which ends on September
30, would land shortly before election
day on November 3.
However, the June employment data
were collected before the new outbreak
forced officials in Texas, Arizona and
Florida to roll back reopening plans,
raising questions over whether the
rebound can continue.
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Wednesday 8 July 2020 ★ FINANCIAL TIMES 5
 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
6 ★ FINANCIAL TIMES Wednesday 8 July 2020

Michael Howell If China and the eurozone team up investors should knuckle down for a weaker US dollar y MARKETS INSIGHT, PAGE 11

Deutsche fined Cleaning up Russia hits Norilsk Nickel with

record $2bn fine for Arctic rivers diesel spill
Lansdowne to
shut flagship
for compliance fund after
bruising run
failures over Laurence Fletcher — london

Lansdowne Partners, one of Europe’s

Epstein deals
3 Lender rebuked for series of missteps
3 Danske and FBME errors also made
Kadhim Shubber — Washington
Deutsche Bank has agreed to pay a
$150m fine for compliance failures in its
dealings with Jeffrey Epstein, the late
disgraced financier, as well as Danske
Bank Estonia and FBME Bank.
The German lender processed mil-
lions of dollars of potentially suspicious
transactions by Epstein, a registered sex
offender, including payments to alleged
co-conspirators, Russian models, and
$800,000 in suspicious cash withdraw-
als, the New York State Department of
Financial Services said yesterday.
“Despite knowing Mr Epstein’s
terrible criminal history, the bank
inexcusably failed to detect or prevent
millions of dollars of suspicious transac-
‘Onboarding [Epstein] as
a client in 2013 was a
critical mistake and should
never have happened’
tions,” Linda Lacewell, the super-
intendent of financial services, said.
The settlement marked the first
enforcement action against a bank for
dealings with Epstein, who was con-
victed in 2008 of soliciting sex from a
minor and arrested last year on federal
charges of sex trafficking underage girls.
He died in jail last August while awaiting
trial, in what was ruled suicide.
“Onboarding [Epstein] as a client in
2013 was a critical mistake and should
never have happened,” Christian Sew-
ing, Deutsche’s chief executive, said in
an internal memo seen by the Financial
Times. “Our reputation is our most val-
uable asset and we deeply regret [the]
association.”
Deutsche has paid billions of dollars
in fines and settlements for a number of
misconduct issues over the past decade.
The consent order agreed by Deut-
sche revealed details about Epstein’s
finances, such as “The Butterfly Trust”,
whose beneficiaries included alleged co-
conspirators and “a number of women
with eastern European surnames”.
Epstein sent more than 120 wires
amounting to $2.65m to the trust’s bene-
ficiaries for “hotel expenses, tuition,
and rent”, according to the consent
order, which detailed apparent settle-
ment payments of more than $7m and
legal expenses of more than $6m. The
bank allowed an unnamed attorney for
Epstein to withdraw about $800,000 in
cash between 2013-2017 for travel, tip-
ping, and expenses, the regulator said.
The New York regulator outlined a
series of “procedural failures, mistakes,
and sloppiness” in the handling of more
than 40 accounts opened by Epstein
between 2013 and 2018, when Deutsche
ended the relationship amid renewed
scrutiny of Epstein’s crimes.
Yesterday’s settlement, which cred-
ited Deutsche’s “exemplary co-
operation”, said it had “failed to take
appropriate action” to prevent Danske
Bank Estonia executing billions of dol-
lars in suspicious trades via accounts in
New York. Between 2007-2015, Deut-
sche cleared more than €160bn for Dan-
ske’s Estonian branch, which is sus-
pected of laundering €200bn out of
money from ex-Soviet states.
Deutsche quit clearing dollars for
Danske’s Estonian branch in 2015 after
its internal controls started to flag a ris-
ing amount of suspicious transactions,
which the bank reported to authorities.
The regulator said that Deutsche had
similarly failed to act on red flags in its
relationship with FBME in Cyprus.
FBME was sanctioned by the US in
2015 over money laundering concerns.
Deutsche acknowledged deficiencies
in its relationships with Danske and
FBME but said that “there was no inten-
tional effort by anyone within the bank
to facilitate unlawful activity”.
More than 21,000 tonnes of Norilsk fuel spilled into the rivers Ambarnaya and Daldykan in May — Irina Yarinskaya/AFP
Max Seddon — Moscow
Russia has hit Norilsk Nickel, the
world’s biggest producer of palla-
dium and nickel, with a record $2bn
fine over a fuel spill that turned two
rivers in Siberia crimson in late May.
Rosprirodnadzor, Russia’s environ-
mental watchdog, said it expected
Norilsk to make a “voluntary” contri-
bution of Rbs147bn ($2.05bn) to
repair damage to Arctic waterways
and a further Rbs738m ($10m) for
damage to the nearby soil.
“The scale of the damage to Arctic
waterways is unprecedented. The fine
is proportional to it,” Dmitry Kob-
ylkin, the ecology minister, said. “If
you recall the Exxon Valdez disaster
off the coast of Alaska, the fine for the
damage was more than $5bn.”
More than 21,000 tonnes of diesel
leaked into the rivers Ambarnaya and
Daldykan in May when an ageing fuel
tank at a Norilsk subsidiary power
plant collapsed near the company’s
main operations inside the Arctic
Circle.
The fine dwarfs the Rbs10bn cost of
the clean-up estimated by Vladimir
Potanin, Russia’s richest man, who is
Norilsk’s controlling shareholder and
chief executive, as well as the Rbs27bn
penalty against Russian Railways in
2016 that was the largest levied
against a Russian company.
The fine is equivalent to about a
third of Norilsk’s net profit for 2019.
Analysts said that Norilsk could prob-
ably absorb the blow with its $5bn of
cash on hand and $2bn of undrawn
facilities but would struggle to meet
its generous dividend policy.
Russian industrials have avoided
paying large fines for environmental
damage in the past. Russian Railways
successfully lowered the 2016 fine to
insignificant administrative penal-
ties, while the average fine last year
was below Rbs20,000 — only just
above the poverty line.
Evgeny Shvarts, a former head of
conservation policy at the World
Wildlife Fund in Russia who is an
independent member of Norilsk’s
board, said that the company would
probably seek to have the fine low-
ered through the courts.
Norilsk, one of the world’s worst
sulphur dioxide emitters, avoided
paying any fines for four years in the
mid-2000s thanks to a decision by
Russia’s supreme court.
But environmentalists say the
extent of the damage may be too
much for Norilsk to avoid paying a
hefty sum after Vladimir Putin, Rus-
sia’s president, gave Mr Potanin a pub-
lic tongue-lashing over the disaster.
“The fine against Norilsk is unique,
and not just for Russia,” said Boris
Morgunov, dean of the ecology faculty
at Moscow’s Higher School of Eco-
nomics. “Russian companies don’t
have environmental risk strategies in
place that are the global standard.
And most of them don’t have the
finances to digest disasters like this.”
oldest and best-known hedge fund
managers, is planning to shut its flag-
ship hedge fund after a long period of
poor performance.
The Mayfair-based firm, once regarded
as the gold standard of equity investing,
will close its $2.8bn Developed Markets
fund run by Peter Davies and Jonathon
Regis because it has become harder to
find attractive bets against overpriced
companies, according to a person famil-
iar with the plans.
“It is much harder to see opportuni-
ties in the short book, either in terms of
generating specific value or as a hedging
offset to the long investments,”
Lansdowne said in a letter to investors.
The firm declined to comment further.
The Developed Markets strategy,
which managed more than $12bn in
assets five years ago, is known for a well-
timed bet against Northern Rock during
the financial crisis and some large gains
in the period that followed.
However, performance has lagged.
The fund lost 23 per cent during the first
six months of 2020, as its long positions
in airline stocks were hard hit.
The FT reported last year that the
fund’s short bets had not beaten the
market in aggregate since 2008, reflect-
ing how some had struggled to make
money from short positions as central
bank easing pushed asset prices higher.
Lansdowne’s Developed Market fund
was also hit by bullish bets on UK stocks.
It has been negative on US equities,
which have on average fared better than
European stocks this year. Hedge funds
on average are down 1.1 per cent in the
first six months of this year, according to
data group Hedge Fund Research.
The fund gained only about 1 per cent
in last year’s bull market, and suffered
losses in two of the three previous years,
according to investors.
Mr Davies and Mr Regis have become
very positive on the outlook for betting
on rising stock prices, and believe exces-
sive short-term reactions to coronavirus
by investors have created large valua-
tion opportunities, the person said.
The closure of the Developed Markets
fund was first reported by Institutional
Investor. Clients will be able to pull their
cash out, or invest in either an existing
long-only version of the strategy or a
new fund called LDM Opportunities,
investing in early-stage companies.
Additional reporting by Paul Murphy

Legal Notices
Airwallex is winning backers in its mission to shake up payments
possible for new entrants to upend the
inside business status quo.
That’s because Airwallex is also creat-
asia ing an entirely new infrastructure to
replace the traditional pipes of the glo-
Henny bal payments system, dominated by
Belgium-based SWIFT.
Sender SWIFT is not controlled by any gov-
ernment, but it is still seen as part of a
financial world that is dominated by the
West.
“It is a big deal. It took five decades to
tutions and big tech. Today, it is backed
by a diverse group. Investors include
Tencent, Sequoia Capital, Hillhouse
Capital, DST, and financial institutions
such as credit card giant Mastercard, as
well as regional banks, such as ANZ and
BCA in Indonesia.
Salesforce invested in the latest fund-
raising round, enabling Airwallex to
offer its services to the Salesforce eco-
system as it already does with the Ten-
cent ecosystem.

I
n April, when the pace of fundrais-
ing for young tech businesses had
slowed dramatically, digital pay-
ments network Airwallex bucked
the trend. The five-year-old
start-up raised $160m from banks, tech
groups and investment firms, in a deal
that valued it at $1.8bn.
Many areas of fintech — especially
those using data analytics to extend
loans to consumers and smaller enter-
prises — have been caught out by the
speed of the economic slowdown that
has followed the coronavirus pandemic.
But Airwallex, whose head offices are
in Shanghai and Melbourne, has held up
better because it operates in a more
promising fintech space: it helps small
enterprises with operations beyond
their home borders manage their for-
eign exchange needs, sending and
receiving multiple currencies without
handing exorbitant fees to the banks.
“We are building a digital payments
infrastructure to help small and
medium enterprises operate globally,”
explained its co-founder Jack Zhang.
But Airwallex has ambitions that
potentially far exceed eating into what
has been a hugely profitable business
for the banks. If successful, it will pose a
challenge to one of the principal build-
ing blocks of the international mone-
tary system today — illustrating the
speed with which technology makes it
build up SWIFT into a system which is
low cost, robust and resilient,” says Dino
Kos, who ran the markets group at the
New York Fed for many years and is now
an executive vice-president of CLS,
which provides foreign exchange settle-
ment services for the world’s largest
banks. “There is no alternative today.”
While SWIFT has tried to be politi-
cally neutral, it has
come under pres- ‘It is a big deal. It took
sure from the US,
seeking informa- five decades to build up
tion on transac- SWIFT into a system
tions that may be
violating US laws, which is low cost,
adds Mr Kos. At the robust and resilient’
same time, govern-
ments including those of Russia and
China have talked about trying to
develop an alternative to SWIFT — but
have never actually done so.
Moreover, Airwallex is gaining
ground just as digital currencies have
the potential to challenge a system in
which central banks have a monopoly
on creating money and the US dollar
dominates international payments. It is
in discussions with Facebook to explore
synergies with that group’s Libra experi-
mental digital currency. Mr Zhang
declined to comment on the talks.
Yet in spite of its potential disruptive
power, Airwallex has sought allies
among both traditional financial insti-
“The existing system is inefficient and
fragmentary,” says Lucy Liu, Airwallex’s
co-founder, who is based in Shanghai.
“And while we want to build our own
payments platform, both for settlement
and payment, we want to work with
banks and other financial institutions.”
Even given these positive dynamics,
Airwallex still faces many challenges
before it can begin to have the trans-
formative effect to which it aspires.
As Mr Zhang notes, the digital world
may be borderless, but any financial
product is heavily regulated by different
jurisdictions. In the US, for example, the
business needs licences from all 50
states. An application to the People’s
Bank of China is subject to such tight
non-disclosure agreements that Air-
wallex’s founders can’t even disclose
how long the process may take.
Precisely because it — and most of its
customers — live in a digital world, Air-
wallex also faces competition not only
from local Asian start-ups including
Hangzhou-based PingPong Payments
but those in Silicon Valley, such as
Stripe.
This has done little to dent its ambi-
tion. “If there is an alternative rails for
the global payments system, you want
to be part of it,” says Mr Kos. “You do not
want to be on the outside looking in.”
henny.sender@ft.com
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Wednesday 8 July 2020 ★ FINANCIAL TIMES 7

COMPANIES & MARKETS

Financials Financials

Suitors line up for a piece of Wirecard Moore Capital

Potential bidders for parts
of failed payments group
number more than 100
Olaf Storbeck —Frankfurt
More than 100 potential bidders had
flagged interest in buying parts of
insolvent German payments group
Wirecard, the company’s administrator
said yesterday.
Munich-based lawyer Michael Jaffé
has been appointed to oversee proceed-
ings after the group collapsed into
insolvency last month in one of the
biggest accounting frauds in Germany’s
postwar history.
The company, which is sitting on
€3.5bn of debt, disclosed in June that
large parts of its business in Asia —
which was outsourced to external part-
ners and accounted for half of the
reported group revenue — were misrep-
resented to investors.
Wirecard also warned that €1.9bn in
cash was missing from its accounts.
Mr Jaffé said yesterday that he had
taken steps to “secure [Wirecard] assets
at different international locations”
and that a team of specialists was
analysing its payment flows in an
attempt to uncover the causes of the
company’s crisis.
Shares in Wirecard have fallen more
than 98 per cent since mid-June, wiping
out more than €12bn in market value.
Deutsche Bank has emerged as one of
the potential suitors of Wirecard’s pay-
ments processing business.
Last week it said it was willing to pro-
vide financial support to Wirecard
Bank, which is not part of the insolvency
procedure and is processing payments
as normal.
Deutsche chief executive Christian
Sewing yesterday said that it was
“almost an obligation” for Germany’s
Banks. Succession
largest lender to look at Wirecard Bank,
given Deutsche’s focus on transaction
banking and payments.
“We all now need transparency and
that’s the first task,” said Mr Sewing
in a webcast organised by Bloomberg
News, adding that it was “too early to
judge” how Germany’s largest lender
might get involved.
With regard to potential divest-
ments, most progress had been
made with Wirecard’s US-based subsid-
iary, Wirecard North America, the
administrator said.
The former Citi Prepaid Card Services
business, which was bought by the Ger-
man company for an undisclosed sum
in 2016, has put itself for sale and man-
dated investment bank Moelis & Com-
pany to manage the process.
Additional sales procedures for other
international subsidiaries, as well as
for Wirecard’s core business, the
settlement of electronic payments in
Europe and the issuing of credit cards,
“are currently being launched”, the
administrator said.
Soon potential suitors would be able
to begin conducting due diligence, he
said. The aim was to come to “timely
solutions with investors in the interest
of creditors, employees and clients”.
founder backs
top manager’s
solo fund effort
Ortenca Aliaj
Louis Bacon, the billionaire founder of
hedge fund manager Moore Capital
who last year announced that he
would return money to outside inves-
tors, is investing $1bn of the firm’s capi-
tal to back one of its managers striking
out alone.
Rami Abdel-Misih is set to spin out of
Moore Capital, where he has been a
portfolio manager for almost a decade,
with his own long/short equity hedge
fund as early as next year, according to
sources with knowledge of the matter.
The move illustrates how Mr Bacon, a
legendary trader and one of the hedge

Lloyds grapples with change at the top
Some board members want
decisive action including M&A
after chief bows out next year
Nicholas Megaw and Stephen Morris
London
António Horta-Osório, chief executive
of Lloyds Banking Group, has been bat-
ting away questions about his future
longer than many executives stay in
their jobs.
After years of speculation, on Monday
the Portuguese banker announced his
intention to step down next June after a
decade at the helm of the UK’s largest
high street bank.
The announcement raised fresh ques-
tions for both Lloyds and for Mr Horta-
Osório as the banking sector grapples
with unprecedented uncertainty and
pressures from the impact of the pan-
demic and prolonged low interest rates.
Attention has quickly turned to
potential candidates to replace Mr Hor-
ta-Osório, as well as where the 56-year-
old might head.
Lloyds chairman Norman Blackwell
told staff on Monday that the bank was
approaching “a natural break point for
him to hand over the executive leader-
ship”, as it nears the end of its latest
three-year strategic plan.
Mr Horta-Osório, known for running
a highly centralised operation and tak-
ing an active role in the management of
Lloyds’ £440bn balance sheet, won
plaudits for stabilising the bank after
the 2008 financial crisis and cutting
costs to create one of the UK’s most effi-
cient lenders.
The pressure became too much in
2011 when Mr Horta-Osório was diag-
nosed with stress-induced insomnia
and signed off work. He slept almost
continuously for over a week and spent
time at the private Priory Hospital.
He recovered and went on to turn
Lloyds “from a liability to the taxpayer
into an asset for the country”, according
to Mervyn King, who was governor of
the Bank of England when Mr Horta-
Osório was appointed in 2011.
The chief executive told staff on Mon-
day, in a memo seen by the Financial
Times, that they had “led a revolution”
on how [mental health] is managed in
organisations large and small.
Despite the turnround, Lloyds’ share
price almost halved during his tenure,
weighed down by low interest rates and
more than £20bn of penalties and cus-
tomer compensation for mis-selling
payment protection insurance.
The bank’s £22bn market capitalisa-
tion is barely higher than the cost of the
PPI scandal and it is valued at half the
hundreds of millions of pounds from its
annual revenues.
The bank plans to extend its push into
wealth management and insurance in
an attempt to offset low rates. Some
board members have pushed for more
radical action such as M&A — a call that
may be strengthened by the announce-
ment of former investment banker
Robin Budenberg as chairman.
“A traditional banker might not be the
right fit given the way the board seems
to be thinking about strategic evolu-
tion,” said John Cronin, an analyst at
Goodbody.
Insiders regard Vim Maru, who fol-
lowed Mr Horta-Osório from Santander,
as the leading internal candidate for the
top job. As head of retail banking, Mr
Maru runs Lloyds’ largest unit and will
play a key role in designing the strategic
plan that is set to be announced in Feb-
ruary. His appointment would avoid the
potential complications that could
come with a new executive arriving to
implement their predecessor’s strategy.
External candidates include Alison
Brittain, a former Lloyds executive who
has built up M&A experience as head of
Whitbread, and RSA chief executive
Stephen Hester. Mr Hester is highly
rated by many in the City, but has a
chequered history with Mr Budenberg,
who played a part in his defenestration
as chief executive of Royal Bank of Scot-
land in 2013 amid a dispute with the
government over strategy.
Lloyds under Horta-Osório David Herro, vice-chairman of Harris
Associates, Lloyds’ biggest shareholder,
Share price (pence)
said that Mr Horta-Osório was leaving
100 the bank in a strong position but cau-
First of many provisions Government sells last of its stake, Chair Lord Blackwell tioned that, like many of its European
for PPI mis-selling making nominal profit of £900m announces he will peers, the relatively low pay on offer for
step down 80 the top job, compared with US rivals,
might discourage some candidates.
“We have what seems to be a capable
60 new chairman coming in. The bank is in
Horta-Osório takes two great shape and extremely well capital-
months' medical leave ised,” Mr Herro said. Mr Horta-Osório
40
Virus drives sharp rise in Lloyds' “caught a lot of guff in the media over his
provisions for bad loans pay and pension and I hope it doesn’t
20 chase a good-quality successor away”.
Although Mr Horta-Osório’s
2011 12 13 14 15 16 17 18 19 20
announcement was styled a “retire-
Source: Refinitiv ment”, friends expect him to seek
another big job in European banking.
António Horta- book value of its net assets. The BoE has investors. “Markets may not reward this The £22bn He has been linked with the vacant
Osório stabilised banned any dividends or share buy- during his tenure, but . . . I suspect his chief executive role at HSBC twice in the
the bank after backs until virus fallout is clearer. creation of true value will be very evi- market cap past three years and was once consid-
the financial Defenders of the chief executive said dent in a few years’ time.” is barely ered the most likely successor to take
crisis and the PPI scandal was beyond his control, Hopes of hitting profitability targets over as chief executive of Santander.
reduced costs to though some sector veterans blame him were disrupted by the virus and analysts higher than Analysts on Monday suggested his
create one of the for breaking ranks and agreeing to start suggested Mr Horta-Osório’s successor the cost of experience in retail banking and digiti-
most efficient compensating customers without first might need a different set of skills as the sation would suit the Spanish bank.
UK lenders setting a time limit for claims. bank seeks growth in new areas. the PPI One person who has worked closely
Jason Alden/Bloomberg
“In very trying circumstances he has Pre-tax profit fell 95 per cent in the scandal with Mr Horta-Osório said: “He is
created a strong and secure bank,” said first quarter owing to £1.4bn of charges relentless. I’ve seen some other CEOs
Peter Davies of hedge fund Lansdowne to cover expected credit losses, and the ready to leave after so long in their role,
Partners, one of the group’s top-20 BoE’s recent interest rate cuts will cut but that is not him.”
fund industry’s best-known names, is
seeking to tap into the high returns
often generated by hedge funds in their
first few years of trading.
Moore Capital told investors in
November that it would shut its flagship
funds to external clients and focus on
running internal money, following years
of underwhelming performance and
declining assets. It said that Mr Bacon
would take a step back from day-to-day
trading to focus on family and philan-
thropic pursuits.
Mr Bacon also outlined plans to let his
traders launch funds that could be spun
out into separate entities.
“We intend to launch individual funds
managed by our best-performing port-
folio managers from both our macro
Abdel-Misih will start
Mane Global with $1bn
from Bacon’s firm and also
raise capital from outside
and our long/short equity platform,” he
wrote at the time.
The firm has returned all of the
money it was managing for third par-
ties, leaving two smaller funds, run by
Joeri Jacobs and Erik Siegel, which still
manage some external capital.
Mr Abdel-Misih will start Mane Glo-
bal with $1bn from Mr Bacon’s firm, and
also raise capital from outside investors.
His start-up plans come as the
number of new fund launches has been
steadily dropping. In the first three
months of the year they reached a near-
record low of 84, the lowest quarterly
total since the last three months of
2008, said Hedge Fund Research.
The paucity of start-ups reflects the
increasing costs and business risk of set-
ting up alone, which in recent years has
driven portfolio managers to join estab-
lished names like Moore Capital, Millen-
nium Management and Citadel, rather
than setting up their own funds.
Reflecting this trend, Moore Capital
has also brought back three traders who
left the firm to launch Stone Milliner
Asset Management in 2012. In Novem-
ber Jens-Peter Stein, Kornelius Klobu-
car and Chris Nicoll told investors they
were closing their macro hedge fund,
less than a week after Moore said it
would return external capital.
Mr Nicoll has rejoined Moore Capital
while Mr Stein and Mr Klobucar have
launched their own firm in Switzerland
to manage money exclusively for the
hedge fund manager, sources familiar
with the plan said.
Moore is having one of its best years in
at least a decade. Its flagship fund has
gained 25 per cent this year to date. Glo-
bal macro managers, which trade
instruments such as bonds, currencies
and commodities on the back of eco-
nomic trends, are enjoying a long-
awaited revival amid virus volatility.

Media Technology

WPP-owned communications firms merge Shift to remote working bolsters Samsung

Arash Massoudi and Alex Barker
Finsbury, Glover Park Group and Her-
ing Schuppener are merging to form a
new corporate communications firm
that will aim to take on rivals such as
Brunswick Group and Teneo in provid-
ing companies with a one-stop shop for
advice across dealmaking, crisis man-
agement and lobbying.
Managers from the three firms have also
agreed to buy a 49.99 per cent stake in
the new company from WPP, the UK
advertising group, which owns all three
businesses. WPP will remain the major-
ity shareholder in newly formed Fins-
bury Glover Hering.
The deal comes just over a year after
the Financial Times revealed that
Roland Rudd, the founder of London-
based Finsbury, had approached WPP
about buying back the firm which the
FTSE 100 group acquired in 2001.
Mr Rudd’s approach to WPP was
partly driven by a desire to wrestle back
equity in Finsbury as a means to moti-
vate and incentivise his partners in the
firm, which specialises in financial and
crisis communications.
Headquartered in New York, Fins-
bury Glover Hering will be able to offer
its senior leadership the opportunity to
buy into the new equity structure. After
some cost savings, the firm will employ
nearly 700 staff with 130 of those at the
partner or managing directors level
across 18 offices around the world.
“We’ll have more fun and we’ll be
more effective. Those are the two ingre-
dients you need in business,” Mr Rudd
told the FT. He declined to give financial
details of the transaction.
Mr Rudd will become co-chair of the
firm alongside Carter Eskew, co-
founder of Washington DC-based
Glover Park Group, which specialises in
lobbying and public relations.
Alexander Geiser, who is managing
partner of Germany’s Hering Schup-
pener, will become chief executive of the
new group. Mr Geiser said the new firm
will have more than $200m in com-
bined revenues with a global offering
that will make it among the largest com-
petitors in the industry.
WPP executives see the tie-up as giv-
ing the combined agencies new impetus,
geographic reach and an incentive to
grow, while allowing the advertising
group to retain a controlling stake in the
business. Mark Read, chief executive of
WPP, will join the board of Finsbury
Glover Hering.
As well as avoiding an attempted
management buyout, the compromise
fits WPP’s aim of streamlining its family
of creative agencies, public relations
companies and media-buying groups.
Mr Read last year sold a 60 per cent
stake in Kantar, the market data busi-
ness, and has merged several of WPP’s
leading agency brands. He said the Fins-
bury Glover Hering tie-up would help
create a “simpler, stronger and more
integrated” offer to clients.
Song Jung-a in Seoul and
Edward White — Wellington
Samsung Electronics has projected
unexpectedly robust second-quarter
profit boosted by strong demand for
computer chips as the work-from-
home trend picks up, even as coronavi-
rus battered smartphone sales.
The biggest producer of computer
chips, smartphones and electronic dis-
plays estimated operating profit for the
April-June quarter at Won8.1tn
($6.8bn), up 22.7 per cent from a year
earlier. That was much better than the
Won6.3tn analyst forecast by Refinitiv
SmartEstimate.
Samsung estimated that sales fell 7.4
per cent to Won52tn in the quarter.
The results are a bellwether for the
health of Asia’s technology sector in the
second quarter. Chip prices were
boosted by data centres stockpiling
chips as online activity surged, but ana-
lysts warned that the trend was unlikely
to continue in the second half because of
growing economic uncertainty.
“Given a spike of Covid-19 cases in
major developed and emerging market
countries, tech companies in the supply
chain are likely to turn more conserva-
tive on their business strategy in the sec-
ond half,” said C.W. Chung, head of
research at Nomura in Seoul.
22.7 % 7.4 %
Projected rise Estimated
in quarterly sales decline
operating profit in the quarter,
from year earlier to Won52tn
“The semiconductor industry
momentum is likely to slow in the third
quarter” though “smartphone sales are
likely to bottom out, making up for
slowing chip sales to some extent”.
One-off gains for its display business
buoyed operating profit. Kim Young-
woo, an analyst at SK Securities, esti-
mated that Samsung received compen-
sation of as much as Won1tn from Apple
for lower-than-promised orders.
Samsung has grappled with disrup-
tion and delays at factories and supply
chains. But its memory chip business, a
core earnings driver, has been resilient,
with little disruption to production at its
plants in South Korea and China.
The shift to working from home and a
rise in online learning has boosted
demand for much of the back-end infra-
structure Samsung produces. That has
helped cushion the impact of a decline
in spending on consumer electronics.
But memory chip prices were showing
signs of peaking, analysts noted. D-Ram
prices rose 14 per cent in the second
quarter but were flat in June versus May,
according to DRAMeXchange.
Analysts expect second-half earnings
to be boosted by a rebound in smart-
phone sales, with Samsung planning to
launch a new foldable phone and a new
Note flagship smartphone.
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8 ★ FINANCIAL TIMES Wednesday 8 July 2020

COMPANIES & MARKETS

Hong Kong’s bourse reaps benefits

Pharmaceuticals

of China blue-chip ‘homecomings’
Exchange emerges from US tension as a winner but Beijing’s encroachment sparks concerns
Primrose Riordan — Hong Kong
Less than a year after its pursuit of the
London Stock Exchange Group ended in
humiliating failure, the Hong Kong
stock exchange is back on the front foot.
Shares in Hong Kong Exchanges and
Clearing have surged almost 40 per cent
to a record this year as the Asian bourse
shapes up to be one of the few winners
from escalating tensions between the US
and China.
Faced with increasing hostility in
Washington, a number of blue-chip Chi-
nese companies that originally floated
on Wall Street, including internet
groups NetEase and JD.com, have raised
billions of dollars in secondary listings
in Hong Kong.
The decision by the high-profile Chi-
nese companies to take out an insurance
policy against a further deterioration in
relations between the two superpowers
is proving a boon for HKEX, taking
some of the sting from its failed £32bn
bid for the LSE last October.
The wind in HKEX’s sails is not simply
coming from Washington. Even as
China imposed a national security law
on Hong Kong, the bourse managed to
wrestle a lucrative futures contract
awarded by index provider MSCI from
longstanding local rival SGX, Singa-
pore’s stock exchange.
“It’s not an easy time for Hong Kong,
full stop. But of the Hong Kong institu-
tions, HKEX is one of those that is doing
relatively well on the back of Chinese
listings, and has even snatched a bit of
business away from [Singapore],” said
Hugh Young, head of Asia at Standard
Life Aberdeen, a top 10 shareholder in
HKEX.
But as HKEX’s market capitalisation
approaches HK$440bn ($56.9bn), not
everyone is persuaded that geopolitics
will continue to favour the bourse.
Although the delicate political bal-
ance appears to leave HKEX as the best
means for global investors to secure
exposure to the Chinese economy, that
could shift if Beijing’s increasing
encroachment on Hong Kong inflicts
permanent damage on the territory’s
status as a financial centre.
“US-listed Chinese companies are
returning to Hong Kong for non-eco-
nomic reasons and because they prefer
Hong Kong to a mainland [China] list-
ing,” said Brock Silvers, Hong Kong-
based chief investment officer at Ada-
mas Asset Management.
That “may do little to assuage longer-
term investor concerns” given that
Hong Kong is caught in the crosshairs of
US-China tensions, he added.
There are also worries that Mr Trump
could try to target Chinese companies
listed in Hong Kong. In May, he ordered
the main US federal pension fund, the
Federal Retirement Thrift Investment
Board, not to invest in Chinese groups.
In the short term, however, analysts
say HKEX can expect more Chinese
companies to seek secondary listings
as they loosen their dependence on
Wall Street.
NetEase and JD.com, which together
raised more than $7bn in secondary list-
ings, could soon be joined by Baidu,
another tech giant, and Yum
China, which operates KFC and
Pizza Hut restaurants in the sec-
ond-biggest economy.
Companies raised $33.4bn
through initial public offerings
and other equity sales in Hong
Kong in the first six months of
the year, according to Dea-
logic data, up 70 per cent from
the same period in 2019.
Hong Kong Exchanges and Clearing
Share price (HK$)
JD and NetEase unveil
plans to list in Hong Kong
Alibaba floats shares
after $13bn offering
Coronavirus hits market
Jun 2019 2020
Source: Bloomberg
HKEX stands to In May, the Senate passed a bill that
benefit further could force Chinese companies from US
from a ‘less exchanges if they do not comply with
friendly’ US accounting standards. China Renais-
Washington, sance, an investment bank, has esti-
according to mated that about $1tn worth of Chinese
chief executive listings on Wall Street could be ensnared
Charles Li, by the legislation.
below — Vernon Yuen/ Charles Li, who has run HKEX for
NurPhoto; Anthony Kwan/
Bloomberg
more than a decade but will leave by
October next year, recently said that
Hong Kong would benefit from a “less
friendly” Washington.
“The trend is going to continue,”
Christina Bao, head of global issuer serv-
ices at HKEX, said of Chinese compa-
nies seeking secondary listings in the
city. Chinese companies listed in Hong
Kong, which include Alibaba and Meit-
uan Dianping, account for a large chunk
of daily trading volumes, she said.
It is a view echoed by UBS analysts
Kevin Chu and Sam Tang, who noted
that HKEX could emerge “as the pri-
mary channel [for investors] to access
Chinese new economy companies”.
Such a shift would come at the expense
of the New York Stock Exchange and
Nasdaq.
But the growing number of Chinese
companies cooling on Wall Street
does not fully explain investors’
enthusiasm for HKEX.
Like its handful of major global
rivals, HKEX has been in a sweet
spot for much of the last decade
as exchanges have found a way
to profit from the dominant
trends in capital markets,
including passive investing.
Analysts say index provider
China's growing presence on HK bourse
Historical domicile of companies listed in city
340
China
320
300
280
260
240
220
200
Jun
MSCI’s decision in May to award HKEX
an important derivatives licensing
agreement long held by Singapore’s SGX
was an important victory in the battle
for regional dominance. The deal will
allow HKEX to offer futures and options
contracts based on 37 MSCI equity indi-
ces, mostly in Asia.
Roger Xie, an independent analyst
who publishes on the SmartKarma plat-
form, said the win could “redefine”
HKEX as the region’s top derivative
exchange, lifting its trading volumes of
these products by up to 30 per cent.
HKEX has also been pushing for the
rollout of futures based on mainland
China’s onshore stock market, which
Morgan Stanley analysts estimates
could add up to HK$1bn-HK$3bn to
HKEX’s revenues.
That depends on it first securing the
regulatory nod from Chinese regulators.
Last month, the China Securities Regu-
latory Commission’s vice-chairman
Fang Xinghai indicated that Beijing
would support such a move, but no
launch data has been announced.
“China is too big to ignore,” for inves-
tors despite the political turmoil, said
Andy Nybo, managing director of Bur-
ton-Taylor International Consulting in
New York.
When MSCI awarded HKEX the con-
tract, Henry Fernandez, the chief exec-
utive of the index provider, insisted that
“Hong Kong is and will continue to be a
major international financial centre.”
The territory’s ability to maintain that
status will ultimately depend on Beijing,
say analysts, and define HKEX’s long-
term fortunes.
Novavax seals
$1.6bn US
funds deal for
vaccine push
Hannah Kuchler
Novavax has signed a deal worth up to
$1.6bn with the US government’s Oper-
ation Warp Speed vaccine programme,
securing more federal funds than any
other company behind a potential Cov-
id-19 inoculation.
The New York-listed group, which has
yet to have any vaccines approved,
plans to use the money to embark on a
late-stage clinical trial and produce
100m doses of its candidate by January.
Novavax joins Johnson & Johnson,
Pfizer, Merck and AstraZeneca in Oper-
ation Warp Speed, a US health depart-
ment project touted by Donald Trump,
which aims to accelerate development
of a candidate. The biotech groups Mod-
erna and Emergent BioSolutions are
part of the initiative.
Alex Azar, US health secretary, said:
“Adding Novavax’s candidate to Opera-
tion Warp Speed’s diverse portfolio of
vaccines increases the odds that we will
have a safe, effective vaccine as soon as
the end of this year.”
The Novavax agreement is the largest
Operation Warp Speed deal announced
so far, exceeding the size of a partner-
ship with AstraZeneca worth up to
$1.2bn.
Stanley Erck, chief executive of
Novavax, said he believed the company
was the only one creating a vaccine
Jul 1 1997 Jul 1 2020 based on the whole of the Sars-Cov-2
Other 1% Other
spike protein rather than just a part of it,
which could make it more effective.
4% 5% Novavax also uses an adjuvant, an agent
to boost immunity.
He added that the vaccine could be
China distributed using a standard cold supply
30% chain. Some other vaccine candidates
Hong Kong may require special equipment that
Hong Kong 65% could make it hard to deliver to people
95% in developing countries.
Novavax has not yet published data
on how safe or effective its vaccine is in
humans, with results of its earliest stage
trial, conducted on 130 people in Aus-
tralia, due out later this month. If suc-
HKEX Although memories of the LSE rejec- cessful, they will move towards a larger
tion may be fading, the plan fronted by trial of up to 30,000 participants in the
could Mr Li was an ambitious attempt to carve autumn.
become ‘the out a future for the exchange as a link But Mr Erck said that it worked well in
between Chinese companies and global animals, and other vaccines made using
primary investors hungry to invest in them. the platform, including one for influ-
channel [for It was sunk, in part, by concern enza, had “shown it is not a giant leap”
that the Hong Kong government, between how animals and humans
investors] which answers directly to Beijing, has respond to their technique.
to access the ability to pick six of HKEX’s board “We have baboon data that looks
members. really, really good and maybe better
Chinese Mr Young of Aberdeen Standard cau- than anyone else,” he said.
new tioned that the deepening political tur- Novavax also received the largest
moil in Hong Kong might “might make grant given out by the Coalition for Epi-
economy it harder for their global acquisition demic Preparedness Innovations —
companies’ plans.” $388m — which helped it fund the first
Whoever replaces Mr Li, the former trial and buy a factory in the Czech
oil-rigger from mainland China, will Republic that will be capable of making
have their work cut out closer to home if 1bn doses of vaccine next year.
the exchange is to keep riding high. Mr Erck said it was now looking for
Additional reporting by Hudson Lockett in contract manufacturers in the US, Asia
Hong Kong and Philip Stafford in London and Europe.
Public / Company Notices
Fintech video
Why Asia’s
online lenders
are in trouble
ft.com/video

Technology

TikTok to quit Hong Kong over national security law

Mercedes Ruehl, Primrose Riordan
and Nian Liu
TikTok, Zoom and Microsoft have
become the latest companies to
rethink operations in Hong Kong after
Beijing’s imposition of a sweeping
national security law raised concerns
over the handling of data in the city.
TikTok, the video app owned by Chi-
nese technology company ByteDance,
has chosen to exit the city entirely, say-
ing it had decided to stop operations “in
light of recent events”.
Microsoft and Zoom, the video con-
ferencing app, said they would tempo-
rarily block Hong Kong authorities from
accessing user data when requested.
A day earlier, Facebook, Google and
Twitter, which do not operate in main-
land China, announced similar moves.
Apple, which generated $44bn of rev-
enue in Greater China last year — an
area that includes mainland China,
Hong Kong and Taiwan — said it was
“assessing” the impact of the law.
TikTok, which last year said it had
150,000 users in the city, did not say if
Hong Kong residents would be able to
use Douyin, the Chinese version of the
app that can be downloaded only from a
Chinese app store on the mainland.
A person with direct knowledge of the
situation said ByteDance had “no plans
to bring Douyin to Hong Kong app
stores at this time”.
Microsoft, which also owns social net-
work LinkedIn, said it typically received
only a small number of requests from
Hong Kong authorities for user data but
was “pausing our responses to these
requests as we conduct our review”.
Microsoft and LinkedIn both operate
in mainland China. LinkedIn has 50m
users in the country, according to Micro-
soft. But the platform has been criti-
cised for censoring content that Beijing
sees as sensitive. This has included the
profiles of human rights activists. Zoom
said: “We’re actively monitoring the
developments in Hong Kong SAR [spe-
cial administrative region], including
any potential guidance from the US gov-
ernment. We have paused processing
any data requests from, and related to,
Hong Kong SAR.”
Qi Bin, a Beijing-based lawyer at Jin
Mao Partners, said Microsoft was trying
to “buy more time” to figure out the new
law’s implications. “The Hong Kong
national security law happened too
quick and they need more time to sort
out what data they have stored in Hong
Kong and to work out compliance
issues . . . Then they will come back.”
Other analysts raised the possibility
that Beijing may be trying to extend the
“Great Firewall”, which allows it to con-
trol internet access in the mainland, to
semi-autonomous Hong Kong.
“My concern remains the same since
the law was announced — that we may
get our very own version of the ‘Great
Firewall’ of China or even an extension
of it,” said Paul Haswell, a Hong Kong-
based partner at law firm Pinsent
Masons.
Mark Natkin, founder of Beijing-
based Marbridge Consulting, said
ByteDance had worked hard to con-
vince the world that TikTok maintained
a degree of autonomy from Beijing after
it came under attack in Washington.
TikTok has located its data servers
outside mainland China and insisted it
would not surrender its user informa-
tion to Beijing, Mr Natkin said. But it has
been dogged by concerns about privacy,
national security and censorship.
Pulling TikTok from Hong Kong was
an “easy decision”, Mr Natkin said. “It is
sacrificing a relatively small user base to
avoid potentially getting bogged down
in a no-win situation.”
Additional reporting by Patrick McGee
See Lex
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COMPANIES & MARKETS

Commodities. Sector shake-up Fixed income

Eurozone
Oil crash piles pressure on borrowing
costs drop to
bloated refining industry pre-pandemic
crisis levels
Tommy Stubbington

Government borrowing costs in the

eurozone have fallen back to levels last
seen before the start of the coronavirus
crisis, underlining the success of the
European Central Bank and other
economic policymakers in restoring
confidence among debt investors.
Bond yields in Italy and other south-
ern European nations spiked in March
when it became clear that the Covid-19
pandemic and the resulting shutdowns
would lead to a collapse in economic
activity, just as governments were
borrowing heavily to support busi-
nesses and households.
But the ECB’s massive programme of
asset purchases — announced in mid-
March at €750bn and expanded last
month to €1.35tn — has since improved
sentiment, pulling borrowing costs back
down and making investors more confi-
dent about holding the debt of weaker
sovereigns.
Italy’s 10-year yield was close to a
four-month low at 1.22 per cent yester-
day, roughly where it was prior to
March’s sharp sell-off.
Yields in Greece, Spain and Portugal
have also reversed a virus-driven rise
despite a surge in bond issuance across

‘At the height of this

Overcapacity leaves operators
facing the prospect of plant
closures, notably in Europe
Derek Brower and
David Sheppard
Oil refineries are struggling as the worst
demand crash in decades cascades
through the industry, leaving plants at
risk of closure.
Demand for fuel remains depressed
and stockpiles are bulging while the
crude refiners’ process has become
more expensive following deep Opec-
led supply cuts.
That is squeezing margins for the
plants, which convert the crude into
products such as diesel, jet fuel and
petrol.
Europe is considered most at risk
because facilities are generally older
and governments have embarked on
initiatives to phase out some fossil fuels
from transport.
But analysts at UBS said almost 3m
barrels a day of refining capacity —
equivalent to about twice as much as the
UK consumes, or roughly 3 per cent of
the global total — needed to be removed
from the market by the end of 2021 to
restore the sector’s profitability.
Small US refineries and some capacity
in Asia-Pacific could also be forced out,
the analysts said.
Newer refineries tend to be more
complex and efficient, allowing them to
process a wider variety of crude oils at a
lower cost. But plants built in the 1950s
and 1960s, as mass-market adoption of
motor vehicles took off, look vulnerable
— especially in the context of a lot of new
capacity coming on stream in countries
from Nigeria to Kuwait.
Refining oil in Europe has become less profitable
Price difference between Brent crude and the finished products ($ per barrel)
Price of petrol minus Brent
Price of refined products minus Brent
May 2019
Sources: The Argus Media Group; Wood Mackenzie
“We had too much refinery capacity
before Covid,” said Robert Campbell,
head of global oil products for Energy
Aspects, a consultancy. “We’ve certainly
got too much now.”
Demand for fuel has started to
recover from the depths of lockdowns in
April and May — when global consump-
tion was down by more than 20 per cent
— but few see it reaching pre-outbreak
levels before late 2021.
Some plants are already losing
money, once total costs of operating are
factored in.
Analysts said the outlook for the
industry was reminiscent of the period
after the financial crisis when profit
margins recovered only after a number
of facilities shut for good.
Predicting which refineries could
close is difficult as governments often
place plants on life support owing to fears
over security of supply and jobs losses.
But industry figures said plants such
as Essar’s refinery in Stanlow in the
north-west of England and Eni’s Milazzo
in Sicily might struggle, along with
Grangemouth, Scotland’s sole motor
15
10
5 a 93 per cent drop from a year earlier.
0 refining sector has been relatively resil-
-5
2020 Jun
fuel refinery. Commodity trader Gunvor
is already looking to mothball its plant
in Antwerp.
Essar said the Stanlow refinery was a
“profitable and sustainable” business.
Eni said it was “not making any specific
assessment” on the Milazzo plant,
which it jointly owns with Kuwait Petro-
leum Italia. Petroineos, owner of
Grangemouth, did not respond to
requests for comment.
Even before coronavirus, the industry
was under pressure from long-term
plans to move away from petroleum
fuels and competition from newer
plants in Asia.
HollyFrontier, a refiner in the US,
recently converted its plant in Wyoming
to biodiesel. Eni and Total may do the
same with plants in Europe, said UBS.
“There will be a shakeout in the
refining sector,” said John Auers, execu-
tive vice-president of Turner, Mason &
Company, a consultancy.
Margins have plunged in recent weeks
as oil prices rose faster than the price of
finished fuel.
Richard Joswick, head of refining
Industry figures analysis at S&P Global, said that, in an
say plants such average year, refiners net roughly $10
as Grangemouth a barrel — and are now getting about
in Scotland half that.
might struggle Certain plants are earning even less.
Andy Buchanan/AFP
Par Pacific, a US refiner, reported mar-
gins of just $0.24 a barrel in the first
quarter from its operations in Hawaii —
Despite weakening margins, the US
ient, partly because it throttled back
processing operations as demand
dropped earlier this year.
About a third of the country’s capacity
was idle in April, according to the US
Energy Information Administration.
US refiners have begun to process
more crude in recent weeks but, as big
petrol-consuming states such as Texas
reimpose Covid-19 lockdowns, con-
sumption may stall.
US petrol inventories are near historic
seasonal highs, despite the onset of the
summer driving months when demand
tends to peak.
One UK refining executive said there
were about 10 plants considered “at
risk” over the next few years. Moreover,
with countries such as the UK expected
‘We had to ban the sale of new petrol or diesel
cars in the 2030s, fuel makers may be
too much running out of road.
refinery Capital investments to boost plants’
longer term profitability appear risky,
capacity in that context.
before Alan Gelder, head of refining at con-
sultancy Wood Mackenzie, compared
Covid. the industry’s traditional mentality to
We’ve being “chased by a bear”.
“As long as you keep running and the
certainly rival beside you falls over you’d be OK,”
got too Mr Gelder said. “But now they’re run-
ning downhill towards water and it’s not
much now’ clear any of them can swim.”
crisis, it really felt like
markets were being
thrown to the wolves’
the euro area that has caused many
countries’ credit profiles to deteriorate.
Cyprus was the latest country to take
advantage of investor hunger for higher
yielding eurozone debt yesterday,
drawing €5bn of orders for a sale of four-
year and 20-year bonds.
Investors have also been encouraged
by signs of progress on sharing the
financial burden of the crisis response
across the currency bloc.
Eurozone leaders are to meet this
week to discuss details of a €750bn
recovery fund for the worst-hit econo-
mies ahead of a summit on July 17-18.
“At the height of this crisis, it was
every man for himself in the eurozone —
it really felt like markets were being
thrown to the wolves,” said Mark
Dowding, chief investment officer at
BlueBay Asset Management.
“Now we have some evidence of soli-
darity, both in terms of ECB action and
also the EU recovery fund, it’s under-
standable that we have completed this
round trip in yields,” he added.
The spreads between German yields
and those in Italy and Spain — a key
gauge of sovereign risk in the eurozone
— are also back at relatively narrow lev-
els seen in early March.
FastFT Some analysts predict these spreads
Our global could begin to widen again if the ECB
team gives you continues to taper the pace of its asset
market-moving purchases.
news and views, Purchases last week came to €25.9bn,
24 hours a day down 34 per cent from the previous
ft.com/fastft week, according to data published by
the central bank on Monday.

Asset management Equities

BNY Mellon fund appoints Smits as chief
in power shift from New York to London
Siobhan Riding
BNY Mellon Investment Management,
the $1.8tn fund, has appointed
Hanneke Smits as its new head, making
the London-based executive one of the
most powerful women in asset
management.
Ms Smits, who currently heads Newton,
the UK group owned by BNY Mellon,
will take over from outgoing chief
executive Mitchell Harris on October 1.
Mr Harris, 65, is retiring, having spent
16 years with the BNY Mellon group, the
last four of which were spent as head of
investment management.
Reporting to BNY Mellon chief execu-
tive Todd Gibbons, Ms Smits will join
the group’s executive committee.
She will remain in the UK, shifting the
centre of power at BNY Mellon IM from
New York to London, where several of
its subsidiaries — including Newton,
Insight and Alcentra — are located.
The appointment represents a
significant step up for the relatively low-
profile Ms Smits, propelling her into the
influential position of leader of a multi-
trillion-dollar asset management group.
The Dutch native will become one of a
relatively small number of women
running global fund manage, along with
Mary Callahan Erdoes, chief executive
of asset and wealth management at
JPMorgan, Fidelity Investments’ head
Abigail Johnson and Michelle Seitz of
Russell Investments.
BNY Mellon IM considered both
external and internal candidates for the
role. Mr Gibbons said Ms Smits was
among “a strong bench of leaders”
cultivated by the outgoing asset man-
agement head.
“She has spearheaded Newton’s
Hanneke Smits is one of the most
powerful women in the fund industry
business momentum and client-centric
culture and we look forward to her lead-
ership within investment manage-
ment,” he said.
Ms Smits takes on the top job at BNY
Mellon IM at a challenging time for the
multi-boutique asset manager and the
industry overall.
The company suffered $44bn in net
outflows last year following redemp-
tions of $4bn in 2018. Assets at Newton
shrank under Ms Smits’ watch, declin-
ing from $68.6bn when she joined to
£43bn ($53.7bn) at the end of March.
Speaking to the Financial Times at the
peak of the coronavirus sell-off this
year, Ms Smits said that Newton was
looking “not only to manage the obvious
risks in financial markets at present, but
also to harness opportunities”.
A search is now under way for her suc-
cessor at Newton.
Ms Smits started her career in private
equity, culminating in her taking on the
role of chief investment officer of
Adams Street Partners in 2008.
In 2016, she changed paths and took
over from Helena Morrissey, one of the
best known women in the City of Lon-
don, as head of Newton.
Controversial data analytics group
Palantir files long-awaited flotation
Miles Kruppa and Richard Waters
San Francisco
Palantir has filed for a stock market
listing, setting in motion the long-
awaited flotation of the data analytics
company known for its closely guarded
work with government agencies.
The company, co-founded by technol-
ogy entrepreneur Peter Thiel, said on
Monday it had submitted a confidential
draft registration statement with the US
Securities and Exchange Commission.
The company did not specify details of
the proposed transaction.
Palantir’s announcement indicated it
could opt for a direct listing, in which no
new shares are sold, as opposed to a
traditional initial public offering. The
company declined to comment.
Investors valued Palantir at $20bn in
2015, though its shares have since
traded below that level in private sec-
ondary markets. Several mutual funds
have also marked down their stakes in
the company.
Palantir’s work for US intelligence
and national security services — and Mr
Thiel’s early support for the Trump
campaign — has made it one of
Silicon Valley’s most controversial data
analytics companies.
The company was formed in 2004
and made a name for itself with early
work helping to profile terrorists in the
aftermath of the September 11 2001
attacks, prompting complaints from
civil liberties campaigners.
More recently, it been criticised for its
work with the US Immigration and Cus-
The antipathy erupted
after Mr Thiel appeared at
the 2016 Republican party
convention to back Trump
toms Enforcement agency, or Ice, which
has helped to implement the Trump
administration’s immigration policies.
In 2019, Palantir was dropped at the
last minute as a sponsor at a prominent
international conference of privacy
experts at the University of California,
Berkeley, after attendees threatened a
boycott because of its work with Ice.
The company’s willingness to work on
controversial national security issues
has long made it stand out in compari-
son to the liberal nature of much of the
US tech industry. But the antipathy
erupted after Mr Thiel appeared at the
2016 Republican party convention to
back Donald Trump, making him the
most prominent Silicon Valley figure to
come out in support of the president.
Palantir’s planned listing, more than
15 years after it was founded, makes it
one of the oldest Silicon Valley start-ups
to seek a presence on the stock market.
The listing would be one of this year’s
largest and comes as other Silicon Valley
groups look to take advantage of buoy-
ant public markets.
Alex Karp, Palantir’s chief executive,
had long resisted an IPO, keeping the
company’s work for government agen-
cies and other sensitive clients away
from public scrutiny. In June, the com-
pany added three directors to its board,
including the former Wall Street Journal
writer Alexandra Wolfe Schiff.
Palantir’s long road to the stock mar-
ket partly reflects the struggles it has
had to turn its core technology — a data
integration tool that customers use to
pull together information previously
held in different “silos” — into a sustain-
able business.

10
China’s support
for dollar can no
longer be relied on
Michael Howell
Markets Insight
W
hen things cannot
go on forever, they stop.
And so it is with China’s
support of the US dollar.
Foreigners sold more
than $500bn of US government bonds in
the second quarter and perhaps one-
third of that was unloaded by Chinese
entities. The trend is worth watching.
Ever since 2001, when China was
allowed unfettered entry into the World
Trade Organization, the country has
played a huge behind-the-scenes role in
pushing up the value of the US currency
and suppressing US bond yields.
In barely two decades, China’s share of
the $140tn pool of global liquidity —
defined as total savings plus credit —
leapt from about 6 per cent to well over
25 per cent.
China invoices goods in US dollars,
invests in US dollars and provides
timely countercyclical boosts of fiscal
and monetary policy for its dollar-
hungry economy. Flows from China
were most obvious in 2015-16 when an
anti-corruption drive from President Xi
Jinping — forcing capital out of the
country — resulted in a spike in the
dollar and a collapse in Treasury yields.
But it goes well beyond this. We esti-
mate that the bulk of the near-30 per
cent rise in the US currency since the
mid-2000s and about three-quarters of
the drop in US bond yields can be attrib-
uted to China effects.
These gains are fragile, though. They
could quickly reverse with the US dollar
losing a quarter of its value and long-
dated US Treasury yields again testing 2
per cent, almost triple current levels. In
that event, European markets could
gain what America loses.
If China is going to maximise its
potential over the long run, it needs to
Business Leaders
Contracts & Tenders
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COMPANIES & MARKETS
The day in the markets
What you need to know
3 Six back-to-back rises for global stocks
European lenders under pressure this year
come to an end
3 London shares retreat with banks Indices rebased
among the biggest fallers
3 Gold extends rally to hit highest level
since 2011
110
A six-session winning streak for global
stocks came to an end yesterday, as Stoxx Europe 600
100
investors weighed signs of economic 90
recovery against the return of Covid-19
get off the dollar hook and become a France could be set to boost its fiscal curbs in some districts.
major exporter of its own currency. spending by 25 per cent of GDP while The FTSE All-World index slipped 0.4 80
But the country’s key problem is that Germany is looking at an increase of per cent yesterday against a backdrop of
its domestic financial markets are too about 45 per cent, financed by bond more flare-ups in cases.
under-developed to intermediate cross- sales. In other words, US Treasuries are Australia’s S&P/ASX 200 was flat ahead 70
border capital flows. Foreigners still no longer the only safe assets in town. of today’s reinstatement of lockdown
have limited access to China’s bonds; Safe assets are vital to the health of the restrictions in metropolitan Melbourne,
there is no sizeable renminbi-based financial system. Despite a major push following an “unsustainably high” number 60
trade credit market for the nation’s by regulators to force financial institu- of new coronavirus cases, said Daniel Stoxx Europe 600 Banks
banks; and the currency itself is not tions to hold more prudent portfolios Andrews, Victoria’s premier.
50
widely traded outside China. after the 2008-09 financial crisis, the “The overarching issue remains one of
What is more, China’s domestic insti- supply of such assets in the years since uncertainty in terms of the ultimate Feb 2020 Jul
tutions are reluctant to take on foreign then has increased by a meagre 38 per infection rate, pace of infections, and the Source: Refinitiv
exchange risk, given their predomi- cent, by our reckoning. permanent changes in consumption
nantly renminbi-denominated liabili- Much of that supply has been gobbled patterns which result,” said Ian Lyngen,
ties. This forces Beijing collectively to up by central banks to facilitate their head of US rates strategy at BMO Capital and the possibility of a second wave (and interest rates) kill opportunities for banks
own QE policies, leaving the private sec- Markets. lockdown) in many countries, the return to earn margin”, he said. The yield on 10-
tor bereft. German industrial production data of German industry to pre-crisis levels year gilts had been above 0.8 per cent at
Faced by the West’s threats Europe’s available stock of triple A provided clues to the economic will not be easy.” the tail-end of last year but has since
of economic containment, rated debt securities halved from about challenges triggered by the crisis. Output A 0.9 per cent fall in Frankfurt’s Xetra tumbled to 0.18 per cent yesterday.
40 per cent of eurozone GDP in 2008 to in Europe’s largest economy climbed less Dax helped drag the broader Europe Stocks on Wall Street were mixed a day
China has the power barely 20 per cent last year. than economists had expected in May, Stoxx 600 down 0.6 per cent yesterday. after the tech-heavy Nasdaq Composite
to disrupt markets Not surprisingly, many eurozone with industrial production rising 7.8 per London’s FTSE retreated 1.5 per cent, closed at an all-time high. The large-cap
bonds fell to negative yields while fast- cent month on month. with HSBC and Standard Chartered S&P 500 edged up 0.1 per cent at
moving cross-border capital eagerly Germany’s export-leaning economy among the biggest fallers. lunchtime in New York, while the Dow
manage international reserves through sought out American alternatives. was, in part, dependent on the path the “I really can’t see much upside Jones Industrial Average slid 0.6 per cent.
the State Administration of Foreign We estimate that, since the 2008-09 pandemic took beyond its shores, Carsten investing in European banks, including Investors turned to gold during the
Exchange, which now holds at least $1tn crisis, the US debt markets satisfied Brzeski, chief economist at ING, noted. these in the UK,” said Bill Blain, strategist day’s cautious trading, helping the haven
of politically sensitive US Treasuries. global safe-asset demands totalling “With some major trading partners still at Shard Capital. Central banks’ “zero asset to an intraday peak of $1,796 an
Yet, faced by the West’s latest threats nearly 50 per cent of US GDP. experiencing the full force of the virus interest rates (or soon-to-be negative ounce, its highest since 2011. Ray Douglas
of economic containment and a poten- But markets follow money. The com-
tially long struggle over trade, capital ing flood of ECB liquidity and eurozone
and technology, China has the power to safe assets, alongside the pressing need Markets update
disrupt markets. for China to diversify, could cause a
Even a partial switch away from the radical change in capital flows.
dollar should help the euro, the number If we are correct that China and the
two world currency. Bear in mind that a eurozone team up, then investors US Eurozone Japan UK China Brazil
newly assertive European Central Bank should knuckle down for a weaker US Stocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp Bovespa
is prepared to match the US Federal dollar, a stronger than expected euro- Level 3177.02 1437.10 22614.69 6189.90 3345.34 97484.48
Reserve in balance sheet expansion via zone recovery and further gains in the % change on day -0.08 -0.62 -0.44 -1.53 0.37 -1.47
its pandemic relief programme. stock market. Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $
In that context, a clear catalyst to pull Level 96.893 1.129 107.555 1.258 7.024 5.315
these disillusioned Chinese assets Michael Howell is chief executive of % change on day 0.174 -0.265 0.074 0.560 -0.141 0.262
toward Europe could be the EU’s plans CrossBorder Capital and author of new book Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bond
to issue €750bn of so-called eurobonds. Capital Wars: The Rise of Global Liquidity Yield 0.670 -0.430 0.035 0.178 3.043 6.381
Basis point change on day -2.470 0.400 -0.480 -2.100 4.200 2.300
World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX)
Level 356.08 43.38 40.86 1787.90 18.26 2728.20
% change on day -0.42 0.60 0.49 0.85
Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.
1.30 1.70
Main equity markets
S&P 500 index Eurofirst 300 index FTSE 100 index
3360 1520 6720
3200 1440 6400
3040 1360 6080
2880 1280 5760
| | | | | | | |
2720 || | | | | | | | | | | | | | | | | | |
1200 || | | | | | | | | | | | | | | | | | | 5440 | | | | | | | | | | | |
May 2020 Jul May 2020 Jul May 2020 Jul
Biggest movers
% US Eurozone UK
Rollins 7.91 Edp 4.14 Gvc Holdings 3.60
Air Products & Chemicals 5.41 Commerzbank 3.56 Evraz 1.89
Ups
Vertex Pharmaceuticals 4.38 Schindler 2.92 Coca-cola Hbc Ag 1.67
Regeneron Pharmaceuticals 4.04 Bouygues 1.47 Antofagasta 1.67
Twitter 3.68 Telenor 1.40 Polymetal Int 1.62
%
United Airlines Holdings -5.78 Klepierre -5.14 Whitbread -5.53
Technipfmc -5.76 Bayer -4.94 Smurfit Kappa -4.18
Downs
American Airlines -5.66 Sodexo -4.09 Informa -4.09
Devon Energy -4.76 Telefonica -3.23 Land Securities -3.71
Pvh -4.44 Telecom Italia -3.19 Associated British Foods -3.70
Prices taken at 17:00 GMT Based on the constituents of the FTSE Eurofirst 300 Eurozone
All data provided by Morningstar unless otherwise noted.
Wall Street Eurozone London
Rollins led the S&P 500 gainers on a Commerzbank rose for a second day GVC rose after Deutsche Bank advised
positive second-quarter update from the following Monday’s resignations of its buying ahead of a trading update due
Public / Company Notices pest control group. chairman and chief executive officer. next week from the Ladbrokes owner.
Demand from residential customers Former German state secretary Jörg “Spectacular growth” from GVC’s online
during lockdown had helped offset Asmussen was reportedly in line to business during lockdown should help
weaker revenue from the restaurant, retail become the new chairman with Kepler compensate for betting shop closures
and hospitality industries, Rollins said. Cheuvreux analysts commenting: “The said the broker, whose raised earnings
It also flagged encouraging reopening German government seems to be in the forecasts also reflected sports betting
trends with a newly launched disinfectant driver’s seat to steer a rigorous overhaul.” holding up more strongly than expected
service contributing to the recovery. Morgan Stanley upgraded the bank to ahead of the resumption of horseracing
United Airlines led US travel stocks “overweight”, saying investors were not and football in June.
lower after reportedly warning staff that yet pricing in restructuring potential. A wave of publicity around fast-fashion
new state-enforced quarantine rules had Even small improvements should labour practices kept retailers including
hit reservations. trigger a re-rating given Commerzbank’s Boohoo, Asos and Primark owner AB
Chipmaker Skyworks climbed after subscale corporate business has been a Foods under pressure.
KeyBanc analysts turned positive. drain on profitability, said Morgan Stanley. Halfords slipped after pulling full-year
US export restrictions will force Huawei “Taking a leaf out of Deutsche [Bank]’s guidance and reminding investors that
of China into using third-party vendors playbook could unlock significant bike equipment sales, the main reason for
such as MediaTek, the Taiwanese outperformance, as signs of execution recent improved trading, were lower
Financial designer of communications chips that is come through,” it said. margin than car maintenance supplies.
a key Skyworks partner, KeyBanc Schindler rose after UBS raised the lift Caterer Compass fell after French peer
predicted. maker to “buy”, citing Chinese exposure Sodexo cut sales targets for the current
Skyworks, which makes little money and margin improvement potential. quarter to reflect Covid-19 disruption in
from Chinese manufacturers currently, Portuguese utility EDP rose after the Americas and India.
could earn up to $8 per handset on every Berenberg upgraded to “buy”, saying the Micro Focus hit its lowest in a decade
MediaTek-powered phone sold, it said. company’s renewables subsidiary, EDPR, after the software maintenance company
Walmart jumped on a report that it can accelerate its strategy of selling booked a $922m goodwill impairment
would this month launch a subscription completed power plants and recycling the charge linked to economic uncertainty
service offering same-day deliveries and cash into new projects. and delays in contract renewals.
fuel discounts. The suspension on Monday of the chief A sharp fall in half-year maintenance
Regeneron Pharmaceuticals rose after executives of EDP and EDPR relating to a and licence revenue heightened fears
news that the US government had put in corruption probe should have a minimal that customers were using the recent
a $450m order for its experimental Covid- effect on operations, Berenberg said. disruption to upgrade legacy systems
19 antibody treatment. Bryce Elder Bryce Elder and switch to new suppliers. Bryce Elder
 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
Wednesday 8 July 2020 ★ FINANCIAL TIMES 11

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.08% -0.67% -1.53% -0.62% -0.44% -1.38% -0.42% -0.265% -0.773% -0.74%
0.49% 0.560% 0.074% 0.85%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Jun 08 - - Index All World Jun 08 - Jul 07 Index All World Jun 08 - Jul 07 Index All World Jun 08 - Jul 07 Index All World Jun 08 - Jul 07 Index All World Jun 08 - Jul 07 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
3,232.39 15,854.07 6,472.59 23,178.10 2,184.29 2,164.17
3,177.00 15,672.50 12,819.59 12,616.80 22,614.69
6,189.90

Day -0.08% Month -0.56% Year 6.21% Day 0.02% Month -1.15% Year -5.26% Day -1.53% Month -4.47% Year -17.99% Day -0.92% Month 2.48% Year NaN% Day -0.44% Month -1.09% Year 3.99% Day -1.09% Month -0.81% Year 2.54%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
10,485.25 39,954.01 1,457.59 7,896.10
1,437.10 25,975.66
2,751.50
9,814.08 37,897.19 7,447.40 24,776.77 2,661.42

Day 0.49% Month 6.80% Year 28.43% Day 0.03% Month -2.67% Year -12.67% Day -0.62% Month -1.59% Year -6.39% Day -1.44% Month -5.40% Year -20.22% Day -1.38% Month 4.77% Year -9.81% Day -1.05% Month -3.36% Year -21.02%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
5,175.52 3,345.34 36,674.52
97,484.48 20,231.38 20,012.68
27,110.98 5,043.73
26,109.89 94,637.06 34,370.58
2,919.25

Day -0.67% Month -3.69% Year -3.02% Day -1.47% Month 3.02% Year -6.33% Day -0.74% Month -2.96% Year -9.83% Day -0.10% Month -0.73% Year -8.85% Day 0.37% Month 14.14% Year 11.10% Day 0.51% Month 6.96% Year -7.18%

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 42217.27 43339.69 Cyprus CSE M&P Gen 68.46 68.68 Italy FTSE Italia All-Share 21793.49 21816.52 Philippines Manila Comp 6267.40 6328.41 Taiwan Weighted Pr 12092.97 12116.70 Cross-Border DJ Global Titans ($) 381.03 380.87
Australia All Ordinaries 6126.70 6125.90 Czech Republic
PX 936.79 938.00 FTSE Italia Mid Cap 33380.12 33599.61 Poland Wig 51065.23 51480.18 Thailand Bangkok SET 1373.22 1372.27 Euro Stoxx 50 (Eur) 3325.50 3350.03
S&P/ASX 200 6012.90 6014.60 Denmark OMXC Copenahgen 20 1274.28 1277.87 FTSE MIB 20012.68 20031.86 Portugal PSI 20 4452.22 4407.47 Turkey BIST 100 116840.94 116315.98 Euronext 100 ID 1002.64 1008.05
S&P/ASX 200 Res 4490.00 4434.00 Egypt EGX 30 11087.64 10959.35 Japan 2nd Section 6667.11 6678.98 PSI General 3251.31 3186.21 UAE Abu Dhabi General Index 4318.44 4303.92 FTSE 4Good Global ($) 8010.52 8027.63
Austria ATX 2317.36 2343.05 Estonia OMX Tallinn 1242.06 1241.00 Nikkei 225 22614.69 22714.44 Romania BET Index 8523.47 8595.51 UK FT 30 2314.60 2287.20 FTSE All World ($) 356.08 357.57
Belgium BEL 20 3462.83 3473.18 Finland OMX Helsinki General 9247.39 9358.25 S&P Topix 150 1307.99 1312.97 Russia Micex Index 2828.08 2835.18 FTSE 100 6189.90 6285.94 FTSE E300 1437.10 1446.00
BEL Mid 7661.36 7637.08 France CAC 40 5043.73 5081.51 Topix 1571.71 1577.15 RTX 1249.21 1247.14 FTSE 4Good UK 5702.10 5792.75 FTSE Eurotop 100 2751.57 2772.84
Brazil IBovespa 97484.48 98937.16 SBF 120 3972.40 4002.45 Jordan Amman SE 1583.23 1576.34 Saudi-Arabia TADAWUL All Share Index 7390.59 7388.49 FTSE All Share 3429.03 3479.20 FTSE Global 100 ($) 2118.65 2120.53
Canada S&P/TSX 60 942.74 942.24 Germany M-DAX 26909.23 27060.39 Kenya NSE 20 1945.64 1945.64 Singapore FTSE Straits Times 2661.42 2689.61 FTSE techMARK 100 5356.88 5419.96 FTSE Gold Min ($) 2464.14 2439.04
S&P/TSX Comp 15672.50 15669.67 TecDAX 3031.69 3041.57 Kuwait KSX Market Index 6633.44 6603.51 Slovakia SAX 323.50 331.12 USA DJ Composite 8393.28 8449.43 FTSE Latibex Top (Eur) 4440.00 4432.20
S&P/TSX Div Met & Min 429.54 416.58 XETRA Dax 12616.80 12733.45 Latvia OMX Riga 1058.95 1053.03 Slovenia SBI TOP 873.85 - DJ Industrial 26109.89 26287.03 FTSE Multinationals ($) 2270.61 2224.06
Chile S&P/CLX IGPA Gen 21419.24 21584.95 Greece Athens Gen 644.12 655.79 Lithuania OMX Vilnius 746.60 742.90 South Africa FTSE/JSE All Share 55243.80 54846.28 DJ Transport 9341.26 9386.94 FTSE World ($) 631.21 633.77
China FTSE A200 12448.22 12368.62 FTSE/ASE 20 1559.10 1587.79 Luxembourg LuxX 1021.54 1016.17 FTSE/JSE Res 20 52017.34 51142.00 DJ Utilities 772.17 779.03 FTSEurofirst 100 (Eur) 3733.51 3766.74
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 25975.66 26339.16 Malaysia FTSE Bursa KLCI 1566.72 1576.90 FTSE/JSE Top 40 50922.32 50503.91 Nasdaq 100 10667.48 10604.06 FTSEurofirst 80 (Eur) 4512.76 4551.81
Shanghai A 3506.50 3493.44 HS China Enterprise 10600.41 10726.83 Mexico IPC 37897.19 37884.76 South Korea Kospi 2164.17 2187.93 Nasdaq Cmp 10485.25 10433.65 MSCI ACWI Fr ($) 542.19 532.50
Shanghai B 238.84 238.27 HSCC Red Chip 4205.32 4321.04 Morocco MASI 10225.67 10203.83 Kospi 200 286.77 290.62 NYSE Comp 12083.08 12160.01 MSCI All World ($) 2264.29 2226.39
Shanghai Comp 3345.34 3332.88 Hungary Bux 35747.71 36489.42 Netherlands AEX 575.52 578.52 Spain IBEX 35 7447.40 7556.20 S&P 500 3177.02 3179.72 MSCI Europe (Eur) 1510.73 1485.74
Shenzhen A 2258.46 2220.36 India BSE Sensex 36674.52 36487.28 AEX All Share 826.08 829.35 Sri Lanka CSE All Share 5081.78 5075.90 Wilshire 5000 32419.53 32379.10 MSCI Pacific ($) 2611.04 2576.30
Shenzhen B 926.22 925.07 Nifty 500 8850.30 8815.70 New Zealand NZX 50 11743.73 11656.21 Sweden OMX Stockholm 30 1720.45 1730.88 Venezuela IBC 305579.16 301778.38 S&P Euro (Eur) 1507.65 1518.99
Colombia COLCAP 1129.47 1125.26 Indonesia Jakarta Comp 4987.08 4988.87 Nigeria SE All Share 24336.12 24374.40 OMX Stockholm AS 671.21 673.72 Vietnam VNI 863.42 861.16 S&P Europe 350 (Eur) 1472.31 1481.62
Croatia CROBEX 2013.05 2011.29 Ireland ISEQ Overall 6141.69 6128.54 Norway Oslo All Share 883.88 884.59 Switzerland SMI Index 10207.96 10253.38 S&P Global 1200 ($) 2503.52 2511.48
Israel Tel Aviv 125 1342.42 1384.15 Pakistan KSE 100 35373.35 35202.77 Stoxx 50 (Eur) 3048.71 3070.78
(c) Closed. (u) Unavaliable. † Correction. ♥ Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERS

AMERICA LONDON EURO MARKETS TOKYO Jul 07 %Chg %Chg Jul 07 %Chg %Chg Jul 07 %Chg %Chg Jul 07 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Amazon.com 80.1 3043.50 -13.55 National Grid 148.0 893.00 -24.20 Bayer Ag Na O.n. 384.4 63.75 -3.31 Softbank . 2228.8 6190.00 272.00 Gvc Holdings 817.40 10.4 -11.1 Oxford Biomedica 769.00 9.7 14.3 Amigo Holdings 10.70 84.2 -84.9 Construction & Materials 6382.20 4.6 -9.4
Apple 45.9 377.63 3.78 Glaxosmithkline 106.7 1617.00 -33.40 Sap Se O.n. 229.5 128.78 -1.94 Tokyo Electron 578.4 29940.00 440.00 Scottish Mortgage Investment Trust 892.00 8.8 52.2 B&m Eur Value Retail S.a. 434.00 9.2 7.0 Cmc Markets 342.50 28.3 132.0 Industrial Metals 3083.74 3.8 -
Facebook 35.2 246.47 6.19 Astrazeneca 91.7 8537.00 -123.00 Asml Holding 201.7 342.20 -1.35 Fast Retailing Co., 415.9 62360.00 -970.00 Jd Sports Fashion 668.40 7.4 -19.6 Meggitt 320.00 8.7 -51.1 Batm Advanced Communications Ld 118.00 18.5 204.9 Health Care Equip.& Services 6660.13 3.4 -
Boeing 33.3 181.06 -6.85 Bhp 87.9 1649.40 -15.80 Axa 173.4 18.48 -0.01 Sony 310.9 7502.00 -78.00 Intercontinental Hotels 3821.00 7.1 -26.8 Euromoney Institutional Investor 853.00 8.7 -34.8 Aptitude Software 413.00 18.0 -37.0 Real Estate & Investment Servic 2448.87 3.3 -
Microsoft 27.0 212.98 2.28 Hsbc Holdings 77.3 395.15 -13.50 Dt.telekom Ag Na 168.9 14.95 -0.09 Toyota Motor 297.6 6770.00 -89.00 Barratt Developments 528.40 6.6 -29.7 Cls Holdings 201.00 8.6 -35.0 Dwf 58.40 18.0 -54.3 Oil Equipment & Services 4162.64 3.1 -
Nvidia 18.6 401.22 7.65 Diageo 69.8 2730.00 -28.00 Total 160.5 34.68 -0.40 Advantest 279.1 6810.00 310.00 Persimmon 2412.00 5.5 -11.6 Liontrust Asset Management 1410.00 8.0 25.9 Clipper Logistics 340.00 15.3 16.4 Equity Investment Instruments 10915.73 2.9 -0.3
Alphabet 15.1 1519.65 20.00 Rio Tinto 65.6 4570.00 20.00 Endesa 160.1 23.51 0.06 Mitsubishi Ufj Fin,. 196.1 425.60 -3.70 Fresnillo 885.20 5.2 37.5 Fidelity China Special Situations 298.00 7.8 26.0 Discoverie 590.00 15.2 5.0 Travel & Leisure 6290.66 2.5 -
Netflix 14.3 495.84 2.03 Scottish Mortgage Investment Trust 63.5 892.00 -6.00 Novo Nordisk B A/s 159.8 57.82 -0.76 M3,. 155.3 4875.00 170.00 Crh 2891.00 5.1 -6.7 Rathbone Brothers 1530.00 7.7 -28.0 Jpmorgan China Growth & ome 516.00 14.7 42.3 Index - Technology Hardware & Equipment 1944.19 2.5 -1.8
Alphabet 10.4 1514.61 18.91 Bp 62.0 308.35 -4.40 Intesa Sanpaolo 159.5 1.79 -0.01 Chugai Pharmaceutical Co., 155.0 5490.00 -195.00 Smith & Nephew 1578.50 4.8 -13.8 Avon Rubber 3440.00 7.5 65.4 Premier Foods 79.90 14.1 110.0 Banks 2336.97 2.5 -
Walmart 10.1 123.19 4.30 Royal Dutch Shell 59.5 1237.60 -26.20 Allianz Se Na O.n. 151.7 184.52 -2.24 Sumitomo Mitsui Fin,. 154.6 3078.00 -37.00 Evraz 301.50 4.5 -25.8 Crest Nicholson Holdings 212.20 7.3 -51.6 Schroder Real Estate Investment Trust 34.45 13.9 -38.9 Nonlife Insurance 2671.49 2.2 -
Hsbc Holdings 395.15 4.4 -33.6 Edinburgh Worldwide Investment Trust 280.00 7.3 41.1 Countrywide 119.00 13.9 -65.9 Industrial Engineering 11929.77 2.2 -
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Melrose Industries 118.95 4.3 -50.9 Playtech 301.50 7.1 -25.7 Bmo Private Equity Trust 357.00 12.3 -5.2 Life Insurance 6394.35 2.1 -
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Rollins 46.13 3.38 7.91 Cls Holdings 201.00 7.20 3.72 Edp 4.53 0.18 4.14 Cyberagent,. 6370.00 400.00 6.70 Smith (ds) 281.10 -14.4 -27.3 Micro Focus Int 352.80 -18.3 -68.3 Kier 78.00 -20.0 -17.7 Gas Water & Multiutilities 4893.60 -6.6 -8.8
Air Products & Chemicals 262.38 13.47 5.41 Gvc Holdings 817.40 28.40 3.60 Commerzbank Ag 4.59 0.16 3.56 Yamato Holdings Co., 2713.00 157.00 6.14 National Grid 893.00 -9.7 -6.0 John Laing 305.60 -12.3 -21.2 Riverstone Energy 320.00 -14.7 -25.8 Fixed Line Telecommunication 1330.24 -5.0 -
Vertex Pharmaceuticals 304.08 12.77 4.38 Plus500 Ltd 1379.00 44.00 3.30 Schindler N 218.89 6.21 2.92 Advantest 6810.00 310.00 4.77 Sainsbury (j) 193.95 -7.1 -16.4 Energean 550.00 -10.6 -40.8 Ten Entertainment 151.00 -11.2 -50.4 Food & Drug Retailers 4007.05 -3.4 -4.5
Regeneron Pharmaceuticals 652.61 25.36 4.04 Kaz Minerals 513.60 11.00 2.19 Getinge Ab Ser. B 17.61 0.34 1.94 Softbank . 6190.00 272.00 4.60 Itv 69.44 -7.0 -54.0 Go-ahead 754.00 -9.4 -65.9 Forterra 180.00 -10.4 -49.6 Automobiles & Parts 2705.52 -2.2 -
Twitter 33.53 1.19 3.68 Ferrexpo 175.00 3.60 2.10 Bouygues 33.16 0.48 1.47 Rakuten . 1000.00 38.00 3.95 Bt 107.30 -5.9 -45.3 Just 48.00 -8.6 -42.2 Premier Oil 46.93 -8.9 -52.9 Forestry & Paper 16548.52 -2.1 -
Smurfit Kappa 2522.00 -5.9 -14.3 Mitchells & Butlers 172.20 -8.4 -62.3 Tritax Eurobox 93.00 -8.8 -2.3 Electricity 7719.66 -2.1 -8.2
Downs Downs Downs Downs
Pennon 1067.50 -4.6 4.0 Capita 41.00 -7.0 -75.6 Stobart Ld 31.60 -8.7 -70.3 Personal Goods 35773.38 -1.7 -6.1
United Airlines Holdings 33.18 -2.04 -5.78 Micro Focus Int 352.80 -85.90 -19.58 Klepierre 16.69 -0.91 -5.14 Marui Co., 1875.00 -91.00 -4.63
Tesco 218.20 -4.3 -14.7 Hilton Food 1182.00 -6.5 6.1 Just 48.00 -8.6 -42.2 Tobacco 31630.64 -1.5 -8.1
Technipfmc 7.28 -0.45 -5.76 Hammerson 83.82 -6.56 -7.26 Bayer Ag Na O.n. 63.75 -3.31 -4.94 Tokyu 1433.00 -61.00 -4.08
Imperial Brands 1472.00 -4.3 -21.5 Future 1200.00 -6.0 -17.9 Ted Baker 77.75 -7.8 -77.9 Mobile Telecommunications 2883.13 -1.3 -13.6
American Airlines 12.08 -0.73 -5.66 Tui Ag 366.90 -26.60 -6.76 Sodexo 61.86 -2.64 -4.09 West Japan Railway 5697.00 -241.00 -4.06
Morrison (wm) Supermarkets 182.65 -4.1 -9.8 National Express 176.50 -5.5 -62.7 Costain 65.50 -7.7 -57.8 General Industrials 5304.39 -1.3 -
Devon Energy 10.63 -0.53 -4.76 Polypipe 419.00 -30.00 -6.68 Ericsson, Telefonab. L M Ser. B 8.49 -0.32 -3.64 Nissan Motor Co., 398.80 -15.50 -3.74
Informa 452.70 -3.8 -47.8 Hochschild Mining 183.50 -5.5 4.0 Mccoll's Retail 39.00 -7.7 2.6 Media 7261.55 -0.9 -
Pvh 44.44 -2.07 -4.44 Babcock Int 296.70 -19.00 -6.02 Telefonica 4.08 -0.14 -3.23 Mazda Motor 661.00 -25.00 -3.64
United Utilities 883.80 -2.9 -7.4 Wh Smith 1038.00 -5.4 -60.4 Stagecoach 55.25 -7.1 -65.6 Software & Computer Services 1883.10 -0.5 -
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
Based on last week's performance. †Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Jul 7 Currency Mid Change Mid Change Mid Change Jul 7 Currency Mid Change Mid Change Mid Change Jul 7 Currency Mid Change Mid Change Mid Change Jul 7 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 70.8197 0.0029 79.9238 -0.2228 89.0556 0.4638 Indonesia Indonesian Rupiah 14440.0000 -50.0000 16296.3325 -102.7019 18158.2784 31.2698 Poland Polish Zloty 3.9649 0.0231 4.4745 0.0134 4.9858 0.0546 ..Three Month 0.7953 -0.0041 0.8973 -0.0072 - -
Australia Australian Dollar 1.4350 0.0037 1.6195 -0.0004 1.8045 0.0140 Israel Israeli Shekel 3.4437 -0.0120 3.8864 -0.0246 4.3304 0.0074 Romania Romanian Leu 4.2878 0.0129 4.8390 0.0010 5.3919 0.0441 ..One Year 0.7955 -0.0041 0.8969 -0.0072 - -
Bahrain Bahrainin Dinar 0.3771 - 0.4255 -0.0012 0.4741 0.0024 Japan Japanese Yen 107.5550 0.0800 121.3816 -0.2529 135.2502 0.7989 Russia Russian Ruble 71.3038 -0.1762 80.4701 -0.4271 89.6643 0.2428 United States United States Dollar - - 1.1286 -0.0032 1.2575 0.0065
Bolivia Bolivian Boliviano 6.9100 - 7.7983 -0.0221 8.6893 0.0449 ..One Month 107.5550 0.0799 121.3816 -0.2528 135.2502 0.7988 Saudi Arabia Saudi Riyal 3.7510 0.0001 4.2332 -0.0119 4.7169 0.0245 ..One Month - - 1.1285 -0.1224 1.2575 0.0065
Brazil Brazilian Real 5.3151 0.0139 5.9984 -0.0012 6.6837 0.0519 ..Three Month 107.5549 0.0797 121.3817 -0.2527 135.2501 0.7987 Singapore Singapore Dollar 1.3934 0.0020 1.5725 -0.0022 1.7522 0.0116 ..Three Month - - 1.1283 -0.1224 1.2576 0.0065
Canada Canadian Dollar 1.3584 0.0051 1.5330 0.0014 1.7082 0.0151 ..One Year 107.5543 0.0786 121.3818 -0.2524 135.2502 0.7982 South Africa South African Rand 17.1088 0.1825 19.3081 0.1519 21.5142 0.3395 ..One Year - - 1.1276 -0.1224 1.2577 0.0065
Chile Chilean Peso 791.9500 -4.8500 893.7580 -8.0178 995.8755 -0.9220 Kenya Kenyan Shilling 106.7500 0.1500 120.4731 -0.1711 134.2379 0.8812 South Korea South Korean Won 1195.7500 - 1349.4679 -3.8183 1503.6531 7.7688 Venezuela Venezuelan Bolivar Fuerte - - - - - -
China Chinese Yuan 7.0240 -0.0099 7.9270 -0.0336 8.8327 0.0333 Kuwait Kuwaiti Dinar 0.3080 0.0005 0.3476 -0.0005 0.3873 0.0026 Sweden Swedish Krona 9.2408 -0.0130 10.4287 -0.0442 11.6203 0.0438 Vietnam Vietnamese Dong 23189.0000 -13.5000 26170.0635 -89.3373 29160.1299 133.7333
Colombia Colombian Peso 3628.3950 -7.4550 4094.8381 -20.0242 4562.6995 14.2471 Malaysia Malaysian Ringgit 4.2775 - 4.8274 -0.0137 5.3789 0.0278 Switzerland Swiss Franc 0.9416 0.0019 1.0626 -0.0009 1.1841 0.0084 European Union Euro 0.8861 0.0025 - - 1.1143 0.0089
Costa Rica Costa Rican Colon 581.6500 0.1550 656.4232 -1.6818 731.4236 3.9729 Mexico Mexican Peso 22.6295 0.3635 25.5386 0.3391 28.4565 0.6018 Taiwan New Taiwan Dollar 29.4450 0.0495 33.2303 -0.0380 37.0270 0.2532 ..One Month 0.8860 0.0025 - - 1.1142 0.0089
Czech Republic Czech Koruna 23.6507 0.0850 26.6911 0.0207 29.7407 0.2600 New Zealand New Zealand Dollar 1.5228 -0.0035 1.7185 -0.0088 1.9149 0.0055 Thailand Thai Baht 31.2600 0.1325 35.2786 0.0501 39.3094 0.3689 ..Three Month 0.8859 0.0025 - - 1.1141 0.0089
Denmark Danish Krone 6.6025 0.0184 7.4513 -0.0003 8.3027 0.0659 Nigeria Nigerian Naira 387.7500 1.4200 437.5966 0.3690 487.5948 4.2956 Tunisia Tunisian Dinar 2.8451 -0.0044 3.2108 -0.0140 3.5776 0.0130 ..One Year 0.8851 0.0025 - - 1.1137 0.0089
Egypt Egyptian Pound 16.0313 -0.0066 18.0922 -0.0587 20.1593 0.0958 Norway Norwegian Krone 9.4505 0.0689 10.6653 0.0477 11.8839 0.1475 Turkey Turkish Lira 6.8585 -0.0035 7.7402 -0.0259 8.6245 0.0402
Hong Kong Hong Kong Dollar 7.7500 0.0000 8.7463 -0.0248 9.7457 0.0503 Pakistan Pakistani Rupee 167.1000 0.8500 188.5813 0.4284 210.1279 2.1490 United Arab Emirates UAE Dirham 3.6732 - 4.1453 -0.0117 4.6190 0.0239
Hungary Hungarian Forint 313.9959 2.6770 354.3611 2.0271 394.8491 5.3890 Peru Peruvian Nuevo Sol 3.5477 0.0001 4.0037 -0.0113 4.4612 0.0231 United Kingdom Pound Sterling 0.7952 -0.0041 0.8975 -0.0072 - -
India Indian Rupee 74.9325 0.2506 84.5653 0.0443 94.2275 0.8003 Philippines Philippine Peso 49.5150 0.1380 55.8803 -0.0019 62.2650 0.4943 ..One Month 0.7953 -0.0041 0.8974 -0.0072 - -
Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata
UK SERIES
FTSE ACTUARIES SHARE INDICES www.ft.com/equities FT 30 INDEX FTSE SECTORS: LEADERS & LAGGARDS FTSE 100 SUMMARY
Produced in conjunction with the Institute and Faculty of Actuaries Jul 06 Jul 03 Jul 02 Jul 01 Jun 30 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D Total FT 30 2314.60 2287.20 2322.20 2284.50 2287.70 0.00 3314.70 1337.80 Leisure Goods 27.90 Construct & Material -11.19 Media -20.51 FTSE 100 Price Change FTSE 100 Price Change
Jul 07 chge% Index Jul 06 Jul 03 ago yield% Cover ratio adj Return FT 30 Div Yield - - - - - 0.00 3.93 2.74 Tech Hardware & Eq 16.16 Mobile Telecomms -11.88 Telecommunications -20.52 3I Group PLC 841.40 -22.00 Kingfisher PLC 225.00 -1.40
FTSE 100 (100) 6189.90 -1.53 5374.69 6285.94 6157.30 7549.27 4.80 1.44 14.48 114.49 5826.95 P/E Ratio net - - - - - 0.00 19.44 14.26 Pharmace & Biotech 2.32 Technology -12.22 FTSE 250 Index -20.94 Admiral Group PLC 2265 -20.00 Land Securities Group PLC 566.00 -21.80
FTSE 250 (251) 17350.04 -1.14 15065.05 17550.03 17302.03 19581.47 3.84 1.71 15.24 159.72 13631.01 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 18/02/1900Base Date: 1/7/35 Health Care -0.24 Industrial Eng -13.62 Real Est Invest & Se -22.85 Anglo American PLC 1841.8 -18.40 Legal & General Group PLC 220.20 -1.30
FTSE 250 ex Inv Co (184) 17554.54 -1.18 15242.61 17764.13 17533.40 20555.33 4.26 1.40 16.72 131.64 14075.31 FT 30 hourly changes Electronic & Elec Eq -0.96 Industrials -13.82 Life Insurance -22.92 Antofagasta PLC 976.00 16.00 Lloyds Banking Group PLC 30.74 -0.47
FTSE 350 (351) 3467.11 -1.46 3010.49 3518.59 3450.30 4174.43 4.64 1.48 14.60 58.71 6509.93 8 9 10 11 12 13 14 15 16 High Low Equity Invest Instr -3.56 Software & Comp Serv -14.29 Industrial Metals & -23.15 Ashtead Group PLC 2761 -1.00 London Stock Exchange Group PLC 8288 -206.00
FTSE 350 ex Investment Trusts (283) 3390.83 -1.49 2944.26 3442.08 3375.67 4127.14 4.76 1.43 14.75 58.17 3284.85 2287.2 2340.6 2327.4 2348.3 2399.1 2395.8 2394.3 2414 2426.7 2439.2 2366.1 Food & Drug Retailer -3.61 FTSE SmallCap Index -14.95 Financials -23.77 Associated British Foods PLC 1951 -75.00 M&G PLC 171.00 0.80
FTSE 350 Higher Yield (153) 2721.41 -1.57 2363.00 2764.91 2710.09 3699.85 7.07 1.29 10.96 65.43 5581.49 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Household Goods & Ho -4.92 Financial Services -15.75 Consumer Services -24.51 Astrazeneca PLC 8537 -123.00 Melrose Industries PLC 118.95 -0.30
FTSE 350 Lower Yield (198) 4010.14 -1.35 3482.01 4064.96 3987.83 4293.88 2.10 2.13 22.31 43.38 4708.78 Personal Goods -5.43 Forestry & Paper -16.16 Real Est Invest & Tr -24.59 Auto Trader Group PLC 527.40 -2.60 Mondi PLC 1470 -43.00
FTSE SmallCap (260) 5090.94 -0.81 4420.46 5132.39 5060.92 5585.16 4.70 1.07 19.98 63.67 7989.55 Electricity -6.19 Chemicals -16.57 Industrial Transport -28.50
FTSE SmallCap ex Inv Co (141) 3879.23 -0.84 3368.33 3912.26 3871.57 4473.49 6.13 1.26 12.96 36.50 6385.43 FX: EFFECTIVE INDICES Utilities -6.63 Food Producers -16.64 Aerospace & Defense -33.77
Avast PLC 543.50 -5.50 Morrison (Wm) Supermarkets PLC 182.65 -1.70
Aveva Group PLC 4097 -77.00 National Grid PLC 893.00 -24.20
FTSE All-Share (611) 3429.03 -1.44 2977.42 3479.20 3412.28 4115.79 4.64 1.46 14.73 57.53 6504.23
FTSE All-Share ex Inv Co (424) 3323.21 -1.48 2885.55 3373.07 3308.50 4040.63 4.78 1.42 14.71 56.54 3269.98 Jul 06 Jul 03 Mnth Ago Jul 07 Jul 06 Mnth Ago Gas Water & Multi -6.76 Beverages -16.68 Travel & Leisure -38.57 Aviva PLC 284.90 1.50 Next PLC 4775 -75.00
Support Services -7.23 NON FINANCIALS Index -16.81 Banks -39.26 Bae Systems PLC 489.20 -3.00 Ocado Group PLC 2021 -10.00
FTSE All-Share ex Multinationals (537) 1027.39 -1.25 739.37 1040.45 1025.28 1157.20 4.11 1.29 18.82 12.22 2034.21 Australia - - - Sweden - - - Mining -8.23 Nonlife Insurance -18.30 Fixed Line Telecomms -39.50 Barclays PLC 114.96 -2.34 Pearson PLC 569.80 -2.80
FTSE Fledgling (95) 8248.45 -0.15 7162.13 8261.00 8203.59 9573.12 4.91 1.24 16.47 129.37 16807.38 Canada - - - Switzerland - - - Tobacco -8.24 FTSE 100 Index -18.36 Oil & Gas Producers -40.42 Barratt Developments PLC 528.40 -1.00 Pennon Group PLC 1067.5 -38.00
FTSE Fledgling ex Inv Co (45) 9532.63 -0.33 8277.19 9564.13 9475.76 11639.04 7.06 1.67 8.50 105.50 19021.96 Denmark - - - UK 76.57 76.70 78.08 Consumer Goods -9.37 FTSE All{HY-}Share Index -18.69 Oil & Gas -40.58 Berkeley Group Holdings (The) PLC 4296 -28.00 Persimmon PLC 2412 14.00
FTSE All-Small (355) 3523.20 -0.77 3059.20 3550.65 3502.51 3877.75 4.71 1.07 19.76 44.71 7094.75 Japan - - - USA - - - Basic Materials -9.58 General Retailers -18.77 Automobiles & Parts -49.64 Bhp Group PLC 1649.4 -15.80 Phoenix Group Holdings PLC 642.40 -11.80
FTSE All-Small ex Inv Co (186) 2895.04 -0.82 2513.76 2919.10 2888.88 3342.87 6.17 1.28 12.71 27.39 6036.93 New Zealand - - - Euro - - - Health Care Eq & Srv -20.30 Oil Equipment & Serv -50.46 BP PLC 308.35 -4.40 Polymetal International PLC 1601 25.50
FTSE AIM All-Share (728) 883.07 -0.86 766.77 890.76 893.22 911.08 1.50 1.34 50.03 3.55 1009.99 Norway - - -
British American Tobacco PLC 3065 -66.50 Prudential PLC 1246.5 -16.50
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. British Land Company PLC 388.00 -14.50 Reckitt Benckiser Group PLC 7438 -136.00
Oil & Gas (11) 4969.15 -1.76 4314.71 5058.37 4963.54 9684.99 9.65 1.41 7.34 206.26 5461.58 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Bt Group PLC 107.30 -2.20 Relx PLC 1858.5 -29.50
Oil & Gas Producers (8) 4827.77 -1.76 4191.96 4914.30 4822.80 9379.50 9.61 1.42 7.31 202.92 5500.25 Bunzl PLC 2229 -13.00 Rentokil Initial PLC 518.20 -4.60
Oil Equipment Services & Distribution (3) 4332.72 -2.02 3762.10 4421.91 4295.75 10514.76 12.77 0.74 10.64 6.80 3730.80 FTSE GLOBAL EQUITY INDEX SERIES Burberry Group PLC 1610 -18.50 Rightmove PLC 563.00 -8.00
Basic Materials (22) 5844.16 -0.25 5074.49 5858.68 5739.59 6795.42 5.90 2.20 7.72 143.43 6901.01 Coca-Cola Hbc AG 2006 33.00 Rio Tinto PLC 4570 20.00
Chemicals (7) 12167.31 -0.13 10564.88 12183.69 11839.17 14474.83 2.45 2.95 13.82 139.21 11625.64 Jul 7 No of US $ Day Mth YTD Total
YTD Gr Div Jul 7 No of US $ Day Mth YTD Total YTD Gr Div Compass Group PLC 1139 -42.00 Rolls-Royce Holdings PLC 277.50 -3.40
Forestry & Paper (1) 18057.48 -2.84 15679.31 18585.69 18254.02 21834.81 1.71 5.96 9.79 0.00 21365.94 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Crh PLC 2891 -19.00 Royal Bank Of Scotland Group PLC 121.80 -3.30
Industrial Metals & Mining (2) 3321.68 1.94 2884.21 3258.48 3128.00 6418.79 16.63 1.05 5.74 302.71 4292.87 FTSE Global All Cap 8870 605.59 1.8 0.2 -4.9-3.7 925.60
2.4 Oil Equipment & Services 32 178.05 0.3 0.3 -33.5 293.36 -31.6 5.9 Croda International PLC 5374 4.00 Royal Dutch Shell PLC 1237.6 -26.20
Mining (12) 16985.12 -0.16 14748.18 17012.00 16682.91 19467.54 6.29 2.16 7.35 444.07 10589.68 FTSE Global All Cap 7079 462.39 0.3 7.3 -0.3 0.2 624.68
2.5 Basic Materials 349 476.67 1.7 1.7 -7.3 800.43 -5.5 3.5 Dcc PLC 6938 -28.00 Royal Dutch Shell PLC 1296.4 -24.60
FTSE Global Large Cap 1770 550.37 1.9 0.9 -3.0-1.7 866.19
2.5 Chemicals 159 695.24 1.6 1.6 -7.3 1159.27 -5.6 3.0 Diageo PLC 2730 -28.00 Rsa Insurance Group PLC 425.80 -1.20
Industrials (100) 5215.22 -0.84 4528.37 5259.26 5166.00 5441.87 2.65 1.43 26.38 24.59 5740.75
Construction & Materials (15) 6604.13 -0.92 5734.37 6665.77 6559.76 6198.10 2.99 0.51 65.22 95.82 7587.11 FTSE Global Mid Cap 2176 747.38 1.5 -2.0 -9.9-8.91074.95
2.3 Forestry & Paper 20 231.94 1.8 1.8 -16.6 436.25 -14.9 3.4 Evraz PLC 301.50 5.60 Sage Group PLC 669.60 -11.20
Aerospace & Defense (9) 3514.73 -1.07 3051.84 3552.79 3453.42 4809.22 3.53 1.03 27.50 2.61 3987.57 FTSE Global Small Cap 4924 775.30 1.3 -1.8 -10.4-9.51073.10
2.1 Industrial Metals & Mining 92 305.56 2.6 2.6 -19.2 514.42 -17.9 4.0 Experian PLC 2873 -48.00 Sainsbury (J) PLC 193.95 -1.75
General Industrials (7) 4268.61 -1.40 3706.44 4329.04 4234.34 4762.10 3.46 1.09 26.59 0.00 5257.49 FTSE All-World 3946 357.57 1.8 0.4 -4.2-3.0 578.31
2.4 Mining 78 733.38 1.5 1.5 0.6 1256.70 2.8 4.0 Ferguson PLC 6586 -22.00 Schroders PLC 3016 -8.00
Electronic & Electrical Equipment (10)10401.02 -0.26 9031.21 10428.47 10133.58 9530.73 1.32 2.13 35.45 0.00 9901.40 FTSE World 2593 633.77 1.7 -0.2 -4.6-3.41375.73
2.4 Industrials 747 413.98 1.7 1.7 -7.8 633.27 -6.8 2.1 Flutter Entertainment PLC 10745 15.00 Scottish Mortgage Investment Trust PLC 892.00 -6.00
Industrial Engineering (13) 12938.01 -0.52 11234.08 13006.02 12736.70 14297.81 2.65 1.69 22.29 40.37 16750.18 FTSE Global All Cap ex UNITED KINGDOM In 8567 639.13 1.8 0.4 -3.9-2.7 959.53
2.3 Construction & Materials 147 504.68 2.1 2.1 -9.0 810.38 -7.8 2.3 Fresnillo PLC 885.20 4.80 Segro PLC 915.00 -8.60
Industrial Transportation (6) 2859.44 0.30 2482.85 2850.88 2812.75 3586.39 8.49 0.68 17.43 0.00 2892.70 FTSE Global All Cap ex USA 7090 473.50 2.0 1.0 -8.7-7.2 788.94
3.1 Aerospace & Defense 37 631.60 2.0 2.0 -29.4 951.23 -28.9 2.7 Glaxosmithkline PLC 1617 -33.40 Severn Trent PLC 2428 -42.00
Support Services (40) 8497.26 -0.79 7378.17 8565.16 8459.29 8298.37 2.01 2.19 22.76 44.99 9385.00 FTSE Global All Cap ex JAPAN 7520 624.80 1.8 0.2 -4.7-3.5 964.04
2.4 General Industrials 67 196.16 1.7 1.7 -13.9 328.29 -12.6 2.9 Glencore PLC 174.58 -0.56 Smith & Nephew PLC 1578.5 -16.50
FTSE Global All Cap ex Eurozone 8220 636.51 1.7 0.3 -4.4-3.2 952.64
2.3 Electronic & Electrical Equipment 142 493.02 1.9 1.9 -3.2 684.24 -2.2 1.8 Gvc Holdings PLC 817.40 28.40 Smith (Ds) PLC 281.10 -7.10
Consumer Goods (42) 18342.15 -1.56 15926.50 18631.97 18249.20 20109.89 4.37 1.71 13.37 272.34 15226.35
FTSE Developed 2169 580.96 1.7 -0.3 -4.1-2.9 895.33
2.4 Industrial Engineering 142 788.37 2.3 2.3 -4.9 1201.22 -3.6 2.3 Halma PLC 2331 -7.00 Smiths Group PLC 1437.5 5.50
Automobiles & Parts (2) 2719.38 -1.81 2361.24 2769.47 2768.75 6389.86 0.90 5.55 19.98 0.00 2782.52
FTSE Developed All Cap 5639 603.22 1.7 -0.5 -4.8-3.7 916.72
2.3 Industrial Transportation 125 716.41 1.5 1.5 -5.4 1101.67 -4.5 2.4 Hargreaves Lansdown PLC 1588.5 -33.00 Smurfit Kappa Group PLC 2522 -110.00
Beverages (6) 21465.74 -0.85 18638.71 21650.15 21156.80 27408.91 2.66 2.14 17.63 230.59 16248.57
FTSE Developed Large Cap 881 547.93 1.8 0.2 -2.8-1.6 859.29
2.4 Support Services 87 522.63 0.8 0.8 3.6 755.32 4.4 1.4 Hikma Pharmaceuticals PLC 2235 11.00 Spirax-Sarco Engineering PLC 10025 -55.00
Food Producers (10) 6558.66 -2.01 5694.89 6693.24 6730.63 7516.23 2.74 2.08 17.57 57.48 6059.67
FTSE Developed Europe Large Cap 232 344.25 2.3 -1.0 -10.4-8.5 638.92
3.7 Consumer Goods 535 486.63 2.0 2.0 -4.6 778.29 -3.4 2.6 Homeserve PLC 1298 -8.00 Sse PLC 1330.5 -36.00
Household Goods & Home Construction (14)14618.09 -1.09 12692.89 14778.63 14314.81 13364.42 3.42 2.18 13.45 141.01 11633.68
FTSE Developed Europe Mid Cap 356 558.82 2.2 -2.0 -11.6
-10.5 907.08
3.0 Automobiles & Parts 126 373.61 4.9 4.9 -1.9 583.61 -0.6 3.0 HSBC Holdings PLC 395.15 -13.50 St. James's Place PLC 979.60 -5.40
Leisure Goods (2) 21519.79 -0.45 18685.65 21618.09 21270.16 13694.60 2.36 1.19 35.63 109.33 22313.06
FTSE Dev Europe Small Cap 696 754.57 1.9 -2.5 -16.0
-14.91181.49
3.1 Beverages 67 619.31 1.4 1.4 -12.6 998.33 -11.5 2.6 Imperial Brands PLC 1472 -46.50 Standard Chartered PLC 442.20 -15.10
Personal Goods (6) 30912.99 -1.95 26841.76 31527.14 31327.94 37033.11 3.30 2.69 11.27 447.31 22821.60
FTSE North America Large Cap 253 700.22 1.7 0.4 0.5 1.51014.00
1.9 Food Producers 131 665.53 1.1 1.1 -2.4 1087.88 -0.8 2.4 Informa PLC 452.70 -19.30 Standard Life Aberdeen PLC 268.80 -2.50
Tobacco (2) 31630.70 -2.28 27464.95 32368.74 31643.49 33237.47 7.78 1.11 11.59 785.33 24597.20
FTSE North America Mid Cap 411 865.75 1.1 -3.1 -8.5-7.71156.68
1.8 Household Goods & Home Construction 58 493.80 1.6 1.6 -2.5 784.15 -1.3 2.5 Intercontinental Hotels Group PLC 3821 -9.00 Taylor Wimpey PLC 144.00 0.05
Health Care (16) 12877.79 -1.55 11181.79 13080.43 12841.03 11410.83 3.32 0.98 30.69 247.69 11059.82
FTSE North America Small Cap 1304 857.20 1.0 -3.3 -10.2-9.51106.66
1.6 Leisure Goods 42 267.08 1.4 1.4 10.3 366.55 11.1 1.1 Intermediate Capital Group PLC 1307 -13.00 Tesco PLC 218.20 -0.70
Health Care Equipment & Services (7) 6711.97 -1.03 5828.01 6782.13 6735.14 7882.90 2.05 1.72 28.44 77.97 6144.55
FTSE North America 664 453.52 1.6 -0.2 -1.2-0.1 671.13
1.9 Personal Goods 98 855.33 1.4 1.4 -5.1 1265.70 -4.4 1.8 International Consolidated Airlines Group S.A. 220.60 -7.40 Unilever PLC 4262 -90.00
Pharmaceuticals & Biotechnology (9) 18170.80 -1.60 15777.71 18466.28 18107.54 15582.11 3.44 0.94 30.93 363.15 14011.99
FTSE Developed ex North America 1505 246.92 1.9 -0.4 -9.2-7.7 443.40
3.3 Tobacco 13 846.04 1.0 1.0 -15.1 2070.42 -12.2 7.1 Intertek Group PLC 5494 -68.00 United Utilities Group PLC 883.80 -16.40
Consumer Services (82) 4277.74 -1.44 3714.36 4340.44 4289.09 5228.76 3.60 1.57 17.65 48.64 4356.42 FTSE Japan Large Cap 180 374.80 1.5 0.4 -5.5-4.2 520.94
2.5 Health Care 279 630.42 1.1 1.1 3.2 964.84 4.5 1.9
Food & Drug Retailers (5) 4162.54 -0.48 3614.33 4182.79 4204.08 4073.15 3.20 1.19 26.15 78.41 5231.42 Itv PLC 69.44 -1.40 Vodafone Group PLC 127.02 -3.22
FTSE Japan Mid Cap 327 562.95 1.9 -1.3 -10.4-9.3 743.00
2.3 Health Care Equipment & Services 96 1172.45 1.3 1.3 0.0 1407.91 0.5 1.0 Jd Sports Fashion PLC 668.40 -6.20 Whitbread PLC 2305 -135.00
General Retailers (25) 1963.09 -1.43 1704.56 1991.61 1956.23 2008.06 2.81 2.09 17.01 6.13 2450.52
FTSE Global wi JAPAN Small Cap 843 612.59 2.0 -1.0 -12.0
-10.7 837.77
2.3 Pharmaceuticals & Biotechnology 183 429.78 1.0 1.0 4.7 697.94 6.4 2.4 Johnson Matthey PLC 2141 -11.00 Wpp PLC 624.80 -7.20
Media (17) 7388.09 -1.63 6415.08 7510.52 7381.50 8998.77 3.69 1.56 17.38 80.73 4947.33
FTSE Japan 507 156.27 1.6 0.0 -6.5-5.2 243.20
2.4 Consumer Services 450 583.38 2.7 2.7 4.6 814.25 5.3 1.3 Just Eat Takeaway.Com N.V. 8698 -142.00
Travel & Leisure (35) 6179.16 -1.77 5365.36 6290.76 6215.36 9204.05 4.20 1.53 15.56 79.44 6338.21
FTSE Asia Pacific Large Cap ex Japan 925 721.42 2.4 6.1 -0.7 0.71237.28
2.7 Food & Drug Retailers 67 270.45 0.7 0.7 -8.3 405.53 -7.0 2.6
Telecommunications (6) 1763.65 -2.40 1531.38 1806.96 1806.75 2142.85 7.67 -0.46 -28.63 42.45 2383.53 FTSE Asia Pacific Mid Cap ex Japan 835 815.50 2.6 6.0 -5.8-4.61340.32
3.0 General Retailers 147 1105.29 3.3 3.3 22.1 1484.36 22.6 0.8
Fixed Line Telecommunications (3) 1379.05 -2.14 1197.43 1409.20 1430.08 2402.68 12.94 1.27 6.10 0.00 1507.29
Mobile Telecommunications (3) 2878.77 -2.47 2499.64 2951.81 2938.16 3040.54 6.08 -1.57 -10.51 90.67 3509.95
FTSE Asia Pacific Small Cap ex Japan
FTSE Asia Pacific Ex Japan
1788
1760
539.37
561.54
1.9
2.5
5.8
6.1
-0.7
-1.2
0.4
0.3
865.50
2.9 Media
1022.94
2.7 Travel & Leisure
85 363.71
151 401.06
2.1
2.1
2.1 -5.3 511.15
2.1 -22.6 572.02 -21.9
-4.7 1.5
2.3
UK STOCK MARKET TRADING DATA
Utilities (8) 7021.68 -2.48 6096.93 7200.07 7209.56 6649.75 6.19 0.56 28.92 195.73 9588.98 FTSE Emerging All Cap 3231 749.03 2.7 6.3 -5.2-3.71219.92
2.8 Telecommunication 96 145.28 1.3 1.3 -9.4 310.25 -7.3 4.7 Jul 07 Jul 06 Jul 03 Jul 02 Jul 01 Yr Ago
Electricity (3) 7702.13 -2.62 6687.76 7909.49 7869.14 6727.05 6.86 0.56 26.16 151.05 13589.29 FTSE Emerging Large Cap 889 724.02 2.7 6.1 -4.4-3.01187.30
2.7 Fixed Line Telecommuniations 43 113.99 1.1 1.1 -15.8 272.20 -13.6 5.7 - - - - - -
Gas Water & Multiutilities (5) 6467.39 -2.43 5615.64 6628.71 6650.44 6271.75 5.98 0.56 29.88 196.53 8782.17 FTSE Emerging Mid Cap 888 856.54 2.6 6.8 -12.0
-10.51393.07
3.4 Mobile Telecommunications 53 166.28 1.6 1.6 -0.3 312.07 1.6 3.4 Order Book Turnover (m) 391.43 33.59 33.59 33.59 3359.77 191.03
Financials (308) 3967.85 -1.63 3445.29 4033.64 3922.51 5021.18 4.31 1.69 13.74 48.18 4099.25 FTSE Emerging Small Cap 1454 725.37 2.2 7.7 -4.1-2.81128.98
3.0 Utilities 189 289.53 -0.2 -0.2 -8.9 626.40 -7.1 3.7 Order Book Bargains 821350.00 647025.00 647025.00 647025.00 938462.00 942955.00
Banks (11) 2306.05 -2.77 2002.35 2371.77 2269.07 3865.68 5.79 1.98 8.73 0.02 1899.29 FTSE Emerging Europe 75 334.45 1.2 -4.5 -24.0
-23.1 608.28
7.4 Electricity 132 324.89 -0.3 -0.3 -8.8 692.20 -7.0 3.6 Order Book Shares Traded (m) 1519.00 1326.00 1326.00 1326.00 1865.00 1740.00
Nonlife Insurance (8) 3058.04 -1.24 2655.30 3096.28 3029.03 3913.17 4.62 1.56 13.87 31.79 5930.42 FTSE Latin America All Cap 244 668.45 2.2 -2.5 -32.1
-31.31129.74
3.4 Gas Water & Multiutilities 57 291.48 0.1 0.1 -9.2 652.38 -7.3 3.9 Total Equity Turnover (£m) 4802.61 4902.09 4902.09 4902.09 9938.26 8721.13
Life Insurance/Assurance (7) 6508.70 -0.79 5651.51 6560.65 6331.21 8325.44 5.67 1.74 10.15 154.93 7289.68 FTSE Middle East and Africa All Cap 327 557.08 0.5 0.6 -19.2
-17.2 4.2 Financials
957.73 863 214.60 2.1 2.1 -18.9 385.41 -17.4 3.7 Total Mkt Bargains 1024013.00 795589.00 795589.00 795589.00 1142122.00 1149707.00
Real Estate Investment & Services (17) 2306.64 0.15 2002.86 2303.26 2265.91 2465.18 2.51 2.83 14.05 14.65 6580.26 FTSE Global wi UNITED KINGDOM All Cap In 303 277.62 2.3 -5.1 -22.4
-21.1 4.7 Banks
522.79 280 154.11 2.5 2.5 -27.9 302.93 -26.4 5.6 Total Shares Traded (m) 5303.00 5551.00 5551.00 5551.00 6738.00 7547.00
Real Estate Investment Trusts (39) 2262.00 -1.87 1964.10 2305.20 2273.73 2628.33 4.40 -0.24 -92.81 39.50 3183.95 FTSE Global wi USA All Cap 1780 776.06 1.6 -0.5 -1.7-0.7 1.8 Nonlife Insurance
1085.28 74 252.35 1.8 1.8 -18.3 393.86 -16.8 2.6 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (39) 9187.24 -1.49 7977.28 9326.17 9182.35 9648.07 3.39 1.12 26.35 185.14 11724.75 FTSE Europe All Cap 1433 402.76 2.2 -1.4 -11.5-9.9 3.6 Life Insurance
718.13 57 193.80 3.9 3.9 -19.7 342.38 -17.9 4.0 (c) Market closed.
Equity Investment Instruments (187) 10968.26 -0.93 9523.74 11070.81 10843.29 10704.52 2.58 2.58 15.00 146.59 6489.89 FTSE Eurozone All Cap 650 392.30 2.3 -1.1 -9.8-8.3 3.3 Financial Services
698.18 210 348.10 2.1 2.1 -6.0 508.29 -4.9 2.1
Non Financials (303) 4156.42 -1.38 3609.02 4214.47 4145.44 4896.44 4.75 1.39 15.10 76.29 6921.05 FTSE EDHEC-Risk Efficient All-World 3946 391.89 1.4 -2.2 -9.4-8.3 2.7 Technology
585.16 292 424.12 2.0 2.0 17.9 541.74 18.7 1.0
Technology (16) 1966.47 -2.24 1707.49 2011.51 1986.83 2358.92 3.46 0.05 616.56 23.53 2731.39 FTSE EDHEC-Risk Efficient Developed Europe 588 302.89 2.1 -2.1 -10.4-9.2 3.4 Software & Computer Services
501.73 154 741.30 1.7 1.7 22.0 885.40 22.3 0.6 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (14) 2102.59 -2.41 1825.68 2154.54 2123.98 2642.87 3.66 -0.05 -523.19 25.75 3089.88 Oil & Gas 146 242.43 1.1 -10.3 -33.4
-31.6 442.40
6.1 Technology Hardware & Equipment 138 314.70 2.6 2.6 13.2 428.05 14.3 1.7 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (2) 4993.26 -0.44 4335.65 5015.11 5053.94 2989.75 1.37 2.76 26.40 43.15 6169.53 Oil & Gas Producers 104 232.97 1.3 -10.6 -34.0
-32.2 434.40
6.2 Alternative Energy 10 135.74 1.6 1.6 7.3 192.03 8.3 1.3 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Real Estate Investment & Services 161 328.69 2.7 2.7 -11.0 599.62 -9.1 3.3 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Real Estate Investment Trusts 81 430.40 0.4 0.4 -13.2 933.33 -11.5 4.1 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 6243.84 6230.37 6212.75 6203.68 6205.11 6198.32 6185.11 6187.57 6189.72 6245.38 6180.15 Real Estate Investment & Services 152 258.63 2.8 2.8 -30.0 463.40 -29.7 4.2
FTSE 250 17491.65 17464.49 17423.08 17407.48 17400.66 17391.35 17357.78 17350.30 17352.37 17494.70 17331.07 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
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 5134.65 5104.80 5106.45 5101.35 5094.26 5091.49 5086.88 5083.08 5083.22 5134.65 5080.77
FTSE All-Share 3458.59 3451.06 3441.90 3437.24 3437.51 3434.12 3427.05 3427.82 3428.85 3458.59 3424.28 (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,
Time of FTSE 100 Day's high:07:03:15 Day's Low14:46:15 FTSE 100 2010/11 High: 7674.56(17/01/2020) Low: 4993.89(23/03/2020) WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE All-Share Day's high:07:03:00 Day's Low14:47:00 FTSE 100 2010/11 High: 4257.93(17/01/2020) Low: 2727.86(23/03/2020) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange
Group companies and is used by FTSE International Limited under licence.
Further information is available on http://www.ftse.com © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the
London Stock Exchange Group companies and is used by FTSE International Limited under licence. † Sector P/E ratios greater than 80 are not shown.
For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. ‡ Values are negative.

UK RIGHTS OFFERS UK COMPANY RESULTS UK RECENT EQUITY ISSUES

Amount Latest Company Turnover Pre-tax EPS(p) Div(p) Pay day Total Issue Issue Stock Close Mkt
Issue paid renun. closing Chelverton UK Dividend Trust Pre 16.064L 5.368L 77.230L 25.750L 2.40000 2.40000 Jul 16 4.800 4.590 date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- FinnCap Group Pre 26.006 24.516 1.183 3.199 0.490 1.850 0.00000 0.35500 - 0.420 0.503
There are currently no rights offers by any companies listed on the LSE. Halfords Group Pre 1155.100 1138.600 19.400 51.000 8.900 21.200 0.00000 12.39000 - 6.180 18.570
Invesco Asia Trust Pre 22.710L 1.750 34.180L 1.680 3.60000 2.90000 Apr 20 7.000 5.700
JD Sports Fashion Int 2721.200 1846.300 129.900 121.900 9.670 10.050 0.28000 0.27000 Jan 3 1.720 1.640
JD Sports Fashion Pre 6110.800 1846.300 348.500 121.900 25.290 10.050 0.00000 0.27000 - 0.280 1.640
Micro Focus International Int 1454.200 1657.100 1036.000L 99.600L 3.092L 3.353 0.00000 60.33600 - 113.000L
Palace Capital Pre 21.147 18.750 9.071L 6.433 11.800L 11.300 0.00000 4.75000 - 4.750 9.500
Photo-Me International Pre 215.387 228.118 4.139 42.593 0.310 8.270 0.00000 4.73000 - 0.000 8.440
RM Int 79.267 95.489 2.198 8.407 1.800 8.300 0.00000 2.00000 - 0.000 7.700
SDV 2025 ZDP Pre 0.000 0.000 0.00000 0.00000 - 0.000 0.000
Totally Pre 105.948 78.007 3.410L 1.815L 1.820L 2.470L 0.25000 0.00000 Feb 28 0.250 0.000

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier. §Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
12 ★ FINANCIAL TIMES Wednesday 8 July 2020

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

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 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
Wednesday 8 July 2020 ★ FINANCIAL TIMES 13

MANAGED FUNDS SERVICE

Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield

American Fund GBP Hedged £ 69.00 - 0.91 0.00 M&G Charity Multi Asset Fund Inc £ 0.78 - 0.00 - Data Provided by
American Fund GBP Unhedged £ 109.04 - 1.08 0.00 M&G Charity Multi Asset Fund Acc £ 84.04 - -0.63 -

Aberdeen Standard Capital (JER) CG Asset Management Limited (IRL) Polar Capital LLP (CYM)
Slater
Investments
PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130 25 Moorgate, London, EC2R 6AY Regulated
FCA Recognised Dealing: Tel. +353 1434 5098 Fax. +353 1542 2859 Foord Asset Management MMIP Investment Management Limited (GSY) European Forager A EUR € 172.86 - 5.01 0.00
Aberdeen Standard Capital Offshore Strategy Fund Limited FCA Recognised Website: www.foord.com - Email: info@foord.com Regulated www.morningstar.co.uk
Bridge Fund £ 2.0982 - 0.0105 1.80 CG Portfolio Fund Plc FCA Recognised - Luxembourg UCITS Multi-Manager Investment Programmes PCC Limited
Foord International Fund | R $ 43.94 - 0.64 - UK Equity Fd Cl A Series 01 £ 2082.38 2119.65 59.84 0.00
Data as shown is for information purposes only. No
Global Equity Fund £ 2.9471 - 0.0292 1.11 Absolute Return Cls M Inc £ 128.64 128.64 0.72 1.45
Global Fixed Interest Fund £ 0.9482 - 0.0037 4.32 Foord Global Equity Fund (Lux) | R $ 14.83 - 0.29 - Diversified Absolute Rtn Fd USD Cl AF2 $ 1552.27 - 8.97 0.00 offer is made by Morningstar or this publication.
Capital Gearing Portfolio GBP P £ 34691.37 34691.37 167.54 0.53
Income Fund £ 0.6109 - 0.0006 2.91 Capital Gearing Portfolio GBP V £ 168.71 168.71 0.81 0.59 Regulated Diversified Absolute Return Stlg Cell AF2 £ 1468.22 - 8.68 0.00
Sterling Fixed Interest Fund £ 0.8960 - 0.0012 2.99 Dollar Fund Cls D Inc £ 178.47 178.47 -0.07 1.76 Foord Global Equity Fund (Sing) | B $ 18.03 - 0.35 0.00 Global Equity Fund A Lead Series £ 1461.55 1466.23 77.03 -
UK Equity Fund £ 1.7740 - -0.0118 3.08 Dollar Hedged GBP Inc £ 104.52 104.52 0.31 1.83 Foord International Trust (Gsy) $ 43.66 - 0.63 0.00
Real Return Cls A Inc £ 215.84 215.84 0.09 2.03 Private Fund Mgrs (Guernsey) Ltd
Regulated
(GSY)
Guide to Data
Orbis Investments (U.K.) Limited (GBR)
Monument Growth 30/06/2020 £ 475.18 479.71 -4.53 1.61
Slater Investments Ltd (UK)
28 Dorset Square, London, NW1 6QG www.slaterinvestments.com; Tel: 0207 220 9460
www.orbis.com 0800 358 2030 FCA Recognised The fund prices quoted on these pages are supplied by
Slater Growth 544.66 544.66 -5.25 0.00 the operator of the relevant fund. Details of funds
Regulated
published on these pages, including prices, are for the
Orbis OEIC Global Cautious Standard £ 9.94 - 0.06 0.03 Slater Income A Inc 115.78 115.78 -0.55 5.22
Marwyn Asset Management Limited (CYM) purpose of information only and should only be used
Orbis OEIC Global Balanced Standard £ 14.16 - 0.20 0.00 Slater Recovery 258.21 258.21 -1.26 0.00
Regulated as a guide. The Financial Times Limited makes no
Franklin Templeton International Services Sarl (IRL) Orbis OEIC Global Equity Standard £ 17.38 - 0.29 0.00 Slater Artorius 221.39 221.39 -1.63 0.45
Chartered Asset Management Pte Ltd Marwyn Value Investors £ 340.40 - -14.66 0.00 representation as to their accuracy or completeness
JPMorgan House - International Financial Services Centre,Dublin 1, Ireland Orbis OEIC UK Equity Standard £ 6.79 - 0.11 0.00 and they should not be relied upon when making an
Other International Funds Other International Funds investment decision.
CAM-GTF Limited $ 274286.72 274286.73 1711.76 0.00 Prusik Investment Management LLP (IRL)
Franklin Emerging Market Debt Opportunities Fund Plc
CAM GTi Limited $ 787.20 - 29.83 - Enquiries - 0207 493 1331
Franklin Emg Mkts Debt Opp CHFSFr 13.66 - 0.49 11.06 The sale of interests in the funds listed on these pages
Raffles-Asia Investment Company $ 1.29 1.29 -0.02 2.32 Regulated may, in certain jurisdictions, be restricted by law and
Franklin Emg Mkts Debt Opp GBP £ 8.86 - -0.30 7.91
Prusik Asian Equity Income B Dist $ 161.38 - -2.69 5.30 the funds will not necessarily be available to persons
Franklin Emg Mkts Debt Opp SGD S$ 19.33 - 0.71 5.53
Prusik Asia Emerging Opportunities Fund A Acc $ 143.28 - 0.67 0.00 in all jurisdictions in which the publication circulates.
Franklin Emg Mkts Debt Opp USD $ 15.18 - 0.65 7.72
Prusik Asia Fund U Dist. £ 209.20 - 1.60 0.00 Persons in any doubt should take appropriate
Milltrust International Managed Investments ICAV (IRL) professional advice. Data collated by Morningstar. For
mimi@milltrust.com, +44(0)20 8123 8369 www.milltrust.com other queries contact reader.enquiries@ft.com +44
(0)207 873 4211.
Regulated
Algebris Investments (IRL)
British Innovation Fund £ 123.94 - 23.92 0.00
Regulated The fund prices published in this edition along with
Dodge & Cox Worldwide Funds (IRL) MAI - Buy & Lease (Australia) A$ 123.94 - 21.42 0.00 additional information are also available on the
Algebris Core Italy I EUR Acc € 100.73 - -0.14 0.00 MAI - Buy & Lease (New Zealand)NZ$ 98.28 - 0.99 0.00
6 Duke Street,St.James,London SW1Y 6BN Financial Times website, www.ft.com/funds. The
Algebris Allocation Fund - Class I EUR € 94.57 - 0.66 0.00 Milltrust Global Emerging Markets Fund - Class A $ 94.29 - 1.98 0.00
www.dodgeandcox.worldwide.com 020 3713 7664 funds published on these pages are grouped together
Algebris Core Italy Fund - Class R EUR € 94.48 - -0.13 0.00 GAM
FCA Recognised
The Climate Impact Asia Fund (Class A) $ 86.74 - -0.97 - Purisima Investment Fds (CI) Ltd (JER) by fund management company.
Algebris Financial Credit Fund - Class I EUR € 174.46 - 0.08 0.00 funds@gam.com, www.funds.gam.com
Regulated
Algebris Financial Credit Fund - Class R EUR € 152.23 - 0.05 0.00 Dodge & Cox Worldwide Funds plc - Global Bond Fund Regulated Prices are in pence unless otherwise indicated. The
PCG B 247.56 - -0.06 0.00
Algebris Financial Credit Fund - Class Rd EUR € 105.02 - 0.03 5.03 EUR Accumulating Class € 15.04 - -0.06 0.00 LAPIS GBL TOP 50 DIV.YLD-Na-D £ 98.06 - 0.44 4.68 change, if shown, is the change on the previously
PCG C 242.09 - -0.06 0.00
Algebris Financial Income Fund - Class I EUR € 130.46 - -0.19 0.00 EUR Accumulating Class (H) € 10.96 - 0.03 0.00 LAPIS GBL F OWD 50 DIV.YLD-Na-D £ 94.75 - 1.17 - quoted figure (not all funds update prices daily). Those
Algebris Financial Income Fund - Class R EUR € 121.34 - -0.17 0.00 EUR Distributing Class € 11.92 - -0.05 3.87
Stonehage Fleming Investment Management Ltd (IRL) designated $ with no prefix refer to US dollars. Yield
Algebris Financial Income Fund - Class Rd EUR € 81.65 - -0.12 5.41 EUR Distributing Class (H) € 8.66 - 0.03 4.11 Pictet Asset Management (Europe) SA (LUX) www.stonehagefleming.com/gbi percentage figures (in Tuesday to Saturday papers)
Algebris Financial Equity Fund - Class B EUR € 88.13 - -0.49 0.00 GBP Distributing Class £ 13.16 - 0.01 3.91 15, Avenue J.F. Kennedy L-1855 Luxembourg enquiries@stonehagefleming.com allow for buying expenses. Prices of certain older
Algebris Macro Credit Fund - Class I EUR € 120.53 - -0.25 0.00 GBP Distributing Class (H) £ 9.10 - 0.03 4.44 Tel: 0041 58 323 3000 Regulated insurance linked plans might be subject to capital
Algebris Macro Credit Fund - Class R EUR € 118.68 - -0.25 0.00 USD Accumulating Class $ 12.27 - 0.03 0.00
Milltrust International Managed Investments SPC FCA Recognised SF Global Best Ideas Eq B USD ACC $ 211.01 - 3.02 - gains tax on sales.
Algebris Macro Credit Fund - Class Rd EUR € 118.68 - -0.25 0.00 em@milltrust.com, +44(0)20 8123 8369, www.milltrust.com Pictet-Absl Rtn Fix Inc-HI EUR € 111.15 - 0.07 0.00 SF Global Best Ideas Eq D GBP INC £ 255.90 - 2.80 -
Dodge & Cox Worldwide Funds plc-Global Stock Fund
Algebris IG Financial Credit R EUR Acc € 103.57 - 0.09 - Regulated Pictet-Asian Equities Ex Japan-I USD F $ 340.67 - -1.27 0.00 Guide to pricing of Authorised Investment Funds:
USD Accumulating Share Class $ 20.29 - 0.37 0.00 (compiled with the assistance of the IMA. The
Algebris IG Financial Credit B EUR Acc € 104.06 - 0.10 - Milltrust Alaska Brazil SP A $ 65.72 - 1.44 - Pictet-Asian Local Currency Debt-I USD F $ 180.61 - 0.01 0.00
GBP Accumulating Share Class £ 26.71 - 0.42 0.00 Genesis Investment Management LLP Milltrust Laurium Africa SP A $ 79.70 - -0.20 - Investment Management Association, 65 Kingsway,
Pictet-Biotech-I USD F $ 1087.08 - 5.21 0.00
GBP Distributing Share class £ 18.48 - 0.30 1.61 Other International Funds London WC2B 6TD.
Milltrust Singular ASEAN SP Founders $ 102.47 - 1.10 - Pictet-CHF Bonds I CHF SFr 508.69 - 0.04 0.00
EUR Accumulating Share Class € 26.94 - 0.32 0.00 Emerging Mkts NAV £ 7.21 - -0.16 0.00 Tel: +44 (0)20 7831 0898.)
Milltrust SPARX Korea Equity SP A $ 109.14 - 2.16 - Pictet-China Index I USD $ 182.49 - 7.50 0.00
GBP Distributing Class (H) £ 9.95 - 0.18 1.30
Milltrust Xingtai China SP A $ 129.85 - -0.89 - Pictet-Clean Energy-I USD F $ 121.89 - -0.20 0.00
Dodge & Cox Worldwide Funds plc-U.S. Stock Fund OEIC: Open-Ended Investment Company. Similar to a
Pictet-Digital-I USD F $ 519.50 - 0.59 0.00 unit trust but using a company rather than a trust
USD Accumulating Share Class $ 25.15 - 0.41 0.00 Pictet-Em Lcl Ccy Dbt-I USD F $ 178.16 - 0.97 0.00 structure.
GBP Accumulating Share Class £ 31.32 - 0.44 0.00 Pictet-Emerging Europe-I EUR F € 396.59 - -1.57 0.00
GBP Distributing Share Class £ 19.16 - 0.26 1.11 Pictet-Emerging Markets-I USD F $ 691.10 - -3.44 0.00 Different share classes are issued to reflect a different
The Antares European Fund Limited EUR Accumulating Share Class € 28.84 - 0.29 0.00 Pictet-Emerging Markets Index-I USD F $ 302.95 - 7.90 0.00 currency, charging structure or type of holder.
Other International GBP Distributing Class (H) £ 10.50 - 0.17 1.60 Pictet-Emerging Corporate Bonds I USD $ 132.62 - 0.31 0.00
AEF Ltd Usd $ 586.00 - 1.16 - Pictet-Emerging Markets High Dividend I USD $ 126.72 - -1.07 0.00 Selling price: Also called bid price. The price at which
HPB Assurance Ltd
AEF Ltd Eur € 550.10 - 1.06 0.00 Pictet-Emerging Markets Sust Eq I USD $ 100.71 - -1.01 0.00 Ram Active Investments SA units in a unit trust are sold by investors.
Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490
Pictet-EUR Bonds-I F € 640.66 - 0.41 0.00 www.ram-ai.com
International Insurances Buying price: Also called offer price. The price at
Pictet-EUR Corporate Bonds-I F € 217.18 - 0.20 0.00 Other International Funds
Holiday Property Bond Ser 1 £ 0.51 - 0.00 0.00 which units in a unit trust are bought by investors.
Pictet-EUR Government Bonds I EUR € 178.42 - 0.28 0.00 RAM Systematic Emerg Markets Eq $ 179.07 - 5.05 -
Holiday Property Bond Ser 2 £ 0.63 - 0.00 0.00 Includes manager’s initial charge.
Pictet-EUR High Yield-I F € 274.90 - 0.71 0.00 RAM Systematic European Eq € 418.90 - 4.72 -
Pictet-EUR Short Mid-Term Bonds-I F € 137.03 - 0.06 0.00 RAM Systematic Funds Global Sustainable Income Eq $ 115.15 - 2.12 0.00 Single price: Based on a mid-market valuation of the
Pictet-EUR Short Term HY I EUR € 123.23 - 0.16 0.00 RAM Systematic Long/Short Emerg Markets Eq $ 103.58 - 1.12 - Toscafund Asset Management LLP (UK) underlying investments. The buying and selling price
Pictet-EUR Sov.Sht.Mon.Mkt EUR I € 100.19 - 0.00 0.00 RAM Systematic Long/Short European Eq € 134.14 - -0.50 - for shares of an OEIC and units of a single priced unit
www.toscafund.com
Arisaig Partners Pictet-Euroland Index IS EUR € 155.51 - 2.24 0.00 RAM Systematic North American Eq $ 314.63 - 2.88 -
Authorised Funds trust are the same.
Other International Funds Pictet-Europe Index-I EUR F € 194.55 - 3.05 0.00 RAM Tactical Global Bond Total Return € 153.16 - 0.19 -
Aptus Global Financials B Acc £ 3.10 - 0.06 6.70
Pictet-European Equity Selection-I EUR F € 614.00 - -4.63 0.00 RAM Tactical II Asia Bond Total Return $ 151.61 - 0.30 - Treatment of manager’s periodic capital charge:
Arisaig Asia Consumer Fund Class A (Ex-Alcohol) shares $ 102.23 - 0.64 - Aptus Global Financials B Inc £ 2.15 - 0.04 9.41
Pictet-European Sust Eq-I EUR F € 286.23 - -1.80 0.00 The letter C denotes that the trust deducts all or part
Arisaig Asia Consumer Fund Limited $ 100.54 - 0.70 0.00
Arisaig Global Emerging Markets Consumer Fund $ 12.75 - 0.08 0.00
Intrinsic Value Investors (IVI) LLP (IRL)
New Capital UCITS Fund PLC (IRL) Pictet-Global Bds Fundamental I USD $ 133.96 - 0.66 0.00 of the manager’s/operator’s periodic charge from
1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210 Pictet-Global Bonds-I EUR € 195.15 - -0.90 0.00 capital, contact the manager/operator for full details
Arisaig Global Emerging Markets Consumer UCITS € 12.85 - -0.01 - Leconfield House, Curzon Street, London, W1J 5JB
FCA Recognised Pictet-Global Defensive Equities I USD $ 190.29 - -1.17 0.00 of the effect of this course of action.
Arisaig Global Emerging Markets Consumer UCITS STG £ 14.50 - -0.10 - www.newcapitalfunds.com
IVI European Fund EUR € 21.95 - 0.31 0.00 Pictet-Global Emerging Debt-I USD F $ 452.14 - 5.35 0.00
Arisaig Latin America Consumer Fund $ 22.85 - 0.36 0.00 FCA Recognised Exit Charges: The letter E denotes that an exit charge
IVI European Fund GBP £ 26.43 - 0.46 0.36 Pictet-Global Env.Opport-I EUR € 257.14 - 0.62 0.00
New Capital UCITS Funds Pictet-Global Megatrend Selection-I USD F $ 343.33 - -1.55 0.00 may be made when you sell units, contact the
New Capital China Equity Fund $ 222.61 - 6.47 0.00 manager/operator for full details.
Dragon Capital Group Pictet-Global Sust.Credit HI EUR € 161.91 - 1.16 0.00
New Capital Dynamic European Equity Fund € 125.04 - 1.62 0.00 Pictet-Greater China-I USD F $ 838.71 - 0.26 0.00
Ruffer LLP (1000)F (UK)
Toscafund Asset Management LLP
1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam 65 Gresham Street, London, EC2V 7NQ Time: Some funds give information about the timing of
New Capital Dynamic UK Equity Fund £ 109.58 - 2.07 0.00 Pictet-Health-I USD $ 354.09 - -1.31 0.00 www.toscafund.com
Fund information, dealing and administration: funds@dragoncapital.com Order Desk and Enquiries: 0345 601 9610 price quotes. The time shown alongside the fund
New Capital Global Alpha Fund £ 110.23 - 0.54 0.00 Pictet-SmartCity-I EUR € 210.07 - -1.12 0.00 Tosca A USD $ 283.29 - 6.90 - manager’s/operator’s name is the valuation point for
Other International Funds New Capital Global Equity Conviction Fund $ 166.00 - 2.68 - Pictet-India Index I USD $ 114.56 - 1.23 0.00 Authorised Inv Funds Tosca Mid Cap GBP £ 172.98 - 6.71 - their unit trusts/OEICs, unless another time is
Vietnam Equity (UCITS) Fund A USD $ 19.41 - 0.05 0.00 New Capital Global Value Credit Fund $ 154.34 - 0.19 0.00 Pictet-Indian Equities-I USD F $ 525.97 - 3.53 0.00 Authorised Corporate Director - Link Fund Solutions Tosca Opportunity B USD $ 267.22 - 10.20 - indicated by the symbol alongside the individual unit
Artemis Fund Managers Ltd (1200)F (UK) New Capital Japan Equity Fund ¥ 1354.33 - 16.56 0.00 Pictet-Japan Index-I JPY F ¥ 17987.79 - -57.55 0.00 LF Ruffer European C Acc 624.39 - 0.57 0.65 Pegasus Fund Ltd A-1 GBP £ 41.38 - 1.60 0.00 trust/OEIC name.
57 St. James's Street, London SW1A 1LD 0800 092 2051 Janus Henderson Investors (UK)
New Capital US Growth Fund $ 356.26 - 7.87 0.00 Pictet-Japanese Equities Opp-I JPY F ¥ 11068.22 - -45.78 0.00 LF Ruffer European C Inc 114.06 - 0.11 0.70
Authorised Inv Funds PO Box 9023, Chelmsford, CM99 2WB Enquiries: 0800 832 832
New Capital US Small Cap Growth Fund $ 160.84 - 0.95 0.00 Pictet-Japanese Equity Selection-I JPY F ¥ 15956.99 - -73.39 0.00 LF Ruffer European O Acc 609.75 - 0.56 0.34 The symbols are as follows: ✠ 0001 to 1100 hours; ♦
Artemis Corporate Bond I Acc £ 1.07 - 0.01 - www.janushenderson.com New Capital Wealthy Nations Bond Fund $ 149.76 - 0.49 0.00 Pictet-LATAM Lc Ccy Dbt-I USD F $ 131.54 - 1.12 0.00 1101 to 1400 hours; ▲1401 to 1700 hours; # 1701 to
LF Ruffer Equity & General C Acc 447.55 - -0.22 0.51
Artemis Target Return Bond I Acc £ 1.02 - 0.00 - Authorised Inv Funds Pictet-Multi Asset Global Opportunities-I EUR € 128.87 - 0.54 0.00 midnight. Daily dealing prices are set on the basis of
LF Ruffer Equity & General C Inc 410.12 - -0.20 0.51
Janus Henderson Instl UK Idx Opps A Acc £ 0.87 - -0.01 - Pictet-Nutrition-I EUR € 242.72 - -0.71 0.00 LF Ruffer Equity & General O Acc 437.08 - -0.22 0.20 the valuation point, a short period of time may elapse
Pictet-Pacific Ex Japan Index-I USD F $ 426.46 - 3.69 0.00 LF Ruffer Equity & General O Inc 404.67 - -0.20 0.22 before prices become available. Historic pricing: The
Pictet-Premium Brands-I EUR F € 204.00 - -0.21 0.00 letter H denotes that the managers/operators will
Ennismore Smaller Cos Plc (IRL) LF Ruffer Gold C Acc 316.65 - 7.93 0.00
Pictet-Russia Index I USD $ 84.73 - 0.78 0.00 normally deal on the price set at the most recent
5 Kensington Church St, London W8 4LD 020 7368 4220 LF Ruffer Gold C Inc 191.64 - 4.79 0.00 Troy Asset Mgt (1200) (UK) valuation. The prices shown are the latest available
FCA Recognised Pictet-Russian Equities-I USD F $ 82.55 - -0.20 0.00 LF Ruffer Gold O Acc 309.13 - 7.74 0.00 65 Gresham Street, London, EC2V 7NQ before publication and may not be the current dealing
Ennismore European Smlr Cos NAV £ 128.71 - -0.30 0.00 Pictet-Security-I USD F $ 319.03 - -2.30 0.00 LF Ruffer Japanese C Inc 143.00 - -2.87 0.29
Order Desk and Enquiries: 0345 608 0950 levels because of an intervening portfolio revaluation
Ennismore European Smlr Cos NAV € 142.27 - -0.80 0.00 Pictet-Small Cap Europe-I EUR F € 1383.50 - -5.14 0.00 LF Ruffer Japanese C Acc 307.07 - -6.17 0.29
Authorised Inv Funds or a switch to a forward pricing basis. The
Pictet-ST Emerg Local Currency Debt-I USD F $ 102.70 - 0.48 0.00 LF Ruffer Pacific & Emerging Markets C Acc 352.88 - -1.56 1.31 managers/operators must deal at a forward price on
Kames Capital ICVC (UK) Pictet-ST.MoneyMkt-I € 138.00 - 0.00 0.00 LF Ruffer Pacific & Emerging Markets C Inc 96.98 - -0.43 1.38 Authorised Corporate Director - Link Fund Solutions
request, and may move to forward pricing at any time.
Kames House, 3 Lochside Crescent, Edinburgh, EH12 9SA Pictet-ST.MoneyMkt JPY I USD ¥ 100717.56 - 0.32 0.00 LF Ruffer Pacific & Emerging Markets O Acc 344.31 - -1.51 1.03 Trojan Investment Funds Forward pricing: The letter F denotes that that
0800 358 3009 www.kamescapital.com Pictet-ST.MoneyMkt-ICHF SFr 119.76 - 0.00 0.00 LF Ruffer Total Return C Acc 477.82 - 0.61 1.41 managers/operators deal at the price to be set at the
Trojan Ethical O Acc 115.81 - 0.35 0.15
Authorised Funds Pictet-ST.MoneyMkt-IUSD $ 145.93 - 0.00 0.00 LF Ruffer Total Return C Inc 310.27 - 0.39 1.43 next valuation.
Trojan Ethical O Inc 115.66 - 0.35 0.12
Pictet-Timber-I USD F $ 173.93 - -1.93 0.00 LF Ruffer Total Return O Acc 466.60 - 0.58 1.41
Kames Global Equity GBP B Acc £ 2.56 - 0.04 0.21
Pictet-US High Yield-I USD F $ 172.97 - 1.11 0.00 LF Ruffer Total Return O Inc 302.82 - 0.38 1.43 Investors can be given no definite price in advance of
Pictet-USA Index-I USD F $ 296.59 - 4.62 0.00 the purchase or sale being carried out. The prices
Ennismore European Smlr Cos Hedge Fd Pictet-USD Government Bonds-I F $ 767.34 - -0.42 0.00 appearing in the newspaper are the most recent
Other International Funds Pictet-USD Short Mid-Term Bonds-I F $ 144.49 - 0.06 0.00 provided by the managers/operators. Scheme
NAV € 510.58 - -1.34 0.00 Pictet-USD Sov.ST.Mon.Mkt-I $ 109.68 - 0.00 0.00 particulars, prospectus, key features and reports: The
Pictet-Water-I EUR F € 404.95 - -2.37 0.00 most recent particulars and documents may be
Northwest Investment Management (HK) Ltd obtained free of charge from fund
Ashmore Investment Management Limited (LUX) 11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9331 9220 managers/operators. * Indicates funds which do not
WA Fixed Income Fund Plc (IRL)
2 rue Albert Borschette L-1246 Luxembourg Other International Funds price on Fridays.
Regulated
FCA Recognised Northwest China Opps Class T $ $ 2839.04 - -78.14 0.00
European Multi-Sector € 120.31 - 0.07 3.34 Charges for this advertising service are based on the
Ashmore SICAV Emerging Market Debt Fund $ 87.29 - 1.21 6.03 Northwest Feilong Class T $ $ 2006.00 - -74.28 0.00
Ashmore SICAV Emerging Market Frontier Equity Fund $ 140.63 - 1.00 1.70 Northwest Fund Class T $ $ 2564.79 - -90.67 0.00 number of lines published and the classification of the
fund. Please contact data@ft.com or
Ashmore SICAV Emerging Market Total Return Fund $ 76.21 - 0.86 5.14 Northwest Warrant Class A $ $ 1330.60 - 12.11 0.00
Equinox Fund Mgmt (Guernsey) Limited (GSY) call +44 (0)20 7873 3132 for further information.
Ashmore SICAV Global Small Cap Equity Fund $ 157.04 - 1.83 0.03
EM Active Equity Fund Acc USD $ 132.20 - 6.06 0.00 Regulated
EM Equity Fund Acc USD $ 114.36 - 2.67 0.00 Equinox Russian Opportunities Fund Limited $ 163.96 - 5.30 0.00
EM Mkts Corp.Debt USD F $ 84.32 - 0.44 6.94
EM Mkts Loc.Ccy Bd USD F $ 73.64 - 0.28 5.29
EM Short Duration Fund Acc USD $ 112.60 - 2.51 0.00

Kames Capital VCIC (IRL) Oasis Global Mgmt Co (Ireland) Ltd (IRL)
1 North Wall Quay, Dublin 1, Ireland +35 3162 24493 Regulated
RobecoSAM (LUX)
Tel. +41 44 653 10 10 http://www.robecosam.com/
FCA Recognised Oasis Crescent Global Investment Fund (Ireland) plc
Euronova Asset Management UK LLP (CYM) Absolute Return Bond B GBP Acc 1128.18 - 0.52 1.48 Regulated
Oasis Crescent Global Short Term Income Fund I - Class A Dist $ 0.99 - 0.01 2.33 RobecoSAM Sm.Energy/A £ 22.61 - 0.52 1.35
Regulated High Yield Global Bond A GBP Inc 481.23 - 1.37 4.35 Oasis Crescent Global Equity Fund $ 31.27 - 0.47 0.51 RobecoSAM Sm.Energy/N € 20.81 - 0.40 0.00
Smaller Cos Cls One Shares € 48.60 - -0.71 0.00 High Yield Global Bond B GBP Inc 1026.48 - 2.95 5.10 Oasis Crescent Variable Balanced Fund £ 9.02 - 0.08 0.12 Platinum Capital Management Ltd RobecoSAM Sm.Materials/A £ 192.95 - 3.66 1.63
Atlantas Sicav (LUX) Smaller Cos Cls Two Shares € 32.21 - -0.43 0.00 Kames Global Equity Income B GBP Acc 1879.86 - 10.29 0.00 OasisCresGl Income Class A $ 10.83 - 0.01 2.80
Regulated Smaller Cos Cls Three Shares € 16.22 - -0.22 0.00 Other International Funds RobecoSAM Sm.Materials/N € 201.44 - 3.19 0.00
Kames Global Equity Income B GBP Inc 1455.44 - -8.32 3.19 OasisCresGl LowBal D ($) Dist $ 11.86 - 0.08 1.04
American Dynamic $ 5463.06 5463.06 123.85 0.00 Smaller Cos Cls Four Shares € 20.84 - -0.28 0.00 Kames Global Equity Market Neutral Fund - B Acc GBP £ 11.33 - 0.11 0.00 Platinum All Star Fund - A $ 127.55 - - - RobecoSAM Sm.Materials/Na € 131.37 - 2.08 1.64
OasisCresGl Med Eq Bal A ($) Dist $ 12.75 - 0.11 0.37 RobecoSAM S.HealthyLiv/B € 228.54 - 1.37 0.00
American One $ 5314.41 5314.41 207.75 0.00 Kames Inv Grd Gbl Bond A Inc GBH 611.46 - 1.58 1.81 Platinum Global Growth UCITS Fund $ 11.88 - 0.00 0.00
Oasis Crescent Gbl Property Eqty $ 7.42 - 0.03 1.90
Platinum Essential Resources UCITS Fund SICAV USD Class E $ 7.16 - -0.04 0.00 RobecoSAM S.HealthyLiv/N € 220.36 - 1.33 0.00 Yuki - Co, LLC (IRL)
Bond Global € 1522.37 1522.37 1.37 - Global Sustainable Equity B Acc GBP £ 22.34 - 0.32 0.00
Platinum Global Dividend UCITS Fund $ 50.94 - -0.01 0.00 RobecoSAM S.HealthyLiv/Na £ 164.93 - 1.53 1.42 Tel +18015545191 www.yukifunds.com
Eurocroissance € 1153.11 1153.11 34.64 0.00 Global Sustainable Equity C Acc GBP £ 22.63 - 0.33 0.00
RobecoSAM S.Water/A £ 273.99 - 3.43 1.56 Regulated
Far East $ 1012.09 - 54.04 0.00 Short Dated High Yld Bd B Acc GBP £ 10.44 - 0.01 0.00
Short Dated High Yld Bd C Acc GBP (Hdg) £ 10.53 - 0.01 0.00 RobecoSAM S.Water/N € 239.47 - 2.25 0.00 Yuki Mizuho Umbrella Fund
Strategic Global Bond A GBP Inc 1236.14 - 2.72 2.68 Yuki Mizuho Japan Dynamic Growth ¥ 6062.00 - 27.00 0.00
Strategic Global Bond B GBP Inc 701.96 - 1.56 3.43 Yuki Japan Low Price ¥ 32744.00 - 117.00 0.00
FIL Investment Services (UK) Limited (1200)F (UK) Yuki Asia Umbrella Fund
130, Tonbridge Rd, Tonbridge TN11 9DZ Yuki Japan Rebounding Growth Fund JPY Class ¥ 28316.00 - 268.00 0.00
Omnia Fund Ltd
Callfree: Private Clients 0800 414161 Yuki Japan Rebounding Growth Fund USD Hedged Class $ 1163.27 - 10.99 0.00
Other International Funds
Broker Dealings: 0800 414 181
Barclays Investment Funds (CI) Ltd (JER) Estimated NAV $ 553.18 - 55.05 0.00
OEIC Funds Rubrics Global UCITS Funds Plc (IRL)
39/41 Broad Street, St Helier, Jersey, JE2 3RR Channel Islands 01534 812800
Fidelity American Fund W-ACC-GBP £ 48.93 - -0.03 0.35 www.rubricsam.com
FCA Recognised Fidelity Cash Fund Y-ACC-GBP £ 1.02 - 0.00 0.66
Lloyds Investment Fund Managers Limited (1000)F (JER) Regulated
Bond Funds FID Emerg Europe, Middle East and Africa Fund W-ACC-GBP £ 2.03 - -0.01 4.62
PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555 Rubrics Emerging Markets Fixed Income UCITS Fund $ 136.30 - 0.61 -
Sterling Bond F £ 0.50 - 0.00 2.30 Fidelity Global Enhanced Income Fund W-ACC-GBP £ 1.98 - -0.02 3.77 Rubrics Global Credit UCITS Fund $ 17.13 - 0.01 0.00
Other International Funds
Fidelity Global Focus Fund W-ACC-GBP £ 28.49 - -0.07 0.24 Rubrics Global Fixed Income UCITS Fund $ 182.37 - -0.03 0.00
Fidelity Global High Yield Fund Y-ACC-GBP £ 14.30 - 0.04 - Lloyds Investment Funds Limited Zadig Gestion (Memnon Fund) (LUX)
Q Rubrics India Fixed Income UCITS Fund $ 11.30 - 0.00 0.00
Fidelity Japan Fund W-ACC-GBP £ 4.39 - -0.03 0.64 Euro High Income € 1.5190xd - 0.0020 2.65 FCA Recognised
Oryx International Growth Fund Ltd Rubrics India Fixed Income UCITS Fund $ 98.00 - -0.02 0.00
Fidelity Japan Smaller Companies Fund W-ACC-GBP £ 3.74 - 0.00 0.39 High Income £ 0.8725xd - 0.0028 3.70 Memnon European Fund - Class U2 GBP £ 181.65 - 3.96 0.00
Fidelity Select 50 Balanced Fund PI-ACC-GBP £ 1.09 - 0.00 0.77 Sterling Bond £ 1.5950xd - 0.0070 2.08 Other International Funds
Fidelity Special Situations Fund W-ACC-GBP £ 29.77 - -0.19 3.81 Lloyds Multi Strategy Fund Limited NAV (Fully Diluted) £ 9.10 - -0.52 0.00
Polar Capital Funds Plc (IRL)
Short Dated Corporate Bond Fund Y ACC GBP £ 10.78 - 0.00 3.96 Conservative Strategy £ 1.2890 - 0.0080 0.00 Regulated
Fidelity Sustainable Water & Waste W Acc £ 0.97 - -0.01 -
CCLA Investment Management Ltd (UK) Growth Strategy £ 1.8080 - 0.0220 0.00 Automation & Artificial Intelligence CL I USD Acc $ 14.21 14.21 0.38 0.00
Fidelity Sustainable Water & Waste W Inc £ 0.97 - -0.01 - Aggressive Strategy £ 2.4490 - 0.0350 0.00
Senator House 85 Queen Victoria Street London EC4V 4ET Asian Financials I USD $ 371.19 371.19 0.73 0.00
Fidelity UK Growth Fund W-ACC-GBP £ 3.34 - -0.05 - Global USD Growth Strategy $ 1.6760 - 0.0200 0.00
Authorised Inv Funds Biotechnology I USD $ 32.40 32.40 0.16 0.00
Fidelity UK Select Fund W-ACC-GBP £ 2.85 - -0.02 2.58 Dealing Daily
Diversified Income 1 Units GBP Inc £ 1.51 1.51 0.00 0.03 Emerging Market Stars I USD Acc $ 12.19 - 0.27 0.00
Diversified Income 2 Units GBP Inc £ 1.45 1.45 -0.01 0.03 Institutional OEIC Funds European Ex UK Inc EUR Acc € 11.17 11.17 0.11 0.00
Diversified Income 3 Units GBP Inc £ 1.46 1.46 -0.01 0.03 Europe (ex-UK) Fund ACC-GBP £ 6.43 - -0.06 0.88 Financial Opps I USD $ 10.87 - 0.17 2.98
GEM Income I USD $ 10.92 - 0.22 0.00
Global Convertible I USD $ 14.52 14.52 0.15 0.00
Global Insurance I GBP £ 6.58 - 0.07 0.00
Global Technology I USD $ 70.06 - 1.58 0.00
Healthcare Blue Chip Fund I USD Acc $ 15.00 15.00 0.19 0.00
M & G Securities (1200)F (UK) Healthcare Opps I USD $ 56.98 - 0.95 0.00
PO Box 9038, Chelmsford, CM99 2XF Income Opportunities B2 I GBP Acc £ 2.06 2.06 0.02 -
Findlay Park Funds Plc (IRL) Japan Value I JPY ¥ 99.13 99.13 -1.40 0.00
www.mandg.co.uk/charities Enq./Dealing: 0800 917 4472
30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900 North American I USD $ 25.20 25.20 0.48 0.00
Authorised Inv Funds
UK Absolute Equity I GBP £ 15.47 15.47 0.00 0.00
FCA Recognised M&G Charibond Charities Fixed Interest Fund (Charibond) Inc £ 1.25 - 0.00 -
UK Val Opp I GBP Acc £ 10.21 10.21 -0.03 0.00
American Fund USD Class $ 136.42 - 1.82 0.00 M&G Charibond Charities Fixed Interest Fund (Charibond) Acc £ 42.35 - 0.01 -

14
The dramatic spectacle of a
new building going up is
normally hidden from view,
but should it be open to the
public? By Edwin Heathcote
I
recently discovered the phenome-
non of the umarell. The umarell is
one of those things that are some-
how familiar but only when they’re
given a name do we recognise their
ubiquity. The umarell is an old man
(and it is always a man) who stands
around, hands often behind his back,
watching roadworks and construction
sites and occasionally giving advice.
The word is taken from a Bolognese
dialect (it means “little man”) and you
can even buy little umarell figures. But it
is not a phenomenon limited to Bologna.
We all know the type. I’ve seen them in
Spain and in Chicago (more there than
in New York, where even older men
seem to hurry past building sites).
Cities are always under construction
and to want to watch is natural, particu-
larly if you’ve spent a lifetime walking
the same streets. There’s also the condi-
tioning, going right back to childhood.
Like most boys my age, I enjoyed filling
my yellow Tonka dumper truck with
earth and envied my best friend’s digger,
which had an articulated arm. Labour-
ing on building sites in my teens put a
temporary end to the fascination but it
always returns. Construction is exciting:
its scale is impressive, the tools are
remarkable and the sense of the earth
being churned up to prepare it for a huge
structure can be awe-inspiring.
There was a time in the UK when
demolition became a kind of spectator
sport. Tower blocks, power stations and
industrial chimneys in a dance of
destruction, watched by people over
whose lives those structures had
loomed. Perhaps now there is more rev-
erence for the past and, in a housing cri-
sis, an uneasy awareness that demol-
ished blocks of public flats will be
replaced by private property.
Construction lacks the bang of demo-
lition, the dramatic moment of collapse.
On the other hand it is positive, a symp-
tom of economic activity. And, although
it is slow and laborious, there are
moments of drama and tension. In the
2013 film Locke, Tom Hardy gives a solo
performance as a man whose life is
UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
Construction — a site for sore eyes
falling apart, but the central tension is
the huge concrete pour of which he is in
charge while his marriage collapses
behind him. When construction
appears in a film it is often as a back-
drop, associated with Mafia or union
corruption, male ego or dodgy develop-
ers. The drama of the building process is
hidden away behind hoardings.
Now, structural engineer Tristram
Carfrae of Arup is suggesting that sites
be opened up to the public and that the
construction world celebrate its drama
and complexity. He will be taking part in
an online discussion tomorrow on the
topic with artist Antony Gormley and
designer Thomas Heatherwick.
★ FINANCIAL TIMES
ARTS
Carfrae’s current project makes his
argument easy: he is working on Antoni
Gaudí’s Sagrada Família in Barcelona,
one of the world’s most visited and most
insane buildings. Over almost 140 years
its construction has become a perma-
nent sight on the skyline, an unending
homage to the visionary architect.
Sagrada Família reopened on July 4
and part of the reason for tourists’ con-
tinuing fascination is its status as a mas-
terpiece still under construction. It gives
a glimpse into what the medieval cathe-
drals must have been like while they
took generations to build.
“We’re doing big lifts of 20 tons of
stone craned in like pieces of Lego,”
Carfrae tells me. “It’s incredibly dra-
matic. Now with building information
technology, we are able to be very pre-
cise and manufacture off-site for assem-
bly. It’s cleaner, quieter, less polluting
and easier for tourists to visit the site
while construction continues around
them. And with all that we can make it a
novelty to watch the pieces being put
in place.”
Tom Emerson of 6a architects (and
professor at Zurich’s ETH university)
brings up the scaffolding at Notre-Dame
in Paris. “During the fire, the scaffolding
became a central character,” he says.
“Scaffolding is ephemeral, it just sud-
denly appears and has a different logic
to the rest of the city. It’s nothing to do
with beauty or planning, it just does
what it does.” It’s notable, too, that mass
live entertainment, from the music
festival to outdoor theatre, adopts the
temporary language of the scaffold as
the armature for spectacle.
For Emerson, though, there is more to
it than the spectacular. “At the small
One-way route to Rubens via Vermeer
London’s National Gallery
reopens today, unveiling
a restored room and a newly
acquired work by Artemisia
Gentileschi. Jan Dalley reports
H
mmm. Now, which way to
go? Do I feel like Route A:
all those sumptuous
Italians, including my
favourite, palate-cleansing
Pieros? Or perhaps Route C: Hogarth,
Constable, Turner and more, ending up
through the Monets, van Goghs?
I decide to start with Route B, for no
special reason but that it’s the longest
(35 minutes, we’re promised, as against
25 for the other two). On view will
be Rubens, Vermeer, Rembrandt,
Velázquez, Caravaggio and others, wind-
ing up again through the Impressionists.
Welcome to the post-Covid world of
London’s National Gallery, which reo-
pens to the public today after its long
hibernation. These routes through the
permanent collections follow a one-way
system designed to ensure proper dis-
tancing. I was all ready to rebel against
following the arrows on the floor, which
seem to be the antithesis of the semi-
instinctive browsing and grazing that is,
for me, the essence of gallery-going. But
not only did I not mind, it was actually
quite an interesting way of seeing pic-
tures that are apparently familiar — and
of making me concentrate on them.
During its closure, the National Gal-
lery has been busy with the completion
of a long-running project, which is also
unveiled to the public today. For almost
two years, the largest gallery in the
building, Room 32 — a massive 34
metres long — has been getting a lavish
up-do, its original rich red wall-
coverings, ornately painted and gilded
ceiling details, lunettes with lions and
dolphins all carefully restored. With of
course latter-day ventilation and light-
ing too. Renamed the Julia and Hans
Rausing Room, after the donors of the
£4m budget, it houses the enormous
dramatic 17th-century Italians — Guido
Reni and Guercino, and world-beating
Caravaggios including the “Boy Bitten
by a Lizard” that everyone knows.
Among them, installed in place of
scale, there’s a performative quality to
the work of a good builder. It’s like
watching a sportsman with no move-
ment wasted. There is an incredible
embodied knowledge about how things
work and where things are.”
He points me towards the Instagram
feed of a builder he often works with,
John Perkins: “He posts a concrete pour
and it’s incredible to watch.” Construc-
honour with Caravaggios to the left and
right of her, is a proud new acquisition, a
glowing self-portrait by Artemisia Gen-
tileschi. Artemisia — she is often
referred to by her first name to avoid
confusion with her father Orazio Gen-
tileschi, some of whose (rather less
good) pictures also hang here — has
really only been accorded her proper
status in the past 30 years, and is now
the classicist du jour. Partly because we
are relieved finally to place a woman
firmly among the A-listers, partly
because of her dramatic life story as a
woman who battled every prejudice to
become a highly successful artist, the
first female member of Florence’s pres-
tigious Accademia delle Arti del Dis-
egno, and a survivor of rape who under-
went a very public trial. A full exhibition
of her work, simply entitled Artemisia, is
one of the sad victims of the Covid crisis:
it was to have opened in the gallery’s
Sainsbury Wing in April.
British art-lovers feel a little posses-
sive about Artemisia, because in 1638 at
the invitation of Charles I she came to
London, where Orazio was installed as
court painter to Charles — his is the elab-
orate ceiling in the Queen’s House,
Greenwich, an allegory of Peace and the
Arts. Charles I, the finest collector the
British royal family has ever mustered,
acquired what is probably Artemisia’s
best-known work, “Self-Portrait as an
Allegory of Painting”, which is still in the
Royal Collection.
The National Gallery’s new self-
portrait also has a story. Lost for centu-
ries, it was rediscovered in France in
2017, and has been lusciously restored
Gentileschi’s ‘Self-Portrait as Saint
Catherine of Alexandria’ (c.1615-17)
Wednesday 8 July 2020
Clockwise, from left: an ‘umarell’
watches the renovation of a bridge
in Florence; work continues on the
Sagrada Família in Barcelona;
a London construction site in May
Alamy
tion can be fraught with danger, replete
with skill and perfect timing. “Frank
Gehry said that a building is most satis-
fying when it’s not complete,” says
Emerson, and it’s true. A tower glowing
with construction lights as a concrete
skeleton is an amazing sight. When clad-
ding is added, it somehow takes the raw-
ness away, making the building blander.
I talk also to artist Richard Went-
worth, an acute observer of processes
that most of us in cities take for granted.
“I think it’s free cinema,” he says of
construction, “a movie which Walter
Benjamin would recognise, witnessing
comings and goings, risings and fallings.
Even when not the manual labour of the
pick or the maul, the remote ballet of the
crane and usually invisible driver is
totally admirable.”
He talks to me about the Irish labour-
ers who reshaped postwar London from
a ruin into what it is now. “They’d stand
on a building in army surplus boots tak-
ing the walls out with pickaxes and
sledgehammers. It was the spectacle of a
city being transformed. Heroic gents,
the crafts, the trades, the knowhow.”
With theatres closed and football sta-
diums empty, the city might yet turn to
itself in a quest for new forms of culture.
There may not be an infrastructure in
place yet, there may be no banks of seat-
ing set up around construction sites or
street celebrations for the erection of a
crane but, like the umarells, we might
just find some solace and appreciation
in the skill of labour and the remarkable
spectacle of conjuring architecture from
a hole in the ground.
arup.com/news-and-events/
construction-as-theatre
Seated spectator with Seurat
by the gallery’s specialists. It shows
Artemisia as the martyr St Catherine,
her hand on the instrument of her tor-
ture, a viciously spiked wheel —
although the artist’s strong features, in
dramatic close-up, look firmly out at the
viewer, sombre but undefeated. Defi-
antly unmartyred. It is not only the first
work by Artemisia in the National Gal-
lery, and of superb quality, it’s the first
and only work by a woman in its other-
wise magnificent collection of 17th-
century Italians.
There are other new hangs, too, for
the reopening, including some delicate
19th-century French landscapes — but
Artemisia’s powerful piece, as well as a
personality that reaches down the cen-
turies, steal the limelight. And remind
us that art history, our understanding of
it, and the work of museums and galler-
ies cannot stand still. The Rausings’
mighty gift could make us think, for a
moment, that the British government’s
£1.5bn bailout plan for the arts is not so
necessary after all. But philanthropic
funds for renovations are completely
different from the sheer grinding busi-
ness of keeping our institutions alive
and running, as well as protecting their
staff: besides which, it is only very few
places that can attract this kind of lar-
gesse. A visit to any of our just-opening
museums and galleries, large or small,
brings home to us how essential to life
our cultural institutions are.
nationalgallery.org.uk

Wednesday 8 July 2020
FT series As much as $650bn is lost every year from tax avoidance. With the coronavirus crisis adding to
their fiscal burden, governments are intent on squeezing more contributions from multinationals.
T
he Savoy Hotel has been
welcoming its well-heeled
and connected clientele
for 131 years. But for all
the Art Deco design and the
sublime personal service, the Savoy
loses money. Lots of money.
In fact it has been losing money since
the current owners — Prince Alwaleed
bin Talal of Saudi Arabia and Qatar
Investment Authority — purchased the
hotel in 2005. It recorded losses of
£20.4m in 2018 and £83m a year earlier.
The company’s accounts throw up
a variety of explanations: terrorism,
Brexit and the one-time strength of
sterling. Covid-19 will no doubt feature
in the current period. But there is
another stark reason: in 2018 the Savoy
was carrying £347m of debt on which it
has been paying an interest rate of up to
15 per cent.
The money was lent by The Savoy
Hotel Limited’s immediate parent, a
company called Dunwilco (1784) Lim-
ited, which in turn is owned by a com-
pany called Dunwilco (1783); that
company is owned by Dunwilco (1847),
which is owned by the Savoy’s ultimate
UK-registered parent, Breezeroad Lim-
ited. The debt, which cascades down
through this corporate structure, has
been refinanced or restructured every
year or two.
For the Savoy’s two shareholders —
one of the world’s richest men and one
of the largest sovereign wealth funds —
this convoluted arrangement has two
notable effects: the Savoy’s accounts
seem impenetrable to an outsider and
the business has paid no corporate tax
at all in 15 years.
In the modern world of corporate tax-
ation, the Savoy is far from an outlier.
The hotel is just one of many high-pro-
file international businesses that have
become masters at minimising tax. The
method is simple enough: the Savoy’s
owners lent the hotel money and
extracted untaxed revenue through
interest payments to offshore jurisdic-
tions. (The Savoy declined to comment
on its corporate structure and tax
affairs.) Tax advisers are not short of
other ideas, where needed, to ease a
company’s fiscal burden.
“My view is the existing framework is
totally broken,” says Michael Devereux,
professor of business taxation at the
University of Oxford’s Saïd Business
School. “You can respond to these
problems by blaming multinationals
[for taking advantage of the rules] or
blaming tax havens but I think we have
to blame the tax system.”
Across the world, governments have
responded to the coronavirus pandemic
with massive public spending. They
have given cash payments to citizens
and picked up the wage bills of entire
companies. Fitch Ratings estimates 20
of the largest economies have so far pro-
vided fiscal support of $5tn, or 7 per cent
of their combined national income —
and there could be big bills still to come.
At some stage, governments will need
to start thinking about who will pay for
their ballooning deficits. And that
means they will have a historic and com-
pelling reason to look again at the creak-
ing framework for corporate taxation.
Multinational companies make an
attractive target. The corporate sector
as a whole has been a relatively stable
contributor to the overall tax take: over
the past half century, corporate taxation
accounts for roughly 8-10 per cent of
revenues in OECD countries. Yet over
that same period, tax rates have more
than halved, tax breaks have prolif-
erated and tax avoidance through off-
shore havens has blossomed.
‘We need a fair system’
Behind this anomaly lies an important
corporate divide. Domestic companies
— the broader tax base in most countries
— enjoy little flexibility in the taxes they
pay. But many cross-border companies
have seized the chance in recent dec-
ades to manage down their headline tax
exposure. IMF economists estimated
lost revenues from global tax avoidance
to be as high as $650bn every year.
In the UK, more than 50 per cent of
the subsidiaries of foreign multinational
companies report no taxable profits,
according to a 2019 study by Oxford
university research fellow Katarzyna
Bilicka. In the US, the Institute on Tax-
ation and Economic Policy found that
91 Fortune 500 companies, including
Amazon, Chevron and IBM, paid an
effective federal tax rate of zero in 2018.
Emergency funds injected into econ-
omies have, at times, flowed through to
companies that pay minimal levels of
tax — in the Savoy’s case, by paying for
520 furloughed staff.
Many governments are also drawing
up plans to collect more revenues from
the digital businesses that have pros-
pered through the pandemic — even if
their operations are possibly the hardest
for the 21st century taxman to pin down.
For multinationals, it is cheap populism
to make them scapegoats for soaring
UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
★ FINANCIAL TIMES
FT BIG READ. THE NEW SOCIAL CONTRACT
By Tabby Kinder and Emma Agyemang
‘It’s a matter
of fairness’
Americans are paying more tax since the financial crisis,
but corporations are not 2018: $5.0tn
Value of governments’ fiscal responses (% of 2019 GDP)
1995: $3.3tn
Personal taxes
Social security contributions
Property taxes
Sales tax
Taxes on specific goods and services
Corporate
taxes
Other
1995 2000 2005 2010
Source: OECD
Big companies are paying less tax on their profits,
even since the crisis
Median effective tax rate paid by constituent companies (%)
S&P 500
FTSE 100
1990 1995 2000 2005 2010
Sources: S&P Global Market Intelligence; FT research
Covid-19 budget deficits. But to some
of the finance ministers presiding over
record borrowing, a reckoning is nigh.
“It is simply a matter of fairness,”
The New Social Bruno Le Maire, the French finance min-
Contract ister, told the FT. “We owe it to our citi-
Each day this
week the FT
zens and companies, especially SMEs,
who pay their fair share of taxes,” he says.
explores the
“Digitalisation and international tax
frailties in our
economic and optimisation have created, for too long,
social model and loopholes allowing some companies to
the potential escape taxes. We need to re-establish a
solutions. system based on fair taxation.”
Tomorrow: the
crisis for
He says the coronavirus crisis “has
made this reform more urgent than
millennials
ever”. “It is time for tech companies that
ft.com/thebigread
have been thriving in this crisis to con-
tribute to the public effort.”
Changing the system, however, would
truly need a revolution. Aggressive tax
practices came into sharp focus after the
2008 financial crisis, giving life to count-
less political promises to tighten up.
While a few made progress, it was indi-
vidual taxpayers rather than corpor-
ations who carried the extra burden.
By 2018, a decade after the financial
crisis, big multinationals were paying
less tax as a proportion of profit, accord-
ing to FT research, even though per-
sonal tax had increased.
Today, Europe and America look
closer to a trade war over digital taxes
than setting any bold new global stand-
ards. Yet history suggests existential
stress on exchequers can be the midwife
to fiscal inventiveness: the American
‘For too long, civil war made the US federal govern-
ment first turn to income tax, while con-
digitalisation sumption taxes were initially tested in
and tax Europe to bankroll the first world war.
optimisation Tax campaigners believe the fiscal
hangover of this pandemic might be
have created another such moment.
loopholes, Alex Cobham, chief executive of the
allowing Tax Justice Network, a UK-based inde-
pendent advocacy group, says the world
some cannot return to “dirty” business as
companies usual. “For decades we have tolerated
to escape the idea that paying less tax was just
good business. That mood has gone,” he
taxes’ says. “Pinning down the most aggressive
Race to the bottom in developed economies
Corporate income tax rate (%)
$2.0tn
Range of OECD rates
$0.1tn
2015 2018 1981
Source: OECD
Some fiscal responses to the coronavirus crisis have been vast
Value of fiscal responses (% of 2019 GDP)
Immediate Deferred
fiscal impulse
40
Italy
Germany
35
Belgium
France
30 UK
Portugal
25 Denmark
Netherlands
20 US
Spain
Hungary
15 Greece
2015 2019 0 10
Source: Bruegel
tax avoiders was the big opportunity for
the next decade — now it feels like it
could happen in the next two years.”
‘Harvard of tax departments’
Dozens of factors have eroded the sys-
tem for taxing multinationals: falling
rates; ever increasing cross-border cap-
ital flows; hard-to-resist loopholes; and
aggressive incentives from states des-
perate to attract multinationals.
Since the late 1980s, there has been
a complete change in mindset, one
pioneered and taken to its extreme by
General Electric, America’s biggest
manufacturer by market capitalisation
for most of the past 40 years.
Under the late Jack Welch, who ran
the company from 1981 to 2001, a tiny
corporate tax team was transformed
into a money-spinning entrepreneurial
machine, with 1,200 tax lawyers
£337bn 0%
Leaked estimate of Effective federal
UK budget deficit tax rate paid by
in the current 91 Fortune 500
financial year companies in 2018
spanning five continents. The fruits:
between 2008 and 2015 the company
not only paid no federal income tax in
the US, according to research by the
Institute on Taxation and Economic
Policy, it booked positive tax benefits
worth more than $1.3bn over the seven-
year period.
GE called the report “deeply flawed
and misleading” and claimed to have
paid $32.9bn in cash income taxes glo-
bally over the last decade. But its tax
department has long been acknowl-
edged as one of the most effective.
One of the first tax experts hired by
Welch was John Samuels, a tall, bowtied
former Treasury official. By the time he
left GE in 2014, Mr Samuels was presid-
ing over what was dubbed the “Harvard
of tax departments”. “There was low-
hanging fruit everywhere. Everyone
thought I was a genius, and I’m not and
Germany
Japan
1990 2000 2010
Other liquidity/
guarantees
20 30
was not,” Mr Samuels said in an inter-
view with his alma mater NYU.
Over the years, public and political
unease over these practices has grown.
For GE, this has come to a head in the
UK, where the government is suing it
for allegedly making fraudulent claims
to qualify for a tax break and aims to
recoup at least £1bn, plus interest and
penalties. GE has denied there were any
misrepresentations and is challenging
the case in court.
“Working out where that line between
avoidance and evasion is, and walking
on the correct side of it, has turned out
to be an important part of the tax strat-
egy of major multinationals,” says a tax
expert with knowledge of the GE case.
“The HMRC case raises questions about
the entire political set-up of tax policy.”
Although there were political pledges
aplenty to crack down on aggressive tax
behaviour after the 2008 crisis, it was
often accompanied by governments
offering sweeteners to attract invest-
ment from companies.
“Corporate tax policy has become a
playground for populist impulses,” says
Mihir Desai, professor at Harvard Bus-
iness School. “Grand antagonistic ges-
tures — particularly toward foreign
companies — can be offset by lucrative
deals and patent boxes [a form of tax
break for innovation] that no one
notices. It’s a recipe for an even more
Byzantine corporate tax policy.”
Dan Neidle, head of tax at law firm
Clifford Chance in London, says the
problem with turning to supposedly
easy tax revenue from the corporate
sector is “the numbers don’t easily add
up. You can raise rates, or reform corp-
orate tax from the ground up, and you
won’t make much of a dent in budget
deficits measured in the multiple
$100bn.” Corporate profits are likely to
decline steeply this year and possibly in
2021 too, he adds, reducing revenue.
But the pandemic — and the breadth
of support for business — might harden
political views. Nearly a third of the
companies that received coronavirus
15
loans from the Bank of England are
either based in, or substantially owned
by, a tax haven resident, according to
TaxWatch UK, a think-tank. Baker
Hughes, a GE subsidiary, was granted a
£600m loan despite its parent company
being sued by the UK over the unpaid
taxes going back 16 years.
Pillars of reform
Few reforms are as daunting to inter-
national policymakers as corporate tax.
It essentially requires overhauling prin-
ciples first laid down by the League of
Nations in 1924, which gave the right to
tax a company’s income based on
whether it was physically present in the
country.
These principles still underpin bilat-
eral tax treaties, which are seemingly
oblivious to how the intangible digital
economy has transformed global capital
flows. Working out where profit is
earned is hard for multinationals with a
web of international offshoots. Once the
existence of tax havens is factored in, it
is easy to see why critics view the system
as a 20th century relic.
Political inertia has helped it endure.
“Our tax system is an oil tanker not a
little speedboat and when it creates
waves it creates very big waves,” says
Anita Monteith, tax technical lead and
senior policy adviser at the Institute of
Chartered Accountants of England and
Wales. “You have to change the rules
FT montage; Dreamstime
internationally which is not easy; it
causes recrimination and there is a risk
of retaliation.”
Since the 2008 crisis, at the bequest of
60 the G20, the business of global tax reform
has fallen to the OECD and Pascal Saint-
50 Amans, a former French Treasury offi-
cial who now runs the Paris-based
40 organisation’s tax administration. He
US admits that to some countries tax regu-
30 lation remains “a four-letter word”.
“We have global players but local sov-
20
ereignty,” he says. “These global players
UK can play sovereignties one against the
10 other. The absence of regulation by
countries for fear of losing their sover-
0 eignty has meant countries de facto
2019 losing their sovereignty.”
After years of behind the scenes hag-
gling between 137 countries, the OECD
efforts are now focused on two reforms
to better capture tax from multinat-
ionals. The first, so-called “pillar one”,
strengthens the right of countries to tax
corporate income from sales on their
territories, regardless of where the com-
pany is legally located (a boon for most
big economies and a loss for tax havens).
“There will be winners and losers,”
says Ross Robertson, international tax
partner at BDO. For Europeans, the
attraction is capturing a bigger slice of
US tech profits, while the US would have
a bigger claim on profits on European
luxury goods or cars sold in America.
The second pillar attempts to set
40 50 a minimum level of tax applied to all
multinationals. The OECD estimates the
two reforms would raise corporate tax
‘Countries revenues by 4 per cent worldwide, total-
ling $100bn annually.
which have Mr Saint-Amans has conceded the
bought out year-end deadline for a deal sounds
“insane”. That was even before Steven
companies Mnuchin, US Treasury secretary, called
will expect for talks to be suspended last month,
complaining that they had become an
that when exercise in others taxing Silicon Valley.
they are back He also threatened to hit European
in profit, countries with tariffs if they went ahead
with unilateral digital taxes.
they will not Despite these obstacles, Mr Saint-
put those Amans says that given the corporate
bailouts during the pandemic, govern-
profits in tax ments will want to hold multinationals
havens’ to a higher standard of behaviour.
“Countries which have bought out com-
panies will expect that when they are
back in profit, they will not put those
profits in tax havens,” he says.
Perhaps the most sobering aspect of
the OECD process are its limits in a
post-Covid-19 age. Even $100bn of extra
corporate tax will be a modest contrib-
ution to the world’s fiscal consolidation.
A leaked UK Treasury document esti-
mated a £337bn deficit in the current
financial year. By comparison, the coun-
try’s digital services tax is forecast to
raise £280m this year.
When the epic fiscal repair job begins
in earnest, radical options may be con-
templated that both bring in serious
revenue and offer the promise of poten-
tially being more equitable.
Some scholars advocate an expansion
of carbon taxes; OECD data reveals 70
per cent of energy-related CO2 emissions
across rich and developing countries are
entirely untaxed. Others have proposed
forms of consumption tax, which would
tax business income at the destination
goods or services are purchased. Both
ideas have the potential to keep OECD
negotiators busy for a long time.
Whatever steps are taken, the tax his-
torian Joseph Thorndike sees one thing
as being almost certain: “In an emer-
gency, everyone pays more.”
Additional reporting by Alex Barker and
Paul Murphy

16
WEDNESDAY 8 JULY 2020
Traps ahead on Biden’s
path to the White House
The elusive candidate will have to be more visible before the poll
Thirty-two years after he first ran for
the White House, Joe Biden seems
increasingly likely to make it his home.
The Democrat holds a handsome poll
lead over Donald Trump. He is not just
ahead in Michigan and Pennsylvania
but also competitive in the “redder”
states of Arizona and North Carolina.
In June, he outperformed the president
in campaign fundraising.
His surge is simple enough to
explain. Mr Trump’s response to the
coronavirus pandemic fused technical
incompetence with bizarre rhetoric.
He then met the police killing of George
Floyd with incendiary actions against
protesters. Throw in the recession, for
which he is less culpable, and the US is
going through one of its worst years in
peacetime. It would be perverse if the
mood were for continuity rather than
change. A poll conducted for the FT
showed that Americans, especially in
the south and west, are becoming ever
more pessimistic about the future and
the chances of an economic rebound.
For all the encouraging signs, though,
Democrats are among the least exuber-
ant people in Washington. Some have
never trusted the polls since they failed
to predict Mr Trump’s victory over Hil-
lary Clinton four years ago. They are
right to be cautious. But this has less to
do with the polls themselves (which
did not err quite as much in 2016 as
sometimes billed) than with the way
Mr Biden has built his lead in them.
The former vice-president has been
a relatively quiet candidate. His surge
took place during the lockdown, when
he could pick and choose his public
interventions. As such, his core liability
— a verbose, error-prone speaking style
— has been little tested. Nor has he had
to define positions on many issues. His
line on the recent spate of statue-fell-
ing, for instance, is hard to make out.
There is no disgrace in this circum-
spection. Mr Biden has no duty to
Lloyds proves there is
merit in being sensible
A new CEO at the high-street lender must look for growth in the UK
António Horta-Osório, the outgoing
chief executive of Lloyds Banking
Group, arrived in 2011 with one job to
do. The bank was recovering from the
traumatic events of the financial crisis,
when it had been tempted into the dis-
astrous acquisition of its UK rival, Hali-
fax Bank of Scotland. The bank’s lead-
ership had been so eager to grasp the
long-cherished prize of domestic con-
solidation that they did not realise
HBOS was, in fact, a poisoned chalice.
Its losses eventually forced the British
government to bail out Lloyds and take
an equity stake in what was then — and
still is — Britain’s biggest retail and
small business lender.
The after-effects of those tumultu-
ous years have kept Mr Horta-Osório
busy. Not only did he have to repair the
bank’s balance sheet but also pay out
more than £20bn in mis-sold payment
protection insurance, where Lloyds
had been one of the worst offenders.
This firefighting put on hold the bigger
strategic question that has dogged
Lloyds for more than 30 years. Its dom-
inance in the UK market is its greatest
strength, but also a potential weakness.
Mr Horta-Osório eschewed ideas of
buying banks in other geographies and
instead chose to commit to the UK
economy by buying another UK-fo-
cused business, a credit card operation.
In many ways, Mr Horta-Osório was
following the lead of one of his prede-
cessors, Brian Pitman. Sir Brian flirted
with big acquisitions, trying to buy first
Midland Bank and then Standard Char-
tered. Eventually he chose to concen-
trate on improving Lloyds itself, focus-
ing on what retail customers wanted
and shareholder returns. The strategy
— largely followed by his successors,
most notably Eric Daniels — created a
domestic franchise and proved to be a
strength in the run-up to the financial
crisis which exposed the expensive
expansion sprees of many of Lloyds’
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interrupt his opponent while he is
making a host of mistakes. But then nor
is it a tenable strategy until November.
At some point, Americans will have to
see and hear more from the candidate.
At the very least, there will be televised
debates with president Trump in the
autumn. When the public exposure
comes, Republicans will seek to tease
out the ideological rifts within the
Democratic world. There is no lack of
them.
Mr Biden is a life-long moderate in a
party with an ever more assertive
leftwing. Not just on matters of iden-
tity, but on economics, he will have to
reconcile the protest movement, which
is restless for change, with the subur-
banites who voted Democrat in the
2018 midterms. At the moment, each
side can project on him whatever they
wish. The more specific he becomes,
the more he risks the disappointment
of one or the other. His choice of run-
ning mate will just be the first of many
fraught moments ahead. His campaign
has been smooth, even masterly. But it
has not been stress-tested.
As for Mr Trump, if his Independ-
ence Day speech is any guide, he
intends to turn this election into a cul-
ture clash. He plans to pose as the
defender of US history against those
who would “defame” and “erase” it. As
a campaign message, it is a recourse —
he had hoped to run on a booming
economy — but it could nevertheless be
a potent one.
Mr Trump will never be able to por-
tray Mr Biden himself as a radical. A
40-year record, in which he voted for
conservative policies on crime and wel-
fare, screens him against that charge.
But the president might be able to
frame him as too weak to stand up to
the radicals. If he has failed thus far, it is
partly because his opponent is so elu-
sive. Mr Biden cannot keep that up for
another four months.
peers. The strategic challenge has not
gone away, however, and the question
of diversification from the reliance on
the UK will have to be tackled.
Today’s economic crisis together
with Brexit could make the next two
years almost as challenging as when Mr
Horta-Osório took over. The changing
nature of the banking industry also
means it will be difficult for a new chief
executive to repeat Sir Brian’s
approach. The rise of financially savvy
challenger banks and fintech compa-
nies, which can provide many of a
bank’s functions, will be difficult to
stop. The introduction of Open Bank-
ing in January 2018 to reduce the
advantages of incumbent high-street
lenders may have been slow to start but
is gathering momentum. A large
branch network — Lloyds has more
than 2,000 branches throughout the
UK — no longer carries the competitive
advantage it did. Digital transforma-
tion would have topped the agenda for
any successor but given the downturn,
a new chief may be tempted to put that
on hold.
They should resist the temptation to
postpone the revolution. Britain’s post-
Covid economy looks set for, at best, a
period of pedestrian growth. History
suggests expanding from a strong
domestic base by buying weak global
franchises usually ends in failure. A
new chief executive will therefore need
to work out how the bank can improve
its profits against tough competition in
the UK. This will involve further cost
cutting and exploiting Lloyds’ market
share by creating new products. Sir
Brian, drawn by the cost efficiencies of
the digital transformation, would prob-
ably have been a keen supporter. Mr
Horta-Osório’s successor should heed
the lessons of the past and ignore the
siren calls of international diversifica-
tion — and concentrate on making the
UK bank fit for the future.
★ FINANCIAL TIMES
Letters
Investing in low-cost housing will soften the blow of recession
Following announcements by the
prime minister last week (Report, June
30), we are concerned that government
may be about to miss a historic
opportunity to boost the economy,
create jobs and protect the country
from recession.
The government’s £12bn funding for
affordable housing over five years from
2021 is far short of what is needed to
keep housebuilding even at its current
low levels. Currently low-cost housing
to rent and buy is funded mostly by
housing associations and private
developers. Housing associations had
£34bn in capital commitments to fund
development at the end of the last
Mass organisation is only
bulwark against oligarchy
Martin Wolf (“Democracy will fail if we
don’t think as citizens”, FT Big Read,
July 6) is correct to ring an alarm bell
for the fate of democracy in western
societies. However, his diagnosis misses
some key elements.
In the political sphere, our political
parties have declined from being mass
organisations that represented all parts
of society to being largely the preserve
of an educated elite. At the same time,
power has been delegated to
transnational bodies via treaties, and
the courts are increasingly used by the
elite to trump politics. In the economic
sphere, deunionisation coupled with
offshoring, and the importation of
cheap labour, have weakened worker
bargaining power and have led to
workers falling behind economically. In
the cultural sphere, the decline of the
churches and other civic institutions,
has meant that there is now little push
back against the increasingly intolerant
values of a woke elite.
The only way the silenced majority
have been able to make their views
heard is by voting for populists such as
Trump, Farage and Johnson. Despite
the attempted demonisation of these
figures, thankfully none of them are
tyrants. However, it is unlikely that any
of them alone are going to be the
saviours of their peoples.
It is only through countervailing
power structures that genuine
democracy can be salvaged. The mass
of citizens lack money and status, and
have only one source of power — their
numbers. They can affect politics,
economics and the culture only
through mass organisations answerable
to them. It is only through building and
rebuilding these that we can hope for a
better society. The alternative is an
increasing drift towards oligarchy.
Jonathan Notley
London W3, UK
Welfare of citizens should
always be a priority
In his FT Big Read (“Democracy will
fail if we don’t think as citizens”, July 6)
Martin Wolf is right to say that
democratic states should prioritise “the
welfare of all their citizens”; that all
citizens should have access to an
education that allows them to
participate in the economy; that every
citizen should have protection at work;
that successful citizens should pay
sufficient tax to sustain that society;
and that politics should be open to all
citizens, not just the wealthiest few.
But why does any of this need to be
Wary
optimism on
the British
high street
Notebook
by Sebastian Payne
financial year, but with competing
demands for investment and a reliance
on market values to fund affordable
homes, this is no longer sustainable.
If we are to scale up the supply of
genuinely affordable rented homes and
boost home ownership, a fiscal
stimulus will be needed.
Without increased government
investment or sharing of sales risk,
housebuilding across all tenures will go
down and the coming recession will be
deeper and longer than necessary. It is
an inevitability without action.
This can be avoided by putting good
quality affordable housing
infrastructure, construction and
said in the first place? What intellectual
sleights-of-hand, and what moral
gymnastics, have been performed by
elites for this to be anything other than
common sense?
That’s the real question, and it
should prompt some soul-searching.
Leo von Bülow-Quirk
Founder & Director, VBQ Speakers
London E8, UK
Switch focus to Wirecard’s
supervisory board
The FT’s coverage of the Wirecard
scandal has been instrumental in the
exposure of a vast fraud there, but I
find it odd that you concentrate your
attention on the auditors without a
word about the responsibility of the
supervisory board.
At least in the UK it would not be the
shareholders who choose the auditor
(“After Wirecard: is it time to audit the
auditors?”, FT Big Read, July 4), but the
audit committee of a company’s board
that recommends one.
Certainly the auditors are not
without blame in this case, but one
wonders why the supervisory board’s
feet are not being held to the fire as
well. In particular, the independent
members of that board, starting with
Stefan Klestil (independent deputy
chairman of the supervisory board)
and other independent members —
Anastassia Lauterbach, Vuyiswa V
M’Cwabeni, and Susana Quintana-
Plaza — must all bear some
responsibility.
One of them [Ms Lauterbach] claims
to be “as well versed as it gets when it
comes to economic topics”. Too bad
this did not include accountancy!
John V Baldwin
Cernobbio, Italy
Southwold is a gorgeous English
seaside resort. Perched on the eastern
edge of the British Isles,
holidaymakers flock here in their
thousands — many to second homes
away from London. Reflecting the
palpable wealth of those who shop
here, its high street has few chains,
almost no empty shops and plenty of
upmarket pubs and cafés.
England, including Southwold, has
been shutdown since March. When
the lockdown was mostly eased last
weekend, it was hard to spot the
difference with an ordinary summer’s
day. The heart of this town is more
than just retail: the high street is the
core of a small community where
people gather for socialising as much
as shopping — a mix other small
towns need to emulate.
Most of Southwold’s outlets are
trading prosperously again. Emily,
who serves coffee from Harris and
James near the beach, says the town
has developed a new rhythm. “It’s
almost back to normal — except for
the plastic screens. We’ve had a steady
stream of people this weekend and the
customers seem to have adjusted
pretty well.”
The jewel in Southwold’s crown is
Adnams, the family brewery that
employs 552 people through 50 pubs
and 13 shops. Its typical customers are
middle aged folks with “quite a degree
of affluence” says chief executive
Andy Wood. Yet this 150-year-old
brewery, still based in its Victorian
buildings near the high street, has had
to act rapidly to adapt to the
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to the FT Editorial Complaints Commissioner: complaints.commissioner@ft.com
sustainability at the heart of the
recovery. It would drive the economy,
create jobs and opportunities, and
address the critical inequalities that
Covid-19 has exposed. The people of
this country who have seen us through
the health emergency deserve a good
home at a price they can afford.
A housing-led economic stimulus
would give government a significant
bang for its buck, paying for itself in
the long-term and adding £320bn to
the economy by 2070. It would support
the construction industry which, for
context, contributed £117bn to the UK
economy in 2018. It would protect and
create jobs in different sectors, save the
The tricky question of
Hong Kong dollar’s future
Referring to Gideon Rahman’s column
(Opinion, July 7) there are indeed
other reasons why Hong Kong cannot
ever be another Singapore. After
independence, Singapore took the hard
decisions to forge its own future, based
on its own currency supported by
sound fiscal, monetary and broader
economic policies. Business has had to
focus on achieving external success.
Hong Kong never took such
ownership of its future. Its exchange
rate had evolved messily to be a hard
peg to the US dollar. This has precluded
pursuit of policies tailored to achieving
competitiveness and broadening the
base of its economy. Instead, Hong
Kong’s leadership and business have
merely imported US monetary policies,
whether or not appropriate to local
circumstances, leading to inevitable
boom-and-bust cycles. Business has —
unsurprisingly — opted more narrowly
for rent-seeking and asset price
speculation.
In the future the Hong Kong dollar
will disappear, replaced by the Chinese
currency. One country does not often
have two currencies. How that shift
occurs is moot. A rational leadership
would re-peg the Hong Kong dollar to
the Chinese currency to minimise costs
and potential trauma of the inevitable
transition. It would have been better to
make the switch before people, as now,
start counting the years to the end of
two systems.
Alex Erskine
MD Erskinomics Consulting
Neutral Bay, NSW, Australia
What about the same
rights for Syrian refugees?
So the UK wants to give refuge and
accelerated citizenship to 3m Hong
Kong residents — many if not most of
whom are economically well off, and
already have third country residence
rights, and several other potential
resettlement opportunities worldwide.
How about the 3m Syrians who are
genuine refugees — with no food, no
shelter, no security, no safety, no access
to medical care or education, and no
homes to go back to?
Perhaps the UK prime minister
needs to give consideration to more
humane priorities; he would do well to
remember Abraham Maslow’s
hierarchy of needs, which he must
have surely been tutored in, at the posh
educational establishments he had the
privilege to attend?
Raj Dorai
London TW4, UK
circumstances enforced by Covid-19.
When lockdown began in March, 80
per cent of Adnams’ revenue
evaporated. Now, the indications of
brisk recovery are emerging. “One
swallow doesn’t make a summer, but
we saw demand over the weekend in
our pubs at about 70 per cent of what
we’d normally see, which I was quite
encouraged by,” Mr Wood says.
During lockdown, Adnams
expanded online operations while
temporarily closing physical outlets.
Rather than mainly selling beers and
spirits to pubs and supermarkets, it
focused on sales directly to drinkers.
The new on and offline mix will
probably continue. “We’re in a
relatively good position, but we
mustn’t be complacent,” the CEO says.
Well-heeled high streets are not the
only ones that appear to have
survived the worst of the lockdown.
Richard Holden, Conservative MP for
rural North West Durham, says “most
things were open on my high streets
with only a handful still closed. It’s
nowhere near as bad as people
predicted . . . everyone is happy to be
back open and people are happy to be
out again.”
As with much else in the British
economy, coronavirus will exaggerate
existing trends — particularly the shift
away from shopping-dominated
malls. Helen Dickinson, chief
executive of the British Retail
Consortium trade group, says
companies are taking a tough look at
the need for so much physical space.
“The British high street is no longer
Wednesday 8 July 2020
Email: letters.editor@ft.com
Include daytime telephone number and full address
Corrections: corrections@ft.com
exchequer money by reducing the
mammoth £23bn annual housing
benefit bill, and save the NHS millions
of pounds each year.
The key message last week was
“Build, Build, Build”. Sharing risk and
ramping up capital investment in
affordable housebuilding to match
housing associations’ own investment
would be “Win, Win, Win” and help
secure a decade of growth, jobs, quality
homes and prosperity.
Lord Kerslake
Chair, Peabody
Brendan Sarsfield
Chief Executive, Peabody
London SE1, UK
Unesco has role to play
in Hagia Sophia debate
Having grown up in Ravenna, Italy
until I was 18 years old and studied and
worked in Milan (as well as having had
other work stints in Istanbul), I was
enthralled by the article of Laura Pitel
concerning the threat to the status of
Emperor Justinian’s Hagia Sophia in
Istanbul (“Museum or mosque:
Erdogan stokes debate over Hagia
Sophia’s future”, Report, July 4).
It is worth mentioning that the
architectural crown jewel of Istanbul
derives its design and construction
from two masterpieces of the last two
capitals of the Roman empire after
Rome: Milan and Ravenna.
One is Milan’s San Lorenzo Maggiore,
the largest centrally-planned Early
Christian church, built in the fourth
century. It is an imperial basilica that
confirms the role of Milan as capital of
the west, in rivalry with Rome and
Constantinople (later Istanbul).
The second is in Ravenna, capital of
the Western Roman empire after Milan
and of the subsequent kingdoms of
Odoacer and Theodoric from 402 until
Justinian’s reconquest in 540. This is
the octagonal Basilica of San Vitale,
begun under Theodoric in 525 and
completed under the Byzantines.
It is crucial to remember both are
sites of Unesco World Heritage, which
currently dictates that they must be
accessible to everyone. Thus any
change to Hagia Sophia would require
approval from Unesco’s World Heritage
Committee.
Paolo Giulianini
London SW5, UK
Split share structure may
be a way out of HSBC bind
HSBC is in quite a pickle (“Lex letter
from London: the agony of HSBC”. June
11). The only sensible way out is to
divide the company into two with
existing shareholders receiving shares
in both companies. Politics in business
is messy and does not pay — like the
non-existent HSBC dividends.
Ian Ferguson
Dawlish, Devon, UK
Correction
c A comment in an article on July 7
about German industrial output taking
longer than consumption to “find its
feet” after the Covid-19 crisis was from
Melanie Debono, economist at Capital
Economics, not Rosie Colthorpe, econo-
mist at Oxford Economics. We apologise
for the error.
all retail, it’s about being an integral
part of the community. The
reimagining into a broader purpose
was already under way, but now it’s
crucial. The lockdown has shown us
the importance of community and
care to people’s wellbeing and we need
to build on that,” she says. Prime
minister Boris Johnson’s government
is aiding that shift: by relaxing
planning laws, it has brought more
alfresco dining to British high street,
despite the frequently inclement
weather. But the expansion of online
retailing adds to another major
challenge facing town centres:
business tax rates. Although
chancellor Rishi Sunak has granted a
rates holiday until next April,
Southwold’s small retailers are fearful
of the cliff edge. Some say they hope
to save up whatever cash they can this
summer ahead of more difficult times.
So far the government has given
high streets what they have asked for
since the pandemic began — relaxing
taxes and creating a generous
furlough scheme. But as physical
shops decline in importance, there is a
growing need to cut taxes on them to
match. As one Tory minister remarks,
“if I was prime minister for a day, I
would slash business rates and
conjure up a rent assistance package.
It would empty half of my post bag.
Our voters need to feel their local
community is strong and a thriving
high street is part of that. Even if there
are fewer shops than before.”
sebastian.payne@ft.com

Wednesday 8 July 2020
Raghuram
Rajan
I
ndustrialised Europe and east Asia
seem to have contained the first
wave of the virus. News elsewhere is
bleaker. Brazil is an unfortunate
standout, vying with the US for the
largest number of identified new cases.
Cases in south Asia, Latin America and,
increasingly, Africa, are climbing. Death
rates in these less-industrialised coun-
tries are still relatively low. But the eco-
nomic damage they will suffer is higher.
Given actual or perceived fiscal con-
straints, few of these countries sup-
ported poor households or small and
medium-sized businesses significantly
during lockdown. Many also opened up
before they contained the virus, in order
to prevent further economic damage.
The world falls
apart as the US
withdraws
Martin Wolf Economics
An American administration that
has dismantled its own government
makes a stark contrast with China
C
ovid-19 has not transformed
the world, at least so far. But
it has accelerated its devel-
opment, technologically,
socially and politically. This
has been strikingly true in international
relations: the divide between China and
the west and the failure of US leadership
of the west have both deepened. The
western-led world order is in crisis. If
the US re-elects Donald Trump, this will
be terminal.
China is increasingly assertive. It pays
no respect to western pieties about
human rights, as shown in the brutal
treatment of the Uighurs and the new
security law in Hong Kong. Under Xi Jin-
ping, emperor for life, the assertion of
China’s status as a superpower and a
despotism is complete. The abandon-
ment of Deng Xiaoping’s celebrated
advice to “hide your strength, bide your
time, never take the lead” is unambigu-
ous. Yet China must also be a partner in
managing every global challenge.
The west has valuable assets in any
competition for influence with China.
Many still admire its core values of free-
dom and democracy. Western cultural
and intellectual influence remains far
greater than that of China.
The US has been able to create and sus-
tain long-lived alliances of like-minded
countries. If one adds together the
nations that naturally align with the US,
including those of Europe, Japan, South
Korea, Canada, Australasia and, increas-
ingly, India, their economic and political
weight remains huge. (See charts.)
technology
Elaine
Moore
A
pology videos by YouTube
influencers are so inescapa-
ble that they have blos-
somed into a recognisable
format. The set-up is care-
fully planned so viewers are not dis-
tracted by mansions, sports cars and
other evidence of YouTube-generated
wealth. Wacky jump-cut edits and vis-
ual effects are also out. The idea is to
demonstrate total sincerity while star-
ing damp-eyed into the camera and
asking fans (and advertisers) for
forgiveness.
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Pursue self-interest by helping other economies
But their recoveries are weak. Fear and
uncertainty have kept domestic con-
sumers at home. Disrupted trade, for-
eign investment and tourism have
curbed overseas demand.
The longer this persists — and rising
infections suggest that worse is still to
come — the more that even viable, large
domestic corporations will have to bor-
row to stay afloat. If lenders do not write
down corporate loans, many of these
over-indebted firms will then be unable
to finance their recoveries when
demand improves. Yet lenders may also
lack the capital to absorb accumulating
loan losses. As a result, corporate over-
indebtedness will restrain growth long
after the virus subsides. Massive unem-
ployment will in turn drag many house-
holds back into poverty, increasing the
risks of social and political conflict.
Unlike industrial countries that may
lose a year or two of growth, these coun-
tries risk losing a decade or more.
What can these struggling economies
Yet things have fallen apart. The US
has succumbed to fierce internal divi-
sions that have ended up in a destruc-
tive zero-sum nationalism. Mr Trump is
the embodiment of these divisions, as
former secretary of defence Jim Mattis
has asserted. He is also the chief protag-
onist of his country’s rejection of its his-
toric role as global model of liberal
democracy and leader of an alliance of
similarly inclined countries.
Mr Trump’s is a post-values US. It is
also post-competence. Even when peo-
ple around the world did not like what
the US did, they thought it knew what it
was doing. The frightening success of
the Trump administration in disman-
tling government has transformed that
view during the coronavirus era.
This president and administration
neither want to govern nor know how to
do so. The contrast with China, for all
the latter’s initial failures in managing
Covid-19, is stark. In an article in The
Atlantic, James Fallows describes the
systematic dismantling of the world-
leading US system of pandemic
response. But the failure was not just
due to the crippling of the government.
It was also due to the character of the
malevolent incompetent who runs it.
The world has noticed. US prestige
and credibility have been grievously
damaged. It is symbolic of the break-
down in relations among the core alli-
ance that the EU, which has gained
incomplete, but real, control over the
disease, is not planning to allow Ameri-
cans back in, yet.
Apology YouTube videos are the ‘new new thing’
In the past fortnight, two of YouTube’s
longest serving and biggest stars —
Jenna Marbles and Shane Dawson —
have uploaded mesmerising examples.
Ms Marbles, a 33-year-old usually
adorned in goofy colours and accompa-
nied by tiny dogs, looked sombre as she
apologised to her 20m subscribers for
dressing as black pop star Nicki Minaj
and making fun of Asian people in vid-
eos. She ended by declaring that she was
stepping away from YouTube.
A day later Mr Dawson, a 31-year-old
fond of skits and conspiracies, apolo-
gised for “all the racism” he had put
online, including wearing blackface. Mr
Dawson, who has become a sort of
YouTube Boswell by making documen-
taries about other influencers, also
attempted some meta-analysis. “Every
apology video I’ve ever made has been
through fear,” he said softly. “It’s me sit-
ting at home thinking the whole world
★ FINANCIAL TIMES
Opinion
do? The faster they control the virus, the
less damage there will be to fix. Beyond
this, their governments must expand
the resources they can devote to eco-
nomic repair and recovery.
The poorest countries should nego-
tiate lower sovereign payments to
Industrialised Europe
and Asia have contained
the virus but elsewhere
prospects are bleaker
external creditors, including private
ones. The rest should expand sovereign
borrowing capacity by committing
to return to fiscal viability over the
medium term, for instance via leg-
islated debt reduction targets. They
should shelve unnecessary spending
and, where feasible, sell state-owned
assets. The resources thus raised
China’s economy has risen enormously, but
those of the democracies are still bigger
GDP based on purchasing power parity,
share of world total (%)
Russia Others*
China India
China Large China
& Russia democracies & Russia democracies
2000 2019
* Japan, S Korea, Canada, Australia, New Zealand
Source: IMF
In a Foreign Affairs article, Francis
Fukuyama argues that the foundation
of any political order, quite obviously so
in a pandemic, is an effective govern-
ment. In an earlier work, he argued per-
suasively that the ideas of the rule of law
and accountability to citizens through
democratic political processes are
founded on this: if the state does not
work, nothing does. The Trump admin-
istration appears determined to prove
this hypothesis.
An alliance of liberal democracies
Absence of rule of law and
accountability makes the
Chinese state too strong
and civil society too weak
hates me and crying and hyperventilat-
ing and then just turning on the webcam
and just saying I’m sorry and hoping
people know I’m a good person and then
it will go away. And that is just stupid.
It’s something a child does. Not some-
thing a 31-year-old man does.”
Racism highlighted by
Black Lives Matter has
left many millennial
influencers floundering
The racism highlighted by Black Lives
Matter has left many millennial influ-
encers floundering. Some of YouTube’s
most popular creators have long made
racist jokes under the guise of “dark
humour”. For those who leave the plat-
form or whose videos no longer carry
should be used where needed most.
Instead of bailouts, governments should
encourage debt renegotiation outside of
bankruptcy by strengthening media-
tion structures, and reforming bank-
ruptcy systems that take too long or are
biased toward liquidation.
Corporate and bank capital will be
depleted as losses are realised. So limits
on domestic investors, such as pension
funds, investing in such capital should
be relaxed within broad prudential
norms. Foreign investment in risk capi-
tal should also be welcomed. If viable
firms still need capital, especially in the
crucial financial sector, governments
should provide it on fair terms. This is a
high value use of funds.
Another is support for the poorest
households, especially if the pandemic
drags on. Targeted transfers, sufficient
to support life, are morally right, sup-
portive of demand, and may keep anger
from exploding into social conflict.
Brazil’s recent programme offers a
China and Russia are still
relatively poor countries
GDP per head at purchasing power
parity ($000s, 2019)
US China and Russia
EU and UK
US
Australia
Canada
Japan
South Korea
EU (including UK)
New Zealand
Large Russia
China
India
0 10
Source: IMF
dedicated to creating a counterweight to
China in some areas, while co-operating
successfully with it in others, is conceiv-
able. But it will not happen if the US does
not recreate itself as a functioning state
led by a president who does not admire
every authoritarian he meets. Harold
James, professor of history at Princeton,
has even written a gloomy article about
“Late Soviet America”.
Yet modern China has weak founda-
tions, too. Its state is unquestionably
effective and its people hard working
and entrepreneurial. But the absence of
a rule of law and democratic accounta-
bility makes the state too strong and
civil society too weak. China did well
when opening up to the world, as it did
over the past four decades. But, if the
world closes down, it will become
harder for it to progress so rapidly.
adverts, the financial fallout will be sig-
nificant. “I loved you, I looked up to you,
hell I thought of you as a father figure,”
wrote one fan under Mr Dawson’s video.
“But honestly I’m disgusted, and . . . I’m
gonna have to burn some merch.”
YouTube responded by suspending
monetisation on Mr Dawson’s channels.
For YouTube, the cultural reckoning
is a chance to reassess the chaos of user-
generated videos. Like Reddit, Face-
book, Twitch and Twitter, the company
is keen to prove to regulators and adver-
tisers that it takes a firm stance on
malevolent content. It already allows
advertisers to avoid certain types of vid-
eos. Last week, it announced an inexpli-
cably delayed decision to ban white
supremacist channels. For now, it has
avoided an advertiser boycott, unlike
Facebook. That’s just as well. In Febru-
ary, parent company Alphabet cracked
open YouTube’s financial details for the
model. Repair will do little, though,
without a rapid recovery of demand.
With fiscal resources limited, govern-
ments will be unable to stimulate much.
So recovery will depend on external
demand, be that from exports, invest-
ment or tourism.
By the time these countries tame the
virus and reopen, the more developed
and industrial countries — assuming no
second wave of infections — will be on
their way to economic recovery, which
the rest can then piggyback on.
Yes, the poorest countries will benefit
from debt relief, while others will need
multilateral loans. But most of all they
will need uninterrupted trade and
investment flows to help them build on
domestic policies.
Is this wishful thinking? US trade
policy looks ever less predictable as
its presidential election nears. Europe
plans a carbon border levy to protect
industries from being undercut by over-
seas polluters, which could become a
The US and China have both been losing
popularity in the democracies, but the
US is still well ahead
% of those polled in each country
Democracies who have favourable views...
… Of China
2015
Germany
Australia
France
UK
India
Canada
Japan
20 30 40 50 60
Source: Pew Research Center, Global Attitudes Project
In The Narrow Corridor, Daron
Acemoglu and James Robinson explain
the dilemma faced by an effective des-
potism. It can allow entrepreneurs off
the reins, to enormous effect. But, with-
out a rule of law, the result will inevita-
bly be a tidal wave of corruption, which
undermines the regime’s legitimacy.
The ruler may then pull on the reins
once again, forcing people back into
behaving. But it also risks killing off
needed animal spirits.
This is probably what is happening to
the Chinese economy today. Some peo-
ple seem to believe that artificial intelli-
gence and the reaping of vast quantities
of data will allow central planning to
replace the market. Nothing is less
likely. The driving force of change is the
ideas inside people’s heads. No one can
plan for that. People need the incentives
first time and showed how important it
was to Google’s business. Gross annual
advertising revenue was over $15bn in
2019 — equal to about a tenth of the
group total.
Ad boycotts could therefore be a seri-
ous problem. Created in 2005, YouTube
has consistently struggled to cope with
grotesque content uploaded by users.
When Google bought the platform in
2006 for $1.65bn, it had 50m users, but
the cost of streaming videos exceeded
sales. Advertisers had to be persuaded
that homemade videos were a good fit
for brands; over the years, they have
repeatedly suspended accounts, com-
plaining that YouTube put adverts
alongside unpalatable content.
The headache for YouTube is that
removing content risks the anger of
popular creators, particularly those on
the far-right who claim bias against
them. The controversy over YouTube’s
17
protectionist nightmare. Uncertainty
over trade policy makes multinational
firms reluctant to invest abroad. Devel-
oped countries may also constrain out-
ward flows of capital, as financial
repression becomes more attractive as a
way of financing growing public debt.
Yet, out of self interest, the world’s
more industrialised countries need to
avoid beggaring the rest. What happens
elsewhere will not stay there. A decade
of lost growth in the industrialising
world would affect more developed
countries severely. Mass long-term
unemployment will also prompt mass
emigration. Perceptive leaders should
persuade less-farsighted colleagues that
closing borders to trade and investment
will only subject them to endless flotillas
and caravans of the desperate. Sharing
growth is in everyone’s interest.
The writer is professor of finance at the
Chicago Booth School of Business and
author of ‘The Third Pillar’
… Of the US
2019 2015 2019
80 France 80
India
Japan
Canada
60 UK 60
Australia
40 Germany 40
20 20
0 0
FT graphic
to create new and challenging things.
Will today’s more oppressive Chinese
state nurture that?
On the one side, then, we have a rising
despotic superpower, but one with real
frailties. On the other, we have an
incumbent superpower that has lost its
way. I want western core values to suc-
ceed and flourish. I want China to pros-
per, but not at the cost of corroding soci-
eties that uphold those values. I want
humanity to manage its relations peace-
fully and its fragile world wisely. If this is
to happen, the US remains the indispen-
sable power. The problem is not so
much Mr Trump as that so many Amer-
icans want him to lead them. The west-
ern crisis is a crisis of values. We can
overcome it. But it will be hard.
martin.wolf@ft.com
“Rewind” 2018 overview of the year is a
perfect example. The decision to leave
out of the video popular but controver-
sial creators like PewDiePie, who has
joked about anti-Semitism and Nazis, in
favour of brand-friendly creators was
unsubtle. It became YouTube’s most
disliked video, with 18m thumbs down.
Professional content circumvents
some of these problems. Unfortunately,
it is not very popular. YouTube has more
than 2bn monthly users, while its TV
subscription package had just 2m sub-
scribers at the end of last year. So DIY
videos will remain the core of the busi-
ness. Like all social media platforms,
YouTube will have to continue to mud-
dle its way through the impossible
conundrum of neutrality and responsi-
bility. If it struggles to explain its deci-
sions, at least it knows how to apologise.
elaine.moore@ft.com
 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws
18 ★ FINANCIAL TIMES Wednesday 8 July 2020

Gold: ring the changes

Gold prices have surged towards nine-year highs this year. Although jewellery demand makes up most of
consumption, this rally is driven by buyers of bars, coins and ETFs. Falling real US bond yields boosts gold’s
appeal to investors. However, its bull run has begun to look frothy.

Twitter: @FTLex
TikTok/Hong Kong:
worlds apart
Facebook, Google and Microsoft have
stopped processing data requests from
Hong Kong police in response to a
national security law imposed by
Beijing. ByteDance has gone one better
by withdrawing an app from the city
altogether. Hong Kong teens will no
longer be able to upload videos of
themselves on the Chinese company’s
popular app TikTok. Another small
thread connecting the Chinese and US
technospheres has been broken.
Douyin, the censored Chinese
version of TikTok, is still available in
Hong Kong, a territory of little
financial importance to ByteDance. But
TikTok’s new chief executive, Kevin
Mayer, still risks offending Beijing.
Almost 90 per cent of its in-app
spending comes from China.
However, China cannot produce
much more growth for ByteDance; the
market is already saturated. Tech
giants Tencent, Baidu and Alibaba all
compete for top spot. TikTok needs
international users for growth. India,
previously the market with the biggest
number of users outside China,
blocked TikTok last week, citing
security concerns. That leaves the US.
The US is crucial to TikTok’s plans to
become a global social media platform
to rival Facebook. ByteDance’s
revenues, reported to have hit $17bn
last year, already put it well ahead of
microblogging social media network
Twitter. US secretary of state Mike
Pompeo’s threat to close the app in the
US threatens any lift in ByteDance’s
estimated private valuation of $110bn.
Beijing’s new security law means
tech companies in Hong Kong have to
monitor social media platforms and
censor content critical of the Chinese
government or face prosecution. If
TikTok had gone down that path, it
would have certainly lost its US
business. Had it resisted, it would have
followed Google; the search giant was
forced to shut down Chinese operations
after pushing back on government
requests to censor search results.
Mr Mayer must reason that pulling
TikTok from Hong Kong buys
ByteDance time. But in the US-China
commercial war, no group active across
the two countries can expect to keep
both happy for long.
Expect polarisation to deepen. Other
global techs will quit Hong Kong, once
seen as a financial hub.
For Hong Kongers, the new law
signals that their home lies irrefutably
within Chinese borders. That applies in
technology, as in everything else.
Reach/newspapers:
printers bedevilled
Like pubs, newspapers had fallen on
hard times before the pandemic. But
the virus created new reasons for
Britons to forsake daily papers: all sold
under 1m print copies in April.
Advertisers have followed readers
out of the door. Reach, publisher of the
Daily Mirror, Daily Express and many
local titles, is to axe 550 jobs after
quarterly revenues fell 27.5 per cent.
Critics who carp about the death of
newspapers are nonetheless guilty of
peddling fake news. Digital media did
not swing the wrecking ball as
predicted. Newbies such as BuzzFeed
and Vice never lived up to their early
promise. Old school media at least has
the underpinning of familiar brands as
it tries to make the hard switch online.
The New York Times illustrates the
point. Like other publications, it is
smarting from lost ads, projecting that
ad revenues will halve in the second
quarter. But it has received welcome
backing from digital subscriptions.
These are rising, suggesting consumers
are happy to pay for reliable data that
reflect their world view. Surging shares
show that investors buy the model too.
After a succession of transformation
attempts, Reach is rolling the online
dice again. It is targeting a fourfold rise
in registrations to 10m by 2022. Split
into categories, readers will be
delivered to advertisers for a suitably
juiced-up fee. Does that model sound
familiar? It should: Facebook is a
better-known exponent.
Reach shares yesterday fell 13 per
cent. It is the cheapest title on the
newsstand, with an enterprise value of
1.6 times trailing operating profits.
That is far below Daily Mail and
General Trust, whose pre-tax profits
nearly halved in the six months to
March. The latter trades at 16.8 times
compared with NYT at 40 times, S&P
Global says. But DMGT has healthy side
hustles in events and professional
publishing, and strong readership for
Mail Online. Reach is no bargain,
Investors drive gold’s rally
Gold demand (tonnes)
Jewellery
Investment
1,200
1,000
800
600
400
200
0 0
2010 12 14 16
FT graphic Sources: Refinitiv; World Gold Council
Like the metal itself, reasons to buy
gold are malleable. Own the yellow
metal for its untarnishable beauty or
as a store of value, or both.
Jewellery is the largest stable
component of demand. But when
gold soars, as at present, bling starts
to lose its zing. This can presage a
price drop.
Demand for gold as an investment
had outstripped purchasing for
jewellery manufacture just three
times in the past decade. That was
until the last quarter. The switch
suggests that a speculative bubble is
building up.
Gold has rallied 27 per cent over 12
months, outrunning all other traded
commodities in this Covid-stricken
year. The push has been driven by
unfortunately. Investors fear that if it
could reinvent itself, it would already
have done so.
HeidelbergCement:
hard yards
Concrete crumbles if you get the mix
wrong. HeidelbergCement, afflicted by
a similar malady in M&A, is writing
down assets acquired before the
financial crisis. Brexit and coronavirus
contributed to its decision yesterday to
take €3.4bn of non-cash charge.
Two-thirds related to the 2007 top-
of-the-cycle acquisition of Hanson, a
UK corporate raider that became a
humdrum aggregates group.
Better late than never. The charges
Gold prices move inversely with real yields*
Gold price Per cent
($ per ounce)
2,000
1,500 2007
* Sensitivity of gold price to 100bps move of real US Treasury yields (3-7 years)
Returns on gold are getting frothy
Annual % change
1,000
500
18 20 1972 80
Source: Citigroup
anxious investors snapping up gold
bars, coins and exchange-traded funds.
Jewellery retailing has meanwhile been
obstructed by the closure of shops and
postponements of weddings, a trigger
for purchases, particularly in India.
These problems should only be
temporary.Bulls will offer as many
reasons to invest in gold as there are
carats. One of these is that the metal —
primarily traded in dollars — performs
well when real US interest rates
(adjusted for inflation) decline. That
has happened this year, as reflected in
the collapse of US bond yields.
Since 2006, for every one percentage
drop in real US Treasury yields, gold
prices have increased by about a fifth,
according to Citi. The debasement of
fiat currencies by central banks and
will not affect liquidity and this year’s
results were going to be weak anyway.
Expensive deals such as Hanson are the
reason the German group’s balance
sheet carries more ballast than rivals
LafargeHolcim and Saint-Gobain,
depressing returns on capital. Goodwill
accounted for almost a third of total
assets at Heidelberg last year. It is
closer to a fifth at its two competitors.
Another legacy of consolidation is
Heidelberg’s leverage; net debt was
close to three times ebitda at the end of
last year. The Hanson deal pushed net
debt to 6.5 times ebitda. After paying
that down, Heidelberg took on more
debt to buy Italcementi in 2016, shortly
after Lafarge and Holcim completed
their all-share merger. Investors in
both groups have had little to celebrate
since. Total returns from mid-2015 to
10 12 14 16 18 20
+/-1 standard
deviation
90 2000 10
world instability are other reasons for
gold bugs to hoard the stuff.
There is still a case to be made that
the metal is overbought. Real annual
gold price returns are again
approaching those of the 2008-11 bull
run, which were in the 20-25 per cent
area. Back then, retail buyers
beseiged bullion dealers in London.
Afterwards, gold slumped.
Perhaps the best reason to question
gold’s rally is that it is hard to find
bearish commentators these days.
Even crotchety Lex became a
cheerleader early last year.
The current rally is yet young —
less than two years old. But if
economies show signs of sustained
recovery, expect gold to take a
hammering.
the end of last year were flat for
Heidelberg and down a tenth for
LafargeHolcim.
Higher leverage and lower returns
are one reason Heidelberg shares trade
at a discount. They are worth just nine
times two-year forward earnings,
compared with 13 for LafargeHolcim
and 12 for Saint-Gobain. A tidier
balance sheet should help Heidelberg
close the gap on both. Heidelberg’s
expected returns on invested capital
will move to 5.9 per cent for 2021, from
5.3 per cent, thinks Citi. LafargeHolcim
should earn 6.1 per cent, compared
with 8.2 per cent for Saint-Gobain.
The sector will benefit from stimulus
and recovery spending in the US and
Europe. Sweeping up the mess of past
building work puts Heidelberg in a
better position to make the most of it.
40
20
0
-20
-40
Western Union:
-60 down to the wire
-80
To the list of businesses that have been
upended by the coronavirus outbreak,
add this: the money transfer industry.
Global remittances are set to fall 20
80
per cent this year to $445bn, according
60 to the World Bank. The pandemic has
40 paralysed large parts of the global
20 economy and thrown millions out of
0 work. Those at the bottom of the
-20 economic ladder have been hit hardest.
-40 This is bad news for those whose
-60 business is based on helping migrants
20 move money across borders. Western
Union and MoneyGram International,
two of the biggest traditional bricks-
and-mortar participants, have reported
a sharp drop in transactions. Workers
whose jobs or hours were cut have less
cash to send home. Those who still
have means are hampered by shelter-
in-place restrictions.
At Western Union, customer-to-
customer transactions were down 30
per cent in late March and 21 per cent
in April, although the decline eased to
5 per cent in May. Still, investors have
marked down shares in the sector
accordingly. Western Union has fallen
about 25 per cent from its February
high. It had been nursing a steeper
decline before a boost from reports it
was in talks to buy rival MoneyGram.
The pandemic should hasten the rise
of digital upstarts such as TransferWise.
The London-based group is reportedly
in talks to sell shares owned by early
investors and staff at a £4bn ($5bn)
valuation. It was valued at $3.5bn just
14 months ago. Western Union has a
market capitalisation of $8.7bn while
MoneyGram is worth less than $200m.
TransferWise’s appeal is ease of use
and low costs. The group now processes
about £4bn of payments every month
and has branched out into products
such as debit cards and services for
small businesses. It recently received
permission to start offering investment
products in the UK.
Even so, TransferWise is unlikely to
come through the crisis unscathed. The
fact that shareholders are cashing out
for a second time in as many years
should give investors food for thought.
Lex on the web
For notes on today’s breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 Covered in blotches and wet earth
5 Happy laughs from Charles in the
States with comedian Dawson (8)
No. 16,523 Set by GOZO in odd soggy parts (6) 6 Buttoned up about one inept slob
4 Dull bank payment system backed (3,4,3)
        7 Member in bar, musing (3)
cover (8)
 10 Greatly impress from end to end 8 Democrat, hopeful, hugging wife,
of Scottish loch (7) nodding (6)
  11 Muppet dancing round, fast (2-5) 9 Series of six having ten in front
12 Pale blue sign. Not half (4) (5)
13 Pilates exercises causing 14 French fifth son comes in, say,
  
accidents with the rig (10) visiting often (11)
16 Seeing that is part of the 15 Almost in fun, get nine
 landscape (2,4) reconditioned turbo-props (3,7)
17 Pop singer’s genealogical tree 18 Coming soon – about 10.10 – small
  talk finishes (4,4)
about me as subject getting
 
justice (6,1) 19 Part of speech roughly suggests
20 Planned school by eastern sea (7) cost of the meal (4,4)
  21 A drop of the hard stuff for the 22 Intellectual’s hearty laugh at home
lolly-eater, reportedly (6) (6)
 
24 Duty on money owed (10) 23 Single within the boundaries of
 
25 Form of chalcedony – some Headingley, dearie (5)
chalcedony unknown (4) 26 Instrument from borders of Zaire –
 27 Blaze on headland with no main twice (4)
road to Italians’ city (7) 28 Trumpeter’s drink (3)
   29 Retired professors backing the
engineers, at heart British (7) Solution 16,522
30 Poor Sam A. Keen and his double?
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salvo in European republic (8) 5 8 5 ( ( /
2 In Paris, one French female who’s ' ( 7 ( & 7 , 9 ( 6 $ 0 % $
outspoken and explicit (11) 6 ( 7 3 / & % 1
+ 2 1 2 8 5 5 ( 9 ( $ / ( '
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in Austrian city (4) 3 , ( & ( 6 6 7 5 ( 6 6 ( '