Tuesday4 February 2020 ★ 13
The Financial Times Limited 2020© Week 6
Companies / Sectors / People
JAV I E R E S P I N OZ A— BRUSSELS
K AT E B E I O L E Y— LONDONThe UK competition watchdog is to
push for tougher powers to investigate
antitrust issues and go after the likes of
Google nda Facebook ftera Brexit.“The upside [of leaving the EU] is that
you take back control, genuinely, of the
decisions,” Andrea Coscelli, chief execu-
tive of the Competition and Markets
Authority, told the Financial Times.
The regulator wants the power to
impose fines on companies engaging in
anti-competitive behaviour without
going through the courts as it is cur-
rently required to do. It is also petition-
ing to stop alleged anti-competitive con-
duct while probes are under way.The CMA will take on atough extra
workload after Brexit, shouldering
responsibility for larger and more com-
plex merger, cartel and competition
enforcement cases that were previously
the domain ofBrussels. It will have to
decide whether to follow regulators
elsewhere when bringing cases and set-
ting rules, or to depart fromthem.
Mr Coscelli said the likes of Canada,
Australia and Brazil would be the UK’s
benchmarks nd suggested that Britaina
was “in a very strong position to lead”
competition policy on a global stage.
“These are well-resourced, highly
competent competition authorities in
sizeable markets. They work quite sig-
nificantly in parallel with the US agen-
cies and the European Commission andothers,” he said. Thepledge to take a
tougher stance comes in spite of criti-
cism that too much regulation might
stifle innovation and clash with
political hopes of attracting more tech
investment.
Last week a group of investors back-
ingDeliveroo aid the regulator’s probes
of the food-delivery app’s deal with
Amazon isked undermining the incen-r
tives to invest in Britain. But
Mr Coscelli insisted the regulator had
a solid understanding of business.
Deals such as Facebook’s purchase of
WhatsApp n 2014 have heightenedi
competition concerns. In the UK, the
CMA aunchedl a probe f Google’s pro-o
posed $2.6bn acquisition ofLooker, the
data analytics company.UK competition regulator to ramp up
pursuit of US tech groups after Brexit
Aberdeen Standard InvestmentsCompanies ...
AirAsiaAirbus........................................................................................................................ (^1414)
Alcoa............................................................... 15
AlphabetAlphaplate.......................................................................................................... 2313
Altria..........................................................14,
AmazonAnglo American...........................................................................................12,13 16
Apple...........................................4,11,12,13,
ArcelorMittalAsset Value Investors............................................................................ (^159)
Atos................................................................. 24
B2C2BOE Technology...................................................................................................... (^2312)
BP.................................................................15,
BT .....................................................................Bain.................................................................. (^1616)
Banque Havilland.................................... 17
BaupostBlackRock.......................................................................................................1,11,14 13
Boeing.......................................................12,
BoschBritish American Tobacco................................................................................ (^1317)
Burford Capital.......................................... 17
CareemCeres Power........................................................................................................... (^1513)
Citigroup.....................................................1,
CumberlandDHL................................................................................................................... (^234)
DRWDavidoff......................................................................................................................... (^2317)
Deliveroo..................................................13,
DeloitteDeutsche Bank.................................................................................................... 2311
Didi Chuxing.............................................. 14
DongfengDoorDash............................................................................................................ (^1215)
DowDuPontDrax............................................................................................................17,24 15
EY...................................................................... 11
Edgewell Personal CareElliott Management....................................................... (^169)
EquinorEskom....................................................................................................................... (^1516)
ExxonMobil.....................................15,23,
FacebookFidelity.............................................................................................................11,13 14
FinablrFiserv......................................................................................................................... (^2416)
Fitch.................................................................. 11
Flow TradersFortress....................................................................................................... (^2323)
FoxconnFranchise Partners........................................................................................4,12 9
Frasers............................................................ 17
FutureGalaxy Digital........................................................................................................ (^2423)
Gideon AllenGilead Sciences....................................................................................... 2411
Glass Lewis.................................................. 11
Global PaymentsGoldman Sachs....................................................................12,13,23 16
GoogleHS2...........................................................................................................................11,13 11
HSBC............................................................... 17
Harry’sHonda......................................................................................................................... (^1612)
HuaweiIBM................................................................................................................................. (^119)
ITM Power................................................... 13
IberdrolaImperial Brands...........................................................................................14,17 15
InchcapeIngenico.....................................................................................................12,16,24 17
Institutional Shareholder Services.
J SainsburyJPMorgan...............................................................................................9,12,13 17
Jane StreetJapan Tobacco............................................................................................ (^2314)
Johnson & JohnsonJulius Baer..............................................12,14............................... 13
Jump............................................................... 23
JuulKPMG................................................................................................................................. (^1411)
Keatz............................................................... 15
KirinKitopi.................................................................................................................................. 159
Knollwood.................................................... 15
Kobe SteelLegal & General........................................................................................... (^1515)
Lixil.................................................................... 9
London Stock ExchangeLooker................................................................................... 139
Lumia Capital............................................. 15
LyftMicrosoft.....................................................................................................................13,13 14
Mizuho Bank................................................. 1
Moody’sMuddy Waters..................................................................................................... 1711
NMC Health............................................... 24
NetscapeNike......................................................................................................................... 2411
Nintendo......................................................... 9
Nippon Active ValueNissan............................................................................................ 129
Norwegian.................................................... 12
NuFlareOasis Management.............................................................................................. (^99)
OlympusOrsted....................................................................................................................... 159
PNC Financial............................................ 12
PanasonicPearson............................................................................................................9,15 17
Pegatron......................................................... 4
PeugeotPictet........................................................................................................................ (^1212)
PowerCellProcter & Gamble....................................................................................13,16 13
PwC................................................................... 11
Queens Park RangersRBS............................................................................................. (^1417)
RenaultRio Tinto.................................................................................................................. (^1215)
Royal Dutch Shell.................................... 15
RyanairRémy Cointreau.......................................................................................12,17,24 24
S&PSGS..................................................................................................................................... 2411
SSE................................................................... 17
Santa TeresaScenic Advisement...........................................................................14,14 6
Scottish PowerSequoia Capital..............................................................................15,17 11
Siemens Healthineers.......................... 24
SonySprint................................................................................................................................. 169
State StreetSusquehanna............................................................................................... 2311
Sysco.............................................................. 24
TCP CapitalTaster.........................................................................................................14,14 15
TescoTesla..........................................................................................................................14,15 17
Third Point.................................................... 9
Thomas CookTiger Global Management............................................................. (^1214)
Tokyo Broadcasting SystemTokyo Dome................................................................ (^99)
Tokyo Electron............................................ 9
ToshibaToshiba Machine................................................................................................... (^99)
ToyotaTyr Capital................................................................................................................ 239
US Bancorp................................................. 12
UberUber Eats...................................................................................................................... (^1415)
Ulta BeautyUnilever......................................................................................................... (^2416)
Vanguard....................................................... 11
VerizonVestas........................................................................................................................ (^1615)
Virgin Money UKVodafone.......................................................................................... (^2416)
WhatsAppWinston............................................................................................................... (^1317)
WorldComWorldline...............................................................................................12,16,24 16
XiaomieasyJet........................................................................................................................ (^1212)
Airlines................................................Sectors 12,17,
Automobiles..........................................12,
BanksEnergy.............................................................................12,13,14,23,2413,15,16,17,
Financial ServicesFinancials................................................12,14,16,23,2416,17,23,
Food & BeverageHealthcare....................................................................................... (^2424)
MediaMining......................................................................................................................... (^2416)
Oil & GasPersonal & Household Goods....................................13,15,23,24..16,
PharmaceuticalsRetail..........................................................................................13,17,24 24
Support ServicesTechnology...........................................................12,14,15,16,2312,
TelecomsTobacco.....................................................................................................14,14,17 16
People
Ackman, BillAnderson, Keith........................................................................................ (^1317)
Ashley, MikeBallout, Mohamad................................................................................... (^1715)
Bauernfreund, JoeBezos, Jeff........................................................................................ 139
Bomhard, StefanBoonen, Max.................................................................................... (^1723)
Buffett, WarrenBurrows, Jonathan............................................................................... (^131)
Clark, Jim....................................................... 11
Cohn, BarrettCooper, Alison........................................................................................ (^1417)
Coupe, Mike................................................ 17
Crosthwaite, KCCutifani , Mark.................................................................................. (^1416)
Dimon, Jamie............................................... 9
Ebbers, BernardFernandes, Tony............................................................................. (^1614)
Gardiner, Will.............................................. 17
Grapinet, GillesKalanick, Travis............................................................................12,16 14
Katz-Mayfield, Andy.............................. 16
Khosrowshahi, DaraKlarman, Seth......................................................................13,13 14
Levkowitz, Howard...........................14,
Lewis, DaveLoeb, Dan........................................................................................................ (^179)
Meranun, Kamarudin............................. 14
Murphy, KenMusk, Elon.............................................................................................14,15 17
Novogratz, Mike...................................... 23
O’Leary, MichaelPoulsen, Henrik............................................................................... (^1715)
Raider, Jeff.................................................. 16
Rickenbacher, PhilippRosenwald, James...........................................................12,14 9
Seto, KinyaShah, Paras........................................................................................................ (^91)
Shetty, BR................................................... 24
Solomon, DavidStrømme, Jan...............................................................................12,13 23
Umeda, Hirokazu..................................... 15
Yoshida, KenichiroZuehlke, Chris............................................................................... 239
nesses that sell on its site, using the data
on their cash positions to offer quick-
decision loans in a handful of countries.
An agreement with Amazon would
follow last year’scredit card partnership
between Goldman andApple, which
featured the bank’s branding on the
physical card and in some marketing,
and gave Goldman a direct channel to
Apple’s100m-plus US subscribers.
The bank’s new consumer ventures
accounted for less than 3 per cent of rev-
enue last year, whilecards and con-
sumer loan balances at the end of 2019
were less than 1 per cent of its $993bn in
total assets.
Lex age 12p
“significantly extend” its small and
medium-sized business lending plat-
form “without any associated credit risk
of regulatory obligations”.
Amazon declined to comment on the
Goldman talks but said that lending was
one of the services provided to “our sell-
ing partners”. It has already expanded
far beyond its origins as an online book-
seller by building businesses that sell
petabytes of cloud-computing space
and state of the art warehouse facilities
to a variety of businesses.
It had outstanding small-business
loans of more than $863m on its balance
sheet at the end of 2019. For the past
eight years it has lent to small busi-
powerhouse into a broader financial
services group that more closely resem-
bles rivalsJPMorgan hase andC Citi-
group.David Solomon, Goldman chief
executive, last week told shareholdersit
would boost returns by generating reve-
nues fromsources uch as consumers
banking and wealth management.
A Goldman deal would be in line with
Jeff Bezos’s push to turn Amazon into an
infrastructure provider that profits
from a growing chunk of online trade by
charging for a host of commercial serv-
ices offered to other companies.
John Cronin, an analyst at Good-
body’s, a brokerage, said that banking
partnerships could allow Amazon to
L AU R A N O O N A N— NEW YORK
Goldman Sachs s close to striking a deali
withAmazon o offer small-businesst
loans to its US customers as the Wall
Street bank turns to Big Tech to extend
its push on to Main Street.
Goldman has begun building technol-
ogyto facilitateloan offers to small and
medium-sizedcompanies overthe
online retailer’s lending platform,
according to two people briefed on the
discussions. The project could launchas
soon as March, one of them said.
The bank, which declined to com-
ment, is in the midst of a transformation
from a trading and investment banking
Goldman nears Amazon loans deal
3 Main Street push accelerates 3 Bid to cater for small businesses 3 Bezos eyes expansion
Amazon
had small-
business
loans of
more than
$863m on
its balance
sheet at the
end of 2019
An upturn in performance is luring
banks back to cryptocurrencies. Wall
Street has been hurt before. As the
‘crypto rush’ pushed bitcoin above
$20,000 in 2017, banks piled in but
their projects crashed and burnt with
the virtual money the following year.
Analysisi AGE 23P
Banks fall under spell of
magic money once more
Shares in hydrogen producers and fuel-
cell manufacturers have soared to their
highest in a decade, reflecting hopes that
the gas can replace fossil fuels in
everything from trucks to homes.
ITM Power, which makes electrolysers
to produce hydrogen, are up more than
45 per cent this year o their highest sincet
- Meanwhile, Sweden’sPowerCell ash
risen 28 per centover the same period and
342 per cent in the past ear.y
“After years of false dawns, investors
are realising clean hydrogen and fuel cells
have an important part to play in the
energy transition, particularly heavy duty
mobility and heavy industry,” said Adam
Collins, an analyst at Liberum.
Hydrogen was touted in the late 1990s
as the solution to “greening” the planet
but fell out of favour sacosts forlithium-
ion battery technology fell. Today,
hydrogen accounts forabout 2 per cent of
primary energy use globally.
But investors have grown more bullish
as big companies havebacked hydrogen
fuel-cell producers and costs have started
to drop.Car-parts makerBoschplans to
increase its shareholding in UKCeres
Power, a developer of solid oxide fuel-cell
technology, and China has continued to
subsidisethe technology while cutting
subsidies for lithium-ion batteries.
The Hydrogen Council, an industry
body,believes that the cost of producing
hydrogen could be halved by 2030.
At the moment, however, the gas is not
“close to being competitive”, said Stuart
Joyner, at Redburn. enry SandersonH
Rising hopes nvestors hit the gas on hydrogen producersI
Hydrogen producers leap
on hopes of fossil fuel death
Share prices rebasedSources: Bloomberg; IEA PowerCell
Ballard Power Systems
ITM PowerDemand for hydrogen
on the rise
Million tonnes* Direct reduced iron steel production Other pure
Ammonia
RefiningOther mixed
DRI*
Methanol
EstimatesFilling up: bullishness over hydrogen reflects hopes it can replace fossil fuels —Kyoshi Ota/BloombergRobin
Wigglesworth
Tail
Risk
Interest in nvironmental, social and governancee -oriented
investing has soared lately. It now appears to be having a
subtle but noticeable impact on some stock prices, widen-
ing an already big divergence between different parts of the
equity market.
ESG-focused equity funds have taken in nearly $70bn of
assets just over the past year, according to EPFR, while
traditional equity funds have suffered almost $200bn of
outflows over the same period. No wonder then, that asset
managers seem to be engaged in a war of one-upmanship
in touting theirESG credentials.
While dedicated ESG funds remain a tiny part of the glo-
bal stock market, the broader trend is towards all asset
managers becoming more focused on these issues,
whether their funds are explicitly ESG-oriented or not.
This is having a real impact — with possibly profound
implications for frustrated“value” investors uch as hedges
fund managersSeth Klarman nda Bill Ackman, who try to
seek out unloved and cheap stocks.
What constitutes a virtu-
ous company is woolly. Asset
managers tend to define ESG
differently, or weight metrics
in conflicting ways.
But look under the hood of
some of the biggest ESG
funds and it becomes appar-
ent that they are heavily
tilted towards tech stocks,
including Microsoft and
Alphabet, plus a smattering of consumer companies, such
asJohnson & Johnson nda Procter & Gamble. In the jargon
of finance, ESG investing leans towards stocks classified as
“growth” (fast-expanding, racy companies) and “quality”
(those with little debt and stable earnings growth).
The ESG boom might, therefore, partly explain both why
growth stocks have done so well lately, and why the under-
performance of value — embodied by energy stocks — has
gone from extreme to record-shattering.
The worsening outlook for value has caused anguish and
frustration among investors who have dedicated them-
selves to thestyle, which was first formulated by Benjamin
Graham and most famously espoused byWarren Buffett.
Mr Klarman ofBaupost, a value-oriented hedge fund,
bemoaned the environment in his latestletter to clients,
but argued that the “ongoing selling pressure of value
names has contributed to mispricings that represent
potential opportunity for long-term investors”.
Over time, the shunning of companies that lag behind on
ESG metrics may indeed lead to investors being able to har-
vest a “sin premium” by buying systematically under-
priced stocks.
However, given the fact that ESG-focused investing is
likely to prove a secular trend, it might also mean that
value will stay in a funk far longer than its proponents
might like.[email protected]No wonder asset
managers are
engaged in aone-upmanship
war over theirESG credentials
Robin
Wigglesworth
Tail
Risk
No wonder asset
managers are
engaged in aone-upmanship
war over theirESG credentials
Green giantOrsted’s plans to be first
environmental supermajor— ANALYSIS, PAGE 15
Ground downFTSE turnover rockets,
in terms of bosses, at least— LOMBARD, PAGE 17
FEBRUARY 4 2020 Section:2Front Time: 2/20203/ - 20:16 User:nick.miller Page Name:2FRONT, Part,Page,Edition:LON , 13, 1