Financial Times Europe - 04.03.2020

(John Hannent) #1

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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

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