Financial Times Europe - 12.09.2019

Thursday12 September 2019 ★ 11

The Financial Times Limited 2019© Week 37

Apple’s product event underwhelmed

on the hardware front, but confirmed

its resolve to boost services, from

music to movies and streaming TV, to

ensure that users stick with its iPhone

and lure new people to its ecosystem.

AnalysisiPAGE 12

Lexi AGE 10P

Apple prices iPhone to

put premium on services

J O S E P H C OT T E R I L L— JOHANNESBURG

Naspers reated a €120bn Europeanc

tech giantyesterday as shares in a

Dutch listing of itsinternet assets,

including a significant stake in China’s

Tencent,soaredondebut.

Prosus, a company that will house the

South African group’s 31 per cent share-

holding in Tencent among other invest-

ments, opened on the Amsterdam

bourseat €76 a share, versus a reference

price of €58.70. The shares closed at

€74.19, up more than 26 per cent.

The move gives Prosus a value slightly

higher than that of its Tencent stake,

making it Europe’s largest consumer

internet company and tackling a valua-

tion quandary for Naspers. It had sought

the listing, in which it retains about 73

per cent of Prosus, to attract interna-

tional investors and reduce a large dis-

count in its shares created by the sheer

size of its Tencent holding.

The valuation gap meant that share-

holders had, in effect, ascribed no worth

to a range of otherinternet businesses

that Naspers owns in markets including

India, Russia and Brazil.

Prosus will be the third-largest stock

in Amsterdam behindRoyal Dutch

Shell andUnilever, meaning that

passive investors in European indices

will automatically become significant

owners of the group’s shares.

“The listing of Prosus[gives] global

technology investors direct access to

our unique and attractive portfolio

of... internet businesses,”Bob van

Dijk, Naspers’ chief executive, said.

A 2001 bet on what was then an

unknown Chinese start-up transformed

Naspers from a former apartheid-

backing publisher into Africa’s biggest

group by market value. Over time, the

rise in Tencent’s value made Naspers

too big for the Johannesburg bourse,

where it rose to a quarter of a share-

weighted index of the top 40 companies.

Local investors were forced to sell the

shares toreduce concentration risk.

The problem threatened Naspers’

plans to addbillions of dollars of value

to its investment portfolio. “We needed

a place to attract that next $100bn of

shareholder value,” Mr van Dijk said.

Lex age 10p

South Africa’s Naspers spins off Tencent

stake to create €120bn tech giant Prosus

Aramco’s chief executive, said this week

that the IPO would take place “very

soon”. A local listing, which would side-

step legal complications and onerous

disclosure requirements, could later be

extended to an overseas listing.

Riyadh oustedKhalid al-Falih sa

chairman of Saudi Aramco and the

country’s energy minister this month

with advisers saying he was regarded as

insufficiently enthusiastic about push-

ing through the privatisation.

He was replaced by Prince Moham-

med’s close aideYasir al-Rumayyan,

head of the sovereign Public Investment

Fund, which is expected to be the main

recipient of the IPO proceeds.

of America Merrill Lynch,Citigroup,

Credit Suisse nda Goldman Sachs, are

new to the process. Saudi banks taking

part includeNational Commercial Bank

andSamba.

As many as 40 banksattended a

“beauty parade” in Saudi Aramco’s Lon-

don office this month to pitch for their

roles, managed by one of the company’s

financial advisers, Lazard.

JPMorgan, regarded as the kingdom’s

in-house global bank, is expected to be

most prominent in the process.

Officials have privately floated the

idea of listing 1 per cent of theshares on

Riyadh’s Tadawul market, with another

1 per cent next year.Amin Nasser, Saudi

Mohammed bin Salman, Saudi Arabia’s

de facto leader, to push through his

economic transformation plan.

The world’s most profitable company

intends to launch the listing process as

early astomorrow. The plan to eventu-

ally list up to 5 per cent of Saudi Aramco

has targeted a valuation for the com-

pany of up to $2tn. Some banks are

believed to have pitched for their man-

dates at valuations of up to $2.5tn, but

industry analysts regard a range of

$1tn-$1.5tn as more realistic.

Many of the lenders, such as JPMor-

gan, Morgan Stanley andHSBC, had

been working on the process before it

stalled last year. Others, includingBank

S I M E O N K E R R— DUBAI
A R A S H M A S S O U D I— LECCE
DAV I D S H E P PA R D— LONDON

Saudi Aramco ash chosen a range of
international and local banks, led by
JPMorgan andMorgan Stanley, to
handle itspotential $2tn initial public
offering.
Advisers and bankers involved in the
IPO said that the state oil company had
started informing lenders of their man-
datesyesterday as Riyadh accelerates
theprocess with a view to a local listing
this year.
If successful, the deal would be one of
the world’s largest flotations, marking
renewed intent by Crown Prince

Aramco selects banks to run IPO

3 JPMorgan and Morgan Stanley to lead 3 Riyadh eyes $2tn float 3 Plan for local 1% listing

Zara wnero Inditex eported a 7 per centr

sales increase aftera polka-dot dress

became a summer sensation, helping the

world’s largest clothes retailer withstand

a tough retail conditions.

The Spanish group generated €12.8bn

in revenues in the first half as like-for-

like sales rose 5 per cent and gross profit

increased 7 per cent to €7.3bn.

The polka-dot dress, priced at £39.

in the UK, was so popular this summer

that it had its own Instagram account.It

became a must-have, selling out and

gaining cult status ith wearersw

embracing seeing others in the same

dressas being part of a club.

Richard Chamberlain at RBC Europe

said that positive sentiment towards the

retailer went beyond the success of a

single product. “We continue to

favour.. its strong business model,.

which is relatively integrated and

flexible. It looks attractively valued

compared to... global peers.”

Inditex has pushed into new markets,

opening online in Brazil audi Arabia,S

the United Arab Emirates and Morocco.

The company also opened physical

stores in many markets, going against

the grain as bricks-and-mortar retailers

suffer from rising costs and the shift

towards ecommerce.Sarah Provan

Top spot

Polka-dot dress

brings Zara success

As many as

40 banks

attended a

‘beauty

parade’ in

Aramco’s

London

office this

month

Companies / Sectors / People

Companies
ABN Amro.................................................... 12
Air France.................................................... 15
Alibaba.......................................................... 10
AllianceBernstein..................................... 19
Antofagasta............................................... 20
Apple.........................................................10,
Audi................................................................. 14
BMW................................................................ 14
BNP Paribas................................................ 12
BP.................................................................... 20
Baker Hughes........................................... 20
Bank of America.................................11,
Bosch.............................................................. 14
British Airways.......................................... 15
British Land............................................... 20
CME................................................................ 20
CME Group.................................................... 1
Calpers........................................................... 19
CapitaLand.................................................. 10
Centerview Partners.............................. 12
Citigroup.............................................11,12,
City Developments.................................
Credit Suisse..........................................11,
Crédit Agricole.......................................... 19
Dave & Buster’s...................................... 20

Deutsche Bank.......................................... 12

Discovery...................................................... 14

DoorDash...................................................... 12

EasyJet........................................................... 15

Entertainment One................................ 14

Estée Lauder................................................ 9

ExxonMobil................................................... 9

Formula E.................................................... 14

GPIF.................................................................. 11

Gamestop.................................................... 20

General Electric....................................... 20

Gerry Gallagher........................................ 12

Goldman Sachs....................................11,

HSBC..........................................................11,

Hain Celestial............................................ 14

Hasbro........................................................... 14

Heineken...................................................... 14

Honda............................................................. 14

Hong Kong Exchanges...1,10,12,13,

Hyundai......................................................... 14

IIFL................................................................... 14

IL&FS.............................................................. 14

Inditex......................................................11,

Intercontinental Exchange............1,

International Airlines Group............. 15

JPMorgan...........................................11,12,

Jaguar............................................................ 14

Jeffrey Epstein.......................................... 14

Just Eat......................................................... 10

Kaz Minerals.............................................. 20

Kone............................................................... 20

L Brands....................................................... 14

Les Wexner................................................. 14

Liberty Global........................................... 14

London Metal Exchange...............10,

London School of Economics............ 9

London Stock Ex’ge.........1,10,12,13,

Lufthansa..................................................... 15

Lyft................................................................... 12

MIT..................................................................... 9

Mahindra & Mahindra.......................... 14

Maruti Suzuki............................................ 14

Mercedes-Benz......................................... 14

Mizuho Securities.................................. 19

Morgan Stanley...................................11,

Moët & Chandon..................................... 14

Naspers....................................................10,

National Commercial Bank................. 11

Netflix.......................................................10,

Nissan............................................................. 14

Peloton.......................................................... 10

Pemex............................................................. 19

Porsche.......................................................... 14

Post Holdings............................................ 14

Prosus............................................................. 11

Refinitiv.............................................10,10,

Royal Dutch Shell..............................11,

Ryanair........................................................... 15

Samba............................................................... 1

Samsung....................................................... 10

Saudi Arabian Airlines......................... 14

Saudi Aramco............................................. 11

SoftBank....................................................... 10

SoulCycle...................................................... 10

Spotify............................................................ 12

Swire Properties...................................... 10

Tadhg Flood............................................... 12

Takeaway.com.......................................... 10

Tata Motors................................................ 14

Tencent....................................................10,

ThyssenKrupp.......................................... 20

Tilda................................................................ 14

Toyota............................................................ 14

UOL................................................................. 10

Uber................................................................. 12

Unilever.......................................................... 11

United Rentals......................................... 20

Vestas Wind Systems.......................... 20

Victoria’s Secret....................................... 14

Virgin Atlantic........................................... 15

Weetabix....................................................... 14

Wellington Management................... 19

Zara............................................................11,

Sectors

Airlines........................................................... 15

Automobiles............................................... 14

Banks.........................................................12,

Financial Services....................................

Financials...........................1,10,12,13,19,

Food & Beverage.................................... 14

Industrial Goods...................................... 20

Industrials.............................................14,

Mining........................................................... 20

Oil & Gas...........................................11,19,

Personal & Household Goods......... 14

Pharmaceuticals....................................... 14

Property.................................................10,

Retail...................................................11,14,

Retail & Consumer................................. 14

Support Services..................................9,

Technology...........................................10,

Telecoms................................................10,

Travel & Leisure....................10,14,15,

People

Agag, Alejandro....................................... 14

Agrawal, Prabodh................................... 14

Cha, Laura.................................................... 12

Cook, Tim...............................................10,

Dijk, Bob van............................................... 11

Dimon, Jamie.............................................. 12

Epstein, Jeffrey........................................... 9

Falih, Khalid al-.......................................... 11

Foley, John.................................................. 10

Lakhani, Kinner......................................... 12

Li, Charles......................................1,10,12,

Malone, John.............................................. 14

Mizuno, Hiromichi.................................... 11

Nasser, Amin............................................... 11

Reif, Rafael.................................................... 9

Reynolds, Paul........................................... 12

Rumayyan, Yasir al-............................... 11

Schiller, Mark............................................. 14

Schwarzman, Stephen............................ 9

Schwimmer, David................................1,

Thiam, Tidjane.......................................... 12

Vitale, Robert.............................................

Wadhera, Rajan........................................ 14

Waters, Martin.......................................... 14

Car crashMotor sales slump signals

India’s stalled economy— ANALYSIS, PAGE 14

Go ViennaTaste for Austria’s 100-year

bond reveals market hunger— ANALYSIS, PAGE 19

Leo

Lewis

Tail

Risk

The attributes of a really good chief investment officer are

hard to quantify, but the Tokyo stock market may soon

provide a gauge.

The question arises from the future ofHiromichi

Mizuno, a former private equity and banking executive

who has served as the CIO of Japan’s$1.48tn overnmentg

pension investment fund (GPIF) since January 2015. His

term is due to end in a couple of weeks and GPIF officials

are typically mum on what happens next.

It is important because Mr Mizuno’simpact oes a longg

way beyond GPIF’s financial performance on his watch. He

has overseen a historic shift in the world’s biggest pension

fund away from domestic bonds and into foreign and

domestic equities, which has opened the institution to a lot

more risk than in the past.

In February, afterGPIF nnounced a recorda quarterly

loss, theinvestment philosophy came in for a lot of criti-

cism, as did Mr Mizuno as its main proponent.

But over four years the CIO has transformed GPIF into

an active — his fans might

even say activist — force for

change, not only within the

domestic market but also in

the way it has been perceived

by foreign investors.

Through front-of-house

allocation changes, he made

the fund a visible backer of

the “Abenomics” stimulus

and reform programme that

has helped drive the Nikkei 225 almost 150 per cent higher

from its levels before Shinzo Abe became prime minister.

Behind the scenes, he applied pressure for stronger

corporategovernance nd better stewardship among insti-a

tutional investors.His GPIF has also been a counter-

balance to the hugeinfluence of theKeidanren usinessb

lobby and advocated shareholder interests when those

have directly or indirectly featured in legislative debates.

The big question now is whether Mr Mizuno stays where

he is and, if he does not, whether GPIF can find someone

able to project the same sense of a country on the move.

The general assumption is that he will be given an exten-

sion. Board minutes suggest that members have not begun

a search for a replacement.

But set against that are two things. People who know

Mr Mizuno say he wants to go. Andyesterday there was a

cabinet reshuffle hich removed Hiroshige Seko not justw

as the country’s trade minister but from Mr Abe’s cabinet.

Mr Seko had been Mr Mizuno’s political bodyguard, as

GPIF elbowed its way past convention, habit and vested

interests.

So how big a hit would the market take if he leaves? Some

fund managers think there would be significant damage,

talking about a 1,000-point drop in the Nikkei. That could

be overstating it. But finding another talismanic figure like

Mr Mizuno will not be easy.

[email protected]

Hiromichi

Mizuno’s impact

goes a long way

beyond GPIF’s

financial

performance

Getty