Financial Times Europe 04Mar2020

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Briefing

i rban ally takes Slovenia premiershipO

Centre-right, anti-immigrant politician Janez Jansa

has been confirmed as prime minister. He said he

would push through a version of health reforms

planned by his centre-left predecessor.— PAGE 2

i outh Africa falls back into recessionS

Severe rolling blackouts have plunged the economy

into recession for the second time in two years and

piled pressure on President Cyril Ramaphosa,

whose vow of a “new dawn” has flagged.— PAGE 4

i ifa club contest overplayed, says officialF

Alejandro Domínguez, head of South American

football’s governing body, has warned that Fifa has

exaggerated the financial potential of the revamped

tournament starting next year.— PAGE 11; LEX, PAGE 10

i yprus warns EU over refugee ‘disaster’C

President Nicos Anastasiades

has told the FT the bloc must

stand up to the “blackmail”

vow by Turkey’s Recep Tayyip

Erdogan to “open the gates” to

refugees.— PAGE 4

i orway fund steps up board grillingsN

The $1.1tn oil fund’s responsible investment report

has revealed meetings with Amazon about human

rights, with Citigroup about anti-money laundering

systems and Microsoft about top pay.— PAGE 14

i hevron hands back $80bn to investorsC

The second-biggest US oil group has outlined plans

to hand out up to $80bn over the next five years,

promising solid cash payouts and share buybacks in

an industry plagued by poor returns.— PAGE 14

i S charges Chinese over Kim arms bidU

Two Chinese nationals have been charged with

laundering $100m of virtual currency linked to a

North Korean hacking operation that is believed to

fund Pyongyang’s weapons programme.— PAGE 4

Datawatch

Merkel must go

Only a new leader can move

Germany forward—TONY BARBER, PAGE 9

WEDNESDAY4 MARCH 2020 WORLD BUSINESS NEWSPAPER EUROPE

World Markets

STOCK MARKETS

Mar 3 prev %chg

S&P 500 3073.25 3090.23 -0.

Nasdaq Composite 8904.45 8952.17 -0.

Dow Jones Ind 26475.34 26703.32 -0.

FTSEurofirst 300 1487.26 1469.19 1.

Euro Stoxx 50 3354.92 3338.83 0.

FTSE 100 6718.20 6654.89 0.

FTSE All-Share 3749.09 3706.83 1.

CAC 40 5393.17 5333.51 1.

Xetra Dax 11985.39 11857.87 1.

Nikkei 21082.73 21344.08 -1.

Hang Seng 26284.82 26291.68 -0.

MSCI World $ 2212.38 2141.12 3.

MSCI EM $ 1017.03 1005.52 1.

MSCI ACWI $ 528.45 512.76 3.

CURRENCIES

Mar 3 prev

$ per € 1.118 1.

$ per £ 1.282 1.

£ per € 0.872 0.

¥ per $ 107.555 107.

¥ per £ 137.854 137.

SFr per € 1.068 1.

€ per $ 0.895 0.

Mar 3 prev

£ per $ 0.780 0.

€ per £ 1.147 1.

¥ per € 120.226 120.

£ index 78.584 79.

SFr per £ 1.225 1.

COMMODITIES

Mar 3 prev %chg

Oil WTI $ 47.43 46.75 1.

Oil Brent $ 52.31 51.90 0.

Gold $ 1599.65 1609.85 -0.

INTEREST RATES

price yield chg

US Gov 10 yr 1.04 -0.

UK Gov 10 yr 0.39 -0.

Ger Gov 10 yr 106.33 -0.63 0.

Jpn Gov 10 yr -0.12 0.

US Gov 30 yr 124.21 1.64 0.

Ger Gov 2 yr 105.94 -0.83 0.

price prev chg

Fed Funds Eff 1.58 1.55 0.

US 3m Bills 1.13 1.27 -0.

Euro Libor 3m -0.49 -0.47 -0.

UK 3m 0.60 0.67 -0.

Prices are latest for edition Data provided by Morningstar

M E H U L S R I VA STAVA— TEL AVIV

Benjamin Netanyahu, Israel’s longest-

serving prime minister, has beaten

rival Benny Gantz at the ballot box and

delivered his rightwing Likud party its

highest share of the vote since 2003.

With most of the ballots counted in the

third election in 12 months, Mr Netan-

yahu declared victory over former

military chief Mr Gantz, claiming a total

of 58 seats for Likud and its allied right-

wing parties. Likud alone had won 35

seats so far, three more than Mr Gantz’s

neophyte Blue and White alliance.

The results mark another remarkable

turnround for Mr Netanyahu, who was

indicted on corruption charges in Janu-

ary. But they are not enough to propel

him straight to a record fifth premier-

ship or to end the political deadlock that

has sent Israelis to the polls three times

in less than a year. For that, he needs a

coalition commanding at least 61 seats

in the 120 member Knesset.

TheLikud leader was closer to the

required majority in April 2019, when

his rightwing bloc won 60 seats. Back

then his efforts to build a governing coa-

lition collapsed over concern from some

allies that his rightwing government

would be beholden to the demands of

the ultraorthodox rabbis in a potential

coalition.

Ten months later that issue remains

unresolved but Mr Netanyahu is pro-

ceeding as if his route to a new premier-

ship is assured. He declared victory

before all the votes were counted, has

promised to form a government before

he has delivered the necessary majority,

and framed his victory as a referendum

on the credibility of the criminal

charges against him, which he denies.

“They said the age of Netanyahu is

over,” he told cheering supporters in Tel

Aviv in the early hours of yesterday

morning. “This is a night of a great vic-

tory, even sweeter because they had

already written my eulogy.”

Mr Netanyahu has not allowed his

corruption trial,due to start on March

17, to dent his celebrations but it could

derail his plans. An anti-corruption

watchdog petitioned the High Court

immediately after Mr Netanyahu

declared victory, to rule on whethera

person indicted for serious crimes

should be allowed to form a government

or be sworn in as prime minister.

President Reuven Rivlin, who failed

to deliver a unity government in Sep-

tember, will decide within days who to

ask first to form a government. With the

numbers on his side, Mr Netanyahu is

the likely pick.

Netanyahu defies corruption trial and

political ‘eulogies’ with election victory

© THE FINANCIAL TIMES LTD 2020

No: 40,339★

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

AnalysisiPAGE 2

Surge in infections casts

doubt over Iran leadership

Austria €3.90 Malta €3.
Bahrain Din1.8 Morocco Dh
Belgium €3.90 Netherlands €3.
Bulgaria Lev7.50 Norway NKr
Croatia Kn29 Oman OR1.
Cyprus €3.70 Pakistan Rupee
Czech Rep Kc105 Poland Zl 20
Denmark DKr38 Portugal €3.
Egypt E£45 Qatar QR
Finland €4.70 Romania Ron
France €3.90 Russia €5.
Germany €3.90 Serbia NewD
Gibraltar £2.90 Slovak Rep €3.
Greece €3.70 Slovenia €3.
Hungary Ft1200 Spain €3.
India Rup220 Sweden SKr
Italy €3.70 Switzerland SFr6.
Latvia €6.99 Tunisia Din7.
Lithuania €4.30 Turkey TL
Luxembourg €3.90 UAE Dh20.
North Macedonia Den

The coronavirus

outbreak has

further disrupted

the global outlook.

Uncertainty was

already at a record

high at the end of

last year, largely

due to tensions

including the US

trade war with

China and Britain’s

exit from the EU

In the balance

World Uncertainty Index



    

Iraq war and Sars outbreak

EU debt crisis

US-China trade war

Source: IMF

Lavatory larceny

Panic buying loo roll is a sign of

Japan’s times— NOTEBOOK,PAGE 8

Turkish dilemma

Why Erdogan needs Putin’s help in

Syria —GLOBAL INSIGHT,PAGE 4

B R E N DA N G R E E L E Y— WASHINGTON
C O L BY S M I T H— NEW YORK
C H R I S G I L E S —LONDON

The Federal Reserve took charge of the
global response to coronavirus yester-
day, cutting its main policy rate by half a
percentage point in response to what
the Group of Seven leading nations
called the “downside risks” from the
spread of the disease.
In a unanimous statement,its Open
Market Committee declared “the fun-
damentals of the US economy remain
strong” butthat the virus “poses evolv-
ing risks to economic activity”.
The Fed’s sudden move — its first
emergency rate cut since the peak of the
global financial crisis — came after G
finance ministers and central bank gov-
ernors pledged touse “all appropriate
policy tools” to maintain the economic
health of the advanced world.
While the Australian and Malaysian
central banks also cut their mainrates
to stave off recession, others have been
slower to respond. Confirmed cases glo-
ballyrose to 92,313, with3,124 deaths.
The European Central Bankwas orem
cautious, while Mark Carney,Bank of
England governor, suggesteddifferent
countries would take a domestically tai-
lored approach rather than the big bang
co-ordination of thefinancial crisis.
“Across jurisdictions there’ll be some
differences in the exact form and timing
of those measures,” Mr Carney said.
The Fed’s rate-setting committee re-
iterated last week’s comments that it
would “closely monitor” developments
and would continue to “act as appropri-
ate to support the economy”.
Chair Jay Powell said the Fed had
already seen effects from the virus on
sentiment forecasts for the travel and
hotels industry, and on manufacturers
that depend on foreign supply chains.
“The effects are at a very early stage,”
he cautioned. “I don’t think anybody
knows how long it will be.”
Stocks gyrated immediately after the
Fed move o cut its policy rate by 50t

basis points to a range of 1 to 1.25 per

cent. Following Mr Powell’s remarks,

the S&P 500 fell 1.3 per cent, and Nas-

daq was down 1.1 per cent.

Treasuries rallied, with the yield on

the policy-sensitive two-year note fall-

ing 16 basis points to 0.74 per cent, and

the10-year yield alling below 1 per centf

for the first time, to a record 0.999 per

cent. Yields fall when prices rise.

Bank of America, considered the most

rate-sensitive of the big US banks, fell

5 per cent, whileless diversified lenders

fared worse: technology lender Silicon

Valley Bank fell 7.2 per cent.

“Given the Fed has little firepower

left, they went early,” said Alicia Levine,

at BNY Mellon Investment Management.

“The cuts will stabilise sentiment.”

Donald Trump, who has made a

strong economythecornerstone of his

re-election campaign, had beenraising

pressure on the Fed to cut interest rates

in recent days as stocks slumped. After

the Fed’s announcement, he tweeted:

“The Federal Reserve is cutting but

must further ease and, most impor-

tantly, come into line with other coun-

tries/competitors. We are not playing on

a level field. Not fair to USA. It is finally

time for the Federal Reserve to LEAD.

More easing and cutting!”

teven Mnuchin, US Treasury secre-S

tary,said: “I think they did the right

thing getting ahead of this.”

Report & Analysis age 3p

Ian Goldinpage 9

Thermo Fisher move age 11p

Amazon price-gouging age 12p

Airbus hit age 13p

Markets age 19p

Mounting coronavirus worries

push Fed into emergency action

3 Half-point rate cut 3 G7 vow to use ‘all appropriate tools’ 3 Stocks volatile after move

Federal funds target rate

Per cent

    

First rate rise

in nine years

Coronavirus

fears prompt

emergency cut

Source: Refinitiv













A person passes the

New York Stock

Exchange yesterday

Photo: Justin Lane/EPA

Monetary policy cannot

address the supply shock of

ill people being unable to

travel or work. The Fed

must be careful not to look

as if it is led by markets

“

Editorial

Comment

Page 8

MARCH 4 2020 Section:FrontBack Time: 3/3/2020- 19:14 User:simon.roberts Page Name:1FRONT USA, Part,Page,Edition:EUR, 1, 1