Financial Times 27Feb2020

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Briefing

iNMC fires chief after review findings

The healthcare group has fired Prasanth Manghat,

suspended a treasury team member and granted

“extended sick leave” to its chief financial officer

after finding bank statement discrepancies.— PAGE 13

iPutin agrees vote on constitution change

The Russian president has agreed to a nationwide

vote on proposed changes on April 22, as he seeks

backing for a shake-up that would give him options

potentially to maintain rule in a new role.— PAGE 2

iRamaphosa wage-cut plan sets up clash

Pretoria has unveiled plans to

slash the public sector wage

bill, setting the president on a

collision course with powerful

trade unions as he seeks to fix a

wide fiscal deficit.— PAGE 3

iBank of England spurs shift from Libor

The UK central bank has sought to “turbocharge”

lenders’ shift away from the tainted interest rate

benchmark by toughening the terms of its lending

against it. Measures start in October.— PAGE 21

iBP cuts ties to lobby groups over climate

The oil group has said it will cut ties with three US

industry bodies after reviewing its membership of

30 global trade groups and weighing their positions

on climate policies against its own.— PAGE 16

iKyiv told bank spat risks capital flight

Petr Krumphanzl, chief executive of PrivatBank,

has warned Ukraine is at risk of capital flight and a

plummeting currency unless president Volodymyr

Zelensky commits to clean up the lender.— PAGE 2

iRobots lift vineyards’ grape expectations

Winemakers have turned to technology as limits on

working hours and immigration choke the labour

supply, with robots measuring everything from leaf

temperature to water availability.— PAGE 16

Datawatch

Healthy prognosis

The tangible benefits of AI for

medicine— BROOKE MASTERS, PAGE 11

THURSDAY 27 FEBRUARY 2020 WORLD BUSINESS NEWSPAPER ASIA

World Markets

STOCK MARKETS

Feb 26 prev %chg

S&P 500 3155.49 3128.21 0.

Nasdaq Composite 9073.11 8965.61 1.

Dow Jones Ind 27305.13 27081.36 0.

FTSEurofirst 300 1577.03 1576.17 0.

Euro Stoxx 50 3576.97 3572.51 0.

FTSE 100 7042.47 7017.88 0.

FTSE All-Share 3928.00 3921.63 0.

CAC 40 5684.55 5679.68 0.

Xetra Dax 12774.88 12790.49 -0.

Nikkei 22426.19 22605.41 -0.

Hang Seng 26696.49 26893.23 -0.

MSCI World $ 2269.42 2330.75 -2.

MSCI EM $ 1056.54 1055.32 0.

MSCI ACWI $ 542.91 555.73 -2.

CURRENCIES

Feb 26 prev

$ per € 1.087 1.

$ per £ 1.292 1.

£ per € 0.841 0.

¥ per $ 110.575 110.

¥ per £ 142.825 143.

SFr per € 1.062 1.

€ per $ 0.920 0.

Feb 26 prev

£ per $ 0.774 0.

€ per £ 1.189 1.

¥ per € 120.146 119.

£ index 81.367 80.

SFr per £ 1.263 1.

COMMODITIES

Feb 26 prev %chg

Oil WTI $ 49.41 49.90 -0.

Oil Brent $ 54.05 54.95 -1.

Gold $ 1650.30 1671.65 -1.

INTEREST RATES

price yield chg

US Gov 10 yr 1.33 -0.

UK Gov 10 yr 0.50 -0.

Ger Gov 10 yr 105.29 -0.51 0.

Jpn Gov 10 yr -0.10 0.

US Gov 30 yr 120.44 1.81 0.

Ger Gov 2 yr 105.82 -0.70 0.

price prev chg

Fed Funds Eff 1.55 1.55 0.

US 3m Bills 1.53 1.53 0.

Euro Libor 3m -0.45 -0.44 -0.

UK 3m 0.73 0.74 -0.

Prices are latest for edition Data provided by Morningstar

G U Y C H A Z A N— BERLIN

Germany’s finance minister is eyeing a

suspension of the country’s limit on

taking on new debt, in what would be a

big shift in fiscal orthodoxy in the euro-

zone’s largest economy.

Olaf Scholz wants to help 2,500 towns

and cities that are struggling to service

their debt. According to an official

familiar with his thinking, he is looking

at temporarily lifting Germany’s “debt

brake” — a measure enshrined in the

constitution that limits Berlin’s ability

to run deficits.

Germany’s strict fiscal discipline has

delivered a string of surpluses but a cho-

rus of economists, business leaders and

politicians argue that Angela Merkel’s

government should take advantage of

historically low interest rates to loosen

the purse strings and boost investment.

Calls for higher spending have grown

louder as the prospects for the eurozone

darken. Data published this month

showed the single currency area grow-

ing at its slowest rate since the debt cri-

sis seven years ago. There are also

mounting concerns over economic dis-

ruption from the coronavirus,which is

already having an impact on manufac-

turing supply chains, exports and travel.

Christine Lagarde, head of the ECB,

praised Mr Scholz’s initiative yesterday,

telling Bloomberg that “any fiscal meas-

ures intended to support the economy

are certainly very welcome, particularly

under present circumstances”.

“If that has the characteristic of fiscal

support and the encouragement to the

economy, that’s welcome,” she added.

However, changing or suspending the

debt brake could prove difficult. An

amendment to the constitution requires

a two-thirds majority in both houses of

the German parliament.

Mr Scholz, a Social Democrat, is also

unlikely to overcome resistance to his

proposal from Ms Merkel’s Christian

Democratic Union, senior partner in the

governing grand coalition.

Eckhardt Rehberg, the CDU spokes-

man on budgetary matters, accused Mr

Scholz of “trampling on the constitu-

tion”. He said: “You cannot just suspend

the debt brake whenever you feel like it,

just as you cannot suspend fundamental

rights.”

But Marcel Fratzscher, head of the

DIW think-tank, said Mr Scholz’s plan

would “create fiscal space for munici-

palities to build up capacity and raise

long-run investment”.

The ministry said only that Mr Scholz

would present his proposals for regulat-

ing debt in the first part of this year.

Finance minister eyes shift in German

fiscal orthodoxy by easing ‘debt brake’

©THE FINANCIAL TIMES LTD 2020

No: 40,334★

Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, Doha

AnalysisiPAGE 2

US tariff restraint opens

trade window to Brussels

Australia A$7.00(inc GST)

China RMB

Hong Kong HK$

India Rup

Indonesia Rp45,

Japan ¥650(inc JCT)

Korea W4,

Malaysia RM11.

Pakistan Rupee 350

Philippines Peso 140

Singapore S$5.80(inc GST)

Taiwan NT$

Thailand Bht

Vietnam US$4.

Central banks

in advanced

countries have

been cutting

interest rates at

the fastest pace

since the

financial crisis.

Expectations for

even more cuts

are now on the

rise, given fears of

the coronavirus

spreading further

Central bank action

Number of interest rate cuts in OECD

countries (-month rolling sum)



 

Recession

  

Source: Deutsche Bank

Fairytale ending?

Disney springs plot twist with new

role for Bob Iger— ANALYSIS, PAGE 15

Metal fatigue

Sanjeev Gupta’s salvage operations

come under strain—BIG READ, PAGE 9

F T R E P O RT E R S

The coronavirus epidemic broke fresh
ground yesterday with the number of
new cases reported outside China sur-
passing those inside the country for the
first time, as the outbreak spread across
Europe, Asia and north Africa and
arrived in Latin America.
Brazil confirmed its first coronavirus
patient and said it was monitoring 20
more suspected cases, while Algeria,
Pakistan and Greece were among those
to report their first positive tests for the
flu-like infection.
Despite the increasingly international
nature of the outbreak, the World
Health Organization has so far resisted
labelling the disease a “pandemic”.
“For the moment, we are not witness-

ing sustained and intensive community

transmission of this virus, and we are

not witnessing large-scale severe dis-

ease or death,” said WHO director-

general Tedros Adhanom Ghebreyesus.

The number of people infected by the

coronavirus has now pushed beyond

81,000, with 2,770 deaths.

Global markets were steady following

two days of steep falls. The Stoxx 600, a

gauge of European equities was flat. US

stock markets rallied in morning trade,

but had given up most of the gains by

lunchtime.

Gold continued to strengthen, climb-

ing 0.4 per cent to $1,642 per troy ounce,

while the price of US crude sank to its

lowest level in more than a year.

This week’s sell-off across global stock

markets has developed into one of the

most significant retreats since the

2008-09 financial crisis, with investors

ditching riskier assets amid growing

fears that the impact of the virus will be

more widespread than first thought.

“The recent swings indicate the com-

placency that appears to have settled

over markets during the earlier stages of

the outbreak has been dislodged,” said

George Efstathopoulos, multi-asset

portfolio manager at fund manager

Fidelity International. “In our view, the

volatility isn’t as surprising as the fact

that it took so long to rear its head.”

South Korean officials said they had

started the mass testing of more than

200,000 members of a quasi-religious

sect believed to be at the heart of an out-

break in Asia’s fourth-biggest economy.

The country is now the worst hit outside

China, with 12 deaths and 1,261 people

with confirmed infections.

The impact on corporate earnings

also became clearer, with Diageo, the

world’s biggest spirits maker, warning of

a hit to profits this year of up to £200m

and Danone trimming its target for

2020 sales growth.

The outbreak is also taking its toll on

sport. The Ireland v Italy Six Nations

rugby match set for March 7 in Dublin

was postponed, adding to the list of can-

celled or delayed sporting events across

Asia and Europe.

Reports & analysispage 4

Editorial Commentpage 10

Prabhat Jhapage 11

Lexpage 12

US banks in Japanpage 13

Marketspage 21

Infection spread speeds up beyond

China as virus breaks new ground

3 First Latin American case 3 WHO resists pandemic tag 3 Corporate impact clearer

Among ruins

Modi calls for

calm in Delhi

Muslim wedding guests pass security
personnel on patrol in New Delhi yester-
day among riot-hit shops and homes.
Thousands of paramilitary police
were deployed on the streets of India’s
capital to restore order following days of
religious violence that has left at least 20
dead and almost 200 people injured.
Narendra Modi, India’s prime minister,
appealed for calm yesterday in his first
public acknowledgment of the worst
religious clashes in the city in decades.
Religious tensions have been rising
since Mr Modi’s government introduced
a law that incorporates religious criteria
into India’s citizenship policies for the
first time.
India sends in paramilitariespage 3
Editorial Comment & Notebookpage 10
Sajjad Hussain/AFP via Getty Images)

The World

Health

Organization

said: ‘We are not

witnessing

sustained and

intensive

community

transmission of

this virus’

FEBRUARY 27 2020 Section:FrontBack Time: 26/2/2020 - 19: 12 User: simon.roberts Page Name: 1FRONT USA, Part,Page,Edition: ASI, 1, 1