Financial Times Europe - 10 09 2020

2020·11.32 MB·English

WORLD BUSINESS NEWSPAPER
THURSDAY 10 SEPTEMBER 2020 EUROPE
Office politics China’s Mideast pivot Pressure on London
Don’t underestimate the power of the US’s withdrawal from the region is ECB tells banks to accelerate shift
workplace Beijing’s gain from the City
— EDITORIAL COMMENT, PAGE 18 — JAMIL ANDERLINI, PAGE 19 — INSIDE FINANCE, PAGE 6
Brexit blast
Briefing
Johnson faces
i US to withdraw 2,000 troops from Iraq
heat over treaty
The US will pull more than 2,000 of its troops out of
Iraq this month, furthering President Donald
Trump’s ambition to withdraw American forces
from the deep insecurity they face there.
— PAGE 4
Boris Johnson in the House of Commons
in London yesterday as the UK’s contro- i SoftBank investors demand clarity
versial bill to unstitch parts of the Brexit Shareholders in SoftBank are calling on the Japanese
withdrawal treaty was published. conglomerate to reveal who is running the unit at the
The British prime minister faced centre of its large US equity options trades, as nerves
growing criticism for breaching interna- stoked a 10 per cent dip in its share price.
— PAGE 6
tional law from other national leaders as
well as one of his predecessors. i New Renault chief signals deeper cuts
Micheál Martin, the Irish prime min- Luca de Meo has warned that
ister, said the bill would damage trust the French carmaker might
with the EU as a trade deal is being nego- have to make deeper cuts than
tiated before the transition period ends. planned to get out of the “red
John Major, former British prime zone” as he tries to copy the
minister, said: “If we lose our reputation strategy of rival PSA.
— PAGE 8
for honouring the promises we make,
we will have lost something beyond i Belarus opposition activist detained
price that may never be regained.” Maxim Znak, one of Belarus’s key opposition figures,
Report page 2 was reportedly detained by masked men amid a
Big Read page 17 widespread crackdown on opponents of Alexander
Lukashenko, the autocratic president.
Jessica Taylor/AFP — PAGE 3
i Risk of financial hit from climate change
LVMH refuses to complete Tiffany
A first-of-its-kind report from a Wall Street regulator
has warned that climate change brings, in addition
to the risk of fires, surging oceans and droughts,
a profound threat to the US financial system.
— PAGE 2
takeover after France orders delay i Lesbos fire ravages migrants’ camp
Thousands of asylum seekers have fled a blaze that
swept through a packed camp on the Greek island of
Lesbos, in what critics condemned as a predictable
result of hardline EU migration policies.
— PAGE 3
i Australia’s tensions with China mount
3 $17bn takeover at risk 3 Protracted legal fight likely 3 US jeweller hits back with lawsuit
A diplomatic row that saw two Australian journalists
flee China this week escalated after Beijing said the
homes of Chinese journalists and academics were
James Fontanella-Khan cashmere” for his hardball dealmaking the closing of the acquisition until Janu- out in the agreement with Tiffany — but raided by Australia’s intelligence service.— PAGE 4
and Ortenca Aliaj — New York tactics. He has been seeking to renegoti- ary 6 to “support the steps taken vis-à- nor did it want to extend the deadline as
Leila Abboud — Paris
ate the terms of the $135-a-share deal vis the American government”. the US jeweller had earlier requested.
Arash Massoudi — London
agreed last November to reflect the fall- The letter referred to a move by Presi- “The deal cannot take place,” said Mr
Datawatch
LVMH’s $16.6bn takeover of US jeweller out from the Covid-19 pandemic. dent Donald Trump to implement cus- Guiony. “We are prohibited from closing
Tiffany has become embroiled in trade The largest-ever deal in the luxury toms duties by that date on certain the transaction and we do not want to
Childcare during lockdown
tensions between Paris and Washing- sector has become the most high-profile French industries, including luxury The wranglings lengthen the lock-stop date so the deal About half of all
%of UK respondents
ton, with the world’s largest luxury example of how transactions agreed goods, in reaction to France adopting a show how deals cannot happen. It’s is as simple as that.” UK mothers
Doing more Sharing equally
group saying it pulled out of the deal before the pandemic have soured digital services tax. agreed before Tiffany shares fell 8.4 per cent to surveyed say they
Partner doing more
after the French government urged it to because of a radically different business “I am sure that you will understand the virus crisis $111.67 by midday yesterday. None/Don’t know have taken on
delay completion. outlook. The stage is now set for a bitter the need to take part in our country’s have soured Roger Farah, Tiffany’s chairman, said 0 20 40 60 80 100 more childcare
responsibilities
Tiffany hit back with a lawsuit against legal battle that will leave judges in the efforts to defend its national interests,” amid a radically LVMH had left it with “no choice but to
Mothers during lockdown,
LVMH, which is controlled by French US state of Delaware with the task of Mr Le Drian added in the letter. altered business commence litigation to protect our
while only 23 per
billionaire Bernard Arnault, alleging deciding which side prevails — and if the Jean-Jacques Guiony, LVMH’s chief outlook company and our shareholders”. Fathers
cent of fathers say
that LVMH used tactics such as delaying deal completes. financial officer, said the group con- The French government said: “In the
Working the same. Fathers
antitrust filings to run down the clock The latest skirmish began on Tuesday sulted lawyers and decided the French context of very important international mothers are much more
on the merger agreement. when LVMH’s legal team told Tiffany government letter was a “valid request” negotiations with our partners, the Working likely to say that
LVMH’s attempted withdrawal from that the French foreign minister, Jean- that it could not ignore. As a result, French government will not be naive, fathers they are sharing
the deal caps months of manoeuvring Yves Le Drian, had written to the Paris- LVMH could not meet the November 24 nor passive.” Source: Ipsos Mori (July 2020) childcare duties.
by Mr Arnault, dubbed “the wolf in based luxury company asking it to delay deadline to complete the merger as laid Lex page 20
Biden vows to bring US jobs home as
Trump’s China ‘decoupling’ falls flat
Demetri Sevastopulo — Washington with operations in China found that less Mr Biden — who claims the president
Tom Mitchell — Singapore than 4 per cent were relocating any pro- has failed to meet his 2016 pledge to
Joe Biden has pledged to penalise com- duction capacity back to the US. The return manufacturing jobs to the US —
panies that move jobs overseas and majority — more than 70 per cent — had said he would provide a 10 per cent tax
reward businesses that employ people no plans to relocate any manufacturing credit to companies that create jobs
Putin’s party faces dry run in the US, as he rolled out a “Made in out of China. domestically, either by returning them
of main event in local polls America” plan to help woo voters in the The American Chamber of Commerce from overseas or revitalising previously
industrial Midwest. in Shanghai said that US companies closed factories.
Analysis i PAGE 3; Notebook i PAGE 18 were ignoring President Donald The Democrat would need congres-
The Democratic presidential nominee Trump’s threats to “decouple” from sional support to make changes to the
said his administration would pursue China and repatriate manufacturing tax code — a prospect that would face
tax reforms to woo companies into despite higher tariffs from his long-run- stiff opposition if the Republicans main-
Austria €3.90 Malta €3.70
Bahrain Din1.8 Morocco Dh45 bringing jobs back to the US. His cam- ning trade war. tain control of the Senate. But he also
Belgium €3.90 Netherlands €3.90
Bulgaria Lev7.50 Norway NKr40 paign said he would force companies to Mr Trump this week reiterated his pledged to issue two executive orders in
Croatia Kn29 Oman OR1.60 pay a corporate tax rate of 30.8 per cent enthusiasm for “decoupling” the his first week in office to promote “Buy
Cyprus €3.70 Pakistan Rupee350
Czech Rep Kc105 Poland Zl 20 on profits generated by the overseas world’s two largest and closely inte- America” policies.
Denmark DKr38 Portugal €3.70
Egypt E£45 Qatar QR15 production of goods sold back into the grated economies. “If we didn’t do busi- Mr Biden released the plan as he pre-
Finland €4.70 Romania Ron17 US. The tax would also apply to compa- ness with [China] we wouldn’t lose bil- pared to go to Michigan as part of his
France €3.90 Russia €5.00
Germany €3.90 Serbia NewD420 nies using overseas call centres to serv- lions of dollars,” he said. “We will make new strategy to campaign in swing
Gibraltar £2.90 Slovak Rep €3.70
Greece €3.70 Slovenia €3.70 ice customers in the US. America into the manufacturing super- states after months of running a virtual
Hungary Ft1200 Spain €3.70 The proposal comes as a survey of power of the world and will end our reli- campaign from his Delaware home.
India Rup220 Sweden SKr39
Italy €3.70 Switzerland SFr6.20 more than 200 American companies ance on China once and for all.” Lex page 20
Latvia €6.99 Tunisia Din7.50
Lithuania €4.30 Turkey TL19
Luxembourg €3.90 UAE Dh20.00
North Macedonia Den220
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SEPTEMBER 10 2020 Section:FrontBack Time: 9/9/2020 - 19:07 User: nick.miller Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1
2 ★ FINANCIAL TIMES Thursday 10 September 2020
INTERNATIONAL
Post-Brexit ties EU divorce
Johnson faces rising EU anger over treaty French trade
minister
warns UK on
Talks continue as UK bill If approved by MPs, the bill, pub- Former prime minister John Major Barnier, EU chief negotiator, was in demand for a robust legal framework
threatens to undermine lished yesterday, would allow Britain to also issued a stinging rebuke, saying the London yesterday to try to unblock the with independent enforcement mecha- Brexit level
interpret the deal unilaterally. It move would damage the UK’s interna- stalled Brexit trade talks, which have nisms. The UK is proposing it will sim-
Irish border agreement includes the crucial phrase “notwith- tional standing. “For generations, Brit- foundered on disputes about fisheries ply operate under looser World Trade
playing field
standing inconsistency or incompatibil- ain’s word — solemnly given — has been and state aid policy. Organization subsidy rules.
ity with international or domestic law”. accepted by friend and foe,” said Sir Shortly after publication of the inter- Mr Barnier will review the new inter-
George Parker, Peter Foster
Speaking to MPs at prime minister’s nal market bill, Mr Johnson’s govern- nal market bill and state aid proposals
and Jim Pickard — London
Jim Brunsden — Brussels questions, Mr Johnson defended the bill. ‘If we lose our reputation ment published its plans “for a new before reporting back to EU capitals at
Boris Johnson faced renewed EU anger “My job is to uphold the integrity of the approach to subsidy control”, seen as a the end of the week. Victor Mallet — Paris
for honouring promises
yesterday as he pressed ahead with a bill UK but also to protect the Northern Ire- sign Downing Street was hoping to avoid Downing Street’s latest attempt to
France’s new minister for external
to unstitch parts of Britain’s Brexit land peace process and the Good Friday we make, we will have lost a breakdown of talks this week. explain its breach of international law —
trade has warned that a Brexit deal
treaty, even though UK ministers have Agreement,” he said. “And to do that, we The proposals were not expected to be that Mr Johnson did not fully under-
something beyond price’ remains unattainable so long as the UK
admitted it breaks international law. need a legal safety net to protect our published until next week, but were stand what he was agreeing in his deal
remains unwilling to be bound by rules
Irish prime minister Micheál Martin country against extreme or irrational rushed out to coincide with the resump- with the EU last October — is unlikely to
that would ensure a “level playing
said the bill, which would override a interpretations of the protocol.” John. “Our signature on any treaty or tion of talks between Mr Barnier and his impress fellow leaders. “The treaty was
field” in trade with the EU.
carefully crafted UK-EU deal on the Mr Martin said he agreed with Ursula agreement has been sacrosanct. If we UK counterpart, David Frost. written in a rush and was never meant
future of Northern Ireland, would von der Leyen, European Commission lose our reputation for honouring the But the UK’s promise that it did “not to be the final agreed text between the Speaking after the UK confirmed it
damage trust between the two sides president, that it amounted to a “very promises we make, we will have lost intend to return to the 1970s approach UK and the EU,” Number 10 said. planned legislation to redefine parts of
as they tried to negotiate a new trade serious development” and insisted he something beyond price that may never of trying to run the economy or bailing Additional reporting by Sebastian Payne in the withdrawal agreement affecting
deal in time for the end of the Brexit would raise his “strong concerns” with be regained.” out unsustainable companies” comes London and Arthur Beesley in Dublin Northern Ireland, Franck Riester said a
transition period on December 31. Mr Johnson in person. Despite the growing anger, Michel nowhere near to satisfying Brussels’ See Editorial Comment free trade deal was still possible pro-
vided the agreement was comprehen-
sive and enforceable, did not allow for
social or fiscal “dumping”, and included
Turkey. Alliances access for EU boats to fish in British
waters.
“There’s a game of bluff going on,” he
Erdogan’s embrace of Hamas riles Israel
said in an interview with the Financial
Times. “We’ll try to stay calm and
serene but firmly behind the line of the
EU27 . . . In any deal, in the end there is
a compromise that can come into play.
But that is unattainable for the moment
President’s warm relations
because the UK is not moving on the
with militant group plays into essential matter, which is the ability to
ensure that trade is fair.”
broader regional struggle Mr Riester added that the same need
for a level playing field lay behind
Mehul Srivastava — Jaffa France’s push for the EU to adopt a fron-
Laura Pitel — Ankara tier carbon tax so that its trade partners
At Friday prayers at the Al Aqsa Mosque could not compete unfairly with Euro-
in East Jerusalem, the faithful often hold pean manufacturers that may be bound
up portraits of Recep Tayyip Erdogan, by tighter environmental regulations
the Turkish president, worshipping and pay more for cleaner energy.
under the gold crescent on the Dome of Opinions were “changing fast in
the Rock that was paid for by Turkey. Europe on the need to become a power
Mr Erdogan’s popularity with Pales- that ensures respect for a certain
tinians reflects his long championing of number of principles such as reciproc-
their struggle for nationhood and comes ity, the fight against global warming,
as their cause has slid down the list of mobilising for biodiversity, and so on”,
regional concerns, sidelined by Israel’s Mr Riester said. “I think the [coronavi-
wooing of the Gulf states. He has rus] crisis has accelerated the aware-
stepped into that vacuum, coupling his ness in public opinion and among differ-
adventures in Libya and Syria with a ent leaders.” The pandemic had also
desire to wield influence in the Israeli- hastened French “reshoring” of strate-
Palestinian conflict. gic industries and a European rethink of
For Israel, the most troubling aspect is globalisation, he added. But he insisted
his embrace of Hamas, the militant this did not signal a retreat from inter-
group that controls the Gaza Strip, and is national trade.
considered a terrorist group by Israel, Mr Riester, who fell ill from Covid-19
the EU and the US. in early March, defended France’s deci-
The US, a close ally of Israel, has also sion to allocate €1bn of its €100bn
voiced concerns. Last month, in a rare recovery plan to helping companies
public statement on this relationship, it High-level said a UN official, who has mediated emerged in 1987 as a rival to the secular, ‘Erdogan relations, said Asli Aydintasbas, a senior start production at home of medical
strongly objected to Mr Erdogan hosting support: between Israel and Hamas for nearly a left-leaning Palestine Liberation Organi- policy fellow at the European Council on equipment such as protective face
sees
two Hamas leaders in Istanbul, chiding Palestinians decade. “Find the one thing that Israel zation, drawing inspiration from Egypt’s Foreign Relations. masks as well as other items such as
him for his “outreach to the terrorist wave Hamas doesn’t have an answer to, doesn’t know Muslim Brotherhood. The Turkish pres- emerging For Israel, Turkey’s ideological sup- electronics, food products and indus-
organisation”. flags during a how to manage and can’t get rid of, and ident, whose roots lie in Islamist politics, port of Hamas had until recently been a trial inputs.
alliances in
The US rebuke came after Mr demonstration make it your own personal vanity views the Brotherhood and its offshoots manageable irritant. But a 2019 meeting “Of course it’s not about making eve-
Erdogan tweeted a photo of his meeting outside Al Aqsa project.” as fellow travellers. “There is this sense the region between Mr Erdogan and Ismail Hani- rything in Europe or saying there will
with Hamas figures, including Saleh al- Mosque in East In the past decade, Turkey has funded of kindred spirit and solidarity,” said yeh, the chief of Hamas’ political wing, never again be a need to import raw
as a threat
Arouri, a prominent military com- Jerusalem. hospitals, schools and projects both in Steven Cook of the Council on Foreign signalled a shift in Turkish strategy, materials, products or services,” he said.
mander who worked in Lebanon, Syria Below, Recep the Gaza Strip, run by Hamas, and in the Relations in Washington. but he’s also from moral support to material, accord- “It’s about ensuring that we are self-suf-
and the occupied West Bank. Tayyip Erdogan occupied West Bank, moves that have It also works politically for Mr ing to people briefed on the issue. ficient in certain sectors or for certain
presenting
“There are both geopolitical and ideo- Ahmad Gharabli/Getty irked the Israeli government but been Erdogan, who has melded foreign policy As well as financial help, over the past products that seem to us essential.”
logical considerations here,” said Sarah welcomed by Palestinians, who have with domestic considerations, and himself as two years, Turkey has also granted citi- Even before the pandemic, President
Feuer of the Washington Institute for long sought a champion unmoved by strives to cast himself at home as a zenship to dozens of Hamas members, Emmanuel Macron and his finance
the leader
Near East Policy in Tel Aviv, referring to Israel’s anti-Iran posture and untamed champion of Muslims across the world. according to one person briefed on the minister, Bruno Le Maire, said France
Turkey’s regional rivalry with the by US foreign policy demands. Mr Erdogan inherited a strong rela- of the issue, allowing them to travel without and the EU needed to reduce their
United Arab Emirates and Saudi Arabia. Turkey’s president has often scolded tionship with Israel when he swept to visas to more than 100 countries. This dependence on Asia and the US for key
Muslim
“Erdogan sees emerging alliances in Prime Minister Benjamin Netanyahu, power almost 20 years ago. Turkey, brought relations between Turkey and products and services, especially in
the region as a threat but he’s also pre- who has led Israel’s most rightwing gov- which was the first Muslim-majority world’ Israel to a near halt, according to two emerging or fast-growing technologies
senting himself as the leader of the Mus- ernment in years. Mr Erdogan has made nation to recognise the fledgling Jewish others briefed on the situation — and such as artificial intelligence and elec-
lim world and flag bearer for Islamist the Al Aqsa Mosque, Islam’s third-holi- state, forged close co-operation on was what triggered the recent repri- tric vehicles.
movements, to counter the Emirati- est shrine and perhaps the most sensi- defence and security with Israel in the mand from the US. Acute shortages of masks and certain
Saudi-Egyptian camp. There’s a tive of issues dividing the Jews and 1990s. Trade with Israel was $6bn last The Israeli security establishment medicines, including paracetamol pain-
broader struggle still Arabs, a centrepiece of his pledge year, according to Turkish official statis- had already been suspicious of Turkish killers, when the pandemic filled hospi-
under way over the con- to liberate Palestine from Israeli tics — up from $4.3bn in 2016. passport holders, subjecting them to tals earlier this year prompted the gov-
tours of the regional occupation. But a clash between Mr Erdogan and stringent scrutiny the Turks describe as ernment to add medical ingredients and
order, and that is partly Mr Erdogan’s embrace of President Shimon Peres on a Davos targeted harassment. Turkey insists it equipment to the list of strategic items
what motivates him.” Hamas makes ideological sense. stage in 2009 marked the “dividing line” never grants citizenship to people with to be manufactured in France or the EU.
“It fits in perfectly,” The Islamist militant group between two chapters in Turkey-Israeli proven links to terrorism or violence. See FT Big Read
Wall Street
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Gregory Meyer — New York who convened the group. Members nise that climate change poses serious or the costs of switching to an energy
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34204, Bagcilar- Istanbul, Tel. [phone].
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SEPTEMBER 10 2020 Section:World Time: 9/9/2020 - 18:31 User: john.conlon Page Name: WORLD1 USA, Part,Page,Edition: EUR, 2, 1
Thursday 10 September 2020 ★ FINANCIAL TIMES 3
INTERNATIONAL
Russian regional elections
Eastern Europe
Belarus opposition leader
held as crackdown escalates
to test Putin’s party machine
James Shotter — Warsaw Tikhanovskaya, the main opposition
Max Seddon — Moscow candidate in last month’s election, to
Maxim Znak, one of Belarus’s leading negotiate a transition of power away
Sunday’s ballot will be a dress rehearsal for a parliamentary poll next year opposition figures, was reportedly from Mr Lukashenko, have either been
detained by masked men yesterday, in detained or forcibly taken abroad.
the latest step in a sweeping crackdown Prosecutors have launched a criminal
on opponents of autocratic president probe into the council, claiming that it
Henry Foy — Moscow Alexander Lukashenko. represents a threat to state security.
Maria Kolesnikova — who along with
Hours before succumbing to nerve Mr Lukashenko, who has ruled the east- Ms Tikhanovskaya and Veronika Tsep-
agent novichok on a plane to Moscow, ern European nation since 1994, has kalo spearheaded the opposition cam-
Russia’s most prominent opposition been battling to retain his hold on power paign against Mr Lukashenko and is the
activist Alexei Navalny posted a photo- since huge protests erupted against his only one of the three women to remain
graph of himself on Instagram with a regime after he claimed a landslide vic- in Belarus — is facing charges under the
group of supporters in the Siberian city tory in a deeply flawed presidential elec- probe, which carry a sentence of up to
of Tomsk. tion last month. five years in prison.
His message was aimed at voters in Local media reported that Mr Znak, a Investigators interrogated Mr Znak
the city, who go to the polls on Sunday in lawyer, was taken away from his office last month as a witness in the case.
one of dozens of elections for local gov- by men in plain clothes, and that his Svetlana Alexievich, the Nobel laure-
ernors and parliaments in 23 of Russia’s house was searched. ate who is the council’s only member
85 regions. Mr Navalny urged them to Gleb Glebov, from the team of jailed still at large, summoned journalists and
turf out lawmakers backed by President opposition presidential candidate EU diplomats to her apartment yester-
Vladimir Putin’s ruling United Russia Viktor Babariko, told Tut.by, an inde- day after receiving phone calls and
party. “The party in power has a lot of pendent Belarusian website, that he had knocks at the door from unknown men.
money, but we can only rely on the help been in touch with Mr Znak briefly “First they kidnapped the country,
of good, honest people,” said Mr Nav- before losing contact. now they’re kidnapping the best of us,”
alny, who emerged from a coma in a Ber- “At 8.30 Maxim was meant to have an she wrote in a statement published on
lin hospital on Monday. “Crooks will not interview, but he didn’t join the Zoom the website of Belarus’ branch of the Pen
expel themselves!” call. I called him. He said: ‘It looks like Club, a writers’ organisation.
Sunday’s regional elections represent someone is here’, rang off and wrote the Mike Pompeo, US secretary of state,
the most important test of the popular- word ‘masks’. Now he’s unreachable,” warned Washington was considering
ity of Mr Putin’s party ahead of next Mr Glebov said. “additional targeted sanctions to pro-
year’s parliamentary elections. A stag- The detention of Mr Znak means that mote accountability for those involved
nant economy and the impact of the five of the seven leaders of the Coordina- in human rights abuses and repression
coronavirus pandemic have helped tion Council, set up by Svetlana in Belarus”.
inflame public anger sparked by specific 1 Smolensk
local issues where voters feel aban- 2 Kaluga
Russia’s regional
doned or slighted by United Russia, 3 Bryansk
elections in
which holds a supermajority in the 4 Belgorod Asylum seekers
Sep 2020
national parliament but whose popular-
Arkhangelsk 5 Voronezh Fire at Greek migrant camp
ity fell to a record low last month. No election
“It is definitely a dress rehearsal [for Leningrad Governor 6 Tambov
2021],” said Tom Adshead, director of St Petersburg Regional parliament 7 Ryazan leaves thousands homeless
Magadan
research at Macro-Advisory, a strategic Komi Yamal- Governor and 8 Penza
consultancy. “Showing Putin that the 1 Moscow Nenets regional parliament Kamchatka 9 Chuvashia
mhyeeaa cdrh o. ie.n s.e nI it’st i isnn a epnel aaduc etdo,i ei twn acolelr woryfo o rankbeso. ”auntd n thexatt UKRAINE34 25 678 91011 PKerarmi 1101KTaotsatrrsotmana Kerin Hope — Athens maritime border with Turkey to pre-
But the machine is showing signs of Sevastopol* Jewish Michael Peel — Brussels vent renewed arrivals of asylum seek-
Rostov Kurgan Autonomous Erika Solomon — Berlin
malfunction. ers. He has denied accusations that the
Novosibirsk Region
Irkutsk
Protests in Khabarovsk, a region in Chelyabinsk Thousands of asylum seekers have fled country’s coastguard violated interna-
Krasnodar
the Far East, have run for two months a blaze that swept through an over- tional human rights law by pushing
arefptelarc ietds bgyo tvheer Knroerm wlians, saprarreksitnegd c oapnyd- KAZAKHSTAN MONGOLIA CVHlIaNdAivostok J A P A N cLreoswbodse,d in c wamhapt ocrni ttihcse cGornedeekm isnleadn da so af binatcok T buorkatissh f iwllaetde rws.i tThh aes fyirleu cmo mseeesk jeursst
cat protests across the country. While predictable result of hardline EU weeks before the European Commission
500 km
there are no polls in Khabarovsk on migration policies. is due to launch its latest effort to reform
Sunday, opposition candidates are tar- *Crimea is annexed by Russia but this is not recognised by the international community Cartography: Alan Smith Sources: Mapzen.com/OpenStreetMap; FT research the EU’s migration and asylum system
SOUTH KOREA
geting other restive regional electorates. Brussels announced it would fund the after years of wrangling since the
United Russia’s popularity fell to 30.5 All smiles: opposition parties could overturn ‘Our major can galvanise opposition sentiment. immediate transfer of hundreds of 2015-16 spike in arrivals in the bloc.
per cent last month, according to the President United Russia majorities in the regional That said, certain administrative barri- unaccompanied children and teenagers
project is
state-run pollster. It won 54.2 per cent of Vladimir Putin parliaments of Novosibirsk and ers have been deployed to block poten- from the Moria site to the Greek main-
the vote in the 2016 parliamentary elec- attends Moscow Magadan, among others. smart tial challengers from running in races land, after the conflagration gutted Young victim: a
boy with two water
tion, but since then has presided over City Day In all five of these regions, roughly a that are set to be close. shacks and container homes in a facility
voting, the containers sits
falling real incomes for three of the past celebrations third of voters rejected a new constitu- The likely beneficiaries of poor show- long notorious for its squalor.
next to destroyed
four years, an increase in the retirement at Zaryadye tion ratified by a national referendum primary ings by United Russia will be parties Kyriakos Mitsotakis, the Greek prime shelters following
age and a pandemic response that has concert hall that allowed Mr Putin to remain as pres- from the so-called systemic opposition: minister, declared a state of emergency a fire at the camp
aim, and
seen Russia record the world’s fourth- this week ident for an additional 12 years. parties approved by the Kremlin that on the island and warned the govern-
highest number of Covid-19 infections. Alexei Druzhinin/RIA Novosti/ In Irkutsk, a region in eastern Siberia, probably offer voters a choice, but typically sup- ment would not allow asylum seekers to Critics charge that the dismal condi-
The tightly centralised system of con- EPA-EFE the federal government is accused of port Mr Putin on critical national issues. leave Lesbos for the mainland. tions in Moria and other Greek island
the
trol implemented by Mr Putin means poor handling of vast floods last year Mr Navalny and his organisation rep- “I recognise conditions are tough at camps reflect an increasingly harsh
regional governors and parliaments that killed dozens and left thousands Kremlin’s resent true opposition to United Russia Moria but there can be no excuse for a effort by EU countries to discourage
exercise limited power. But they are also homeless. In the north-western regions and are often barred from ballots. violent response when it comes to people from even trying to make the
primary
beholden to the Kremlin for handouts, of Arkhangelsk and Komi, protests have Instead, he has developed a system of health controls,” he said in a video journey to Europe.
making them prime targets for his run since 2018 against plans to build a concern’ “smart voting”, which in elections last posted on his Facebook page, in a refer- “Moria was the emblem of an EU
opponents. “As a local administration landfill for Moscow’s rubbish at a site year helped unseat incumbents by ence to the multiple fires in the early deterrence policy in which the ware-
your incentive is not to be friendly to close to their joint border. directing opposition votes to the most hours of yesterday, whose cause has not housing of asylum seekers in humiliat-
your constituents but to the centre so The pandemic has also disproportion- likely challenger. been independently confirmed. ing circumstances was THE point,”
you get more resources and support for ately affected Russia’s regions, where Some of his supporters claim he was “There will be some restrictions on tweeted Daniel Howden, senior editor at
your re-election,” said Elina Ribakova, hospitals, medical provisions and poisoned in a bid to stall that effort. The movement and local shutdowns but I the Refugees Deeply digital media
deputy chief economist at the Institute healthcare budgets are far worse than Kremlin has denied any involvement. feel sure the islanders will understand project.
of International Finance. “And the those in the capital, and many are still “Our major project is smart voting, and will be supportive.” “Any other approach is seen as creat-
financial situation has not got better under various levels of lockdown. the primary aim, and probably the The premier said Greece would con- ing a ‘pull factor’. This base assumption
over time, but worse.” The Kremlin has in recent weeks Kremlin’s primary concern,” said tinue to maintain tight controls on its is impervious to evidence.”
Analysts say that Kremlin-backed sought to play down the threat of its Vladimir Milov, a senior aide to Mr Nav-
candidates in gubernatorial races in the nominees failing to win more than 50 alny. “This will continue regardless [of
Irkutsk, Komi and Arkhangelsk regions per cent of votes in gubernatorial his poisoning].”
face the strongest challenges, while elections, prompting a run-off that See Notebook Budget
Mexico’s ‘optimistic’ growth
Economic crisis forecasts met with scepticism
North Korea’s dependence on China rises as sanctions bite
Jude Webber — Mexico City the budget predicted, a far cry from July
Edward White — Wellington its borders, a feat met with scepticism ment cyber actors” who have attempted at the National Committee on North production, with private sector part-
The Mexican government promised
Christian Shepherd — Beijing by some international experts. to steal as much as $2bn over the past Korea, a US think-tank, said “travel ners, of 1.595m — the lowest level since
austerity in a budget for 2021 but was
Kim Jong Un’s dependence on illicit Data on the state’s finances are rare five years. The group, dubbed the Bea- restrictions have made it far more diffi- criticised by analysts for its overly opti- 1979. While Mexican oil for export was
Chinese business networks and aid and often unreliable. This means ana- gleBoyz, targeted cash from ATMs in cult for North Korea to send workers mistic growth forecasts that were likely trading at $35.50 per barrel on Tuesday,
from Beijing is set to increase as the lysts are reluctant to provide estimates cyber attacks that have also left banks’ and trading network operatives abroad, to pile pressure on a country struggling the budget pencilled in a “prudent”
North Korean leader faces the coun- of the potential respite from sanctions- computer systems inoperable, the agen- so the regime has had to rely on those with one of the biggest Covid-19 crises. price of $42.10.
try’s worst economic crisis in almost a busting revenue. cies said. overseas networks in place at the begin- “It’s unnecessarily optimistic,” said
decade, analysts say. But a report published this month by Experts stressed, however, that the ning of the year”. The 2021 finance package predicted the Alonso Cervera at Credit Suisse. “The
the Royal United Services Institute, a fallout from the coronavirus pandemic Mr Lankov said that despite the eco- economy would shrink 8 per cent this finance ministry will now be playing
The 36-year-old dictator said last London-based think-tank, found that a on global economic activity would likely nomic hardship facing North Korea’s year and bounce back to 4.6 per cent defence, having to answer the questions
month that North Korea was struggling network of 150 Chinese businesses had a hit North Korea’s overseas business 25m people — 60 per cent of whom growth next year. But the estimates of analysts and rating agencies.”
to meet its economic objectives. The central role in facilitating North Korean interests, which are predominantly in already face food insecurity, according were out of step with the mean forecast The Mexican government has scant
admission was a rare concession of fail- access to international markets. It said China, as well as North Korean workers to the US government — China would of 35 economists in the central bank’s room for manoeuvre. After Pemex was
ure and a blow to his hallmark policy of they were involved in about $2.7bn in China and Russia. not let the situation deteriorate into a latest monthly survey, which pointed to cut to junk status in April by a second
economic growth alongside nuclear worth of shipments between 2014 and “All these types of networks are hit political crisis. Beijing had made a stra- a median 9.9 per cent fall in 2020 and rating agency, the country is widely
weapons development, a dual-track 2017, representing about 20 per cent of less severely than other kinds of eco- tegic decision to support Mr Kim as part meagre 2021 growth of 2.95 per cent. expected to face sovereign downgrades
known as the byungjin line. the $13.9bn value of North Korea’s trade nomic activity, but it doesn’t mean they of a “buffer” against the US and would The Bank of Mexico has outlined a that could strip it of its coveted invest-
The combination of tough US and UN during that period. are not shrinking,” said Andrei Lankov, ensure Pyongyang had access to food worst-case contraction of 12.8 per cent ment grade status, perhaps as early as
sanctions, coupled with the fallout from Several “red flags” from the business at Kookmin University in Seoul. and fuel, he added. this year and Mariana Campos, budget 2021.
the coronavirus pandemic and the sub- operations, such as co-located Daniel Wertz, a programme manager “They will just send enough food, just specialist at México Evalúa, a think- President Andrés Manuel López
sequent plunge in legal trade with China addresses and phone numbers, as well to make sure North Koreans will be mal- tank, said it was “sinful that with the Obrador has refused to take on debt to
— as well as a series of recent typhoons as minimal public information, indi- nourished but not starving to death,” he current level of [Covid-19] uncertainty, fund Covid-19 stimulus measures, say-
and flooding — has increased the impor- cated the groups were front companies said. “They will send enough fuel, just to the government is not budgeting differ- ing developed countries that had done
tance of revenue from North Koreans for North Korean interests, RUSI said. make sure vital production can con- ent scenarios”. so “took the easy way out”. Mr Herrera
operating businesses in other countries, The report also noted that 135 of the tinue. They will send basic supplies, just Arturo Herrera, finance minister, said that would have cost “money we
remittances from overseas workers and companies were still registered as active to make sure that North Koreans will insisted the targets were responsible don’t have”.
cash from cyber crime. on Chinese corporate databases, sug- not get angry and go out on the streets.” and not contingent upon a vaccine The president has also ruled out tax
“It is probably worse than it has been gesting many remained operational Mr Ward added that Mr Kim theoreti- allowing the economy to resume activ- hikes or new taxes. Mr Herrera said it
for a long time . . . Things do look very, despite the imposition of US and UN cally had the option to ease pressure via ity faster. was “not the moment” for tax changes.
very bad, and they looked like they were Security Council sanctions. economic “liberalisation” — a move that Nevertheless, oil production and But with revenues under pressure as the
bad before the coronavirus hit,” said Separately, four US government agen- would cut against a broader reassertion export price assumptions were met with pandemic drags on, analysts widely
Peter Ward of the University of Vienna. cies last month released a joint alert of centralised control. caution in the financial markets. Pemex, believe the government should plan
North Korea has not reported a single over the resumption of activity this year Kim Jong Un visits South Hamgyong, Additional reporting by Katrina Manson in the state oil company, will boost produc- comprehensive tax reform sooner
confirmed coronavirus infection within by a group of “North Korean govern- which was hit by typhoon Maysak Washington and Kang Buseong in Seoul tion to 1.857m barrels per day in 2021, rather than later.
SEPTEMBER 10 2020 Section:World Time: 9/9/2020 - 18:19 User: john.conlon Page Name: WORLD2 USA, Part,Page,Edition: USA, 3, 1
4 ★ FINANCIAL TIMES Thursday 10 September 2020
INTERNATIONAL
global insight
Middle East
argentina
US to pull 2,000 troops out of Iraq
Benedict
Mander
Withdrawal this month ceremony. “The US decision is a clear redeployed some US troops from ‘This militia,” said Brett McGurk, special
demonstration of our continued com- smaller bases that were difficult to pro- presidential envoy for the global coali-
will leave 3,000 soldiers mitment to the ultimate goal, which is tect in March, following a series of decision is tion against Isis who resigned at the end Pragmatic Fernández
to support security forces an Iraqi security force that is capable of rocket attacks blamed on Iran-backed due to our of 2018. “That was not happening at all
preventing an Isis resurgence and of militias, some of which were fatal. until the end of last year. There were no walks tightrope to
confidence
securing Iraq’s sovereignty without Mr Trump upset Iraqi leaders in early Iranian-backed attacks on US forces
Katrina Manson — Washington
external assistance.” 2019, when he hinted that the US in the Iraqi from the time we went back in 2014
The US will withdraw more than 2,000 Gen McKenzie said the reduced foot- wanted to retain its presence in Iraq “to through late 2018.” keep Peronists on side
security
US troops from Iraq this month, further- print would allow the US to continue its be looking a little bit at Iran”, against Mr Trump is seeking to reduce the US
ing President Donald Trump’s long-held support to Iraqi forces to root out “the which his administration has run an forces’ troop presence in Iraq and Afghanistan
ambition to bring back US forces amid final remnants of Isis in Iraq”. intense economic and diplomatic pres- as he faces a battle for re-election in
deep insecurity faced by American sol- The decision also reflects deep insecu- sure campaign. But the US has been November, and his attitude to the mili-
diers in the country. rity faced by US forces stationed at bases steadily handing control of military tary has recently become a matter of W hen it was suggested to Alberto Fernández
General Frank McKenzie, com- in Iraq, which have come under regular bases to Iraqi security forces this year, as intense focus. In 2016, he campaigned he might be predestined by the stars to
mander of the Centcom region in the fire from Iran-backed militias this year the international anti-Isis mission has on a promise to end the US involvement rebuild from the ashes, Argentina’s presi-
Middle East and Afghanistan, said yes- in the wake of Mr Trump’s decision to shrunk. Many partner countries pulled in “endless foreign wars” and on Mon- dent said he accepted his fate.
terday the US had decided to reduce its kill top Iranian commander Qassem out their troops over coronavirus con- day he accused the Pentagon of wanting “If it is my destiny, let it be my destiny.
troop presence from 5,200 to 3,000 Soleimani at the start of the year. cerns this year. US secretary of state to “do nothing but fight wars so that all What is important is that I build,” he said in a televised
troops this month. Iraqi lawmakers voted for the with- Mike Pompeo announced a strategic of those wonderful companies that interview last month, recalling he first came to power as
“This decision is due to our confi- drawal of US troops following the strike review in April. make the bombs and make the planes Néstor Kirchner’s cabinet chief in 2003, when Argentina
dence in the Iraqi security forces’ against Soleimani, which also killed a “We are withdrawing from Iraq and and make everything else stay happy”. emerged from an economic crisis. Courtesy of Covid-19,
increased ability to operate independ- top Iraqi militia leader, Abu Mahdi al- losing focus from Isis partially because Additional reporting by Chloe Cornish in which started spreading three months after his election in
ently,” he said at a change-of-command Muhandis. US military commanders we’re under fire from Iranian-backed Beirut December, there is a sense of déjà vu for the Argentine
leader.
Mr Fernández has won applause for reaching a deal with
creditors on the restructuring of $65bn of the country’s
Pandemic. Treatments foreign debt in August. But that only represents a first step
in the reconstruction of Argentina’s economy, which
started spiralling down under his predecessor, Mauricio
Plasma and antibody therapies on trial
Macri, triggering a record $57bn IMF bailout in 2018.
Next comes a tough negotiation with the IMF to delay a
punishing repayment schedule starting next year, in which
the lender is to request a clear plan to reduce a fiscal deficit
likely to reach 10 per cent this year. But such a condition
the world. Eli Lilly expects to have the may clash with the more radical factions of Mr Fernández’s
Methods have been used to Developing an antibody treatment
first results from its trials this month. ruling coalition.
fight disease for decades but The therapy could also be used to Many commentators see the pragmatic leader as a tight-
Antibodies are proteins produced treat the early stages of infection but, as rope walker, straining to balance the demands of his Per-
some scientists are sceptical by human cells that bind to viral the disease progresses within a patient onist supporters. That has led to chaotic policymaking,
structures and neutralise them from a respiratory to an inflammatory startling announcements and U-turns. Critics take such
illness, experts say treatment will need moves as evidence of a radicalisation of Mr Fernández’s
Anna Gross — London to shift towards drugs such as steroids. leftist government under the influence of his vice-presi-
Nine months into the coronavirus pan- Antibody Former Various Mice immunised One of the problems with monoclonal dent, Cristina Fernández
demic, scientists are conflicted about sources patients laboratory against the virus’s antibody treatments is cost. The de Kirchner, who was ‘Every initiative is
the use of convalescent plasma and anti- who have techniques ‘spike protein’ with median price in the US for a year’s treat- president from 2007-15.
body therapies to battle Covid-19 while recovered which it enters a ment for diseases such as cancer ranges Examples include att– portrayed as a
human cell
a fully tested vaccine remains under from $15,000 to $200,000, according to empts to nationalise the radicalisation with
development. the Wellcome Trust, a British research country’s largest grains
evil motives, but
The US Food and Drug Administra- charity. As a result, 80 per cent of such exporter; the freezing of
tion last month awarded an emergency therapies are sold in the US, Europe and telecoms tariffs by presi- it’s pure politics’
Immune replica Hybridoma
authorisation for the use of convales- Canada. dential decree; and bills
technology: technology:
cent plasma to treat coronavirus in hos- Production “The number of people who would be being pushed through
antibodies antibodies
pital patients, only for a panel of experts platforms able to receive them is very low com- Congress such as a wealth tax and judicial reform that
gathered from produced from
convened by the US National Institutes B-cells in blood immortalised pared to convalescent plasma,” said opponents say is an effort to secure immunity for Ms Fern-
of Health to hit back last week, citing B-cells Alain Townsend, professor of molecular ández de Kirchner, who faces corruption charges.
insufficient evidence to support its use. immunology at Oxford university, “Every single initiative is portrayed as a radicalisation
Convalescent plasma — the antibody- though he added: “I think that well cho- with evil motives, but it’s pure politics,” said Juan Cruz
rich fluid left behind when all the cells sen monoclonals are more likely to Díaz, managing director at Cefeidas Group, a risk consul-
are filtered out of blood — has been used work.” tancy in Buenos Aires, arguing that a united — albeit lead-
successfully for more than a century as Screening erless — opposition is trying to exploit the real differences
Cocktail treatments
an emergency treatment in epidemics, Tests the Bind to the Neutralise Be developed for between Mr Fernández and his deputy. He needs to keep
from the 1918 Spanish flu through to the antibodies’ spike protein the protein mass-production Another challenge for such treatments his coalition together to be competitive in midterm elec-
2014-16 Ebola outbreak in west Africa. ability to: in cell cultures is the capacity of the virus to mutate, tions next year and guarantee governability. Few people
First trialled in the 1890s by German changing its genetic make-up around can dance with all those actors, and one of them is Alberto
scientist Emil von Behring to treat diph- the part known as the “spike”, which Fernández — so in general he is doing pretty well under the
theria, researchers took blood from ani- antibodies attack. circumstances . . . [even if] things are pretty messy.”
mals that had recovered from the dis- “I expect relatively quickly there will Despite one of the strictest and longest lockdowns in the
ease and injected it into infected be mutations that develop in that world, Mr Fernández’s approval ratings remain relatively
Testing, development, approval,
humans. His first clinical tests showed a region,” said David Stuart, professor of high at about 60 per cent, although they have been gradu-
manufacturing and distribution
positive response in 77 per cent of cases. structural biology at Oxford university ally falling from highs of more than 80 per cent in March
But nearly 130 years later, no ran- who is leading the UK’s Covid-19 when the pandemic first hit Argentina, according to Juan
domised controlled trial of the therapy research on antibody therapeutics. Germano at Isonomia, a local pollster.
— the gold standard for drug testing — Graphic: Ian Bott Sources: AstraZeneca; FT research The solution for doctors treating But Covid-19 is proving a mightier opponent than diffi-
has been completed and some scientists viruses such as Ebola has been to deploy cult political factions: Argentina’s ongoing lockdown, the
remain sceptical of its long-term use in ‘Vaccines released results yet but David Roberts, research, and is used widely in the treat- a cocktail of neutralising antibodies longest and toughest in Latin America, has failed to pre-
the global fight against Covid-19. professor of haematology at Oxford uni- ment of cancer and autoimmune rather than a single antibody. “Even if it vent some of the highest daily deaths from coronavirus,
usually take
One concern around the use of plasma versity, which is running the biggest diseases. escapes one, it would be hard to escape while dealing a blow to the economy. Argentina is suffering
is that it might contain other harmful weeks to study in the UK, described plasma treat- “Vaccines usually take a few weeks to two,” said Prof Stuart. the worst of both worlds: according to the country’s indus-
ingredients to which patients would ments as “incredibly valuable”. have an effect, whereas neutralising Eli Lilly is experimenting with cock- trial union, production at 63 per cent of companies has
have an
respond negatively. Others argue that it So far, 25,000 people have donated antibodies hit your bloodstream imme- tail therapies, along with companies either fallen more than half, or ceased altogether.
is very hard to create a reproducible effect, their blood to Oxford university, and diately,” said Dan Skovronsky, chief sci- including Celltrion and Immunoprecise Mr Fernández’s success in reactivating the economy will
product given that patients generate dif- more than 360 are involved in the study, entific officer at US pharmaceutical Antibodies, even though for the treat- be critical for his political survival. But María Esperanza
whereas
ferent antibodies, at different concen- company Eli Lilly, which has been work- ment of influenza monoclonal antibod- Casullo, a political scientist at the National University of
Antibody therapies
trations. “Is the juice worth the neutralising ing on the development of monoclonal ies in general have previously been Río Negro, believes there will be no rupture in the uncom-
squeeze?” said Myron Cohen, professor Other research groups are using more antibody therapies for Covid-19. found to have limited effect. fortable alliance between the two Fernándezes for now.
antibodies
of medicine, microbiology and immu- advanced technologies to clone specific Eli Lilly’s first antibody was isolated “In the face of difficult odds, knowing “It is in neither of their interests. Cristina has nothing to
nology at the University of North Caro- hit your neutralising antibodies, which can then from a recovered patient who travelled that most of the time we try we’ll fail, we gain from a crisis in the government, which is not to say
lina. “Convalescent [plasma] is a bridg- be injected into vulnerable groups to to the US from China in February. “We still get excited,” said Eli Lilly’s Dr that there won’t be any tensions,” said Ms Casullo. “If the
bloodstream
ing mechanism before we have more protect against the virus. found the best antibody we could possi- ­Skovronsky. If you have a 5 or 10 per economy rebounds, and a vaccine appears, the govern-
targeted treatments,” he added. immediately’ The therapy, known as monoclonal or bly find,” Dr Skovronsky said. cent chance of saving people’s lives, ment should do well next year. But those are big ifs.”
Randomised controlled trials are “designer” antibody treatment, is one of There are at least 50 monoclonal anti- you’ll try it.”
under way around the world. None has the fastest-growing fields in biomedical body therapies in clinical trials around See Editorial Comment and Companies [email protected]
Diplomatic dispute National security law
China claims Australia interrogated reporters Hong Kong pupil suspended over protest sign
Jamie Smyth — Sydney Australia’s Department of Home orating. It added that the questioning of Nicolle Liu — Hong Kong law on the semi-autonomous territory facto parliament, who represents the
Christian Shepherd — Beijing Affairs did not respond to a request for Mr Birtles and Mr Smith was conducted in June, with critics arguing it has dis- education sector, said the school’s deci-
A Hong Kong high school student has
Beijing has alleged the homes of Chi- comment. The Australian Security “according to law”. been suspended after displaying a pro- proportionately limited individuals’ lib- sion was harsh. “The education bureau
nese journalists and academics were Intelligence Organisation said it would A report by state-owned news agency test-related slogan in online classes, in erty and right to free expression. has decided to strangle a student’s
raided by Australia’s intelligence serv- not comment on intelligence matters. Xinhua alleged that the June raid on the the first case since Beijing imposed a Schools have come under particular thoughts for greater control,” he said.
ices, escalating a diplomatic row that The revelation came against a back- Chinese journalists was linked to an draconian national security law on the scrutiny. A teacher at the Heung To Mid- Teachers have said the recent inci-
culminated in two Australian reporters drop of deepening diplomatic tensions investigation by Australian intelligence city. dle School alleged her contract was not dents have created a difficult environ-
fleeing China this week. between Beijing and Canberra. of Shaoquett Moselmane, an opposition renewed because of her political views ment in schools. Leo, a teacher who
Bill Birtles, a correspondent for Aus- MP in New South Wales. Xinhua The teenage student at Heung To Mid- refused to give his full name for fear of
The allegations, first reported by Chi- claimed Mr Moselmane was suspected dle School displayed the phrase “Free repercussions, said he was worried and
nese state media on Tuesday, claimed ‘Australia [must] of being a Chinese agent because he Hong Kong, Revolution of Our Times” China has blamed confused about “what could and
Hong Kong’s
intelligence officers in June interrogated had “criticised Australia’s anti-China in an online profile picture and was sus- couldn’t be said” in classes.
immediately stop education system
the unnamed reporters for several policies”. pended for a week, according to a Face- “I have to stop telling the reality I
for helping to spur
hours, while seizing computer equip- this savage and In an interview with ABC in August, book post by a student group. pro-democracy know to avoid violating some rules . . .
ment, mobile phones and documents. Mr Moselmane said police had asked The school said the boy would be protests The education system has become
unreasonable behaviour’
The officers told the journalists to keep him about a social media chat group expelled if he was found to have partici- insincere, which creates distrust
the raids secret, Chinese reports claim. that he was a member of that also pated in so-called social movements and for not stopping a student from between teachers and students,” he
“We have provided consular support tralia’s national broadcaster ABC, and included Chinese academics and foreign again, the post added. playing Glory to Hong Kong, the unoffi- said.
to Chinese journalists in Australia and Michael Smith, a journalist for the Aus- journalists. “There’s nothing sinister. Hong Kong’s education bureau said cial anthem of the protest movement, in The Chinese government has long
made representations with relevant tralian Financial Review, were rushed But it’s been made to sound like some- the term was not an “ordinary political a music exam, according to local media. seen Hong Kong’s education system as a
Australian authorities to safeguard out of China on Monday after they were thing covert,” Mr Moselmane said. slogan” but carried subversive and sedi- Publishers have also been asked to weak spot in its ability to exercise its
legitimate rights and interests of Chi- questioned by security agents. James Laurenceson, director of the tious meaning under the national secu- review textbooks that include content authority. In recent months, professors
nese citizens,” a Chinese embassy That followed the detention of Aus- Australia-China Relations Institute at rity law. critical of the Chinese government. involved in social movements have been
spokesman said. tralian journalist Cheng Lei, who University of Technology Sydney, said: The decision highlights how authori- Wong Kwan-Yu, president of pro- dismissed, and authorities have warned
China’s foreign ministry said four Chi- worked as a newsreader for state broad- “If Australia’s security agencies are raid- ties are imposing stricter controls over establishment Hong Kong Federation of teachers and students from joining in
nese journalists were questioned “with- caster China Global Television Network. ing the property of Chinese journalists, the territory’s education system, which Education Workers, a teacher’s union, political activities and requested the
out reasonable explanation” and On Tuesday, China’s foreign ministry that obviously raises the prospect of the Chinese government blamed for said the school was probably “making scrapping of a controversial history
demanded that “Australia immediately said Ms Cheng was “suspected of engag- retaliation, as well as giving the Chinese helping spur last year’s pro-democracy an example” of the student. examination question about the Japa-
stop this savage and unreasonable ing in criminal activities endangering government propaganda material to protests. But Ip Kin-yuen, a member of Hong nese invasion of China during the sec-
behaviour”. China's national security”, without elab- paint Australia as hypocritical.” Beijing imposed the national security Kong’s Legislative Council, the city’s de ond world war.
SEPTEMBER 10 2020 Section:World Time: 9/9/2020 - 18:03 User: john.conlon Page Name: WORLD3 USA, Part,Page,Edition: USA, 4, 1
Thursday 10 September 2020 ★ FINANCIAL TIMES 5
6 ★ FINANCIAL TIMES Thursday 10 September 2020
y
Mark Haefele The sharp rotation out of tech within the past week highlights the need to diversify
MARKETS INSIGHT
Shareholders
Airlines cut
India advance Middle East wealth funds enter
flights after
talks to take stake in Ambani’s Reliance Retail
in dark over
passengers
fail to return
huge SoftBank
Claire Bushey — Chicago
Philip Georgiadis — London
options trades US and European airlines warned yes-
terday of a grim outlook for the coming
months, cutting back schedules as pas-
sengers continue to avoid air travel
during the pandemic.
Ryanair, Europe’s largest low-cost air-
line, reduced its forecast for passengers
3 No answers on who is calling shots
it expects to carry in the fiscal year to
March, as the carrier warned that this
3 Unease at $30bn exposure hits stock
winter would be “a write-off”.
Finnair, Finland’s flagship airline,
said it would operate no more than 80
flights daily in October compared with
the 200 previously planned.
Leo Lewis and Kana Inagaki — Tokyo ment of a hedge fund is a bit crazy when In the US, United Airlines said its
Robert Smith and he’s also the head of a huge company,” capacity would fall 70 per cent com-
Katie Martin — London the person added. pared with the third quarter of 2019.
SoftBank shareholders are calling on the The FT has spoken to several large Earlier guidance was a fall of 65 per cent.
conglomerate to reveal who is running institutional investors since revealing Revenue, too, will be lower than exec-
the unit at the centre of its large US last week that SoftBank had fuelled a utives had forecast: down 85 per cent
equity options trades, with nerves over long rally in tech stocks by placing bil- from the $11.4bn a year earlier, not 83
an unexplained strategic shift stoking a lion-dollar bets on derivatives. The per cent.
10 per cent decline in its share price. investors said that over the past few The cutbacks are part of a pattern in
Investors have unsuccessfully weeks — in some cases before the deriv- which airlines announce ambitious fly-
quizzed SoftBank — famed for big bets atives trades came to light — they had ing schedules only to trim them as
on unlisted tech start-ups — for details attempted to discover how the asset departure dates approach and passen-
on its new asset management unit since management unit was managed and, in gers fail to materialise. Industry body
founder Masayoshi Son disclosed it last particular, who was in charge of its day- Iata said airlines globally were projected
month, according to people briefed on to-day running. The investors said that to lose a record $84bn this year.
the discussions. despite those efforts, SoftBank had EasyJet cut its flight schedule earlier
Now, the company’s aggressive foray refused to disclose who was in charge this week. Now Ryanair expects to carry
beyond assuring them that Mr Son was 50m passengers in the 12 months to the
‘The idea that Son is taking closely involved. end of March, down from the 60m pro-
SoftBank said it had confirmed only Centre stage: Reliance is hoping to push into India’s fast-growing market for online shopping jected in July. It had forecast more than
a personal interest in the — Anindito Mukherjee/Bloomberg
that Mr Son was a member of its invest- 150m passengers before the pandemic.
micro management of a ment committee. It has not disclosed Anjli Raval — London secured $20bn in investments for his Jio’s other investors include Google, Michael O’Leary, Ryanair chief execu-
the other members of the committee, digital business, Jio Platforms, from 13 which put in $4.5bn, along with pri- tive, said the airline might cut more
hedge fund is a bit crazy’ Middle East sovereign wealth funds
nor the date of the unit’s establishment. global investors. Some of those inves- vate equity groups such as General flights in the coming months.
including the Abu Dhabi Investment
It declined to comment further. tors were offered the first opportunity Atlantic and Vista Equity Partners. The industry’s recovery hopes have
Authority and Saudi Arabia’s Public
into US equity options, led by the Japa- The existence of the asset manage- to invest in the retail business. The fundraising into Jio helped Reli- been hit hard by rising coronavirus
Investment Fund are in talks to buy
nese billionaire and first reported by the ment unit was revealed to shareholders The flurry of deals for stakes in Reli- ance cut its net debt, which it had cases across Europe and parts of the US.
stakes in Reliance Retail, the arm of
Financial Times last week, has sown last month, while a regulatory filing in ance’s businesses began this year accumulated building the business, It is pushing for testing on arrival at air-
Indian billionaire Mukesh Ambani’s
confusion about what this in-house mid-August disclosed SoftBank had when Facebook invested $5.7bn in Jio. from more than $20bn to zero. ports to help cut quarantine times and
empire that is seeking to raise $5.7bn
hedge fund is doing, and how much risk bought nearly $4bn in tech stocks It has highlighted how global inves- The latest investments are poised to encourage people back into the sky.
by selling new shares.
it is willing to assume. including Amazon, Microsoft, Tesla and tors see Mr Ambani’s conglomerate as help Reliance, which runs India’s larg- Airlines are also adapting to an envi-
“Concern centres around the lack of Google’s parent, Alphabet. Adia is in discussions over an invest- their best way into the enormous est bricks-and-mortar retail business, ronment where business travel has been
information about the strategy that is But people with direct knowledge of ment of $750m at a valuation of Indian market at a time when rela- push into the country’s fast-growing hit particularly hard by focusing on lei-
going on behind this trading activity and SoftBank’s trades say that over the past roughly $57bn, according to people tions with China are souring. market for online shopping and take sure travel and customers flying to see
also the wider question of who is in month, it has also snapped up $4bn familiar with the matter, while the PIF KKR has also expressed interest in on competitors such as Amazon and friends and family.
charge of these different activities,” said worth of mostly call options — bets on could funnel as much as $1.5bn into an investment, with one person famil- Walmart-owned Flipkart. United said it would launch seven new
a person briefed on the views of one further price gains — in some of those the entity controlled by Mr Ambani’s iar with the matter saying the private The new fundraising is to help grow long-haul routes from the US over the
institutional shareholder. names, taking on options exposure with oil-to-telecoms conglomerate Reli- equity group could funnel up to the retail business, with investment in next year: two from mainland cities to
The person said that, apart from the a notional value of $30bn. ance Industries. Mubadala may also $1.5bn. A second person, close to logistics and warehouses. Hawaii, and five connecting diaspora
company’s huge stake in Chinese ecom- Rajeev Misra, who heads SoftBank’s take a stake. KKR, said it “is looking at it but it is Through Jio and retail, Mr Ambani populations to India and Africa.
merce giant Alibaba, asset managers $100bn Vision Fund, and Akshay Adia, Mubadala and PIF declined to still early”. Bloomberg first reported has sought to diversify from petro- “We’re really focused on rethinking
were generally not invested in SoftBank Naheta, a former Deutsche Bank trader, comment. Reliance did not imme­- KKR’s interest. chemicals into online and consumer- the network,” said Patrick Quayle,
because they wanted exposure to listed are closely involved, but Mr Son has diately respond to a request for US private equity group Silver Lake facing businesses. United’s vice-president of international
stocks they could easily buy themselves. driven the decisions behind the options comment. said yesterday it would invest $1bn in Additional reporting by Simeon Kerr, network and alliances. “We’re not just
“The idea that Son is taking a kind of trades, according to people with direct The new round of fundraising Reliance Retail, confirming talks first Benjamin Parkin, Henny Sender looking at adding everything back prior
personal interest in the micro manage- knowledge of the matter. comes only weeks after Mr Ambani reported by the Financial Times. and Kaye Wiggins to the way it was before coronavirus.”
ECB supervisors turn the screw on banks over Brexit plans
structurally profitable, being operation- all activities related to European prod-
INSIDE BUSINESS
ally self-standing in key areas and most ucts or European customers should, as a
importantly not excessively reliant on general principle, be managed and con-
EUROPE
back-to-back booking to the parent.” trolled from entities located in the EU,”
The ECB is responsible for supervis- Yves Mersch, an ECB executive director
Martin ing the 25 new or restructured banking and vice-chairman of its supervisory
operations that have applied for fresh board, said in a blog over the summer.
Arnold authorisations because of Brexit, as well ECB supervisors worry that some
as 10 others that have increased the size banks cling to uncertain scenarios that
of their eurozone-based operations. they hope will let them keep more oper-
Among these, the eurozone opera- ations in the UK. These include count-
tions of four banks — Goldman Sachs, ing on Brussels to grant the UK “equiva-
E urope’s top financial supervi- JPMorgan Chase, Morgan Stanley and lence”, a status that would open access
sor is fed up of waiting for big UBS — grew big enough to fall under to the bloc’s financial markets in some
banks to prepare for Brexit. direct supervision of the ECB last year. areas. But discussions have been bogged
This is the message ECB offi- Others are supervised by both national down in recriminations. Another
cials have given executives regulators and the ECB. involves a technique known as “back-to-
this summer, while asking them for A question for bankers has been back” operations that would allow insti-
“action plans” to make their EU off- whether their EU offshoots will be able tutions to transfer the risk of EU deals
shoots “operationally self-standing in to operate on a standalone basis after across borders by carrying out a parallel
key areas” by the end of this year when Brexit. The answer for many is that they transaction in the UK.
the Brexit transition period ends. still rely heavily on It would be too risky for banks to rely
But turning the screw has produced their parents for Officials are not persuaded heavily on these options, according to
loud complaints. Some bankers pri- functions such as Rachel Kent, head of financial services
that enough people, assets
vately suspect it is a politically moti- risk management regulation at Hogan Lovells. “Equiva-
vated way of pressing the UK as trade or IT services. This and resources have been lence has become politicised, so I don’t
talks with the EU enter a crucial stage. is because for think banks are holding out for that.”
shifted from London to
While the largest banks have been many years, banks In the immediate aftermath of the
working on the issues since the UK centralised their eurozone offshoots Brexit vote, there were forecasts that
voted to leave the EU, the ECB is still not European corpo- London would lose tens of thousands of
persuaded that they have shifted rate and investment banking activities jobs. Lobby group Frankfurt Main
enough people, assets and resources in London. Almost half of all debt and Finance projected that the German
from London to eurozone offshoots to equity issuance for non-financial financial hub would draw 10,000 bank-
ready them for the post-Brexit world. institutions in the eurozone from ers. But now it says only 1,500 jobs have
“Some banks have substantially 2012 to 2018 was done from the UK. been added, with a further 2,000
reached their target operating model Financial services exports to the EU expected after the transition period.
already or are well on track towards were worth £26.1bn in 2018, a fifth of What is now more worrying for the
that target,” the ECB said. “There are UK services exports. banks is that if the ECB gets its way, they
other banks that still need to make The tussle between the ECB and the will end up with overlapping European
progress, both in terms of relocating banks will be vital in determining how operations — in London and in the euro-
assets and staff. Our joint supervisory much of this business leaves the City of zone — at a time when the fallout from
teams have engaged with these banks London. ECB officials say banks have the pandemic already threatens to
to make sure there is a shared under- outlined plans to move more than make a big dent in their profits. If that
standing of the path towards the target €1.2tn of assets from the UK to their happens, expect more cost-cutting on
operating model. eurozone offshoots, quadrupling their both sides of the Channel.
“This is not about moving assets and size since the end of 2017.
staff alone. It is also about aiming to be “The ECB’s expectation is very clear: [email protected]
SEPTEMBER 10 2020 Section:Companies Time: 9/9/2020 - 19:02 User: jeremy.wright Page Name: COMP&MKTS1, Part,Page,Edition: USA, 6, 1
Thursday 10 September 2020 ★ FINANCIAL TIMES 7
SEPTEMBER 10 2020 Section:Ad Page Time: 9/9/2020 - 10:53 User: william.baxter Page Name: AD LONGINES2, Part,Page,Edition: LON, 7, 1
8 ★ FINANCIAL TIMES Thursday 10 September 2020
COMPANIES & MARKETS
Automobiles Healthcare
Renault boss signals deeper cost cuts Saliva-based
virus tests
launched by
De Meo calls projections The former Volkswagen executive compounding existing issues, including ucts would need to be cut back by whilst it leaves PSA to its own devic- UK groups
said in the memo, first reported by Reu- its relationship with partner Nissan. about 30 per cent and that he wasn’t es despite owning a 12.2 per cent
‘alarming’ and praises
ters, that PSA “was almost bankrupt five The French group fell to a record “afraid to envision” an increase in aver- stake.”
rival PSA’s strategy years ago” before being turned round by €7.3bn loss in the first half of the year. Its age prices of 25 per cent to 30 per cent Paris, which has backed a €5bn
former chief Carlos Tavares. for smaller cars. credit line from banks to the company Anna Gross — London
“The goal is to get back on track and ‘In the next five years, It is not the first time Mr de Meo has to get it through the pandemic, is
David Keohane — Paris Two UK groups will today launch rapid
solve our problems as quickly as possi- underlined the depth of the challenge at Renault’s largest shareholder, just
we are going to do saliva-based tests for Covid-19 amid
Renault’s new chief executive warned ble: treasury and costs. That means that Renault, ahead of unveiling a detailed ahead of Nissan.
growing calls for more testing capacity
that the carmaker might have to make we might have to go further than what PSA has done in strategy in January of next year. Despite the turmoil in the remodelled
in Britain as employees head back to
deeper cost cuts than planned to get out planned in the effort to reduce costs.” Analysts expressed cautious alliance with Nissan in recent years, par-
the last five years’ offices and pupils return to school.
of the “red zone” as he tries to copy the Renault has already unveiled a three- optimism. ticularly after the arrest of Mr Ghosn in
strategy of French rival PSA. year, €2bn cost-cutting initiative in May “We have the proof that turnrounds in late 2018, Mr de Meo is backing the part- Tech company iAbra has developed a
Luca de Meo, who took over at that will involve shedding 15,000 jobs. share price has fallen almost 40 per cent EU mass-market car businesses are do- nership. test that uses a mouth swab to extract
Renault in July, said that the carmaker’s It scaled back its ambitions pushed by so far this year. able,” said Arndt Ellinghorst at Bern- “If we separate . . . we would send saliva, which uses a computer to iden-
cash projections were “alarming” and former boss Carlos Ghosn, cutting pro- “In the next five years, we are going to stein in a note to clients. ourselves straight to the second division tify the virus.
that it needed to model itself on PSA, duction capacity from 4m vehicles in do what PSA has done in the last five “Sadly, there is one key fundamental in the automotive championship. So I The results were delivered in 20 sec-
which owns Peugeot, in an internal 2019 to 3.3m by 2024. years,” said Mr de Meo. difference. The French govern- am determined to do everything to onds, the company said.
memo seen by the Financial Times. The pandemic has hit Renault hard, He said that Renault’s range of prod- ment . . . is getting involved in Renault make sure it succeeds.” The test has been trialled at Heathrow
airport, which is one of the group’s first
customers. A division of US defence
company Lockheed Martin is another,
Financials. Market reform and iAbra said it was in talks with other
multinationals.
The company said the cost of the
Wall Street strives for star performance in China
machine that processed the data was
under $20,000, with each kit equivalent
to “roughly the price of a paperback
book”.
“Testing for Covid-19 is the lifeline
that the UK economy needs to get
BlackRock, Citi, Vanguard back on its feet,” said John Holland
Kaye, Heathrow chief executive,
and JPMorgan benefit from
adding that iAbra’s test was “quicker,
Beijing’s liberalisation drive cheaper and potentially more accurate”
than the government’s conventional
swab test.
Thomas Hale — Hong Kong “We urge the government to fast-
Siobhan Riding — London track this technology to protect the
Wang Xueqiao — Shanghai
economy and help save millions of jobs
Some of the most powerful financial in this country,” he added.
institutions on Wall Street are stepping As more employees return to work
up efforts to strike deals in China, as Bei-
jing takes steps towards the liberalisa- ‘We urge the government
tion of its vast but heavily protected
to fast-track this tech to
capital markets.
Last month BlackRock, the world’s protect the economy and
biggest asset manager, received
help save millions of jobs’
approval for a partnership with a state-
owned bank in China. Days later, Van-
guard said it would relocate its regional and students to universities, epidemiol-
headquarters to Shanghai, while Citi- ogists have underscored the need for
group became the first US bank to robust and widescale testing to screen
receive a fund custody licence in the for infection and prevent local out-
country. Details also emerged of JPMor- breaks.
gan Chase’s plan to buy out its local part- While the government undertakes
ner in a Chinese funds business. large trials of several rapid Covid-19
Behind the bluster of US-China ten- tests, some companies have swept in to
sions in the lead-up to November presi- meet private demand for scalable test-
dential elections, the two countries are ing systems that do not require profes-
edging closer in financial services. sional medical administration.
“Everywhere you look [in China], British biotech company Halo will
there’s a lot of money, and where else in launch a saliva test which it says pro-
the world is there an opportunity like vides results within 24 hours. Clients
this to go and get that sort of money for can take the test at home by spitting into
management?” said Stewart Aldcroft, a tube and sending the sample off for
Asia chairman of Cititrust, a Citigroup processing at the company’s lab at
unit. “There isn’t anywhere, frankly”. Imperial College London.
The recent wave of activity has The group’s first customer is Exeter
focused mainly on the fund manage- University, which has bought tens of
ment industry — part of a broader range thousands of tests, and Halo said it was
of services that were deemed to present in talks with an unidentified hedge fund
an opportunity for “co-operation and Flag-flying: “They see the competition foreign firms Foreign firms’ interest is not limited ‘Where else interview in Beijing in 2018 that his and airline.
mutual benefit” in the US-China phase I despite US- can bring to be a very healthy develop- to selling mutual funds. company was “building here for 100 “Saliva is much less intrusive, has a
in the world
trade deal published in January. China tensions, ment,” he said. BlackRock recently received the right years”. He said: “One day you’ll proba- lower impact on the environment, and
Chinese reforms that came into force the two China’s mutual fund industry is still in to wholly own its own mutual fund busi- is there an bly have a tower here that looks like the is less labour-intensive than other
this year mean that foreign companies countries are its infancy. Goldman Sachs estimates ness, but its new partnership with China tower we have in New York.” tests,” said Jonathan Biles, Halo’s chief
opportunity
can for the first time fully own their own edging closer in that just 7 per cent of the country’s Construction Bank and Singapore’s Taking market share may not be easy. executive.
businesses in the rapidly growing financial household assets are in equities and Temasek will also allow it play a role in like this to Hugh Young, head of Asia for Standard “Our tests are very, very sensitive. We
mutual fund sector. According to services mutual funds, compared with 32 per the country’s wealth management mar- Life Aberdeen, said that international think we’ve got something that’s game-
— FT go and get
Deloitte, publicly registered funds could montage cent in the US. Two-thirds of Chinese ket, which is dominated by domestic asset managers are up against some changing.”
hold assets of $3.4tn by 2023. households’ assets are in property, and banks. that sort of “entrenched” domestic competitors. Mr Biles said the test, which purifies
Casey Quirk, a consultancy, estimates nearly a fifth is in cash and deposits. China this month approved Citi as the He added that many foreign firms the genetic material from saliva and
money?’
that China will overtake the UK as the Chinese stock markets are also first bank offering custodian serv- are trying to cement their presence in uses polymerase chain reaction (PCR)
second-largest funds market by 2023. wracked by volatility — an issue over ices such as record-keeping, trade set- the market in order to benefit from an to detect the virus in a lab, is close to
“We knew China’s intention was to which official state media has expressed tlement and income processing. eventual liberalisation of capital flows, 100 per cent accurate.
open up the market, and the reason they concern this year, as indices have rallied In March, Morgan Stanley received when Chinese authorities relax controls iAbra’s Virolens test uses a digital
were doing that is not because they were sharply. Wild swings in prices have approval to take majority ownership of on the amounts of money households camera attached to a microscope to ana-
being magnanimous,” said Peter Alex- fanned fears among ordinary investors its China securities joint venture. and companies are allowed to move lyse saliva samples, with the data then
ander, founder of Z-Ben Advisors, a that the market can be treacherous. JPMorgan was recently permitted to overseas. run through a computer. Each digital
Shanghai-based consultancy. Rather, he “For us who don’t have professional become the first foreign bank to fully Mr Alexander agreed that to “run camera machine could process several
said, China wants to benefit from US financial knowledge, it’s hard to gain,” own a futures business in China, on top Chinese money globally” is the “holy hundred tests per day, the company
“best practice.” said Shen Jiahong, a retail investor in of taking control of its Chinese mutual grail” for foreign firms — but that Bei- said.
Mr Aldcroft cites a visit six years ago Shanghai. Rather than buying individ- fund business through its asset manage- jing will not allow them to dominate in Studies conducted by the University
by senior officials at the China Securities ual stocks, she mainly buys mutual ment arm. that process. of Bristol found that the test had
Regulatory Commission to Citi and the funds, which she assesses based on Jamie Dimon, the bank’s chairman “The Chinese are going to go out and 99.8 per cent sensitivity, identifying all
SFC, Hong Kong’s securities regulator. rankings on WeChat. and chief executive, said in a Bloomberg buy someone,” he said. real cases and avoiding false negatives.
Growth hub Retail & consumer
Ant, Haitong and WeBank in Singapore push Jones wins Lagerfeld’s design role at Fendi
Mercedes Ruehl — Singapore been heightened by restrictions on The Monetary Authority of Singapore Carola Long — London Mr Jones said that “working across Mr Jones has carved out a reputation
mainland groups in India and the US, and the Economic Development Board two such prestigious houses is a true for blending streetwear, pop culture and
China’s largest technology and finan- Kim Jones has been named artistic
and with Hong Kong increasingly sus- say they do not collect data on the honour as a designer”. tailoring, and creating a marketing buzz
cial services groups are stepping up director of women’s ready-to-wear,
ceptible to Sino-US friction. number of Chinese financial or tech Mr Jones was born in London and around his products.
efforts to expand in Singapore, as doors haute couture and fur collections at
A number of Chinese apps including companies setting up shop in Singapore. studied fashion at Central Saint Martins. Analysts expect Mr Jones to try to
slamming shut on mainland groups in Italian fashion house Fendi, ending
TikTok have been banned in the US and IMAS members must have a Singa- He became creative director of Richem- bring that same cool and commercial
the US and India make the hub crucial speculation over who would assume
India in recent months on the grounds pore office, while SFA requires mem- ont’s Dunhill in 2008. From 2011 to flair to Fendi’s womenswear. While the
for growth. the role held by the late Karl Lagerfeld.
that they pose a threat to national secu- bers to be registered in the city. 2018, he was men’s artistic director at house is well known for its handbags, its
Alibaba-backed Ant Group; brokerage rity, while telecoms equipment maker Carmen Wee, IMAS head, said an Silvia Venturini Fendi, granddaughter Louis Vuitton, the largest brand in the clothing does not set trends in the same
Haitong Securities; Huawei’s cloud arm; Huawei is grappling with US sanctions. appeal for asset managers was the abil- of the company’s founders who has been LVMH stable. way that rivals such as Gucci do.
and Tencent-backed digital bank “Singapore is benefiting from geopo- ity to reach south-east Asia and its pop- acting as sole creative director since The appointment at Fendi is his first LVMH became the majority share-
WeBank are among those that have in litical tensions,” said Chia Hock Lai, ulation of 650m. “Given Singapore’s Lagerfeld’s death in February 2019, will womenswear role. holder in Fendi in 2001, after buying the
recent months approached Singapore president of the Singapore Fintech strategic position in south-east Asia, we continue to design the LVMH-owned Prada Group’s 25.5 per cent stake, and
industry groups about membership or Association. Membership had swelled have seen increased interest from Chi- brand’s accessories and menswear. later increased its own holding.
partnerships. from 350 groups in March to 780 as of nese asset management firms to estab- Mr Jones will continue his role as Bernard Arnault, chairman and chief
The Investment Management Associ- September. “The worsening of the trade lish a presence,” Ms Wee said. artistic director of menswear at Dior, executive of LVMH, said: “Kim Jones is a
ation of Singapore said it had seen such a and geopolitical relationship [between Mr Chia said Haitong was interested which is also owned by LVMH. It is not great talent, and since joining, he has
surge in interest that it was setting up a Beijing and Washington] is actually in identifying potential acquisition tar- unusual for designers to hold more than continuously proven his ability to adapt
China chapter to better support and accelerating the move and diverting gets, while Huawei, which has been in one position, but more often this com- to the codes and heritage of the LVMH
attract mainland companies. investment out of China.” Singapore for almost 20 years, was bines a role at a big brand and a houses while revisiting them with great
Singapore, which also markets itself For funds, a primary draw has been focused on expanding its cloud comput- designer’s own label than across two modernity and audacity.
as a technology centre in Asia, has long Singapore’s Variable Capital Companies ing unit to provide companies with arti- major houses. Mr Jones follows in the “At Fendi, I am convinced that his
been a popular first choice for Chinese regime, designed to lure assets of fund ficial intelligence and cloud services. footsteps of Lagerfeld, who was creative vision and passion will highly contrib-
companies seeking a springboard to managers and family offices. Since Janu- Ant Group is bidding for a digital bank- director of Chanel and his own label Kim Jones will stay in his position ute to the success of the women’s
expand internationally. Its allure has ary, 109 VCC funds have been set up. ing licence in the city-state. while working for Fendi. as an artistic director at Dior collections.”

SEPTEMBER 10 2020 Section:Companies Time: 9/9/2020 - 18:54 User: jon.wright Page Name: CONEWS1, Part,Page,Edition: USA, 8, 1
Thursday 10 September 2020 ★ FINANCIAL TIMES 9
SEPTEMBER 10 2020 Section:Ad Page Time: 9/9/2020 - 10:53 User: william.baxter Page Name: AD BANCA IMI, Part,Page,Edition: LON, 9, 1
10 ★ FINANCIAL TIMES Thursday 10 September 2020
COMPANIES & MARKETS
AstraZeneca’s trial pause injects dose of Energy
Former Lego
executive
reality into race for coronavirus vaccine
Nipper picked
as Orsted CEO
Pharma group’s safety move comes as reminder that sector is aiming for unprecedented success
‘One in Richard Milne
Sarah Neville, Clive Cookson Nordic and Baltic Correspondent
and Kiran Stacey 100,000
Orsted, the world’s biggest offshore
When AstraZeneca confirmed on Tues- [adverse wind developer, has chosen a former
day evening that it had temporarily Lego marketing boss who is one of
events] is
halted trials of its coronavirus vaccine, Denmark’s leading corporate advo-
the news disconcerted millions around pretty cates of sustainability as its next chief
the globe counting on a jab as a route executive.
important
back to normal life.
The pharma group’s measured state- if you are Mads Nipper, chief executive of the
ment sought to dispel any suggestion world’s largest pump manufacturer
going to be
that the race to develop a vaccine — the Grundfos, will take over from Henrik
candidate it is developing in partnership vaccinating Poulsen at Orsted at the start of next
with Oxford university is considered a year.
1bn people’
frontrunner — had encountered signifi- Mr Poulsen transformed the former
cant problems. Dong Energy from a Danish state-
Pascal Soriot, AstraZeneca’s chief controlled oil, gas and utility group to a
executive, cast the decision as proof of world-leading wind power developer
his company’s adherence to “science, that wants to become the first “green
safety and the interests of society”. The supermajor” within five years, challeng-
pause showed that the company would ing energy companies such as BP and
follow those principles, he said, as a sus- Royal Dutch Shell.
pected serious adverse reaction suffered “The challenge we face in transform-
by a UK trial participant was assessed by AstraZeneca has ing the world’s energy systems from fos-
a committee of independent experts. committed to sil fuels to renewable energy to avoid the
But the incident has served as a make no profit catastrophic consequences of climate
reminder that the industry is trying to from the drug change is more pressing than ever and
pull off an unprecedented feat: aiming during the requires action in all parts of society,”
to beat, by years, the previous fastest pandemic said Mr Nipper, who added that Orsted
— David
development of a vaccine. That record is Parker/ANL/Rex/Shutterstock was in a “unique position to make a dif-
held by the mumps vaccine, which took ference in the fight against climate
AstraZeneca shares have risen on a potential Covid-19 vaccine Medical trials in the UK have remained flat
four years to bring to market. change”.
Share price (£) Number of interventional trials of investigational medicinal products
Despite the anticipation of a vaccine A fan of rock band AC/DC and Liver-
that will arrive and free people from pool Football Club, the incoming Orsted
100 1,200
lockdown, history demonstrates there CEO shot to prominence as one of the
are no guarantees. Overall, vaccines for driving forces behind the resurrection
1,000
infectious diseases have about a 33.4 per of Lego after the Danish toymaker’s
90
cent success rate after entering human 800 brush with financial collapse in 2003.
trials, although this rises to 85 per cent Mr Nipper, who spent more than two
for those that reach phase 3 trials. 80 600 decades at Lego, rising to the post of
There has been an extraordinary sci- chief marketing officer, insisted that the
entific effort devoted to finding a vac- 400 toymaker needed to refocus on its core
cine that will prevent Covid-19 or at 70 audience of six- to nine-year-old boys
200
least lessen the symptoms. The Oxford- and pushed the launch of a classic fire
AstraZeneca candidate is one of five in engine in 2004 as it started its journey
60 0
trials that use the weakened form of a to become the world’s largest toymaker.
common type of virus known as adeno- Jan 2020 Sep 2010 15 19 He turned Grundfos round after tak-
viruses. The modified adenovirus deliv- Sources: Refinitiv; MHRA; PwC ing over as chief executive in 2014 when
ers instructions for human cells to make the pump manufacturer was suffering
proteins on Sars-Cov-2, the coronavirus said: “When we say we are going to focus [adverse events] is still pretty impor- Analysts and investors largely reacted from falling profits. In recent years he
EU negotiations
that causes the disease. Another type of on safety and make no compromises, tant if you are going to be vaccinating up calmly to the news. Peter Welford at Jef- has been vocal in his support for sus-
vaccine uses RNA, a molecule contain- BioNTech and Pfizer in here is exhibit A.” to a billion people.” feries said temporary pauses were tainability goals.
ing genetic instructions to make viral talks over 200m doses If the trial participant’s illness is “a It was that possibility that was behind “standard clinical trial practice”. “Anchored in a clear sustainability
proteins that is inserted in human cells. real consequence of this vaccine and can AstraZeneca’s decision voluntarily to He and his team envisaged “a short- vision, Mads has led a highly successful
US biotech Moderna and the partner- be shown to be cause and effect, then all pause the trial, he said. term stock correction which may prove transformation of Grundfos over the
ship between Pfizer and BioNTech are Germany’s BioNTech, and the the doses that are currently being man- Scientists emphasised that pauses are misplaced”, he added. past six years that has reinforced the
taking this approach and, along with the company’s US partner Pfizer, are ufactured for that will be thrown away. routine in drug development. Jeremy Describing the muted market reac- company’s position in an increasingly
Oxford/AstraZeneca candidate, are negotiating a contract with the EU We do not want to manufacture some- Farrar, director of the Wellcome Trust, tion — shares closed fractionally higher competitive market, while also
considered among the most advanced. to supply at least 200m doses of thing that is not safe,” he said. said: “It’s very unusual to go through a at almost £84 — as “sensible”, Mr strengthening financial performance,”
The pause in the AstraZeneca trial their Covid-19 vaccine candidate. Dan Mahony, co-head of healthcare at vaccine trial and not to have to pause it.” Mahony argued the fate of the vaccine said Thomas Andersen, Orsted chair-
comes as politicians have encouraged If an agreement is reached, fund manager Polar Capital, said the bar The condition that led the trial to be was unconnected to the company’s man.
the narrative that a vaccine will arrive at deliveries could begin by the end of for administration of a vaccine can be paused is transverse myelitis, an inflam- broader prospects of success. Astra- Mr Poulsen, another former Lego
“warp speed”, to quote the name of Don- 2020, the companies said, if the higher than for other pharmaceuticals, mation of the spinal cord that has a Zeneca has committed to make no profit executive who in June announced his
ald Trump’s vaccine project. product is approved by regulators. because they are almost always given to known, but very rare, association with from the drug during the course of the decision to step down after eight years
Earlier this week Matt Hancock, the The EU will have the option to people who are otherwise well. vaccination. pandemic. as chief executive, will act as an adviser
UK health secretary, held out hope that buy a further 100m doses of the The difficulty for vaccine makers is Stephen Evans, Professor of Pharma- He said: “I don’t think this vaccine has to Mr Nipper in his first month at Orsted
the Oxford one could even win regula- vaccine, which uses mRNA that even clinical trials involving 30,000 coepidemiology at the London School of ever been a financial driver for them. It and has yet to announce his next move.
tory approval before the end of the year, technology, and is likesly to require people — such as AstraZeneca’s current Hygiene & Tropical Medicine, warned is more a factor of being a good corpo- He has been linked with various promi-
although he suggested the early part of two shots per person immunised. phase 3 trial — may not pick up rare, but against assuming a link between the rate citizen.” nent Nordic chief executive roles in
2021 was more likely. The Mainz-based biotech group, potentially devastating, reactions. participant’s illness and the vaccine. AstraZeneca’s status as one of the fast- recent years after his work in trans-
Some experts believe the announce- which says it will be able to Mr Mahony said regulators were “When large numbers of people are est growing pharma companies in the forming Orsted and bringing it to the
ment of the pause will be a useful reality manufacture 1.3bn doses of its always wary of reactions that studies included in trials, coincidental events world stemmed instead from its oncol- stock market.
check, emphasising that safety is para- vaccine by the end of 2021, will such as AstraZeneca’s would not neces- can occur and when they are unex- ogy business, he added. It became the first fossil fuel producer
mount. Referring to it at a Senate hear- earmark 30m doses for the UK. sarily pick up. He added: “These are big pected, then an investigation is required “This is a company on the up and they to ditch its traditional business, moving
ing yesterday Francis Collins, the head Joe Miller studies but it is still difficult to pick up to see if they are just coincidence or a have stepped in to do something on into offshore wind as it became increas-
of the US National Institutes of Health, those rare events. But one in 100,000 result of the vaccine,” he said. Covid from a position of strength.” ingly competitive on price.
Mining Oil & gas Financials
Rio meets indigenous leaders Husky considers scrapping Pandemic stimulus lifts ETF
over Australia cave blasts Canadian offshore project assets to $7tn for first time
site to make way for the expansion of an tainty leave us no choice but to under- year to use fixed income ETFs to help
Neil Hume Derek Brower — US Energy Editor Chris Flood
iron ore mine. take a full review of the project and, by stabilise the bond market, an unprece-
Natural Resources Editor
Investors have called for Rio to recon- Husky Energy, the Canadian group extension, our future operations in Assets held by exchange traded funds dented vote of confidence from the US
Rio Tinto chief executive Jean-Sébastien sider the decision to impose only finan- controlled by Li Ka-shing, said yester- Atlantic Canada,” said Rob Peabody, have reached $7tn for the first time, central bank.
Jacques has held talks with the indige- cial sanctions. Yesterday, the Church of day it might scrap an Atlantic offshore chief executive of Husky. boosted by emergency public spending ETFs were regarded as an insignifi-
nous owners of the ancient Aboriginal England said it had asked the Rio board crude project, putting pressure on the The move is the latest blow to eastern measures that helped drive a rebound in cant niche before the financial crisis.
site that the mining group blew up ear- to “reflect” on whether the penalties government to bail out another oil Canada’s oil sector, after local authori- markets. But the failure of most traditional active
lier this year, as the company’s board were adequate. development. ties forced Suncor to halt operations at Governments have announced $20tn managers to avoid brutal losses led
prepares to debate his future. “It’s very much a test for the board of The announcement follows weeks of another field offshore Newfoundland of stimulus measures in response to the many investors to seek less volatile
The Puutu Kunti Kurrama and how seriously they respond to this,” negotiations between investors in West late last year. pandemic, slashing interest rates and strategies.
Pinikura Aboriginal Corporation said it Adam Matthews, head of ethics and White Rose, including Calgary-based Cancellation of the West White Rose expanding bond-buying. ETF providers have drawn $4.3tn in
had held discussions with senior Rio engagement at the Church’s pension Suncor Energy, and authorities about expansion could shorten the life of the Aggressive steps by policymakers net new cash since the start of 2009.
executives “to share our feelings and the possibility of the federal or provin- original White Rose project, which is in have encouraged investors to plough BlackRock and Vanguard have devel-
attempt to establish a way forward to cial government buying a stake in the terminal decline. $428bn in new cash into ETFs so far this oped into the two largest asset managers
repair, rebuild and grow our relation- Jean-Sébastien project. Four eastern Canadian offshore year, up 57 per cent compared with the over the past decade by aggressively
Jacques, CEO,
ship”. Seamus O’Regan, Canada’s federal projects produced about 260,000 b/d in same period last year, according to expanding their ETF units.
engaged in talks
The meeting comes amid mounting natural resources minister, said his gov- 2019, according to the Canadian Associ- ETFGI, a London-based consultancy. BlackRock’s iShares ETF arm has
with owners of the
pressure for Rio to respond more site that Rio blew ernment and officials in Newfoundland ation of Petroleum Producers. The oil Assets held in ETFs (funds and prod- gathered net inflows of $98.6bn so far
strongly to the blasts that led to the up earlier this year were “hammering out the concrete industry accounted for about a quarter ucts) reached a record $7tn at the this year. Pennsylvania-based Vanguard
destruction of two 46,000 year old rock steps needed to support the offshore”. of Newfoundland’s gross domestic prod- end of August just before the US is ahead in this year’s race for investors’
shelters in Western Australia just over board, told the BBC. “Its clear that The West White Rose project, in one uct between 1997 and 2017, Capp said. stock market reached an all-time high cash after attracting ETF inflows of just
three months ago. investors do not feel the measures they of Canada’s poorest regions, would add Andrew Parsons, Newfoundland’s and before this week’s correction in under $115bn.
The state is home to Rio’s flagship iron have currently outlined are sufficient.” 75,000 barrels a day of production and energy minister, said a Husky with- technology stocks. Their competitors trail far behind but
ore operations, which accounted for Rio secured approval from Western generate C$3bn (US$2.3bn) in royalties drawal would be devastating for the “The ETF industry has registered pos- nine of the top 10 ranked ETF providers
more than 90 per cent of the earnings Australia’s state government to destroy while supporting thousands of jobs, local economy. “We’re talking about itive investor net inflows for the past 15 have seen new business growth increase
generated by the $105bn company in the rock shelters in 2013 as part of the Husky said. thousands of jobs in a province of half a months, even during February and this year. UBS and New York-based Wis-
the first half of the year. expansion of its Brockman 4 mine. The project, 350km off Newfound- million people. You can’t overstate the March of this year when equity markets domTree are the only two top-20
Rio’s board was to meet yesterday to However, the company faced criti- land, is 60 per cent complete and was importance.” were in retreat as a result of worries ranked ETF managers to have regis-
discuss further sanctions for the blasts, cism for not altering its expansion plan scheduled to start producing oil in 2022. He said Newfoundland would “do about the economic impact tered net outflows this year.
including whether Mr Jacques and Chris after archaeological digs found the site Husky said capital and operating invest- what it can” to find a way of keeping from the spread of coronavirus,” said Strong buying via ETFs has also
Salisbury, head of iron ore, and Simone had the potential to “radically change” ment would have amounted to C$11bn. Husky but could not afford to buy an Deborah Fuhr, founder of ETFGI. helped push the price of gold to a record
Niven, head of corporate relations, the understanding of the “earliest The company suspended it in March equity stake on its own. “Everybody is Sceptics who had projected that the above $2,000 in August. Investors have
should keep their jobs. human behaviour in Australia”. amid an oil price crash triggered by the quite aware of our fiscal capacity, and violent correction would mark an end to spent $51.2bn buying gold ETFs so far
Rio last month cut £4m from their Mr Jacques told a parliamentary pandemic and the Saudi-Russian mar- how we just don’t have the ability to the rapid expansion of the ETF industry this year, pushing the asset value of
bonuses after a board-led review found inquiry he was not aware of the cultural ket share war. assume an equity investment like is were proved wrong, Ms Fuhr said. these vehicles to $241bn, according to
they bore “partial responsibility” for the significance of the rock shelters until “Unfortunately the delay caused by being asked . . . The federal govern- ETF sentiment has been strengthened the World Gold Council, the trade body
failings that led to the destruction of the they were blown up on May 24. Covid-19 and continued market uncer- ment plays a huge role in this.” by the Federal Reserve’s decision this representing bullion mining companies.
SEPTEMBER 10 2020 Section:Companies Time: 9/9/2020 - 18:59 User: jon.wright Page Name: CONEWS2, Part,Page,Edition: EUR, 10, 1