Financial Times Europe - 13.03.2020

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Briefing

iIBM patent suit raises

doubts over Airbnb listing

The US computing group has sued

over functions such as “improved

navigation using bookmarks”, in a

move that raises uncertainty over

the short-term rental business’s

listing bid. Its is IBM’s latest salvo

against online groups.— PAGE 11

iNMC finds signs of fraud

The Mideast-focused health group

has found evidence of suspected

fraud in its finances after

revelations over undisclosed debt

on its balance sheet and doubts

over its cash position.— PAGE 14

i‘Turbulence’ guided Putin

The Kremlin has said in an

explanation of his rationale that

the Russian president backed a

move that could let him remain

president until 2036 because of

the “extreme turbulence”.— PAGE 4

iAttack raises Iran tension

Two American and one British

soldier have been killed by rocket

fire on an Iraqi base hosting US-led

forces, threatening to reignite

tensions between the White House

and Iran.— PAGE 4

iRio agrees ex-chief bonus

The mining group has agreed to

pay former chief Sam Walsh nearly

$4.5m in deferred bonus payments

despite continuing bribery probe

over a payment made in 2011 to a

French consultant.— PAGE 12

iUnizo risks investigation

The Japanese hotel chain at the

centre of an employee revolt and

a bidding war between two of the

biggest private equity groups risks

a regulatory probe over allegations

it lied to the market.— PAGE 12

Datawatch

FRIDAY 13 MARCH 2020 WORLD BUSINESS NEWSPAPER EUROPE

World Markets

STOCK MARKETS

Mar 12 prev %chg

S&P 500 2525.17 2741.38 -7.

Nasdaq Composite 7333.13 7952.05 -7.

Dow Jones Ind 21506.40 23553.22 -8.

FTSEurofirst 300 1150.90 1300.82 -11.

Euro Stoxx 50 2570.06 2905.56 -11.

FTSE 100 5237.48 5876.52 -10.

FTSE All-Share 2942.21 3287.07 -10.

CAC 40 4044.26 4610.24 -12.

Xetra Dax 9161.13 10438.68 -12.

Nikkei 18559.63 19416.06 -4.

Hang Seng 24309.07 25231.61 -3.

MSCI World $ 1972.04 2051.96 -3.

MSCI EM $ 946.62 964.55 -1.

MSCI ACWI $ 473.55 491.46 -3.

CURRENCIES

Mar 12 prev

$ per € 1.108 1.

$ per £ 1.254 1.

£ per € 0.884 0.

¥ per $ 105.680 104.

¥ per £ 132.539 135.

SFr per € 1.057 1.

€ per $ 0.902 0.

Mar 12 prev

£ per $ 0.797 0.

€ per £ 1.132 1.

¥ per € 117.110 118.

£ index 78.812 78.

SFr per £ 1.196 1.

COMMODITIES

Mar 12 prev %chg

Oil WTI $ 31.29 32.98 -5.

Oil Brent $ 33.19 35.79 -7.

Gold $ 1653.75 1655.70 -0.

INTEREST RATES

price yield chg

US Gov 10 yr 0.70 -0.

UK Gov 10 yr 0.26 -0.

Ger Gov 10 yr 107.54 -0.75 0.

Jpn Gov 10 yr -0.07 -0.

US Gov 30 yr 132.07 1.28 -0.

Ger Gov 2 yr 106.23 -0.96 0.

price prev chg

Fed Funds Eff 1.58 1.55 0.

US 3m Bills 0.42 0.44 -0.

Euro Libor 3m -0.54 -0.51 -0.

UK 3m 0.38 0.53 -0.

Prices are latest for edition Data provided by Morningstar

MARTIN ARNOLD— FRANKFURT

TOMMY STUBBINGTON— LONDON

Christine Lagarde started a bond mar-

ket sell-off yesterday as she launched a

package of measures to alleviate the

economic chaos caused by corona-

virus, saying it was not the European

Central Bank’s role to respond to move-

ments in government debt markets.

Her comments were made after the ECB

announced it would expand its quanti-

tative easing programme with €120bn

of extra bond purchases, launch a new

programme of cheap loans to banks and

make the rates on its existing bank lend-

ing scheme more favourable.

“We are not here to close spreads; this

is not the function or the mission of the

ECB,” said Ms Lagarde. “There are other

tools for that and other actors to deal

with those issues.”

She also rebuffed suggestions that she

sought to emulate the legacy of Mario

Draghi, her predecessor as ECB presi-

dent, saying that she did not seek to be

“whatever it takes, number two”.

Her remarks “came across like the

inverse of [Mr] Draghi’s ‘whatever it

takes’” moment, said Richard McGuire,

a Rabobank strategist, referring to Mr

Draghi’s famous phrase, which was

widely credited with calming the euro-

zone’s debt crisis in 2012 and bringing

down Italian and Spanish yields.

Italian sovereign bond prices fell by a

record daily amount after she spoke,

widening the spread between the yields

on Italy’s 10-year bonds and German 10-

year Bunds — a key market indicator of

concern over Italian sovereign risk — to

more than 2.6 percentage points, its

highest since June 2019.

Ms Lagarde later sought to clarify her

remarks in a television interview, say-

ing: “I am fully committed to avoid any

fragmentation in a difficult moment for

the euro area. High spreads due to the

coronavirus impair the transmission of

monetary policy.”

She added that the ECB’s latest easing

package could “be used flexibly to avoid

dislocations in bond markets, and we

are ready to use the necessary determi-

nation and strength”.

George Saravelos, a strategist at Deut-

sche Bank, said that although the ECB’s

package of measures delivered “above

expectations”, Ms Lagarde’s “verbal

execution was highly flawed”.

“The market is looking for comfort

that Italy can make it through the crisis

without having to be concerned about

market access,” he said, adding that Ms

Lagarde “gave the wrong signal”.

Analysispage 2

Lagarde alarms bond investors as ECB

launches fresh stimulus measures

©THE FINANCIAL TIMES LTD 2020

No: 40,347★

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

AnalysisiPAGE 14

Debt-bloated companies

face their judgment day

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

Half of Dutch people say their former

empire is something more to be proud

of than ashamed. Britons come second

Attitudes to empire

 of respondents

    

Netherlands

UK

France

Belgium

Italy

Japan

Spain

Germany

Something to be proud of

Neither proud nor ashamed

Don't know

Something to be ashamed of

Source: YouGov * Empires from -

FT REPORTERS

The Federal Reserve will inject trillions
of dollars into the financial system in a
bid to calm markets after steep falls on
Wall Street, the biggest ever slide in
European equities and the worst drop
in London’s FTSE 100 since the Black
Monday crash of 1987.
Wall Street stocks were down more
than 8 per cent by midday in New York,
but pared losses to around 7 per cent
after the Fed said it wanted “to address
highly unusual disruptions in Treasury
financing markets associated with the
coronavirus outbreak”.
European equities had already shed a
10th of their value in their worst ever
trading day before the Fed announced
its move. The FTSE 100 ended the day
down 10.9 per cent.
Markets have suffered more than two

weeks of persistently sharp falls, but

responded violently yesterday to Don-

ald Trump’s ban on travel from Europe

to the US in a bid to stem the coronavi-

rus outbreak. “This was the most

expensive speech in history,” said Luca

Paolini, chief strategist at Pictet Asset

Management. “Investors are voting

with their feet and I can’t blame them.”

The Fed’s step into the short-term

lending markets — its third in four days

— came as analysts and investors said

US government bond trading had

begun to seize up.

The falls in Europe accelerated after

the European Central Bank left interest

rates on hold. The ECB declined to join

the Fed and Bank of England in rate

cuts, announcing a package of easing

measures but keeping rates at minus

0.5 per cent. Markets had been pricing

in a 0.1 percentage point rate cut, and

the reaction suggests investors were

hoping for more from the central bank.

The week’s rout suggested investors

were bracing themselves for a worst-

case scenario, including a global reces-

sion, the lockdown of large urban cen-

tres and a severe credit crunch, said

Masanari Takada, strategist at Nomura.

“The market has been jolted to the

point of breaking,” he added.

US equities have now dropped by

more than 20 per cent since hitting a

record high in mid-February, leaving

Wall Street on track to enter a bear mar-

ket. European stocks fell into a bear

market this week.

Travel and leisure stocks came under

acute pressure. Cruise operator Carni-

val lost a fifth of its value, while United

Airlines fell 17 per cent and British Air-

ways owner IAG declined 11 per cent.

UK companies including WHSmith,

Go-Ahead and Travelex warned inves-

tors about the impact,while Cineworld,

the second-biggest cinema chain,

warned that in a worst-case scenario it

would be unable to pay its debts.

Oil prices, which crashed at the start

of this week fell a mid the expectation

the US travel ban would cause more

pain for the travel industry. Benchmark

Brent crude was down 7 per cent at

$33.10 a barrel yesterday.

Mr Trump’s comments also caused

sharp gains for Japan’s yen, which

firmed as much as 1.4 per cent after the

president’s announcement and is now

trading near ¥104 per dollar. The yen,

often viewed as a haven during times of

stress, has surged in recent days.

The Topix index, which closed 4.1 per

cent lower, is down by almost a quarter

from its recent peak on February 6,

putting the benchmark on track for its

worst year since the 2008 crisis.

Reporting by Adam Samson, Philip Georgi-

adis and Myles McCormick in London,

Hudson Lockett in Hong Kong, Leo Lewis

in Tokyo, and Colby Smith and Richard

Henderson in New York

Traumatic day on global markets

spurs central banks to step up action

3 Biggest slide in European shares 3 Wall Street hit 3 Worst day for FTSE 100 since Black Monday

FTSE 

S&P 

Stoxx 

Feb 



Mar 

Mar 

Mar 

Feb 



Feb 



Mar 



-

Mar 

*

*As at pm GMT

Mar 

 A deserted Rhine-Main Airport in Frankfurt yesterday - Andreas Arnold/dpa via AP

-

-

3 Coronavirus reports & Global

Insight: Edward LucePages 2-

3 Editorial Comment

& NotebookPage 8

3 Gillian Tett & David PillingPage 9

3 LexPage 10

3 Banks round-upPage 11

3 Airlines maydayPage 12

3 Markets reportsPage 17

3 Markets Insight:

Robin WigglesworthPage 20

Inside

MARCH 13 2020 Section:FrontBack Time: 12/3/2020 - 19: 08 User: simon.roberts Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1