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INTEREST RATES

price yield chg

US Gov 10 yr 105.94 0.76 -0.12

UK Gov 10 yr 0.21 -0.07

Ger Gov 10 yr -0.64 -0.02

Jpn Gov 10 yr 100.80 0.03 -0.01

US Gov 30 yr 114.86 1.54 -0.14

Ger Gov 2 yr 105.96 -0.80 -0.01

price prev chg

Fed Funds Eff 0.10 0.09 0.01

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

Joshua Chaffin — Philadelphia

It took Karri Ray a cane, a bottle of water, a folding metal chair and the kindness of strangers to travel the roughly 100 yards from a kerb to the polling place in south Philadelphia to cast her ballot on Tuesday evening. Ms Ray, asthmatic and infirm, was also propelled by something else: a seething contempt for President Donald Trump.

“Anything to get his ass out,” her daugh-ter, Toni, explained during one of three pit stops in which an ailing Ms Ray rested on the aforementioned chair as she gasped for breath.

By yesterday morning, that proposi-tion hung in the balance as the passion and determination of voters in the vital swing state of Pennsylvania had given way to the clerical toil of counting more than 1m mail ballots. It is a task that

could take days, election officials have warned, leaving residents in a collective state of agony. “It’s crazy,” said Anton Moore, the Democratic leader for the 48th ward, summing up the stomach-churning mood.

While nerves were jangling, the con-test was playing out much the way many election experts had predicted — and feared: Mr Trump raced out to a big lead among in-person voters, particularly in the rural heartland that lies between Pennsylvania’s urban poles, Philadel-phia and Pittsburgh.

As of 3am yesterday, he enjoyed a margin of about 657,000 votes over Joe Biden out of more than 5m ballots counted by that point, prompting him to declare victory in a state that is essen-tial to his re-election bid.

But yet to be processed were more than 1m mail ballots from a record 2.5m

cast. The bulk of those are from the big cities and urban areas that are expected to tilt heavily toward Mr Biden. Like Ms Ray, they appeared to be limping — slowly but steadily — across the finish line and narrowing the gap.

Under a contested ruling from the Pennsylvania Supreme Court, mail bal-lots can arrive and be counted up to three days after election day.

The scenario that has stirred near-universal dread is that the race is tight enough that those late-arriving ballots come into play and become the subject of legal challenges that could rise to the Supreme Court.

In anticipation of litigation, the state had ordered that those ballots be kept separate — a process that election law-yers likened to stacking kindling for a fire. The first legal matches were struck

Continued on page 4

Mountain of mail ballots looms over Philadelphia in long push to final tally

© THE FINANCIAL TIMES LTD 2020 No: 40,549 ★

Printed in London, Liverpool, Glasgow, Dublin, Frankfurt, Milan, Madrid, New York, Chicago, San Francisco, Orlando, Tokyo, Hong Kong, Singapore, Seoul, Dubai

As investors reel from the eleventh-hour halting of the record-breaking $37bn initial public offering of Ant Group, controlled by China’s richest man, Jack Ma, officials say they acted to protect capital markets. The block is likely to have come from the very top, perhaps from President Xi Jinping himself. Ant’s IPO created a frenzy with investors but, behind the scenes, regulators are tightening control of China’s booming micro-lending sector.Report i PAGE 8

Beijing halted $37bn Ant IPO ‘to maintain stability’

FT reporters

Donald Trump and Joe Biden both claimed they were on course to win the US election yesterday after a rancorous campaign disrupted by the coronavirus pandemic drew to an end without a clear winner.

With votes still being counted in sev-eral battleground states 24 hours after polls closed, Mr Biden took a narrow lead in Wisconsin, Michigan and Nevada, raising his hopes for an elec-toral college victory — and the White House.

But the Trump camp vowed to fight on and challenge the late counting of votes in the courts. It requested a recount in Wisconsin, saying Mr Trump was “well within the threshold” to

request one and would “immediately do so”. With the count also continuing in Pennsylvania, a clear winner of the 2020 election may not emerge for days.

As states scrambled to count millions of absentee ballots, neither candidate had secured the 270 electoral college votes needed to win the presidency.

Mr Trump defied polls that had shown him trailing significantly head-ing into election day, with his conserva-tive base of supporters turning out in big numbers. The US president won the crucial swing states of Ohio and Florida, as he did in 2016, as well as Texas, a bat-tleground for the first time in decades. Mr Trump also made gains among His-panic voters, a crucial voting bloc for Democrats, in Florida.

Mr Biden won Arizona and also

picked up traditional Democratic strongholds such as California and New York, which award a total of 84 electoral college votes.

The two candidates were focused yes-terday on the states that remained in play: Georgia, North Carolina, Nevada, Wisconsin, Michigan and Pennsylvania, which accepts mail-in ballots within three days of the poll.

The Trump campaign intensified its efforts to cast aspersions on mail-in bal-lots, with the president writing on Twit-ter that he was “leading, often solidly” in key battlegrounds. He added that his lead “started to magically disappear as surprise ballot dumps were counted”.

Mr Biden accused Mr Trump of mak-ing an “outrageous” statement thatwas a “naked effort to take away the

democratic rights of American citizens”.“If the president makes good on his

threat to go to court to try to prevent the proper tabulation of votes, we have legal teams standing by ready to deploy to resist that effort,” Mr Biden said. “And

they will prevail.” Mr Trump has tried to paint the huge number of postal ballots as unanticipated.

However, the state authorities that administer US elections have known for weeks that an unprecedented number of Americans planned to vote early, by mail or in person, because of the pandemic.

According to the US Elections Project at the University of Florida, more than 100m Americans voted before Tuesday, putting the US on course for a record turnout when all the ballots are counted.

The Biden campaign expressed confi-dence that the former vice-president would win because the majority of uncounted ballots in Wisconsin, Michi-gan and Pennsylvania were from heavily Democratic areas — particularly in Michigan and Pennsylvania.

The Trump camp maintained that the president would be re-elected. Bill Stepien, his campaign manager, said: “We are confident in our path-way. We are confident in our math.”

Mr Biden can afford to lose more of the battleground states than Mr Trump and still win the White House.

The Democratic nominee could lose Pennsylvania, North Carolina and Georgia but still prevail if he clinches Wisconsin, Michigan, Ari-zona and Nevada.

If Mr Trump loses Pennsylvania, he can afford only to lose Nevada, which Hillary Clinton won in 2016, if he is to still triumph in the election.Reporting by Demetri Sevastopulo, James Politi, Lauren Fedor, CourtneyWeaver, Aime Williams and Kiran Stacey

News & analysis pages 2-6Oil shares climb page 10Markets pages 12 & 13Janan Ganesh& Gillian Tett page 19Lex page 20

President Donald Trump made key gains among Latino voters, particularly in Florida Carlos Barria/Reuters

‘To impugn absentee ballots as lesser votes is an affront to democracy’ Editorial Comment — PAGE 18

US election on a knife edge3 Trump defies polls with strong showing and vows to challenge late counting of votes in court

3 Biden takes narrow lead in key battlegrounds, raising hopes of winning the White House

Joe Biden won Arizona and also traditional Democratic states such as New York and California Angela Weiss/AFP via Getty

NOVEMBER 5 2020 Section:FrontBack Time: 4/11/2020 - 19:07 User: nick.miller Page Name: 1FRONT USA, Part,Page,Edition: USA, 1, 1

2 ★ FINANCIAL TIMES Thursday 5 November 2020

western states. During the Democratic primary, Mr Biden emphasised he had grown up in a working-class family in Pennsylvania and was a longtime sup-porter of workers’ unions.

Democrats hoped that background would allow him to rebuild the “blue wall” of Michigan, Wisconsin and Penn-sylvania that Mr Trump broke four years ago when he won the former Dem-ocratic strongholds.

Mr Biden had stepped up campaign-ing in Ohio in recent weeks after local Democrats told him he had a chance of victory. But Mr Trump won the rustbelt state with almost the same level of sup-port as he had in 2016, raising concerns about neighbouring Pennsylvania.

Mr Trump had a strong lead in Penn-sylvania early yesterday but the state had more than 1m absentee ballots to count. Democrats were hopeful that African Americans and suburban women in Philadelphia would help Mr Biden win a state that had voted Demo-cratic from 1992 to 2016.

“It’s just still too early to tell because there are so many uncounted mail bal-lots in Philadelphia,” said Brendan Boyle, a Democratic congressman and Biden supporter from Philadelphia as he waited for a result yesterday. “They still have more than half of the vote left to count.”See Editorial Comment, Opinion, Lex and Markets Insight

Mr Biden emerged when results arrived from Florida’s Miami-Dade, a 2.7m-strong heavily Hispanic county that includes Miami. While Florida was viewed as one of the tightest swing states, Mr Biden’s weakness with His-panics in the area appeared to have stopped the Democrats reclaiming the state from Mr Trump.

“We as a party still have a lot of work to expand the number of Latino voters in particular who vote Democratic. What happened in Florida is not accept-able,” said Jim Manley, who served as a top aide to Harry Reid, the former Dem-ocratic Senate leader whose state of Nevada boasts a very large Hispanic population.

Chuck Rocha, a consultant who helped Bernie Sanders win a big propor-tion of Hispanics in the Democratic pri-mary race against Mr Biden, said the Florida result underscored how the Biden campaign erred in the state.

“Tonight proves the Latino vote is a persuadable universe, but Democrats did not treat it as such,” Mr Rocha said. “So we are paying the price for not start-ing early and often, as they did with per-suadable white voters.”

Mr Rocha said that mistake would resonate beyond Florida, though to a lesser extent in states such as Arizona that lacked Florida’s large numbers of conservative Cuban Americans. Mr Biden won Arizona, validating his strat-

Demetri Sevastopulo, Courtney Weaver and Lauren Fedor Washington

By the early hours of yesterday Donald Trump and Joe Biden still did not know who had won the presidential election but one thing was clear: Democrats had not secured the big victory some had anticipated.

Heading into election day, Democrats were not only confident they would avoid a repeat of the surprise loss in 2016, but were counting on several fac-tors to give Mr Biden a strong tailwind. Instead, the Democratic challenger was left in a nail-biting fight to the finish

Democrats had been buoyed by polls that showed Americans — including many Republicans — were frustrated with how Mr Trump had handled the coronavirus pandemic. They banked on suburban Republican women abandon-ing the president and argued that Mr Biden had the right background to win back white, working-class voters who had switched to Mr Trump four years ago. Finally, Democrats believed Mr Biden would do better with black voters than Hillary Clinton in 2016, and would appeal to anti-Trump Hispanics.

But as the world waited for results from key outstanding states — Nevada, Wisconsin, Michigan and Pennsylvania — some of the weaknesses of the Demo-cratic campaign were apparent.

One of the first signs of problems for

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US electioN

Clockwise from main photo: ballots are processed in California; an election watch party at the US embassy in Ulaanbaatar, Mongolia; a Democrat voter in Florida; and, below, Joe Biden, the Democratic candidate — Zuma/DPA/AFP/Getty

Eric Platt and Colby SmithNew YorkKatie Martin — LondonRobin Wigglesworth — Oslo

Fading expectations of a decisive US presidential election win for Joe Biden boosted government bonds and the shares of US technology stocks, as investors abandoned trades based on any “blue wave” Democratic sweep of the White House and Congress.

The S&P 500 advanced 1.6 per cent in early trading in New York yesterday, led by tech stocks rather than the economy-sensitive stocks that had been favoured to climb in a blue wave scenario. The Nasdaq Composite, which has far out-paced the wider S&P 500 this year, bobbed 2.7 per cent higher.

Investors also rushed into haven gov-ernment bonds as they prepared for the poll outcome to remain unclear for days. The yield on the benchmark 10-year US Treasury slid 0.13 percentage points to 0.77 per cent, its biggest decline since market gyrations in March. Yields fall as a bond’s price rises.

Opinion polls had led investors to bet that decisive Democratic victories would spark another round of stimulus

for the pandemic-stricken US economy. Those stimulus hopes are now fading.

Mr Biden may still clinch an unex-pectedly tight race, but the Republicans’ strong showing in several battleground states, and seemingly tight grip on the Senate, have prompted money manag-ers to prepare for the prospect that the US could be left with a divided govern-ment, clouding the investment outlook.

“The blue wave trade has been going on since the summer and has built up more recently, and I would expect it to unravel now,” said Fabiana Fedeli, glo-bal head of fundamental equities at Robeco. Economic stimulus and the path of the pandemic were more signifi-cant drivers for markets than the out-come of the election alone, she said.

The yield on the 10-year Treasury had briefly eclipsed 0.9 per cent late on Tuesday, hitting its highest since June, on expecting that a big Democratic win could fire up government spending, and potentially inflation. That was expected to place more downwards pressure on longer-term bond prices, and send yields rising. Yet yields dropped as results poured in, reflecting how some fund managers had been caught out.

“Markets need to have a serious look at their systems,” said Didier Saint-Georges, member of the strategic invest-ment committee at French investment house Carmignac. “Now we are back to where we were before the blue wave trade. We are back to fundamentals.”

Jim Leaviss, chief investment officer of public fixed income at M&G, said that the slim chance of the Democrats taking the Senate meant that further big fiscal

stimulus was less likely to emerge. “[That] means that in the event that the US economy slows again, and a winter Covid wave is likely, it will be down to monetary policy to provide support.”

More bond purchases by the US Fed-eral Reserve, more rate cuts — possibly into negative territory — and so-called yield curve control to keep bonds in check “might come into play”, he added. “Markets got what they really didn’t want, with a lot of uncertainty.”

Donald Trump introduced more nervousness yesterday, after he vowed to go to the Supreme Court to halt the counting of votes as he prematurely claimed victory in the race. “In the next few days there is going to be very messy news flow,” said Mr Saint-Georges.

That kind of rhetoric may also be helping to boost government bonds. “Some people are using bonds as a safe haven, reflecting the risk of a contested election with bad outcomes,” said Toby Nangle, global head of asset allocation at Columbia Threadneedle. “But I see it as a reduction in the likelihood of very sub-stantial stimulus.”Additional reporting by Laurence Fletcher in London and Leo Lewis in Tokyo

Market reaction

Investors abandon trades based on ‘blue wave’ sweep

Investors rush into USgovernment bonds

Source: Bloomberg

10-year Treasury yield (%)

0.75

0.80

0.85

0.90

0.95

Oct 2020 Nov

Biden landslide hopes turn to nail-biting finish Poor result among conservative Latino voters in Florida exposes a weakness in Democratic campaign strategy

‘We as a party still have a lot of work to expand the number of Latino voters’

Winning back the suburban vote was particularly important for Biden’s chances

would remain Democratic. In Miami-Dade, two Democrats who had taken Republican seats two years ago were ousted, partly because of the party’s poorer than expected performance in the Latino community. But they also lost seats in Charleston, South Carolina, and a swath of New York’s Long Island.

Democrats also failed to flip several districts in the Houston, Austin and San Antonio suburbs. Those losses contrib-uted to Mr Biden’s failure to win Texas, a state that had not voted for a Democrat since 1976 but which has become more liberal because of demographic changes.

Mr Biden was hoping for better results in the suburbs in Pennsylvania

and Michigan, two states crucial to determining whether Mr Biden would emerge victorious when all outstand-ing votes were tallied.

Exit polls from ABC News found that Mr Biden had a 3-point margin over Mr

Trump among suburban voters. Among female suburban voters, Mr Biden led

Mr Trump 55 per cent to 44 per cent, the polls found.

The suburban vote was particularly important for Mr Biden as a balance

against any weakness in winning back the so-

called Trump Demo-crats in Pennsylva-

nia and the Mid-

egy to try to expand the Democratic base in a state that had voted for a Dem-ocrat only once since Harry Truman won in 1948.

The plan to attack Mr Trump over his response to the pandemic also appeared to have been less effective than the Democrats had expected. The presi-dent’s approval ratings appeared to dip in early October, after he was hospital-ised for Covid-19, and polls showed most Americans disapproved of his handling of his own infection.

But as election results trickled in, it was clear that many voters had not cast their ballots with Covid-19 in mind. According to a CNN exit poll, the econ-omy — the one issue where Mr Trump consistently polled better than Mr Biden — was the most important issue for voters, followed by racial inequality and coronavirus.

The Biden campaign also banked on Republican women in the suburbs abandoning the president. Many Democrats looked to their sig-nificant gains in the 2018 midterm elections — which were driven by women — as proof that the party could replicate those results in the presidential race.

But the party found itself losing some of the dis-tricts it had flipped in 2018 and that polls had suggested

The resultFor live results and what each candidate has to do to win

ig.ft.com/us-election-2020

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World Markets

STOCK MARKETS

Mar 30 prev %chg

S&P 500 2365.93 2361.13 0.20


Dow Jones Ind 20703.38 20659.32 0.21

FTSEuro�rst 300 1500.72 1493.75 0.47

Euro Stoxx 50 3481.67 3475.27 0.18

FTSE 100 7369.52 7373.72 -0.06

FTSE All-Share 4011.01 4011.80 -0.02

CAC 40 5089.64 5069.04 0.41

Xetra Dax 12256.43 12203.00 0.44

Nikkei 19063.22 19217.48 -0.80

Hang Seng 24301.09 24392.05 -0.37

FTSE All World $ 297.99 297.73 0.09

CURRENCIES

Mar 30 prev

$ per € 1.074 1.075

$ per £ 1.249 1.241

£ per € 0.859 0.866

¥ per $ 111.295 111.035

¥ per £ 139.035 137.822

€ index 89.046 89.372

SFr per € 1.069 1.072

Mar 30 prev

€ per $ 0.932 0.930

£ per $ 0.801 0.806

€ per £ 1.164 1.155

¥ per € 119.476 119.363

£ index 76.705 76.951

$ index 104.636 103.930

SFr per £ 1.244 1.238COMMODITIES

Mar 30 prev %chg

Oil WTI $ 50.22 49.51 1.43

Oil Brent $ 52.98 52.54 0.84

Gold $ 1248.80 1251.10 -0.18

INTEREST RATES

price yield chg

US Gov 10 yr 98.87 2.38 0.00

UK Gov 10 yr 100.46 1.21 -0.03

Ger Gov 10 yr 98.68 0.39 -0.01

Jpn Gov 10 yr 100.45 0.06 0.00

US Gov 30 yr 100.14 2.99 0.01

Ger Gov 2 yr 102.58 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00


LAURA NOONAN — DUBLINJENNIFER THOMPSON — LONDON

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

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

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

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

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

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

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

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

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

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

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

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

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

Citywatchdog sends a clearmessage asbanker loses joboverWhatsAppboast

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

Shutdown risk as borderwall bid goes over the top

FRIDAY 31 MARCH 2017

Briefing

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

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

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

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

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

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

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

Datawatch

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

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

Sources: Jane’s Terrorism and Insurgency Centre

Terror attacks in western Europe

Highlighted attack Others

NorwayParis Nice

Brussels

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

WORLDBUSINESSNEWSPAPER

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

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

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

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

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

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

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

Lloyd’s of Brussels Insurancemarketto tapnew talent poolwithEUbase

AFP

JAMES BLITZ — WHITEHALL EDITOR

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

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

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

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

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

Problems with CDS and other projectsessential toBrexit could force London to

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

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

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

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

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

World Markets

STOCK MARKETS

Mar 31 prev %chg

S&P 500 2367.10 2368.06 -0.04


Dow Jones Ind 20689.64 20728.49 -0.19

FTSEuro�rst 300 1503.03 1500.72 0.15

Euro Stoxx 50 3495.59 3481.58 0.40

FTSE 100 7322.92 7369.52 -0.63

FTSE All-Share 3990.00 4011.01 -0.52

CAC 40 5122.51 5089.64 0.65

Xetra Dax 12312.87 12256.43 0.46

Nikkei 18909.26 19063.22 -0.81

Hang Seng 24111.59 24301.09 -0.78

FTSE All World $ 297.38 298.11 -0.24

CURRENCIES

Mar 31 prev

$ per € 1.070 1.074

$ per £ 1.251 1.249

£ per € 0.855 0.859

¥ per $ 111.430 111.295

¥ per £ 139.338 139.035

€ index 88.767 89.046

SFr per € 1.071 1.069

Mar 31 prev

€ per $ 0.935 0.932

£ per $ 0.800 0.801

€ per £ 1.169 1.164

¥ per € 119.180 119.476

£ index 77.226 76.705

$ index 104.536 104.636


Mar 31 prev %chg

Oil WTI $ 50.46 50.35 0.22

Oil Brent $ 53.35 53.13 0.41

Gold $ 1244.85 1248.80 -0.32

INTEREST RATES

price yield chg

US Gov 10 yr 98.63 2.41 -0.01

UK Gov 10 yr 100.35 1.22 0.02

Ger Gov 10 yr 99.27 0.33 -0.01

Jpn Gov 10 yr 100.36 0.07 0.00

US Gov 30 yr 99.27 3.04 0.01

Ger Gov 2 yr 102.57 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00


ALEX BARKER — BRUSSELSGEORGE PARKER — LONDONSTEFAN WAGSTYL — BERLIN

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

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

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

ambitioustradeandairlineaccessdeals.Gibraltar yesterday hit back at the

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

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

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

Brussels sees little room for compro-

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

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

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

Brussels takes tough stance onBrexitwith Spainhandedveto overGibraltar

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

Living wage rise to pilepressure on care services

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





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

HOW DRIVERLESS TECHNOLOGY IS CHANGING AN AMERICAN WAY OF LIFE

THE END OF THE ROAD FT WEEKEND MAGAZINE

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

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

How To Spend It

Chic new lodgings in ScotlandMAGAZINE

Art of persuasionMystery deepensover disputed painting of JaneAusten

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

RALPH ATKINS — ZURICHDUNCAN ROBINSON — BRUSSELS

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

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

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

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

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

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

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

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

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

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

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

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

FEBR

UARY

4 2017

THE RISE OF ECO-GLAM

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

NOVEMBER 5 2020 Section:World Time: 4/11/2020 - 18:01 User: sanjay.gohil Page Name: WORLD1 USA, Part,Page,Edition: USA, 2, 1

Thursday 5 November 2020 ★ FINANCIAL TIMES 3

US electioN

Kadhim Shubber — Washington

As several key battleground states raced to complete counting ballots, Donald Trump yesterday said he would go to the Supreme Court to secure his re-elec-tion, setting up the possibility of pro-tracted litigation over the eventual result.

“We’ll be going to the US Supreme Court,” Mr Trump said in the early hours of yesterday, claiming victory at a press conference. “We want all voting to

stop. We don’t want them to find any ballots at four o’clock in the morning and add them to the list.”

He followed up later with a string of tweets about “ballot dumps”, an appar-ent reference to newly counted votes that could make Mr Biden, the Demo-cratic candidate, the eventual winner.

Any lawsuits would not go directly to the Supreme Court, however, and there is little legal basis for the idea that the courts would order a general halt on what the president referred to as “all voting”. Polls have closed and election officials are now tallying the results.

Justin Levitt, an election law profes-sor at Loyola Law School, called Mr Trump’s comments “exceedingly out-

landish, and no, there’s no actual legal basis behind any of it”.

“What happens next is the same thing that’s happened for hundreds of years: we count the ballots that have been cast by eligible voters,” he said.

Still, the president’s comments have cast a cloud over the continuing process, not least in states where mail ballots can lawfully arrive after November 3.

In some states still counting, such as Pennsylvania, Republican lawmakers refused to let the election officials start counting mailed ballots ahead of polling day, leaving a backlog of votes that are expected to lean to the Democrats.

In certain states, it is legal for mail bal-lots to arrive after polling day if they

were posted by November 3, although the law is not settled in Pennsylvania — a state seen as especially critical to Mr Trump’s chance of winning — and could be the subject of further litigation by Republicans.

Legal action would have to begin in the lower state or federal courts before working its way up to the US Supreme Court. There is no precedent for a gener-alised halt on counting ballots, or even a halt in a specific state at this very early stage. In Bush vs Gore in 2000, the Supreme Court halted a recount of votes — not an initial count — and did not issue its contentious decision until almost the middle of December, weeks after polling day. There had been litiga-

tion in the Florida courts before Amer-ica’s highest court took up the case.

Court battles over the 2020 election have raged leading up to November 3, and some are continuing. These include two cases in Pennsylvania relating to processes for allowing voters to fix defective ballots, with local Republicans arguing it is not allowed under state law.

In Wisconsin, the Trump campaign has already begun forecasting the possi-bility of a recount. “That is recount ter-ritory,” Bill Stepien, the Trump cam-paign manager, said of the close margins in the state yesterday. Wisconsin law does not automatically call for a recount but if the margin of victory is less than1 per cent, a recount can be requested.

The significance of these and other existing and potential disputes will ulti-mately rest on how close the eventual vote totals are. Either side will contest each other’s moves in court, and proba-bly appeal against any ruling against them until it reaches the US Supreme Court, which has a 6-3 majority of Republican-appointed justices.

“The US Supreme Court only gets involved if there’s a genuine basis for lit-igating over enough ballots that could make a difference,” said Edward Foley, a professor at The Ohio State University Moritz College of Law. “It’s going to take at least several days to have a sense of what the landscape really looks like. We’re still in the beginning.”

Ballots

Trump’s litigation pledge casts cloud over count Legal action would have to start in lower courts ahead of Supreme Court hearing

Hannah Murphy — San FranciscoSid Venkataramakrishnan — London

Facebook and Twitter scrambled to live up to their pledges to curb online election interference and misinforma-tion yesterday, adding cautionary labels to a stream of misleading posts from President Donald Trump.

The Silicon Valley social media groups had said they would clamp down on any political candidate spreading misinfor-mation around the election process, despite accusations from Republicans that they censor rightwing voices.

But with the result of the election hanging in the balance, experts argued that the platforms’ differing approaches to the president’s rule-breaching posts — despite being swift — fell short of fully curbing their impact. They also warned the companies failed to counter what they said was a deluge of voter misinfor-mation that targeted swing states in par-ticular, with some high-profile conserv-ative figures amplifying dubious claims.

“For all the attention on disinforma-tion from the president, I think there was a failure to adequately deal with his influential aides and allies who have so much clout in the rightwing media eco-system,” said Jesse Lehrich, head of social media non-profit group Account-able Tech and a former foreign policy spokesman for Hillary Clinton.

“Now there are thousands of Trump supporters who baselessly believe the state was stolen from them, which is such a dangerous dynamic.”

In an unprecedented move, Facebook opted to automatically add informa-tional labels to all posts from the presi-dent and Mr Biden from late on Tues-day, saying in a statement: “Once Presi-dent Trump began making premature claims of victory, we started running notifications on Facebook and Insta-gram that voters are still being counted and a winner is not projected.”

This included a video in which the president prematurely declared victory and accused political opponents of “a major fraud”, which garnered more than 9.5m views and close to 70,000 shares, according to Crowdtangle.

Twitter added warning labels to sev-eral tweets from the president, includ-ing one alleging that his opponents “are trying to STEAL the Election” and restricted the sharing of the posts — a step not taken by Facebook. The labels had to be clicked on for users to see the tweets beneath.

However, at the time of writing, the platform had not added any label to the video that Facebook flagged, which had been initially posted by Mr Trump’s campaign account on Twitter and shared nearly 40,000 times, including by Mr Trump himself.

Facebook and Twitter have been drip-feeding out new policies in recent months, including pledges to add warn-ing labels to premature claims of vic-tory. In the wake of revelations that Rus-sia waged disinformation campaigns during the 2016 US presidential election in a bid to sway the vote, the companies had promised to better police their plat-forms this time around.

Facebook raced out eleventh-hour policy changes, confirming just hours before election day that it was temporar-ily disabling its recommendations tool that directs users to join political groups, and also temporarily restricting Insta-gram users from discovering certain content from users they do not know.

But some experts argued that the moves to label posts were ineffective.

“Facebook’s failure to obscure misin-formation but instead to ‘label’ does not curb the message’s impact,” saidMarietje Schaake, international policy director at Stanford University’s Cyber Policy Center.

Warning labels

Facebook and Twitter act to curb false information

In a statement from the White House early yesterday, President Donald Trump falsely claimed he had already won re-election, reviving concerns he may not accept the final result if he is defeated.

The president vowed to block any further counting of ballots, even as state officials in several crucial battlegrounds with close races were still tallying votes.

The remarks made by Mr Trump — who was surrounded by a group of top aides and supporters, as well as Vice-president Mike Pence — break from the tradition of US presidential contenders waiting until a concession from their rival to claim victory.

The comments were criticised by Joe Biden’s campaign as “a naked effort to take away the democratic rights of American citizens”.

The FT fact-checks key quotes from the president’s statement.

“I want to thank the American people for their tremendous support, millions and millions of people voted for us tonight. And a very sad group of people is trying to disenfranchise that group of people

and we won’t stand for it. We will not stand for it.”

There is no evidence of any effort to “disenfranchise” Americans who voted for Mr Trump. Rather, state officials were still tallying ballots that were legitimately cast, including those favouring the incumbent US president.

“It’s also clear that we have won Georgia. We’re up by 2.5 per cent or 117,000 votes with only 7 per cent left. They’re never going to catch us. They can’t catch us.”

At the time, the vote count was not complete in Georgia, a battleground state, and the Associated Press had yet to call the state for Mr Biden or Mr Trump yet. Many of the remaining votes were in the Atlanta area, which is heavily Democratic, so while Mr Trump was ahead, it was undecided.

“You know what happened? They knew they couldn’t win so they said, ‘Let’s go to court’ . . . I’ve been saying this from the day I heard they were going to send out tens of millions of ballots.”

Throughout the campaign Mr Trump has been claiming — without evidence — that the use of postal ballots, which was expanded because of the pandemic, would lead to widespread fraud. He repeated that claim yesterday morning.

“This is a fraud on the American public. This is an embarrassment to our country. We were getting ready to win this election. Frankly, we did win this election. We did win this election.”

There was no evidence for Mr Trump’s claim of a “fraud” being perpetrated on the American public — and his victory claim was premature.

The Associated Press had not called the election for either Mr Trump or Mr Biden, and state election officials had not yet certified a result. The Democratic challenger had not conceded defeat. Mr Biden still had a good chance of prevailing, albeit narrowly, once all the votes were counted.

“We want the law to be used in a proper manner. So we’ll be going to

the US Supreme Court. We want all voting to stop. We don’t want them to find any ballots at four o’clock in the morning and add them to the list.”

Mr Trump quickly invoked America’s highest court, where there is a solid conservative majority, suggesting it might intervene to deliver him victory.

Any potential legal challenge would have to be filed on a state-by-state basis in either a state or a federal court before winding its way up to the Supreme Court.

The courts are unlikely to halt counts in general as Mr Trump demanded — there is nothing unlawful or inappropriate about counting all legitimately cast ballots. But the Trump campaign may argue that certain ballots were cast unlawfully, for example.

The main precedent for a Supreme Court intervention is the race between George W Bush and Al Gore in 2000, when the court halted a recount in Florida in December after weeks of tension and litigation, handing victory to Mr Bush.James Politi and Kadhim Shubber

Fact check President’sunfounded fraud claims

Speaking out: Donald Trump is watched by wife Melania as he makes an election night address in the White House — Al Drago/Bloomberg

complaints could play a part in deciding who becomes the next president.

Indeed Mr Trump promised in an early morning speech yesterday to chal-lenge the continuing vote tallies in court. “Frankly, we did win this elec-tion,” he said. “So we’ll be going to the US Supreme Court. We want all voting to stop.”

Moreover, the US postal service was looking for 300,000 postal ballots that were processed but not scanned for delivery, including some in Pennsylva-nia and Wisconsin. The situation had the ingredients to turn into a protracted battle, like the month-long fight over Florida in 2000 that was resolved when the US Supreme Court halted a recount.

No wonder Mr Trump claimed that “they are trying to steal the election” in a post that Twitter marked as “disputed or misleading”.

How did it end up like this? Polls before the vote suggested that Mr Biden would win by a clear margin. There was a reasonable chance he would still win the electoral college once all the votes were counted in those three so-called blue wall states. In addition, it looked like he was heading to a victory in the popular vote, probably larger than Hil-lary Clinton’s 2.9m margin.

still being counted in the three blue wall states. Mr Biden could afford to lose one, including Pennsylvania, and still win the election, but not more unless he made gains elsewhere.

Either way, America faces two dan-gers, one immediate, the other struc-tural. The first is that the judiciary may well get involved in deciding the out-come. Constitutional scholars have been warning about this for months. This is because of the order in which bal-lots are counted in the three key swing states.

Mr Trump, who did much better among voters who went to the polls on Tuesday, appeared initially to be heavily in the lead in each of the three. Dubbed the “red mirage” by political scientists, this lead shrank as the mail-in ballots were counted.

This gives Mr Trump a window to repeat his pre-election claims that mail-in ballots are fraudulent and peti-tion to have some thrown out. The 2000 Florida recount was partly derailed by the so-called Brooks Brothers riot, in which Republican protesters managed to stop the recount in one critical county. A repeat of that kind of incident cannot be ruled out.

Mr Trump is already laying the

groundwork, saying in his speech yes-terday that the election “is a fraud on the American public. This is an embar-rassment to our country.”

The second danger is to the legitimacy of the system. If Mr Trump won the elec-toral college, it would be the second time he had done so with a minority of the vote and the third time a Republican has done so this century.

In other systems where the president is elected, Mr Biden would already have been declared the winner. The electoral college, which gives outsized influence to small, rural states, is like a dodgy appendix that haemorrhages a little more bile with each election.

If Mr Biden prevails, he will inherit a profoundly divided country that will be hard to govern, especially if the Senate remains in Republican hands.

If Mr Trump loses, he will still have outperformed all expectations. The Republican party is Trumpian for the foreseeable future. “We are a working- class party now. That’s the future,” tweeted Josh Hawley, the Missouri sena-tor who has 2024 presidential aspira-tions. The American people have spo-ken. And it is a cacophonous noise.

[email protected]

Bitter campaign has resolved little while throwing two dangers into the mix

But the race was far closer than any of the models predicted, including the Trump campaign’s internal numbers. The most cited forecaster, Nate Silver, gave Mr Biden an 89 per cent chance of winning (against 70 per cent for Mrs Clinton last time). Further, this was after pollsters made considerable ad-justments to correct the undercounting of white, blue-collar voters in the Mid-

west and elsewhere and take into account the way education affects vot-ing patterns.

It looks like that was not enough. Mr Trump’s clear win in Florida was partly fuelled by a boost in his support from Hispanic and especially Cuban voters. Polls ahead of the election had given Mr Biden an average lead of more than 2 percentage points in the state.

It is possible the pollsters and fore-casters also overestimated the high Democratic share of the mail-in ballots

The electoral college islike a dodgy appendix that haemorrhages a little more bile with each election

E lections are meant to resolve differences. But whichever of Donald Trump or Joe Biden prevails in the presidential race, at time of writing too

close to call, he will inherit a country in which roughly half the electorate rejects his legitimacy.

It could get worse. As in 2016, a US presidential count looked like it would boil down to Pennsylvania, Michigan and Wisconsin. The one wild card was that Georgia might also be in play for the first time since 1992.

The other big difference between now and four years ago was that it could take days to tally all the votes.

Meanwhile Republicans have already filed at least two election day lawsuits in Pennsylvania to contest the legitimacy of postal votes. Since a majority of mail-in ballots were sent in by Demo-crats, the fate of the Republican legal

insight

EdwardLuce



Theresa Upchurch, a poll worker for the 16th ward, said Mr Samuel was typi-cal of the neighbourhood: “The young men weren’t voting [before]. But they’re coming out in droves.” As she spoke, a propeller plane buzzed overhead, trail-ing a banner urging citizens to vote.

Alexis Dowell rolled up to a polling place near Temple University in a motorised wheelchair with a bumper sticker reading My Daughter is an Honor Student at Girls High. “I just don’t trust mail ballots,” she said of her decision to vote in person.

For all the talk of armed militia mem-bers descending on the polls, the atmos-phere at Mr Moore’s ward was festive. A DJ played funk music outside a wedding hall that had been converted to a polling station. Meanwhile, volunteers from rival charities — some from Brooklyn — competed to unload thousands of pizzas and gourmet meals on local voters. “It’s not going to get violent unless they try to steal the election,” Mr Moore predicted.

In the courtyard by the wedding hall, Ms Ray was lumbering towards a school that was her assigned polling place, her daughter and folding chair in tow. She slumped on the steps, still 20 paces from her destination. She had tried to vote by mail, she explained: “Somehow, some way, it didn’t work out for me.”

“Take your time,” a poll worker coun-selled. “You’ve got until 8 o’clock.”

Her husband, a security guard, arrived, and there was a family discus-sion. A short while later, Toni Ray left before returning in a car with a taped-up mirror to carry her mother the final dis-tance. A young man took her under the arm and helped the elder Ms Ray up the steps. “We’re gonna make sure you get your opportunity to vote,” he promised.

AL 9

AK 3

CO 9

IN 11

KS 6

ME 4

MA 11

MN 10

NJ 14

ND 3

OK 7

SD 3WY 3

CT 7

MO 10

WV 5IL 20

NM 5 AR 6

CA 55

DE 3

DC 3

HI 4

KY 8

MD 10MS 6

MT 3NH 4

NY 29

OR 7

TN 11

UT 6

VA 13

WA 12

NE 5

SC 9

ID 4

VT 3

LA 8

RI 4

AZ 11

FL 29

GA 16

NC 15

PA 20

TX 38

IA 6

MI 16

OH 18

WI 10

NV 6

KEYBiden winTrump winYet to be called

Toss-up state(based on pollingaverages)

In most states, electoral votes are distributed on a winner-takes-all basis. In Maine and Nebraska, the electoral votes can be split between candidates

Joe BidenDEMOCRAT

Donald TrumpREPUBLICAN

270 to win451 out of 538 electoral college votes called

238 213

Electoral collegevotes by state

232 Outgoing House 197

193 DEMOCRATS 185REPUBLICANS

47 Outgoing Senate 53

47 DEMOCRATS 47REPUBLICANS

35 seats notup for election

30 seats notup for election

218 50

The solitary electoral college vote won by the Democrats in Nebraska’s 2nd Congressional District could yet prove pivotal to the outcome of the election

Trump’s victory in Florida e�ectively ruled out an early overall win for Biden

Associated Press reported early yesterday that Arizona had turned blue for the first time this century — and only the second time since 1952

House of Representatives

377 out of 435 races called 29 out of 35 races called

Senate

FT graphic As at 13:00 EST, Nov 4 Sources: Associated Press; FT analysis of polls on RealClearPolitics; FT research

ME

VT

NHNY

MAWA CT

MT ND MN

RIOR SDID WY

OH NJNE IA IL IN

MDUT CO

KS MO DE

WVAZ OK DCAR KYCA VANM

TNLA AL

SCMS

TXHI

FL

NCGA

AK

MI

PA

Biden can top 270 votes by winningPennsylvania and Michigan ...

Possible paths to the White House

270 to win

MI

PAWI

NV

... but if Biden loses Pennsylvania, he will needto win Michigan, Wisconsin and one other state

270 to win

PANV

NCGAAK

Trump’s easiest path to victory involveswinning Pennsylvania ...

270 to win

MI

PANV

NCGA

... but if Trump loses Pennsylvania, he mustwin Michigan, Georgia and North Carolina

270 to win

274 Biden Trump 213 270 233

238 274 258 270

WI

NV

AK

Biden win Trump win Yet to be called

States called by the AP that have an estimated 90% of vote reported

-10 0 10 20 30ArkansasLouisianaKentucky

South DakotaKansas

MontanaSouth Carolina

TexasOhioIowa

FloridaMinnesotaVirginia

Polls marginTrump’s polls and win margin (percentage points)TrumpBiden Win margin

Trump outperformed the polls in many states

US electioN

Lauren Fedor — Washington

The Democratic party’s hopes of regain-ing control of the Senate were dealt a blow after it failed to oust several Republican incumbents, including Lindsey Graham of South Carolina and Joni Ernst of Iowa.

Democrats had sought to take back the reins of the upper chamber in order to push through their legislative agenda, on issues ranging from healthcare to cli-mate change, to an economic stimulus, without Republican support.

But Tuesday’s results set the stage for a possible “divided” government if Democrat Joe Biden wins the White House but Republicans maintain con-trol of the Senate. Under such a sce-nario, Mitch McConnell, Republican Senate majority leader, would be able to block every proposal from a Biden administration.

Democrats ousted incumbents in Ari-zona and Colorado, but a Republican candidate won back a seat in Alabama, giving Mr Biden’s party a net gain of one seat with several important races still undeclared. Republicans went into the elections holding 53 seats in the 100-member Senate. Democrats had set their sights on flipping several of the most closely fought seats, including

Iowa and South Carolina, making their defeats there a significant blow.

Results in the battleground states of North Carolina, Georgia, Maine, Michi-gan and Alaska were yet to be called.

Democrats need a net gain of three seats to take the Senate, if Mr Biden is elected president. If Democrats fail to take the upper chamber it would stymie the ability of a Biden administration to appoint federal judges and reshape the Supreme Court, which Mr Trump has given a 6-3 conservative majority.

Democratic activists have called for a potential Biden administration to expand the Supreme Court beyond its nine-member bench, amid concerns that the court will rule to restrict abor-tion and voting rights.

If President Donald Trump is re-elected, Democrats would need a net gain of four seats to control the Senate, as the vice-president can cast a tie-breaking vote in the chamber.

Mr Biden’s party won its Senate tar-gets in Colorado, where former gover-nor John Hickenlooper defeated Repub-lican incumbent Cory Gardner, and Ari-zona, where astronaut Mark Kelly beat incumbent Martha McSally.

In South Carolina, Mr Graham, a one-time Trump critic who became a staunch ally of the president, defeated Jaime Harrison, the Democratic chal-lenger, in the most expensive Senate race in history.

Mr Harrison, a 44-year-old former state party chairman, raised a record $109m in his bid to oust Mr Graham, 65, who called Mr Trump a “xenophobic, religious bigot” in the run-up to the 2016 election before changing his tune.

In Iowa, Ms Ernst saw off a challenge from Democrat Theresa Greenfield. In Alabama, Doug Jones, the incumbent Democrat, lost his race against Republi-can challenger Tommy Tuberville, a former college football coach. Mr McCo-nnell, meanwhile, won re-election in

Kentucky, defeating Democratic chal-lenger Amy McGrath, a former marine fighter pilot.

Many states may take days or even weeks to finalise their vote counts from Tuesday and at least one Senate race will not be decided until January.

In Georgia, a special election to deter-mine whether Republican Kelly Loeffler will keep the seat she was appointed to fill last December will advance to a run-off to be held on January 5.

Ms Loeffler, a former Intercontinental Exchange executive, will battle against Democrat Raphael Warnock, pastor of Atlanta’s Ebenezer Baptist Church, in the run-off.

Democrats are expected to retain con-trol of the House of Representatives.

Capitol Hill

Democrats’ hopes dimmed in Senate battleRepublican-controlled chamber would leave a Biden presidency hobbled

Democrats had set their sights on flipping several seats, making their defeats a significant blow

Continued from page 1

on Tuesday, with Republican lawyers in suburban Montgomery County, outside Philadelphia, asking a court to invali-date some mail ballots because, they claimed, election workers had processed them too soon, giving voters a chance to correct mistakes like missing signatures.

As Philadelphians awoke to the uncertainty of an election like no other in American history, the focus shifted to a crew of about 100 election workers cloistered inside the cavernous Conven-tion Center and insulated from the pres-ident’s tweets. There they conveyed bal-lots through an assembly line with vari-ous stations including sorting, extrac-tion, slicing, unfolding and scanning.

Lisa Deeley, the city’s leading election commissioner and a Democrat, turned tautologous as she updated reporters yesterday morning on their progress. “We’ll be done as soon as we’re done,” she said. “We’re going to count the votes and we’re going to end up at the end.”

Tom Wolf, the Pennsylvania gover-nor, also pleaded for patience, saying: “The delay that we’re seeing is a sign that the system is working.”

He added: “We may not know the results even today, but the most impor-tant thing is that we have accurate

Mountain of mail ballots looms over Philadelphia

Claire Bushey — Kenosha, WisconsinPatti Waldmeir — Chicago

Erin Decker, a Wisconsin Republican, surveyed a room full of like-minded voters who risked catching coronavi-rus to watch the results of the election trickle in on Tuesday night.

“Florida is looking really good for Presi-dent Trump,” Ms Decker said excitedly as early returns showed him leading in the crucial battleground state.

“It seems like a normal election night watch party, despite the pandemic,” added Ms Decker, the Republican party chair in Kenosha County, Wisconsin, a key battleground in an important swing state that is also one of the worstCovid-19 hotspots in the US.

A life-sized cut-out of President Trump looked down over the room, which was filled with 40 or so guests, many of them wearing Make America Great Again baseball caps. They were hunched over plates of cheese, sausage or pepperoni pizza served by the Italian eatery booked for the occasion. Almost no one wore a mask.

The pandemic raged outside: over the past month, Wisconsin has been one of the US states worst-hit by the latest surge in Covid-19 cases, with the state’s seven-day average Covid-19 positivity rate topping 30 per cent in recent days.

“So far, so good,” said Gabe Nudo, as he watched returns relayed by Fox News, which was playing on widescreen televisions mounted behind the bar.

Mr Trump won Mr Nudo’s home county of Kenosha by only 238 votes in 2016, his closest margin of victory in a state that he won by less than 23,000 votes last time.

Kenosha became the campaign focus of both US presidential candidates in August after a white policeman shot and paralysed Jacob Blake, a black man. Widespread protests broke out, fol-lowed by fires, looting and rioting that destroyed several businesses. A white teen later killed two protesters as white vigilante groups clashed with rioters.

Mr Trump visited Kenosha several times and seized on the unrest to bolster his appeal as a “law and order” candi-date to win over local white voters.

Five minutes away in a different part of Kenosha and on the other side of the political divide about 40 Democratic supporters gathered at a car park. They watched the returns in an open tent, for

a socially distanced party with a big screen, chicken wings and pizza.

Guests bundled in coats as the mer-cury dropped in the evening after an unseasonably warm winter day. Cicely Hunter, who lives in Kenosha, said the election was an opportunity to undo some of the most obvious racism of the Trump administration.

“We need to move forward instead of continuous moving back,” she said.

The party was organised by Tanya McLean, executive director of Leaders of Kenosha, an activist group, and the Service Employees International Union. She said it would have been demoralis-ing, after working to turn out the vote and secure justice for Mr Blake, to watch the results of their hard work alone.

“We’ve been working really hard the last couple months,” she said. “We decided to do it as a family, because we’re like family now.” Ten minutes later the screen briefly went dark as the WiFi in the lot proved unreliable.

A new administration is important, Ms McLean said, but she noted: “Biden is a doorway, not a destination. He has promised the black community certain things, and we’re going to hold him to it.”

In nearby Milwaukee, members of the local Democratic Socialists of America chapter joined a Zoom call to watch election results for Mr Biden, their pre-ferred candidate. The mood turned noticeably glum as Mr Trump appeared to be doing better than expected in early returns from several states.

Wisconsin

Voters risk infection to watch results come in

Glued to the TV: customers watch the election at a Wisconsin bar

Electoral map What the candidates need to do to clinch victory

results, again, even if that takes a little longer than we’re used to.”

Philadelphia, the birthplace of Ameri-can democracy and a city known for its creaky election machinery, has been under scrutiny like no other place in this campaign since Mr Trump singled it out as a hotbed of election fraud.

“Bad things happen in Philadelphia,” he said during the presidential debate, unwittingly minting a popular new T-shirt.

A police shooting of a black man with mental health issues, just days before the election, triggered protests and loot-ing and deepened unease about how election day would play out. Store fronts were boarded up and pundits talked

about the risk of leftwing mobs or right-wing “patriots” unleashing violence.

For all the anticipation, polling places were generally smooth. That may have been, workers speculated, because so many people had taken the opportunity to vote early and avoid the risk of Covid infection at a crowded polling place.

Jamar Samuel, 27, felt such conviction that he wanted to vote in person on the day, or, as he put it, “go straight to the source”. A resident of the overwhelm-ingly black north Philadelphia, he voted for Barack Obama in 2012, but skipped the 2016 election. “I regret it, but I didn’t vote last time,” Mr Samuel said. It was Mr Trump who brought him back to the polls. “We gotta get him out of office.”

‘The delay that we’re seeing is a sign that the system is working’Tom Wolf, Pennsylvania governor

NOVEMBER 5 2020 Section:World Time: 4/11/2020 - 18:56 User: gerry.white Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1


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Consumers were a bright spot

Consumer spending has been one of the strongest features of the US economy under Mr Trump — and has helped pro-mote the recovery from the shock of the pandemic.

But not all is rosy. While retail sales suggest a “V-shaped” recovery, con-sumer sentiment has been depressed for months, according to the University of Michigan survey. There are good rea-sons for caution: coronavirus is still surging in many areas and fiscal stimu-lus — which helped to drive spending by struggling households earlier this year — has been fading, with no deal in sight between Mr Trump and congressional Democrats.

Canada and Mexico remained top marketsFor all the bluster of Donald Trump’s trade rhetoric, the structure of US trade has been little changed since he entered the White House. Canada solidified its position as the main market for US exports and Mexico remained the sec-ond most important destination — though the pandemic hit sales south of the border more than sales north of it.

In the midst of the trade war with China, there was a clear dip in exports. But after Washington and Beijing signed a “phase 1” trade deal in January, which included large-scale purchases of US goods by Chinese entities, there has been a rebound. China now imports more from the US than it did when Mr Trump took office.

ing because of schools being closed. Even after restrictions eased, men returned to the labour force more fre-quently than women.

Property prices rose most in western citiesThe last US recession was triggered by mortgage defaults that came crashing down on Wall Street, but this year’s cri-sis reinforced a housing boom as Ameri-cans sought roomier homes for remote work.

From the first month of his presi-dency to the most recent observation in August, home prices in big cities increased, but some much morethan others — with the greatest benefits going to properties to the west of the Rockies.

Seattle had valuations that were 33.5 per cent higher than January 2017. Las Vegas and Phoenix also had prices rise more than 30 per cent over the same period. In New York, the gains were more limited.

Economy matters most to voters after four years of tumult under TrumpWith tax cuts and trade wars, the US rode a wave of expansion until pandemic struck

Covid-19 pandemic

Employment in Trump-supporting states fared better than othersNonfarm employees (rebased, Jan 2017=100)

Sources: US Bureau of Labor Statistics; University of Michigan; US Census Bureau; US Federal Reserve

4. South Carolina

2. Utah

5. Colorado

3. Arizona

1. Idaho

50. Hawaii

47. New York46. Michigan

49. Vermont48. Alaska

75

80

85

90

95

100

105

110

2017 18 19 20

Covid-19pandemic

Financial services is best employment performer in Trump era12-month change in nonfarm employees (%)

-50

-40

-30

-20

-10

0

10

9. Mining and logging

4. Construction

6. Manufacturing

2. Retail trade

8. Information

1. Financial activities

7. Professional & businessservices

5. Education & health services

10. Liesure and hospitality

3. Government

2017 18 19 20

Consumer sentiment declines as retail sales bounce backSurvey of consumer sentiment Retail and food sales ($bn)

70

80

90

100

110

400

450

500

550

2017 18 19 20

Change in home prices since start of Trump’s termS&P/Case-Shiller home price index (%)

0 5 10 15 20 25 30

ChicagoNew York

MiamiDallas

San FranciscoLos Angeles

BostonSan Diego

DenverPhoenix

Las VegasSeattle

35

Manufacturing jobs growth picked up initially but Trump’s trade wars backfired on industrial America and employment suffered. US bank stocks fell yesterdayAdam Glanzman/Bloomberg/AFP/Getty

facturing employment also suffered dis-proportionately.

Over Mr Trump’s presidency, leisure and hospitality — his own business — did the worst, largely because of the pan-demic. The best employment performer was the financial sector — not a look the president wanted.

Pandemic forced women from workforce

Female participation in the labour force, either as jobholders or jobseek-

ers, had been stagnant for a few years before Mr Trump came into office, and under his watch it began to creep up — from 56.9 per cent in January 2017 to 57.8 per cent in February of this year. This represented stronger growth than the change from 69.2 per cent to 69.3 per cent experienced by men over the same period.

But when coronavirus hit, it was women who disproportionately left work or abandoned the search for jobs to care for children using remote learn-

James Politi — Washington Brooke Fox — New York

Exit polls underscored what Donald Trump and the Republicans had obsessed with throughout the campaign — that the economy, above other issues such as the pandemic and racial ine-quality, was the issue that mattered most to voters.

The US election capped almost four years of tumult for the world’s largest economy on Tuesday as President Trump secured a $1.7tn tax cut, launched trade wars around the world, and grappled with the fallout from a pandemic that threw millions of Ameri-cans out of work.

Before coronavirus hit, the US was riding the long wave of an expansion that began under Barack Obama in the aftermath of the financial crisis. Unem-ployment hit record lows during Mr Trump’s term, but the economy came crashing down in March, and a full recovery could still be years away.

These charts show how the US econ-omy performed under Mr Trump, and identify some of the winners and losers during his presidency.

Red states did the best on jobs

The last data on employment before the election showed the US economy with 141.7m jobs in September — not a number that left Mr Trump much room for celebration. It represented a 6.4 per cent drop compared with 12 months earlier, and was 2.7 per cent below the level when he took office.

The decline happened almost entirely during the pandemic and ensuing lock-downs, and left the US with 10.7m fewer jobs than in February.

Not all regions suffered to the same degree. According to a Financial Times analysis of the data, Idaho was the best-performing state in terms of jobs during Mr Trump’s presidency, while Hawaii was the worst.

The five states that did the best as of September 2020 were generally sympa-thetic to Mr Trump politically, having backed him by an average margin of 12.6 percentage points in 2016, and were mostly out west. The five states that per-formed the worst in terms of jobs — including New York — leaned Demo-cratic, except Alaska. On average, they supported Hillary Clinton by 13.2 per-centage points in 2016.

Blue-collar boom sputtered

Mr Trump came into office in January 2017 with a vow to reshape the economy to favour blue-collar workers who had been displaced by trade, immigration, globalisation and automation.

For a while it seemed to be work-ing: mining and logging jobs rebounded strongly with Mr Trump’s election after suffering big declines at the end of Mr Obama’s presidency. Manufacturing jobs growth also picked up.

But even before the pandemic hit, those gains started to erode as Mr Trump’s trade wars backfired on industrial America. Mining and log-ging jobs went from having the most rapid employment gain to being among the worst performers. Manu-

James Politi, Andrew Edgecliffe-Johnson and Laura Noonan

Hopes for another round of large-scale federal spending to revive the US econ-omy suffered a blow as election results suggested a continuation of divided government appeared more likely than Democrats winning both the presi-dency and the Senate.

Business leaders, economists and inves-tors had been increasingly counting on Joe Biden winning the White House, with Democrats regaining control of the Senate as well as adding seats in the House of Representatives.

Mr Biden had laid out a plan to rapidly inject billions of dollars of short-term stimulus into the economy and raise taxes on the wealthy and large compa-nies to fund further investments in pub-lic goods, from education to green energy and infrastructure.

While Mr Biden may capture the pres-idency if he maintains his small lead in key swing states, he could be severely impaired in passing his economic agenda by Republicans who are on track to keep their Senate majority and have been very sceptical of additional spend-ing.

“Without control of the Senate, the Democrats’ ambitious legislative

agenda will be scrapped, making a large stimulus package difficult,” Beacon Pol-icy Advisors said in a note yesterday, adding that other “top progressive pri-orities” could also become casualties.

Before the vote, Nancy Pelosi, the House Speaker, and Steven Mnuchin, US Treasury secretary, had been negoti-ating a near $2tn package of measures to prop up the economy, but they never reached a deal and it is unclear whether those talks could be revived before the end of the year.

While some in business will welcome a Republican Senate as a check to pre-vent a possible Biden administration from veering too far to the left, lobbyists and business leaders are expected to keep pressing for compromise on stimu-lus. The US Chamber of Commerce said on Monday it would put “maximum pressure on our leaders to pass an aid package as quickly as possible”.

Tom Donohue, the chamber’s chief executive, said Washington’s largest corporate lobby group had “worked hard to maintain a pro-business Senate” and was “very well positioned to break through the gridlock” to make progress on issues from healthcare to economic revitalisation.

Business leaders have also expressed frustration with the failure of both the

corporate taxes under a Biden adminis-tration. Retailers and banks boarded up outlets in major cities in anticipation of possible election violence.

One of the few CEOs to comment on the election yesterday was Jamie Dimon, chairman and chief executive of JPMorgan Chase, who urged the bank’s staff to have faith in the country’s elec-toral and judicial systems and to muster the “patience and fortitude” to wait for final results.

“It is the responsibility of each of us to respect the democratic process, and ultimately, the outcome,” he said.

Shares in America’s biggest banks fell yesterday, which experts said was because bank shares tend to move inversely to the price of US government debt, not because banks faced a tougher policy or regulatory outlook.

“There’s actually something kind of nice about this election,” said Jeff Harte, an analyst at Piper Sandler. “Neither candidate is really targeting banks or the economy. Neither one seems like a horrible outcome. Either side is going to be focused on the economy.”

Glenn Schorr, an analyst at Evercore ISI, added that brokerages like Morgan Stanley and Goldman Sachs, which have enjoyed a six-month trading boom, would benefit from continued volatility.

Federal spending

Results dash business hopes for stimulus package progress

US electioN

Leslie Hook — LondonKatrina Manson — Washington

The US has formally withdrawn from the Paris climate agreement, two-and-a-half years after President Donald Trump announced plans to pull out of the ambitious environmental pact.

The exit of the second-biggest global carbon dioxide emitter from the 189-nation accord is a milestone in a presi-dency that has pushed through a weak-ening of environmental regulations and voiced support for the fossil fuel sector.

Mr Trump has described the pact as a deal that “disadvantages the US to the exclusive benefit of other countries”.

The US, under then president Barack Obama, played a central role in develop-ing the 2015 accord, which aims to limit global warming to well below 2C.

The US exit, the culmination of a bureaucratic process that began a year ago, will be completed automatically and is not dependent on the result of Tuesday’s presidential election. But if Democratic challenger Joe Biden becomes president, the US could rejoin

the Paris accord quickly. He has said he would do so on his first day in office.

“If Biden wins, then the fact that the withdrawal became final on November 4 really won’t matter,” said Todd Stern, who was the top US climate negotiator during the Obama administration.

The US is the only country that has formally left the Paris accord, although several other nations, including Brazil, have talked about quitting. Signatories include China, which announced in Sep-tember that it would try to become car-bon neutral by 2060. Japan and South Korea have also announced net zero tar-gets in recent weeks.

Mr Biden has promised a $2tn climate stimulus package and said he would introduce a target of net zero emissions for the US by 2050. He will also aim to make electricity generation emission-free by 2035, which would close coal and gas-fired power stations.

Mr Trump has focused on loosening environmental regulations, including watering down vehicle emissions stand-ards set by the Obama administration.

“If Trump wins, it is likely that not much will change regarding their stance on climate right away,” said Sarah Ladis-law, director of the climate change pro-gramme at the Center for International and Strategic Studies. “It is quite likely other countries with ambitious emis-sions reduction targets . . . will try to influence US behaviour through cross-border carbon tariffs and a push to influence the global financial system to incorporate climate considerations.”

Contentious issues for the next round of climate talks in Scotland next year include creating global carbon markets — which a Biden administration would support — and increasing climate dona-tions from rich countries to poor.

Environmental pact

Washington retreat from Paris climate accord confirmed

‘If Biden wins, the fact that the withdrawal became final on November 4 really won’t matter’

Trump and Obama administrations to pass promised infrastructure spending bills. And their hopes for bipartisan con-sensus on reforming policy around skilled immigration have faded as Mr Trump has restricted visas on which many companies rely.

Jay Timmons, chief executive of the National Association of Manufacturers,

signalled industry’s desire for a policy agenda that veered to neither party’s extreme. “Voters have proven that our country is deep purple — not red, not blue,” he tweeted yesterday.

The chamber, other industry lobbies and individual CEOs have also called for patience until all votes are counted, making clear that Mr Trump would find little support from business should he attempt to resist any widely accepted conclusion that he had lost.

Polls have shown that concern about potential unrest should election results be contested has outweighed the fears many industry leaders have of higher

‘Without control of the Senate, the Democrats’ ambitious legislative agenda will be scrapped’

World Markets

STOCK MARKETS

Mar 30 prev %chg

S&P 500 2365.93 2361.13 0.20


Dow Jones Ind 20703.38 20659.32 0.21

FTSEuro�rst 300 1500.72 1493.75 0.47

Euro Stoxx 50 3481.67 3475.27 0.18

FTSE 100 7369.52 7373.72 -0.06

FTSE All-Share 4011.01 4011.80 -0.02

CAC 40 5089.64 5069.04 0.41

Xetra Dax 12256.43 12203.00 0.44

Nikkei 19063.22 19217.48 -0.80

Hang Seng 24301.09 24392.05 -0.37

FTSE All World $ 297.99 297.73 0.09

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Mar 30 prev

$ per € 1.074 1.075

$ per £ 1.249 1.241

£ per € 0.859 0.866

¥ per $ 111.295 111.035

¥ per £ 139.035 137.822

€ index 89.046 89.372

SFr per € 1.069 1.072

Mar 30 prev

€ per $ 0.932 0.930

£ per $ 0.801 0.806

€ per £ 1.164 1.155

¥ per € 119.476 119.363

£ index 76.705 76.951

$ index 104.636 103.930


Mar 30 prev %chg

Oil WTI $ 50.22 49.51 1.43

Oil Brent $ 52.98 52.54 0.84

Gold $ 1248.80 1251.10 -0.18

INTEREST RATES

price yield chg

US Gov 10 yr 98.87 2.38 0.00

UK Gov 10 yr 100.46 1.21 -0.03

Ger Gov 10 yr 98.68 0.39 -0.01

Jpn Gov 10 yr 100.45 0.06 0.00

US Gov 30 yr 100.14 2.99 0.01

Ger Gov 2 yr 102.58 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00


LAURA NOONAN — DUBLINJENNIFER THOMPSON — LONDON

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

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

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

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

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

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

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

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

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

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

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

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

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

Citywatchdog sends a clearmessage asbanker loses joboverWhatsAppboast

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

Shutdown risk as borderwall bid goes over the top

FRIDAY 31 MARCH 2017

Briefing

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

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

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

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

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

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

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

Datawatch

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





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

Sources: Jane’s Terrorism and Insurgency Centre

Terror attacks in western Europe

Highlighted attack Others

NorwayParis Nice

Brussels

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

WORLDBUSINESSNEWSPAPER

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

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

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

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

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

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

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

Lloyd’s of Brussels Insurancemarketto tapnew talent poolwithEUbase

AFP

JAMES BLITZ — WHITEHALL EDITOR

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

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

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

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

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

Problems with CDS and other projectsessential toBrexit could force London to

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

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

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

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

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

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S&P 500 2367.10 2368.06 -0.04


Dow Jones Ind 20689.64 20728.49 -0.19

FTSEuro�rst 300 1503.03 1500.72 0.15

Euro Stoxx 50 3495.59 3481.58 0.40

FTSE 100 7322.92 7369.52 -0.63

FTSE All-Share 3990.00 4011.01 -0.52

CAC 40 5122.51 5089.64 0.65

Xetra Dax 12312.87 12256.43 0.46

Nikkei 18909.26 19063.22 -0.81

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FTSE All World $ 297.38 298.11 -0.24

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Mar 31 prev

$ per € 1.070 1.074

$ per £ 1.251 1.249

£ per € 0.855 0.859

¥ per $ 111.430 111.295

¥ per £ 139.338 139.035

€ index 88.767 89.046

SFr per € 1.071 1.069

Mar 31 prev

€ per $ 0.935 0.932

£ per $ 0.800 0.801

€ per £ 1.169 1.164

¥ per € 119.180 119.476

£ index 77.226 76.705

$ index 104.536 104.636


Mar 31 prev %chg

Oil WTI $ 50.46 50.35 0.22

Oil Brent $ 53.35 53.13 0.41

Gold $ 1244.85 1248.80 -0.32

INTEREST RATES

price yield chg

US Gov 10 yr 98.63 2.41 -0.01

UK Gov 10 yr 100.35 1.22 0.02

Ger Gov 10 yr 99.27 0.33 -0.01

Jpn Gov 10 yr 100.36 0.07 0.00

US Gov 30 yr 99.27 3.04 0.01

Ger Gov 2 yr 102.57 -0.75 0.00

price prev chg

Fed Funds E� 0.66 0.66 0.00

US 3m Bills 0.78 0.78 0.00

Euro Libor 3m -0.36 -0.36 0.00


ALEX BARKER — BRUSSELSGEORGE PARKER — LONDONSTEFAN WAGSTYL — BERLIN

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

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

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

ambitioustradeandairlineaccessdeals.Gibraltar yesterday hit back at the

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

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

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

Brussels sees little room for compro-

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

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

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

Brussels takes tough stance onBrexitwith Spainhandedveto overGibraltar

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

Living wage rise to pilepressure on care services

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





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

HOW DRIVERLESS TECHNOLOGY IS CHANGING AN AMERICAN WAY OF LIFE

THE END OF THE ROAD FT WEEKEND MAGAZINE

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

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

How To Spend It

Chic new lodgings in ScotlandMAGAZINE

Art of persuasionMystery deepensover disputed painting of JaneAusten

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

RALPH ATKINS — ZURICHDUNCAN ROBINSON — BRUSSELS

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

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

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

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

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

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

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

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

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

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

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

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

FEBR

UARY

4 2017

THE RISE OF ECO-GLAM

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

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Members of Tigray’s security forces on parade in Mekelle — Michael Tewelde/AFP/Getty

Richard Milne, Nordic and Baltic Correspondent

Denmark said it would cull its entire population of up to 17m mink over fears that a coronavirus mutation in the animals that are farmed for their valuable fur could threaten the effec-tiveness of any future vaccine.

Danish authorities said a variant detected in a dozen people who had recently caught the infection from mink in the north of the country was so wor-rying that it raised questions of how well any potential inoculation would work across the world.

“Due to the discovery of a mutated infection in mink, which weakens the ability to form antibodies, resolute action is needed. It is necessary to kill all mink,” Mette Frederiksen, the Danish prime minister, said yesterday.

“The mutated virus carries the risk that a future vaccine will not work as it should.”

Denmark is the world’s largest pro-ducer of minks skins. Annual produc-tion of about 19m skins accounts for €1.1bn in Danish exports, with China being the largest market.

The Scandinavian country has already culled more than 1m mink due to virus worries but the latest action is a dramatic escalation in a country known for its animal products, including its pork. Danish police said the cull of 15m-17m animals would take several days.

Ms Frederiksen, who is in self-isola-

tion along with much of her government after Denmark’s justice minister tested positive for the virus, said the decision had been taken with a “heavy heart” as she apologised to mink farmers for destroying their “life’s work”.

Denmark’s agriculture minister said the cull amounted to the de facto clo-sure of the country’s mink industry for “a number of years”.

Magnus Heunicke, health minister, said the mutations had been found at five mink farms.

The people who had the new form of the virus were not severely ill but they do not respond positively to antibodies, he said.

“Studies have shown that the muta-tions could affect the current candidates for a Covid-19 vaccine,” he added.

Kaare Molbak, Denmark’s top epide-miologist, warned that in the “worst-case scenario, the pandemic will restart, this time in Denmark”.

Denmark, like most European coun-tries, has imposed extra restrictions in recent weeks as its virus infections hit a new record, due in large part to more extensive testing than in the spring. Additional measures will be introduced in North Jutland due to the mutated virus, the prime minister said.

Tage Pedersen, chairman of the asso-ciation of Danish mink breeders, said: “We must of course not be the cause of a new pandemic . . . But the govern-ment’s decision is a catastrophe for the industry and for Denmark.”

Coronavirus

Denmark to cull up to 17m mink blamed for mutation

Simeon Kerr — Dubai

Saudi Arabia is to allow 10m expatriate workers to change jobs and leave the country without their employers’ per-mission, as it seeks to modernise its controversial kafala system, diversify the oil-reliant economy and create more jobs for Saudi nationals.

Since the kingdom discovered oil in the 1930s, it has been reliant on foreign labour, from western engineers who helped found the hydrocarbons indus-try to millions of low-income labourers manning the construction boom trig-gered by those oil riches.

But to date, overseas workers have been tied to their sponsor, who is responsible for their legal status in a sys-tem known regionally as kafala. Rights groups have criticised this system as akin to indentured labour and say it leaves workers vulnerable to abuse.

From March 2021, foreigners, who make up a third of the population, will be able to move jobs and secure exit visas electronically without the prior approval of their employers, the Minis-try of Human Resources and Social Development announced yesterday.

“This set of reforms will safeguard the rights of both employees and employers in the private sector,” said Sattam Alharbi, a deputy minister. “They will abolish the mobility differences between Saudis and non-Saudis — meaning employers will hire based on capabilities and qualifications.”

Saudi Arabia’s planned reforms come as Gulf states seek to overhaul its labour markets to better suit the knowledge-based, open economy envisioned by the ambitious crown prince, Mohammed bin Salman. The ministry said the reforms would increase competition in the labour market, which would in turn boost wages and public spending.

The reforms could also create more jobs for Saudi nationals, particularly the kingdom’s growing population of young people. Unemployment in the kingdom is rising — up from 11.4 per cent in the first quarter to 15.4 per cent in the sec-ond quarter — as the economy reels from the impact of the coronavirus pan-demic and lower oil prices.

“If this turns out to be a serious reform, it could also play into the Saudi-sation agenda — part of the appeal for companies in hiring migrants has been the ease of controlling them through the abusive kafala system,” said James Lynch, a director of FairSquare, a Lon-don-based human rights organisation. “But there is not much overlap between the jobs migrants do and the work Sau-dis are qualified and want to do.”

He added: “This announcement focuses in on some of the most problem-atic elements of kafala — the fact that workers can’t leave the country or change jobs without their employers’ permission.”

But it was not clear how workers would change jobs and why exit visas would still be required, he said.

Middle East

Saudi Arabia pledges more rights for foreign workers

Andres Schipani — NairobiDavid Pilling — London

Fighting has begun in Ethiopia’s north-ern region of Tigray after prime minis-ter Abiy Ahmed sent federal troops to quell a rebellion in a move that threat-ens to bring Africa’s second most popu-lous country to the brink of civil war.

According to the prime minister’s office military operations began in Tig-ray yesterday. A western diplomat in Addis Ababa said “people have been killed” and the death toll “uncertain”.

Mr Abiy took to social media to say a “red line” had been crossed and accuse Tigrayan regional forces of attacking a federal army base and of “arming and organising irregular militias”.

Mr Abiy, whose government has been struggling to control ethnic-nationalist violence, said his patience had run out with the northern region, which held elections in September in defiance of a national postponement attributed to the Covid-19 pandemic.

The prime minister’s office said the Tigrayan People’s Liberation Front had attacked the base in Tigray and “attempted to rob the northern com-mand of artillery and military equip-ment”. The TPLF, the political party that controls the region and lost much of its power nationally after Mr Abiy became prime minister in 2018, viewed the Ethiopian army as an occupying force, the statement said, adding: “The TPLF has chosen to wage war.”

The Tigray conflict is the most serious to have flared since Mr Abiy took office in the country of 110m people in 10 eth-nically based autonomous regions.

Mr Abiy’s appointment had been meant to resolve tensions between the then TPLF-dominated government and those of the Oromo and Amhara regions that felt excluded from power. Instead, it has triggered a wave of ethno-nation-alist sentiment as groups suppressed by the previous authoritarian regime assert their rights.

The tensions threaten one of Africa’s most promising economic experiments. Under a state-led development model, the economy grew at close to 10 per cent for much of the past two decades. Mr Abiy had promised sweeping liberal

reforms, including privatisation of the telecoms monopoly, to take the econ-omy towards middle-income status. With phone lines and the internet cut in Tigray, according to NetBlocks, which tracks online disruption, TPLF officials could not be reached for comment. But Debretsion Gebremichael, Tigray’s regional president, was quoted on Tues-day as saying: “We have prepared our military of special force not in need of a war, but if the worst comes, to defend ourselves.” The Federal Council of Min-isters in Addis Ababa declared a six-month state of emergency in Tigray.

Tigray’s well-organised military has its roots in the rebel army that over-threw a Marxist regime in 1991 and brought the Tigrayans to the centre of power for 27 years.

A western diplomat in Addis Ababa called the federal deployment a “civil war” that risked the reforms that Mr Abiy, who last year won the Nobel Peace Prize for his role in ending a 20-year conflict with Eritrea, had championed.

The US embassy called for an “imme-diate de-escalation of the current situa-tion in Tigray and a measured response by both sides”.

Mr Abiy’s push for a pan-Ethiopian

identity, opponents say, threatens the autonomy of the ethnic-based states in the federal system and has sparked vio-lence. To the Tigrayan leadership and many from other ethnic groups, includ-ing Mr Abiy’s own Oromo, the national unity push undermines a federal system guaranteeing significant autonomy for ethnically defined territories.

The government of Oromia accused the TPLF of supporting the Oromo Lib-eration Front-Shane, a militia that it says was involved in the killing of at least 54 people on Sunday. On Tuesday, members of Ethiopia’s House of People’s Representatives said the TPLF should be labelled a terrorist group.

After Mr Abiy came to power, the TPLF refused to merge into his unitary Prosperity party, which replaced the Ethiopian People’s Revolutionary Dem-ocratic Front, a four-party coalition that had run the country for three decades.

East Africa

Ethiopian action to stem revolt raises civil war fearsDeployment ordered after attack on federal army base in restive Tigray

‘We have prepared our military . . . not in needof a war, but if the worst comes, to defend ourselves’

INTERNATIONAL



H ere is a story that shows how very fuzzy the bound-aries can get when you attempt to define what is a “green” or “socially

responsible” investment. It involves a large US private equity firm and, yes, an oil company based in Texas.

Hydrocarbon producer Clearly Petro-leum has operations in the state along-side the Brazos river where, thanks to more extreme weather events in recent years, the watercourse has become increasingly prone to heavy flooding.

So the company’s owner, the buyout firm Carlyle, supported it in building flood barriers around its storage tanks and elevating electrical equipment, pro-tecting the works from inundation.

Pretty sensible, you might think. At least if the plan is to pump oil. It doesn’t obviously do much for the planet. Yet despite the fossil fuel bit and lack of any obvious carbon abatement, Carlyle claims that this is a green investment.

The firm says that achieving impact “isn’t just about putting money into companies with strong records on envi-ronmental, social and governance fac-tors. It’s also about making sure portfo-lio companies are in a good position to deal with the effects of climate change that are happening right now”.

You might argue if that’s “green”, almost anything could fit the descrip-

Ethical investment is about morals not markets

running ethical portfolios. The ESG industry counters that it is possible “to do well and do good” both at the same time. But there is no reason that doing good should deliver superior returns.

If anything, it should be the opposite. Remember that impact investors should be funding something that does not seem sufficiently lucrative ex-ante to be backed by conventional financiers.

Logically, then, you would expect them to receive “concessional” — or lower than market — returns.

Accept that premise and it points to a very different way of looking at impact investing. As the Oxford academic Ludovic Phalippou points out, it should not be viewed as a route to superior financial performance but rather the fulfilment of a moral imperative.

After all, why does everyone want decarbonisation, fair wages or encour-agement of diversity on boards? Not because they raise returns but because they are the right thing to do.

Stocks with high ESG ratings may have performed well during the pan-demic, not least because tech groups make up much of the indices. But what would happen if they underperformed at some point? Mr Phalippou asks: Would “destroying the environment and mistreating people become the right thing to do?”

The confusion surrounding ethical investment is unlikely to be solved by more auditors and standards.

Such steps will just drown investors in paper while not getting the world much further along the desired ethical path.

There is a only one way to achieve moral imperatives such as decarbonisa-tion and diversity — establish laws and rules that deliver the outcomes you wish to achieve.

[email protected]

INSIDE BUSINESS

FINANCE

Jonathan Ford

tion. But Carlyle isn’t the only one applying questionable definitions when it comes to ethical investment. Let’s take another example: the mushroom-ing green bond market, which reached €660bn this year and is estimated to reach €2tn by 2023, according to research by NN Investment Partners.

Among the bond issues that left inves-tors with doubts about their green pur-pose is one by Saudi Arabia’s fossil fuel- guzzling electricity monopoly to raise money to install smart meters. Another is the trend for carmakers issuing green bonds to fund development of electric vehicles. As fund manager Tom Chin-nery of Aviva Investors puts it: “That’s business as usual. Every car company on the planet should be doing this.”

The explosion of ESG finance has led to predictable cries of “greenwashing” and the need for t ighter rules around what can be termed an ethi-cal investment.

An alphabet soup of standard-setting bodies has called for better disclosure and reporting to help the market work by separating the virtuous from the sinful.

But it’s worth asking if the problem lies rather deeper and how effective market mechanisms really are at deliv-ering these goals.

“Impact” investment only has real meaning if it means funding activities that would not otherwise happen. Oth-erwise, where’s the impact? You are sim-ply dressing up “business as usual” investments that would be made any-way. That does not so much help the planet as provide a decent income to the rubber-stamp merchants and those investment firms charging high fees for

Why does everyone want decarbonisation, fair wages or encouragement of diversity on boards? Not because they raise returns

Hannah Kuchler — New York

Biogen moved a significant step closer to winning approval for what would be the first new Alzheimer’s drug in the US for decades after the country’s regula-tor said there was “substantial evi-dence” it was effective, adding $15bn to the company’s market value.

The Food and Drug Administration yes-terday published a positive clinical review on the application for aducanu-mab, a potential treatment for the neu-rological disease that affects 5.7m peo-ple in the US alone.

The FDA reviewers addressed con-cerns that there was not enough evi-dence that the drug worked, after one of Biogen’s two clinical trials failed. They said the failed trial did not “meaning-fully detract” from the results of the suc-cessful one, which it called “robust and exceptionally persuasive”.

Biogen shares leapt 40 per cent to a two-year high, pushing the company’s market capitalisation to $53bn from $38bn at Tuesday’s close.

The company has argued that clinical data shows aducanumab slows loss of memory, language and executive func-tions in Alzheimer’s patients. The drug targets clumps of protein called beta amyloid that can build up in the brain.

“The applicant has provided substan-tial evidence of effectiveness to support approval,” the regulator’s reviewers wrote in their 343-page report.

The document is not a final decision, but it suggests how the agency will view the company’s submission.

Biogen originally halted both trials of the drug in March 2019, saying an analy-sis by an independent committee found it was not going to be effective. But in October last year, it reversed course, claiming that a larger data set showed the drug did work at a higher dose.

The FDA said yesterday that the agency and Biogen had “jointly con-cluded” that terminating the pro-gramme early did not stop it from being able to interpret the data.

Some experts have been concerned that the drug may not be effective, how-ever. David Knopman, a Mayo Clinic neurologist who worked on one of the trials, called for a third trial focused on the higher dose, in a medical journal this week.

Umer Raffat, an analyst at Evercore, said he did not think the data was “high quality” but he still believed the drug was likely to be approved.

Biogen leaps on prospect of Alzheimer’s drug approval

Mohamed El-Erian The election makes clear three things that spell trouble for the US economy y MARKETS INSIGHT

Dave Lee — San Francisco

Uber and Lyft shares soared after California voted overwhelmingly to allow gig economy companies to keep treating their workers as inde-pendent contractors.

Gig economy companies collectively funded much of a $200m campaign for Proposition 22, a state ballot meas-ure to exempt them from what they said would be an existential threat to their business models.

By yesterday morning, with 99 per cent of the vote counted, 58 per cent were in favour of the proposition.

As a result, Uber and other app-based gig economy groups will not have to treat workers as employees, with associated health benefits, holi-day pay and other benefits.

Uber shares shot up 15 per cent and Lyft shares by 13 per cent in morning trading yesterday, having already been boosted on election day by

strong polling. Uber’s shares are at their highest level since August 2019.

Ahead of the vote, Uber warned it would have had to greatly reduce the number of drivers on its platform and increase prices, particularly in less populated areas, if the proposition was defeated.

Under Prop 22, the companies will instead offer limited healthcare options, with drivers remaining as independent contractors. Workers will have a minimum earnings guar-antee of at least 120 per cent of the state’s hourly minimum wage, although the time during which driv-ers are waiting to be matched with a rider will not be counted.

According to Morgan Stanley, implementing such measures will increase Uber’s costs 1 per cent, com-pared with 5 per cent had it lost the vote. The company reports its third-quarter earnings today.

“Drivers and delivery people will

get what so many of you have been asking for: access to benefits and pro-tections, while maintaining the flexi-bility and independence you want and deserve,” Uber chief executive Dara Khosrowshahi wrote in a mes-sage to the state’s drivers.

Mr Khosrowshahi retweeted a tweet by tech investor Jason Calacanis in which he referred to Lorena González, a state assemblywoman who had opposed Prop 22, as a “grifter”. Mr Khosrowshahi deleted his retweet shortly afterwards.

Labour organisations that had opposed Prop 22 reiterated their view that Uber, Lyft and others were exploiting workers. “Gig workers did not lose today, democracy did,” a spokesman for campaign group Gig Workers Rising said. “When corpora-tions spend hundreds of millions of dollars to write their own labour laws . . . that is a loss for our system of government and working people.”

Gig green light Uber and Lyft buoyant after ballot win on treating drivers as contractors

A protest at City Hall in Los Angeles — but a majority of California voters backed Prop 22 — Frederic J. Brown/AFP/Getty Images

as securities and sold on, with only 2 per cent falling on to Ant’s balance sheet.

The draft rule calls on Ant to provide at least 30 per cent of the funding for loans and to cap loans at Rmb300,000 ($44,843) or a third of a borrower’s annual salary, whichever is lower.

Mr Ma, Ant’s founder, has been lobby-ing regulators against the proposals, according to two people familiar with the situation, culminating in a speech in Shanghai at the end of October when he suggested that China’s banks had a “pawnshop mentality” and Ant was an essential part of the credit system.

An Ant Group spokesperson denied that Mr Ma had lobbied regulators on the matter: “The claim is baseless and is pure fabrication. Ant Group has made full disclosure of the material risks of our business in the prospectus.”

An executive at one of China’s Big Four state banks said that while Ant had a low level of defaults, the government was concerned that the figure “could take off in the event of a sharp economic slowdown. That creates social risks the government is keen to avoid.” Mr Ma’s open challenge to the regulator in Shanghai had been “unacceptable” and prompted it to act. “The logic for Beijing is, ‘If I don’t understand and can’t con-trol you, I won’t let you grow’.”

Rebecca Chua, founder of Premia Partners, said it was “better for the regu-lators to put constraints” on Ant now rather than expose traders to heavier losses later. “You don’t want retail inves-tors to lose half their fortunes. Jack Ma can afford to but they can’t.”Reporting by Henny Sender, Hudson Lockett, Primrose Riordan and Nicolle Liuin Hong Kong; Ryan McMorrow, Sun Yuand Yuan Yang in Beijing; Tom Mitchell inSingapore; Xueqiao Wang in Shanghai; andQianer Liu in ShenzhenEditorial Comment page 18John Thornhill page 19

Beijing shelved $37bn Ant IPO to ‘maintain stable markets’3 Effort to ‘protect investors’ interests’3 Regulators focus on micro-lending

FT reporters

Beijing said it had suspended the $37bn listing of Ant Group, controlled by China’s richest man, Jack Ma, to protect its capital markets as investors reeled from the eleventh-hour decision.

The order to stop Ant from launching a record IPO in Hong Kong and Shang-hai, two days before trading was due to start, is likely to have come from the very top, potentially from President Xi Jinping himself, according to two people familiar with the situation.

Wang Wenbin, China’s foreign minis-try spokesman, said yesterday that offi-cials had halted the IPO to “better main-tain the stability of the capital markets and to protect investors’ interests”.

Ant’s IPO had created a frenzy in both Hong Kong and Shanghai among insti-tutional and smaller investors. Bankers working on the IPO in Shanghai saidlast week that retail bids had exceeded the value of the shares on offer bymore than 870 times, equivalent to Rmb19.1tn ($2.8tn).

Behind the scenes, Chinese regulators have been steadily tightening control of the country’s booming micro-lending sector, and have Ant in their crosshairs.

Draft regulations published on Mon-day, shortly before the IPO was halted, will hurt Ant’s lending business, which was responsible for nearly 40 per cent of its sales in the six months to June.

Ant’s credit business issues a tenth of China’s non-mortgage consumer loans but the vast majority of these are made through its partner banks or packaged

‘You don’t want retail investors to lose halftheir fortunes. Ma can afford to but they can’t’

NOVEMBER 5 2020 Section:Companies Time: 4/11/2020 - 19:02 User: andy.puttnam Page Name: COMP&MKTS1, Part,Page,Edition: USA, 8, 1


NOVEMBER 5 2020 Section:Ad Page Time: 4/11/2020 - 10:08 User: john.lee Page Name: AD MITCH, Part,Page,Edition: USA, 9, 1


“actively exploring options” for the business.

Barcelona-based Cellnex was consid-ered to be a likely candidate to acquire the masts, or a stake in the now separate and renamed CK Hutchison Networks, after it raised €4bn via the issue of new shares in July to pursue takeover oppor-tunities.

CK Hutchison said yesterday that it was in talks with Cellnex over a disposalthat would depend on service agree-ments being struck with the Spanish company to accelerate the rollout of 5G networks.

CK Hutchison is the latest company to separate out its masts from its core tele-coms operating business with the

fone, are considering floating stakes in their infrastructure arms to crystallise value without losing control of the asset.

The sale of Three’s towers has been seen as a potential spur for further con-solidation in the telecoms sector.

CK Hutchison’s failed attempt to buy O2 in 2016 was complicated by its joint ownership of the MBNL tower joint ven-ture in the UK alongside BT.

Cellnex shares rose more than 5 per cent after talks over a potential deal were confirmed and it reported strong results for the first nine months of the year. Revenue grew 53 per cent to €1.1bn while earnings before interest, tax, depreciation and amortisation, as well as one-off costs such as restructur-

Nic Fildes

CK Hutchison is closing in on a sale of its large portfolio of mobile towers in Europe to Cellnex, the acquisitiveSpanish telecoms infrastructure com-pany, which would net the owner of the Three mobile brand €10bn if a deal is agreed.

The Hong Kong-based group carved out the assets, which comprise 29,100 sites across six European countries, in August and said at the time that it was

Spain’s Cellnex in talks to buy Three owner’s masts in six European countries

Derek Brower — US energy editor

US oil and gas stocks rose while those of renewable energy producers fell yester-day, as traders gambled that even if Joe Biden wins the White House, Demo-crats’ probable failure to gain control of Congress would kill plans for a clean-energy revolution.

Mr Biden has proposed $2tn of spend-ing in the next four years to decarbonise US electricity by 2035 along the way to hitting net-zero carbon emissions by 2050, with plans to expand clean power generation and build a network of charging stations for battery-powered cars.

But the proposals hang in the balance following Tuesday’s election, which look set to deny his Democratic Party the Senate majority needed to push the programme through, especially follow-ing the Supreme Court’s tilt to the right.

“If Biden prevails but Republicans keep the Senate, they will prevent much of the $2tn in green spending Democrats favour,” said Bob McNally, head of con-sultancy Rapidan Energy Group and a former adviser to George W Bush.

“Court-packing, adding states, and large tax hikes on oil and gas companies go out the window.”

The market seemed to agree that Tuesday’s vote — and the lack of a “blue wave” handing the Democrats control of Congress — would help fossil fuel pro-ducers more than their clean energy counterparts.

Shares in ExxonMobil, which only last week reported its third consecutive quarterly loss, rose yesterday along with those of rival Chevron and the S&P 500 Energy index that mainly consists of oil and gas companies.

By contrast NextEra, a power pro-ducer with a growing clean-energy port-folio whose market valuation recently overtook Exxon’s, were down — as were those in other clean-energy producers. Denmark’s Vestas, a big supplier of wind turbines to the US, also fell.

The election offered voters a stark choice between Mr Biden’s climate-focused plan — including his pledgeto rejoin the Paris climate accordfrom which the US officially withdrew

Democrats’ probable failure

to gain control of Congress

puts $2tn proposals at risk

Mr Biden’s comments during one of the pre-election debates that he would “phase out” the oil industry.

“Will you remember that, Texas?” Mr Trump said in the debate. “Will you remember that, Pennsylvania, Okla-homa?”

The oil industry also claimed Mr Biden’s proposals would curb drilling on federal lands in states such as New Mex-ico, home to part of the Permian Basin, the world’s most prolific oilfield.

In an interview with the Financial Times last month, Scott Sheffield, head of shale driller Pioneer Natural Resources, said US oil production would fall 3 per cent a year if Mr Biden won the White House.

But a modest victory for Mr Biden without a Senate majority would — if confirmed — force him to pursue a more moderate energy agenda, even allowing for compromise, said some oil and gas industry figures.

“The shift toward lower-carbon energy is not over, but it’s going to be on

yesterday — and Donald Trump’s efforts to boost fossil fuels through deregula-tion and scrapping rules to control pol-lution.

This year’s coronavirus-induced oil price collapse has scarred the US oil and gas industry, where tens of thousands of jobs have been lost, bankruptcies con-tinue to mount and production has fallen about 20 per cent.

The sector’s troubles made energy — and its future in an economic recovery — a theme in the election battle.

Mr Biden said his clean-energy deal would create jobs in everything from solar panel installations to cleaning up abandoned oil and gas wells.

Mr Trump tried to depict his rival as a green radical who would ban fracking, the drilling technique that enabled the shale revolution, at the cost of thou-sands of jobs in swing states such as Pennsylvania and Ohio. Mr Biden has insisted fracking will not be “on the chopping block” if he wins.

The president’s campaign seized on

Joe Biden plans to decarbonise US electricity by 2035 on the way to hitting net-zero emissions by 2050 — Joe Raedle/Getty Images

‘The shift is going to be on a more realistic timeline absent a blue wave’

COMPANIES & MARKETS

ing and bonus payments, rose 68 per cent, boosted by recent acquisitions.

However, pre-tax losses in the period widened to €228m compared with losses of €166m a year earlier.

The Spanish company has spent €7bn on deals this year, having bought towers in Portugal, Poland and the UK, funded by debt and equity.

It now owns 61,000 sites and has a market capitalisation of almost €28bn, nearly double that of Spanish incum-bent telecoms company Telefónica.

Giles Thorne, an analyst with Jeffer-ies, said the results helped justify the performance of the company’s stock. “Once again, Cellnex does much to jus-tify its year-to-date share gains.”

CK Hutchison nears €10bn towers sale

a more realistic timeline absent a blue wave,” said Dan Eberhart, head of oil-field services company Canary and a vocal Trump supporter.

“The truth is that Republicans are supportive of policies to reduce carbon emissions. But they just think it needs to be done through increased competition and market-oriented policies.”

Lobbyists in Washington said the need to win cross-party support for a cli-mate plan would dominate Mr Biden’s strategising around new energy legisla-tion.

“This opens the door to addressing cli-mate change in a way that is not only comprehensive but bipartisan,” said Frank Maisano, a consultant at Bracewell, which represents energy cli-ents in Washington.

“A $2tn climate plan will have to take the shape of a $2tn jobs plan with some climate thrown in.”

Additional reporting by Leslie Hook and Myles McCormickSee Lex

Joe Miller — Frankfurt

BMW’s third-quarter profits grew almost 10 per cent as pent-up demand, primarily in Asia, helped the German brand post the best sales figures in its history.

Sales in China, BMW’s largest and most profitable market, surged more than 31 per cent in the quarter to the end of Sep-tember compared with the same period in 2019.

The luxury group’s European sales also increased 7 per cent from a year earlier, contributing to a record of more than 675,000 sales in total worldwide.

The rebound in demand helped BMW report a pre-tax profit of €2.5bn for the period, up from €2.25bn in the same quarter last year.

Two weeks ago, BMW revealed it had more than €3bn in free cash flow in the third quarter of the year, comfortably beating market expectations.

However, the manufacturer warned yesterday that its automotive business, which includes the Mini and Rolls-Royce brands, could still make no profit for the whole of 2020, saying it “contin-ues to assume that demand in all key markets will be significantly reduced in light of the coronavirus pandemic”.

Nicolas Peter, BMW’s chief financial officer, cautioned that “the business

environment has remained extremely volatile”, emphasising that the company experienced its worst-ever drop in sales in the previous quarter.

“Now the situation in Europe is wors-ening again,” he added. “We have never recorded swings like this within such a short period of time.”

Global sales are still 12.5 per cent lower for the first nine months of 2020 compared with the same period in 2019.

The Munich-based group also announced that all four of its German plants would be producing battery-pow-ered vehicles “in the foreseeable future”, as it pushes ahead with plans to put close to 5m pure electric cars on the road over the next decade.

By the end of next year, BMW, which was an electric car pioneer with its i3 model, said it would have a total of five electric cars on the market, adding the iX3, iNEXT and i4 to its line-up, alongside the i3 and Mini Cooper.

While BMW has ploughed more than €4bn into research and development this year, largely into electric and hybrid driving technology, the company is slashing costs, with at least 6,000 jobs set to be cut across the group.

BMW’s results come after domestic rival Daimler reported that its net prof-its increased nearly a fifth in the third quarter to almost €2.2bn, thanks to a strong rebound in sales of its Mercedes-Benz cars in China.

Volkswagen, which owns premium brands Audi and Porsche, also returned to profit in the three months to the end of September, after posting a loss of €1.4bn for the first six months of the year.

BMW profits jump 10% after China rebound spurs record deliveries

Energy. Green spending

US oil shares climb as renewables sector slides

‘The situation in Europe is worsening. We have never recorded swings like this within such a short period’

Telecoms Automobiles

Harry Dempsey and Alice Hancock London

After transforming the fortunes of hand sanitiser and soap producers, the pan-demic looks set to do the same for another previously unheralded indus-try — manufacturers of outdoor heaters.

A wave of new restrictions on indoor gatherings in western countries heading into winter has set off a scramble for heaters that will allow people to social-ise safely and warmly.

Buyers range from households keen to meet friends and family outside to pubs, bars and restaurants desperate to attract enough customers so they can stay in business through to the spring.

“We’ve been in this business for 55 years and we’ve never seen demand like the last three months,” said Pete Arnold, chief executive of AEI Corporation, an outdoor heating supplier.

Despite England’s pubs, bars and res-

taurants having to shut for much of November as part of a second lockdown, executives in the UK hospitality indus-try say outdoor heated space will be vital to their fortunes once they are allowed to reopen.

Phil Urban, chief executive of Mitch-ells & Butlers, one of the UK’s largest bar chains, said the group would press ahead with a £1.5m investment in heated and covered outside spaces.

“The view is as soon as we do open we will need those outdoor spaces. It’s diffi-cult to see over the next three, four, five months being able to operate normally,” he said.

England’s second lockdown starts today and is scheduled to last until December 2.

Heaters aimed at domestic use retail for between £50 and £100, but prices can reach up to £800.

“People are becoming less price-sen-sitive,” said Paul Morey, chief executive of Herschel Infrared Heaters, a Bristol-based manufacturer and supplier.

But manufacturers and distributors in the US, the UK, Australia and China said the record demand risked pushing a supply chain dependent on shipping

outdoor spaces, households have been preparing for months of winter socialis-ing in their gardens.

Elizabeth Terry, a retired doctor from Wiltshire who is vulnerable to infection due to cancer treatment, said she had not entertained inside at all due to Cov-id-19 and had spent £300 on her third electric outdoor heater last month.

“It’s been a life saver for us. We’ve sat outside with friends of ours at 7 degrees outside,” she said.

Mr Levy reckons that England’s sec-ond lockdown will provide some tempo-rary respite for suppliers.

“It’s a bit of a relief as we were not cop-ing with the level of demand,” said Mr Levy, who plans to use the window to restock.

If distributors in the UK and US are struggling to get hold of heaters, manu-facturers in China have not been able to produce them quickly enough.

Sam Xue, general manager at Liangdi, a Changzhou-based manufacturer, said that the company had increased its workforce by 30 per cent since the sum-mer and production was running at 1,000 units a day — double last year’s levels.

The heaters come in two broad types: those powered by gas that are less envi-ronmentally friendly and dominate the US market, and electric infrared ones. Concern over their effect on the envi-ronment had prompted France to out-law both types this winter, but the ban has been pushed back until the spring because of the pandemic.

It is one reason why some are refusing to join the rush.

“They are expensive to run, they don’t last that long, and they are not good for the environment,” said Ralph Findlay, chief executive of UK pub group Marston’s, which has left heaters out of its plans to navigate the pandemic.

But for other UK pub groups, the question of heaters’ green credentials takes second place to trying to stay in business once allowed to reopen.

Jamie Atherton, general manager at Quarter, a Bristol-based group of bars, hotels and workspaces, which created outdoor areas with heaters at two ven-ues and plans to reconfigure more space during the lockdown, is unequivocal. “We do this or go down.” Additional reporting by Judith Evans in London and Sun Yu in Beijing

Industrial goods. Distribution snags

Surge in demand for outdoor heaters raises pressure on supply chainChina manufacturers bolster

capacity as restaurants, pubs

and households snap up units

the bulk of heaters from Asia’s largest economy to breaking point.

“The entire supply chain has broken down,” said Mr Arnold of AEI.

Steve Levy, managing director of Heat Outdoors, a Hertfordshire-based dis-tributor, said Chinese manufacturers that typically deliver gas heaters within

six to eight weeks could now only do so by February or March. As a result, the company resorted to paying for 1,000 units to be flown in last weekend, even though rates for air freight have trebled.

While England’s new lockdown only permits people to meet one other per-son from another household in public

One Changzhou maker has expanded its workforce 30% and doubled output

former having attracted much higher valuations.

The plunge in share prices across the sector, combined with high levels of debt and the need to invest in 5G upgrades, has pushed some networks to sell their towers to specialists such as Cellnex or infrastructure investors such as KKR.

Other companies, including Voda-

The disposal of Three’s assets has been seen as a potential spur for further consolidation in the sector

NOVEMBER 5 2020 Section:Companies Time: 4/11/2020 - 18:13 User: jon.wright Page Name: CONEWS1, Part,Page,Edition: USA, 10, 1


Joe Miller — Frankfurt

As European governments combat a resurgent pandemic, the chief executive of Volkswagen, the world’s largest car-maker, is fighting his own battle.

Since taking the top job in 2018, Her-bert Diess has been driven by a fear that the German group will be left behind as the era of the combustion engine gives way to that of the electric vehicle.

“Many of our differentiators, all our knowledge, our actual capabilities, will not be as important any more,” Mr Diess told the Financial Times in an interview at VW’s headquarters in Wolfsburg.

“This is exactly what happened to Agfa or Kodak” he added, referring to the photography companies upended by technology. “They knew what was coming, but they still couldn’t change.”

Volkswagen has already pledged to spend €33bn on its electric vehicle busi-ness, an investment Mr Diess hopes will eventually triple the company’s market capitalisation to €200bn and secure its future as a heavyweight that can com-pete against pioneers such as Tesla.

But as the pandemic threatens more pain for the car sector, pointing to the complacency of Kodak may not be enough to persuade everyone — inside and outside VW — that a profitable elec-tric future is within his grasp.

After shutdowns at battery plants this summer delayed deliveries of VW’s first mass-market electric car, the ID. 3, and Audi’s e-tron, the group is in danger of missing tough EU emissions targets in 2020, and could be fined hundreds of millions of euros. Unions have also bris-tled at the cost cuts needed to pay for the transition, while shareholders worry that recent missteps have weakened the 62-year-old’s leverage in a highly politi-cal organisation.

It is a predicament that has even drawn sympathy from Tesla founder Elon Musk, who tweeted last month that Mr Diess was “in a tough position with so many constituencies to please”.

Some of Mr Diess’s woes are self-inflicted. In June, he was forced to apol-ogise to VW’s supervisory board, which includes workers’ representatives, after accusing members of being responsible for damaging leaks about software com-plications with the new Golf model.

He subsequently relinquished control of the VW brand, the largest of the group’s 12 marques, a position he had held since 2015, when he joined the company from rival BMW.

In his office overlooking the Wolfs-burg plant, Mr Diess acknowledged the boardroom drama had led to “scepti-cism” about his ability to transform VW.

“We have to prove that governance is working” he added. “Is it still hard work to convince all stakeholders; to take them along? Yes, because it’s complex. It’s very unionised. There are different interests within the group”.

He also dismissed suggestions that troubles may flare as VW’s truck subsid-iary, MAN, plans to axe 9,500 roles to fund an expansion into electric technol-ogy. When MAN’s management tore up an agreement with unions in Septem-ber, the head of VW’s works council, Bernd Osterloh, warned that the com-pany would be “well advised to not link restructuring with the spectre of unem-ployment”.

After the turbulence of the summer, something of a truce has been achieved.

“It seems [Mr Diess] came to terms with how things are run here at VW,” said a person close to the works council, who added that the executive is much more communicative with union bosses.

But even if relations with the unions improve further, it will do little in the short-term to revive VW’s share price, which has lagged behind European rivals this year.

“VW lost some pace in the last few months,” said Ingo Speich, a portfolio manager at institutional investor Deka, and was engaged in “a power struggle”.

Mr Diess says shareholders should wait a few months before delivering their verdicts. “The proof point will be towards the end of this year and into next year when people will see that [the transition is] working, that we can sell the cars, that the demand is there, that we can deliver on our promises, he said.

And VW is pulling ahead of tradi-tional rivals in the electrification race. The group recently overtook the Renault-Nissan alliance to become the largest seller of electrified vehicles in Europe, and is on course to become the largest in the world within a couple of years. After a slow start, it is also nearing full capacity for production of the ID. 3 and is about to launch several more

Pursuing his electric and software ambitions is not the fastest route to the €200bn valuation Mr Diess is aiming for. Analysts instead recommend float-ing a part of brands such as Porsche.

“VW has such valuable assets, if they were to restructure to a holding model, they could lift so much capital and use it to innovate at such an amazing pace,” said Arndt Ellinghorst at Bernstein.

But Mr Diess is aware that such deci-sions would have to win the approval of the Porsche-Piëch family, who own more than 53 per cent of VW’s voting capital and remain cautious about restructuring the company’s portfolio.

In a year turned upside down by the virus, the VW boss also knows he needs to stay focused on keeping the company, whose pre-tax earnings have fallen 85 per cent so far this year, in the black.

“If we can keep the economy running and plants running, we should still be able to deliver a good last quarter,” he said. Amid the crisis, he added, VW is “making progress” in restructuring its internal supply chains, and reducing costs.

“Is it fast enough for the capital mar-kets?” he asked aloud, referring to the electric race VW is running. “Probably not, but, it’s quite fast for Volkswagen.”

Diess closes in on VW electric dreamAfter missteps, head of German carmaker says ‘proof point’ for investors is within sight

VW aims to steal Tesla’s crown VW GroupGlobal electric car sales, year to Sep (’000 units)*

Sources: Investment Company Institute; Refinitiv; Bloomberg* Includes battery electric and plug-in hybrids

0 50 100 150 200 250 300Tesla

VolkswagenRenault alliance**

HyundaiBMWBYDGM

DaimlerPSA

Geely-Volvo CarsSAICGAC

ToyotaFord

** Renault-Nissan-Mitsubishi

Share prices and index, rebased

405060708090

100110

Jan 2020 Oct

Stoxx Europe 600 Auto & Parts indexDaimler

Volkswagen

Pre-tax earnings (€bn)

-10

-5

0

5

10

15

2012 14 16 18 20

VW earnings recovered last quarter but are still down

85% year to date compared with the same period in 2019

Madison Darbyshire andStephen Morris — London

Barclays has been ordered by regula-tors to repay millions of pounds in interest on improperly sold timeshare loans in Malta and faces a further inves-tigation that could force the bank to reimburse debt payments in full.

In a letter to borrowers last week, the UK lender acknowledged it had been told by the Financial Conduct Authority to hand back interest already charged on loans issued between April 2014 and April 2016 by timeshare operator Azure Services.

Barclays will also cancel future inter-est due on the more than 1,400 loans.

Barclays Partner Finance was the banking partner for Azure Resorts, and underwrote financing agreements sold to holidaymakers. Although Azure Resorts was licensed by the FCA to sell loans, the employees brokering the financing agreements were working for another company, Azure Services, which was not authorised by the FCA until April 25 2016.

The repaid and waived interest amounts to an estimated £26m, about half of the value of the £48m of loans in question, according to Malaga-based

law firm M1 Legal, which represents the borrowers whose cases were reviewed by the FCA. Barclays said that figure could be “materially overstated”, but declined to provide an estimate.

Barclays must also install an “inde-pendent assessor” to review whether each of the timeshare loans was afforda-ble. If not, the bank will be required to cancel the loans and reimburse custom-ers for all payments, including an addi-

tional 8 per cent interest, according to the letter to borrowers seen by the Financial Times.

Andrew Cooper, chief executive of European Consumer Claims, a firm that helps people out of improper timeshare contracts, said the FCA’s decision set an important precedent.

While the sum is a “drop in the bucket” for the bank, “there are billions of pounds of timeshare loans in this marketplace that all fit the terms of these breaches”, Mr Cooper said.

The interest reimbursement is a sig-nificant portion of the loans, which gen-erally have interest rates above 9 per cent. In one Barclays financing agree-ment seen by the FT, a 2014 loan for just over £20,000 carried a rate of more than 9.5 per cent over 15 years — equat-ing to total interest of £17,420, almost doubling the cost of the loan.

Barclays said it ended its relationship with Azure in 2018, but “we recognise that between April 2014 and April 2016 we did not provide the right level of service”.

Azure Services Ltd did not respond to a request for comment. Both Azure Resorts Ltd and Azure Services Ltd began liquidation proceedings in April.See Lombard

Financials

Barclays forced into timeshare redress

The UK lender has been told to repay interest on timeshare loans in Malta

Herbert Diess says he is wary of the business becoming another Agfa or Kodak, bound to old technology in a fast-changing world — Ronald Wittek/epa/EFE

‘We have a chance because the car is really complex and Google can’t do a car today’

David Keohane — ParisOwen Walker — London

Crédit Agricole warned there was no visibility at the “end of the tunnel” in the face of a resurgent coronavirus pandemic in Europe but increased its provisions for bad loans by less than expected.

The caution from the French lender came as its third-quarter profits fell 19 per cent from a year earlier, to €977m. The bank’s revenues climbed 2 per cent to €5.2bn during the same period.

Although the outlook for the French economy is deteriorating, Crédit Agri-cole’s third-quarter results beat fore-casts. Analysts had expected net income of €790m, while the bank’s revenues were 4 per cent above expectations, according to Jefferies.

The Paris-based lender’s better than expected results were in line with Euro-pean and US peers, as bank bosses on both sides of the Atlantic struck a san-guine tone in their third-quarter earn-ings despite a second wave of the pan-demic gathering pace.

On Tuesday, Crédit Agricole’s rival BNP Paribas reported surging trading revenues, lower than expected reserves for bad loans, and set aside half its prof-

its for shareholder payouts. However, Crédit Agricole said the coronavirus cri-sis was “not resolved and with the sec-ond lockdown period we have no clear visibility at the end of the tunnel”.

The bank said its cost of risk stood at €577m in the third quarter — 1.7 times more than at the same point lastyear but lower than in the previoustwo quarters and below expectations.

Chief financial office Jérôme Grivet also said it was too early to say if the sec-ond lockdown in France would lead to an “explosion in the cost of risk” next quarter. Just over 70 per cent of the increased provisioning in the third

quarter was for the risk of loans souring “primarily related to prudent provision-ing in sensitive sectors such as aviation, hotels, tourism, restaurants and certain professionals”, the bank said.

Despite being a smaller player in glo-bal financial markets than many of its rivals, Crédit Agricole still benefited from the boost in trading revenues enjoyed by peers. Its investment bank-ing revenue was up 10 per cent in the quarter, the bank said.

Chief executive Philippe Brassac said he hoped for a return to “normality” and that banks would be able to start paying dividends again from next year.

Banks

Crédit Agricole warns of uncertainty

battery models, including its first dedi-cated electric SUV, the ID.4.

The bigger concern for Mr Diess, how-ever, is to ensure that an electric future for VW is also a lucrative one. The dan-ger is that electric cars, which contain far fewer parts than combustion engine models, will be commoditised. It is a sce-nario Mr Diess hopes to combat by own-ing the valuable customer data gener-ated by vehicles that are ever more automated and connected to the web.

Modern vehicles contain more lines of code than a smartphone, but Volkswa-gen relies on suppliers for 90 per cent of its models’ software. Unlike rivals such as Daimler, which has partnered with Nvidia, VW is ploughing €7bn into building a unit with 5,000 staff, tasked with increasing the amount of proprie-tary software in VW cars six-fold.

Yet competing with Silicon Valley giants, whose cash reserves alone are larger than VW’s entire market value, is not straightforward.

“We have a chance because the car is really complex and Google can’t do a car today,” he said. “Elon [Musk] can make a car, but also with some limitations still. Can we get to his level? Yes, I think so. Many of the people working for West Coast tech companies are Europeans.”

COMPANIES & MARKETS

Judith Evans — London

The world’s largest consumer goods groups are making slow progress on increasing the amount of recycled plas-tic in their packaging, despite signing up to a set of targets that aim for signifi-cant progress by 2025.

Companies including Mars, Mondelez and Keurig Dr Pepper all reported that in 2019, less than 1 per cent of their plas-tic packaging was made from materials recycled from consumer use, despite agreeing to 2025 targets ranging from 5 to 30 per cent.

The data was submitted by the com-panies to the Ellen Macarthur Founda-tion, which together with the United Nations environment programme brought together businesses responsi-ble for more than a fifth of the plastic packaging used globally to agree targets for cutting waste.

Some consumer goods groups showed better progress. Unilever increased its use of recycled material from 1 per cent in 2018 to 5 per cent a year later. Its ulti-mate goal is 25 per cent. SC Johnson and Danone also reported improvements.

But the foundation warned that many companies taking part in the initiative

so far showed only piecemeal attempts to rethink models dependent on single-use plastics, and urged them to invest in reuse, which in 2019 accounted for just 1.9 per cent of packaging, only fraction-ally up from a year earlier.

Companies signed up to the New Plas-tics Economy Global Commitment — including retailers, consumer goods makers and packaging producers — increased their use of post-consumer recycled plastic overall by 22 per cent between 2018 and 2019.

Sander Defruyt, who leads the initia-tive for the Ellen Macarthur Founda-tion, said this was “real progress . . . we were positively surprised on the recy-cled content side”.

The rise was driven by retailers such as Walmart, which increased the amount of recycled plastic in its packag-ing from 0.47 per cent to 9 per cent in the year. Schwarz Group, which owns Lidl, went from 0 to 6.1 per cent.

Among consumer goods groups, sev-eral showed little change; Nestlé’s use of recycled plastic was static at 2 per cent and Reckitt Benckiser at 3 per cent. The data does not include Procter & Gamble, the world’s largest consumer goods maker, which chose not to take part.

Overall, the companies reduced their total plastic by only 0.1 per cent, a figure that Mr Defruyt said demonstrated the importance of working towards reduc-tion as well as recycling.

“In order to meet the 2025 targets we will need to see a significant accelera-tion in progress,” he said. “Everything elimination-related is mainly driven by substitution to other materials rather than really fundamentally redesigning the system to reduce the need for pack-aging in the first place.”

Retail

Slow progress for consumer goods groups on recycling

‘In order to meet the2025 targets we will need to see a significant acceleration in progress’

Contracts & Tenders

NOVEMBER 5 2020 Section:Companies Time: 4/11/2020 - 19:02 User: alistair.fraser Page Name: CONEWS2, Part,Page,Edition: USA, 11, 1


COMPANIES & MARKETS

Patricia Nilsson

British shoe brand Clarks has agreed to sell a majority stake to a Hong-Kong based private equity company in a £100m deal, as the group’s founding family cedes control for the first time in its 195-year-old history.

C&J Clark, the company behind the brand, yesterday said LionRock Capital was set to become its largest share-holder with an investment that would help “grow the Clarks brand globally and most notably in China and across the rest of Asia Pacific”.

The group had been grappling with heavy losses before the pandemic and recently launched a company voluntary agreement, an insolvency proceeding that allows businesses to renegotiate debts. Clarks called the CVA, through which it was hoping to cease rent pay-ments on 60 of its 320 stores, an “abso-lute necessity”, but stressed it had not announced any store closures.

Clarks has 230 shops in the UK and Ireland and has 1,265 stores and fran-chises globally, and in May announcedthat it would cut more than 900 jobsworldwide.

The Clark family is set to maintain an undisclosed holding in the business after the £100m deal, which is contin-gent on a shareholder vote in December as well as the CVA for the brand’s stores in the UK and Ireland. Family members own 85 per cent of the company.

“The challenges to our business brought on by Covid-19 have meant that we need more resources and investment in order to fully deliver this strategy and safeguard the future of our business,” said chief executive Giorgio Presca, who

in the two sides’ planned trade treaty and insisted that the relationship must be based on unilateral access rights that Brussels will remain free to withdraw.

Those rights, known as equivalence provisions, cover areas such asbrokerage services and share trading, and are based on the EU judging enough countries’ regulations to be as tough as its own.

John Berrigan, the EU's chief civil servant dealing with financial services policy, told MEPs last week that the EU still needed further clarifications from the UK about its future regulatory plans to ensure that they would not stray too far from European norms.

“At the end of the transition period, the UK’s and EU’s regimes will be the most equivalent in the world but, as it stands, this has not been recognised by the EU,” said Nausicaa Delfas, executive director of international at the FCA.

Nick Bayley, managing director at consultancy Duff & Phelps and a former FCA official, said: “The rules around share trading may be up for grabs. Dark pools are another example where the FCA doesn’t like the European approach and would want control of it.”

was appointed in February. Mr Presca has pledged to transform the company, which has reported a sharp drop inprofits in recent years and in 2019 impaired the value of its UK and US stores by almost £50m. In the year to February 2019, the last for which accounts are available, it made a £75.7m operating loss.

LionRock’s bid comes three decades after the group was embroiled in frac-tious buyout negotiations with proper-ties and commodities group Berisford International, which eventually failed to take the company public.

The battle for control took place as Clarks, much like many peers, started to manufacture its shoes outside the UK.

Clarks was in 1825 founded by broth-ers James and Cyrus Clark, who began selling a slipper made of sheepskin offcuts under their family name.

Daniel Tseung, founder and manag-ing director of LionRock, said he looked forward to working with the Clark fam-ily. “We are extremely pleased to have the opportunity to partner with Clarks in expanding the company’s global operations and worldwide customer footprint,” he said.

Equities

Clarks shoe brand agrees £100m sale of majority stake to HK buyout group

Philip Stafford — London Jim Brunsden — Brussels

UK regulators have threatened todeviate from EU rules on share trading if Brussels does not deliver market access permissions to the City ofLondon.

The move yesterday by the Financial Conduct Authority is a sign of UKfrustration over the EU’s silence on post-January 1 arrangements.

The FCA said it might diverge from the EU’s financial market rule book, known as Mifid, if European counter-parts fail to treat London’s stock exchanges as having a supervisorysystem equal to the EU’s own rules.

The warning came as the UKregulator took steps to defuse investors’ concerns about trading shares around Europe from January, confirming that banks, high-frequency traders and fund managers will be able to use venues based in the EU.

The ruling also included privatemarketplaces run by banks and high-frequency traders, such as dark pools.

The regulator said its approach was intended to ensure investors got the best

Equities

UK fires warning shot at Brussels over post-transition share trading

price for their deals and gave issuers the freedom to choose where and how to raise capital.

However, to protect market integrity, the FCA warned that it would need to examine EU rules that govern transpar-ency on share trading.

It questioned whether standards on trading large blocks of shares in private deals, or between banks on dark pools,

“remain appropriate for the UK in the absence of our current equivalence being recognised”.

The comments reflected the uncer-tainty that remained over whether the UK will qualify for EU market access provisions for financial services when the Brexit transition expires at the end of the year.

EU negotiators have rejected British attempts to codify new arrangements for co-operation on financial regulation

‘Dark pools are another example where theFCA doesn’t like the European approach’

LionRock’s deal for the brand ends195 years of Clark family control

conference call with clients yesterday. Underscoring the calm, the Vix index

that measures the expected volatility of US equities dropped sharply from a high of 36 points on the eve of the election to 28.1 points by midday yesterday.

Some observers warned that thecurrent calm might be misplaced.

“We do not think financial markets have so far adequately reflected this uncertain outcome,” warned Ajay Rajadhyaksha, an analyst at Barclays. “We encourage investors to be cautious on risk assets in the very near term.”

Markets were surprised by Mr Trump’s stronger-than-expected show-ing in the initial results filtering out of various states on Tuesday night.

Coupled with the Republicans looking set to maintain control of the Senate, that darkened the outlook for a big fiscal stimulus package.

This spurred a big boost to bond prices, which had fallen in the lead up to the election on expectations that a spending spree would prompt stronger economic growth and inflation.

Adding to the murky outlook, Mr Trump declared himself the victor on Tuesday night and, without evidence, claimed the election was a “major fraud

on our nation”. That stoked simmering fears that, in addition to the fadingoutlook for fiscal stimulus, Wall Street’s nightmare scenario of a nastily disputed election result leading to weeks of legal wrangling and social tension could still come to the fore.

“Put on your seat belts,” said Nathan Sheets, chief economist at PGIM Fixed Income. “The markets were prepared to absorb a clear victory by either of the two candidates — but the uncertainties associated with a disputed election were what investors feared the most.”

He added: “At a minimum, there is a good chance we will be waiting for averdict in Pennsylvania to determine the election’s outcome and the final vote count in Pennsylvania is likely to take until the end of the week.”

Some investors still cautioned that legal challenges to the election results could weigh heavily on sentiment.

“Any suggestion that the outcome could be contested by either the Trump or Biden campaigns is likely to be viewed dimly by investors and could give way to a period of renewed volatil-ity in equity and currency markets,” warned Richard Buxton, head ofstrategy at Jupiter Asset Management.

Some investors looked to history to inform them on how markets would respond to a more protracted process of determining the US election winner.

In the modern era, the 2000 battle between Al Gore and George W Bush looms large with a victor not declared until December 12 when the US Supreme Court intervened to halt a Florida recount.

Over that period, US stocks fell nearly 5 per cent, the gold price rose almost 4 per cent and the 10-year Treasury yield dipped 0.85 percentage points to 5 per cent, Invesco data show.

“That’s not a great outcome but not a disaster either,” said Brian Levitt, global market strategist at Invesco, the US investment group.

However, despite the short-term importance of more fiscal stimulus for the US economy and the possibility of a messy transfer of power, investors and analysts stressed that the longer term market outlook would be more dictated by efforts to contain and roll back the pandemic that has roiled the global economy this year.

“The next president and his adminis-tration could hasten the US economic recovery through the right policy mix,” Mr Levitt said. “Nonetheless, I believe that betting against that recovery over the next couple of years, irrespective of the ultimate outcome of the 2020 elec-tion, is akin to betting against medicine, science and human ingenuity.”

Amid much head-scratching and sce-nario-planning after the inconclusive election, Wall Street seemed in agree-ment on one clear loser from the elec-tion — pollsters that had led them to believe the only question was what shade of “blue wave” was coming.

“This is one of the worst opinionpolling performances in history,” Jim Reid, a Deutsche Bank strategist wrote in a note to clients yesterday.

Robin Wigglesworth and Katie Martin

Investors are dealing with a delayed and fraught process to determine the future political make-up of Washington with unusual poise.

US stocks and government bondsrallied sharply, even though the widely anticipated sweeping victory for Demo-cratic presidential candidate Joe Biden failed to materialise and his party was unlikely to take control of the Senate.

Tellingly, the rally was mostly driven by big technology stocks rather than the more economy-sensitive corners of the equity market that investors had thought would benefit from aDemocratic “blue wave” and resulting fiscal stimulus.

While periods of choppiness erupted overnight, trading was smooth, orderly and relatively subdued in volume,analysts said. The uneasy sense of calmheld despite President Donald Trump threatening to call on the Supreme Court to bring vote-counting to a halt.

Traders’ mostly sanguine outlook reflected the view that a divided legisla-tive branch — whoever ends up winning the presidency — might not be a bad thing. “It’s more like status quo, with less stimulus but no tax hikes,” said Luca Paolini, chief strategist at Pictet Asset Management.

Tobias Levkovich, chief US equity strategist at Citi, said the lack of wide-spread unrest around the election was another source of cautious optimism.

“We haven’t had a big outbreak of vio-lence . . . and things have been pretty orderly, which is something investors are relieved about,” he said in a

Trading proves smooth and

relatively subdued despite

potential for more uncertainty

‘We haven’t had a big outbreak of violence . . .and things have been pretty orderly’

While there were periodsof choppiness, traders experienced mostly calmer sentiment in the wake of US election results Frank Rumpenhorst/dpa

Cross asset. Post-poll rally

Investors hold their nerve inface of cliffhanger election

Investors flock to US government bonds as big stimulus hopes dim

Source: Refinitiv

10-year Treasury yield (%)

0.76

0.78

0.80

0.82

0.84

0.86

0.88

0.90

Oct 2020 Nov

Richard Henderson — New York

US stock market volatility fell yesterday as the chances of a sweeping win for Joe Biden in the presidential election faded, reviving a familiar prospect for inves-tors — political gridlock in Washington.

Cboe’s Vix index, which measures market volatility based on futurescontracts tied to the blue-chip S&P 500 index, fell below 29 in New York trading as stocks rallied almost 3 per cent.

The Vix had traded around 36 for much of the previous day.

The fall accompanied dimmingprospects of a so-called “blue wave”victory for Mr Biden, in which he would claim the White House and his Demo-cratic colleagues would hold a majority in both chambers of Congress.

Instead, early indications yesterday pointed to a lead for Republicans in the Senate race while Democrats were tipped to hold a majority in the House — with the presidential election too close to call.

“The extreme outcomes have been taken off the table — both a blue wave and a red tide,” said Michael Mullaney, global head of research for BostonPartners.

“That means we’ll be in some sort of gridlock situation, which is whatmarkets like,” he said. “Historically a split Congress has been the best

environment for stocks, no matter who the president is.”

The falling Vix is a win for hedge funds and other investors who haddisagreed with a common view among strategists and analysts in the run-up to the election that an uncertain result would trigger a jump in marketvolatility.

The drop for the index, which is known as Wall Street’s “fear gauge”, leaves it still above its long-term average of around 20.

It has remained elevated since surging to a record high after the coronavirus crisis sent shudders through financial markets from February. But the move takes the Vix well below the smaller peaks hit in June and late October.

A divided Congress would stymie the policy agenda of either candidate. In the case of Mr Biden, it would limit hisability to deliver a big fiscal stimulus package.

The former vice-president’s desire to raise corporate taxes to 28 per cent, after Mr Trump cut the rate from 35 per cent to 21 per cent in 2018, would be likely to face a rocky reception in a Republican-dominated Senate.

If the status quo continues inCongress, Quincy Krosby, chief market strategist for Prudential Financial, said Republican Senate majority leader Mitch McConnell would “make sure Biden will have to bide his time overthe next four years”, adding: “For the markets, that’s good.”

Equities

Volatility falls as prospect revived of US ‘gridlock’

‘The extreme outcomes have been taken off the table — both a blue wave and a red tide’

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

NOVEMBER 5 2020 Section:Markets Time: 4/11/2020 - 19:03 User: stephen.smith Page Name: MARKETS1, Part,Page,Edition: USA, 12, 1


COMPANIES & MARKETS

JPMorgan and Bank of America slid as investors digested the implications of an uncertain US election result that could take weeks to resolve.

Uber and rival Lyft jumped after a landmark vote in California that meant they would be exempt from a law that would force companies to treat workers as employees.

The gig economy companies had said the reclassification would pose an existential threat to their business models.

Insurance companies including Cigna, UnitedHealth and Anthem also rose sharply.

Traders were cheered by expectations that a Republican-held US Senate — which now looks more likely than some polls had anticipated — would minimise the chances of substantial healthcare reform even if Joe Biden won the election.

Pharmaceutical companies Biogen, Eli Lilly and AbbVie also climbed.

Hilton moved higher after the hotel chain said demand had improved gradually in the second half of this year and that cost-cutting had pushed it to a surprise quarterly profit.

The world’s second-largest hotels operator had previously warned in August that it faced “a long journey” to recovery due to the effects of the pandemic. Camilla Hodgson

Wall Street LondonEurozone

Shares in Cellnex, the acquisitive Spanish telecoms infrastructure company, hit an all-time high on hopes for its next deal.

Hong Kong’s CK Hutchison said yesterday that it was in talks with Cellnex about a €10bn sale of its large portfolio of mobile towers in Europe.

The Barcelona-based company has spent €7bn on deals this year, having bought towers in Portugal, Poland and the UK, funded by debt and equity.

The Amsterdam-listed shares of Royal Dutch Shell seesawed yesterday, ending the day flat as the energy sector came under renewed pressure over the continuing possibility that Joe Biden, who has pledged to tackle climate change, could win the US election.

The sector has already been hit by the worsening pandemic and further lockdown measures across Europe.

HelloFresh gained after announcing that it had more than doubled its quarterly sales as demand from consumers in lockdown continued.

The online meal kit provider’s chief executive said the pandemic had led to a “profound change in behaviour” that he expected to continue in coming months.

Intesa Sanpaolo rose after the Italian lender said it had met its 2020 profit target after third-quarter revenues climbed, bucking a trend lower for banks on pandemic concerns. Camilla Hodgson

Retailer Marks and Spencer rose as England prepared for the imposition of stricter lockdown measures to stem the rising number of coronavirus infections.

Its gain came despite announcing its first ever half-year loss.

The company said it planned to keep most of its stores trading when renewed restrictions came into force today and that it was lobbying the government for extended opening hours in December.

Ocado was also among the day’s winners after the online food retailer raised its full-year profit guidance.

That also bolstered M&S, which owns half of Ocado’s retail business.

Drugmaker AstraZeneca gained on hopes that late-stage trial results for a Covid-19 vaccine it is developing with the University of Oxford could be announced next month.

Andrew Pollard, the university’s vaccine chief, said there was a “small chance” that it could start to be introduced this year.

Banks including HSBC and NatWest fell on inconclusive US election results.

Traders had hoped that a decisive win for Joe Biden would lead to a large fiscal stimulus package supporting economy-sensitive stocks such as banks.

Other stocks that have been badly hit by the pandemic this year also slipped, including engineering group Rolls-Royce. Camilla Hodgson

3 Strong Treasuries rally triggers steepest fall in yields since June3 Dollar weakens on expectation of a divided US legislature 3 Tech-heavy Nasdaq heading for best day in seven months

Sovereign debt and stocks rallied as the results of the US election hung in the balance, wrongfooting investors who had bet on a decisive victory for Joe Biden, the former vice-president.

The outcome “certainly isn’t going to be a convincing knockout victory [for Biden] accompanied by a ‘blue wave’”, said James Knightley, economist at ING, referring to polling that had suggested the Democrats would win the White House and both houses of Congress.

That scenario was now remote as votes continued to be counted in closely fought battleground states.

A sell-off in US Treasuries earlier this week in anticipation of a huge spending programme from Mr Biden sharply reversed. The yield on the 10-year note tumbled 12 basis points to 0.76 per cent, its steepest fall since June.

“The failure of this wave to materialise” combined with the Republicans likely retaining control of the Senate dashed hopes of large fiscal stimulus, said Mark Dowding, chief investment officer at BlueBay Asset Management.

The possibility of a divided legislature also weighed in the dollar, which slid as much as 0.5 per cent against a basket of peer before paring back some losses.

“The prospects of a split government in the US are high and that argues for dollar weakness once the safe-haven flows

ebb,” said Win Thin, global head of currency strategy at BBH.

Expectations of political stalemate in Washington proved to be a boon for tech stocks. Shares in Facebook, Apple and Amazon, which had been in the crosshairs of US regulators, all rallied yesterday.

“If there is no Biden presidency or a gridlocked Washington, then the prospect of large corporate tax increases and regulatory attacks on big technology and other large consumer services companies may be less of an issue,” said David Page and Chris Iggo at Axa Investment Managers.

political and social challenges. These three real and present challenges for the US economy translate into a more diffi-cult outlook for both the short and longer term.

It means less dynamic supply and less buoyant demand. The growth in the economic pie will not just be less than what’s needed, it will also fall short of what the two sides of the political divide believe is possible under their different approaches, fuelling a messy blame game that will further undermine the social fabric.

The US plight is also problematic for a global economic recovery. America’s internal divisions will preclude the early resumption of its traditional role in informing, influencing and sometimes imposing outcomes in multilateraleconomic co-ordination forums. They will also increase the risk of deglobalisa-tion and the further weaponisation of economic and investment tools.

Regardless of who ultimately wins this nail-biting election, a politically divided US means a more challenged domestic economy at a time when a sec-ond Covid-19 wave is already disrupting activity in much of the west. Eventually, the science will force politicians to act but the risk of economic and financial disruptions is rising considerably.

Ultimately, the combination of another health emergency, a weakening economy and increased financialinstability will force the US government into decisive action — but not before considerable damage to the lives, liveli-hoods and mental wellbeing of this gen-eration, and perhaps future ones as well.

Mohamed El-Erian is president of Queens’ College, University of Cambridge, and adviser to Allianz and Gramercy

The Nasdaq Composite led Wall Street higher by midday in New York, climbing more than 4 per cent, leaving the tech-heavy index on track for its best daily performance in seven months.

The S&P 500 and Dow Jones Industrial Average both gained about 3 per cent.

The region-wide Stoxx Europe 600 index rose 2 per cent with tech also among the strongest sectors.

Oil prices, which had collapsed 10 per cent last week on fears over waning fuel demand, rebounded. Brent crude, the international benchmark, rose 3.5 per cent to $41.10 a barrel. Ray Douglas

What you need to know

US tech heads for best day in more than half a yearNasdaq Composite index

Source: Refinitiv

9,000

9,500

10,000

10,500

11,000

11,500

12,000

May 2020 Nov

8,500

The day in the markets

Markets update

US Eurozone Japan UK China BrazilStocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp BovespaLevel 3474.37 1406.62 23695.23 5883.26 3277.44 97817.23% change on day 3.12 2.07 1.72 1.67 0.19 1.91Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $Level 93.385 1.171 104.485 1.299 6.713 5.670% change on day -0.180 -0.171 -0.077 -0.612 0.375 -0.600Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bondYield 0.765 -0.641 0.034 0.206 3.175 7.353Basis point change on day -12.370 -2.100 -0.670 -6.600 0.600 -13.600World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX)Level 383.47 41.15 38.99 1908.30 24.17 3089.80% change on day 2.50 2.77 2.61 0.97 0.81 1.16Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.

Main equity markets

S&P 500 index Eurofirst 300 index FTSE 100 index

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

Sep 2020 Nov3200

3360

3520

3680

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

Sep 2020 Nov1280

1360

1440

1520

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

Sep 2020 Nov5440

5760

6080

6400

Biggest movers% US Eurozone UK

Ups

Biogen 39.52Cigna 14.57Eli Lilly & Co 13.91Anthem 11.97Unitedhealth 10.56

Fresen.med.care 6.96Novo Nordisk 6.32Sanofi 6.31Ucb 5.22Thales 5.08

Astrazeneca 6.88Avast 6.29Ocado 5.39Next 5.22Auto Trader 4.68

%

Dow

ns

Comerica -10.15Zions Ban Na -9.05Huntington Bancshares -7.64M&t Bank -7.48Fox -7.47

Prices taken at 17:00 GMT

Bbva -6.65B. Sabadell -5.33Aegon -4.45Santander -4.09Klepierre -3.57Based on the constituents of the FTSE Eurofirst 300 Eurozone

Standard Chartered -4.72Crh -4.41Hsbc Holdings -4.15Barclays -2.63Lloyds Banking -2.48

All data provided by Morningstar unless otherwise noted.

Mohamed El-ErianMarkets Insight

I n the wake of the US presidential vote, there are three things that are clear at this stage that spell trouble for the US economy and well beyond that.

The 2020 election has confirmed that the US remains a deeply dividedcountry facing mounting challenges that threaten both this and future gen-erations. Despite a collective wake-up call in the form of a severe health and economic crisis, the country seems both unwilling and unable to embark on the decisive measures needed.

The unwillingness comes from funda-mental differences of views on how best to pursue economic and financial reforms while urgently dealing with the threats from Covid-19.

The inability is due to a probably divided Congress, where the damage of the past few years to the most basic of cross-party working relationships has been accentuated by the past month’s rush to approve a new Supreme Court justice.

If Joe Biden does clinch the presi-dency, there could be a rocky period until he moves into the White House.

There is not likely to be much co-op-eration between the Trump administra-tion and its successor, adding to the uncertainty of the next few months.

What is at risk here is not just the longer term oriented reforms seeking to limit another move down in productiv-ity, yet more household economic inse-curity and a worsening in inequality.

Also at risk is the short-term health and economic effort to help the nation recover from the huge damage that the first Covid-19 wave left in its wake.

Second, the deep divisions also mean that the second wave that is gaining more momentum is likely to get a lot

Divided electorate spells trouble for the US economy

worse before a turnround is even in sight. A deeply divided configuration of individual states is likely to adopt varied responses to a virus that knows no geo-graphic borders.

With the centre initially unable to impose a uniform approach, even if it wanted to, the US is likely to repeat the experience of the UK in which regional approaches fail. Widespread lockdowns needed to protect the health system and restore a workable test-and-trace sys-tem were overwhelmed by rising infec-tions, hospitalisation and tragic deaths.

Third, the US Federal Reserve will be pushed yet again to do more with

increasingly ineffective and inevitably distortionary policy tools.

The traditional monetary policy mindset will continue to give even more ground as the Fed faces pressure to insure risks that are difficult to price, let alone underwrite properly.

This venturing into even bigger experimental unconventional mone-tary policies will do little to genuinely stimulate the economy.

Instead, it is likely to create further distortions in financial markets, increase incentives for irresponsible risk-taking and lead to the misallocation of resources throughout the economy.

This will heighten the threat offinancial instability. In the process, the already large disconnect between Main Street and Wall Street will widen, adding

The traditional monetary policy mindset will give even more ground as the Fed faces pressure

NOVEMBER 5 2020 Section:Markets Time: 4/11/2020 - 18:57 User: stephen.smith Page Name: MARKETS2, Part,Page,Edition: USA, 13, 1


WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

3.12%

Nasdaq Composite

4.21%

Dow Jones Ind

2.56%

FTSE 100

1.67%

FTSE Eurofirst 300

2.07%

Nikkei

1.72%

Hang Seng

-0.21%

FTSE All World $

2.50%

$ per €

-0.171%

$ per £

-0.612%

¥ per $

-0.077%

£ per €

0.334%

Oil Brent $ Sep

1.95%

Gold $

0.97%

Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparisonAMERICAS EUROPE ASIAOct 05 - - Index All World Oct 05 - Nov 04 Index All World Oct 05 - Nov 04 Index All World Oct 05 - Nov 04 Index All World Oct 05 - Nov 04 Index All World Oct 05 - Nov 04 Index All World

S&P 500 New York

3,360.973,474.40

Day 3.12% Month 3.83% Year 12.94%

Nasdaq Composite New York

11,154.6011,630.55

Day 4.21% Month 5.06% Year 37.97%

Dow Jones Industrial New York

27,772.7628,184.64

Day 2.56% Month 1.84% Year 2.66%

S&P/TSX COMP Toronto

16,410.1916,091.45

Day 0.96% Month -0.66% Year -3.47%

IPC Mexico City

36,740.3337,770.87

Day 0.81% Month 3.06% Year -13.82%

Bovespa São Paulo

94,015.6897,817.23

Day 1.91% Month 3.99% Year -10.12%

FTSE 100 London

5,949.94 5,883.26

Day 1.67% Month -0.46% Year -20.28%

FTSE Eurofirst 300 Europe

1,415.83 1,406.62

Day 2.07% Month 0.02% Year -11.14%

CAC 40 Paris

4,895.46 4,922.85

Day 2.44% Month 2.03% Year -15.48%

Xetra Dax Frankfurt

12,906.0212,324.22

Day 1.95% Month -2.88% Year -6.18%

Ibex 35 Madrid

6,936.20 6,781.90

Day 0.45% Month 0.41% Year -27.98%

FTSE MIB Milan

19,429.81 19,358.28

Day 1.96% Month 1.45% Year -17.03%

Nikkei 225 Tokyo

23,312.1423,695.23

Day 1.72% Month 2.89% Year 3.70%

Hang Seng Hong Kong

23,980.65

24,886.14

Day -0.21% Month 6.12% Year -8.14%

Shanghai Composite Shanghai

3,217.533,277.44

Day 0.19% Month 1.85% Year 10.79%

Kospi Seoul

2,365.90 2,357.32

Day 0.60% Month 1.26% Year 12.24%

FTSE Straits Times Singapore

2,529.26 2,515.98

Day 0.75% Month 0.78% Year -22.10%

BSE Sensex Mumbai

39,574.5740,616.14

Day 0.88% Month 4.96% Year 1.12%

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 47214.23 47965.31Australia All Ordinaries 6265.00 6262.80

S&P/ASX 200 6062.10 6066.40S&P/ASX 200 Res 4335.70 4385.70

Austria ATX 2146.51 2144.63Belgium BEL 20 3205.12 3154.13

BEL Mid 7396.73 7315.99Brazil IBovespa 97817.23 95979.71Canada S&P/TSX 60 958.42 948.20

S&P/TSX Comp 16091.45 15939.15S&P/TSX Div Met & Min 524.39 530.00

Chile S&P/CLX IGPA Gen 17790.44 17832.48China FTSE A200 12684.05 12581.78

FTSE B35 9000.71 8988.96Shanghai A 3435.08 3428.39Shanghai B 243.31 243.85Shanghai Comp 3277.44 3271.07Shenzhen A 2367.61 2360.21Shenzhen B 947.02 948.61

Colombia COLCAP 1151.37 1136.75Croatia CROBEX 2013.05 2011.29

Cyprus CSE M&P Gen 68.46 68.68Czech Republic PX 865.01 856.51Denmark OMXC Copenahgen 20 1394.89 1347.41Egypt EGX 30 10556.89 10512.16Estonia OMX Tallinn 1170.21 1166.62Finland OMX Helsinki General 10010.92 9911.88France CAC 40 4922.85 4805.60

SBF 120 3891.96 3803.12Germany M-DAX 27241.37 26571.82

TecDAX 2964.36 2885.84XETRA Dax 12324.22 12088.98

Greece Athens Gen 588.24 584.48FTSE/ASE 20 1386.03 1375.41

Hong Kong Hang Seng 24886.14 24939.73HS China Enterprise 10099.16 10071.41HSCC Red Chip 3604.15 3629.36

Hungary Bux 34774.72 33834.43India BSE Sensex 40616.14 40261.13

Nifty 500 9764.60 9696.30Indonesia Jakarta Comp 5105.20 5159.45Ireland ISEQ Overall 6749.29 6703.10Israel Tel Aviv 125 1395.53 1389.50

Italy FTSE Italia All-Share 21053.20 20660.33FTSE Italia Mid Cap 32711.79 32282.39FTSE MIB 19358.28 18986.24

Japan 2nd Section 6134.45 6081.90Nikkei 225 23695.23 23295.48S&P Topix 150 1356.40 1338.10Topix 1627.25 1607.95

Jordan Amman SE 1533.35 1536.78Kenya NSE 20 1755.75 1763.72Kuwait KSX Market Index 6633.44 6603.51Latvia OMX Riga 1114.27 1120.35Lithuania OMX Vilnius 747.18 746.45Luxembourg LuxX 1083.23 1083.84Malaysia FTSE Bursa KLCI 1464.61 1461.45Mexico IPC 37770.87 37466.09Morocco MASI 10360.37 10367.00Netherlands AEX 565.26 554.48

AEX All Share 820.09 800.61New Zealand NZX 50 12199.93 12130.31Nigeria SE All Share 30733.47 30479.39Norway Oslo All Share 905.51 893.65Pakistan KSE 100 40281.96 40480.88

Philippines Manila Comp 6464.05 6335.56Poland Wig 47294.20 47160.46Portugal PSI 20 4067.95 4049.65

PSI General 3141.31 3130.74Romania BET Index 8774.67 8701.40Russia Micex Index 2786.42 2737.54

RTX 1108.15 1069.33Saudi-Arabia TADAWUL All Share Index 8088.73 7998.59Singapore FTSE Straits Times 2515.98 2497.22Slovakia SAX 350.78 356.70Slovenia SBI TOP 873.85 -South Africa FTSE/JSE All Share 53656.21 53187.81

FTSE/JSE Res 20 49535.78 50112.78FTSE/JSE Top 40 49300.89 48853.14

South Korea Kospi 2357.32 2343.31Kospi 200 313.83 312.07

Spain IBEX 35 6781.90 6751.60Sri Lanka CSE All Share 5905.91 5843.27Sweden OMX Stockholm 30 1795.53 1772.27

OMX Stockholm AS 719.10 703.99Switzerland SMI Index 10286.79 10003.82

Taiwan Weighted Pr 12867.90 12736.01Thailand Bangkok SET 1222.44 1221.33Turkey BIST 100 1167.65 1150.71UAE Abu Dhabi General Index 4689.79 4649.42UK FT 30 2098.60 2047.70

FTSE 100 5883.26 5786.77FTSE 4Good UK 5513.93 5422.85FTSE All Share 3309.13 3254.88FTSE techMARK 100 5635.08 5461.19

USA DJ Composite 9515.86 9336.27DJ Industrial 28184.64 27480.03DJ Transport 11698.34 11559.96DJ Utilities 896.82 889.78Nasdaq 100 11809.95 11279.91Nasdaq Cmp 11630.55 11160.57NYSE Comp 13122.02 12662.17S&P 500 3474.37 3369.16Wilshire 5000 35844.37 34128.45

Venezuela IBC 579560.00 576075.19Vietnam VNI 939.76 935.41

Cross-Border DJ Global Titans ($) 405.34 390.02Euro Stoxx 50 (Eur) 3161.07 3098.72Euronext 100 ID 989.63 966.73FTSE 4Good Global ($) 8558.23 8253.51FTSE All World ($) 383.47 374.11FTSE E300 1406.62 1378.11FTSE Eurotop 100 2627.05 2573.74FTSE Global 100 ($) 2271.63 2188.41FTSE Gold Min ($) 2643.03 2565.46FTSE Latibex Top (Eur) 4440.00 4432.20FTSE Multinationals ($) 2361.40 2316.19FTSE World ($) 679.17 662.07FTSEurofirst 100 (Eur) 3503.84 3446.75FTSEurofirst 80 (Eur) 4330.01 4245.19MSCI ACWI Fr ($) 568.09 557.84MSCI All World ($) 2369.27 2322.14MSCI Europe (Eur) 1442.34 1411.22MSCI Pacific ($) 2693.27 2662.01S&P Euro (Eur) 1467.89 1439.93S&P Europe 350 (Eur) 1443.04 1414.00S&P Global 1200 ($) 2689.91 2622.13Stoxx 50 (Eur) 2887.27 2820.82

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

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

traded m's price changeAmazon.com 124.7 3235.95 187.54Apple 77.6 115.11 4.67Facebook 53.7 286.31 21.01Microsoft 41.1 217.27 10.84Alphabet 31.7 1767.30 121.64Alphabet 29.6 1769.00 118.79Biogen 29.5 344.64 97.63Advanced Micro Devices 29.5 80.44 3.86Nvidia 27.2 546.88 26.10Unitedhealth 17.9 355.30 33.95

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

UpsBiogen 344.64 97.63 39.52Cigna 210.67 26.79 14.57Eli Lilly & Co 149.20 18.22 13.91Anthem 328.60 35.14 11.97Unitedhealth 355.30 33.95 10.56

DownsComerica 43.86 -4.96 -10.15Zions Ban Na 31.34 -3.12 -9.05Huntington Bancshares 10.24 -0.85 -7.64M&t Bank 101.78 -8.23 -7.48Fox 25.02 -2.02 -7.47

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

Astrazeneca 222.0 8511.00 548.00Glaxosmithkline 185.2 1415.00 59.00British American Tobacco 124.5 2576.50 88.00Hsbc Holdings 117.0 332.45 -14.40Rio Tinto 111.1 4440.50 -58.00Diageo 108.6 2649.00 91.50Unilever 103.4 4663.00 110.00Bp 98.9 208.75 -1.20Relx 84.4 1623.00 -0.50Reckitt Benckiser 79.8 7092.00 172.00


UpsRoyal Mail 252.50 18.70 8.00Morgan Sindall 1250.00 86.00 7.39Worldwide Healthcare Trust 3720.00 245.00 7.05Astrazeneca 8511.00 548.00 6.88Tui Ag 321.40 20.00 6.64

DownsStandard Chartered 354.90 -17.60 -4.72Crh 2820.00 -130.00 -4.41Iwg 265.20 -12.00 -4.33Hsbc Holdings 332.45 -14.40 -4.15Ao World 386.00 -15.50 -3.86


Inditex 762.1 22.60 0.39Sap Se O.n. 521.1 96.75 2.80Asml Holding 519.7 322.65 4.25Sanofi 352.2 86.81 5.15Intesa Sanpaolo 325.6 1.60 0.06Allianz Se Na O.n. 303.2 164.12 2.44Daimler Ag Na O.n. 281.5 48.02 0.82Linde Eo 0,001 280.4 202.00 1.50Siemens Ag Na O.n. 268.3 107.46 1.18Bayer Ag Na O.n. 264.6 43.75 1.79


UpsFresen.med.care Kgaa O.n. 70.68 4.60 6.96Novo Nordisk B A/s 59.54 3.54 6.32Sanofi 86.81 5.15 6.31Ucb 95.92 4.76 5.22Thales 62.50 3.02 5.08

DownsBbva 2.46 -0.18 -6.65B. Sabadell 0.27 -0.02 -5.33Aegon 2.43 -0.11 -4.45Santander 1.78 -0.08 -4.09Klepierre 11.07 -0.41 -3.57


Softbank . 1384.1 6535.00 -161.00Sony 839.6 8903.00 135.00Fast Retailing Co., 444.3 74380.00 1790.00Toyota Motor 438.0 6976.00 27.00M3,. 355.5 7595.00 413.00Z Holdings 317.8 639.00 -9.20Ntt Docomo,. 286.2 3888.00 3.00Tokyo Electron 263.3 27910.00 30.00Mitsubishi Ufj Fin,. 254.0 422.20 0.50Fanuc 240.2 22615.00 365.00


UpsFujikura 362.00 79.00 27.92Ntt Data 1318.00 131.00 11.04Chugai Pharmaceutical Co., 4314.00 241.00 5.92M3,. 7595.00 413.00 5.75Yokogawa Electric 1650.00 87.00 5.57

DownsMitsubishi Materials 1903.00 -64.00 -3.25Japan Exchange 2489.00 -65.00 -2.55Softbank . 6535.00 -161.00 -2.40Ana Holdings 2281.00 -42.00 -1.81Oki Electric Industry , 981.00 -17.00 -1.70

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

Nov 04 %Chg %ChgFTSE 100 price(p) week ytdWinnersRoyal Dutch Shell 1031.80 14.6 -54.3Royal Dutch Shell 988.70 14.1 -56.2Taylor Wimpey 119.50 13.0 -39.3Flutter Entertainment 13720.00 11.7 47.6Ocado 2561.00 10.7 103.3Smurfit Kappa 3214.00 9.9 9.2Int Consolidated Airlines S.a. 102.75 9.7 -59.9Rsa Insurance 459.70 9.3 -19.2Natwest 126.00 9.2 -48.4Barratt Developments 528.00 8.3 -29.8Fresnillo 1255.50 8.2 95.0Intermediate Capital 1266.00 8.1 -22.8

LosersStandard Chartered 354.90 -5.0 -50.7Bt 99.42 -2.2 -49.3Morrison (wm) Supermarkets 163.00 -1.6 -19.5Jd Sports Fashion 740.60 -1.4 -10.9Rolls-royce Holdings 83.90 -0.8 -64.1Next 6092.00 -0.7 -12.4Severn Trent 2481.00 -0.3 -1.4Evraz 360.20 0.1 -11.3Johnson Matthey 2200.00 0.1 -27.4Antofagasta 1020.50 0.6 8.0Avast 500.00 1.1 5.4Gvc Holdings 981.80 1.1 6.8

Nov 04 %Chg %ChgFTSE 250 price(p) week ytdWinnersCrest Nicholson Holdings 266.00 22.5 -39.3Ao World 386.00 15.4 349.9Cineworld 27.64 13.7 -87.4Virgin Money Uk 103.65 13.6 -45.7Premier Foods 103.60 13.1 172.3Morgan Sindall 1250.00 12.6 -22.8Hochschild Mining 237.00 12.3 34.4Wizz Air Holdings 3492.00 11.8 -12.5Ferrexpo 201.40 10.9 25.2Easyjet 540.80 10.8 -62.2Tui Ag 321.40 10.5 -67.6Coats 62.40 10.4 -16.6

LosersSerco 107.20 -17.0 -34.8Fisher (james) & Sons 1120.00 -4.9 -45.4C&c 152.60 -4.6 -62.8Rank 86.30 -4.1 -69.2Ibstock 156.60 -3.9 -51.4Micro Focus Int 219.10 -3.9 -80.3Domino's Pizza 326.00 -3.7 0.2Victrex 1832.00 -3.4 -27.9Ascential 275.00 -3.2 -29.1Frasers 376.00 -3.1 -18.2Capital & Counties Properties 102.50 -2.9 -61.2Aston Martin Lagonda Global Holdings 53.45 -2.8 -69.6

Nov 04 %Chg %ChgFTSE SmallCap price(p) week ytdWinnersReach 131.80 29.7 -0.6Aa 26.65 16.6 -54.1Clipper Logistics 485.00 15.8 66.1Baillie Gifford China Growth Trust 516.00 15.6 50.4Ao World 386.00 15.4 349.9Icg-longbow Senior Secured Uk Property Debt Investments 85.00 14.9 -10.8On The Beach 241.00 14.8 -50.7Sportech 20.03 13.1 -38.4Premier Foods 103.60 13.1 172.3Stobart Ld 20.15 12.8 -81.0Morgan Sindall 1250.00 12.6 -22.8Pharos Energy 13.00 11.9 -75.8

LosersAmigo Holdings 6.02 -30.4 -91.5Ted Baker 89.30 -14.8 -74.7Countrywide 141.00 -12.9 -55.4Senior 51.30 -10.2 -72.4Bmo Real Estate Investments 52.60 -9.3 -37.8Dp Eurasia N.v. 31.50 -8.7 -39.8Allied Minds 36.00 -8.5 -28.9Petra Diamonds 1.40 -7.9 -84.2M&g Credit ome Investment Trust 86.75 -7.2 -18.5Card Factory 31.15 -7.2 -78.4The Gym 130.60 -7.0 -55.9Vitec (the) 680.00 -6.6 -37.6

Nov 04 %Chg %ChgIndustry Sectors price(p) week ytdWinnersOil & Gas Producers 3619.61 11.8 -Pharmaceuticals & Biotech. 17502.77 7.2 -2.0General Industrials 5898.66 6.2 -8.3Travel & Leisure 6556.72 6.2 -Construction & Materials 6216.46 6.0 -Life Insurance 5633.13 5.5 -30.5Food & Drug Retailers 4143.45 5.2 -1.4Forestry & Paper 17634.87 5.1 -Support Services 9440.89 5.1 -0.4Nonlife Insurance 2797.47 5.0 -Real Estate Investment Trusts 2504.13 4.8 -25.8Household Goods 16814.37 4.8 -6.3

LosersFixed Line Telecommunication 1247.69 -1.6 -Automobiles & Parts 2894.06 -1.5 -47.1Index - Technology Hardware & Equipment 2251.80 -0.5 12.7Chemicals 12512.85 1.3 -6.3Oil Equipment & Services 4023.92 1.9 -51.9Industrial Metals 3676.36 2.0 -3.0Real Estate & Investment Servic 2371.38 2.1 -Software & Computer Services 1906.87 2.1 -14.2Gas Water & Multiutilities 5075.13 2.3 -6.1General Retailers 2426.77 2.3 -3.5Health Care Equip.& Services 6271.84 2.5 -Personal Goods 38357.31 2.7 0.5

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

CURRENCIES

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

Nov 4 Currency Mid Change Mid Change Mid Change






Nov 4 Currency Mid Change Mid Change Mid ChangeArgentina Argentine Peso 79.0292 0.1242 92.5314 -0.0280 102.6513 -0.4777Australia Australian Dollar 1.3969 0.0018 1.6356 -0.0009 1.8145 -0.0089Bahrain Bahrainin Dinar 0.3771 - 0.4415 -0.0008 0.4898 -0.0031Bolivia Bolivian Boliviano 6.9100 - 8.0906 -0.0152 8.9754 -0.0560Brazil Brazilian Real 5.6699 -0.0342 6.6386 -0.0526 7.3647 -0.0906Canada Canadian Dollar 1.3135 0.0027 1.5379 0.0003 1.7060 -0.0070Chile Chilean Peso 757.4050 3.6550 886.8081 2.6231 983.7962 -1.3563China Chinese Yuan 6.7130 0.0251 7.8599 0.0147 8.7195 -0.0216Colombia Colombian Peso 3804.9200 -13.0200 4454.9939 -23.6334 4942.2254 -47.8294Costa Rica Costa Rican Colon 610.8300 0.9250 715.1906 -0.2573 793.4094 -3.7375Czech Republic Czech Koruna 22.9535 0.0742 26.8751 0.0366 29.8143 -0.0889Denmark Danish Krone 6.3589 0.0108 7.4453 -0.0013 8.2596 -0.0374Egypt Egyptian Pound 15.7188 0.0376 18.4044 0.0096 20.4172 -0.0781Hong Kong Hong Kong Dollar 7.7557 0.0045 9.0808 -0.0117 10.0740 -0.0569Hungary Hungarian Forint 309.7195 -0.2460 362.6352 -0.9692 402.2958 -2.8297India Indian Rupee 74.7400 0.3350 87.5094 0.2287 97.0801 -0.1674

Indonesia Indonesian Rupiah 14565.0000 -20.0000 17053.4387 -55.4939 18918.5405 -144.1108Israel Israeli Shekel 3.3937 -0.0120 3.9735 -0.0215 4.4080 -0.0432Japan Japanese Yen 104.4850 -0.0800 122.3363 -0.3235 135.7160 -0.9507..One Month 104.4850 -0.0801 122.3364 -0.3234 135.7159 -0.9507..Three Month 104.4849 -0.0803 122.3364 -0.3232 135.7159 -0.9509..One Year 104.4845 -0.0811 122.3367 -0.3227 135.7159 -0.9511Kenya Kenyan Shilling 108.9000 0.0500 127.5056 -0.1807 141.4506 -0.8165Kuwait Kuwaiti Dinar 0.3061 0.0001 0.3584 -0.0006 0.3976 -0.0024Malaysia Malaysian Ringgit 4.1680 0.0120 4.8801 0.0049 5.4138 -0.0181Mexico Mexican Peso 21.0970 -0.0368 24.7014 -0.0895 27.4030 -0.2189New Zealand New Zealand Dollar 1.4963 0.0070 1.7520 0.0049 1.9436 -0.0029Nigeria Nigerian Naira 385.7500 - 451.6556 -0.8477 501.0521 -3.1238Norway Norwegian Krone 9.3225 -0.0313 10.9153 -0.0573 12.1090 -0.1165Pakistan Pakistani Rupee 159.7750 0.0250 187.0726 -0.3218 207.5323 -1.2612Peru Peruvian Nuevo Sol 3.5969 -0.0137 4.2114 -0.0240 4.6720 -0.0470Philippines Philippine Peso 48.4020 -0.0080 56.6715 -0.1158 62.8695 -0.4024

Poland Polish Zloty 3.8835 0.0095 4.5471 0.0027 5.0444 -0.0190Romania Romanian Leu 4.1562 0.0089 4.8663 0.0012 5.3985 -0.0221Russia Russian Ruble 78.1501 -1.0831 91.5020 -1.4423 101.5094 -2.0485Saudi Arabia Saudi Riyal 3.7505 - 4.3913 -0.0082 4.8715 -0.0304Singapore Singapore Dollar 1.3581 -0.0015 1.5901 -0.0047 1.7640 -0.0130South Africa South African Rand 15.9275 -0.1100 18.6487 -0.1640 20.6883 -0.2727South Korea South Korean Won 1137.6500 3.5000 1332.0182 1.6057 1477.6979 -4.6380Sweden Swedish Krona 8.7908 -0.0438 10.2928 -0.0707 11.4185 -0.1284Switzerland Swiss Franc 0.9119 -0.0004 1.0678 -0.0025 1.1845 -0.0079Taiwan New Taiwan Dollar 28.6350 0.0275 33.5273 -0.0307 37.1941 -0.1959Thailand Thai Baht 31.1375 0.0900 36.4574 0.0371 40.4446 -0.1345Tunisia Tunisian Dinar 2.7672 0.0047 3.2400 -0.0006 3.5943 -0.0163Turkey Turkish Lira 8.4183 -0.0097 9.8565 -0.0299 10.9345 -0.0809United Arab Emirates UAE Dirham 3.6732 0.0002 4.3007 -0.0078 4.7711 -0.0295United Kingdom Pound Sterling 0.7699 0.0048 0.9014 0.0039 - -..One Month 0.7699 0.0048 0.9014 0.0039 - -

..Three Month 0.7700 0.0048 0.9013 0.0039 - -

..One Year 0.7702 0.0048 0.9008 0.0039 - -United States United States Dollar - - 1.1709 -0.0022 1.2989 -0.0081..One Month - - 1.1708 -0.1361 1.2989 -0.0081..Three Month - - 1.1706 -0.1361 1.2990 -0.0081..One Year - - 1.1699 -0.1361 1.2992 -0.0081Venezuela Venezuelan Bolivar Fuerte - - - - - -Vietnam Vietnamese Dong 23177.5000 - 27137.4103 -50.9835 30105.4292 -187.6870European Union Euro 0.8541 0.0016 - - 1.1094 -0.0048..One Month 0.8540 0.0016 - - 1.1093 -0.0048..Three Month 0.8538 0.0016 - - 1.1092 -0.0048..One Year 0.8531 0.0016 - - 1.1088 -0.0048

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

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

Produced in conjunction with the Institute and Faculty of Actuaries£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D TotalNov 04 chge% Index Nov 03 Nov 02 ago yield% Cover ratio adj Return

FTSE 100 (101) 5786.77 2.33 5025.62 5654.97 5577.27 7302.42 4.41 1.34 16.90 178.17 5504.60FTSE 250 (251) 17491.70 1.81 15190.97 17180.52 17214.38 20158.77 3.17 1.33 23.76 285.17 13840.31FTSE 250 ex Inv Co (182) 17578.74 2.26 15266.55 17189.50 17263.15 21299.51 3.40 1.55 18.94 255.73 14192.58FTSE 350 (352) 3283.89 2.24 2851.95 3212.02 3176.95 4079.18 4.19 1.34 17.82 92.61 6227.04FTSE 350 ex Investment Trusts (282) 3194.15 2.33 2774.01 3121.53 3086.33 4029.99 4.31 1.35 17.17 91.89 3125.56FTSE 350 Higher Yield (148) 2455.65 2.26 2132.65 2401.48 2365.02 3529.72 6.52 1.25 12.28 100.11 5103.48FTSE 350 Lower Yield (204) 3984.80 2.22 3460.67 3898.25 3871.24 4302.85 2.01 1.62 30.81 70.28 4709.86FTSE SmallCap (263) 5148.57 1.38 4471.36 5078.28 5092.45 5491.29 4.02 -1.32 -18.81 112.33 8157.62FTSE SmallCap ex Inv Co (143) 3840.99 1.48 3335.78 3785.05 3816.41 4436.23 4.66 -0.82 -26.13 61.03 6363.06FTSE All-Share (615) 3254.88 2.21 2826.75 3184.55 3151.27 4022.74 4.18 1.25 19.07 91.03 6235.07FTSE All-Share ex Inv Co (425) 3133.19 2.31 2721.07 3062.42 3028.96 3946.68 4.31 1.31 17.69 89.38 3113.93FTSE All-Share ex Multinationals (545) 1025.30 1.95 897.91 1005.66 1003.15 1196.68 3.50 0.84 34.15 20.00 2045.27FTSE Fledgling (93) 8718.47 0.30 7571.70 8692.49 8706.44 9440.12 3.17 -0.01-2854.69 185.56 17880.85FTSE Fledgling ex Inv Co (43) 10106.30 -0.21 8776.99 10127.73 10184.24 11236.67 3.73 3.70 7.25 154.87 20265.15FTSE All-Small (356) 3571.54 1.33 3101.77 3524.83 3534.43 3812.84 3.97 -1.27 -19.87 77.88 7259.99FTSE All-Small ex Inv Co (186) 2874.10 1.41 2496.06 2834.11 2857.28 3312.35 4.62 -0.68 -31.85 45.57 6031.34FTSE AIM All-Share (716) 959.38 1.31 833.19 946.98 948.60 890.70 1.05 0.55 172.43 5.91 1100.02

FTSE Sector IndicesNon Financials (304) 3931.83 2.00 3414.66 3854.55 3806.77 4803.70 4.35 1.27 18.02 120.57 6617.55Technology (20) 972.51 1.12 961.26 961.78 971.74 978.37 1.25 0.54 148.15 9.18 1025.41Software and Computer Services (18) 969.16 1.13 957.95 958.35 968.49 975.35 1.25 0.51 156.16 9.32 1023.03Technology Hardware and Equipment (2) 1017.01 0.51 1005.25 1011.83 1011.26 1007.77 1.04 2.32 41.51 0.00 1051.67Telecommunications (8) 540.24 0.24 533.99 538.96 529.83 825.51 8.45 -0.49 -23.93 14.91 623.22Telecommunications Equipment (2) 2855.14 3.03 2822.12 2771.10 2879.85 1872.74 1.27 3.38 23.20 36.43 3037.13Telecommunications Service Providers (6) 519.32 0.10 513.32 518.81 508.56 816.91 8.82 -0.52 -21.66 14.73 599.93Health Care (15) 1229.18 2.31 1214.96 1201.45 1190.96 1323.59 3.60 1.18 23.46 38.16 1359.25Health Care Providers (4) 393.63 2.86 389.08 382.68 383.15 714.97 2.18 0.57 81.07 3.93 406.97Medical Equipment and Services (2) 1009.13 1.96 997.46 989.69 989.90 1201.55 2.22 1.09 41.12 22.38 1072.45Pharmaceuticals and Biotechnology (9) 1293.86 2.33 1278.90 1264.45 1252.27 1363.95 3.74 1.19 22.39 41.61 1439.43Financials (255) 704.94 2.90 696.79 685.05 681.01 900.99 3.67 1.45 18.86 13.99 776.60Banks (11) 459.73 4.74 454.42 438.94 433.30 786.56 4.51 2.22 9.97 0.22 502.02Finance and Credit Services (8) 826.77 1.99 817.20 810.65 809.55 1118.82 4.28 5.07 4.61 11.02 882.47Investment Banking and Brokerage Services (31) 944.65 2.49 933.73 921.70 927.38 1068.07 3.66 0.75 36.41 30.40 1044.90Closed End Investments (190) 1129.58 0.90 1116.52 1119.55 1114.61 1047.72 2.50 -0.03-1598.62 23.36 1216.47Life Insurance (7) 626.85 4.14 619.60 601.93 596.43 849.71 4.25 2.15 10.96 25.55 713.67Nonlife Insurance (8) 842.22 3.02 832.48 817.50 809.47 947.76 4.16 1.57 15.37 25.56 930.34Real Estate (56) 762.21 1.99 753.40 747.35 750.22 973.45 3.88 -0.79 -32.82 17.19 841.44Real Estate Investment and Services (17) 769.30 1.62 760.40 757.02 766.67 897.53 2.02 2.35 21.06 9.59 815.81Real Estate Investment Trusts (39) 760.36 2.04 751.56 745.13 747.00 987.31 4.15 -1.01 -23.76 18.56 845.32Consumer Discretionary (92) 740.88 2.45 732.31 723.15 721.12 972.62 3.46 1.48 19.56 9.49 804.05Automobiles and Parts (3) 304.67 3.19 301.14 295.24 295.86 446.92 1.87 5.17 10.36 0.00 320.93Consumer Services (4) 725.28 2.29 716.89 709.02 703.53 1266.02 3.40 1.37 21.51 16.22 769.93Household Goods and Home Construction (12) 761.78 4.21 752.97 731.00 726.84 919.75 6.00 1.32 12.59 9.21 871.80Leisure Goods (2) 1201.55 3.16 1187.66 1164.70 1185.45 732.27 2.06 0.99 49.11 12.50 1328.43Personal Goods (4) 678.39 2.55 670.54 661.51 657.28 953.85 3.48 1.60 17.98 0.00 710.79Media (11) 759.16 3.35 750.38 734.52 724.19 995.35 2.65 2.41 15.63 15.64 827.32Retailers (22) 921.85 1.00 911.19 912.70 910.11 912.53 3.14 1.26 25.16 3.02 991.66Travel and Leisure (34) 620.14 1.61 612.96 610.31 616.47 912.06 3.19 1.05 29.83 5.90 665.22Consumer Staples (27) 791.76 1.02 782.60 783.79 773.63 854.17 4.53 1.54 14.34 29.24 884.38Beverages (6) 916.61 1.85 906.01 899.93 898.26 1145.39 2.85 1.63 21.50 24.25 983.32Food Producers (10) 715.67 1.22 707.39 707.07 698.74 846.14 2.91 1.84 18.70 9.02 759.77Tobacco (2) 474.45 1.05 468.97 469.51 466.75 544.23 9.50 1.15 9.17 32.40 576.79Industrials (93) 957.10 3.15 946.03 927.90 915.04 999.05 2.00 0.76 65.65 12.21 1019.77Construction and Materials (16) 921.54 4.22 910.89 884.24 864.37 948.87 2.38 0.15 284.40 17.87 999.05Aerospace and Defense (9) 621.18 5.19 614.00 590.51 568.86 1025.16 3.78 -1.87 -14.12 19.60 669.71Electronic and Electrical Equipment (11) 1133.26 1.34 1120.15 1118.31 1118.57 1041.32 1.67 1.76 34.11 12.68 1197.70General Industrials (8) 1005.77 2.56 994.13 980.68 959.52 961.99 2.81 0.64 55.70 13.61 1079.92Industrial Engineering (4) 1289.37 2.32 1274.46 1260.12 1252.66 1037.34 1.55 1.80 35.82 8.86 1352.04Industrial Support Services (34) 1026.58 2.73 1014.71 999.28 994.14 1021.46 1.13 2.58 34.14 6.99 1083.41Industrial Transportation (11) 1016.73 4.27 1004.97 975.05 954.76 959.25 2.52 2.30 17.25 11.02 1095.24Basic Materials (26) 1065.69 2.15 1053.37 1043.26 1031.83 1060.23 4.30 2.74 8.49 48.02 1233.24Industrial Materials (3) 776.61 2.44 767.63 758.11 745.00 843.02 3.18 2.64 11.91 19.91 855.43Industrial Metals and Mining (12) 1113.68 2.14 1100.80 1090.31 1079.50 1126.12 4.77 2.80 7.49 57.75 1317.28Precious Metals and Mining (5) 1324.14 2.69 1308.83 1289.45 1255.51 941.91 3.10 1.09 29.57 41.30 1454.65Chemicals (6) 901.58 1.67 891.15 886.76 881.81 929.29 1.81 3.39 16.33 12.94 957.49Energy (13) 380.91 1.54 376.51 375.14 358.62 876.00 10.25 0.96 10.15 25.09 442.89Oil. Gas and Coal (13) 381.45 1.54 377.04 375.66 359.12 877.23 10.25 0.96 10.15 25.12 443.52Utilities (10) 965.12 1.95 953.96 946.69 944.68 960.18 5.89 0.90 18.84 36.97 1135.55

Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/dayFTSE 100 5709.57 5737.11 5755.27 5748.40 5762.47 5768.27 5769.37 5785.32 5784.87 5787.30 5709.57FTSE 250 17320.36 17414.77 17417.39 17386.24 17449.06 17466.42 17448.17 17486.77 17476.93 17491.70 17320.36FTSE SmallCap 5091.46 5115.75 5124.98 5127.74 5131.23 5132.32 5133.79 5136.92 5143.52 5150.18 5091.46FTSE All-Share 3213.70 3229.54 3237.93 3233.92 3242.29 3245.46 3245.39 3253.83 3253.45 3254.88 3213.70Time of FTSE 100 Day's high:14:59:30 Day's Low08:03:00 FTSE 100 2010/11 High: 7674.56(17/01/2020) Low: 4993.89(23/03/2020)Time of FTSE All-Share Day's high:16:45:13 Day's Low08:03:00 FTSE 100 2010/11 High: 4257.93(17/01/2020) Low: 2727.86(23/03/2020)Further information is available on http://www.ftse.com © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of theLondon Stock Exchange Group companies and is used by FTSE International Limited under licence. † Sector P/E ratios greater than 80 are not shown.For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. ‡ Values are negative.

FT 30 INDEX

Nov 03 Nov 02 Oct 30 Oct 29 Oct 28 Yr Ago High LowFT 30 2098.60 2047.70 2030.00 2019.80 2034.50 0.00 3314.70 1337.80FT 30 Div Yield - - - - - 0.00 3.93 2.74P/E Ratio net - - - - - 0.00 19.44 14.26FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 18/02/1900Base Date: 1/7/35FT 30 hourly changes

8 9 10 11 12 13 14 15 16 High Low2047.7 2074.7 2081.2 2153.9 2399.1 2395.8 2394.3 2414 2426.7 2439.2 2366.1

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

FX: EFFECTIVE INDICES

Nov 03 Nov 02 Mnth Ago Nov 04 Nov 03 Mnth Ago

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

Sweden - - -Switzerland - - -UK 78.12 77.59 77.43USA - - -Euro - - -

Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100.Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk

FTSE SECTORS: LEADERS & LAGGARDS

Year to date percentage changesLeisure Goods 56.97Tech Hardware & Eq 26.80Electronic & Elec Eq 6.58Equity Invest Instr 0.17Industrial Metals & -4.02Industrial Eng -4.11Personal Goods -5.32Food & Drug Retailer -6.48Support Services -7.15Chemicals -7.21Gas Water & Multi -8.75General Retailers -8.95Utilities -9.53Pharmace & Biotech -9.75Basic Materials -11.23Household Goods & Ho -11.47Mining -11.49

Health Care -11.97Electricity -12.12Technology -13.04Industrials -14.24FTSE SmallCap Index -14.42Construct & Material -15.72Software & Comp Serv -15.93Forestry & Paper -17.46Consumer Goods -17.75Nonlife Insurance -18.46Financial Services -19.99FTSE 250 Index -21.34Beverages -22.84NON FINANCIALS Index -23.60Industrial Transport -24.26Real Est Invest & Se -24.88FTSE All{HY-}Share Index -24.91Consumer Services -25.35

FTSE 100 Index -26.05Tobacco -26.24Media -26.98Food Producers -27.36Financials -28.43Real Est Invest & Tr -28.96Mobile Telecomms -29.18Health Care Eq & Srv -29.35Telecommunications -33.94Life Insurance -34.52Travel & Leisure -39.16Fixed Line Telecomms -44.34Aerospace & Defense -44.60Automobiles & Parts -47.00Banks -47.01Oil Equipment & Serv -54.72Oil & Gas -57.76Oil & Gas Producers -57.80

FTSE GLOBAL EQUITY INDEX SERIES

Nov 4 No of US $ Day Mth YTD Total YTD Gr DivRegions & countries stocks indices % % % retn % Yield

Nov 4 No of US $ Day Mth YTD Total YTD Gr DivSectors stocks indices % % % retn % Yield

FTSE Global All Cap 9033 636.21 1.9 0.8 -0.1 978.08 1.8 2.1FTSE Global All Cap 9033 636.21 1.9 0.8 -0.1 978.08 1.8 2.1FTSE Global Large Cap 1743 573.54 1.8 0.4 1.1 908.14 3.0 2.1FTSE Global Mid Cap 2237 796.61 2.1 1.6 -3.9 1151.85 -2.4 2.2FTSE Global Small Cap 5053 844.38 2.3 2.6 -2.4 1174.55 -0.9 1.9FTSE All-World 3980 374.11 1.8 0.6 0.2 608.65 2.1 2.1FTSE World 2570 662.07 2.0 0.3 -0.3 1445.59 1.5 2.1FTSE Global All Cap ex UNITED KINGDOM In 8742 673.69 1.8 0.9 1.3 1017.13 3.1 2.0FTSE Global All Cap ex USA 7284 486.07 1.9 0.7 -6.3 815.79 -4.1 2.7FTSE Global All Cap ex JAPAN 7634 656.56 2.0 0.8 0.2 1018.72 2.0 2.1FTSE Global All Cap ex Eurozone 8391 672.64 1.8 1.1 1.1 1012.66 2.9 2.1FTSE Developed 2141 607.55 2.0 0.3 0.3 941.58 2.2 2.1FTSE Developed All Cap 5634 634.02 2.1 0.5 0.0 968.81 1.8 2.1FTSE Developed Large Cap 836 570.11 2.0 -0.1 1.1 899.24 3.0 2.1FTSE Developed Europe Large Cap 226 337.81 3.1 -1.8 -12.0 630.35 -9.8 3.0FTSE Developed Europe Mid Cap 345 581.50 3.3 -1.3 -8.0 949.08 -6.4 2.5FTSE Dev Europe Small Cap 695 779.83 2.9 -2.2 -13.2 1226.21 -11.7 2.3FTSE North America Large Cap 224 741.17 1.8 -0.1 6.3 1078.94 8.0 1.7FTSE North America Mid Cap 412 933.79 2.1 2.6 -1.3 1253.26 0.0 1.9FTSE North America Small Cap 1295 955.61 2.4 4.2 0.1 1238.37 1.3 1.6FTSE North America 636 481.87 1.9 0.5 5.0 716.73 6.6 1.8FTSE Developed ex North America 1505 250.25 2.3 -0.1 -8.0 452.38 -5.8 2.8FTSE Japan Large Cap 181 392.56 0.2 1.1 -1.0 550.59 1.2 2.3FTSE Japan Mid Cap 335 584.14 0.2 -0.3 -7.0 776.76 -5.2 2.2FTSE Global wi JAPAN Small Cap 883 652.43 0.2 -0.4 -6.2 898.72 -4.2 2.3FTSE Japan 516 163.39 0.2 0.9 -2.2 256.50 -0.1 2.3FTSE Asia Pacific Large Cap ex Japan 936 766.35 0.9 4.4 5.4 1323.88 7.8 2.4FTSE Asia Pacific Mid Cap ex Japan 901 875.35 1.8 3.0 1.1 1450.44 3.2 3.0FTSE Asia Pacific Small Cap ex Japan 1888 563.55 1.8 1.6 3.8 913.56 6.0 2.6FTSE Asia Pacific Ex Japan 1837 597.04 1.0 4.2 5.1 1095.58 7.4 2.5FTSE Emerging All Cap 3399 783.82 0.4 3.3 -0.8 1287.61 1.6 2.5FTSE Emerging Large Cap 907 762.42 0.2 4.0 0.6 1260.55 3.0 2.3FTSE Emerging Mid Cap 932 875.13 1.5 0.2 -10.1 1436.00 -7.7 3.4FTSE Emerging Small Cap 1560 734.19 1.2 0.9 -2.9 1156.74 -0.4 2.9FTSE Emerging Europe 76 280.87 3.9 -3.4 -36.2 530.67 -32.9 6.6FTSE Latin America All Cap 240 622.68 2.6 1.9 -36.8 1061.49 -35.4 3.0FTSE Middle East and Africa All Cap 321 580.32 1.0 0.3 -15.9 1001.30 -13.5 3.5FTSE Global wi UNITED KINGDOM All Cap In 291 269.12 3.6 -0.7 -24.7 511.91 -22.8 4.3FTSE Global wi USA All Cap 1749 829.82 1.9 0.9 5.1 1165.97 6.6 1.7FTSE Europe All Cap 1417 399.46 3.2 -1.8 -12.2 716.61 -10.0 2.9FTSE Eurozone All Cap 642 386.41 3.2 -2.2 -11.2 691.10 -9.2 2.5FTSE EDHEC-Risk Efficient All-World 3980 414.85 2.0 1.1 -4.1 623.23 -2.3 2.3FTSE EDHEC-Risk Efficient Developed Europe 571 316.25 3.0 -1.0 -6.4 526.46 -4.7 2.5Oil & Gas 128 203.49 1.5 -0.7 -44.1 377.24 -41.6 6.6Oil & Gas Producers 93 187.98 1.4 -1.1 -46.8 356.01 -44.5 6.9

Oil Equipment & Services 24 162.64 1.7 1.7 -39.3 272.91 -36.4 6.7Basic Materials 356 518.05 2.4 2.4 0.8 877.89 3.7 3.0Chemicals 163 753.58 1.5 1.5 0.5 1264.36 3.0 2.7Forestry & Paper 21 264.00 3.3 3.3 -5.1 500.47 -2.3 2.8Industrial Metals & Mining 93 352.00 2.9 2.9 -6.9 601.75 -4.0 3.7Mining 79 773.86 3.4 3.4 6.2 1341.27 9.8 3.2Industrials 747 457.19 2.2 2.2 1.8 702.93 3.5 1.8Construction & Materials 147 557.73 2.2 2.2 0.6 900.76 2.5 1.9Aerospace & Defense 36 605.23 3.7 3.7 -32.4 915.95 -31.5 2.4General Industrials 71 217.77 2.8 2.8 -4.5 366.73 -2.4 2.6Electronic & Electrical Equipment 140 564.27 1.7 1.7 10.8 787.73 12.5 1.5Industrial Engineering 148 916.07 2.1 2.1 10.5 1401.65 12.5 1.6Industrial Transportation 122 844.73 2.7 2.7 11.5 1306.15 13.3 1.8Support Services 83 551.33 1.6 1.6 9.2 799.93 10.5 1.2Consumer Goods 532 529.53 1.9 1.9 3.8 852.90 5.9 2.3Automobiles & Parts 128 464.58 2.9 2.9 22.0 729.93 24.3 1.9Beverages 67 637.76 2.0 2.0 -10.0 1034.63 -8.2 2.6Food Producers 132 676.29 1.4 1.4 -0.8 1111.85 1.4 2.4Household Goods & Home Construction 62 560.80 1.7 1.7 10.7 898.51 13.1 2.2Leisure Goods 43 282.79 0.8 0.8 16.8 389.59 18.1 1.1Personal Goods 87 926.85 2.0 2.0 2.8 1380.14 4.3 1.5Tobacco 13 802.69 1.3 1.3 -19.5 2003.16 -15.0 7.7Health Care 306 629.16 1.6 1.6 3.0 967.26 4.7 1.8Health Care Equipment & Services 111 1283.83 2.1 2.1 9.5 1545.20 10.3 0.8Pharmaceuticals & Biotechnology 195 406.05 1.2 1.2 -1.1 663.23 1.1 2.5Consumer Services 441 625.67 1.2 1.2 12.2 875.66 13.2 1.1Food & Drug Retailers 69 272.86 2.1 2.1 -7.5 413.10 -5.2 2.7General Retailers 145 1209.89 0.5 0.5 33.7 1627.73 34.5 0.6Media 87 381.36 2.2 2.2 -0.7 537.42 0.2 1.2Travel & Leisure 140 420.67 2.1 2.1 -18.8 601.69 -17.8 2.0Telecommunication 98 141.53 0.7 0.7 -11.8 307.44 -8.1 4.8Fixed Line Telecommuniations 43 109.21 0.5 0.5 -19.3 266.57 -15.4 6.1Mobile Telecommunications 55 165.11 0.8 0.8 -1.0 313.45 2.1 3.5Utilities 191 307.74 1.8 1.8 -3.2 671.82 -0.4 3.4Electricity 131 346.37 1.8 1.8 -2.7 745.56 0.1 3.4Gas Water & Multiutilities 60 307.77 1.9 1.9 -4.2 693.27 -1.5 3.3Financials 867 215.55 2.5 2.5 -18.5 390.33 -16.4 3.2Banks 272 152.54 2.7 2.7 -28.6 303.19 -26.3 4.4Nonlife Insurance 74 260.05 1.9 1.9 -15.8 407.90 -13.8 2.4Life Insurance 54 193.69 3.7 3.7 -19.7 346.54 -16.9 3.8Financial Services 208 354.89 2.6 2.6 -4.2 521.10 -2.5 2.0Technology 314 455.55 1.7 1.7 26.7 583.44 27.8 1.0Software & Computer Services 165 772.54 1.6 1.6 27.1 924.00 27.7 0.5Technology Hardware & Equipment 149 351.64 1.8 1.8 26.5 480.33 28.3 1.5Alternative Energy 11 196.42 3.2 3.2 55.2 279.17 57.5 0.8Real Estate Investment & Services 161 322.52 1.4 1.4 -12.7 593.23 -10.0 3.0Real Estate Investment Trusts 98 426.14 2.0 2.0 -14.0 932.18 -11.6 3.9FTSE Global Large Cap 1743 573.54 1.8 1.8 1.1 908.14 3.0 2.1

The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please seewww.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock ExchangeGroup companies and is used by FTSE International Limited under licence.

FTSE 100 SUMMARY

Closing Day'sFTSE 100 Price Change

Closing Day'sFTSE 100 Price Change

3I Group PLC 1021.5 21.90Admiral Group PLC 2934 70.00Anglo American PLC 1869.4 -15.40Antofagasta PLC 1020.5 -23.50Ashtead Group PLC 2977 -56.00Associated British Foods PLC 1707 -21.00Astrazeneca PLC 8511 548.00Auto Trader Group PLC 594.40 26.60Avast PLC 500.00 29.60Aveva Group PLC 4417 177.00Aviva PLC 267.80 -0.60B&M European Value Retail S.A. 510.40 7.40Bae Systems PLC 442.20 12.20Barclays PLC 110.38 -2.98Barratt Developments PLC 528.00 12.80Berkeley Group Holdings (The) PLC 4270 84.00Bhp Group PLC 1539.4 5.40BP PLC 208.75 -1.20British American Tobacco PLC 2576.5 88.00British Land Company PLC 374.60 3.80Bt Group PLC 99.42 -1.53Bunzl PLC 2531 40.00Burberry Group PLC 1428.5 15.50Coca-Cola Hbc AG 1837 68.00Compass Group PLC 1100.5 11.50Crh PLC 2820 -130.00Croda International PLC 6338 154.00Dcc PLC 5224 8.00Diageo PLC 2649 91.50Evraz PLC 360.20 -5.70Experian PLC 3038 119.00Ferguson PLC 8288 108.00Flutter Entertainment PLC 13720 580.00Fresnillo PLC 1255.5 13.50Glaxosmithkline PLC 1415 59.00Glencore PLC 162.34 1.62Gvc Holdings PLC 981.80 38.80Halma PLC 2492 70.00Hargreaves Lansdown PLC 1437.5 33.00Hikma Pharmaceuticals PLC 2654 69.00Homeserve PLC 1164 28.00HSBC Holdings PLC 332.45 -14.40Imperial Brands PLC 1271 27.00Informa PLC 443.00 9.50Intercontinental Hotels Group PLC 4081 89.00Intermediate Capital Group PLC 1266 32.00International Consolidated Airlines Group S.A. 102.75 2.89Intertek Group PLC 5814 130.00Jd Sports Fashion PLC 740.60 32.80Johnson Matthey PLC 2200 19.00Just Eat Takeaway.Com N.V. 9006 370.00

Kingfisher PLC 297.00 -0.30Land Securities Group PLC 535.50 8.00Legal & General Group PLC 192.70 1.35Lloyds Banking Group PLC 28.52 -0.73London Stock Exchange Group PLC 8710 376.00M&G PLC 155.45 3.10Melrose Industries PLC 127.90 -0.80Mondi PLC 1566.5 42.50Morrison (Wm) Supermarkets PLC 163.00 -0.20National Grid PLC 950.60 9.60Natwest Group PLC 126.00 -2.80Next PLC 6092 302.00Ocado Group PLC 2561 131.00Pearson PLC 524.60 -7.60Pennon Group PLC 1021.5 16.50Persimmon PLC 2468 47.00Phoenix Group Holdings PLC 705.00 11.20Polymetal International PLC 1755 15.00Prudential PLC 1035 24.50Reckitt Benckiser Group PLC 7092 172.00Relx PLC 1623 -0.50Rentokil Initial PLC 564.20 24.80Rightmove PLC 652.40 27.80Rio Tinto PLC 4440.5 -58.00Rolls-Royce Holdings PLC 83.90 -0.10Royal Dutch Shell PLC 988.70 4.20Royal Dutch Shell PLC 1031.8 4.80Rsa Insurance Group PLC 459.70 7.60Sage Group PLC 653.00 12.60Sainsbury (J) PLC 208.90 0.60Schroders PLC 2737 12.00Scottish Mortgage Investment Trust PLC 1064 42.00Segro PLC 939.20 19.00Severn Trent PLC 2481 15.00Smith & Nephew PLC 1425 58.00Smith (Ds) PLC 298.80 9.20Smiths Group PLC 1396.5 25.50Smurfit Kappa Group PLC 3214 120.00Spirax-Sarco Engineering PLC 11830 310.00Sse PLC 1326 31.50St. James's Place PLC 924.80 18.40Standard Chartered PLC 354.90 -17.60Standard Life Aberdeen PLC 234.10 3.10Taylor Wimpey PLC 119.50 3.45Tesco PLC 212.00 2.10Unilever PLC 4663 110.00United Utilities Group PLC 874.80 12.60Vodafone Group PLC 106.38 0.22Whitbread PLC 2296 74.00Wpp PLC 631.40 -1.60

UK STOCK MARKET TRADING DATA

Nov 04 Nov 03 Nov 02 Oct 30 Oct 29 Yr Ago- - - - - -

Order Book Turnover (m) 108.61 45.10 66.91 66.91 66.91 48.88Order Book Bargains 1029656.00 980636.00 899438.00 899438.00 899438.00 1105508.00Order Book Shares Traded (m) 1540.00 1471.00 1513.00 1513.00 1513.00 1649.00Total Equity Turnover (£m) 5162.46 3979.50 4734.34 4734.34 4734.34 4063.82Total Mkt Bargains 1256531.00 1219027.00 1127414.00 1127414.00 1127414.00 1357921.00Total Shares Traded (m) 9322.00 8153.00 7066.00 7066.00 7066.00 7765.00† Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.(c) Market closed.

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believedaccurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant norguarantee that the information is reliable or complete. The FT does not accept responsibility and will not beliable for any loss arising from the reliance on or use of the listed information.For all queries e-mail [email protected]

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

UK RIGHTS OFFERS

Amount LatestIssue paid renun. closingprice up date High Low Stock Price p +or-There are currently no rights offers by any companies listed on the LSE.

UK COMPANY RESULTS

Company Turnover Pre-tax EPS(p) Div(p) Pay day TotalAston Martin Lagonda Global Holdings 3rd 270.000 650.000 307.900L 94.800L 19.200L 11.600L 0.00000 0.00000 - 0.000 0.000Gattaca Pre 538.651 634.281 1.437 3.368 5.500L 18.300L 0.00000 0.00000 - 0.000 0.000Marks & Spencer Group Int 4090.900 4860.900 87.600L 158.800 3.500L 6.400 0.00000 3.90000 - 0.000 11.000Prime People Pre 23.992 24.660 2.133L 2.471 19.360L 13.720 0.00000 3.40000 - 1.800 5.200

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier.For more information on dividend payments visit www.ft.com/marketsdata

UK RECENT EQUITY ISSUES

Issue Issue Stock Close Mktdate price(p) Sector code Stock price(p) +/- High Low Cap (£m)11/03 20.00 AIM VRCI Verici Dx PLC 46.00 1.38 47.00 29.97 6520.410/29 162.00 AIM SBI SourceBio International PLC 172.00 -1.50 183.44 163.40 12759.510/26 0.04 AMOI Anemoi International Ltd 2.00 0.00 4.80 1.06 60.010/05 48.00 AIM CLX Calnex Solutions PLC 57.00 0.24 59.00 48.00 4987.510/05 50.00 MODE Mode Global Holdings PLC 42.50 -0.50 52.00 41.00 3422.810/02 8.00 GILD Guild Esports PLC 5.60 -0.15 10.00 5.00 2890.309/29 5.00 CRTM Critical Metals PLC 5.15 -0.01 5.90 4.75 156.009/25 73.00 AIM VARE Various Eateries PLC 65.00 -2.00 74.00 64.00 5785.6

§Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/irFor a full explanation of all the other symbols please refer to London Share Service notes.

MARKET DATA

NOVEMBER 5 2020 Section:Stats Time: 4/11/2020 - 18:27 User: peter.bailey Page Name: MARKET DATA 1, Part,Page,Edition: USA, 14, 1


MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES52 Week

Stock Price Day Chg High Low Yld P/E MCap m52 Week





Stock Price Day Chg High Low Yld P/E MCap m

Australia (A$)ANZ 19.30 -0.17 27.29 14.10 7.43 13.53 39184.37BHPBilltn 34.28 -0.42 41.47 24.05 6.04 14.87 72289.28CmwBkAu 68.41 -1.41 91.05 53.44 6.37 16.71 86690.97CSL 291.58 -0.41 342.75 242.67 1.01 42.89 94953.56NatAusBk 18.70 -0.20 29.18 13.20 7.95 18.69 44042.42Telstra 2.73 -0.03 3.94 2.66 3.70 17.65 23242.72Wesfarmers 47.01 -0.08 49.67 29.75 3.29 32.45 38156.14Westpc 17.35 -0.35 27.79 13.47 8.98 14.54 44857.13Woolworths 38.55 -0.26 43.96 32.12 2.70 41.35 34856.4Belgium (€)AnBshInBv 46.82 0.31 75.26 29.03 2.77 -94.80 92812.31KBC Grp 43.70 -0.32 73.56 33.44 2.31 12.27 21305.32Brazil (R$)Ambev 12.88 0.10 19.58 10.36 4.13 21.12 35744.68Bradesco 18.52 -0.11 32.45 14.05 1.37 5.92 14486.7Cielo 3.33 0.03 9.07 3.23 2.53 11.93 1595.61ItauHldFin 23.24 0.96 32.79 19.46 3.78 11.04 20323.24Petrobras♦ 19.80 0.05 33.65 10.50 2.87 - 25990.02Vale 62.14 -1.20 63.89 32.45 3.37 41.70 57915.89Canada (C$)BCE 54.54 0.83 65.28 46.03 6.04 19.78 37551.51BkMontrl♦ 82.31 0.78 104.75 55.76 4.96 12.19 40295.34BkNvaS 56.69 0.37 76.75 46.38 6.16 10.40 52286.15Brookfield 42.26 0.26 60.48 31.35 1.48-310.22 50634.84CanadPcR 415.86 -5.50 432.27 252.00 0.81 24.26 42910.38CanImp 102.76 0.79 115.96 67.52 5.48 12.31 34854.8CanNatRs 22.21 0.26 42.57 9.80 7.30 730.14 19970.97CanNatRy 136.44 -1.58 149.11 92.01 1.65 26.65 73907.5Enbridge 37.67 1.21 57.32 33.06 8.33 39.53 58082.95GtWesLif 28.66 0.38 35.60 18.88 6.02 10.73 20242.46ImpOil 19.13 0.25 35.80 10.27 4.66-471.73 10691.61Manulife 18.75 -0.29 27.78 12.58 5.73 9.44 27691.29Nutrien 50.39 -0.15 66.74 34.80 4.93 25.00 21835.06RylBkC♦ 96.01 1.07 109.68 72.00 4.31 12.72 104044.54Suncor En 16.05 0.40 45.12 14.02 9.57 -4.50 18636.93ThmReut 111.43 3.17 111.49 75.91 1.83 25.78 42126.58TntoDom 60.18 0.23 77.72 49.01 4.93 12.02 82647.68TrnCan 53.96 1.45 76.58 47.05 5.48 12.69 38614.21ValeantPh 30.80 -1.06 36.02 14.01 - -3.78 8158.48China (HK$)AgricBkCh 2.74 -0.02 3.50 2.38 7.66 4.32 10859.72Bk China 2.56 -0.01 3.39 2.33 8.62 4.04 27602.04BkofComm 3.95 -0.03 5.68 3.66 9.21 3.73 17831.54BOE Tech 0.62 0.03 0.80 0.47 - -4.27 15.90Ch Coms Cons 4.14 0.02 6.63 3.97 6.49 3.82 2363.4Ch Evrbrght 2.76 - 3.97 2.40 8.91 4.20 4511.98Ch Rail Cons 5.18 -0.02 9.99 4.90 4.67 3.43 1386.74Ch Rail Gp 3.81 0.04 5.05 3.45 3.88 3.39 2066.88ChConstBk 5.64 - 6.85 4.93 6.54 4.99 174831.48China Vanke 24.95 0.05 34.75 21.65 4.85 6.15 6091.45ChinaCitic 3.25 -0.06 4.79 2.93 8.53 3.44 6236.22ChinaLife 17.10 -0.32 22.90 11.64 4.93 8.24 16406.45ChinaMBank 45.10 2.70 45.45 29.80 3.07 10.93 26696.27ChinaMob 48.05 -1.00 70.00 45.20 7.15 8.08 126853.81ChinaPcIns 25.00 -0.45 32.50 17.90 5.58 7.64 8945.93ChMinsheng 4.23 -0.07 6.06 3.85 10.10 3.31 4537.89ChMrchSecs 21.22 -0.09 26.04 13.10 1.03 21.68 23461.18Chna Utd Coms 4.78 -0.04 6.24 4.66 1.26 27.86 15309.01ChShenEgy 13.56 - 16.88 11.94 10.80 5.90 5942.01ChShpbldng 4.23 0.08 5.60 3.98 0.21-151.60 11521.06ChStConEng 5.23 0.07 6.20 4.76 3.53 5.41 32140.27ChUncHK 4.94 - 7.90 3.84 3.48 10.72 19489.48CNNC Intl 4.60 -0.01 5.19 4.02 2.60 14.87 10666.08CSR 3.04 -0.01 6.10 2.95 5.69 7.13 1713.33Daqin 6.44 0.04 8.26 6.32 7.43 8.49 14262.16Gree Elec Apl 0.10 0.00 0.28 0.07 - -0.03 4.31GuosenSec 13.86 -0.11 16.14 10.38 1.44 23.16 16930.13HaitongSecs 6.56 -0.06 9.58 5.79 - 6.86 2883.88Hngzh HikVDT 46.58 0.96 47.50 27.00 1.50 33.54 56172.14Hunng Pwr 2.89 -0.10 4.24 2.24 5.50 22.80 1751.5IM Baotou Stl 1.15 - 1.39 1.04 0.61-128.05 5426.62In&CmBkCh 4.59 -0.01 6.11 3.96 6.60 4.92 51366.45IndstrlBk 18.35 0.44 20.42 14.93 - 6.37 53618.29Kweichow 1699.58 4.58 1828 960.10 1.00 48.80 318040.97Midea 0.64 - 1.17 0.58 - -2.20 17.74New Ch Life Ins 31.35 -0.80 37.30 20.45 2.84 6.94 4180.03PetroChina♦ 2.26 -0.01 4.23 2.16 5.76 -28.43 6148.22PingAnIns 80.25 0.55 101.00 69.00 2.98 10.29 77061.27PngAnBnk 18.32 0.36 18.78 11.91 - 13.81 52958.88Pwr Cons Corp 3.83 -0.04 4.88 3.40 3.58 8.46 6358.22SaicMtr 25.41 1.60 25.48 16.90 8.40 14.71 44224.12ShenwanHong 0.05 - 0.12 0.03 - -0.17 53.08ShgPdgBk 9.34 0.04 13.19 9.22 - 5.41 39101.67Sinopec Corp■ 3.10 -0.07 4.85 2.95 11.65 76.93 10197.72Sinopec Oil 1.77 -0.02 2.59 1.67 - 47.99 3175.29Denmark (kr)DanskeBk 88.42 -3.14 123.60 68.04 - 8.30 11988.61MollerMrsk 10515 105.00 11040 4976 1.41 30.25 15597.54NovoB 443.30 26.35 467.90 331.70 1.90 25.05 126359.85

Finland (€)Nokia 2.93 0.05 4.35 2.08 1.72 26.74 19379.6SampoA 34.14 0.22 42.46 21.34 4.43 22.88 22151.02France (€)Airbus Grpe 68.58 2.30 139.40 48.12 - -11.85 62957.99AirLiquide 134.80 2.80 143.90 94.86 2.02 28.02 74740.18AXA 15.49 0.58 25.62 11.84 4.75 13.27 43860.48BNP Parib 33.12 0.09 54.22 24.51 - 5.92 48465.4ChristianDior 384.60 7.80 484.60 252.40 1.26 37.76 81284.18Cred Agr 7.38 0.09 13.80 5.70 - 5.37 24912.72Danone 50.08 0.61 75.66 46.03 - 17.07 40261.34EDF 10.60 0.23 13.61 5.98 1.43 19.82 38500.92Engie SA 11.07 0.25 16.80 8.63 - -24.39 31564.51EssilorLuxottica 108.75 2.60 145.00 86.76 - -3594.75 55717.64Hermes Intl 833.40 23.40 834.60 516.00 0.55 78.26 103013.24LOreal 299.90 9.70 299.90 196.00 1.29 51.45 196426.96LVMH 421.80 12.85 440.30 278.70 1.15 47.59 249281.85Orange 9.57 0.03 15.38 8.63 5.27 9.69 29812.27PernodRic 145.85 3.45 171.70 112.25 2.16 114.79 44720.28Renault 22.90 -0.06 47.73 12.77 - -0.73 7929.05Safran 98.14 1.20 152.30 51.10 - 62.39 49092.52Sanofi 86.81 5.15 95.82 67.65 3.66 9.73 127960.28Sant Gbn 36.24 0.34 39.57 16.41 3.45 14.94 23111.81Schneider 112.00 1.00 112.35 61.72 2.30 28.11 74362.68SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81SocGen 12.75 -0.03 32.23 10.77 - -14.21 12741.43Total 27.90 0.15 50.93 21.12 9.58 -24.28 86668.89UnibailR 190.00 0.35 236.45 177.35 2.94 -7.05 22215.04Vinci 73.68 1.34 107.35 54.76 2.79 25.55 52831.16Vivendi 25.75 0.17 26.42 16.60 2.35 16.82 35742.88Germany (€)Allianz 164.12 2.44 232.60 117.10 5.90 10.16 80163.93BASF 50.07 0.35 72.17 37.36 6.65 43.27 53845.34Bayer 43.75 1.79 78.34 39.91 6.45 -5.85 50324.39BMW 62.52 0.40 77.06 36.60 4.03 12.66 44066.99Continental 92.80 -0.70 133.10 51.45 - -6.73 21731.64Daimler 48.02 0.82 54.50 21.02 - -170.07 60150.8Deut Bank 8.56 0.07 10.37 4.45 - -6.68 20709.36Deut Tlkm 13.71 0.18 16.75 10.41 4.41 17.43 76432.65DeutsPost 40.23 0.54 42.11 19.11 - 22.29 58243.57E.ON 9.33 0.28 11.56 7.60 4.97 29.85 28853.87Fresenius Med 70.68 4.60 81.10 53.50 - 16.00 25193.89Fresenius SE 33.41 0.99 51.54 24.25 - 10.10 17684.96HenkelKgaA 82.00 1.90 90.30 54.65 2.25 19.98 24942.93Linde 202.00 1.50 221.70 130.45 1.63 53.57 124253.85MuenchRkv 215.60 4.10 284.20 141.10 4.58 15.88 35365.93SAP 96.75 2.80 143.32 82.13 1.65 25.12 139164.7Siemens 107.46 1.18 112.90 53.02 3.66 18.83 106946.66Volkswgn 141.00 -2.00 185.00 99.16 - 13.35 48716.35Hong Kong (HK$)AIA 78.50 0.55 87.80 60.05 1.69 21.36 122404.45BOC Hold 22.55 - 28.90 20.05 7.17 7.52 30740.57Ch OSLnd&Inv 19.32 -0.16 31.00 18.84 5.55 4.51 27291.02ChngKng 37.20 -0.05 57.20 33.40 5.94 6.42 17715.18Citic Ltd 5.75 -0.08 10.74 5.51 8.51 3.35 21567.23Citic Secs 17.00 -0.14 21.45 12.60 3.39 12.50 4993.91CK Hutchison 48.50 -0.20 76.00 45.05 6.88 5.15 24114.69CNOOC 7.25 -0.04 14.04 6.24 11.36 6.84 41736HangSeng♦ 123.80 -2.10 173.80 110.00 6.71 11.28 30517.5HK Exc&Clr 371.60 -6.40 397.80 206.00 1.90 47.35 60745.67MTR 38.90 0.40 47.80 36.20 3.33 37.35 30987.31SandsCh 28.55 0.10 45.45 25.15 3.64 113.32 29778.77SHK Props 100.60 -0.10 124.00 87.60 4.80 7.50 37587.16Tencent 588.50 -9.50 614.00 318.00 0.22 47.63 727130.02India (Rs)Bhartiartl 453.05 -1.55 612.00 350.30 - -5.04 33069.84HDFC Bk 1257.4 9.45 1305.5 738.75 - 24.38 92582.74Hind Unilevr 2060.05 4.35 2614.3 1757.3 1.26 63.84 64760.54HsngDevFin 2088.2 -42.75 2499.9 1473.45 0.87 15.91 50124.66ICICI Bk 437.05 -6.80 552.20 268.30 0.24 27.13 40323.27Infosys 1093.95 31.40 1186 509.25 1.71 25.32 62343.66ITC 169.80 -0.30 266.30 134.60 6.22 13.86 27954.87L&T 939.85 -7.90 1466.95 661.00 3.10 16.21 17654.35OilNatGas 66.45 0.15 148.75 50.00 9.00 18.84 11184.87RelianceIn 1913.2 62.80 2369.35 867.40 0.70 27.61 173095.11SBI NewA 207.00 2.25 351.00 149.45 - 8.22 24717.6SunPhrmInds 504.65 19.05 564.75 312.00 1.19 160.59 16200.48Tata Cons 2653.15 19.55 2885 1506.05 1.29 30.64 133203.62Indonesia (Rp)Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26Israel (ILS)TevaPha 30.90 0.30 46.45 24.30 - 858.09 9942.15Italy (€)Enel 7.37 0.15 8.61 5.15 4.11 40.59 87706.22ENI 6.60 0.08 14.42 5.73 13.15 -2.69 28070.81Generali 12.20 0.17 19.63 10.20 4.13 10.43 22512.93IntSPaolo 1.60 0.06 2.63 1.31 - 8.36 36038.81Unicred 7.01 0.15 14.44 6.01 - -7.44 18330.8

Japan (¥)AstellasPh 1515 62.00 1987 1406 2.69 14.85 26995.34Bridgestne 3482 7.00 4734 2861.5 3.80 14.30 23784.25Canon 1818.5 -16.50 3117 1627 6.72 26.23 23213.37CntJpRwy 13415 115.00 22915 12380 1.14 13.33 26448.68Denso 4882 -36.00 5174 3021 2.92 -46.96 36816.26EastJpRwy 5643 -4.00 10325 5446 2.98 -43.38 20411.28Fanuc 22615 365.00 22920 12020 1.03 72.00 43704.53FastRetail 74380 1790 75240 39910 0.66 78.95 75510.92Fuji Hvy Ind 2068.5 85.00 3167 1671.5 4.92 19.86 15227.45Hitachi 3577 59.00 4693 2524 2.70 17.67 33135.15HondaMtr 2552 27.50 3259 2120 3.79 21.73 44243.34JapanTob 2089.5 0.50 2555 1796.5 7.50 12.37 39996.18KDDI 2909.5 -11.50 3451 2604 4.02 10.01 64162.41Keyence 50180 1990 50800 28905 0.30 63.52 116803MitsbCp 2401 30.50 2960.5 2094.5 5.60 8.71 34141MitsubEst 1640 38.00 2283 1291 2.05 14.46 21838.33MitsubishiEle 1358.5 3.50 1658 1096.5 3.00 14.53 27917.64MitsuiFud 1915 75.00 3035 1538 2.34 11.16 17950.2MitUFJFin 422.20 0.50 603.00 380.00 6.00 17.74 54881.72Mizuho Fin 1341 16.00 1731 1084 5.69 30.35 325896.98Murata Mfg 7319 162.00 7500 4602 1.35 26.17 47338.02NipponTT 2259.5 2.50 2908 2127 4.28 9.61 84354.99Nissan Mt 388.70 7.70 714.80 311.20 2.62 -1.55 15701.69Nomura 493.60 10.50 586.40 367.40 4.13 5.08 16504.01Nppn Stl 1073 29.00 1786.5 798.10 4.75 5.50 9759.25NTTDCMo 3888 3.00 3895 2678 3.14 20.91 120140.79Panasonic 993.40 15.00 1264 691.70 3.07 13.71 23327.45Seven & I 3263 6.00 4419 2937.5 3.08 15.71 27683.02ShnEtsuCh 14680 490.00 14790 8751 1.53 20.04 58540.56Softbank 6535 -161.00 7300 2609.5 0.69 -8.24 130707.14Sony 8903 135.00 9032 5297 0.51 16.53 107452.8SumitomoF 2965.5 1.00 4145 2507.5 6.50 18.95 38998.09Takeda Ph 3371 80.00 4562 2894.5 5.44 43.31 50859TokioMarine 4805 37.00 6317 4167 4.03 13.41 32283.2Toyota 6976 27.00 8026 5771 3.21 12.02 217855.85Mexico (Mex$)AmerMvl 13.32 0.12 16.82 12.33 2.52 33.97 28621.33FEMSA UBD♦ 116.68 1.34 185.00 112.72 1.19 74.01 11952.7WalMrtMex 53.43 0.94 62.71 47.76 1.49 30.25 44222.57Netherlands (€)Altice 4.28 0.05 6.86 2.26 - -3.84 5304.49ASML Hld 322.65 4.25 355.50 177.52 0.75 46.37 160803.56Heineken 79.26 1.50 105.00 68.82 2.14 48.82 53453.97ING 6.41 -0.07 11.26 4.23 3.78 8.95 29265.67Unilever 51.34 1.02 55.39 38.42 3.22 22.73 87805.7Norway (Kr)DNB 136.00 0.35 178.10 94.26 - 10.64 22905.52Equinor 125.10 0.65 187.20 95.20 8.20 -18.24 43715.4Telenor 151.25 1.95 171.90 130.75 5.16 42.24 22705.07Qatar (QR)QatarNtBk 17.80 - 21.25 15.71 3.54 12.54 45154.77Russia (RUB)Gzprm neft 185.71 -3.02 272.68 158.17 9.34 10.45 58976.64Lukoil 4745.5 -157.00 6810 3663 7.64 12.47 44107.51MmcNrlskNckl 20150 -66.00 23656 13352 11.57 14.96 42774.79Novatek 973.20 -3.20 1382.2 682.80 3.47 6.59 39639.58Rosneft 324.00 -11.00 489.90 229.80 10.77 12.36 46063.6Sberbank 188.91 -2.03 270.80 172.15 - 5.33 54705Surgutneftegas 35.13 -0.76 54.89 24.06 1.93 2.10 16833.73Saudi Arabia (SR)AlRajhiBnk 67.70 0.30 68.90 51.00 4.66 16.31 45127.33Natnlcombnk 39.90 0.60 50.70 30.50 6.06 10.88 31915.74SaudiBasic 90.00 0.50 100.00 61.90 5.14 -83.95 71990.4SaudiTelec 101.80 1.00 106.60 72.30 4.13 18.10 54286.1Singapore (S$)DBS 21.55 0.12 26.80 16.65 5.98 11.70 40289.34JardnMt US$ 45.83 -0.34 59.47 37.37 3.95 -83.84 33350.5JardnStr US$ 22.66 0.26 33.50 17.81 1.65 -27.29 25114.26OCBC 8.63 0.06 11.23 7.80 6.28 9.69 27991.92SingTel 2.10 0.05 3.48 2.00 8.33 32.04 25248.71UOB 19.80 0.35 27.02 17.28 5.69 11.06 24339.09South Africa (R)Firstrand 39.80 -0.44 69.90 31.13 7.22 13.61 14017.1MTN Grp 60.85 -0.04 101.11 26.25 8.71 6.92 7198.74Naspers N 3168.77 104.45 3367.26 1843.8 0.25 27.17 86644.76South Korea (KRW)HyundMobis 226500 500.00 268500 126000 1.32 12.26 18924.88KoreaElePwr 20300 -150.00 29500 15550 - -14.23 11455.08SK Hynix 83200 1800 106000 65800 1.20 25.05 53241.15SmsungEl 58500 -300.00 62800 42300 2.41 18.41 306976.9Spain (€)BBVA 2.46 -0.18 5.34 2.13 10.68 -34.79 19174.24BcoSantdr 1.78 -0.08 3.96 1.50 5.68 -3.60 34556.21CaixaBnk 1.59 -0.04 2.94 1.50 4.44 8.43 11145.87Iberdrola 10.68 0.09 11.52 7.76 1.59 18.65 79405.48Inditex 22.60 0.39 32.28 18.51 0.97 38.68 82470.41Repsol 5.90 0.11 15.67 5.04 15.66 -1.22 11235.06Telefonica 2.89 0.00 7.09 2.71 13.73-143.10 18005.16

Sweden (SKr)AtlasCpcoB 355.20 3.00 388.30 223.20 1.86 27.74 15767.05Ericsson 103.05 1.45 110.15 59.54 0.72 123.68 36015.91H & M 148.50 -0.90 214.35 98.13 3.23 83.90 24674.49Investor 566.80 13.40 591.40 370.10 2.28 6.05 29367.86Nordea Bk 71.67 0.08 86.73 48.00 - 24.66 33018.45SEB 81.50 0.80 104.90 59.80 - 10.85 20118.25SvnskaHn 76.28 0.58 113.80 71.70 - 9.60 16875.22Swedbank 148.56 -0.04 162.70 99.14 - 13.73 19130.21Telia Co 35.03 0.47 43.31 30.29 5.89 49.05 16296.49Volvo 183.70 3.70 188.55 95.00 - 20.33 33063.77Switzerland (SFr)ABB 23.50 0.25 24.73 14.11 3.40 36.59 55870.93CredSuisse 9.33 - 13.80 6.18 1.51 5.59 25042.47Nestle 108.46 2.00 112.62 83.37 2.52 22.96 342642.98Novartis 77.05 2.64 96.38 65.09 3.79 25.60 208440.2Richemont 61.48 1.48 81.66 44.64 3.14 35.63 35191.14Roche 323.10 16.45 357.85 265.75 2.82 21.36 248914.97Swiss Re 71.52 1.14 117.05 52.68 8.12 -16.04 24899.84Swisscom 479.40 6.00 577.80 446.70 4.64 15.08 27231.59Syngent 453.40 0.90 471.20 402.50 - 28.99 43035.76UBS 11.57 -0.08 13.28 7.00 2.99 9.81 48960.22Zurich Fin 321.10 4.80 439.90 248.70 6.22 15.28 52977.42Taiwan (NT$)Chunghwa Telecom 109.50 0.50 120.00 103.00 8.11 25.37 29664.4Formosa PetChem 80.90 0.80 104.50 66.10 3.66 880.60 26912.84HonHaiPrc 78.80 0.40 101.50 65.70 5.18 10.45 38149.29MediaTek 677.00 6.00 763.00 273.00 2.94 40.17 37585.15TaiwanSem 450.00 5.50 466.50 235.50 2.15 24.67 407496.72Thailand (THB)PTT Explor 32.50 -0.25 47.75 23.60 6.52 18.60 29812.91United Arab Emirates (Dhs)Emirtestele 16.94 0.10 17.08 11.04 6.52 15.80 40108.12United Kingdom (p)AscBrFd 1707 -21.00 2730 1554 2.72 19.09 17553.23AstraZen 8511 548.00 10120 5871 2.62 64.12 140005.54Aviva 267.80 -0.60 439.40 205.70 3.55 4.88 13959.9Barclays 110.38 -2.98 192.99 73.04 2.72 16.69 24464.83BP 208.75 -1.20 521.50 188.52 15.94 -2.37 54041.18BrAmTob 2576.5 88.00 3507 2362.5 5.98 9.30 62396.16BSkyB 1727.5 1.50 1740 893.50 0.76 36.60 38843.72BT 99.42 -1.53 209.20 1.02 15.49 4.56 12812.84Compass 1100.5 11.50 2077 865.80 3.63 16.96 23508.49Diageo 2649 91.50 3297 2050.6 2.64 44.22 86620.16GlaxoSmh 1415 59.00 1857 1284 5.65 10.65 90387.68Glencore 162.34 1.62 264.12 109.76 4.92 -8.02 30416.59HSBC 332.45 -14.40 603.50 281.50 4.83-205.34 86580.68Imperial Brands 1271 27.00 2072 1203 16.25 14.08 15745.31LlydsBkg 28.52 -0.73 73.66 23.59 3.93 71.30 26698.41Natl Grid 950.60 9.60 1073.8 8.90 5.03 25.97 41444.82Natwest Group 126.00 -2.80 265.00 90.54 1.59 38.18 19583.78Prudential 1035 24.50 1509 682.80 3.58 25.48 34782.54ReckittB 7092 172.00 8191.3 5130 2.46 -18.34 64870.12RELX 1623 -0.50 1613685 1382.86 2.82 24.74 40728.6RioTinto 4440.5 -58.00 5175 2954 6.88 12.45 77358.49RollsRoyce 83.90 -0.10 271.79 0.54 5.48 -0.28 2026.82RylDShlA 1031.8 4.80 2356 878.10 12.14 -8.61 61611.23Shire# 4690 111.00 4780 2944 0.58 11.63 56567.13StandCh 354.90 -17.60 740.80 334.25 1.60 9.88 15197.54Tesco 212.00 2.10 260.40 202.00 3.18 22.22 22546.35Vodafone 106.38 0.22 169.46 92.76 7.20 -38.40 36857.06WPP♦ 631.40 -1.60 1085.5 450.00 3.60 -3.39 10383.73United States of America ($)21stC Fox A 25.02 -2.02 39.74 19.81 1.93 14.69 8598.853M 163.91 -1.61 182.55 114.04 3.73 17.70 94412.47AbbottLb♦ 113.28 3.72 114.20 61.61 1.26 62.65 200565.64Abbvie♦ 96.55 8.59 101.28 62.55 4.90 20.10 170397.83Accenture♦ 229.77 4.06 247.82 137.15 1.10 28.62 152499.45Adobe 490.16 36.14 536.88 255.13 - 63.64 235112.19AEP 91.71 0.82 104.97 65.14 3.18 22.78 45502.42Aetna - - - - - - -Aflac 36.94 0.70 55.07 23.07 3.13 8.78 26334.98AirProd♦ 289.72 0.68 310.74 167.43 1.81 31.97 63997.52Alexion 123.16 6.14 128.57 72.67 - 31.24 26993.34Allergan 193.02 0.03 202.22 114.27 1.54 -25.19 63659.11Allstate 93.74 0.82 125.92 64.13 2.33 6.71 29276.52Alphabet 1767.3 121.64 1767.84 1008.87 - 36.99 531022.67Altria 38.66 1.27 51.78 30.95 9.14 -76.61 71836.34Amazon 3235.95 187.54 3552.25 1626.03 - 118.301620856.07AmerAir 11.28 0.03 31.58 8.25 2.80 -1.31 5737.33AmerExpr♦ 97.09 0.80 138.13 67.00 1.86 19.12 78173.09AmerIntGrp 32.16 -0.73 56.42 16.07 4.18 -5.65 27703.71AmerTower 241.98 7.75 272.20 174.32 1.80 53.41 107332.33Amgen 234.81 14.75 264.97 177.05 2.73 18.23 137526.76Anadarko 72.77 0.56 76.23 40.40 1.50 -63.37 36563.54Anthem 328.60 35.14 328.84 171.03 1.12 13.57 82645.02Aon Cp 182.78 2.82 238.19 143.93 1.01 23.12 42341.05Apple 115.11 4.67 137.98 53.15 0.71 33.211995701.21ArcherDan 47.56 -0.35 52.05 28.92 3.14 14.41 26423.79

AT&T 27.32 -0.14 39.70 26.08 7.97 15.84 194632.2AutomData 167.53 1.05 182.32 103.11 2.21 27.96 72032.1Avago Tech 366.92 13.16 387.80 155.67 3.34 69.56 148419.63BakerHu 22.08 0.09 31.26 20.09 3.39 -1.35 11412.93BankAm 23.95 -0.75 35.72 17.95 3.16 11.00 207461.82Baxter 77.35 0.09 95.19 69.10 1.23 41.11 39157.02BB & T 54.24 0.75 55.66 40.68 3.52 16.82 41564.3BectonDick 243.11 5.39 286.72 197.75 1.36 81.72 70468.49BerkshHat 313875 3216 347400 239440 - 22.11 206500.25Biogen 344.64 97.63 374.99 243.25 - 9.63 54561.25BkNYMeln 35.43 -0.56 51.60 26.40 3.68 7.30 31386.08BlackRock 651.71 22.45 666.64 323.98 2.24 21.83 99375.06Boeing 154.54 0.89 375.60 89.00 4.19 -29.23 87229.91Booking Holdings 1749.88 80.30 2094 1107.29 - 28.42 71655.19BrisMySq 65.96 4.72 68.34 45.76 2.80-216.37 149247.02CapOne 77.40 -0.17 107.59 38.00 2.17-198.99 35343.61CardinalHlth 50.64 1.85 60.69 39.05 4.01 -3.82 14807.91Carnival 13.82 0.11 51.94 7.80 11.40 -3.17 9674.4Caterpillar 159.01 -8.68 171.26 87.50 2.72 20.20 86104.96Celgene 108.24 0.11 110.70 58.59 - 12.71 77035.98CharlesSch 41.29 -1.28 51.65 28.00 1.78 16.43 53201.58Charter Comms 638.85 46.86 663.70 345.67 - 58.27 130899.84Chevron Corp 73.11 1.37 122.94 51.60 7.13 -14.99 136515.95Chubb 135.61 0.33 167.74 87.35 2.35 26.93 61209.73Cigna 210.67 26.79 224.64 118.50 0.02 14.25 77358.16Cisco 36.91 0.23 50.28 32.40 3.81 14.13 156234.56Citigroup 42.87 -0.66 83.11 32.00 5.00 7.03 89249.55CME Grp 154.23 0.75 225.36 131.80 2.18 22.13 55310.54Coca-Cola 50.05 0.70 60.13 36.27 3.40 22.46 214986.72Cognizant 73.79 1.85 76.45 40.01 1.20 23.71 40011.94ColgtPlm♦ 85.33 2.22 85.64 58.49 2.13 27.15 73161.96Comcast 44.39 1.77 47.74 31.71 2.08 16.96 202335.96ConocPhil 30.40 1.09 67.13 20.84 5.41 14.09 32601.72Corning 33.93 0.26 35.83 17.44 2.60 230.52 25843.26Costco 379.41 7.45 384.87 271.28 0.73 43.20 167518.51CrownCstl 163.75 3.40 180.00 114.18 3.03 89.52 68718.58CSX 87.18 2.96 87.28 46.81 1.21 22.29 66697.28CVS 61.33 1.88 77.03 52.04 3.43 9.28 80262.78Danaher 244.14 9.38 244.13 119.60 0.30 58.65 173191.53Deere♦ 237.89 -2.07 243.40 106.14 1.26 28.02 74548.72Delphi 17.02 0.31 18.51 5.39 - -7.42 1469.67Delta 31.25 0.35 62.48 17.51 4.06 -5.11 19929.83Devon Energy 9.90 0.26 26.98 4.70 4.04 -1.58 3788.38DiscFinServ 69.14 -0.22 87.43 23.25 2.68 20.75 21185.96Disney 126.07 2.05 153.41 79.07 0.73-137.85 227816.48DominRes 84.49 1.58 90.89 57.79 4.62 123.65 70983.08DowDupont 30.52 -0.65 48.38 30.06 4.01 -8.62 68559.76DukeEner 95.79 0.27 103.79 62.13 4.15 32.31 70447.04Eaton 108.29 -2.96 111.99 56.42 2.80 27.69 43326.83eBay 48.20 -0.72 61.06 26.02 1.31 16.73 33734.27Ecolab 193.41 0.80 231.36 124.60 1.02 38.73 55196.27Emerson 69.32 -1.09 78.38 37.75 3.02 20.61 41422.08EOG Res 36.43 1.41 89.54 27.00 3.57 57.75 21208.22EquityResTP 51.48 -1.05 87.94 45.43 4.78 16.22 19161.12Exelon 42.78 0.31 50.54 29.28 3.66 15.02 41689.28ExpScripts 92.33 -3.47 101.73 66.93 - 11.10 52061.19ExxonMb 33.87 0.46 73.12 30.11 10.80 19.18 143210.26Facebook 286.31 21.01 304.67 137.10 - 33.30 688370.01Fedex 277.56 3.08 293.30 88.69 0.98 53.91 72885.03FordMtr 7.80 -0.08 9.58 3.96 6.06 -13.75 30492.86Franklin 19.47 -0.54 29.27 14.91 4.32 9.03 9644.59GenDyn♦ 142.95 4.75 190.08 100.55 3.12 12.08 41016.99GenElectric 7.99 0.14 13.26 5.48 0.53 19.99 69895.01GenMills 61.54 0.65 66.14 46.59 3.09 16.96 37595.89GenMotors 35.54 0.19 38.96 14.33 3.37 32.20 50857.74GileadSci 61.03 2.20 85.97 57.04 4.51-276.43 76509.28GoldmSchs 200.20 2.27 250.46 130.85 2.63 14.46 68884.05Halliburton 13.05 0.06 25.47 4.25 4.71 -2.69 11464.04HCA Hold 136.64 0.55 151.97 58.38 0.95 13.41 46187.18Hew-Pack 18.51 -0.11 23.93 12.54 3.68 10.51 25423.42HiltonWwde 96.25 5.60 115.48 44.30 0.49 704.31 26691.03HomeDep 285.64 8.27 292.95 140.63 1.98 26.41 307478.75Honywell 180.79 1.58 184.06 101.08 2.05 21.15 126875.38HumanaInc 450.10 26.67 474.70 208.25 0.55 16.27 59544.22IBM 113.42 -0.74 158.75 90.56 6.02 12.23 101009.89IllinoisTool 206.05 -2.15 209.55 115.94 2.18 28.82 65145.44Illumina 307.74 11.11 404.20 196.78 - 62.69 44930.04Intcntl Exch 100.13 4.07 106.99 63.51 1.21 24.61 54359.3Intel 45.92 1.07 69.29 43.61 2.95 8.06 195297.76Intuit 343.47 18.74 360.00 187.68 0.61 50.15 89567.13John&John 141.34 2.84 157.00 109.16 2.87 23.63 372123.27JohnsonCn 42.55 -1.68 45.08 22.78 2.57 41.72 31655.5JPMrgnCh 101.22 -2.19 141.10 76.91 3.74 12.96 308484.32Kimb-Clark 136.25 0.90 160.16 110.66 3.24 17.40 46467.68KinderM 12.19 0.20 22.58 9.42 8.74 165.60 27581.18Kraft Heinz 32.31 0.53 36.37 19.99 5.21-192.07 39495.4Kroger 32.48 -0.26 37.22 24.88 1.95 10.01 25267.03L Brands 33.94 0.21 35.41 8.00 2.62 -11.99 9384.16LasVegasSd 51.02 2.00 74.29 33.30 4.80 110.29 38965.43LibertyGbl 19.65 0.12 25.71 15.24 - -33.99 3581.64Lilly (E) 149.20 18.22 170.75 110.51 1.95 23.15 142705.38

Lockheed 379.59 16.15 442.53 266.11 2.60 15.82 106110.95Lowes 170.13 5.48 180.67 60.00 1.28 22.77 128569.59Lyondell 71.84 -1.02 98.91 33.71 6.15 11.26 23983.01Marathon Ptl 32.53 0.62 68.73 15.26 7.17 -2.61 21167.12Marsh&M♦ 110.10 3.53 120.97 74.34 1.74 26.45 55768.88MasterCard♦ 310.16 14.77 367.25 199.99 0.49 40.86 307839.93McDonald's 219.15 2.35 231.91 124.23 2.36 33.04 163066.35McKesson 165.29 5.28 172.18 112.60 1.04 28.90 26808.35Medtronic 104.19 1.06 122.15 72.13 2.09 32.29 139957.59Merck 82.62 5.70 92.64 65.25 3.03 19.12 208962.1Metlife 39.73 -0.25 53.28 22.85 4.71 4.89 36056.89Microsoft 217.27 10.84 232.86 132.52 0.96 35.881644223.95Mnstr Bvrg 82.74 3.22 87.05 50.06 - 37.13 43636.78MondelezInt 54.97 0.55 59.96 41.19 2.18 22.44 78515.76Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29MorganStly 51.99 0.81 57.57 27.20 2.83 8.94 81975.8MylanNV 15.40 0.26 23.11 12.75 - 27.63 7958.4Netflix 501.22 14.00 575.37 281.14 - 80.54 221045.76NextEraE 74.34 -1.68 77.02 43.70 7.49 9.77 36400.41Nike 127.89 3.30 131.38 60.00 0.78 76.08 159200.37NorfolkS 228.55 5.05 228.91 112.62 1.73 27.04 62949.53Northrop 322.82 18.00 385.01 263.31 1.76 21.52 53818.63NXP 139.19 0.31 145.15 58.41 1.13-2206.75 38865.22Occid Pet 9.95 0.26 47.58 8.52 25.16 -0.73 9250.26Oracle 57.47 0.67 62.60 39.71 1.62 18.69 173020.68Pepsico 139.64 2.60 147.20 101.42 2.93 27.11 193343.21Perrigo 43.16 -2.21 63.86 40.01 2.12 23.46 5889.77Pfizer 38.03 1.84 40.97 27.88 4.09 14.30 211339.81Phillips66 48.77 1.25 119.92 40.04 7.76 -16.69 21297.7PhilMorris 72.98 1.16 90.17 56.01 6.74 14.87 113650.83PNCFin♦ 115.78 -3.62 161.79 79.41 4.18 17.13 49146.82PPG Inds 134.92 -1.95 138.40 69.77 1.59 30.41 31836.89Praxair 164.50 -0.99 169.75 140.00 2.34 37.33 47306.22ProctGmbl 142.44 1.22 145.87 94.34 2.24 27.32 354621.67Prudntl 65.32 -2.47 97.24 38.62 6.76-100.21 25799.43PublStor 239.17 3.69 240.75 155.37 3.52 32.50 41807.58Qualcomm 127.81 2.36 132.42 58.00 2.06 51.30 144203.66Raytheon 116.96 -5.47 233.48 103.00 2.98 10.60 32566.46Regen Pharm 586.15 28.96 664.64 310.74 - 21.61 61278.13S&P Global 353.78 19.03 379.87 186.06 0.74 31.72 85260.98Salesforce 251.61 14.48 284.50 115.29 - 101.70 226705.02Schlmbrg 15.98 0.22 41.14 11.87 10.69 -0.96 22181.87Sempra Energy 131.33 2.23 161.87 88.00 3.22 17.21 37987.03Shrwin-Will 725.19 15.10 725.91 325.43 0.72 36.17 66028.3SimonProp 64.26 -0.74 158.40 42.25 10.31 10.74 19654.78SouthCpr 53.47 -0.45 54.94 23.43 2.75 33.69 41336.23Starbucks 90.96 2.57 94.13 50.02 1.84 77.26 106332.24StateSt 61.75 -0.63 85.89 42.10 3.54 9.40 21759.67Stryker 213.92 5.66 227.39 124.54 1.10 48.34 80183.25Sychrony Fin 27.08 0.42 38.18 12.15 3.42 7.88 15808.09T-MobileUS 115.55 4.43 123.42 63.50 - 42.60 143022.63Target 158.11 1.38 167.42 90.17 1.65 23.12 79057.45TE Connect 102.74 0.96 109.27 48.62 1.90-287.45 33908.15Tesla Mtrs 424.89 0.99 502.49 61.85 - 976.29 393811.55TexasInstr♦ 152.36 5.06 155.88 93.09 2.39 27.19 139553.19TheTrvelers 126.42 0.08 141.87 76.99 2.75 17.11 32008.43ThrmoFshr 513.00 21.50 513.84 250.21 0.17 52.81 202937.36TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69TJX Cos 54.24 0.25 64.95 32.72 1.26 97.87 64972.61UnionPac 191.02 5.64 210.95 105.08 2.14 22.57 129671.79UPS B 164.61 1.13 178.01 82.00 2.52 31.13 116389.1USBancorp 39.84 -0.98 61.11 28.36 4.43 11.92 60013.48UtdHlthcre 355.30 33.95 355.82 187.72 1.33 19.00 337654.3UtdTech 86.01 -5.36 158.44 69.02 3.12 60.04 74498.84ValeroEngy 39.80 0.32 101.99 31.00 9.93 14.79 16228.74Verizon 57.61 -0.14 62.22 48.84 4.49 11.86 238387.08VertexPharm 218.37 7.23 306.08 195.11 - 26.26 56878.54VF Cp 70.81 0.06 100.25 45.07 2.78 96.23 27591.02ViacomCBS 29.99 -0.14 43.04 10.10 3.15 13.15 16907.51Visa Inc 195.59 7.25 217.35 133.93 0.62 35.37 329766.65Walgreen 37.36 -0.02 64.50 33.36 5.15 41.83 32369.38WalMartSto 143.67 0.89 151.33 102.00 1.47 23.15 407125.28WellsFargo 22.23 0.14 54.75 20.76 9.65 23.50 91588.65Williams Cos 19.52 0.54 24.17 8.41 8.40 168.80 23688.66Yum!Brnds 99.71 2.94 107.62 54.95 1.88 28.48 30052.56Venezuela (VEF)Bco de Vnzla 15299 500.00 16799.99 750.00 710.83 - 108.28Bco Provncl 745000 10000 787000 73000 - -14.85 155.50Mrcntl Srvcs 750000 - 815000 72000 0.02 10.05 88.39

Closing prices and highs & lows are in traded currency (with variations for thatcountry indicated by stock), market capitalisation is in USD. Highs & lows arebased on intraday trading over a rolling 52 week period.♦ ex-dividend■ ex-capital redistribution# price at time of suspension

FT 500: TOP 20

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

Biogen 344.64 247.01 97.63 39.52 100.38 41.1 24.11Cigna 210.67 183.88 26.79 14.57 42.34 25.2 25.96Devon Energy 9.90 9.64 0.26 2.66 1.80 22.2 3.18SaicMtr 25.41 23.81 1.60 6.72 4.32 20.5 32.83Abbvie 96.55 87.96 8.59 9.77 16.06 20.0 12.26Marathon Ptl 32.53 31.91 0.62 1.94 5.03 18.3 15.19Alphabet 1767.30 1645.66 121.64 7.39 256.50 17.0 21.26ImpOil 19.13 18.88 0.25 1.32 2.60 15.7 22.94NorfolkS 228.55 223.50 5.05 2.26 30.44 15.4 7.51UtdHlthcre 355.30 321.35 33.95 10.56 47.30 15.4 13.82Anthem 328.60 293.46 35.14 11.97 42.80 15.0 19.37CSX 87.18 84.22 2.96 3.51 11.25 14.8 13.04McKesson 165.29 160.01 5.28 3.30 21.19 14.7 12.72RylDShlA 1031.80 1027.00 4.80 0.47 131.80 14.6 -98.76HiltonWwde 96.25 90.65 5.60 6.18 12.23 14.6 9.73Sant Gbn 36.24 35.90 0.34 0.95 4.56 14.4 0.08Halliburton 13.05 12.99 0.06 0.46 1.63 14.3 15.83BrisMySq 65.96 61.24 4.72 7.71 8.20 14.2 12.47Lilly (E) 149.20 130.98 18.22 13.91 17.89 13.6 2.84Swiss Re 71.52 70.38 1.14 1.62 8.44 13.4 3.80Based on the FT Global 500 companies in local currency

FT 500: BOTTOM 20

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

ShenwanHong 0.05 0.05 0.00 0.00 -0.01 -16.1 15.38Nokia 2.93 2.88 0.05 1.83 -0.52 -15.1 -10.36eBay 48.20 48.92 -0.72 -1.47 -5.05 -9.5 -6.91ChUncHK 4.94 4.94 0.00 0.00 -0.49 -9.0 -1.78HyundMobis 226500.00 226000.00 500.00 0.22 -18000.00 -7.4 -1.52Westpc 17.35 17.70 -0.35 -1.98 -1.21 -6.5 4.71ChinaLife 17.10 17.42 -0.32 -1.84 -1.14 -6.3 -1.61Aon Cp 182.78 179.96 2.82 1.57 -11.92 -6.1 -11.06Nutrien 50.39 50.54 -0.15 -0.30 -3.09 -5.8 -1.98PingAnIns 80.25 79.70 0.55 0.69 -4.45 -5.3 0.00Softbank 6535.00 6696.00 -161.00 -2.40 -353.00 -5.1 0.46StandCh 354.90 372.50 -17.60 -4.72 -18.80 -5.0 -99.01RelianceIn 1913.20 1850.40 62.80 3.39 -98.25 -4.9 -14.02Hind Unilevr 2060.05 2055.70 4.35 0.21 -104.30 -4.8 -1.67ChinaPcIns 25.00 25.45 -0.45 -1.77 -1.25 -4.8 14.16ChinaMob 48.05 49.05 -1.00 -2.04 -2.25 -4.5 -2.53L&T 939.85 947.75 -7.90 -0.83 -43.00 -4.4 4.10Seven & I 3263.00 3257.00 6.00 0.18 -141.00 -4.1 -0.09Pwr Cons Corp 3.83 3.87 -0.04 -1.03 -0.16 -4.0 1.59ArcherDan 47.56 47.90 -0.35 -0.72 -1.97 -4.0 1.83Based on the FT Global 500 companies in local currency

BONDS: HIGH YIELD & EMERGING MARKET

Day's Mth's SpreadRed Ratings Bid Bid chge chge vs

Nov 04 date Coupon S* M* F* price yield yield yield USHigh Yield US$HCA Inc. 04/24 8.36 BB- Ba2 BB 113.75 4.24 0.00 0.12 -

High Yield EuroAldesa Financial Services S.A. 04/21 7.25 - - B 71.10 28.23 0.00 0.64 25.98

Emerging US$Peru 03/19 7.13 BBB+ A3 BBB+ 104.40 2.60 - - 0.34Colombia 01/26 4.50 - Baa2 BBB- 110.70 2.22 0.01 -0.05 1.88Brazil 04/26 6.00 - Ba2 BB- 116.50 2.71 -0.05 0.03 2.37Poland 04/26 3.25 - A2 A- 112.80 0.83 0.00 -0.04 0.49Mexico 05/26 11.50 - Baa1 BBB- 147.50 2.30 0.00 -0.25 1.96Turkey 10/26 4.88 - B2 BB- 89.46 7.08 0.07 0.60 6.74Turkey 03/27 6.00 - Ba2 BB+ 101.26 5.82 0.00 0.17 3.07Peru 08/27 4.13 BBB+ A3 BBB+ 103.50 3.66 0.01 -0.02 0.80Russia 06/28 12.75 - Baa3 BBB 170.00 2.59 0.01 0.13 -Brazil 02/47 5.63 - Ba2 BB- 111.45 4.85 -0.08 -0.19 -

Emerging EuroBrazil 04/21 2.88 BB- Ba2 BB- 103.09 0.05 0.01 -0.09 -1.19Mexico 04/23 2.75 BBB+ A3 BBB+ 107.76 0.76 0.00 -0.07 -1.56Mexico 04/23 2.75 - Baa1 BBB- 105.75 0.40 0.00 -0.18 0.24Bulgaria 03/28 3.00 BBB- Baa2 BBB 117.04 1.00 0.02 -0.15 -1.42Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; allother London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

BONDS: GLOBAL INVESTMENT GRADE

Day's Mth's SpreadRed Ratings Bid Bid chge chge vs

Nov 04 date Coupon S* M* F* price yield yield yield USUS$FleetBoston Financial Corp. 01/28 6.88 BBB+ Baa1 A- 129.00 2.54 -0.01 -0.05 -The Goldman Sachs Group, Inc. 02/28 5.00 BBB+ A3 A 117.21 2.47 0.00 0.32 -NationsBank Corp. 03/28 6.80 BBB+ Baa1 A- 127.69 2.72 -0.01 0.06 -GTE LLC 04/28 6.94 BBB+ Baa2 A- 128.27 2.80 0.00 -0.11 -United Utilities PLC 08/28 6.88 BBB Baa1 A- 130.43 2.62 -0.07 -0.22 -Barclays Bank plc 01/29 4.50 A A1 A+ 96.46 5.02 0.00 0.02 -EuroElectricite de France (EDF) 04/30 4.63 A- A3 A- 137.45 0.82 -0.01 0.10 -The Goldman Sachs Group, Inc. 02/31 3.00 BBB+ A3 A 121.70 0.93 0.00 0.02 -The Goldman Sachs Group, Inc. 02/31 3.00 BBB+ A3 A 124.42 0.68 0.00 -0.11 -Finland 04/31 0.75 AA+ Aa1 AA+ 111.08 -0.27 0.00 -0.05 -0.87YenMexico 06/26 1.09 - Baa1 BBB- 95.99 1.84 0.00 0.01 1.51£ Sterlinginnogy Fin B.V. 06/30 6.25 BBB Baa2 A- 137.45 2.19 -0.03 0.02 -innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 128.68 3.20 0.00 -0.01 0.40Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other Londonclose. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL

Nov 04 Rate Current Since Last Mnth Ago Year AgoUS Fed Funds 0.00-0.25 15-03-2020 1.00-1.25 1.50-1.75 1.25-1.50US Prime 4.75 30-10-2019 5.25 5.25 4.25US Discount 2.65 30-09-2019 2.75 2.75 1.75Euro Repo 0.00 16-03-2016 0.00 0.00 0.00UK Repo 0.10 19-03-2020 0.25 0.75 0.25Japan O'night Call 0.00-0.10 01-02-2016 0.00 0.00--0.10 0.00--0.10Switzerland Libor Target -1.25-0.25 15-01-2015 -0.75--0.25 -1.25--0.25 -1.25--0.25

INTEREST RATES: MARKET

Over Change One Three Six OneNov 04 (Libor: Nov 03) night Day Week Month month month month yearUS$ Libor 0.08200 0.001 0.001 -0.003 0.13763 0.22475 0.24388 0.33400Euro Libor -0.58757 -0.005 -0.009 -0.013 -0.57586 -0.53500 -0.52314 -0.47300£ Libor 0.04813 0.001 -0.003 0.002 0.04350 0.04450 0.05475 0.12113Swiss Fr Libor 0.000 -0.80720 -0.76700 -0.73260 -0.62440Yen Libor -0.001 -0.09000 -0.10267 -0.06483 0.04317Euro Euribor 0.000 -0.54000 -0.52000 -0.51300 -0.48600Sterling CDs - - - -US$ CDs - - - -Euro CDs - - - -

Short 7 Days One Three Six OneNov 04 term notice month month month yearEuro -0.74 -0.44 -0.72 -0.42 -0.69 -0.39 -0.66 -0.36 -0.66 -0.36 -0.66 -0.36Sterling 0.45 0.55 0.70 0.80 0.78 0.88 0.82 0.97 0.89 1.04Swiss Franc - - - - - - - - - - - -Canadian Dollar - - - - - - - - - - - -US Dollar 0.07 0.37 -0.02 0.28 0.01 0.31 0.08 0.38 0.12 0.42 0.19 0.49Japanese Yen -0.30 -0.10 -0.30 -0.10 -0.20 0.10 -0.35 -0.05 -0.25 0.05 -0.20 0.10Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs:Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA.

BOND INDICES

Day's Month's Year Return ReturnIndex change change change 1 month 1 year

Markit IBoxxABF Pan-Asia unhedged 219.33 0.09 0.10 5.66 1.49 7.53Corporates( £) 394.18 -0.20 0.04 4.74 0.43 5.03Corporates($) 332.09 0.18 0.18 6.59 0.18 6.59Corporates(€) 241.52 0.05 0.08 1.62 0.69 1.33Eurozone Sov(€) 263.06 0.03 0.07 4.83 0.83 3.16Gilts( £) 374.39 -0.62 -0.18 7.45 -0.20 5.41Global Inflation-Lkd 301.45 0.26 0.26 7.83 0.21 7.84Markit iBoxx £ Non-Gilts 383.38 -0.24 -0.01 4.65 0.31 4.65Overall ($) 281.56 0.13 0.13 7.46 0.13 7.46Overall( £) 372.98 -0.51 -0.14 6.40 -0.06 5.02Overall(€) 253.07 0.02 0.04 3.71 0.71 2.48Treasuries ($) 262.43 0.12 0.12 8.36 0.12 8.36

FTSESterling Corporate (£) - - - - - -Euro Corporate (€) 104.47 -0.05 - - 0.54 -1.73Euro Emerging Mkts (€) 586.14 9.01 - - -0.12 30.56Eurozone Govt Bond 110.04 -0.19 - - -0.34 -0.64

CREDIT INDICES Day's Week's Month's Series SeriesIndex change change change high low

Markit iTraxxCrossover 5Y 339.19 -9.66 -33.18 6.72 377.90 307.25Europe 5Y 57.83 -3.20 -6.97 1.16 66.97 50.61Japan 5Y 67.59 -2.46 0.09 -0.18 70.43 64.87Senior Financials 5Y 76.13 -3.42 -7.01 1.88 86.20 66.59

Markit CDXEmerging Markets 5Y 212.10 -6.61 4.65 -6.48 245.71 199.98Nth Amer High Yld 5Y 401.49 -16.53 11.05 4.42 421.26 362.70Nth Amer Inv Grade 5Y 60.00 -3.34 0.16 1.86 65.62 52.55Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names.

COMMODITIES www.ft.com/commodities

Energy Price* ChangeCrude Oil† Nov 38.64 0.74Brent Crude Oil‡ 41.15 1.11RBOB Gasoline† Nov 1.10 0.01Heating Oil† - -Natural Gas† Nov 3.03 -0.03Ethanol♦ - -Uranium† Jul 33.80 -Carbon Emissions‡ - -Diesel† - -Base Metals (♠ LME 3 Months)Aluminium 1890.00 -3.00Aluminium Alloy 1550.00 -20.00Copper 6796.50 17.00Lead 1827.00 22.00Nickel 15315.00 -25.00Tin 18185.00 125.00Zinc 2573.00 27.00Precious Metals (PM London Fix)Gold 1908.30 18.40Silver (US cents) 2417.00 19.50Platinum 875.00 20.00Palladium 2301.00 98.00Bulk CommoditiesIron Ore 117.65 -0.05GlobalCOAL RB Index 61.50 0.00Baltic Dry Index 1224.00 -39.00

Agricultural & Cattle Futures Price* ChangeCorn♦ Dec 401.25 1.00Wheat♦ Dec 606.25 -2.25Soybeans♦ Nov 1066.75 11.25Soybeans Meal♦ Dec 381.20 4.30Cocoa (ICE Liffe)X Dec 1592.00 2.00Cocoa (ICE US)♥ Dec 2267.00 -16.00Coffee(Robusta)X Nov 1300.00 -12.00Coffee (Arabica)♥ Dec 103.05 -0.35White SugarX 392.60 -2.50Sugar 11♥ 14.61 -0.08Cotton♥ Dec 70.63 0.41Orange Juice♥ Jan 115.15 -0.50Palm Oil♣ - -Live Cattle♣ Dec 107.63 -1.03Feeder Cattle♣ Nov 134.88 -Lean Hogs♣ Dec 65.40 -0.65

% Chg % ChgNov 03 Month Year

S&P GSCI Spt 353.90 4.90 -15.55DJ UBS Spot 72.61 4.02 -9.95TR/CC CRB TR 157.83 3.11 -17.44M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05UBS Bberg CMCI TR 13.20 4.85 -4.74LEBA EUA Carbon 24.20 -9.87 -3.70LEBA CER Carbon 0.28 -3.45 40.00LEBA UK Power 355.00 -75.60 -60.11

Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $unless otherwise stated.

BONDS: INDEX-LINKED

Price Yield Month Value No ofNov 03 Nov 03 Prev return stock Market stocks

Can 4.25%' 21 104.76 -0.185 -0.224 -0.05 8.41 95520.56 8Fr 0.10%' 21 104.04 -0.814 -0.809 -0.11 11.35 244526.12 15Swe 0.25%' 22 109.68 -0.556 -0.546 -0.09 26.51 200042.79 7UK 1.875%' 22 110.35 -2.986 -3.002 0.01 15.74 804619.01 28UK 2.5%' 24 359.26 -2.870 -2.889 -0.02 6.82 804619.01 28UK 2%' 35 305.16 -2.734 -2.758 0.01 9.08 804619.01 28US 0.625%' 21 - - - - - - -US 3.625%' 28 135.49 -0.962 -0.982 -0.01 16.78 1612719.67 43Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total marketvalue. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to paramount.

BONDS: TEN YEAR GOVT SPREADS

Spread SpreadBid vs vs

Yield Bund T-Bonds

Spread SpreadBid vs vs

Yield Bund T-Bonds

Australia 0.88 - 0.05Austria - - -Canada 0.71 - -0.12Denmark -0.49 - -1.32Finland -0.41 - -1.24Germany - - -Ireland -0.30 - -1.13Italy 0.16 - -0.67Japan 0.01 - -0.82

Netherlands -0.71 - -New Zealand 0.55 - -0.28Norway 0.73 - -0.10Portugal -0.33 - -Spain -0.66 - -1.49Sweden -1.44 - -2.27Switzerland -0.51 - -1.34United Kingdom - - -United States 0.83 - 0.00

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

VOLATILITY INDICES

Nov 04 Day Chng Prev 52 wk high 52 wk lowVIX 29.64 -5.91 35.55 85.42 11.42VXD 25.90 -6.66 32.56 71.05 2.47VXN 32.59 -5.79 38.38 84.67 13.58VDAX 29.80 -5.00 34.80 93.30 -† CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility.‡ Deutsche Borse. VDAX: DAX Index Options Volatility.

BONDS: BENCHMARK GOVERNMENT

Red Bid Bid Day chg Wk chg Month YearDate Coupon Price Yield yield yield chg yld chg yld

Australia 11/22 2.25 104.39 0.10 -0.02 -0.02 -0.08 -0.6905/32 1.25 104.09 0.88 -0.05 -0.03 -0.04 -

Austria - - - - - - -02/47 1.50 138.73 0.02 0.01 -0.01 -0.08 -0.45

Belgium 09/22 1.00 103.09 -0.67 0.00 0.00 -0.06 -0.11Canada 11/22 2.00 103.55 0.24 0.01 0.04 0.03 -1.38

06/30 1.25 105.01 0.71 0.05 0.10 0.16 -0.77Denmark 11/22 0.25 101.87 -0.66 0.00 -0.02 -0.06 0.04

11/29 0.50 109.13 -0.49 0.01 0.00 -0.07 -0.13Finland 04/23 1.50 105.58 -0.76 0.01 -0.02 -0.08 -0.17

04/31 0.75 112.44 -0.41 0.01 -0.01 -0.09 -0.38France 05/23 1.75 106.47 -0.75 -0.01 -0.03 -0.08 -0.17

11/26 0.25 105.32 -0.61 0.01 -0.01 -0.08 -0.30Germany - - - - - - -

05/23 1.50 105.96 -0.83 0.01 -0.02 -0.08 -0.1502/26 0.50 107.13 -0.82 0.01 -0.01 -0.09 -0.2408/50 0.00 106.67 -0.22 0.01 -0.02 -0.12 -0.37

Greece 02/26 3.65 117.56 0.86 -0.08 -0.06 -0.08 -0.30Ireland 10/22 0.00 101.30 -0.66 0.01 -0.02 -0.10 -0.18

05/30 2.40 126.17 -0.30 0.00 -0.01 -0.09 -0.4005/30 2.40 126.17 -0.30 0.00 -0.01 -0.09 -0.40

Italy 08/22 0.90 102.19 -0.35 0.00 0.01 -0.09 -0.3702/25 0.35 101.59 -0.03 -0.01 -0.02 -0.12 -0.4805/30 0.40 102.26 0.16 -0.02 0.06 -0.14 -0.2803/48 3.45 143.15 1.52 -0.02 -0.01 -0.11 -0.48

Japan 04/23 0.05 99.94 0.08 0.00 0.01 0.02 -04/25 0.05 99.93 0.07 0.00 0.01 0.03 -12/29 0.10 100.80 0.01 0.00 0.02 0.03 -12/49 0.40 94.32 0.61 0.00 0.00 0.03 -

Netherlands 07/22 2.25 105.14 -0.76 0.00 -0.03 -0.09 -0.0807/26 0.50 107.03 -0.71 0.01 -0.01 -0.08 -0.26

New Zealand 04/25 2.75 112.02 0.04 -0.01 0.00 0.01 -0.9605/31 1.50 109.73 0.55 -0.02 -0.01 0.03 -0.8905/31 1.50 109.73 0.55 -0.02 -0.01 0.03 -0.89

Norway 08/30 1.38 106.10 0.73 0.01 0.03 0.10 -08/30 1.38 106.10 0.73 0.01 0.03 0.10 -

Portugal 10/22 2.20 105.52 -0.61 -0.01 -0.05 -0.04 -0.2002/26 3.30 119.48 -0.33 -0.01 -0.05 -0.16 -0.34

Spain 10/22 0.45 102.06 -0.58 0.00 -0.03 -0.09 -0.2111/30 1.00 117.34 -0.66 -0.02 0.01 -0.15 -0.01

Sweden 06/22 0.25 109.68 -0.56 -0.01 0.03 0.17 1.5206/26 0.13 116.22 -1.28 0.03 0.03 0.00 0.6806/30 0.13 116.39 -1.44 0.02 0.02 0.02 -

Switzerland 05/22 2.00 104.44 -0.82 0.00 0.01 0.00 -0.0905/30 0.50 109.91 -0.51 0.01 0.02 -0.01 -0.02

United Kingdom - - - - - - -07/22 0.50 100.91 -0.03 0.03 0.01 0.00 -0.4807/26 1.50 108.61 -0.01 0.04 0.01 0.02 -0.4507/47 1.50 115.82 0.84 0.05 0.06 0.02 -0.33

United States 03/22 0.38 100.30 0.16 0.00 0.01 0.02 -03/25 0.50 100.70 0.34 0.02 0.05 0.09 -02/30 1.50 105.94 0.83 0.03 0.10 0.19 -02/50 0.25 114.86 - - - - -

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

GILTS: UK CASH MARKET

Red Change in Yield 52 Week AmntNov 04 Price £ Yield Day Week Month Year High Low £m

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

Tr 1.5pc '21 100.33 -0.03 50.00 0.00 200.00 -104.55 101.22 100.33 32.84Tr 4pc '22 105.44 -0.07 75.00 16.67 133.33 -114.29 108.15 105.41 38.77Tr 5pc '25 122.17 -0.10 66.67 0.00 25.00 -120.83 124.55 121.74 35.84Tr 1.25pc '27 108.24 0.02 -71.43 0.00 -60.00 -96.30 109.23 103.96 36.34Tr 4.25pc '32 144.64 0.32 -17.95 -3.03 -13.51 -61.45 148.26 137.84 38.71Tr 4.25pc '36 154.99 0.52 -11.86 1.96 -8.77 -48.51 160.46 145.12 30.41Tr 4.5pc '42 177.69 0.70 -9.09 1.45 -7.89 -40.17 186.37 162.55 27.21Tr 3.75pc '52 185.21 0.73 -9.88 0.00 -7.59 -38.14 198.36 164.59 24.10Tr 4pc '60 213.19 0.70 -9.09 1.45 -7.89 -37.50 231.12 186.33 24.12Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.

GILTS: UK FTSE ACTUARIES INDICES

Price Indices Day's Total Return ReturnFixed Coupon Nov 04 chg % Return 1 month 1 year Yield1 Up to 5 Years 89.61 -0.08 2488.96 -0.01 1.36 -0.052 5 - 10 Years 187.26 -0.34 3815.80 0.01 3.39 0.143 10 - 15 Years 226.54 -0.47 4897.45 0.18 5.10 0.424 5 - 15 Years 196.07 -0.39 4079.75 0.08 3.95 0.265 Over 15 Years 396.14 -0.99 6488.05 0.54 9.04 0.777 All stocks 193.05 -0.58 4121.79 0.27 5.63 0.64

Day's Month Year's Total Return ReturnIndex Linked Nov 04 chg % chg % chg % Return 1 month 1 year1 Up to 5 Years 304.64 -0.05 -0.11 -1.52 2509.09 -0.11 -0.052 Over 5 years 842.77 -0.46 1.90 8.92 6366.84 1.90 9.323 5-15 years 520.25 -0.27 0.20 2.47 4138.63 0.20 3.214 Over 15 years 1113.41 -0.54 2.55 11.24 8191.47 2.55 11.525 All stocks 748.41 -0.43 1.72 7.74 5757.02 1.72 8.27

Yield Indices Nov 04 Nov 03 Yr ago Nov 04 Nov 03 Yr ago5 Yrs -0.05 -0.09 0.39 20 Yrs 0.81 0.76 1.1810 Yrs 0.32 0.27 0.70 45 Yrs 0.74 0.70 1.1215 Yrs 0.64 0.60 1.03

inflation 0% inflation 5%Real yield Nov 04 Dur yrs Previous Yr ago Nov 04 Dur yrs Previous Yr agoUp to 5 yrs -2.66 2.95 -2.68 -2.28 -3.04 2.95 -3.06 -2.77Over 5 yrs -2.31 24.20 -2.33 -1.91 -2.33 24.25 -2.35 -1.935-15 yrs -2.82 9.60 -2.85 -2.40 -2.91 9.61 -2.94 -2.47Over 15 yrs -2.25 29.31 -2.27 -1.85 -2.26 29.33 -2.28 -1.87All stocks -2.31 22.37 -2.33 -1.91 -2.34 22.44 -2.36 -1.94See FTSE website for more details www.ftse.com/products/indices/gilts©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSEGilt Closing Prices information contained herein is proprietary toTradeweb; may not be copied or re-distributed; is not warranted to beaccurate, complete or timely; and does not constitute investment advice.Tradeweb is not responsible for any loss or damage that might result from the use of this information.

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurateat the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, norMorningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT norMorningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on theuse of the listed information. For all queries e-mail [email protected]

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

NOVEMBER 5 2020 Section:Stats Time: 4/11/2020 - 18:27 User: peter.bailey Page Name: MARKET DATA 2, Part,Page,Edition: USA, 15, 1


S o our long night of the soul gets no shorter. What better cue for a film by Roy Andersson, Swedish poet of the human condition at its most bleakly

hilarious — and vice very much versa? To say his new film About Endlessness feels slow is a compliment. Slow is his signature: a static camera, a string of vignettes, hapless characters caught between single-frame cartoon and Beck-ett. The cast includes nervous dental patients and exasperated dentists, wait-ers spilling red wine over their only cus-tomer. Life — there remains no cure for it, despite the diagnoses of Andersson’s previous films. (A Pigeon Sat on a Branch Reflecting on Existence still the most definitively titled.) At 77, there is talk of this being his last, an end to the endless-ness. Get it while you can if so, and god-speed a great of European high cinema, every bit the equal of a Fellini or Haneke. Funnier too.

As always, everything is shot in the palette of a Trabant showroom circa 1962, a riot of brownish beige, porridge grey and seasick green. (Ponder that in this style Andersson once made hugely popular commercials for Swedish ketchup and life insurance.) Yet for all the wilfully familiar, a particular flavour emerges. Punchlines are now so gossa-mer they might almost be unmade, barely a sigh to be heard as a busy mother snaps a heel. And no softening wit at all is applied to the bloody after-math of a murder, the rage of a middle-aged nobody. With another film-maker, you might put a darkened mood down to the times. Maybe.

In fact, cruelty and indifference have long preoccupied Andersson more than is implied by interviews that paint him as a deadpan arthouse Santa. His secu-lar hard edge is stark. Here recurring

characters include — Andersson being Andersson — a priest and psychiatrist, the former tormented by a loss of faith, the latter with a bus to catch. “Be con-tent with being alive?” the doctor sug-gests. The priest stars too in one of sev-eral visual chef’s specials, dragging a cross, rhythmically clobbered. The spectacular is no mere sidebar. Every-thing on screen is a set, meticulously built at Andersson’s Stockholmstudio complex. Physically as well as philosophically, this is his place as much as the soundstages of California belonged to the founders of MGM and Paramount. They had Hollywood. He has Anderssonville.

And there things are done differently. If elsewhere film-makers still learn the

Tinseltown way that films should be about the momentous, the world-saving and life-changing, to Andersson that is palpably ridiculous. The most vital moments are moments — fleeting, micro, barely registered. It is where we find the best of life, like an overheard blast of Scandi-jive playing from a café, causing passing young women to break into dance. The best of ourselves as well. (Is there a bigger movie hero than the sod-den figure tying a child’s shoelace in the rain?) The frustrated dentist ends up in a bar. “Everything is fantastic,” a stranger insists with such teary-eyed fervour he might almost make it true. You may choose to raise a glass before you go on your way. After all, none of us gets a choice in that.On Curzon Home Cinema from November 6

Andrea Riseborough must have spent a past life as a trapeze artist — her next move always demands attention. See her morph into a twitchy Svetlana Stalin in Armando Iannucci’s night-black Death of Stalin — or the heroine of the headtrip Mandy, sharing the screen with a fully caffeinated Nicolas Cage.Now, she stars in the coiled drama Luxor. A naturalistic hush descends for this, a whole different challenge. Her character, Hana, is a doctor, Home Counties English, arriving on holidayin the fabled Egyptian city. She is booked in at the old-world-ritzy Winter Palace Hotel. An airport-style metal detector awaits. A guarded note isvisible in Hana too, a woman with a hairline fracture of the spirit. Almost in passing, she mentions having come from a war zone.

Yet director Zeina Durra takes us by surprise, her study of emotional scar tis-sue never earnest or brutal. On the sur-face, Hana’s poise is impeccable. So too the film, crisply shot with urbane chap-ter headings in a neat serif typeface (“Freud and Egyptology: A Fax from Rio de Janeiro”). Drifting about Luxor, she is forever at one remove, as if here less to sightsee than to grade the local tourist industry. More of her own back-story resurfaces with archaeologist Sultan (Karim Saleh), whom she bumps into on a Nile ferry. Both he and Luxor were once meaningful to her, we glean, before whatever happened next. Crumpled into a fluster, Riseborough plays the scene with daredevil acuity. She lets us know her character came to Egypt for exactly this moment, even if Hana doesn’t know it herself.

Amid the reconnection, there are splashes of levity, high jinks in bygone hotel phone booths. Sultan’s tour of temple digs risks amping up the volume on themes of inescapable pasts that until now have been subtle. You prepare to clap your hands over your ears. But the sense of being ceaselessly borne back is delicately handled. For Hana and Durra alike, the question is how much trauma someone can witness and still be themselves beyond it. Fittingly, the answer will lodge in the memory.Streaming from November 6,modernfilms.com/luxor

For all their far-sighted brilliance — and his own ardour for the movies — only two films have ever been made from novels by Don DeLillo, the ostrich-sized curate’s egg Cosmopolis and French adaptation Never Ever. In spirit perhaps we can now add the chewy documen-tary Recorder: The Marion Stokes Project. In the singular American life of Stokes, a black woman born into pov-erty whose personal arc took her to the toniest enclaves of Philadelphia, we find a wealth of ideas that DeLillo would savour. Obsession, intellect, consumer-ism, conspiracy, all are here — and encompassing them is the white noiseof the mass media, the bedlam hum of 24-hour television news.

For Stokes that hum was often literal. Between 1979 and her death in 2012, she oversaw a whirring bank of video machines, recording news channels around the clock. If Howard Hughes was one kind of square-eyed recluse, looping old movies on a networkbought for the purpose, Stokes was of a

different breed. Her personal archive of rolling news was born from a demo-cratic impulse — keeping track of infor-mation relayed to the public by a media she mistrusted, wary of what might go missing from the record. The result left minimal chance for that, a million hours collected on 70,000 videocassettes.

Two of the big stories here — the psy-che of the archivist and the nature of TV news — feel cramped by sharing space. But director Matt Wolf does well with the third, his human interest portrait of Stokes. It is quite the biography — from hardscrabble beginnings to moneyed, utopian-minded adulthood, with notes of soap opera and tech-visionary futur-ism. Television aside, another Stokes fixation was the fledgling Apple of the 1980s; she bought multiple editions of early Macs and stock at $7 a share. The viewer is left to join the dots and mull the ironies. The fate of her media-sceptical credo “see the truth and check the facts”? In 2020, you will find that on your iPhone.Streaming from November 6,modernfilms.com/marionstokes

A lot of hopeful chat often concerns film as an “empathy machine”, uniquely equipped to connect an audience with the inner lives of characters on screen. Oddly, some of it is true. Take the docu-mentary Love Child, a startling chroni-cle of a family of refugees filmed over six years after they fled Iran for Istanbul. That sheer breadth of time explains some of the intimacy directors Eva Mul-vad and Lea Glob conjure with former English teacher Leila, her partner Sahand and their four-year-old son, Mani, a bona fide scamp with whom we eventually share half a childhood.

But pivotal too is the candour involved, the acknowledgment of com-plexity. In Tehran, Leila and Sahand became a couple while still married to other partners. Until they fled execu-tion, Mani believed Sahand was his uncle. Later, we learn grim details of Leila’s marriage, in particular — but even before, the mess of it all may actu-ally be the most potent reminder of common humanity. Nothing is so uni-versal as mess — and whatever version of it might apply to us, many viewers will surely see a glimmer of themselves in this one microcosm family unit, with limbo stretching ahead.On digital platforms from November 6

Above: ‘About Endlessness’ is the latest darkly funny musing on the human condition from Swedish director Roy Andersson. Right: Andrea Riseborough and Karim Saleh in Zeina Durra’s ‘Luxor’

ARTS

Cruel and comic visions of a cine-poetfilm

DannyLeigh

Left: ‘Recorder: The Marion Stokes Project’ unspools the life work of an amateur video archivist. Below: ‘Love Child’ follows a family’s perilous flight from Iran to Turkey

About EndlessnessRoy AnderssonAAAAA

LuxorZeina DurraAAAAE

Recorder: The Marion Stokes ProjectMatt WolfAAAEE

Love ChildEva Muvad, Lea GlobAAAAE

NOVEMBER 5 2020 Section:Features Time: 4/11/2020 - 17:53 User: raphael.abraham Page Name: ARTS LON, Part,Page,Edition: USA, 16, 1


FT BIG READ. LATIN AMERICA

The Brazilian authorities are grappling with a surge in illegal mining for gold in the Amazon region. Swaths of rainforest have been razed to make way for the equipment needed to extract the metal.

By Bryan Harris, Sam Cowie and Gideon Long

mine and those who don’t,” he says. The miners’ methods are also typically rough and ready and do not include proper surveying of deposits. As a result, large areas of forest are need-lessly razed in the search for just a few nuggets, Prof Wanderley adds.

For Mr de Tarso, the federal prosecu-tor, the miners — and the investors behind them — already benefit from “favourable and lenient” legislation. “We take the burden of polluted rivers, of mercury in the rivers, of local popula-tions threatened with violence,” he says.

Venezuela’s ‘mining arc’

For investigators, Brazil’s gold trade has an even more controversial side: its close connections with Venezuela.

With Venezuela’s economy collapsing and revenue from its chief export, oil, drying up, the government of Nicolás Maduro established a “mining arc” on the southern banks of the River Orinoco in 2016. The idea was to exploit the area’s gold, diamonds and coltan. This arc covers 12 per cent of Venezuela’s ter-ritory — the size of Portugal. Brazil is a natural exit point for smuggled gold.

The area is notoriously violent. The UN has recorded cases of a miner beaten in public for stealing a gas cylinder; a young man shot in both hands for steal-ing a gramme of gold and a miner having a hand cut off for not declaring a gold nugget. Campaigners say resources extracted from the region should be pre-fixed with “blood” or “conflict”.

“Much of mining in the arc is control-led by organised criminal groups or armed elements,” according to a UN report published in July. “They deter-mine who enters and leaves the area, impose rules, inflict harsh physical pun-ishment on those who break them, and gain economic benefit from all activity within the mining area.” The report details brutal punishment meted out by the gangs, including amputations for alleged theft and death for alleged espio-nage. “The bodies of miners are often thrown into old mining pits used as clan-destine graves,” the report added.

Cristina Burelli, an adviser at non-governmental group SOS Orinoco, says the “natural exit route for some of that gold is through Brazil. We know that garimpeiros are coming over from Brazil. It’s a very porous border.”

“Between 70 and 90 per cent of mined gold in Venezuela leaves the country illegally. It doesn’t even touch the cen-tral bank of Venezuela,” says Alexandra Pinna, senior programme manager for Latin America at Freedom House, who estimates the value of gold smuggled out of the country in 2018 at $2.7bn.

For prosecutors, police and activists, the solution to the entire equation lies in the creation of a reliable tracing system, starting with the basic digitisation of gold sales in cities such as Brazil’s Itaituba. This, however, would require concerted political pressure — which does not appear to be forthcoming. “If we created a traceability system, we could demand that companies prove the origin of gold,” says one federal agent. “But nobody is doing that. And we con-sumers end up helping indirectly.”

W hen Brazilian military helicopters swooped over the Maicuru Bio-logical Reserve in the Amazonian state of

Pará in October, they discovered an ille-gal mining operation that was surpris-ing in its sophistication.

There was a system of motors to heave gold out of deep caverns where it had been found and landing strips carved out of the surrounding rainforest to take the cargo away.

“This location is only accessible via plane, there’s no other way. So to struc-ture an operation there, first you need to build an airstrip, and then have aero-planes,” says Gecivaldo Vasconcelos, the federal police chief of Santarém, an Amazon port town. “This demands an investment, it is not small scale.”

In the 1980s, towards the end of Bra-zil’s military dictatorship, the Amazon witnessed a ferocious gold rush that attracted thousands of poor people who dug for the metal with shovels in a vast open pit. The medieval scenes of brutal-ity from the wildcat mining and the wanton destruction left in their wake shocked the world at a time when the fate of the Amazon rainforest was first becoming a global issue of concern.

Three decades later, illegal miners are once again flocking to the Amazon with the same get-rich-quick culture. But this time they are also bringing new heavy machinery and financial knowhow.

As the price of the precious metal has soared during the coronavirus crisis, so too has production in the Amazon. Much of the gold is exported, mostly to western nations.

Large swaths of supposedly protected lands are being razed to make way for modern equipment to extract the metal. An area of rainforest equivalent to the size of more than 10,000 football pitches was destroyed last year by illegal wildcat miners alone, according to Ibama, the federal environmental pro-tection group, an increase of 23 per cent over 2018. This is part of a broader surge in deforestation in the Amazon region.

To process the gold, the miners use mercury, which then seeps into the air and rivers, contaminating local produce and affecting surrounding communi-ties, some of which complain about a rise in serious illnesses.

With illegal mining also comes vio-lence. Several indigenous tribes in the Brazilian Amazon, including the Mun-duruku and Yanomami, are under con-stant threat from miners that are often armed and sometimes working for organised crime rings. Murders are common, say the police.

Nor is the violence contained by national borders. The federal police say that the criminal groups at work in Bra-zil have close connections with Vene-zuela, where a mining region in the south of the country is dominated by organised crime and forced labour is common, according to the UN and sev-eral non-governmental agencies.

Much of this gold is spirited out of Venezuela via Colombia, but a lot is also smuggled into Brazil where it can be eas-ily laundered, sold and eventually

An armed agent with Ibama, which every day plays a cat-and-mouse game with the gold miners deep in the forest, is more stark: “It is becoming increas-ingly dangerous,” he says. “We see imminent major conflicts.”

The Covid effect on prices

Since the coronavirus pandemic sent gold prices surging, Brazil’s production and exports of the metal have increased. Between January and September this year, it exported almost $3.4bn of gold, roughly equivalent to its entire exports of the metal last year, according to the economy ministry.

Every year Brazil produces around 100 tonnes of gold, of which about 35 tonnes comes from small-scale miners, known as garimpeiros, who have licences to prospect in parts of the Amazon.

But gold mined illegally in the Ama-zon is often laundered and ends up in this officially sanctioned output or smuggled across the borders with Vene-zuela and Guyana, meaning investiga-tors have no formal figure for illegal gold production. However, Larissa Rod-rigues from the Escolhas Institute, a non-profit group, estimates about 15 tonnes comes from illegal sources.

“Part of it is entering the financial sys-tem. In Brazil we have a lot of interna-tional attention on the traceability of beef linked to deforestation because we export a lot to Europe. But for gold, it just doesn’t happen at all,” she says.

The operation that uncovered the clandestine airstrip was dubbed “Cold Gold” — a subtle riposte to the slang of miners, who “heat up” gold when they succeed in laundering it in the financial system or jewellery market.

The process is a simple one. “A guy has gold in his hand but he has no docu-mentation — because many have extracted gold from places that aren’t legal,” says Mr Vasconcelos. “When he comes to sell that gold, either he presents a false document, or the pur-chasing shop itself produces the docu-ment. He adds: “In that moment the gold is bought by an official business, which declares that it came from a legiti-mate mine.”

The process often uses only pen and paper, meaning there is no digital data-base to track offenders or build evi-dence against the purchasers, which are theoretically regulated by the central bank and the CVM — Brazil’s Securities and Exchange Commission.

Federal prosecutors have for years been pushing the central bank and Bra-zil’s mining agency to devise a new sys-tem, but there is little political motiva-tion. Mr Bolsonaro regularly voices pub-lic support for the opening of the Ama-zon to mining and is a critic of the vast protected lands afforded to indigenous tribes. The central bank and the National Mining Agency did not respond to questions on this subject.

The CVM said it was “permanently modernising” regulations in line with their supervisory experience and “demands from market participants and society as a whole”.

Ms Rodrigues says that the govern-ment “has been completely unhelpful”.

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exported globally from São Paulo. “The risk from illegal gold is that the proceeds can be used to promote more illegalities, including drug and arms trafficking and even terrorism. If we don’t address this problem, we will lose this war,” says Eduardo Leão, director of the National Mining Agency.

Brazilian police have in recent weeks launched a string of operations, aimed at rooting out illegal miners, the cross-border smuggling routes and the laun-dering services that allow illegal gold to enter the global financial system.

The raid in the Maicuru reserve, a joint military-police operation which concluded with the police blowing up the airstrip, was one of a string by authorities in the Amazon. Days earlier, 60 federal police served 18 warrants against members of a cross-border “criminal organisation”, which the authorities allege was smuggling tens of millions of dollars in gold and cash between Venezuela, Brazil and Guyana.

But a victory for law enforcement looks far from certain. “There is an absence of law, of regulation,” says Paulo de Tarso, a federal prosecutor in Santarém. “Our work is like trying to stop ice from melting.”

The enforcement capabilities of the few local police are subsumed by the vast, inhospitable terrain, while Brazil’s environmental protection agencies — historically a bulwark against the destruction of the world’s largest rain-forest — have been starved of funding and gutted of staff since Jair Bolsonaro took over as president last year.

The Amazon’s new gold rush

A miner uses a basin and mercury to pan for gold in the Amazon rainforest. Below, an activist wearing a mask depicting Jair Bolsonaro protests against the president’s environmental policies — Nacho Doce/Reuters, Silvia Izquierdo/AP

“They’ve been launching proposals to liberalise mining and talking with min-ers on the ground,” she says. “It acts like a signal for the illegality to continue.”

Pro-mining lobby

In his quest for the precious metal, José Antônio Pereira dos Santos spent almost 50 years evading law enforcement, until February this year when he received an official licence from the government to dig in the Amazon.

At the forefront of the region’s new gold boom, Mr dos Santos employs a team of labourers as well as heavy equipment and maintains a dirt airstrip that he uses to transport the 5kg of legal gold he mines every month.

Such businesses are the backbone of many poor Amazonian communities, where rudimentary resource extrac-tion, including mining and logging, are often the only way to survive.

“Seventy per cent of our region’s eco-nomic activity depends on gold. Those who don’t depend on it directly, depend on it indirectly. It fuels our economy,” says Wescley Tomaz, a local council member for Itaituba, a mining munici-pality in Para state.

Valmir Climaco, the town’s mayor, believes it is a question of animal spirits: “When gold is discovered in an area, there is nothing in the world that will stop miners from extracting it.”

Both men support the liberalisation of the mining industry in the Amazon and Mr Tomaz in particular is at the fore-front of lobbying Mr Bolsonaro and Con-gress to push through legislation.

This campaign, however, has sparked opposition from local indigenous groups as well as environmentalists, who say the legalisation of more mining would further spur the destruction of the rain-forest, where deforestation has soared under Mr Bolsonaro. “There is a great impact when miners come into contact with indigenous populations. They bring violence and produce conflicts within the communities,” says Luiz Jardim Wanderley, a professor at Flu-minense Federal University.

He adds that some indigenous people have embraced mining to earn income, creating a split within the traditionally environmentalist communities. “Right now we are seeing a split in the Mundu-ruku tribe between those who want to

‘The risk from illegal gold is that the proceeds can be used to promote more illegalities, including drug and arms trafficking’

‘There is an absence of law, of regulation [in the Amazon region]. Our work is like trying to stop ice from melting’

NOVEMBER 5 2020 Section:Features Time: 4/11/2020 - 18:50 User: gerry.white Page Name: BIGPAGE, Part,Page,Edition: USA, 17, 1


THURSDAY 5 NOVEMBER 2020

The moment was at once shocking and entirely foreseeable. With millions of votes uncounted, Donald Trump all but claimed victory against Joe Bidenin the US presidential election yester-day. He also promised legal action to stop the count and called the normal workings of the electoral system a “fraud”. His intention was not just to prejudge the result but to taint a Presi-dent Biden (if the Democrat is elected as such) as illegitimate.

He may yet succeed. On the available evidence, however, it is Mr Trump, not Mr Biden, who needs the vote-counting to continue. By yesterday afternoon, he was behind in Wisconsin and other decisive states. If the Democrat has not scored the landslide that polls prom-ised, he could become the 46th presi-dent of the republic regardless.

To deplore Mr Trump’s intervention, it is not necessary to deny his electoral resilience. A man who has outper-formed expectations in Florida and Ohio may yet have the votes to win other swing states. But that is for Amer-icans themselves to decide. A vast share of them voted through absentee ballots, a wholly legitimate method that is also common sense in a time of pandemic. In many states, they can arrive or be counted after polling day. To impugn these as somehow lesser votes is itself a breach of the demo-cratic process and an affront to Ameri-can democracy. A US leader should cheer what seems to be the highest turnout in a presidential election for over a century. This one seeks to artifi-cially reduce it.

If his irresponsibility is clear, Amer-ica’s immediate future is anything but. A legal wrangle could drag on. Some conservatives in politics and the media seemed to reject Mr Trump’s chican-ery. What matters is whether those on the Supreme Court reject it too, should it come before them. He nominated three of its nine members.

Then, even if Mr Biden is elected, it will be without clear Democratic con-trol of the Senate. This has implications for the US and ultimately the world economy. Under divided government, fiscal relief for stricken households and businesses will be as hard as ever tolegislate. There are times when grid-lock has its advantages. A once-in-a-century crisis of public health is not

one of those times. It again falls to the Federal Reserve to ease the economic harm.

If the relief package is at risk, the same is true of Mr Biden’s longer-range plans to expand healthcare, green America’s infrastructure and raise taxes on the wealthy. There will now be no social-democratic turn in US policy-making. High-earners and corpora-tions, who spent the campaign reach-ing nervously for their wallets, can relax. “We are a working class party now,” tweeted the Republican Senator Josh Hawley, a coming force, on Tues-day night. In electoral terms, perhaps, but not in its policy bias and not in Mitch McConnell’s Senate. If some Republicans disavowed Mr Trump’s intervention yesterday, it is partly in the knowledge that, with the upper chamber and the Supreme Court, los-ing the White House is not catastrophic for the conservative cause.

In a day of precious few certainties, all that can be said for sure is that America is not done with Mr Trump (or perhaps it is the other way around). An election that seemed set to purge him from public life as a one-term aberration has given him a lasting and central role in it. Even if he cannot con-tinue as president, he will become the voice of Republican opposition.

Either way, the Grand Old Party will remain more or less in his grip. He could even parlay his grievance at a “stolen” election into a White House run in 2024, either by himself or one of his children. Those Republicans who privately find this a dismaying specta-cle are no likelier to speak up now than over the past four years. They are left to either quit the party or adjust to its Trumpist future. No doubt, a President Biden would bring much-needed relief to a strained political system. Buta democracy needs two sensible, ethi-cally rigorous parties. The US is inthe process of losing one, perhapsfor good.

In most places, a boarded-up shopor restaurant signifies the economic crisis. In Washington, on Tuesday night, it betrayed local fears of political violence. It was in that fraught context that Mr Trump made his incendiary call to stop counting votes. If it fails,as it must, it will not be last the world hears from him.

Whoever becomes president will confront a deeply divided America

Jack Ma has built his fortune disrupting the status quo. In just over two decades the entrepreneur has helped to revolu-tionise China’s economy by changing the way millions of its citizens buy, sell and invest. This time, however, the limelight-seeking billionaire appears to have flown a little too close to the sun. Mr Ma’s swipe at China’s state-domi-nated banking system, just days before the expected flotation of Ant Group, his online finance business, caused con-sternation in Beijing. The result has been the dramatic suspension of Ant’s market debut.

Beijing’s eleventh-hour decision car-ries obvious risks. Predictable regula-tion helps to underpin confidence in markets and the economy. Unexpected changes, especially if politically-driven, are usually damaging. By, in effect, bringing Mr Ma to heel, Beijing has shown two things: one, no individ-ual or company is more important than the state, and two, its central priority is to ensure domestic economic stability.

The tussle with Ant is also a high-profile example of the wider global debate over regulation in digital bank-ing. Most of today’s challenger banks emerged after the 2008 crisis. Their slick, web-based offerings contrasted sharply with the frequently poor serv-ice of traditional lenders. The pan-demic marks the first downturn to con-front the new entrants. It should have been an opportunity to grab market share. Instead, indications in Europe at

least are that established banks have benefited from a flight to safety.

The trend highlights the trade-off faced by regulators to encourage inno-vation while protecting consumers and ensuring financial stability. Some of the fintech players lack the state-backed consumer protection that comes with a formal banking licence. The question regulators must wrestle with is — what is a bank? Is it a company that takes deposits or is it one that just lends and processes payments?

This is a live debate in the US, where the Office of the Comptroller of the Currency has proposed a fintech char-ter which would, in essence, give fin-techs one set of national regulations while excluding them from the most burdensome ones linked to deposit-taking. There are important repercus-sions both for the Federal Reserve, as well as state regulators, to consider. Another issue is whether the charter would enable large technology groups to enter the financial system by the back door.

To avoid a failure of regulation or rules fragmenting further requires a federal approach and lawmaking by Congress. The US is still scarred by a system of banking regulation that failed to prevent two financial crises in recent decades. Risk tends to concen-trate in the least regulated area of the system. Regulators — in China or the US — cannot afford to let fintech become its Achilles heel.

Next US administration must tackle regulation of start-up sector

A historic US vote provides few certainties

Ant’s failed IPO points to wider clash on fintech

US embrace of Kim has rattled its regional alliesDaniel R DePetris assumes that an attack by North Korea on either South Korea or Japan would automatically trigger a counter response from the US (Letters, November 4). Yet he fails to consider how far Donald Trump has disengaged from traditional allies and has actually embraced Kim Jong Un.

Mr Trump has denigrated the military exercises with South Korea. He has shown no concern for Mr Kim’s test-firing short-range ballistic missiles, which has dismayed and unnerved pacifist Japan, unusually dependent on the US umbrella. This lack of concern flows from Mr Trump’s isolationist perspective, in so far as short-range missiles pose no threat to the US. Yet it is further bound up with Mr Trump’s narcissistic self-regard, and the degree to which Mr Kim has convinced him that their personal relationship is primary.

“We fell in love,” Mr Trump declared, after receiving Mr Kim’s unctuously flattering letters.

These fissures and spaces are wide enough for Mr Kim to contemplate an attack on the south, emboldened by his new military and nuclear prowess, without fear of either a US or Japanese material response.

Given current tensions between the US and China, it is possible that President Xi Jinping would give such aggression tacit approval. Such is the very real possible consequence of Mr Trump’s retreat from alliances and his establishment of “America alone”, which is hardly “America great again”.Albion M UrdankEmeritus Professor, British and European History, UCLA, Los Angeles, CA, US

Georgia can still be a Caucasus success storyYour article highlights the ongoing tensions in Georgia following the election last weekend (Report, November 2). Despite the controversies, Georgian Dream has won another mandate and must now focus on forming a stable government.

The party’s record raises doubts over Georgia’s ability to stay the course of Euro-Atlantic integration. Both gross domestic product and foreign direct investment were already falling pre-Covid. According to the Caucasus Research Centre, just 4 per cent of Georgians fully trust the government and the country’s democratic process.

As a former parliamentary delegate to the Organization for Security and Co-operation in Europe, I noted that the OSCE’s observers pointed to a “blurring of the lines between party and state” during the election, but it has been a feature of political, judicial, and business life in Georgia for years: the World Economic Forum ranks the country just 80th for judicial independence.

Despite the hurdles, Georgia has made significant progress. The elections, beyond their flaws, will give the country a more heterogeneous parliament. Government instability may be an issue, as you point out, but it is from this very instability that democratic checks and balances emanate. Although the process is long, and should constantly be monitored, Georgia still has every chance of being a Caucasus success story.Nick de BoisBishop’s Stortford, Hertfordshire, UK

Post-Brexit Britain has no need to placate EuropeOne wonders whether John Barstow really quite gets it yet (“One way UK can salvage its reputation with Europe”, Letters, November 3).

As a nation, we British do not feel that we somehow need to placate Europe for “the whole Brexit debacle”. Nor do we believe that we have to “salvage something positive” from Brexit, when it was something we actually voted for.

It certainly makes no sense, as Mr Barstow suggests, for Britain to replace the troops America is withdrawing from Europe. It is slightly ridiculous for Britain to spend money defending Europe like this, even when it is dressed up in comforting phrases like “strategic relationships”.Gordon BonnymanFrant, East Sussex, UK

Give science centres the arts funding treatment The government is distributing £1.6bn to the cultural sector to help it during the pandemic. Yet, despite science and technology playing a pivotal role in defining the culture of modern society, the UK’s regional science centres are not even eligible to apply for a share of this funding (Report, October 22). This is illogical and unfair.

Our regional centres serve millions of people, helping them to engage in science and to understand better a world that is shaped increasingly by new developments in science and technology.

Many of us operate in areas of extreme social deprivation, trying to raise the aspirations of young people and open up a better future for them through careers in science. It is ironic that this government constantly references science in its attempts to control the pandemic, yet chooses to slam the door shut on places that exist to promote it.Linda ConlonCEO, International Centre for Life Newcastle upon Tyne, UK

Tory MPs misrepresent the case for lockdownIt is difficult to understand why some Conservative MPs object to attempts to control the spread of the pandemic on the grounds this constitutes the introduction of an authoritarian coercive state (Report, November 4). The essence of such a state is that it seeks to suppress all forms of opposition and dissent in order to ensure the continued exercise of power by those that control it. That is not what this government is doing. In common with other governments across the world, it is seeking to fulfil its primary responsibility of securing the health and wellbeing of its people. Now, there is clearly a question as to whether it is doing a particularly good job of meeting that responsibility.Raj ParkashLondon W4, UK

Army rules OK

Regarding your report “Business leaders lose patience with No 10 over Covid decision-making” (November 3), I suggest that this government would benefit immensely from keeping in mind the old Army “rule of the 7 Ps” — “prior planning and preparation prevent piss poor performance”.Alexander RottenburgSturminster Newton, Dorset, UK

There is nothing that explicitly tells the viewer that One Second, the latest movie from noted Chinese director Zhang Yimou, takes place during the cultural revolution. But then Chinese viewers don’t need to be told.

The opening scenes feature the central character, an ex-conman, trudging across the endless sands of the Gobi Desert as he makes his way from a labour camp to a local village. The audience gradually learns that he is desperate to arrive there to watch a newsreel, which will accompany a rare film screening meant to break up the monotony of rural life. The newsreel features a glimpse, just one second long, of his young daughter, a Communist party volunteer, cheerfully unloading 50kg bags of rice from a truck sent to an unidentified, hunger-stricken area. Viewers only learn later that the truck hits her inadvertently, and kills her.

Originally, One Second was meant to debut at the Berlin Film Festival in February 2019, where it was expected to receive the award for best foreign film. But just days before the planned screening, China’s film bureau — newly merged with the party’s propaganda arm — ruled that it did not pass muster, officially for “technical” reasons.

The decision, the film’s makers were told obliquely, came from above. A few years ago, One Second would have had no such problem, those involved with its production say. But, like so much else in China, movies have become increasingly subject to the

ever tighter grip of the party under the leadership of President Xi Jinping.

One Second marks the return of China’s most famous film-maker to his roots. As in his earlier films Red Sorghum, Raise the Red Lantern, The Story of Qiu Ju and Coming Home have done, it features ordinary citizens in remote areas caught up in the machinations of petty officials — in this case, the one in charge of showing the newsreel. Known as “Mr Movie”, he discovers that the central character has escaped from the labour camp, and reports him to the relevant authorities.

The film, which at its heart is a tribute to basic humanity because it depicts friendship growing between social outcasts, comes after a decade in which Mr Zhang seemingly tried to please the powers that be through various projects. These included orchestrating the opening spectacle of the 2008 Beijing Olympics and movies such as The Great Wall, an appeal to party-sanctioned patriotism.

Sadly, Mr Zhang himself exercised considerable self-censorship before One Second was submitted to the Beijing regulators. For example, virtually every villager in this remote area is depicted with a bicycle, and some even have motorcycles — all inconceivable luxuries in those days. Even the young orphan girl, who befriends the central character, has electricity in her hovel.

Since the film was pulled, those involved with it have been negotiating with the bureaucrats to make changes

in order to secure the party’s blessing. (While a movie can still be shown abroad without censors’ approval, it can never be shown domestically — which is to say it won’t succeed commercially.)

These changes involve eliminating scenes in which the escapee is beaten up by security forces after they recapture him. In the closing scenes of the uncensored version, Mr Movie, remorseful for the beating that the escapee receives, extracts the strip of newsreel that contains the glimpse of his dead daughter, carefully wraps it in a piece of paper, and places it in the recaptured man’s pocket. But the police escort finds the small packet and throws it into the sand. The orphan girl who has been following behind hears his howls of anger, picks up the packet and waves at his retreating back. But the clip is blown away by the wind.

The censored version, by contrast — one minute shorter than the original — ends with a joyful reunion of the ex-conman and his new friend the orphan girl at the labour camp. This is the version that will finally air in late November.

Had the uncensored version of One Second been approved, the good will China would have earned as a result of artistic merit would have been greater than will now be the case. In today’s China, though, the party has the last word in both the real world and the celluloid one.

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America’s politics are not what ‘founders’ envisagedGideon Rachman (Opinion, November 3) is correct in warning about the potential frailty of democracy in America. But Mr Rachman does not focus on the cause. Ironically, the fault lies in the constitution. The question is whether a document written by the best minds of the 18th century is still relevant and can work today. Much of that answer rests in the Senate.

Originally designed when all states were considered politically equal to check and balance the power of the federal government, the role of the Senate has fundamentally altered.

The Senate no longer represents the states as its main task. Instead, senators now regard their political party as the higher priority because of the huge partisan divisions in politics and greater influence of parties for fundraising needed in modern political campaigns. This is not what the US founding fathers intended.

Further, the current US Senate majority represents less than one-third of the American population. While the House of Representatives was created for that purpose, is a majority representing a small minority of the public democratic or fair, especially given the inequality among states in numbers, size, wealth and influence that did not exist in 1789?

Since no constitutional amendment or change is remotely likely, perhaps the only solution for a truly democratic and constitutional government to survive and to function in the 21st century is for one party to control both ends of Pennsylvania Avenue with veto proof majorities.

Until that happens, Mr Rachman is correct. We need to worry about America’s democracy being in peril.Harlan Ullman Senior Adviser at the Atlantic CouncilWashington DC, US

Trump or Biden? Both should heed Thucydides Regarding your report “US election in balance as battleground states count votes” (FT.com, November 4), perhaps the presidential candidates could take comfort from Thucydides, who wrote in his History of the Peloponnesian War: “In a democracy, someone who fails to get elected to office can always console himself with the thought that there was something not quite fair about it.”Mark Solon Chairman, Wilmington Legal Founder, Bond Solon, Wilmington plcLondon E1, UK

The great British planning system was built on solid foundations of public health, economic efficiency, design quality and environmental protection (Report, October 28). Since 1947, it has proved resilient and functional, flexing with successive governments and rising to the challenges of deindustrialisation, globalisation, sustainability and climate change. However, with the publication of the recent white paper, “Planning for the Future”, a significant component — the English planning system — is now under threat from the government who plan to “tear it down and start again”.

The basis for planning reform

outlined in the white paper is the failure of housing delivery, but with around 1m of the homes permitted over the past decade unbuilt, and 300,000 in the capital alone, town planning is only a bit-part player in housing delivery. The government condemns the planning system for a housing crisis that, on any objective analysis of the evidence, demonstrates that planning permissions are being delivered at record levels.

It is hard to avoid a conclusion that the reforms proposed are driven byill-defined proposals and misplaced enthusiasm for change, which seek to replace flexibility and nuance with

rules, codes and zones. This loses the inherent depth and subtlety of a system that allows challenge, locally derived solutions and democratic accountability while driving public benefit from private gain.

As an industry and service, we do acknowledge that change can and should be made to speed up a system that is too often slow, under resourced and can be manipulated to shirk difficult responsibilities. The challenges of those who agree that development in principle is fine, as long as it’s not in my backyard, and the developers who promise so much and deliver so little, must be tackled. But

instead of tearing the system up, we urge the government to work with us.Benjamin Derbyshire Immediate Past PresidentThe Royal Institute of British Architects Janet Askew Vice-President, European Council of Spatial Planners (ECTP-CEU)Mike Kiely Chairman of Planning Officers Society (POS)Hugh EllisPolicy Director Town and Country Planning AssociationProfessor Janice Morphet Visiting Professor at the Bartlett School of Planning

Ministers urged not to ‘tear down’ England’s planning regime

Notebookby Henny Sender

NOVEMBER 5 2020 Section:Features Time: 4/11/2020 - 19:06 User: alistair.hayes Page Name: LEADER USA, Part,Page,Edition: USA, 18, 1


privacy, social media is undermining democracy and a winner-take-all digital economy is exacerbating income ine-quality. Investors should brace for more techlash (which matters, given that Big Tech and communications accounts for 45 per cent of the S&P 500).

Then there is the fourth issue that dominates headlines now: democracy. Thankfully, a Gallup poll suggests around two-thirds of Americans trust the judiciary, a level broadly unchanged in the last decade. But current events might yet undermine that. And even before the election sparked allegations of voter fraud, disenfranchisement and power grabs, only a third of voters told Gallup they trust the legislative branch — sharply down.

All this means the US has been sliding towards what the US military calls “Vuca”: volatility, uncertainty, com-plexity and ambiguity. This week’s events are a symptom of this, not a cause.

So how should investors respond? First, they should expect asset prices to be volatile. Second, they should remem-

Covid-19, be that for households or selected industries, such as coal. Mean-while, the late 20th-century mantra of shareholder capitalism is on the retreat in the US and European business worlds.

That appals fans of Milton Friedman, the economist who laid out this share-holder mantra 50 years ago. However, Friedman’s acolytes should remember this: shareholder-first ideas were devel-oped in the 1970s, when it was assumed that businesses could rely on the US gov-ernment to solve societal problems, because the latter seemed competent. This is no longer the case.

Innovation is also contentious. The 2008 crisis made unfettered creativity in finance seem dangerous. This decade has demonstrated the dark side of dig-ital innovation: the internet is eroding

A s the US voted on Tuesday, I watched workmen board up businesses in Manhat-tan to protect buildings from protesters. Some (the

offices of PwC) used plain wooden boards; others (Givenchy) had stylish barriers that projected their logo. One (Theory clothing) even featured cheery flowers on the wood.

All signalled three things: first, busi-ness leaders know the political climate is (sadly) creating profound new risks; second, many are braced for this to last; third, a few companies are putting a brave face on it and trying to adapt.

Investors should learn from them. Even if there is a clear outcome to the US presidential election soon, this week’s events are not an outlier — this is the cul-mination of a zeitgeist shift that has been building for a dozen years. Inves-tors must recognise this, since it will not be reversed whoever next sits in the White House.

Think back to early 2007, just before the financial crisis. It was taken for granted by western business leaders and financiers — or “Davos man” — that globalisation, free-market capitalism, innovation and democracy were

self-evidently good things that would only spread and deepen.

No, that did not mean investors accepted the “end of history” idea pio-neered by historian Francis Fukuyama. But there was an assumption that the world was moving in one direction. That fostered confidence to plan ahead with a vision of time — and time horizons — as consistent as Newtonian physics.

No longer. Since 2008, faith in all four of those ideas has wilted. Globalisation is the most obvious case in point. As an annual metric compiled by DHL and NYU Stern Business school shows, the global integration of money and goods has slowed, even though the movement of people and information (via the internet) has remained more robust.

And in the case of the US, the White House is almost certainly set to keep embracing America-first policies who-ever wins. The only difference is that the version of “patriotism” from the Demo-crats’ Joe Biden would sound cuddlier than Donald Trump’s, embracing global climate change initiatives and promot-ing a strategy of localisation tightly enmeshed with pro-union policies.

Free-market capitalism is also in retreat. That is partly because the US Federal Reserve has unleashed so many trillions of dollars of quantitative easing that financial market signals are being distorted. The divergence of equity prices from the real economy this year is one example of this.

But remember that even under Mr Trump, politicians have been willing to provide government aid during

Whoever wins, investors face

new risks

Shareholders should learn from corporate leaders who are adapting to the climate of uncertainty

T here are many eye-popping aspects to Ant Group’s plans for a blockbuster public list-ing in China this week, not least its dramatic last-

minute suspension by the Shanghai stock exchange. The saga shows both how capitalist China has become and how communist it remains.

One of the most astonishing things about Ant is that it took just 16 years for a payments app invented by the Alibaba ecommerce platform to develop sepa-rately into one of the world’s most dynamic digital finance companies. Ant’s indicative market valuation of about $300bn had put it roughly on a par with the venerable JPMorgan Chase.

Yet the latest episode has also shown how even a billionaire businessman as

influential as Jack Ma, the founder of Alibaba and Ant’s biggest shareholder, remains subject to the dictates of the Chinese Communist party. Chinese reg-ulators do not appear to have taken kindly to Mr Ma’s public comments last month that red tape was stifling innova-tion. This week they hauled him and his top team in for “supervisory inter-views” and halted Ant’s flotation.

It is far from clear how this latest high-stakes face-off will play out and what regulatory concessions will be wrung out of Ant. The company said it would also pause its listing in Hong Kong and would refund money pledged by local retail investors.

Standing back from the immediate fray, it is worth considering what Ant’s meteoric rise tells us about how busi-nesses flourish in the digital age and how they are still constrained by the markets in which they operate. Here are three lessons that we can perhaps learn from its experience.

First, Ant provides an object lesson in how to build a consumer-led, data-in-fused digital business. Jeff Bezos, Ama-zon’s founder, may have popularised the

that business and moved into lending, investment and insurance, too. Most western companies consider them-selves either business-to-business or business-to-consumer companies. But as Ming Zeng, Alibaba’s chief strategy officer, explains in his book Smart Busi-ness, the Chinese internet giant operates as a consumer-to-business company. Network connections and intelligence make it easier to anticipate and respond rapidly to consumer demand.

Second, it is often easier to build something new than repurpose some-thing old. Part of the reason that China leads the world in digital payments is because it lacked many legacy institu-tions. Rather than replicating what tra-ditional banks had built, Ant antici-pated what customers would want and has built its business off a super app.

As Mr Ma says, Ant has built a techfin company, with technology leading finance, rather than a fintech company, with the opposite priority. Ironically, that may be one of the reasons why Ant has incurred the wrath of regulators. It may now have to act more like a bank, keeping more loans on its balance sheet.

mantra: start with the user and work backwards. But even he must admire the way that first Alibaba, and then Ant, have put that policy into practice.

When I visited Alibaba’s headquarters in Hangzhou a few years ago, I heard how the company created its own pay-ments system in 2004 to solve a trust issue between buyers and sellers on its ecommerce platform. Alibaba spotted an acute customer need and moved fast

to build a massive new financial busi-ness. Ant spun out of Alibaba in 2011 and Alipay now has 711m active users.

Almost accidentally, by holding its users’ money in escrow until its online merchants had delivered their orders, Alibaba created Yu’e Bao, now one of the world’s biggest money market funds with $173bn of assets. Ant expanded

All tech companies need a political as well asa social licence to operate and it is folly to forget it

T ECH NOLOGY

JohnThornhill

A fter an economic and public health shock, after four years of exhausting drama, after impeach-ment, Americans have not

emphatically rejected either Donald Trump or Trumpism. Even if he loses the White House to Joe Biden, that will be the central lesson of the US election for a watching world, as much as for one nation’s anxious liberals.

An unfancied president made short work of Florida (the pollsters’ Water-loo) and put paid to rash talk of a blue Texas. At worst, Mr Trump will lose by a respectable margin. He may yet prevail, with or without the legal action he trailed in a statement that was no less grim for its predictability.

Naturally, a Biden win, even a slight

one, is a better outcome for liberalism than Hillary Clinton’s loss in 2016. But the absence of a landslide and a strongly Democratic Senate will sting. Four years ago, the party could cite excuses and circumstances: an unpopular candi-date, an opponent with no political history to attack.

This time, they have no such solace. Democrats nominated a seasoned and unobjectionable moderate. They ran on the fundamentals of public health and prosperity. They amassed a Fort Knox of campaign money. They had the encour-aging precedent of the 2018 midterm elections. Above all, they had Mr Trump’s ethical and administrative record to go after. All the raw materials were there for a crushing victory that would double as a purgative moment for the republic: a clean-up of sorts.

Yes, a Californian running mate was never ideal — the election hinges on the Midwest and the south-east — but there was no clear alternative to Kamala Harris. As for his avoidance of mass political rallies, Mr Biden could hardly run as a slayer of the coronavirus pandemic while holding them.

What is more, liberals cannot even bank on demographic change to tilt 50-50 into 60-40 in their favour. Mr Trump’s apparent gains among voters of Latin American ancestry (in Florida, for instance) are ominous for the left. A more diverse nation is not axiomatically a more progressive one. Liberalism will have to fight for its future, not assume it.

The states of Wisconsin, Michigan and Pennsylvania may yet turn for Mr Biden. Arizona has gone from red to blue without much of a transition phase, just as Virginia did in 2008.

Yet even these achievements would have struck liberals as the bare mini-mum on the eve of the election. Nor do they amount to any kind of national res-olution.

A system in which neither party wins or loses very badly — nor hangs on to unified government for very long — should be all the more peaceful. In practice, this half-a-loaf politics merely deprives whoever is president of pan-national legitimacy.

Of course, even the narrowest win is still potentially world-changing. It is no more possible to be half-president than

At this point in the search for unforced errors, the trail runs cold. Liberals are left to accept a deeper fact about the US. Far more than when the phrase started doing the rounds a gener-ation ago, this is a 50-50 nation, or thereabouts.

There is almost no politician good enough to prise voters en masse from the opposing half of the electorate — the

last to win more than 400 electoralcollege votes was George H W Bush, in 1988. And there is almost no deedor statement so bad as to cost apolitician many votes from their ownside. Whatever the pretensions ofWashington’s architecture, politics is now better understood as a high-stakes version of team sport than as thediscursive ideal of the ancients.

The president has lived down to the Democrats’ direst expectations yet remained competitive

A M ER ICA

JananGanesh

FINANCE

GillianTett

Opinion

ber that time horizons can change — and are now shortening. Third, they should note that it pays to embrace businesses with a “just-in-case” mentality, rather than the “just-in-time” philosophy that dominated the expansion of global sup-ply chains in previous decades.

Last, they must realise that the envi-ronmental, social and governance trend, and stakeholder mantra, will remain whoever wins the election. That is not because ESG is a tool of activism; the key issue is that it is also a tool of risk management. In a Vuca world it pays to be resilient, and companies can only do so if they track the “externalities” that used to be excluded from economists’ models — such as income inequality or climate change.

Or to put it another way, investors should take a leaf from the book of those Manhattan store owners: batten down the hatches; accept that uncertainty will last; embrace lateral vision, not tunnel vision. Then adapt with some meta-phorical flowers.

[email protected]

Ant’s rocky road holds lessons for business in a digital age

Ant’s IPO prospectus contains 60 pages of risk factors covering the Cov-id-19 pandemic, the global economic slowdown, US-China tensions, cyber crime and regulatory risks. But, tellingly, the first it highlights are whether Ant can continue to maintain the trust of con-sumers and innovate successfully. Regu-latory limits on its ability to innovate could seriously harm the business.

Third, all tech companies need a political as well as a social licence to operate and it is folly to forget it no mat-ter how powerful they become. Regula-tors in the US and Europe are now sprinting to catch up with runaway tech giants. China’s rulers have always kept their internet platform companies under far tighter control and have now given Ant a further tug on the leash.

In creating such a successful com-pany, Ant may have been built back to front and upside down. Yet, in spite of its impressive flexibility, it can never wriggle out of China’s political strait-jacket. Ant has now promised to “embrace regulation”.

[email protected]

D onald Trump called them “bad hombres”, “drug deal-ers, criminals and rapists” in a stream of Latino insults in his four years in office.

Yet his improved showing amongLatino voters, both men and women, almost brought him Arizona, secured Texas and, crucially, won him Florida, so turning the election into a nail-biting race. How did he do it?

That many Latinos reliably vote con-servative is nothing new. The popula-tion, now a larger ethnic group than African Americans, has contributed Republican voters ever since the “Lati-nos con Eisenhower” movement began in California in the 1950s.

Latinos, for all their diversity, share certain cultural conservative traits, such as the importance of family, lan-guage, the Church and work. George W Bush capitalised on that when he spoke Spanish and emphasised issues like faith in his 2000 election campaign.

Even so, to understand why Mr Trump won more Latino voters in 2020 than in 2016 — boosting his national share by 2 percentage points and by15 points in Florida — review the Doral rally he gave in late September.

To a Floridian audience of Cubans, Nicaraguans and Venezuelans, all of whom have fled socialist dictatorship, Mr Trump emphasised a simple point: the supposed socialist threat of “Castro-Chavismo”. Taking aim at Joe Biden’s role as vice-president, Mr Trump pointed out he “met with [Venezuela’s]

Maduro,” prompting boos. Barack Obama also “betrayed the Cuban people and enriched the Castro regime.”

His message contrasted with Demo-crats such as Alexandria Ocasio Cortez, who embraces the “democratic social-ist” label. It also resonated with exiles seeking new lives in the US, on the bet-ter side of Mr Trump’s “wall”. Mr Trump made voting for him about “leaving the crappy country you left behind [and] buying into the false image of the busi-ness mogul as capitalist salvation”, says Michael Bustamante, a Florida Inter-national University scholar. “The Biden campaign never came up with an effec-tive response to the ‘socialism’ charges.”

Racial attitudes may have been another factor, especially as pollssuggest most Latinos identify as not-coloured. In the wake of George Floyd’s death, “conspiracy theories that linked Black Lives Matter to a global commu-nist vanguard provoked a particularly virulent pro ‘law and order’ response”, Mr Bustamante adds.

Clearly, these factors have less trac-tion in other Latino communities with different histories. In Florida, for exam-ple, 47 per cent of Latinos voted Repub-lican, according to exit polls, dropping to just 21 per cent in California, where most Latinos are Mexican.

Culture wars and socialism weren’t the only reasons why Mr Trump won Florida. He allied with a potent Republi-can machine, built during the Ronald Reagan years and led by Senator Marco Rubio, who once opposed him. He ran a better ground game with frequent ral-lies and car caravans blasting blaring pro-Trump tunes, with lyrics like, “Oh my God, I’m going to vote for Trump” from émigré band Los 3 de La Habana.

Indeed, his success in Miami — a city hard hit by Covid-19, with some of the nation’s highest Obamacare enrolment rates, and a vulnerability to climate change — is a wake-up call for Demo-crats about their failure to attract new Latino voters. “Democrats have never found a way to speak to Cubans the way Republicans do, joining them to a bigger geopolitical battle,” said Guillermo Grenier, another FIU scholar.

More existentially, Mr Trump’s suc-cess raises the question of why Latino émigrés vote for the same strongman authoritarianism they once fled. My conclusion, having grown up among exiled Cubans and with my son born in Venezuela, is that the US, in its political division and gaping social inequality, is becoming more Latin American too.

[email protected]

Trump first insulted then

won over Latino voters

Often culturally conservative and allergic

to socialism, they were not courted by Biden

half-pregnant. If elected, Mr Biden could unwind much of Mr Trump’s foreign policy, regardless of which party controls the Senate. His election would be toasted in Nato headquarters and the chancelleries of most US allies. Execu-tive power will also matter in the fight against the pandemic. And even a raising of the presidential tone is worth something.

No, if there is a sense of liberal dread today, it is less about the scotched dreams of a progressive realign-ment than Mr Trump’s dismaying resilience. For four years, he has lived down to the Democrats’ direst expectations and remained electorally competitive. Not enough Americans regard him as a tyrant or a klutz, or care either way. Even if he loses, he has done well enough to remain the Republicans’ reference point in opposition and a plausible candidate in 2024.

And that is the best-case scenario for the cause of liberalism. Vote-counting, or a court ruling to stop it, may yet bring about the very worst one.

[email protected]

Liberals should worry about the lack of a landslide

politics

John PaulRathbone

NOVEMBER 5 2020 Section:Features Time: 4/11/2020 - 18:34 User: alistair.hayes Page Name: COMMENT USA, Part,Page,Edition: USA, 19, 1


CROSSWORDNo 16,626 Set by NEO

JOTTER PAD

ACROSS 1 Pipe down building placed in position

(4,2) 5 Report of girl deceived by a snake (8) 9 Rank ratings given by old music-maker

(8)10 Duck pâté ingredient for celebrity chef

(6)11 Drop round to grab length in material

(6)12 One pulls out the stops roasting nuts (8)14 Deal involving organ transplant? (4-8)18 Dishonestly take position as head

waiter? (4,3,5)22 Dish with wheat base is no meal for

cooking (8)25 Work that caddie, nearby wheeling bags

(6)26 Champion boxer possibly? (3,3)27 Muddle keeps right one in complex

romantic situation (8)28 Good coin and currency reduced in

splendour (8)29 Certain prayers are unfinished in

optimistic environment (6)

DOWN 2 Associate with tramp holding new book

(6) 3 Farewell horrendous lepidoptera —

none seen for ages? (6-3) 4 Having strayed, turn to her for direction

(4,5) 5 Dreaded meow as feline finally moves

(7) 6 Silver inscribed with second name

between (5) 7 One between legs — potential cause of

tears? (5) 8 Groom on time as horse moves (8)13 Timber lifting in Noah’s Ark (3)15 Sound cut in shout to encourage knight

(9)16 Write number appearing within a small

range (9)17 Aussie opening pair, having turned, run

one extra bye (2,6)19 Call for Terence (3)20 This could contribute to change in US

district (7)21 Simple farmer one used to steer (6)23 Perhaps return to university and study

Nash? (5)24 One must extinguish second fire in room

(5)

Solution 16,625

The US presidential race might be too close to call. But in the financial markets a clear winner has emerged: technology stocks.

The Nasdaq Composite was up 4.2 per cent in midday trading, easily outpacing the 2.6 per cent rise of the Dow Jones Industrial Average and S&P 500’s 3.1 per cent gain. Big tech powered the way. The five stocks that have the greatest weight on the Nasdaq — Apple, Microsoft, Amazon, Facebook and Google-parent Alphabet — booked gains between 4 and near-8 per cent.

Correlation does not imply causation. Still, there is no shortage of theories why investors think big tech is still a good bet, despite the sector’s stretched valuations.

Political gridlock tops the list. The so-called blue wave, in which Joe Biden becomes president and the Democrats control the Senate and the House, now looks highly unlikely. A divided government in turn lessens the likelihood of a capital gains tax rise, which would have weighed on high growth sectors such as tech.

On the regulatory front, regardless of who wins the election, the tech sector will remain under scrutiny. But a gridlocked government could make it harder to legislate to disrupt the dominance of big tech companies.

Then there is the economy. The ebbing of the blue wave sharply reduces the likelihood of a big stimulus plan to help the economy recover from the pandemic. This puts pressure on the Federal Reserve again. As if on cue, the yield on the 10-year Treasury fell 0.13 percentage points to 0.76 per cent — the most since March amid expectations that interest rates will stay lower for longer.

Faced with uncertainty, investors have simply reverted to trading existing trends. Big tech has proved it is best placed to benefit from this. The sector may be synonymous with growth and risk-on trades. But consistently solid profit growth and rich balance sheets have also turned these companies into haven plays.

US tech stocks: all-weather endeavours

nicely, sharing a £15.9m profit pool, with £3.8m the biggest payout.

Mr Odey is relinquishing his role before his trial for alleged indecent assault, to which he has pleaded not guilty. He has not followed the example of hedgies who pursued a lower profile for other reasons. It is not uncommon for fund managers to say they are closing their funds to new investors or that they will concentrate on managing family wealth. Such actions typically follow periods of poor performance accompanied by sharply shrinking assets under management.

Mr Odey’s limited retreat reduces the exposure of his business and its co-owners to any future bad publicity future. It covers a number of potential outcomes, as the strategies of hedge fund managers tend to.

Mr Odey donated to the Conservative party and the leadership campaign of Brexiter Boris Johnson, who is now prime minister. Resulting conspiracy theories appeared wide of the mark. As a money manager, Mr Odey went both long and short on sterling, an asset sensitive to Brexit politics.

Investors have had more reason to gripe. Take Mr Odey’s long/short European fund, which has made gains in only one of the past six years. Until the end of September, it was down 21 per cent compared with a near 3 per cent increase from the HFRI 500 equity hedge index of HFR, a data group.

Management fees last year were half those garnered in 2015 at Odey Asset Management LLP, according to filings. Performance fees of under £12m were closer to a sixth. The partners still did

China has now undergone two years of political fallout with the US. Its markets have emerged stronger.

Crispin Odey’s partial retreat from his eponymous asset management firm may mark the end of an era. He is stepping down as co-chief executive ahead of a trial but will continue to manage funds. As a pioneering force in the UK hedge fund industry, he has attracted criticism as well as praise from politicians and investors.

Jeremy Corbyn, former leader of the Labour party, listed the fund manager among five elitists he wanted to target.

Odey Asset Management: one foot out the door

The Chinese renminbi has been a hot bet for investors taking a position on the US election. A historic rally in the currency has boosted its value against the US dollar by more than 7 per cent from May lows. A swift unwind is now on the cards.

A Joe Biden presidency was priced in. The thesis is that, if elected, Mr Biden would be much less hawkish on trade relations with China, reducing tariff pressures on exports. These have been recovering anyway, fuelling a large trade surplus that has also boosted the currency. Foreign investors have driven the rally. There has been a surge in trading volumes in the offshore renminbi market. Offshore funds have then poured into China’s equity markets, helping to push their value to a record of more than $10tn this year.

With the election result hanging in the balance, renminbi bulls could find themselves as confounded as blue wave-backing pollsters. The currency spiked then slumped, according to Refinitiv data, with the publication of voting results that showed a surge in support for Donald Trump.

Worsening trade hostilities would hurt US companies as well as Chinese counterparts. The latter group would, however, receive some compensation via an unwind in the currency trade.

A limiting factor is the Chinese central bank’s greater leeway on setting exchange rates. Last year, a weak yuan would have meant hefty capital outflows from nervous foreign investors. The pandemic has turned the tables. China’s strong economic recovery, cheap government bonds and a growing tech industry have made the currency less prone to sentiment-driven swings.

A stable outlook for Chinese equities, which should stay mostly unaffected by US election results, helps too. The outbreak of the trade war in 2018 was marked by a 30 per cent drop in the country’s benchmark CSI 300 index.

Biden vs Trump: yuan direction

The 2020 US election has failed to deliver the predicted “blue wave” that would have given Democrats a sweeping majority for both the presidency and Congress. As officials pored over ballots in key states such as Wisconsin, Michigan and Pennsylvania yesterday, another four years of economic lethargy was becoming inevitable. A correction in stocks and high-yield bonds is due.

American presidents are limited to two terms. Durational statutes do not apply to an enfeebled economy. Since the 2008 global financial crisis, the US economy has been mired in anaemic growth tempered by rising asset prices.

US growth fell 32 per cent at an annualised rate in the second quarter of the year as the pandemic took hold.

The Federal Reserve may finally be out of bullets. Assets prices, notably stocks, have been resilient on high demand. Broadly-based profits growth has primarily been a feature of a tech sector bolstered by lockdowns.

One way to understand the weakness in aggregate economic demand is to scrutinise real interest rates. The 10-year inflation-protected US Treasury in 2006 traded at a yield of 2-3 per cent. Since 2010, its yield has mostly been below 1 per cent, including a stint in negative territory in 2012 and again in 2020.

Meagre interest rates and cheap, low-risk funds have forced asset prices upwards. The ICE BofA triple B bond spread is currently under 2 per cent.

Absolute returns look even scantier measured by a 10-year Treasury yield below 1 per cent. Companies whose revenues have plummeted — cruise lines, airlines, cinemas — have been able to borrow money easily so far in 2020 to survive. Investors have had few higher-yield options.

With Congress divided, legislators will struggle to deliver a follow-up stimulus to March’s $2.2tn Cares Act. S&P recently forecast that the default rate on leveraged loans would reach 8 per cent by the summer of 2021 after being in the low single digits for much of the 2010s. Marginal companies are increasingly vulnerable to collapse.

Even in a world of secular “stagnation”, an economy still grudgingly grows. The US is instead

US assets/election: blue wave goodbye

facing a deep recession with little political consensus about a remedy.

The S&P 500 index is up 4 per cent in 2020 and credit securities are still tightly priced. That contradiction cannot last forever.

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

Twitter: @FTLex

The future of tax credits for renewable energy projects, especially wind farms, is a debate that goes round and round US Congress. US Production Tax Credits matter to Danish turbine maker Vestas. The US generates nearly a third of its revenues and deliveries. President Donald Trump, no fan of wind power, might want to remove the benefit if he returns to office for another term. Yet even that will not halt the momentum of US wind power.

Vestas has other issues to deal with. Third-quarter results missed targets in an important way. Orders of 4,232MW — worth €3.1bn — fell 11 per cent. That leaves the backlog at €14.6bn, down more than a tenth from the same period last year.

Vestas produced revenues and operating profits significantly above expectations, but the turbine maker did not increase its earnings outlook for the year. That is a problem when the market is pricing in plenty of growth. Vestas trades on an enterprise value 15 times forward ebitda, double the decade average, although that is still cheaper than rival Siemens Gamesa. Any threat to earnings causes wobbles in the share price, which fell more than a tenth yesterday morning before recovering smartly.

The Trumpian part of the wobble — the threat to tax credits — looks overplayed. The scheme has been regularly extended over the years. Further extensions are possible. Earlier this year, requests were approved from

three Republican Senators for projects in their states.

Even if it is not extended, there is hope for wind. Many of America’s wind farms are onshore. Growth for all turbine makers will probably come from offshore projects. In capacity terms these will expand by well over six times to 20GW in the next decade, according to the US Department of Energy. These marine power plants do not depend on the tax credit scheme. Vestas, which has nearly 14 per cent of the offshore turbine market, stands to gain.

The shares look expensive, but the expansion of offshore wind power suggests investors should maintain a breezy attitude towards the company.

FT graphic Source: Refinitiv

Wind power stocks are flyingTotal returns (rebased)

100

150

200

250

300

20192018 2020

Orsted Vestas Siemens Gamesa

Turbine-maker valuations are sky high too

The US market matters to Vestas

Enterprise value to forward ebitda

Percentage of megawatts delivered in 2019

0

5

10

15

20

Vestas

Siemens Gamesa

Source: S&P Capital IQ

Source: Vestas

2020201920182017

Rest of the world 66

US34

Vestas: goin’ with the windWind power stocks have soared since March, as ESG funds tighten their focus on renewable energy. Vestas now has a premium valuation, even if it is cheaper than rival Siemens Gamesa. The turbine maker has long had a strong position in the US and should benefit from growth in America’s offshore wind market.

NOVEMBER 5 2020 Section:FrontBack Time: 4/11/2020 - 18:49 User: andy.puttnam Page Name: 1BACK, Part,Page,Edition: USA, 20, 1

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