Wednesday4 March 2020 ★ 11
The Financial Times Limited 2020© Week 10
Saudi Arabia is said to be pushing for
at least another 1m barrels a day cut
when Opec meets in Vienna this week.
Ironically, the move would receive
enthusiastic support from the oil
cartel’s main competitor — the now
struggling US shale sector.
AnalysisiPAGE 19Under pressure US shale
looks to Opec for reliefM U R A D A H M E D— LONDONFifa as been accused of exaggeratingh
the financial potential of its Club World
Cup as it plans to revamp a competition
that has dividedthe game.Alejandro Domínguez, president of
Conmebol, South American football’s
governing body, said Fifawas offering
false hope that billions of dollars would
be secured for thetournament, which is
duetobelaunchednextyearinChina.
“The clubs are expecting a lot of
money and I’m not so sure the market
is going to give that money,” he old thet
Financial Times. “We are creating
expectations in clubs and I don’t think
we are in a place to reassure them the
moneywillbethere.”The comments reveal growingten-
sions ithw GianniInfantino,presidentof
Fifa, world football’s governing body,
over his plans to expand the eight-team
ClubWorldClubintoa25-teamcontest.
Uefa ears a bigger Club World Cupf
could challenge Europe’s Champions
League,considered the pinnacle of the
club game and which generates about
€2.5bn in broadcasting and sponsorship
revenueseveryyear.
Mr Domínguez, meanwhile, is upset
that Fifa consultedSouth American
clubswithout his knowledge. “We are
not against the Club World Cup, we just
wanttodoittherightway,”hesaid.
Mr Infantino held secret talks in 2018
withinvestors, including Japan’sSoft-
Bank, which pledged to inject $25bninto a joint venture to run the revamped
tournament and a new competition for
nationalteams.
The SoftBank-led consortium has
since dropped its interest, whileCVC
Capital Partners, another interested
party, has also cooled on the idea,
accordingtopeopleclosetothematter.
Fifa launched a tender process in
Decembertosellitsrights othetourna-t
ment and aids t had received “i a lot of
strongexpressionsofinterest”.
But Mr Domínguez said: “We want to
know more about where the money will
comefromandhowitwillbeplayed.We
thinkthereisnotmuchmoretimeleft.”
Additional reporting by James Fontanella-
Khan in New York
Lex age 10pFifa called to account over promise of
revamped Club World Cup billions
year after it parted ways withPeer
Schatz, its long-term chief executive,
and in October warned on profits sa
salesslowedinChina.
Peter Welford, an analyst at Jefferies,
said “a deal is likely to be welcome” for
Qiagen“givenlingeringuncertaintieson
China execution, QIAstat-Dx rollout,
and midterm growth drivers”.The
recenttalkswithsuitorsoverapotential
deal for Qiagen made a counterbid
unlikely,headded,whiletherewaslittle
threatfromantitrustconsiderations.
Qiagenclosedup15percentinFrank-
furt. Thermo Fisher shares opened
3percenthigherinNewYork.
Lex age 10pto accelerate innovation and address
emerging healthcare needs,” saidMarc
Casper, Thermo Fisher president and
chiefexecutive.
Qiagen has been working on equip-
ment to detect Covid-19 since the out-
breakbeganinJanuary.Lastweekitsaid
it had sent test kits to four hospitals in
China for evaluation and it planned to
apply for emergency authorisation to
sellthemintheUS,KoreaandChina.
The kits, which provide test results in
about an hour, are expanded versions of
the company’s QIAstat-Dx Respiratory
Panel, which is used to test for a variety
ofrespiratorysyndromes.
Qiagen’s shares were buffeted lasting equipment used during the Sars and
swinefluoutbreaks.
Thermo Fisher’s nterest in Qiageni
predates the coronavirus outbreak. In
November, the Dutch group, whose
shares are listed in Frankfurt and New
York,launchedareviewtoconsiderbids
from a range of suitors butdecided to
continuetogoitalone.
Thermo Fisher will pay €39 a share
forQiagen,valuingthegroupat$11.5bn,
including $1.4bn in debt. The offer
represents a 23 per cent premium to
Qiagen’sclosingsharepriceonMonday.
“This acquisition provides us with the
opportunity to leverage our industry-
leading capabilities and R&D expertiseM Y L E S M C C O R M I C K— LONDON
Thermo Fisher as agreed to buy Dutchh
diagnostics groupQiagen or $11.5bn inf
a move that expands its disease-testing
capabilities as the world is gripped by
thecoronavirusoutbreak.
The US scientific equipment maker,
which has a market capitalisation of
about $122bn and provides diagnostic
tools, said that buying Qiagen would
allow it to strengthen its portfolio, nota-
blyintestingforinfectiousdiseases.
Qiagen is developing kits to test for
Covid-19, which has infected more than
90,000 people globally and killed more
than 3,000. It previously provided test-
Thermo Fisher to acquire Qiagen
3 Disease-testing specialist valued at $11.5bn 3 Interest in Dutch group predates outbreak
Qiagen’s
coronaviruskits provide
test resultsin about
an hourCompanies / Sectors / People
3M.....................................................................Companies 12
4 Imprint...................................................... 20
AB InBev...................................................... 20
AMD............................................................... 20
ActisAfrica Data Centers............................................................................................... (^1414)
Air France-KLM........................................ 13
Airbus............................................................. 13
Airtel............................................................... 14
Alpha BankAlphabet...................................................................................................10,14 19
Amazon................................................2,12,
American Tower..................................... 20
Anglo American........................................ 12
AngloGold AshantiApple...................................................................................12,13,14 20
Arsenal.......................................................... 10
AstraZeneca................................................ 12
Audi................................................................. 14
AutoNationBASF................................................................................................................ (^1014)
BMW................................................................ 14
BP.................................................................... 14
BT......................................................................
BarclaysBarrick Gold....................................................................................................... (^2020)
Berkshire Hathaway.............................. 14
Berkshire Partners.................................. 14
BioMérieux.................................................. 10
BlackRockBritish Airways.....................................................................................12,197,
CME Group.................................................. 19
CRH.................................................................. 12
CVC.............................................................10,
Canada Pension Plan........................... 10
Charles SchwabChevron............................................................................................... (^1914)
Cipla................................................................... 3
Citigroup................................................14,
Clariant......................................................... 20
Clayton, Dubilier & RiceConmebol........................................................................... (^2011)
ConocoPhillips........................................... 14
Credit Suisse.............................................. 14
Crown Castle............................................. 20
CruiseDaimler........................................................................................................................ (^1012)
Danaher........................................................ 10
Deutsche Bank.......................................... 19
Deutsche Börse........................................ 19
DiaSorinETrade................................................................................................................... (^1019)
EasyJet........................................................... 13
Emirates........................................................ 13
Eskom............................................................... 4
ExxonMobilFacebook....................................................................................................... (^1414)
Fidelity........................................................... 12
Fifa..............................................................10,
Formula One.............................................. 10
FoxconnGeely........................................................................................................................ (^1312)
General Electric...................................... 14
General Motors.....................................2,
Gojo Industries.......................................... 12
GoogleGreggs................................................................................................................10,20 10
HSBC....................................................7,14,
Hershey......................................................... 14
Hunting........................................................ 20
Huntsworth................................................ 20
IAGIBioPharma.................................................................................................................... (^2019)
IHG................................................................... 12
ING................................................................... 14
Intel................................................................. 20
Intercontinental ExchangeIntesa Sanpaolo....................................................8,19 19
Intu................................................................... 12
JPMorgan..............................................14,
LG Chem....................................................... 14
Liquid TelecomLloyds..................................................................................................... 2014
Lloyds Banking Group......................... 12
Lufthansa...............................................13,
MTA................................................................. 12
MTNMagna............................................................................................................................ (^1410)
Manchester United................................ 10
Mercado Libre............................................. 2
Mercedes-Benz......................................... 12
Merrill LynchMicrosoft...............................................................................................12,14 14
Morgan Stanley........................................ 19
Mubadala..................................................... 10
Nestlé............................................................. 14
NetflixNewmont................................................................................................................. (^2020)
Nike.................................................................... 2
Nissan............................................................. 12
Northvolt...................................................... 14
OpelOrange............................................................................................................................ (^1414)
Panasonic..................................................... 12
Pharma Mar............................................... 20
Phoenix Group.......................................... 14
Piraeus Bank.............................................. 19
PorscheProton....................................................................................................................... (^1412)
Qatar Airways............................................ 13
Qiagen................................................10,11,
Quintessentially.......................................... 7
RPGRack Centre.................................................................................................................... 142
ReAssure...................................................... 14
Renesas Electronics............................... 12
Robinhood.............................................10,
Rolls-RoyceRotork.............................................................................................................. 2012
Royal Dutch Shell................................... 14
Ryanair........................................................... 13
Sabic............................................................... 20
Samsung ElectronicsShiseido...................................................................................... (^1212)
Silver Lake.................................................. 10
SoftBank............................................10,11,
Sony................................................................. 12
SpaceXStandard Chartered...................................................................................12,20 12
State Street..........................................10,
Stealth BioTherapeutics.................... 20
Swiss Re........................................................ 14
T Rowe PriceTD Ameritrade....................................................................................... (^1019)
Target............................................................ 20
Tencent......................................................... 14
Teraco Data Environments............... 14
TeslaThermo Fisher..................................................................................12,14,2010,11,
Thyssenkrupp........................................... 20
Toyota......................................................12,
UBI...................................................................... 8
UBS.................................................................. 14
Uefa.................................................................. 11
UniCredit...................................................... 14
VanguardVaxArt............................................................................................................12,19 19
Virgin Atlantic........................................... 13
Volkswagen...........................................12,
Volvo Cars................................................... 12
WPP................................................................... 7
Waymo........................................................... 10
Wizz Air......................................................... 13
Wm Morrison............................................ 20
Sectors
Aerospace & Defence......................12,
AirlinesAutomobiles.................................................................................10,12,14,2013,
Banks........................................................12,
Chemicals..............................................14,
Financial Services........................12,14,
Financials....................................10,12,14,
Food & Beverage................................... 20
Healthcare...................................2,3,9,10,
Industrials................................................... 20
Insurance...................................................... 14
Media............................................................. 20
MiningOil & Gas.....................................................................................................14,19,20 20
Personal & Household Goods......... 12
Pharmaceuticals..................3,10,11,12,
Property....................................................... 20
Retail.............................................................. 20
Retail & Consumer.................................. 12
Support Services.................................7,
Technology...............................10,12,14,
Telecoms....................................................... 12
Travel & Leisure.................................10,
Utilities.......................................................... 20
People
Blume, Oliver..............................................14Branson, Richard........................................ 7
Buffett, Warren......................................... 14
Casper, Marc............................................... 11
Coker, Tunde............................................. 14
Diess, Herbert........................................... 14
Domínguez, Alejandro........................... 11
Drummond, Paul........................................ 7
Duproz, Stephane................................... 14
Elliot, Ben....................................................... 7
Ermotti, Sergio.......................................... 14
Fielding, AnabelGalperín, Marcos.................................................................................. (^72)
Goenka, Harsh............................................. 2
Hamers, Ralph........................................... 14
Infantino, Gianni.................................10,
Johnson, Abigail....................................... 12
Kielholz, Walter........................................ 14
Li, Shufu........................................................ 12
Liu, Young-way....................................... 13
Lundgren, Johan...................................... 13
Musk, Elon................................................... 12
O’Leary, MichaelPorat, Ruth......................................................................................... (^1310)
Schatz, Peer...........................................10,
Seebohm, Annastasia.............................. 7
Simpson, Aaron.......................................... 7
Slyngstad, Yngve.................................... 14
Villamizar-Duque, Caroline.................. 7
Walsh, Willie................................................ 13
Weber, Axel................................................ 14
Winters, Bill................................................. 12
Wirth, Michael........................................... 14
Open seasonUK investors set to turn
spotlight on pensions and pay— ANALYSIS, PAGE 12
Stat attackDon’t hold your breath waiting
for AI to transform investing— MARKETS INSIGHT, PAGE 20
Richard
Henderson
Tail
Risk
Exchange traded funds have radically changed the face of
capital markets. Today, a significant chunk of the world’s
stocks and bonds are held in these passive funds that
typicallytrackanindex.
ETFs have long provoked questions. In a rapidly falling
market, would investors be able to sell ETF units in an
orderly manner? If there were no buyers, could ETF man-
agers sell the bonds they hold quickly enough to free up
moneyfordepartinginvestors?
Onbothcounts,theanswerlastweekwasyes.
Passive funds have become popular with investors
because they are cheap and tend to perform just as well as
more expensive actively managed funds. Their growth
since the financial crisis has mirrored abull run n stocks.i
Investorshavesufferedseverelossesonlyinbriefdips.
The market slump last week was the most severe since
- And yet no large ETF imploded. The largest stock-
focused funds experienced some of their busiest days of
buyingandsellingandstillfunctionedastheyshould.
BondETFshavealsogrown
quickly,surpassing 1tn in$
assets. They give investors
access tobaskets of debt sec-
urities and can be redeemed
throughout the day — not
just at the end of the day, as
withmutualfunds.
Such funds were subject to
persistentworries hat theyt
would exacerbate the effects
ofsell-offs.Someobserversfearedthatwhenenoughinves-
tors in a bond ETF pulled out their money, managers
would struggle to sell the less liquid bonds, pushing down
pricesfurtherandtriggeringyetmoreoutflows.
So it is notable that bond funds tracking riskier assets
also held up while underlying markets sold off last week.
Investors yanked arecord sum f money from junk-bondo
ETFsandmutualfunds,preferringgovernmentbonds.
The world’s largest junk-bond ETF, BlackRock’s HYG,
accountedformorethanhalfofthoseoutflows—including
$1.5bninasingleday.Butthesellingseemedorderly.Bonds
weresoldandthemoneygivenbacktodepartinginvestors.
The fund’s price did fall below the value of the bonds it
holds — a signal of stress — but not for long, noted Samara
Cohen,BlackRock’sco-headofiSharesmarketsandinvest-
ments. “Last week was an extraordinary risk-off market
butanorderlysell-off,”shesaid.
Todd Rosenbluth, head of mutual fund and ETF res-
earch for CFRA, said it was a “real-world example of bond
ETFs adding liquidity to the fixed-income market”,a read-
ingthatpromotersofthesesecuritieshavelongargued.
Others remain sceptical that the mechanics will still
function as smoothly if markets tumble for longer. “That
selling pressure would have tightened at some point,” said
Liz Young, director of market strategy for BNY Mellon
InvestmentManagement.Thedebatewillrunandrun.
[email protected]The market
slump last week
was the mostsevere since
2008 yet no largeETF imploded
Economistspredictthatemerging-
marketcentralbankswillbeforcedtocall
aprematurehalttotheireasingpolicies,
justastheUSFederalReserveaccelerates
itsown.
TheFed’s halfapercentagepointcut
yesterdayconfirmedinvestorbetsthat
developed-marketcentralbankswould
cometotherescueofthecoronavirus-hit
globaleconomy.Foremergingmarkets,
however,weakerexchangeratesmay
pushpolicymakerstohalttheireasing
cycles,evenasgrowthweakens.
AlmostallfreelytradedEMcurrencies
haveweakenedinrecentweeksas
nervousinvestorssoughtsafety.
Commodity-exportingcountrieshave
beendoublyhit,asoilandmetalsprices
havetumbledonsofteningglobal
demand.Weakeningcurrenciesfeed
throughtohigherinflationbyraisingthe
priceofimportedgoodsandservices.
EdwardGlossop,emergingmarkets
economistatCapitalEconomics,predicts
thatthesell-offswillpushupinflation
overthenextyearbyatleast
0.6 p ercentagepointsinRussiaandSouth
Africa—strengtheninghisviewthat
monetaryeasingcyclesinbothcountries
arenow“closetoanend”.
Thiswouldcomeevenaseconomic
growthislikelytocomeunderpressure,
giventhepair’sheavyrelianceon
commodities.MrGlossopalsoexpectsa
similarcurrency-drivenpick-upin
inflationinTurkey,wherehethinksthe
centralbankwillreversecourseandstart
raisingratesinthesecondhalfoftheyear.
Steve Johnson
Crossing point light to safety drives monetary policy in opposite directionsF
Emerging market currencies hit
as investors turn to havensSources: Refinitiv; IMF; Bloomberg; Capital EconomicsYear to date, rebasedInflation set to rise after currency
sell-o
IMF estimate of rise in consumer price
inflation months after a
trade-weighted exchange rate fall
(percentage points)Jan FebColombian pesoRussian roubleChilean pesoBrazilian realSouth African randPakistan
Ukraine
Argentina
Turkey
China
Romania
South Africa
Hungary
Poland
Indonesia
Russia
Peru
Brazil
India
Philippines
Colombia
Malaysia
ChileA Moscow shopping mall. Analysts predict that inflation in Russia will edge higher— Mladen Antonov/AFPMARCH 4 2020 Section:2Front Time: 3/20203/ - 19:10 User:nick.miller Page Name:2FRONT USA, Part,Page,Edition:EUR , 11, 1