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iWashington extends Huawei reprieve
The commerce department has said it will allow US
groups to sell to the Chinese company in some
circumstances for three more months, despite fresh
hostile rhetoric from Donald Trump.— PAGE 11iUS tech groups press Paris on digital tax
Amazon, Google and Facebook have urged France
to pull its plans for a digital services tax, attacking it
as discriminatory. But they also urged the White
House not to retaliate with tariffs.—PAGEiUK business slams Johnson over no-deal
Companies have accused Downing Street of causing
disruption and uncertainty after the premier’s
office warned freedom of movement for EU citizens
would abruptly halt under a no-deal Brexit.—PAGEiBanks warned over key derivatives rate
The European Central Bank has
told financial groups to speed
up preparations for the phasing
out of the Eonia benchmark
that is used to price more than
€24tn of derivatives.— PAGE 11iOpposition riled as Turkey sacks mayors
Turkey has dismissed the elected mayors of three
predominantly Kurdish cities, accusing them of
supporting terrorism. The opposition said the move
was a further blow to electoral democracy.—PAGEiChurch sells property to buoy abuse fund
Ireland’s Catholic church has entered the real estate
market as its waning influence reduces its property
needs and as it seeks to fund donations to a state
redress scheme for victims of priests’ abuse.—PAGEi$100m elixir for life-extension start-up
Juvenescence, a British biotech company seeking to
increase human longevity, has closed a $100m
funding round, valuing it at $500m. City of London
veteran Michael Spencer has put in $10m.— PAGE 12Datawatch
Meals on wheels
Delivery apps threaten a restaurant
revolution— JOHN THORNHILL, PAGE 9
TUESDAY 20 AUGUST 2019 WORLD BUSINESS NEWSPAPER EUROPE
World Markets
STOCK MARKETS
Aug 19 prev %chg
S&P 500 2918.51 2888.68 1.
Nasdaq Composite 7987.92 7895.99 1.
Dow Jones Ind 26110.40 25886.01 0.
FTSEurofirst 300 1471.93 1456.14 1.
Euro Stoxx 50 3367.01 3329.08 1.
FTSE 100 7189.65 7117.15 1.
FTSE All-Share 3936.29 3893.66 1.
CAC 40 5362.21 5300.78 1.
Xetra Dax 11706.50 11562.74 1.
Nikkei 20563.16 20418.81 0.
Hang Seng 26291.84 25734.22 2.
MSCI World $ 2108.50 2082.84 1.
MSCI EM $ 970.27 963.52 0.
MSCI ACWI $ 503.68 497.85 1.CURRENCIES
Aug 19 prev
$ per € 1.110 1.
$ per £ 1.213 1.
£ per € 0.914 0.
¥ per $ 106.495 106.
¥ per £ 129.226 129.
SFr per € 1.088 1.
€ per $ 0.901 0.Aug 19 prev
£ per $ 0.824 0.
€ per £ 1.094 1.
¥ per € 118.161 118.
£ index 74.835 74.
SFr per £ 1.190 1.COMMODITIESAug 19 prev %chg
Oil WTI $ 55.56 54.81 1.
Oil Brent $ 59.29 58.64 1.
Gold $ 1515.25 1515.65 -0.INTEREST RATES
price yield chg
US Gov 10 yr 132.06 1.59 0.
UK Gov 10 yr 150.73 0.47 0.
Ger Gov 10 yr -0.65 0.
Jpn Gov 10 yr 120.46 -0.24 0.
US Gov 30 yr 116.22 2.07 0.
Ger Gov 2 yr 101.28 -0.91 0.price prev chg
Fed Funds Eff 2.40 2.38 0.
US 3m Bills 2.02 2.05 -0.
Euro Libor 3m -0.44 -0.43 -0.
UK 3m 0.77 0.77 0.
Prices are latest for edition Data provided by MorningstarMARTIN ARNOLD— FRANKFURTGermany’s central bank has warned
that Europe’s largest economy is likely
to tip into recession in the third
quarter, dragged down by a sharp drop
in exports and a decline in industrial
production.The Bundesbank said in its monthly
update that it expected Germany’s
economy to remain “lacklustre” in the
three months to September, adding that
it “could continue to decline slightly”
after it shrank 0.1 per cent in the three
months to June.
The warning added to gloom about
the German economy, which has gone
from being the growth powerhouse of
the region to one of its laggards, weighed
down by turmoil in the car industry, the
US-China trade war and the prospect of
achaotic UK exitfrom the EU.In the second quarter, a slowdown
in foreign trade and a decline in indus-
trial production were partly offset by
growth in household and government
spending. But the Bundesbank warned
that it was not sure how long this could
continue.
“Future developments will hinge on
how long the present economic dichot-
omy lasts and which direction it takes
once it dissolves,” it said.
“As things stand, it is unclear whether
exports and, by extension, industry will
regain their footing before the domestic
economy becomes more severely
affected.”
In recent weeks Germany’s decade-
long pledge to maintain a budget sur-
plus has faced growing criticism from
economists, business groups, opposi-
tion leaders and even from individual
members of the government coalition.The European Central Bank is set to
cut interest rates further into negative
territory next month but Mario Draghi,
its president, has insisted repeatedly
that eurozone governments should not
relyon monetary policy alone to save
the bloc’s economy.
There are signs that Berlin is prepar-
ing to announce a stimulus package,
including measures to boost investment
and to cut carbon emissions. Olaf
Scholz, finance minister, said on Sunday
that the government should be able to
muster a €50bn stimulus package, as it
did after the 2008 financial crisis.
Many economists fear that Germany,
which narrowly escaped a technical
recession last year, faces the threat of a
prolonged contraction as weakness in
its manufacturing sector seeps into its
previously buoyant services and con-
sumer spending.Bundesbank adds to fears of German
recession as trade wars and Brexit hit
© THE FINANCIAL TIMES LTD 2019
No: 40,173★Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, DohaAnalysisiPAGE 3Revolutionary Guards draw
power from tanker victoryAustria €3.80 North Macedonia Den
Bahrain Din1.8 Malta €3.
Belgium €3.80 Morocco Dh
Bulgaria Lev7.50 Netherlands €3.
Croatia Kn29 Norway NKr
Cyprus €3.60 Oman OR1.
Czech Rep Kc105 Pakistan Rupee
Denmark DKr37 Poland Zl 20
Egypt E£42 Portugal €3.
Finland €4.50 Qatar QR
France €3.80 Romania Ron
Germany €3.80 Russia €5.
Gibraltar £2.70 Serbia NewD
Greece €3.60 Slovak Rep €3.
Hungary Ft1200 Slovenia €3.
India Rup220 Spain €3.
Italy €3.60 Sweden SKr
Latvia €6.99 Switzerland SFr6.
Lebanon LBP7500 Tunisia Din7.
Lithuania €4.30 Turkey TL
Luxembourg €3.80 UAE Dh17.Foreign demand
for US residential
property is
evaporating.
Between April
2018 and March
this year,
foreigners bought
183,100 properties
with an average
price of $426,100,
totalling $77.9bn
— a 36 per cent
drop on a year agoUS home truths
Foreign residential purchases ( bn) *
*April to May
Sources: National Association of Realtors,
StatistaHSBC headwinds
Bank’s China expansion plans sail
into choppy waters— BIG READ, PAGE 7
Silicon slab
The race for AI spawns the world’s
biggest computer chip— PAGE 13
RICHARD HENDERSON AND
PATRICK TEMPLE-WEST— NEW YORK
One of the US’s biggest business groups
has dropped the “shareholder primacy”
creed that has driven capitalism for
decades, urging companies to weigh the
environment and workers’ wellbeing
alongside pursuing profits.
The Business Roundtable placed
shareholders as one of five stakeholders,
alongside customers, workers, suppliers
and communities in a new “statement of
purpose”.It has close to 200 members,
including the chief executives of JPMor-
gan, Amazon and General Motors,
which generate $7tn in annual revenue.
It is a significant departure from the
belief that businesses serve the owners
of their capital — a philosophy champi-
oned by Nobel Prize-winning economistMilton Friedman and which has driven
corporate America since the 1970s.
Companies should “protect the envi-
ronment” and treat workers with “dig-
nity and respect” while also delivering
long-term profits for shareholders, the
BRT said.
The change amounts to a call to
reform capitalism in a time in which ris-
ing populism and concern over climate
change have led politicians and share-
holder activists to demand that compa-
nies consider their impact on the world
beyond their balance sheets.
“It’s an important shift,” said
Mohamed El-Erian, chief economic
adviser for Allianz. “It reflects an
emerging consensus about the impor-
tance of more inclusive capitalism.”
The BRT’s statement lacks detail onwhat actions companies could take,
such as increasing wages and cutting
carbon emissions.
Larry Summers, who served as US
Treasury secretary under President Bill
Clinton, said that without an enforce-
ment tool the statement lacked teeth
and that government was notably
absent as a stakeholder. “I’m wary,” said
Mr Summers.
“I worry the Roundtable’s rhetorical
embrace of stakeholders is in part a
strategy for holding off necessary tax
and regulatory reform.”
The BRT statement may be seen as an
effort to assuage political pressure for
broad business reform from the likes of
Democratic presidential candidate
hopefuls Elizabeth Warren and Bernie
Sanders. Both have highlighted the factthat US companies are making record
profits and spending record amounts on
share buybacks while wages stagnate.
The statement’s language had echoes
of a reform bill introduced by Ms War-
ren last year that would require com-
pany directors to consider all stakehold-
ers, “including employees, customers,
shareholders and the communities in
which the company operates”.
Marco Rubio, a Republican senator
for Florida, has called on US businesses
to think beyond their shareholders and
instead take a long-term view to invest-
ment, which he thinks will promote
employment.
In the UK, Jeremy Corbyn, leader of
the opposition Labour party, has also
suggested broad corporate reform.
Editorial Commentpage 8US companies rethink business by
ditching creed of shareholders first
3 Roundtable lists ‘stakeholders’ 3 Focus on environment and staff 3 Critics seek detail
All ears
Macron seeks
Ukraine talks
French President Emmanuel Macron,
right, and his Russian counterpart
Vladimir Putin adjust their earpieces at
their meeting yesterday at the presiden-
tial retreat of Fort de Brégançon on the
Mediterranean coast.
Both leaders said they saw an oppor-
tunity for new talks to end the conflict
in eastern Ukraine following the elec-
tion of former comedian Volodymyr
Zelensky as Ukrainian president.
“There are some things that can be dis-
cussed, that provide some cause for
optimism,” Mr Putin said.
Mr Macron is seeking progress on
Ukraine and other international
conflicts in the run-up to the G7 summit
in Biarritz at the weekend.
Full storypage 2
Gerard Julien/ReutersLarry Summers,
former Treasury
secretary, said:
‘I worry the
embrace of
stakeholders
is in part a
strategy for
holding off
reform’
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