Financial Times Europe - 21.02.2020

Friday21 February 2020 ★ 11

The Financial Times Limited 2020© Week 8

After years of focusing on oil, gas and

mining, green campaignersare turning

their attention tofinance. They hope

public pressure on banks, asset

managers and insurers will make them

think twice about investing incarbon-

intensive and polluting industries.

Analysis iPAGE 12

Climate activists take

on the global investors

L E O L E W I S — TOKYO

H U D S O N LO C K E T T — HONG KONG

The tens of millions of people confined

to their homes by China’s coronavirus

outbreak have contributed to record

downloads of games and other apps,

boostingthe$150bn ndustry.i

There were more than 222m downloads

in China throughApple’s online store in

the week starting February 2, according

to data given to the Financial Times by

analytics provider AppAnnie.

Average weekly downloads of apps in

the first two weeks of February jumped

40 per cent compared with the average

for the whole of 2019, the data showed.

The timeframes coincided with an

acceleration in theoutbreak, which has

killed more than 2,000 people. “Down-

loads continued to grow well into the

weeks following the lunar new year holi-

days as millions of workers and students

[used] mobile apps to.. resume daily.

activities remotely,” AppAnniesaid.

Normally, a jump indownloads over

lunar new year falls off sharply s peo-a

ple return to work.Downloads of educa-

tion apps in February spiked o twicet

the average rate for all of 2019. Schools

in manyChinese cities havebeenclosed

since the lunar new yearand are not

expected to reopen for weeks.

Thedownload boom has led to a surge

in the shares ofgames makers.Tencent,

China’s largest mobile games provider,

is at a 20-month high, with a market

capitalisationabove $500bn. Shares in

New Oriental Education, which pro-

vides online education in China, have

jumped 17 per cent this year.

“No one expected that this kind of

epidemic could grow so fast, and that

created an opportunity for these gaming

companies,” said Shawn Yang,manag-

ing director at Blue Lotus Capital Advi-

sors, a boutique investment bank.

“The more time players spend ‘in-

game’ the more likely they are to

[spend],” said Daniel Ahmad, an analyst

at Niko Partners, eferring to paying forr

extra features in games that are free to

download and play.

China banks cut rates age 3p

Gillian Tett age 9p

Lex age 10p

Maersk warns age 14p

Apps and games prosper amid virus

as quarantined millions hit download

Barclays cautioned that Mr Hamers did

“not have experience in running a global

investment bank or wealth manager”.

Shares in UBS ended0.9 per cent

higher, while ING finished flat.

Mr Hamers is likely to receive a signif-

icant boost to his pay. Mr Ermotti

earned SFr13.8m ($14m) in 2018, more

than seven times the €1.75m received by

his counterpart because of a Dutch law

that limits bonuses for bankers to 20 per

cent of their fixed pay.

Mr Ermotti is one of the longest-

serving European bank chiefs, having

taken over in2011.

Lex age 10p

Flying-averse Dutchman age 13p

ing on new customers in Italy for more

than a year.

Axel Weber, the UBS chairman,

approached Mr Hamersmonths ago,

according to people familiar with the

process. After a 15-month internal and

external search, Mr Weber offered him

the job. UBS and ING confirmed the

appointment late on Wednesday, after

the Financial Times reported the suc-

cession plan. Mr Hamers will step down

at the end of June and join UBS in Sep-

tember to work alongside Mr Ermotti.

“Ralph is a battle-tested, charismatic

executive with the experience and per-

sonality to successfully write UBS’s next

chapter,” said Mr Weber.But analysts at

Mr Hamers is a bold choice for UBS.

Since taking the helm of ING in 2013, he

has steered the bank through its post-

financial crisis restructuring, repaid the

money it received from the Dutch

government and resumed dividend

payments. The bank has also invested

heavily in digital services and slashed its

traditional branch network.

“ING is now considered one of the best

examples of digital innovation in the

banking sector,” said Vontobel analysts.

However, his tenure has more

recently been marred by compliance

failings. The bank received a record

€775m penalty from Dutch prosecutors

in 2018 and has been banned from tak-

ST E P H E N M O R R I S , N I C H O L A S M E G AW
A N D R O B E RT S M I T H — LONDON

UBS as appointedh Ralph Hamers s itsa
next chief executive, replacingSergio
Ermotti n a move that elevates thei ING
boss into one of the most powerful roles
in global finance.
The Dutchman will take over no
November 1, succeeding Mr Ermotti
who has spent almost nine years turning
round Switzerland’s largest bank after
its bailout in the financial crisis.
The change at the top of UBS comes
less than a month after rivalCredit
Suisse replacedTidjane Thiam, its
chief, after revelations of corporate spy-
ing scandals at the bank.

UBS appoints Hamers as new chief

3 ING boss to succeed Ermotti 3 Big step for Dutchman 3 Move follows change at C Suisse

Les Wexner ill step down from hisw

leadership roles atL Brands ftera

agreeing a deal withSycamore Partners

to takeVictoria’s Secret rivate.p

The private equity group will pay

$525m to take a 55 per cent stake inthe

lingerie designer. L Brands, which is

disbanding its struggling retail empire,

will retain the rest of the business. The

$1.1bn valuation reflects a sharp decline

for a business hat generated $7bn int

sales in its last fiscal year.

Mr Wexner willrelinquish his roles sa

chief executive and chairman of

L Brands, after coming under pressure

over his relationship with Jeffrey

Epstein, the disgraced financier charged

with sex trafficking who died in jail last

year.

“I’ve thought about where I fit in the

picture.. [and] decided that now is the.

right time to pass the reins to new

leadership,” Mr Wexner old employees.t

Analysts at Jefferies said the Victoria’s

Secret price tag was significantly below

projections that a full sale could earn

close to $3.5bn. “A partial sale and this

low price won’t help the [company’s]

massive debt load and shows just how

desperate LB has become to try to

unload Victoria’s Secrets,” they aid.s

Ortenca Aliaj

No longer a fit

Chief stands down as

Victoria’s Secret sold

‘Ralph is a

charismatic

executive

[who will]

successfully

write UBS’s

next

chapter’

Axel Weber,

UBS chairman

Companies / Sectors / People

Companies
7-Eleven....................................................... 20
Accor............................................................. 14
Aegon............................................................. 14
Air France-KLM........................................ 14
Akzo Nobel................................................. 14
Alibaba........................................................... 9
Allianz............................................................ 14
Amazon..................................................10,
Amazon......................................................... 9
Apple............................................................... 11
BNP Paribas................................................ 12
BP..................................................................... 14
Bank of America..................................... 12
BlackRock..................................................... 12
BoCom........................................................... 10
Boeing........................................................... 20
Burberry....................................................... 20
CBOE Global Markets........................... 19
Charles Schwab........................................ 10
Citadel Securities..................................... 19
Commerzbank............................................ 13
Credit Suisse........................................10,
Credit Suisse............................................. 11
Dean Witter................................................ 10

Delta Lloyd................................................ 14

Deutsche Bank........................................... 11

Dewan........................................................... 20

Disneyland Paris........................................ 8

ETrade............................................1,10,19,

Edelweiss..................................................... 20

Elliott Management............................. 14

Facebook...................................................... 9

Fidelity........................................................... 19

Fifa..................................................................... 4

Flipkart.......................................................... 20

Foxconn........................................................ 14

GAM................................................................. 13

GoCompare................................................. 10

Goldman Sachs...................................12,

Goldman Sachs.......................................... 1

Google......................................................10,

Government Pension Investment

Fund................................................................ 19

Huawei............................................................. 2

ICBC............................................................... 10

IL&FS............................................................. 20

ING.........................................................11,13,

ING................................................................. 10

Indiabulls..................................................... 20

Instacart........................................................ 10

Intercontinental Exchange................ 19

JC Flowers.................................................. 20

JPMorgan..................................................... 19

JPMorgan Chase...................................... 12

Jane Street Capital................................. 19

Kickstarter................................................... 10

L Brands.................................................11,

Life Insurance Corporation of India

20

MIAX............................................................... 19

Maersk........................................................... 14

Marathon Petroleum............................ 20

Meggitt......................................................... 20

Memx.............................................................. 19

Microsoft..................................................9,

Moneysupermarket................................ 10

Moneysupermarket.com..................... 20

Morgan Stanley...............................1,10,

NMC Health............................................... 20

NN Group..................................................... 14

Nasdaq........................................................... 19

New Oriental Education....................... 11

New York Stock Exchange................ 19

Oracle............................................................. 10

Paris Saint-Germain................................ 4

Peabody Energy....................................... 12

Pernod Ricard........................................... 14

Petrobras...................................................... 14

Petróleos de Venezuela...................... 12

Ping An......................................................... 14

Procter & Gamble................................... 14

Reliance Communications................. 20

Royal Dutch Shell..............................14,

Royal Mail................................................... 20

Salesforce.................................................... 10

Santander..................................................... 13

Schneider Electric............................14,

Sears............................................................... 10

Six Flags Entertainment.................... 20

Smith Barney............................................. 10

Snapp............................................................... 4

State Bank of India............................... 20

Swiss Re.................................................12,

Sycamore Partners................................ 11

TD Ameritrade....................................10,

Tencent.......................................................... 11

The Long-Term Stock Exchange..

Tomra Systems....................................... 20

UBS........................................................10,11,

Vallourec...................................................... 20

ViacomCBS...........................................12,

Victoria’s Secret........................................ 11

Virtu Financial........................................... 19

Vivat................................................................ 14

Walmart........................................................ 20

Yes Bank...................................................... 20

Yum Brands................................................ 14

Sectors

Aerospace & Defence.......................... 20

Banks....................................1,10,11,12,13,

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

Healthcare.................................................. 20

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

Industrials................................................... 20

Insurance..........................................12,14,

Media...................................................11,12,

Mining............................................................. 12

Oil & Gas....................................12,14,19,

Personal & Household Goods...11,

Retail...................................................10,11,

Retail & Consumer.................................. 11

Support Services.................................... 20

Technology............................9,10,11,12,

Travel & Leisure............................4,11,

People

Ambani, Anil.............................................. 20

Ellison, Larry.............................................. 10

Ermotti, Sergio.....................................10,

Gorman, James............................................ 1

Gorman, Jamie.......................................... 10

Hamers, Ralph.......................................... 10

Hamers , Ralph.......................................... 11

Haywood, Tim........................................... 13

Kellner, Jonathan..................................... 19

Khan, Iqbal.................................................. 10

Lewis, Mark................................................. 10

Looney, Bernard...................................... 14

Marques de Almeida, Andrea.......... 14

Orcel, Andrea............................................. 13

Pruzan, Jon.................................................... 1

Rickenbacher, Philipp........................... 12

Sanderson, Peter..................................... 13

Shah, Rashesh.......................................... 20

Shetty, BR................................................... 20

Skou, Soren................................................. 14

Thiam, Tidjane.....................................11,

Weber, Axel................................................. 11

Wexner, Les................................................. 11

Zuckerberg , Mark.................................... 9

Cold Turkey Chilling effect of Erdogan’s

commitment to a strong lira— ANALYSIS, PAGE 17

New front Good luck to Brussels in its

assault on Silicon Valley data— INSIDE TECH, PAGE 12

Robin

Wigglesworth

Tail

Risk

Barring some wobblesyesterday, markets seem relaxed

about the impact of thecoronavirus utbreak on alreadyo

tepid global economic growth. Even Apple’s sales warning

this week spurred just a modest, brief retreat. But look

under the hood and some trepidation becomes apparent.

Global equities have climbed more than 3 per cent in

February, and US stocks have beenbuoyant, with traders

beginning to get their “Dow 30,000” caps printed.

The recovery is partly driven by hopes that the epidemic

will be contained.Deutsche Bank’s satellite-powered ship-

ping tracker indicates that Chinese economic activity has

now stopped contracting, and some economists arepro-

jecting a V-shaped recovery. Even China’s CSI 300 index

has clawed back almost all of last month’s losses.

Yet thedriver is the fact that central banks reacted with

alacrity to signs thatgrowth was slowing last year, and

markets expect they will continue to do so in the face of

new threats. TheBank of Mexico’s lowering ofrates last

week was the 800th rate cutsince the collapse of Lehman

Brothers, according to Bank of America.

That has led some investors to argue that markets are

overly complacent. Guggenheim’s Scott Minerd compares

the current dissonance between buoyant asset prices and

deteriorating fundamentals

to Neville Chamberlain

declaring “peacefor our

time” shortly before the sec-

ond world war. “I have never

in my career seen anything

as crazy as what’s going on

right now,” he said in anote.

However, one can see some

signs of investor nerves.

Morgan Stanley notes that

in the downturn phase of a typical economic cycle, invest-

ment-grade debt beats junk, defensive stocks do better

than economically ensitive oness , large-cap stocks outpace

smaller ones, US equities outrun global markets, and pre-

cious metals do better than other commodities. All those

conditions have been in place for almost a year, observes

Andrew Sheets, head of cross-asset strategy at the bank.

Investor skittishness is a healthy sign.But stocks do look

vulnerable at current levels, says Peter Oppenheimer, chief

global equity strategist at Goldman Sachs, because valua-

tions have become stretched.

Robert Shiller’s cyclically adjusted US price-to-earnings

ratio is now back to nearly 32 times, close to the post-crisis

peak it hit in early 2018 just before a severe bout of turmoil

hit global stock markets.

“Equity markets are looking increasingly exposed to

near-term downward surprises to earnings growth, and

while a sustained bear market does not look likely, a near-

term correction is looking much more probable,”

Mr Oppenheimer warnedthis week. And if thecoronavirus

spreads, sheltering in defensive but expensive parts of

markets will probably offer little succour.

[email protected]

‘Investor

skittishness is a

healthy sign.But

stocks do look

vulnerable at

current levels’

Timothy A. Clary/AFP

FEBRUARY 21 2020 Section:2Front Time: 2/202020/ - 19:07 User:nick.miller Page Name:2FRONT USA, Part,Page,Edition:EUR , 11, 1