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TECHNOLOGY: NEW EU LEADERSHIP SET TO KEEP UP SCRUTINY OF U.S. COMPANIES B4

BUSINESS&FINANCE

Saudi Arabia is removing

Energy Minister Khalid al-Fa-

lih as chairman of its state-

owned oil giant, a surprise

shift as plans for an initial

public offering accelerate.

The move, according to

people familiar with it, is in-

tended to further separate the

powerful Saudi energy minis-

try from the governance of

Saudi Aramco, the oil colossus

that is seeking to list a sliver

of itself on public markets as

early as this year. In a tweet

late Monday, Mr. Falih called

the move “an important step

to prepare the company for

the public offering.” Mr. Falih

will continue to serve as en-

ergy minister.

Aramco is elevating Yasir

al-Rumayyan to its chairman-

ship, Mr. Falih said in his

tweet. Mr. Rumayyan is head

of the Public Investment Fund,

ByBenoit Faucon,

Summer Said

andJared Malsin

Adults’abilitytocovera$400expense

withcash

Waysadultswouldcovera$400emergency,

besidescashoritsequivalent*

*Respondents can select multiple answers.

Source: Federal Reserve survey of 11,440 adults conducted Oct. 11-Nov. 12, 2018.

100

0

25

50

75

%

2013 ’14 ’15 ’16 ’17 ’18

Couldn't Couldpay

Creditcard

Familyorfriend

Sellsomething

Bankloanorlineofcredit

Useapaydayloandepositadvanceoroverdraft

Wouldnotbeabletopay

16%

10

6

3

2

12

check arrives. By avoiding late

fees, Ms. McGuffin, who earns

about $16 an hour, said she

has been able to splurge on

the occasional restaurant meal

or toy for her daughter.

Walmart introduced salary

PleaseturntopageB5

Home, says PayActiv has

helped her avoid late and

overdraft fees of as much as

$80 a month. Ms. McGuffin, 36

years old, said she typically

uses PayActiv once or twice

per pay period, generally for

bills due before her next pay-

cludes financial counseling

and online bill payments.

Some point out that a $5 fee

can equate to a high annual-

ized percentage rate on a

small short-term loan.

Robyn McGuffin, a medica-

tion technician at Nazareth

More companies are help-
ing workers gain access to
payroll advances and loans, re-
flecting concern over the im-
pact money problems are hav-
ing on productivity levels and
worker retention.
Employers includingWal-
martInc. and Pima County,
Ariz., have recently added
these services. The aim is to
help cash-strapped employees,
many with damaged credit,
cover unexpected expenses
without resorting to high-cost
debt.
“Employers have woken up
to the fact that a majority of
workers are having a lot of
trouble simply getting by,
never mind getting ahead,”
said Sophie Raseman, head of
financial solutions at Bright-
side, a company Comcast
Corp. co-founded that provides
financial guidance to workers
and is testing payroll loans
with some corporate clients.
Workers typically access
the services online. The pay-
roll-advance programs gener-
ally give employees the option
to accelerate a portion of their
next paycheck for a fee that
often amounts to a few dol-
lars. The loans are typically a
couple thousand dollars and
are repaid through automatic
payroll deductions over a few
months to a year or longer.
Approval and interest rates,
generally 6% to 36%, often de-
pend on factors including a
borrower’s credit score.
Because the services deduct
repayments from workers’
paychecks before the money
goes to their bank accounts,
default rates tend to be low.
According to an Employee
Benefit Research Institute sur-
vey of 250 employers last
year, 12% offered accelerated

the country’s primary sover-

eign-wealth fund, and a key

ally of Saudi Crown Prince

Mohammed Bin Salman.

Aramco declined to com-

ment. The Saudi energy minis-

try wasn’t immediately avail-

able to comment.

For Aramco observers, the

change signaled new urgency

in moving ahead with the pub-

lic listing. Prince Mohammed

has pushed for an IPO of as

much as 5% of Aramco—for-

mally called theSaudi Arabian

OilCo.—the world’s biggest oil

producer and most profitable

company, for which he has ad-

vocated an overall valuation of

some $2 trillion. That would

amount to the world’s biggest-

ever public offering, despite

representing such a small

sliver of the oil giant.

But plans stalled last year

over matters like valuation

and the venue for such a list-

ing, and restarted in earnest

only recently. The Wall Street

Journal reported last week

PleaseturntopageB2

Aramco Names

A New Chairman

A troubled Chinese bank
said it would skip a year of in-
terest payments to interna-
tional bondholders, days after
reporting that losses and
problem loans had soared.
Bank of Jinzhouis the first
Chinese lender to protect its
financial health by using this
provision on its additional
tier-1 dollar bonds, analysts
said. A form of “contingent
convertible,” or CoCo, these
bonds are widely used by
lenders in Europe and Asia to
shore up their financial posi-
tions. If a bank runs low on
capital, it can withhold coupon
payments or in some cases
convert the securities into
common stock.
Concern over the potential
for more defaults in the bank-
ing system has climbed after a
PleaseturntopageB2

BYFRANCESYOON

Chinese

Bank Halts

Coupon

Payments

LastWeek:S&P2926.46À2.79% S&P FINÀ3.20% S&P ITÀ3.12% DJ TRANSÀ3.98% WSJ $ IDXÀ0.97% LIBOR 3M2.138 NIKKEI20704.37g0.03% See more at WSJ.com/Markets

The latest complication in

the long-running saga, these

officials said, stems from a

Boeing briefing in August that

was cut short by regulators

from the U.S., Europe, Brazil

and elsewhere, who com-

plained that the plane maker

had failed to provide technical

details and answer specific

questions about modifications

in the operation of MAX flight-

control computers.

Boeing as a result now has

to resubmit briefing docu-

ments describing proposed

software changes, these people

said. The changes then have to

be vetted by theU.S. Federal

Aviation Administrationbe-

fore a follow-up meeting with

the same participants can be

held and crucial simulator and

flight tests of the final soft-

ware revisions scheduled.

The upshot, the people said,

is likely to be several more

weeks of delay that could sig-

nificantly reduce the likeli-

hood that many of the planes

would be back flying passen-

gers in North America during

the Christmas holidays, as

Boeing and some U.S. carriers

have publicly projected. The

meetings and the fallout ha-

ven’t been reported before.

In Europe, some industry

officials say they are increas-

ingly convinced the bulk of the

planes on that side of the At-

lantic aren’t likely to resume

carrying passengers until Jan-

uary at the earliest. European

regulators have signaled they

might need the extra time to

examine anticipated changes to

the MAX’s flight-control com-

puters and the automated

stall-prevention system dubbed

MCAS. Misfires in MCAS led to

the crashes of two MAX air-

craft in less than five months

that took a total of 346 lives

and prompted a global ground-

ing in mid-March.

A Boeing spokesman de-

clined to comment on the

troubled session last month,

which was held in the Seattle

area. “Our best current esti-

mate continues to be a return

to service of the MAX that be-

gins early in the fourth quar-

ter,” he said, adding that tim-

ing will be driven by the FAA

and global regulators. “Our fo-

cus is on safety and ensuring

the trust and confidence of

customers, regulators and the

flying public,” he said.

PleaseturntopageB2

Friction between Boeing
Co. and international air-
safety authorities threatens a
new delay in bringing the
grounded 737 MAX fleet back
into service, according to gov-
ernment and pilot union offi-
cials briefed on the matter.

BYANDYPASZTOR
ANDALISONSIDER

Boeing Faces New 737 MAX Delay

Friction with regulators

could keep the plane

out of service through

December holidays

pay. The same percentage of-

fered short-term loans repaid

through payroll deductions.

Another 4% and 6% plan to

add the services, respectively.

Lauren Saunders, associate

director of the National Con-

sumer Law Center, said pay-

roll-advance services may cre-

ate “a cycle of chronic early

spending.”

Companies, meanwhile, are

responding to data that indi-

cate American workers are fi-

nancially stressed. While in-

comes have been stagnant for

many, expenses for items in-

cluding health care and educa-

tion have risen.

Employers are concerned

about the effect on productiv-

ity and turnover. Research by

Todd Baker, a senior fellow at

Columbia University’s Rich-

man Center for Business, Law

and Public Policy, looked at 16

companies in the U.K. that of-

fered payroll loans and found

that borrowers had, on aver-

age, an annualized attrition

rate 28% lower than the rate

for all employees.

Mary Haynes, chief execu-

tive ofNazareth Home, which

runs long-term-care facilities

in Louisville, Ky., said her

company began offering accel-

erated paychecks throughPay-

ActivInc. two years ago after

realizing many of its staff

were incurring late fees and

using payday loans. PayActiv

works with 500 employers, in-

cluding Walmart. Of Naza-

reth’s 400 employees, 338 are

enrolled in PayActiv and 280

use it regularly, Ms. Haynes

said.

Typically, payday loans

charge $15 for every $100 bor-

rowed. Bank overdraft fees of-

ten cost about $35. In con-

trast, PayActiv charges $5 per

pay period when an employee

uses the service, which in-

BYANNETERGESEN

Companies Make

It Easier to Get

Payroll Advances

Walmart employees pay $6 a month for PayActiv; the amount they can accelerate is capped at 50% of pay.

DAVID J. PHILLIP/ASSOCIATED PRESS

Long-term bonds have been

on a tear in recent weeks with

yields tumbling enough to

heighten fears of a possible re-

cession ahead.

But the bond market’s

closely watched signals may

have become exaggerated.

That’s because part of the

recent fall in bond yields—

which drives bond prices

higher—has been caused by

banks, insurers and other in-

vestors essentially buying on

auto-pilot, scooping up more

bonds because that’s what

their pre-existing risk models

and investment-hedging strat-

egies tell them to do.

“There was a fundamental

driver to this move in yields

and that continues to be vali-

datedbyeconomicdataand

the Fed,” said Josh Younger,

head of U.S. interest rates de-

rivatives strategy at JPMorgan

in New York.

“But the signals provided

by the rates markets are being

amplified by this hedging ac-

tivity.”

The strong rally in long

bonds such as the 10-year U.S.

Treasury note and the 30-year

bond has made them among

the best performing assets of

any market in the world this

year.

They also caused dreaded

inversions of the U.S. yield

curve in August, most notably

one where the 10-year yield

falls below the two-year yield,

a warning that a recession

may be around the corner.

Still, less than half the fall

in 10-year yields during Au-

gust—the biggest monthly

drop in percentage point

terms since 2011—came down

to economic reasons, accord-

ing to Mr. Younger.

He figures the recent 10-

year Treasury yield of 1.5% is

about 0.25 percentage point

below where it would be with-

out hedging activity, some-

times called “forced buying.”

One giveaway that the

hedging activity has been im-

portant in recent market

moves is that yields in a part

of the derivatives market

where hedging is done have

fallen faster than those on

bonds, according to Mr. Youn-

ger.

Here’s how one prominent

hedge works for bond inves-

tors. Falling rates lead to a

wave of Americans refinancing

home loans. That means mort-

gage-backed bonds get paid

off quicker than expected.

PleaseturntopageB9

BYPAULJ.DAVIES

Bonds’ Big

Swings

Amped Up

By Market

Strategy

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short of the pop singer’s four previous albums, but it logged the biggest sales week of the year. B2

MATT SAYLES/INVISION/ASSOCIATED PRESS