© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Tuesday, September 13, 2016 |B

Yen vs. Dollar 101.95t0.73%

110

105

100

95

J J A

Hang Seng 23290.60t3.36%

23800

22500

21200

19900

J J A

Gold 1321.50t0.65%

1400

1350

1300

1250

J J A

10-Year Treasury yield 1.686%

2.

1.

0.

0.

J J A

10-Year JGB yield -0.013%

0.

-0.

-0.

-0.

J J A

WTI crude 46.21s0.72%

50

45

40

35

J J A

As of 12 p.m. ET Sources: Tullett Prebon; SIX Financial

NEW SAMSUNG ROLE FOR HEIR APPARENT TECHNOLOGY | B

BUSINESS&FINANCE

SHC Design operations chief

Yutaka Tokushima, far left,

with Fuminori Ando, who got a

3-D-printed leg from the

company. Above, prototypes

MIHO INADA/THE WALL STREET JOURNAL (2)

In polite circles they call
it “regularization.” More
bluntly, it is coming clean.
Wealthy people in Europe
have been admitting for
years to having money they
should have de-
clared to tax au-
thorities. For
Swiss banks, that
has been money
out the door as
clients moved it home or
withdrew funds to pay taxes.
But the trend is spreading
to emerging markets. And
starting next year, a global
automatic exchange of infor-
mation program will be ad-
opted by about 50 countries.
Under the program, coun-
tries will share with each
other details of financial as-
sets owned by nonresidents,
lifting the lid on more hid-
den funds.
For the Swiss private
banks, this will tamp down
growth, but is also likely to
depress profitability because
these cross-border assets
have historically produced a
higher gross margin.
Customers in Latin Amer-
ica have already begun tak-
ing back funds from the in-
dustry due to tax amnesty
programs in Argentina, Bra-
zil, Chile and Mexico. Russia
and South Africa, too, are
causing outflows.
Credit Suisse, UBS and Ju-
lius Baer all noted some ef-
fects of this trend in their
recent results.
Within Europe, the total
amounts “regularized” be-
Please see HEARD page B

Fuminori Ando thought he

would never be able to wear

traditional Japanese summer

sandals. The design of his arti-

ficial leg didn’t allow it.

Then the 41-year-old, who

lost his right leg below the

knee soon after he was born,

heard about SHC Design Inc., a

startup that is using three-di-

mensional printing to produce

custom-made polymer limbs.

Mr. Ando, who has a day

job at an internet company,

started working part time for

SHC Design helping with pat-

ents, and the company crafted

him a free prosthetic leg de-

signed to accommodate the

sandal. The artificial limb in-

cludes a specially curved heel,

as well as a space for the san-

dal’s strap between the big

and second toes.

“It would have cost me a lot

if I made something like this

in a regular way,” said Mr.

Ando, wearing a pair of san-

dals color-coordinated with

his Japanese-style summer

outfit.

Typically handmade from

multiple materials, a pros-

thetic limb costs an average of

$4,200 in Japan, according to

health-ministry data. SHC De-

sign Chief Operating Officer

Yutaka Tokushima said he ex-

pects his company’s printer

will be able to produce a pros-

thetic leg for about $100.

The 3-D printing craze

erupted a few years ago with

visions of industrial parts and

even whole minicars being

churned out inexpensively.

Much of the hype has yet to be

borne out, but SHC Design’s

technology suggests the prom-

ise of 3-D printing when com-

bined with other advances.

In the case of prostheses,

the other advance was an elas-

tic polymer that is soft to the

touch and suitable for medical

devices. Developed by rubber

maker JSR Corp., which has

teamed up with SHC Design on

this project, the polymer is fed

into a printer specially de-

signed to output soft materials

stably. Guided by a template

that SHC Design’s software

creates from a scan of the cus-

tomer’s healthier leg and the

desired footwear, the printer

sprays out a prosthetic leg.

Insurance generally pays

for a prosthetic limb for ev-

eryday use, but the high cost

of standard artificial legs

makes it expensive for wearers

to get additional ones special-

ized for activities such as

swimming or skiing, or for

particular shoes.

“There’s a perception out

there that [prosthetics] users

shouldn’t need a lot of op-

tions,” said Mr. Ando. He once

bought an expensive artificial

leg to wear while swimming,

he said, but stopped using it

because it was too heavy and

didn’t look very good.

In a poor country like the

Philippines, SHC Design’s tech-

nology could fill a more funda-

mental need. Nearly 350,

people there need prosthetic

legs, and more than 90% can’t

get one because of the cost

and lack of specialists to treat

them, according to Japan In-

Please see PRINT page B

On Monday, the overnight

interbank yuan borrowing rate

in Hong Kong reached 5.5155%,

its highest since Feb. 19. The

rate breached 5% on Thursday,

ending a nearly two-month

stretch of relative calm, and

has since remained at levels

that traders characterized as

elevated.

Suspected heavy yuan buy-

ing by Chinese banks has

helped squeeze a market that

China had tried to foster just a

few years ago as it looked to

promote the yuan as a major

international trading currency.

It comes on top of other re-

cent measures from Beijing in-

tended to support the cur-

rency, such as tightening

restrictions on money flowing

out of the mainland.

“It’s pretty obvious that

renminbi internationalization

has taken a back seat” to de-

fending the currency, an exec-

utive at one of China’s top

four state banks operating in

Hong Kong said.

“The stated views and anal-

yses are not true,” the People’s

Bank of China said when asked

for comment. It didn’t elabo-

rate. President Xi Jinping said

last week that yuan liberaliza-

tion would be carried out in

an orderly way and China

would continue to encourage

the yuan’s use abroad.

Yuan-related trading has

been falling in Hong Kong

since Beijing first put a

squeeze on the market earlier

this year, according to the lat-

est data. Deposits denomi-

nated in the Chinese currency

have dropped to 667.1 billion

yuan ($99.9 billion) in July

from a peak of just over 1 tril-

lion yuan in December 2014,

according to the Hong Kong

Monetary Authority. Yuan-

bond issuance has dropped to

$6.3 billion this year from

$16.2 billion a year earlier, ac-

cording to Dealogic.

The declining interest in us-

ing the yuan for trading and

capital-raising has come as

Beijing’s priorities have

shifted, with the Chinese econ-

omy losing steam after years

of breathtaking growth—and

steady yuan appreciation. Bei-

jing first allowed the yuan to

be bought and sold outside the

mainland in 2010, in Hong

Kong, still the world’s major

center for offshore trading in

the currency.

Now, a more urgent task for

China is to prevent the cur-

rency from falling too much

and potentially further erod-

ing investors’ confidence in

the economy.

Since early this year,

China’s central bank has been

trying to let some air out of

the yuan while trying to make

sure that the descent doesn’t

become so fast as to trigger

Please see YUAN page B

The most vibrant market
for yuan trading outside main-
land China has turned into a
key battleground for Beijing to
defend the Chinese currency.

Suspected intervention by
Chinese banks in what is
known as the offshore market
in Hong Kong has led to a
surge in the cost for banks in
the territory to borrow yuan
from one another. Investors
and analysts believe the inter-
vention—which they say likely
has come at the behest of
China’s central bank—is aimed
at thwarting bets against the
Chinese currency, also known
as the renminbi.

By Saumya

Vaishampayan

in Hong Kong and

Lingling Wei in Beijing

Hong Kong Yuan Trade Tightens

Intervention by Beijing

suspected as the cost

for banks to borrow

climbs above 5.5%

6

0

1

2

3

4

5

%

JASJ

Sept. 12: 5.52%

Three-monthyuan

Hibor rate

Monthly total customer

yuan deposits

Hibor Highs

The cost of borrowing yuan overnight in Hong Kong has surged in

recent days, while yuan bank deposits in the city have been falling,

tightening liquidity.

Sources: Thomson Reuters (HIBOR rate); Hong Kong Monetary Authority (deposits)

THE WALL STREET JOURNAL.

Note: 1 trillion yuan=$149.7 billion

1.

0.

0.

0.

0.

0.

1.

trillion yuan

2004 ’06 ’08 ’10 ’12 ’14 ’

895 million

TORONTO—Canadian fertil-

izer companies Agrium Inc.

and Potash Corp. of Saskatch-

ewan Inc. confirmed plans to

merge on Monday, in a deal

that would create a crop-nutri-

ent giant valued at $27 billion.

Potash shareholders would

own about 52% of the new

company and Agrium share-

holders would own about 48%.

The two have a current com-

bined market capitalization of

about $27 billion, and the

merged company would have

annual revenue of nearly $

billion.

Joining forces helps Sas-

katchewan-based Potash, the

world’s largest fertilizer pro-

ducer by capacity, insulate its

earnings against volatile

moves in crop-nutrient prices

by giving it access to Agrium’s

steadier retail business that

sells fertilizer, seeds and

equipment.

Agrium, based in Calgary,

Alberta, gains the ability to

greatly bolster its production

of potash and other fertilizer

ingredients, representing a bet

that demand and prices for

these products have bottomed

and are poised for a rebound.

Potash prices have been

under pressure since 2013,

when Russian producer Ural-

kali JSC pulled out of its sales

partnership with Belarusian

Potash Co. That ended a car-

tel system that, along with a

North American trading

group that includes both Pot-

ash and Agrium, helped to

control global prices for the

fertilizer.

Agrium Chief Executive

Chuck Magro said in a confer-

ence call Monday the planned

merger is the culmination of

two years of private talks with

Potash Corp. CEO Jochen Tilk.

“We have a common view of

where the fertilizer world is

going,” Mr. Magro said.

The merger between Potash

and Agrium adds to a string of

transactions involving the

global farming sector, includ-

ing the pending merger of Dow

Chemical Co. and DuPont and

China National Chemical

Corp.’s planned takeover of

Swiss pesticide and seed com-

pany Syngenta AG.

U.S. lawmakers said last

month that they plan to hold a

hearing to examine this wave

of mergers, saying the deals

potentially could reduce com-

petition and lead to higher

prices.

The Potash-Agrium tie-up is

expected to face scrutiny from

antitrust regulators in the U.S.

and Canada, among others,

over the combined companies’

North American share of

global potash production ca-

pacity, analysts say. The two

together would control just

23% of global production ca-

Please see DEAL page B

BYJUDYMCKINNON

ANDAUSTENHUFFORD

Canadian

Fertilizer

Companies

To Merge

BYPAULJ.DAVIES

More Pain

For Swiss

Lenders

BYMEGUMIFUJIKAWA

Low-Cost Prosthetics, Via Printer

SwitchOff

Shares on South Korea's stock

exchange fell after Samsung

asked customers not to use Note

7 devices.

Source: Thomson Reuters

THE WALL STREET JOURNAL.

Note: 1 million won = $897.

1.

1.

1.

1.

1.

1.

1.

million won

9 a.m. Noon 3 p.m.

reversal in trend. “Whatever

growth we are getting [glob-

ally] could slow down” if in-

terest rates rise, Mr. Anvarza-

deh added.

Emerging markets in Asia

are particularly vulnerable to

a rate increase in the U.S. as

better returns there could

prompt a flight of capital from

less-developed areas. But

some analysts say strong

growth and the potential for

earnings to pick up faster in

Asia will temper any sharp

withdrawals.

After U.S. stocks on Friday

posted the biggest declines

since the initial post-Brexit

drops, following a summer de-

void of volatility in equities

trading there, Australia’s S&P/

ASX 200 declined 2.2% Mon-

day and Taiwan’s Taiex fell

1.2%—both finishing at their

lowest levels in two months.

Hong Kong’s Hang Seng In-

dex skidded 3.4% to 23290.60,

the biggest decrease since

February.

The Shanghai Composite

shed 1.8%, finishing at a one-

month low, and the Nikkei

Stock Average ended down

1.7%. Korea’s Kospi, which

notched its largest decline in

two months Friday, topped

that with a 2.3% decline. Sam-

sung Electronics , which

makes up one-sixth of the in-

dex, notched its biggest de-

cline in four years, with a 7%

slide on more worries about

the Galaxy Note 7.

Easy monetary policies

have propped up asset prices

globally since the financial cri-

sis nearly a decade ago.

Alex Furber, a senior client-

services executive at CMC

Markets in Singapore, said,

“U.S. stocks were overvalued,

and a correction there was due

for some time.”

In the U.S., the Dow Jones

Industrial Average edged up

63.38 points, or 0.4%, to

18148.83 at midday and the

S&P 500 rose 0.6%, after Fri-

day posting their biggest de-

clines since the U.K. voted to

leave the European Union. The

Nasdaq Composite rose 0.8%.

In Europe, the Stoxx Europe

600 shed 1%.

One bright spot Monday

was Japanese life insurers,

which gained on expectations

that their investments abroad

will yield higher returns. Dai-

ichi Life Insurance rose 2.3%,

and T&D Holdings rose 2.1%.

Asian shares started the
week notably weaker as fears
of a possible U.S. interest-rate
increase gripped markets, with
investors assessing the poten-
tial impact on
growth.
“We are tak-
ing the selloff
in the U.S. [on
Friday] very, very seriously,”
said Amir Anvarzadeh, global
head of equity sales for Japan
at BGC Partners. He said the
equities weakness on both
sides of the Pacific indicates a

BYKENANMACHADO

Rate Fears, Global Growth Concerns Weigh in Asia

MONDAY’S
MARKETS

HEARD
ON THE
STREET

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