Financial Times Europe - 19.09.2019

(Jacob Rumans) #1

Thursday19 September 2019 ★ 13


The Financial Times Limited 2019© Week 38


Repurchase agreements, a key cog in
the financial market chain, came under
strain this week, raising fears that the
Fed’s move to unwind crisis measures
may have gone too far. The so-called
repo rate soared and the New York Fed
had to step in to try to restore order.
AnalysisiPAGE 21

Surging repo rate shines
spotlight on Fed’s pullback

M A D H U M I TA M U R G I A— LONDON

The smart televisions in our homes are
leaking sensitive user data to compa-
nies includingNetflix,Google nda Face-
book ven when some devices are idle,e
according to two large-scale analyses.

Researchers rom Northeastern Univer-f
sity and Imperial College London found
that a number of smart TVs, including
those made bySamsung nda LG, and the
streaming dongles Roku and Amazon’s
FireTV, were sending out data such as
location and IP address to Netflix and
third-party advertisers.
The data were being sent whether or
not the user had a Netflix account. The
researchers also found that other smart
devices, such as speakers and cameras,

were sending user data to third parties
includingSpotify nda Microsoft.
In a separate study of smart TVs by
Princeton University, esearchers foundr
that some apps supported by Roku and
FireTV were sending data such as spe-
cific user identifiers to third parties,
including Google.
Roughly 68 per cent of US households
had a connected TV device, including
external hardware such as Roku and
Apple TV, at the end of 2018, according
to a Nielsenreport rom March. Tens off
millions of these devices use content
recognition technology that tracks
viewing habits to target TV advertising.
Netflix said: “Information Netflix
receives from smart TVs that are not
signed in is confined to how Netflix per-

forms and appears on screen. We do not
receive any information about other
applications or activity on smart TVs.”
Facebook said: “It’s common for
devices and apps to send data to the
third-party services that are integrated
into them. This could, for example,
include an app sending data to Face-
book to create a login interface, or pro-
vide a Like button.”
Google said: “Like other publishers,
smart TV app developers can use
Google’s ad services to show ads against
their content or measure the perform-
ance of ads. Depending on the user’s
chosen preferences on the device and
consents, the publisher may share data
with Google’s that’s similar to data used
for ads in apps or on the web.”

Smart TV leaks signal fresh privacy


concerns over tech groups’ data use


opportunity to clarify Cobham’s activi-
ties in the context of UK national secu-
rity and to assuage the concerns that
have been expressed by certain share-
holders and via the media.”
The company’s shares were trading
down 1 per cent at 159p after the news,
compared with Advent’s offer of 165p.
Advent said it was “committed to
being a responsible steward of Cobham,
encouraging its future growth and
success”.
The group said it would “continue to
engage constructively and co -
operatively with the UK government in
this part of their review”.
Lex age 12p

Cobham, wrote to the government ask-
ing ministers to intercede. Lady Cob-
hamsaid she was “delighted” that the
government had “listened to the wide-
spread concerns about this takeover
offer and the risk it poses to high-tech
jobs and our national security”.
David Lockwood, chief executive, has
rejected any threat to Britain’s interests
from the deal. Cobham employs 10,
people around the world, of which 1,
are in the UK. It generates more than 50
per cent of its revenues in the US.
“We don’t see a national interest issue
and we don’tsee a job threat to the oper-
ating assets of the company,” he said this
month. Cobham said: “We welcome the

nology is used on all western fast jets
and it is a key components supplier for
the F-35 fighter and to the US military’s
electronic warfare and radar capability.
The UK move comes just days after
shareholders in the FTSE 250 group
overwhelmingly backed the all-cash
offer fromAdvent nternational, withI
more than 93 per cent voting in favour
on a turnout of 78.5 per cent.
It follows a campaign by the founding
family of Cobham — which owns 1.5 per
cent of the company — claiming the
takeover was against the “national
interest”.Nadine Cobham, whose hus-
bandMichael Cobham an the groupr
and who was the son of its founder,Alan

SY LV I A P F E I F E R A N D J I M P I C K A R D
LONDON


The British government has made a rare
intervention in a takeover, questioning
the £4bn purchase ofCobham, the aero-
space and defence group, by a US pri-
vate equity firm, over whether there are
national security concerns.
Andrea Leadsom, business secretary,
said that after advice from the defence
secretary and others, she had decided to
issue an “intervention notice on the
grounds of national security”. The Com-
petition and Markets Authority, the UK
regulator, willreview the transaction
and report back to her by October 29.
Cobham’sair-to-air refuelling tech-


UK to review US move for Cobham


3 State intervention over security fears 3 Defence group’s shareholders back Advent deal


The newLord of the Rings elevisiont
series will be made in New Zealand after
the South Pacific nation saw off
competition from Scotland to win a
lucrative deal from Amazon Studios.
New Zealand has built a multibillion-
dollar movie and tourism industry on
the adventures featuring hobbits,
wizards and orcs after local director
Peter Jackson made six films based on
the JRR Tolkien novels in the country.
TheAmazon eries, which will explores
storylines precedingThe Fellowship of the
Ring —the first of the three epic novels
on which theLord of the Rings ilms weref
based — is expected to be among the
most expensive ever produced and
support thousands of jobs.
“We knew we needed to find
somewhere majestic, with pristine
coasts, forests, and mountains, that is
also home to world-class sets, studios,
and highly skilled and experienced
craftspeople and other staff,” said JD
Payne and Patrick McKay, executive
producers of the Amazon production.
The deal with Amazon is a significant
win for New Zealand’s screen industry,
whose revenues fell 8 per cent to
NZ$3.3bn ($2.1bn) in 2018 compared
with a year earlier.
Jamie Smyth and Mure Dickie

Holding the ring


New Zealand wins


Tolkien TV series


‘We don’t
see a

national
interest

issue and
we don’t

see a job
threat’

David Lockwood

Companies / Sectors / People


Companies
3D Robotics................................................. 12
AHL................................................................... 9
Adobe............................................................. 22
Advent......................................................12,
Airbnb............................................................. 15
Airbus Defence and Space................ 17
Airfare............................................................. 12
Akbank........................................................... 17
Alibaba.....................................................11,
Altria............................................................... 22
Amazon...............................................12,13,
Appier............................................................ 22
Apple....................................................11,14,
Aspect Capital............................................. 9
BAE Systems.............................................. 12
Bain.................................................................. 21
Bank of China............................................ 21
Beijing Kunlun............................................. 4
Boeing............................................................ 17
British Airways.......................................... 17
Broadcom....................................................... 4
Burberry....................................................... 22
CBS................................................................... 15
CDW................................................................ 22
CLSA................................................................ 12
Canyon Bridge Capital Partners......
China Bohai................................................. 21
Chrysler.......................................................... 11
Citic Securities........................................... 12
Co-op.............................................................. 16
Cobham....................................................12,
DJI..................................................................... 12


Deposit Solutions.................................... 14
Deutsche Bank....................................14,
EDF.................................................................. 14
Eutelsat.......................................................... 17
Facebook............................................11,13,
FedEx..................................................12,14,
Framatome.................................................. 14
GFG Alliance............................................... 21
GKN.................................................................. 12
Gap.................................................................... 11
Garanti Bank.............................................. 17
General Electric......................................... 11
Global Payments..................................... 22
Goldman Sachs....................................12,
Google...........................................13,15,16,
Greencore Group..................................... 16
Greensill Capital....................................... 21
Greenwich Associates........................... 21
Hermès.......................................................... 22
Highgate....................................................... 15
Hilton Worldwide..................................... 15
Honda.............................................................. 4
Hooters.......................................................... 15
Huawei........................................................... 16
IAG.................................................................... 17
ICBC................................................................. 21
IWG................................................................... 11
InfraBuild...................................................... 21
Inmarsat........................................................ 17
Ipsos................................................................ 22
J Crew............................................................. 11
JD.com........................................................... 22
JPMorgan................................................11,

Kepos Capital.............................................. 9
Kering............................................................. 22
Keywords..................................................... 22
Kingfisher.................................................... 22
LG...................................................................... 13
LVMH............................................................. 22
Lattice Semiconductor........................... 4
Lazard............................................................ 16
Lyft................................................................... 11
Man Group.................................................... 9
Marks and Spencer................................ 16
Marriott International........................... 15
Maruti Suzuki.............................................. 4
McKinsey...................................................... 21
Meituan......................................................... 22
Meituan Dianping................................... 22
Melrose.......................................................... 12
Microsoft............................................11,13,
Mizuho............................................................ 15
Moelis............................................................. 16
Moncler....................................................12,
Morgan Stanley........................................ 21
N26................................................................... 14
Netflix............................................................. 13
Nomura.......................................................... 15
Orsted............................................................ 16
Oyo................................................................... 15
Peloton........................................................... 11
Philip Morris............................................... 22
Prada................................................................. 7
Pret A Manger.......................................... 16
PrivatBank................................................... 14
Qualcomm...................................................... 4

Quanta........................................................... 22
Renaissance Technologies.................. 9
Reynolds....................................................... 16
Richemont..............................................12,
Roku................................................................ 15
Royal Mail.................................................... 22
SEAS-NVE.................................................... 16
Samsung....................................................... 13
Saudi Aramco............................................ 16
Sequoia Capital........................................ 22
Sirius Minerals.......................................... 22
SkyBridge Capital..................................... 9
SoftBank.............................................11,15,
Spotify......................................................13,
Swatch............................................................ 12
Swire................................................................ 12
TNT Express.............................................. 12
TSMC.............................................................. 22
Temasek....................................................... 22
Tencent......................................................... 22
Thales............................................................. 17
Tiffany............................................................ 12
Total System Services......................... 22
UPS.............................................................12,
Uber...........................................................11,
Vision Fund......................................11,15,
WeWork..............................................11,15,
Weir Group................................................. 22
White Oak.................................................... 21
Winton Group.............................................. 9
Yapi Kredi.................................................... 17
Zipline............................................................. 12
Sectors
Aerospace & Defence................12,13,

Airlines........................................................... 17
Automobiles................................................. 4
Banks...................................................14,17,
Energy......................................................14,
Financials......................9,11,12,15,16,21,
Food & Beverage.................................... 16
Industrial Goods....................................... 21
Media.............................................................. 13
Oil & Gas...................................................... 16
Property........................................................ 22
Retail............................................................... 12
Support Services...........................11,12,
Technology......................11,12,15,16,17,
Telecoms.................................................16,
Travel & Leisure...................................... 15
Utilities.....................................................14,
People
Adam, Mike................................................... 9
Agarwal, Ritesh......................................... 15
Beckham, Victoria..................................... 7
Bosworth, Andrew.................................. 15
Carere, Brie................................................. 14
Carhart, Mark............................................... 9
Christou, Pano........................................... 16
Cobham, Alan.......................................12,
Cobham, Michael...................................... 13
Cobham, Nadine....................................... 13
Cook, Tim...................................................... 11
Coveney, Patrick...................................... 16
Dimon, Jamie.............................................. 11
Drexler, Mickey.......................................... 11
Foley, John................................................... 11
Galle, Jean-Loïc........................................ 17
Gates, Bill................................................10,

Gates, Melinda........................................... 11
Greensill, Lex.............................................. 21
Gupta, Sanjeev.......................................... 21
Harding, David............................................ 9
Hu, Ken.......................................................... 16
Iacocca, Lee................................................. 11
Jobs, Steve................................................... 11
Kalanick, Travis......................................... 11
Kolomoisky, Igor................................14,
Lockwood, David..................................... 13
Lueck, Marty................................................ 9
Ma, Jack......................................................... 11
Nadella, Satya............................................ 11
Nasr, Jean-Marc....................................... 17
Nasser, Amin........................................16,
Neumann, Adam....................................... 11
Poulsen, Henrik........................................ 16
Prada, Miuccia............................................. 7
Rattray, Sandy............................................ 9
Ren, Zhengfei............................................ 16
Rohr, Karl von........................................... 17
Ruffini, Remo.............................................. 12
Rumayyan, Yasir...................................... 16
Sewing, Christian..................................... 17
Simons, Jim................................................... 9
Smith, Brad................................................. 14
Smith, Fred.................................................. 14
Solomon, David......................................... 21
Son, Masayoshi.......................................... 11
Strongin, Steve......................................... 21
Todd, Anthony............................................ 9
Welch, Jack.................................................. 11

New dimensionThe satellite space race


targeting your mobile phone— ANALYSIS, PAGE 17


Crunch timeKiev bank scandal tests


Ukraine’s new president— INSIDE EUROPE, PAGE 14


Katie


Martin


Tail


Risk


The frenzied rush for bonds last month is increasingly
being viewed as an outbreak of summer madness.
The scale of the thirst for super-safe assets is by now well
known. Over just a few weeks, funds hurried into govern-
ment debt at such a pace that at the peak, some$17tn fo
bonds around the world carried a negative yield — around
one-third of the global total. Benchmark yields including
those on German Bunds and long-term US Treasuries
broke records at an alarming pace.
Butthe pullback as proven to be just as violent. The glo-h
bal bond market has lost $1tn in value in 10 days, sparking
familiar talk about whether a three-decade run of gains for
fixed-income assets is coming to an end. The reversal ash
left market participants reeling. “Holy whipsaw, Batman!”
is how Peter Tchir, t Academy Securities put it.a
The August rally, he argues, wasa blip, fuelled in part by
unusually troublesome market conditions, with large gaps
in pricing: “I think the lack of liquidity accentuated the
price action, which then had even more influence than it
should have on investor sen-
timent and opinions.”
Buying was indiscrimi-
nate, he added, exacerbated
by index funds. “Natural sell-
ers had given up and took the
rest of the summer off in
front of the freight train of
buying.”
Hindsight is a wonderful
thing in financial markets
but this is a common assessment. August was a period of
“capitulation” by bond bears, said Steven Bell,at BMO
Asset Management in London. Non-believers threw in the
towel, overwhelmed by talk of how and when US bond
yields might hit zero. “There was a flood of money,” he
said, from hedge funds, trend-following computer-driven
accounts and others, on top of natural long-term buyers.
Inevitably, this quickly exhausted itself. Those latecomers
will now be feeling the pain.
In addition, several of the more pressing reasons to be
miserable have subsided, sucking some of the enthusiasm
out of the bond market. Meanwhile, the more aggressive
talk over trade relations between the US and China has
moderated, and economic data releases, while not neces-
sarily rosy, are at least better than expected. “It may not be
‘good’, but expectations may have gotten so bad, that there
is upside to economic data across the globe,” said Mr Tchir.
Taken together, this points to a pause, but not a reversal,
in the multi-decade rally in fixed income. The market still
has room to climb but probably not at the same rapid pace.
As UBS’s global strategy team notes, it would take, among
other things, a complete resolution of US-China trade talks
and asplurge f fiscal easing from Germany to reallyo
undermine the long-term case for buying safe assets.
Holding one’s breath in anticipation of these outcomes
seems unwise.

katie.martin@ft.com

The fixed-income


market still has
room to climb

but probably
not at the same

rapid pace


Pierre Vinet/New Line/Saul Zaentz
Free download pdf