Financial Times UK 30Jan2020

World Markets

STOCK MARKETS

Jan 29 prev %chg

S&P 500 3286.93 3276.24 0.

Nasdaq Composite 9299.59 9269.68 0.

Dow Jones Ind 28847.06 28722.85 0.

FTSEurofirst 300 1639.11 1632.63 0.

Euro Stoxx 50 3737.31 3719.22 0.

FTSE 100 7483.57 7480.69 0.

FTSE All-Share 4157.33 4154.59 0.

CAC 40 5954.89 5925.82 0.

Xetra Dax 13345.00 13323.69 0.

Nikkei 23379.40 23215.71 0.

Hang Seng 27160.63 27949.64 -2.

MSCI World $ 2372.52 2356.09 0.

MSCI EM $ 1101.72 1102.98 -0.

MSCI ACWI $ 567.40 564.02 0.

CURRENCIES

Jan 29 prev

$ per € 1.100 1.

$ per £ 1.300 1.

£ per € 0.846 0.

¥ per $ 109.180 109.

¥ per £ 141.956 141.

SFr per € 1.072 1.

€ per $ 0.909 0.

Jan 29 prev

£ per $ 0.769 0.

€ per £ 1.182 1.

¥ per € 120.082 120.

£ index 80.324 80.

SFr per £ 1.268 1.

COMMODITIES

Jan 29 prev %chg

Oil WTI $ 53.30 53.48 -0.

Oil Brent $ 59.78 59.51 0.

Gold $ 1574.00 1580.10 -0.

INTEREST RATES

price yield chg

US Gov 10 yr 1.61 -0.

UK Gov 10 yr 0.54 -0.

Ger Gov 10 yr -0.38 -0.

Jpn Gov 10 yr -0.04 0.

US Gov 30 yr 113.64 2.07 -0.

Ger Gov 2 yr 105.87 -0.64 -0.

price prev chg

Fed Funds Eff 1.55 1.55 0.

US 3m Bills 1.57 1.55 0.

Euro Libor 3m -0.42 -0.43 0.

UK 3m 0.69 0.69 0.

Prices are latest for edition Data provided by Morningstar

F TR E P O RT E R S

Businesses have scrambled to evacuate

staff and close down operations in

China as fears rise that the mounting

costs of the coronavirus crisis will hurt

the global economy.

Economists warned that China’s eco-

nomic growth could halve in the first

quarter, after the outbreak forced air-

lines to cancel routes into the country

and tech groups and carmakers to close

factories.

British Airwaysbecame the first big

globalcarriertosuspenddirectflightsto

and from mainland China, a move fol-

lowed by Germany’sLufthansatogether

with its unitsSwiss AirandAustrian

Airlines. Many regional airlines have

already reduced or closed routes.Star-

bucksclosed almost half its 4,300 out-

lets in China, while hundreds ofMcDon-

ald’srestaurants and dozens ofH&M

andUniqlostoreshavealsoclosed.

Officials said that the death toll from

the outbreak had risen to 132, with con-

firmed cases in the country climbing to

5,974. World Health Organisation

experts will meet tomorrow to consider

declaringaninternationalemergency.

“Theeconomicpainiscurrentlybeing

felt by businesses dependent on travel

and tourism both in China and in neigh-

bouring countries that normally see a

boom in Chinese visitors at this time of

year,” said Mark Williams, chief Asia

economist at Capital Economics, which

estimates China’s growth rate could

halveinthefirstquarter.

Zhang Ming, an economist at govern-

ment-backed think-tank the Chinese

Academy of Social Sciences, warned the

virus could push China’s economic

growth below 5 per cent a year in the

first quarter. Jim O’Neill, former econo-

mist at Goldman Sachs, said the crisis

“could not have come at a worse time.

Just as China appeared to be stabilising

from its slowdown, this has caused a

major dilemma not just for authorities

there but also countries linked to China

—notleastGermany.”

Evacuations of foreign nationals from

the central Chinese city of Wuhan, the

heartoftheoutbreakinHubeiprovince,

have started. Japanese and US flights

weresettodepartthismorning.

Shares in BA parentIAGhave fallen

more than 10 per cent since mid-Janu-

ary, while European rivalsAir France-

KLMand Lufthansa have also been hit.

CathayPacifichashalvedthenumberof

flightstoandfrommainlandChina.

Virus spreads faster than Sarspage 6

Lexpage 12

Markets reportspages 25 & 26

Global businesses shut operations in

China as coronavirus death toll mounts

The unlikely star of Apple’s record

earnings this week was its iPhone 11.

Defying expectations of a slow start,

the phone’s winter holiday sales rose

8 per cent from a year ago, accounting

for 61 per cent of Apple’s first-quarter

revenues. The growth is likely to build

support for Apple’s new pricing plan. It

cut the starting price by $50 — a move

designed to lure more users into an

ecosystem of high-margin services.

ReportiPAGE 16

LexiPAGE 12

Success of new iPhone

supports Apple price plan

THURSDAY 30 JANUARY 2020

Briefing

iUS Fed keeps rates on hold

The Federal Reserve kept its benchmark rate

steady and signalled that policy would stay on hold

for the time being as the US enters a presidential

election year.— PAGE 6; MEGAN GREENE, PAGE 11

iBoeing’s Max crisis costs soar to $19bn

Boeinghasmorethandoubledthecostcausedbythe

737Maxcrisisto$18.6bn,accountingforpayments

toairlines,reducedprofitsovertheplane’soutput

andexpensestiedtohaltingmanufacturing.— PAGE 13

iOvo fined 8.9m for five years of errors

EnergysupplierOvoistopay

£8.9minfinesafterOfgem,

reprimandeditforgivingout

“inaccurate”or“incomplete”

informationoverfiveyears.—

REPORT & LOMBARD, PAGE 19

iPompeo calls for UK rethink on Huawei

MikePompeo,USsecretaryofstate,hasurgedBoris

JohnsontorethinkhisdecisiontoletHuaweihelp

developBritain’s5Gmobilephonenetworks,ashe

arrivedintheUK.— PAGE 2; EU UNVEILS 5G PLAN, PAGE 4

iRetail property group suffers debt blow

ShoppingcentreownerIntu,whichhasalmost£5bn

ofnetdebt,facesanewsetbackaftertheplunging

valueofoneofitsflagshippropertiestriggereda

covenantinitslargestbond.— PAGE 13

iKyiv welcomes Putin ally’s promotion

UkrainehasgreetedVladimirPutin’spromotionof

DmitryKozak,akeyfiguredrivingpeacetalks,asa

signalofrenewedwillingnesstoresolveasix-year

conflictthathasclaimed14,000lives.— PAGE 6

iTorra calls snap Catalan election

Spain’sCataloniaregionistoholdearlyelectionsin

anattemptbyQuimTorra,itsleader,toendmonths

ofdeadlockamidtensioninhiscoalitionandcourt

rulingsthathaveputhisfutureindoubt.— PAGE 4

Datawatch

UK £2.90 Channel Islands £3.20; Republic of Ireland €3.

© THE FINANCIAL TIMES LTD 2020
No: 40,310★

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Home ownership

is much more

common in Spain

and Italy than it is

in Switzerland and

the Netherlands,

where the

majority rent.

Fewer than

10 per cent of

households in

these countries

own their homes

outright.

A place to call home

 of households by tenure, 

    

Switzerland

Germany

Netherlands

Sweden

France

US

UK

OECD

Italy

Spain

Own outright Own with

Rent/Other mortgage

Source: OECD

J I M P I C K A R D, G E O R G E PA R K E R
A N D G I L L P L I M M E R

Sajid Javid will today throw his support
behind the controversial £88bn High
Speed 2 rail scheme, in a decisive inter-
vention that makes it almost certain the
projectwillgoahead.
The chancellor of the exchequer has
pored over Treasury analysis of the
project in recent weeks and will argue at
acrunchmeetinginDowningStreetthat
HS2 remains an essential part of the
government’s mission to boost the mid-
landsandnorthofEngland.
Prime Minister Boris Johnson, who
has already said that his “instinct” is to
proceed with the project, now has the
backingoftheTreasury—providedHS
is subject to new savings from its spiral-
ling budget, say officials. Mr Johnson is

holding talks with Mr Javid and trans-

port secretary Grant Shapps with an

announcement expected within days

over whether to move forward with the

contentiousproject.

Although some officials insisted that

the final decision would not be made at

the meeting others said it that it would

ineffectdecidethefateoftheproject.

Mr Javid has been depicted in recent

daysasoneofthemorescepticalcabinet

ministers about the scheme, not least

after the Financial Times revealed that

an official review had suggested that the

budgetcouldriseashighas£106bn.

But one ally said that the chancellor

had decided to support HS2 after con-

cluding that the possible alternatives

didnotstackup.

“The chancellor, having looked at the

numbers and strategic alternatives

going into the meeting, is supportive of

HS2,”thepersonsaid.

“He’s looked closely at this in recent

weeks, given the increase in the budget.

But he will go into the meeting in a sup-

portivemood.”

Government insiders said that the

economiccasemarginallyfavouredpro-

ceeding with the project, subject to con-

trolsonfuturecostsonthenorthernsec-

tionoftheroute.

Mr Johnson has a long record of sup-

porting big infrastructure projects, even

though some of his senior advisers,

including Dominic Cummings and

Andrew Gilligan, have been big critics of

thehigh-speedline.

Mr Johnson, Mr Javid and Mr Shapps

will discuss whether the northern

“Y-shaped” part of HS2 to Manchester

and Leeds should be subject to further

review later in the project to ensure

valueformoney.

The review of the project by former

chairman Douglas Oakervee, commis-

sioned by Mr Johnson, recommended

having14trainsperhourinsteadof18.

Meanwhile, the chief executive of

Network Rail has warned in a letter to

Mr Shapps that plans to upgrade the

northern rail network would be £15bn

more expensive without HS2, according

toaleakedletter.

Mr Johnson, who has modelled him-

self as a champion of northern voters

and big infrastructure schemes, fears

the political consequences of cancelling

HS2—despitethespirallingcosts.

Rail franchisespage 3

HS2 future clearer as Javid throws

support behind £88bn rail project

3 Crunch meeting at No 10 3 Scheme has Treasury backing 3 Alternatives fail to stack up

Sajid Javid, the

chancellor, had

previously been

sceptical of the

controversial

plan but is said

to have changed

his stance

NEWS PROVIDER OF THE YEAR

Left behind

Germany fears the future as Apple’s

value tops the Dax 30— BIG READ, PAGE 9

White-collar crime

Why executives must be held to

account— BROOKE MASTERS, PAGE 11

Trade Secrets

Coping with sanctions, Trump’s

chief weapon— SPECIAL REPORT

US peace plan

Arab disunity

over Palestine

A Palestinian demonstrator in the Jor-
dan Valley in the Israeli-occupied West
Bank argues with an Israel soldier dur-
ing a protest yesterday against Donald
Trump’sMiddleEastpeaceplan.
Palestinians voiced anger over the US
president’s plan, which fell far short of
their minimum demands and paved the
wayforIsraeltoannexmorePalestinian
territory,includingtheJordanValley.
But there was a muted response from
Arab states that historically back the
Palestinians. Egypt, Saudi Arabia and
theUAE,allTrumpallies,praisedWash-
ington’s efforts and called for dialogue.
The strongest response came from Jor-
dan which warned of “dangerous conse-
quences”offurtherannexation.
Conflict fatiguepage 5
Editorial Commentpage 10
Raneen Sawafta/Reuters