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The Daily Telegraph Business May 14 2018

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Business
***
Monday 14 May 2018
telegraph.co.uk
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Monday investor page 6. The week ahead page 7
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Page 7
A SENIOR British scientist who is one
of the leading minds in artificial intelligence (AI) has warned against selfdriving cars, arguing they are not safe
because engineers cannot predict how
their creations will behave “while in
the wild”.
Demis Hassabis, co-founder of the AI
specialist DeepMind, acquired by
Google for £400m four years ago, urged
caution despite his own role in cutting
edge research on thinking machines.
Speaking at the Royal Society in London, Dr Hassabis said: “If we are going
to have self-driving cars, well maybe
we should test them before putting
them on the road rather than beta testing them live on the road like what we
have now. Is that responsible, really?
“How do you ensure, mathematically, that systems are safe and will only
do what we think they are going to do
when they are out in the wild?”
Debate over how to test AI is intensifying after a series of high-profile accidents. An “autopilot” system developed
by the Silicon Valley electric vehicle
specialist Tesla is under investigation
by US safety authorities after two fatal
crashes, and a trial of a self-driving sys-
James Titcomb: Page 2
By Christopher Williams
CARILLION leant on small suppliers to
delay paying its bills and sought to conceal the true scale of its debts, an investigation by MPs has found.
The construction giant “displayed
utter contempt for its suppliers”, according to Frank Field, the chairman of
the joint select committee inquiry into
its collapse.
A full report on Carillion’s failure is
due to be published on Wednesday, but
last night MPs revealed claims by the
credit ratings agency Moody’s that the
company mis-classified £498m of liabilities that should have been accounted for as bank debt.
Carillion kept small suppliers waiting to be paid for 120 days unless they
used an early payment facility (EPF)
provided by Santander. In exchange for
more prompt payments, the suppliers
£498m
The liabilities that Moody’s claims Carillion
mis-classified, saying they should have
been accounted for as bank debt
Uber has been controversially involved in self-drive cars since 2016. Its testing programme in Arizona was suspended after a fatal crash
Virgin and TalkTalk discuss a deal
By Christopher Williams
VIRGIN Media and TalkTalk
are working on a deal to
share the cost of new ultrafast broadband networks
and dial up the pressure on
BT.
The two operators are understood to be discussing
sharing so-called passive infrastructure. It would mean
TalkTalk could lay fibre optics in Virgin Media’s underground ducts and vice versa.
TalkTalk is trying to transform itself from a reseller of
BT broadband lines to a network owner in its own right
via a £1.5bn deal with M&G.
They aim to connect three
million homes with faster,
more reliable lines but have
not yet finalised their terms.
Piggybacking on the Virgin Media network could
bring costs down sharply by
reducing the need to dig up
pavements.
In return the cable opera-
Page 5
Carillion leant
on suppliers to
conceal debts,
MPs claim
KIM WHITE
By Margi Murphy
tem by Uber in Arizona has been suspended after a Volvo fitted with its
technology car hit and killed a pedestrian in March.
Dr Hassabis suggested the nature of
AI technology makes it unsuitable for
such “safety critical” systems.
He said: “We roughly know what it is
doing but not specifically ‘this bit of
code is doing this’ and for safety critical
systems like healthcare or to control a
plane you would want to know why a
decision was made, so you could track
back for accountability.”
The 41-year-old has made several
major breakthroughs in AI, most famously leading the development of AlphaGo, software that defeated the best
human players of the Chinese board
game Go.
Dr Hassabis said that fears about
“killer robots” were overblown but
that current driverless car programmes
may be putting people at risk.
The comments set him at odds with
Elon Musk, Tesla’s founder, who has
branded critics of autopilot “irresponsible”. Google also has a driverless car
program, Waymo, which is currently
testing self-driving cars in the US.
Dr Hassabis said he hoped DeepMind would become an “ethical beacon” in AI. When Google swooped,
DeepMind faced criticism for succumbing to the lure of Silicon Valley
cash. It promised to set up an ethical
board and maintain its independence.
Page 4
+2.25 (+3.01pc)
AI expert
warns of
self-driving
car dangers
British co-founder of
Google-owned DeepMind
says that tests on public
roads are irresponsible
An eerie
calm
Italy’s
eurozone
an accident
waiting to
happen?
Ambrose
EvansPritchard
(July)
+0.16¢
Page 7
p
Choppy
waters
Shipping
industry’s
fragile
recovery
faces
changing
tides
Alan Tovey
tor, owned by Liberty
Global, could accelerate its
ongoing Project Lightning
expansion by following
TalkTalk into new territory,
industry sources said.
The talks are at an early
stage and may not lead to a
deal,
however.
Liberty
Global has opposed infrastructure sharing in other
countries to protect its cable
investments.
Virgin Media and TalkTalk declined to comment.
would accept a discount on their invoices. It meant Carillion built up liabilities to Santander that were not
disclosed as bank debt as its finances
became more stretched.
The company eventually collapsed
in January, weeks after Santander had
pulled the plug on the EPF.
Mr Field said: “The company used its
suppliers as a line of credit to shore up
its fragile balance sheet, then in another of its accounting tricks ‘reclassified’ this borrowing to hide the true
extent of its massive debt. This knocks
down for good the stance of the Carillion board that whinging and blaming
others can be any defence.”
The Sunday Telegraph revealed at the
weekend that the inquiry is expected
to call for a radical overhaul of the Pensions Regulator, which failed to force
Carillion to address its pension deficit
prior to its collapse.
2
***
Monday 14 May 2018 The Daily Telegraph
Business comment
The controversy over Google’s
Duplex software suggests we have
a long way to go in laying the
moral foundations for machines
A
s long as the idea of artificial
intelligence has existed, flesh and
blood philosophers have been
grappling with what it might mean
to create machines that think.
The question of whether manmade intelligence could exist has triggered only
more questions. What, if anything, would we
owe to that intelligence as its creators? How will
artificial intelligence make ethical decisions?
How should it be used for warfare? Who should
profit from its labour? Do robots deserve rights?
Ask these questions to any of the major
technology companies which, thanks to their
enormous war chests are leading much of the
research into AI, and you will typically get the
same answer. Yes, we are going to have to make
some big decisions in the future. Yes, we are
thinking about it. No, we don’t need to have all
the answers yet.
Practical AI ethics is still sat firmly in the “wait
and see” bucket, partly because the technology’s
development is still in its infancy. While machine
learning algorithms have proved adept at a
handful of specialised tasks, such as image
recognition, speech detection and creating
synthetic voices, each one of them is typically
only good for one thing.
A piece of software capable of exhibiting
several different kinds of intelligence more akin
to the way the brain works, so-called “general
AI”, is still seen as being several decades away by
even the most optimistic.
Others are even more sceptical, arguing that
the current level of hype around machine
intelligence is far outstripping what has actually
been accomplished, and claiming that the AI
bubble is bound to burst soon.
Either way, we are told that the difficult
questions about AI can wait. We’ll get there
eventually, let’s just focus on building it first.
Last week Google exposed the naivety of this
position when the company demonstrated a new
system that it said was capable of making phone
calls on people’s behalf. In front of a gobsmacked
audience at the company’s annual conference,
the “Duplex” artificial voice
software appeared to
perfectly imitate a human
caller, successfully booking
a haircut and a restaurant
table without any indication
that the person on the other
end of the phone knew they
were speaking to a robot.
The demo was technically
impressive. Building on
years of Google’s work on
voice recognition, the
software seemed to flawlessly understand what
the other person was saying, and reacted
accordingly. In cases where the conversation
veered off topic, Duplex managed to steer it back
on track. It even peppered its conversation with
inflections and momentary pauses.
The demo elicited rapturous applause from
the onlookers at the conference – largely made
up of Google employees and software
developers. And why not? Who wouldn’t want to
be able to outsource the inconvenience of
hanging on the phone to technology?
But excitement about the software soon
turned to comprehending the ethical minefield it
created. Google’s initial demo gave no indication
that the person on the other end of the phone
would be alerted that they were talking to a
robot. The software even had human-like quirks
built into it, stopping to say “um” and “mmhmm”, a quality designed to seem cute but that
ended up appearing more deceptive.
Some found the whole idea that a person
should have to go through an artificial
conversation with a robot somewhat demeaning;
insulting even.
After a day of criticism, Google attempted to
play down some of the concerns. It said the
technology had no fixed release date, would take
into account people’s concerns and promised to
ensure that the software identified itself as such
at the start of every phone call.
But the fact that it did not do this immediately
was not a promising sign. The last two years of
massive data breaches, evidence of Russian
propaganda campaigns on social media and
privacy failures have proven what should always
have been obvious: that the internet has as much
power to do harm as good. Every frontier
technology now needs to be built with at least
some level of paranoia; some person asking:
“How could this be abused?”
Google’s voice software, technically
impressive as it is, is still a long way from the
general AI that will raise real ethical questions
about how it should be applied. But it is an
inauspicious sign that even relatively basic
potential concerns about it were not addressed
from the start.
There is a parallel here: privacy. In the early
days of the web, companies and consumers gave
little thought to how much personal data was
being given away and how that data might be
exploited for ill. We became too used to
sacrificing privacy for convenience and by the
time privacy issues started to properly matter,
we had already established too many bad habits.
It would have been better to apply current
principles such as “privacy by design” – the
concept that all internet products should be built
with respect for personal information from the
ground up – from the start, rather than in
retrospect, as they have been.
In the same way, we should be baking ethical
principles into artificial intelligence even in
these early days, thus laying the groundwork for
the future. Google’s tone-deaf demo was far from
a promising sign.
‘Every
frontier
technology
now needs to
be built with
some level of
paranoia’
ROGER BOOTLE
TLE
E
U uncertainties again. The
case for remaining in the
EU in some shape or form
increasingly reminds me
of one of those creatures
from Greek mythology
that can grow umpteen heads. As soon
as you have chopped one off, another
appears.
Theresa May is still interested in
the plan for a new customs
partnership (NCP) which we thought
had been killed off by a vote against it
in the Brexit inner Cabinet.
But apparently not. Many good
judges think that this plan would
effectively lock the UK into the EU’s
customs union. I readily understand
that many readers must be heartily
sick of the continuing shenanigans
about Brexit. And I also understand
that matters such as the customs
union and the single market may
appear to be mere details.
But they aren’t. They go right to the
heart of what the EU is about. The
customs union dates back to the
signing of the Treaty of Rome in 1957.
It also goes right to the heart of the
EU’s budget. For about 12pc of its total
income comes from the tariffs that
we, and other members, are bound by
the customs union to levy on imports
from outside.
There is a widespread presumption
throughout the British establishment
that membership of the customs
union, or something very much like it,
is essential to Britain’s economic
self-interest. I don’t know where they
get this idea from. Although customs
unions boost trade between their
members, they tend to diminish it
between their members and the
outside world. Free trade is much
better. This is what we must be
working towards.
The economist Christopher
Smallwood provides an interesting
perspective on our EU membership.
He has drawn my attention to how the
Business
Insight
EasyJet
T
he collapse of rivals
Monarch and Air
Berlin should
provide a profit boost to
easyJet when it gives an
update on its winter
performance tomorrow,
writes Bradley Gerrard.
Analysts are predicting
the Luton-based low-cost
carrier will report a first
half loss of £72m, far
better than the £236m
loss it made in the same
period in 2017.
The bounce-back will
be welcomed by new
chief executive Johan
Lundgren, who took
control in December
when former boss Dame
Carolyn McCall departed
for broadcaster ITV.
The demise of rival
airlines reduced the
GETTY IMAGES
Tech giants
need to build
ethics into AI
from the start
Our PM must show leadership and
ditch any form of customs union
UK’s bilateral trade balances have
developed over recent years. Now you
can get too worked up by bilateral
trade balances. President Trump
frequently does. Nevertheless, they
tell an interesting story.
In 2016, the last year for which we
have full data, the UK ran an overall
trade deficit of about £40bn. Our
deficit with China was £26bn but our
deficit with the EU was £80bn. By
contrast, we ran surpluses of £33bn
with the US, £1bn with Japan and
£30bn with the rest of the world.
The movements over time are
interesting too. Since 1999, our
balances with the US, Japan and the
rest of the world have improved
markedly. Our balance with China has
moved more into deficit to the tune of
about £26bn. But the increase in our
deficit with the EU has been a
whopping £68bn.
Smallwood’s explanation is that we
have entered a lop-sided trading
arrangement with the EU. The single
market works well for goods but it is
very patchy indeed for services. Our
comparative advantage lies mainly in
services, whereas the rest of the EU’s
lies mainly in goods. So under the
single market we have opened up our
markets to the things where they have
a comparative advantage, but they
have done very little to open up theirs
in the areas where we have a
comparative advantage.
Still, as the civil servants say, it is
vital that we remain in this
arrangement, or in something very
close to it. Vital for whom, I wonder?
We are told that at the recent Brexit
inner Cabinet meeting which
discussed the NCP, a Treasury
document was presented which made
clear the dire consequences of the UK
excluding itself from the customs
union.
I suppose Brexit-supporting
ministers and others were supposed
to be cowed by the intellectual
pre-eminence of the authors of this
report. In that case, what should we
make of the 2016 Treasury documents
that assessed the immediate and
long-term economic impact of the
UK’s EU departure? These two
documents were the essential
components of what has come to be
known as “Project Fear”. The one on
the short-term outlook has proved to
be hopelessly pessimistic. What’s
more, as many of us said at the time,
its methodology was deeply flawed.
Lorries arrive and
depart from Dover
Ferry Terminal
‘You have to
wonder why
the positive
case for
Brexit gets so
little airing
in the higher
reaches of the
civil service’
Nevertheless, here we go again. It’s a
different economic model but the
same mindset, the same stable, and
largely the same conclusions.
Oh well, better luck next time. You
have to wonder why the positive case
for Brexit gets so little airing in the
higher reaches of the civil service.
It is a similar story with personal
lobbying. May has been subjected to a
flurry of visits by business leaders,
including the representatives of
Japanese companies based in the UK,
accompanied by the Japanese
ambassador.
I wonder if May or any of her
officials found a way of delicately
reminding his excellency that not so
long ago Japanese companies issued
apocalyptic warnings of the
implications of the UK not joining the
euro. They proved to be hopelessly
wrong and Japanese businesses
prospered by staying here.
More significantly, in the parade of
industrialists trying to sway the
Prime Minister there are, of necessity,
no representatives of the businesses
of the future. All who come to see her
are predominantly people who have
an existing position to defend and
promote, who are not bothered by the
effects of EU regulation in stifling new
competitors and who have large
departments able to engage in the
lobbying game in Brussels.
Nor is she visited by the
representatives of the ordinary
British consumer. Yet a full Brexit,
complete with much lower tariffs on
imports, would greatly benefit British
consumers. Understanding the
benefits of Brexit requires a clear
perception of the interests of those
who do not come to see her.
We are told that May is in search of
a compromise on customs
arrangements. What she is in danger
of delivering is a capitulation. This is
the time for vision and leadership. If
we are really to be outside the EU then
we have to be fully outside it. This
requires leaving the customs union
and not attempting to join or
construct anything like it.
Roger Bootle is chairman of
Capital Economics
roger.bootle@capitaleconomics.com
amount of seats available
across the European
airline industry and thus
pushed up seat prices.
Investors will watch
closely for signs of how
successful its purchase of
parts of Air Berlin,
including slots at Berlin
Tegel, has been.
EasyJet is still in the
running to buy parts of
stricken Italian carrier
Johan
Lundgren
Chief
executive
Alitalia but the political
hiatus in the European
nation has slowed the
deal’s progress.
The airline is expected
to break through 13m
business travellers for the
past 12 months – out of
more than 80m passengers
– as it continues to
broaden its appeal beyond
the leisure market.
ALAMY STOCK PHOTO
James
b
Titcomb
EasyJet is expected to benefit from the collapse of two rivals
Strengths
Threats
 Dominant position
means it can snap up rivals
 Multiple operating
licences should insulate it
in worst Brexit outcome
 Large order of more fuel
efficient planes
 Industry M&A sees it
competing against fewer
but larger competitors
 A delay in a Brexit
aviation deal
 Rising airport charges
could squeeze margins
Weaknesses
Opportunities
 Exposed to downturn in
consumer spending
 Highly unionised
workforce leaves it
exposed to risk of strikes
 Rising oil prices make
hedging more expensive
 Tie-up with long-haul
carriers sees it dominate
short-haul feeder traffic
 Tech deal with Airbus
could help it find faults
with planes quicker
 More business travel
Argentina on the cusp of a Wile E Coyote moment
TOM STEVENSON
NSON
E
very investment bubble has its
Wile E Coyote moment, when the
delusion abruptly ends and
gravity kicks in. For investors of my
vintage, the most memorable example
of this was reached during the dot-com
boom with the massively
oversubscribed flotation of Lastminute.
com in March 2000. The shares were
placed at 380p and rose to 511p on the
first day of trading – such was the
appetite for a slice of the action that
private investors were given just 35
shares each. A month later they had
reason to be grateful – the shares were
changing hands at 30pc of the flotation
price. The bubble had burst.
I wonder whether we will look back
at last year’s issue of a 100-year bond
by the Argentinian government at a
yield of just 7.9pc in the same way.
As with Lastminute.com shares,
there was no shortage of investors
queuing up to lend money to an
administration which had reneged on
its debt obligations eight times in the
past 200 years. In the past 100 years,
Argentina has fallen from the top 10 of
the world’s richest countries to 87th.
In the post-war period, it has been
propped up by the IMF on 20
occasions. The chance of Argentina
repaying the loan to your great
grandchildren is negligible. Only in our
post-crisis environment of low interest
rates could anyone think this a prudent
investment.
Warren Buffett famously remarked
that when the tide goes out you see
who has been swimming naked. He
meant that, during the good times,
optimism and abundant liquidity are
able to disguise a multitude of sins.
In a less benign environment, the
fundamentals suddenly look more
important. Last year, emerging
markets were the place to be. Equity
markets in the developing world rose
by 25pc on average as Donald Trump
found his feet and the dollar weakened
while investors watched and waited for
the spending and tax cuts he had
promised. It was a Goldilocks
environment for emerging market
investors – low interest rates, a cheap
dollar, strong global growth and no real
sign yet of America First protectionism.
The backdrop changed at the
beginning of this year as the tax
reforms began to take effect, Jay
Powell made it clear that the Federal
Reserve was on a steady tightening
path to offset Washington’s fiscal
incontinence and the dollar became
the haven of choice in an uncertain
world where no other major central
bank seems able to lift interest rates
above “emergency” levels.
The first casualties of this chillier
world have unsurprisingly been
countries with dodgy economic
fundamentals. Turkey is the prime
example. Up to its eyeballs in foreign
currency denominated debt, it is
extremely vulnerable to currency
weakness. With the lira more than 12pc
weaker against the dollar than it was
just three months ago, servicing its
mountain of debt is getting tougher by
the day. And what a mountain it is.
Private sector debts have doubled as a
proportion of GDP in 10 years.
Its banks have 60pc more dollar
loans outstanding than they did five
years ago. It is estimated that Turkey
needs to attract foreign capital worth
25pc of economic output every year
just to cover its current account deficit
and debt repayments.
Sentiment towards Argentina has
turned equally sour despite that
confident bond sale. Again, investors’
lack of confidence in the country has
been expressed through the currency
market. A run on the peso has seen
interest rates jacked up to 40pc – a
desperate move that makes Norman
Lamont’s panicky response to the ERM
crisis look measured.
When even that failed to attract
investors, president Mauricio Macri
was forced to do what Argentinians
hate more than anything – go cap in
hand to the IMF in Washington.
Since his election in 2015, Macri has
been on a mission to make Argentina a
“normal country” after more than a
decade of undeliverable populist
promises. The corruption, waste and
pandering to the people under the
husband and wife presidents Kirchner
and Fernandez were the direct result of
the most savage of the IMF’s many
Argentinian interventions in 2001. The
collapse of the economy and 20pc
‘Sentiment
towards
Argentina
has turned
sour. Lack of
confidence
has been
expressed
through the
currency
market’
unemployment they led to have left the
country with a visceral hatred of the
IMF. For Macri, who had hoped to
avoid that kind of shock therapy via a
programme of softly-softly reforms, it
is a bitter pill. The reality is that
gradualism was only possible in an
abnormal world of super-easy money.
Is this the beginning of a wider
emerging market crisis? Probably not.
Argentina and Turkey are more naked
than most of the swimmers today.
Economic growth remains robust,
current accounts are more resilient in
most cases than even during the “taper
tantrum” of five years ago. But the
rapid shift in sentiment shows the
importance of bolstering the defences
of your investment portfolio as the
monetary environment becomes
progressively less supportive this year.
So far, there has been little contagion
to other emerging markets, although
bonds, currencies and equities have
weakened. Investors do still view the
developing world through a single
lens. The FTSE Emerging Market index
is 10pc below its January peak and
emerging equity funds have seen their
biggest outflows since last summer.
That may create some interesting
opportunities but the best way to tap
into those is through a generalist fund
that can protect you from the stomachlurching moment when the running
stops and you look down.
Tom Stevenson is an investment director
at Fidelity International. The views
here are his own. He tweets at
@tomstevenson63
***
The Daily Telegraph Monday 14 May 2018
3
Business
Trump pledges to get ZTE back in business
President says commerce
department has been told
to support the firm after
US imposed ‘denial order’
By Jack Torrance
PRESIDENT Donald Trump has waded
into a row over Chinese telecoms
equipment maker ZTE, promising to
get the firm “back into business fast”
after it was hit by a ban on buying
American hardware and software.
The company said it was halting all
of its major business activities in the
US last week after the country’s De-
partment of Commerce issued a socalled denial order, prohibiting
American exporters from doing business with it, but appeared to have been
thrown a lifeline by Mr Trump
yesterday.
The US president said on Twitter:
“President Xi of China and I are working together to give massive Chinese
phone company ZTE a way to get back
into business fast.
“Too many jobs in China lost. Commerce department has been instructed
to get it done.”
The order followed $1.2bn (£900m)
of fines against the company last year
after it was found to have breached
trade embargoes against Iran and
North Korea by buying components
from US firms, packaging them together into its equipment and selling
them on to the ostracised countries.
ZTE was also handed a seven-year
suspended denial of export privileges,
which the commerce department decided to activate last month after determining the company had lied about
its handling of the matter.
Commerce secretary Wilbur Ross
said at the time: “ZTE made false statements to the US government when
they were originally caught and put on
the entity list, made false statements
during the reprieve it was given and
made false statements again during its
probation.” The company vowed to
President Donald
Trump has offered a
potential olive
branch to ZTE
following a dispute
with the US
fight the move, which it labelled “unfair” and “unacceptable”.
ZTE has also been criticised by
United Kingdom officials, who warned
telecoms companies last month that its
products could pose a national security risk.
Mr Trump’s tweet is an olive branch
to president Xi at a time of escalating
trade tensions between the US and
China.
The US president had made what he
said were China’s “unfair” trade practices a key part of his election campaign and the two countries have in
recent months been slapping tariffs on
goods including steel, televisions and
soya beans.
ZTE spent $2.3bn on products and
services from US companies in 2017,
according to a company source quoted
by Reuters on Friday.
The company was also targeted by
UK authorities last month over fears
that its Chinese government links
could mean its equipment is used for
spying or cyber attacks. Dr Ian Levy of
the National Cyber Security Centre at
GCHQ said that the “national security
risks arising from the use of ZTE
equipment or services within the context of the existing UK telecommunications infrastructure cannot be
mitigated”.
ZTE broke into the UK consumer
market in 2005 via a handset supply
deal with the Hong Kong-owned mobile operator Three.
Its network equipment is much less
common in the UK than that of its bigger Chinese rival Huawei, which is
also banned from the US but agreed to
stringent checks in the UK to maintain
its deals with BT and Britain’s mobile
operators.
Crossrail’s
funding crisis
sparks fears of
rise in fares
By Bradley Gerrard
By Bradley Gerrard
FIVE bidders are in the running to
build the first railway line under new
government proposals aiming to fund
new tracks entirely with private cash.
Hong Kong-based transport giant
MTR, which runs South Western Railway from Waterloo to the West Country
with FirstGroup, and a scheme involving Baroness Valentine, the HS2 director, are among those vying to build a
line linking towns and cities south of
Heathrow directly with the airport.
Bidders were invited to submit proposals in March as part of plans by ministers to inject extra cash into the
railways.
Chris Grayling, the Transport Secretary, has been vocal about his desire for
rail access to Heathrow from the south,
as improved transport links bolster the
argument in favour of the third runway
expansion proposals.
Although proposals can still be submitted until the end of July, a source
close to the Government project said
new challengers are unlikely. Officials
are due to meet bidders today to outline their priorities for the project.
The Heathrow Southern Railway bid
backed by Baroness Valentine would
link the airport to Staines on the Windsor-Staines line and connect to the existing South West main line between
Byfleet and Woking.
The Windsor Link Railway scheme,
headed by George Bathurst, would
provide links from the airport to the
south and west as part of a larger
scheme.
A light rail system has also been proposed by Interlinking Transit Solutions, headed up by Canadian Peter
Buckley, as part of its broader Greater
London transport proposal.
The identity of the fifth bidder has
not yet been disclosed.
Once the bid deadline passes in July,
the Government is expected to provide
an update on the next stage of the process in the autumn. Depending on the
scheme chosen, trains could be running on the new line as early as 2025.
CROSSRAIL faces an estimated £500m
funding black hole as the Government
struggles to keep the country’s most
ambitious rail project on track in its final stages.
With a budget of nearly £15bn, it is
already one of the country’s largest infrastructure projects. It is understood
the final cost is due to rise further,
however, as unexpected problems
have forced unscheduled engineering.
At Paddington, for instance, a pedestrian tunnel had to be dug to allow
Crossrail passengers to reach other
tube lines without crossing the station
concourse, a rail industry insider said.
The work had not been included in the
original plans.
In June last year, Paul Maynard, the
then Parliamentary Under Secretary of
State for Transport, told Parliament
that Crossrail’s board was predicting it
would be within the overall £14.8bn
budget but that “cost pressures are increasing across the project”.
He added Crossrail was “identifying
and implementing initiatives to deliver
cost efficiencies until completion”.
A Government source said a contingency fund was available for Crossrail
but the size of this pot of cash wasn’t
near the estimated £500m overspend,
first reported by The Sunday Times.
Any funding shortfall beyond what
central Government is willing cover is
likely to spark fears of fare rises or
other tax increases for Londoners.
Last week, The Daily Telegraph reported that home owners living within
a certain radius of planned Crossrail 2
stations could be forced to stump up
millions to pay for the £30bn follow-up
scheme.
The next major expansion of London’s underground network is due to
run through central London, between
Broxbourne in Herts and Epsom in
Surrey.
Transport for London is considering
a levy which would create three zones
stretching a kilometre around each station known as the Transport Property
Charge.
REUTERS
First rail line to
be built with
private money
has five bidders
Touching down Turkish president Tayyip Erdogan, accompanied by his wife Emine, after arriving at RAF Brize Norton
over the weekend. The president is on a three-day visit to the UK, during which he is expected to discuss future trade
with Prime Minister Theresa May. Mr Erdogan is also expected to meet the Queen at Buckingham Palace.
Report on HBOS collapse prompts scrutiny of bosses’ conduct
By Lucy Burton
A LEAKED internal report on the collapse of ailing lender HBOS has alleged
two of the mortgage bank’s former
chief executives tried to hide details of
fraudulent lending that targeted struggling small businesses.
James Crosby, who ran HBOS until
2006, is among the senior executives
accused of trying to cover up fraud
alongside his successor Andy Hornby,
the boss at the time of its collapse and
now an executive at gambling operator
GVC Holdings. Two sources confirmed
the contents of the report, which were
first reported by the Mail on Sunday.
The 160-page document was unearthed days after Conservative MP
Kevin Hollinrake told a parliamentary
hearing that he had obtained the dossier, known internally as the Project
Turnbull report.
Referring to the report directly, he
said it contained allegations that senior
managers within the bank had taken
“clear, deliberate and documented action” to conceal fraud just before
Lloyds’ disastrous takeover of HBOS in
2008. “Status, seniority and background cannot be a barrier to justice or
to holding to account those who are ultimately responsible for the devastation caused to so many lives and to the
wider economy,” he said.
Those named in the report for alleged “non-disclosure” include Mr
Hornby and Mr Crosby as well as former chairman Sir Dennis Stevenson,
ex-corporate bank boss Peter Cummings and accounting giant KPMG.
The review was completed in 2013 by
an executive who has now left the
bank.
A KPMG spokesman denied the allegations and said they had “no basis in
fact”. He added: “Over the last nine
years multiple inquiries by the PRA,
FCA and FRC have examined the events
that led to the failure of HBOS in detail.
“We have co-operated with all of
these inquiries when requested to do
so and none have concluded that our
work did not meet the applicable audit
standards of the time.”
Many small businesses went bank-
WAGES are rising at their fastest rate
in three years as a strong jobs market
and growing skills shortages force employers to improve pay.
Average wages rose by 2.9pc in the
12 months to March, economists expect
the Office for National Statistics to reveal tomorrow.
This would represent an acceleration from 2.8pc in February, and comes
2.9pc
The wage growth economists expect the
Office for National Statistics to report this
week for the 12 months to March
at a time of falling inflation. Price rises
slowed to 2.5pc in March, so a 2.9pc increase in regular pay – which excludes
bonuses – would mean the typical
worker’s standard of living is on the up
for a second consecutive month.
By comparison, real wages fell for a
year before February. Rising pay
should bolster the economy overall.
“We expect a further rise to 2.9pc,”
said economist George Buckley at
Nomura. “This improving real earnings picture should support the con-
sumer – a key reason why we think the
[economic] data will improve through
the summer months.”
One factor pushing up pay is that
more workers are changing roles by
moving from one job to another, a statistic which the Bank of England monitors closely as an indicator of wage
growth, as it is often traditionally a reliable way for people to gain a substantial pay rise.
In the final three months of 2018 –
the latest data which is currently available – 2.6pc of people in employment
moved to another job, the highest level
since 2008.
“Unemployment has fallen back significantly and churn in the labour market has recovered, with the proportion
of people moving from one job to another now around its pre-crisis rate,”
said the Bank of England in its Inflation
Report.
“That suggests some recovery in
confidence among employees in their
labour market prospects.
“As a result, businesses have needed
to raise wages for new recruits in order
to attract staff.”
The Bank’s economists expect pay
growth to remain at around 2.75pc for
the rest of this year.
In 2019 that should rise to 3.25pc,
then on to 3.5pc in 2020, officials
anticipate.
lice in 2014,” a spokesman said. “It was
not commissioned by the group, but
was written by a former employee,
whilst employed by us. We are determined to get to the bottom of what happened in HBOS Reading.”
Lloyds has said that the report contains “many unsubstantiated allegations about individuals ... the majority
of which are made without any supporting evidence”. Last night The Daily
Telegraph tried to contact those named
in the report for comment but they
were unavailable.
Oil surge and trade disputes
‘threatening US economy’
Skill shortages drive fastest
wage growth for three years
By Tim Wallace
rupt as a result of the alleged fraud
based at HBOS in Reading. The Financial Conduct Authority has also reopened its probe.
Lloyds said it appointed retired High
Court judge Dame Linda Dobbs to undertake an independent review of the
issues last year and the Project Turnbull report was among the documents
being considered.
“We have reviewed the allegations
and taken the information within the
report seriously and it was shared with
the regulators and Thames Valley Po-
By Tim Wallace
DONALD TRUMP’S freewheeling policies are beginning to damage the
American economy as exuberance over
tax cuts turns to fear on trade and oil
prices, it is claimed.
Crude costs are approaching $80 per
barrel, their highest level since 2014,
and analysts fear the US withdrawal
from the Iran nuclear deal will make
the situation worse. “If a new Iran deal
is not reached in the next six months or
$80
The price per barrel that crude oil is
nearing, marking the highest level
recorded in around four years
Batting for trade Culture Secretary Matt Hancock plays a
straight bat on the streets of Mumbai during a break in his
visit to India in order to discuss tech partnerships.
Opec/Russia extend production cuts
into 2019, global oil markets would
likely tighten further,” said Francisco
Blanch at Bank of America Merrill
Lynch.
Oxford Economics has raised its
forecast for oil prices to an average of
$72 for 2018, which it fears could have
serious repercussions for the economy.
“If WTI crude oil prices average $70
per barrel this year, the US economy
could suffer a drag worth half of the 0.7
percentage point fiscal stimulus boost,”
said Gregory Daco. “If sustained, rising
oil prices could sap global momentum.
“We find that the most severely affected from an oil price shock would be
large emerging markets like China, India, Indonesia. Advanced economies
with reduced oil usage intensity would
also suffer but to a lesser degree.”
At the same time, trade skirmishes
between the US and China risk denting
growth too, credit ratings agency
Standard and Poor’s has warned.
“As the US-China trade spat drags
on, it’s become clear that a prolonged
period of iciness between the countries, or an escalation of the dispute,
could have notable effects on the
world’s two biggest economies,” said
US chief economist Beth Ann Bovino.
Planned US tariffs will add as much
as 0.2 percentage points to inflation.
“While that level alone isn’t enough
to spur the Federal Reserve to raise
rates any faster, it does add to inflationary pressures that have been building
in the supply chain,” she said.
“Add to this the potential job losses
in certain industries – with more than
2m American workers exposed to Chinese retaliatory tariffs on the export
side, according to one estimate – and
it’s clear that an escalation in tensions
between the two countries would have
noteworthy, real-world ramifications.”
4
***
Monday 14 May 2018 The Daily Telegraph
Business
‘The web is not
dead or dying.
It’s something
that is evolving’
S
cott Wagner is braced for
the question before it is
even asked. GoDaddy, the
US firm he took charge of
last year, may be the
world’s biggest seller of
website names, making the company
worth some $11bn (£8bn), but to many
people it is still known for one thing.
Over several years in the previous
decade, GoDaddy gained notoriety for
a series of controversial television
adverts that aired during the Super
Bowl. One featured three male college
students sitting at a computer screen,
manipulating two women in a fantasy
shower scene. In another, a scantily
clad female wrestler suffered a series
of wardrobe malfunctions.
In one less salacious but just as
controversial advert, a lost puppy
made a distressing journey back to its
family, who were only happy to see it
return so that they could then sell the
dog online. The adverts, criticised as
they were, put GoDaddy on the map.
But in the age of #metoo and as the
technology industry grapples with a
series of sexism scandals, does the
company regret the adverts? Not
exactly, as it turns out.
“If we didn’t have awareness we
wouldn’t have anything to build from,”
Wagner says, although he admits the
company would not be able to run
them in 2018. “There’s a good lesson in
that for a lot of people. If you have an
idea you’ve got to get them to pay
attention. [Before] the company had
this great service and great care [but]
nobody knew about it.” After the
release of some of its adverts,
distasteful as they might seem now,
GoDaddy’s business doubled.
The best way to describe GoDaddy
is as the world wide web’s estate agent.
The company specialises in
registering domain names – addresses
like telegraph.co.uk – on behalf of
around 17m businesses and
individuals, and hosting the websites
that appear behind them. Website
names can cost as little as 99p but in
some cases have changed hands for
millions of dollars.
In 2010, insurance.com was sold for
$35.6m; but others have been
prospectively valued at much more:
the owner of cars.com reported the
domain name to be worth $872m.
GoDaddy was founded in 1997, in
the run-up to the dot-com bubble. But
while the crash derailed many web
companies, Bob Parsons, GoDaddy’s
founder, managed to ride out the
storm. “He never took a dime of
outside money,” Wagner says.
Wagner’s path to running the
company was an unusual one, and his
current stint as chief executive is the
second time he has held the job.
In 2011, he was a partner at the
private equity giant KKR when
Parsons decided he wanted to sell the
business. Wagner led KKR, along with
Silver Lake Partners, to a $2.3bn
buyout of GoDaddy. In typical private
equity style, Wagner temporarily took
the reins in 2012 to lay the
groundwork for a flotation, before
returning to KKR. However, he
returned just a few months later when
the next boss, the former Yahoo
executive Blake Irving, recruited him
as chief operating officer.
“I loved what GoDaddy did,
which was get ideas online,”
Wagner says. “You could see all
the opportunities to grow the
business around the world, and
frankly I just fell in love with both
the business and the
people.”
The company
went public in
2015 at a
$4.5bn
valuation,
doubling
Ex-cricketer Freddie
Flintoff, above,
appears in the
latest TV adverts
for GoDaddy, led by
Scott Wagner,
below
what its buyers had paid for it four
years earlier. And while many recent
tech flotations have struggled, its
share price has more than trebled
since then. Last week, the company
reported first-quarter revenues of
$633m, up 29pc year-on-year.
What has surprised many is that the
company’s success has come at a time
when the world wide web’s status at
the centre of the internet economy is
seemingly under threat. Smartphones
were forecast to threaten the value of
websites. Some predicted that massive
internet properties such as Amazon
and Facebook would lead small
businesses to give up their websites: a
small craft seller would simply have a
page on Amazon, for example. Wagner
says this is far from the case.
“We’re finding that [businesses]
need to be everywhere. Somebody’s
content can reside not just on their
site, but on the different points of
social media. The web’s worked pretty
well as an engine of commerce. It’s not
dead or dying, it’s evolving.”
However, Wagner admits that the
days of companies handing over tens
of millions of dollars for a website
name are behind us. “There will still
be high-value name sales, in the
couple of million dollars, because that
real estate’s still so valuable. Will it be
a $50m domain name tied to some
dot-com company? No.”
The company itself has also grown
up after its boisterous early days.
While Parsons had a penchant for big
game hunting and motorbikes,
Wagner spends his spare time
exercising and reading.
Surprisingly given its advertising
history, GoDaddy was also one of the
first big internet companies to publish
regular diversity reports, revealing the
number of women in senior roles as
well as pay disparities. Wagner says
half of promotions to senior roles are
now given to women.
Like many internet companies, the
business is grappling with how to
address criminals, scammers and
terrorists using its services. In August,
in an unprecedented move, GoDaddy
removed the website of The Daily
Stormer, a far-Right group. Last week,
after this interview took place, it took
down a site belonging to Richard
Spencer, a white supremacist. While
‘You could
see all the
options to
grow and
frankly I just
fell in love
with both the
business and
the people’
GoDaddy has long taken down illegal
material, both moves showed a more
proactive approach to websites that,
while legal, incite violence.
Wagner said the move to take down
The Daily Stormer last year was “a
weighty decision” and is at pains to
point out that GoDaddy believes in
free speech. He says that when it
comes to illegal material, the company
has successfully removed it for years,
and suggests social media sites such as
Facebook and YouTube are only now
getting to grips with the issue.
“The content of their networks have
been totally unmonitored and I think
in some ways some of the big social
networks are catching up to how
we’ve operated for a long, long time.”
The biggest sign that the company
has changed is its adverts. Its latest
campaign in the UK features no
“GoDaddy girls” but the ex-cricketer
Freddie Flintoff, sat in a study
meticulously painting miniature
figurines. Nothing could be more
different. GoDaddy may be less
attention-grabbing these days, but at
least it is showing it doesn’t need to be
sexy to sell.
Shipping lines may still have
to weather financial storms
By Alan Tovey
EVER-LARGER vessels laden with
shipping containers cutting through
the waves are a powerful symbol of
international trade and global
prosperity. But the industry is fragile
after a long-lasting “perfect storm” in
the wake of the 2008 financial crisis.
Demand sank like a stone just as a
fleet of new vessels ordered in the
preceding boom years – and which
loaded freight companies with debts
– entered the market. Freight rates
bottomed as too many vessels chased
too little cargo, driving a wave of
consolidation as weaker shipping lines
hit the rocks.
But about a year ago the storm
finally appeared to be breaking. With
the less strong shipping lines
winnowed out and the oversupply
slowly working its way out of the
system as older, less efficient vessels
were scrapped, cargo rates edged up.
The fundamentals of the shipping
industry are solid. Almost 90pc of
global trade in goods travels by sea and
as the world’s population rises, so does
demand for shipping. It’s further lifted
by rising GDP: the richer we get the
more we buy. In 1990 0.8 tons of goods
per person were transported by sea, a
figure that has since all but doubled.
The confidence was shown in freight
rates, with a rise of more than 15pc in
2017. But sometimes the shipping
industry can be its own worst enemy.
A report by Alix Partners warns 2018
has a “decidedly mixed” outlook, with
oversupply of vessels threatening to
set the storm raging again.
“The container market has a short
memory,” says Jonathan Roach, an
analyst at shipbroker Braemar.
“Shipowners see an improvement in
freight rates and orders start again.”
He cautions that rates are highly
unlikely to see highs they hit before
the financial crisis. At its peak in 2008
the Baltic Dry Index – a bellwether for
the shipping market – was nudging
12,000, then plunged as the world
panicked. The index hit a low of just
290 in early 2016. Over the past year it
has averaged 1,200, but has been
rising, closing in on the 1,500 level.
“It’s imperative that carriers curb
their voracious appetite for new
ships,” warns Alix Partners. “New
orders slowed and deliveries were
deferred for much of 2017, but in
September the buying spree returned
in earnest, ensuring a continuation of
QILAI SHEN/BLOOMBERG
Websites remain in
rude health despite
fears of a shift to
mobile, the boss of
domain specialist
GoDaddy explains
to James Titcomb
The biggest of the cargo ships can now transport more than 20,000 shipping containers
the margin-crushing balance of supply
and demand unless scrapping
accelerates dramatically.”
Roach agrees that there could be
more problems ahead. “There’s been a
lot of larger ships ordered – it’s putting
things out of kilter,” he said.
The biggest of these ships can
transport more than 20,000 shipping
containers (known as TEUs, short for
Twenty-foot Equivalent Units) and
measure more than 1,300ft in length,
as long as four football pitches. Not
only do they add masses of capacity to
the market but they are more efficient,
and have less fuel-thirsty engines.
The overall container fleet grew by
3.3pc last year but forecasts are for a
rise of between 4pc and 5pc in 2018,
according to Alix Partners, which adds
that new container ship capacity this
year will be around 1.3m TEUs. Of this
amount about 30pc will come from
mega container ships with capacities
of 18,000 to 25,000 TEUs.
Two of the big five players in the
market – CMA CGM and MSC – have
orders in for 22,000 TEU mega-ships.
Analysts believe that this will put
pressure on the other three giants –
Maersk, COSCO and The Alliance,
made up of Hapag-Lloyd, and Japan’s
MOL, NYK and K-Line – to follow suit.
External forces are also likely to put
further pressure on shipping lines.
Fuel prices have more than doubled
over the past two years, and some
customers have been refusing to pay
surcharges for vessels having to use
greener, low-sulphur fuel required for
ships to sail in certain areas. Carriers
are having to absorb this extra cost
themselves or risk losing custom.
The collapse of the Iran nuclear deal
may push up fuel costs further, while
American protectionism and Brexit
could harm international trade.
China – by far the world’s largest
exporter of goods – also presents an
interesting possibility, according to
Roach. As the country’s population
becomes richer they could start
buying more goods from abroad,
altering the current flow of trade.
Still, there is hope for the industry
from the consolidation it has gone
through. A few years go there were 20
big shipping lines, now the sector has
been reconfigured into the five global
giants who Alix Partners says have
“absorbed the traditional second tier
of mid-size players, leaving about two
dozen small companies who compete
as specialists or in niche markets”.
This means the giants can focus on
efficiency through scale, while smaller
lines play to their strengths.
“The liner companies are nervous,
freight rates are stable but not good,”
says Roach. “The industry is not
cautiously optimistic, it’s optimistically
cautious.”
***
The Daily Telegraph Monday 14 May 2018
5
Business
Growing demand for
leveraged loans has
raised concerns
about the level of
protection on offer
to market players,
reports Tom Rees
T
Investors risk
fresh credit
crisis in their
hunt for yield
‘History has shown us
that the worst debt
transactions are done
at the best of times’
figures indicate that the surge in the
US leveraged loan market’s popularity
now means that it is only around
$100bn smaller than the US high-yield
bond market. That gap is at a near
historic low and its narrowest since
the financial crisis.
BAML argues that the
leveraged loan market boom has
been driven by its
transformation from a “private
bank loan model to a thriving
syndicated market with hundreds
of participants”.
It adds that a “more
standardised, transparent and
efficient” approach has helped the
leveraged loan products had led to
protections “falling by the wayside”,
leaving investors highly exposed in
the event of a company’s collapse. The
leveraged loan market boom is partly a
product of the prolonged period of
historic low interest rates, with
investors pushing into higher-yield
assets in the hunt for stronger returns.
A lure of the leveraged loan market
for investors is that it also protects
against climbing interest rates. While
the value of junk bonds on a fixed rate
will decline as the Federal Reserve
tightens monetary policy, these loans
track interest rates higher.
A surge in global deal-making in
2018 has allowed the high-yield loan
market to hit record highs. Bank of
America Merrill Lynch (BAML)
leveraged loan market go
“mainstream” and entice smaller
investors. Retail investors are sinking
their capital into funds investing in the
leveraged loan market.
Their slice of the market has gone
from virtually none before the crisis to
around 15pc today, a slight pullback
from the 25pc share it peaked at in
2013. BAML predicts that as investors
search for better returns when the
Fed’s hiking cycle gets in full swing,
that proportion is likely to rise.
As a decade of ultra-cheap
borrowing draws to a close, there are
fears that “zombie” companies
tapping the leveraged loan market are
at risk of default. The Bank for
International Settlements (BIS)
estimates that the number of zombies
– companies vulnerable to default
when interest rates and borrowing
costs rise – in the US doubled between
2007 and 2015 to around a tenth of all
listed companies.
The BIS also argued that the rise of
zombie companies could unlock the
productivity puzzle baffling
economists.
Productivity, output per hour
worked, has slumped since the
financial crisis and the BIS warned
that “credit booms tend to undermine
productivity growth”. Zombie
companies could be surviving for
longer now because “they seem to
face less pressure to reduce debt”, it
speculated.
And as that mountain of debt piles
ever higher, the warning signs from
‘Lenders and borrowers are
increasingly vulnerable to a
dramatic and sustained
change in risk appetite’
credit markets indicate that financial
conditions are tightening fast this year.
The Libor-OIS spread, an indicator
measuring stress in the financial
system, widened to its highest level
since the financial crisis in March.
A wider spread indicates that it has
become more expensive to borrow
money.
The widening was blamed on
technical factors rather than a credit
squeeze and the spread has since
started to gradually narrow.
But if it remains close to its current
levels, market analysts believe that it
would act as de facto “stealth
tightening”, which combined with up
to four hikes at the Fed this year
would represent a meaningful
increase in debt servicing costs.
Losses are “inevitable” for lenders that
continue to “pursue yield in the hope
that benign credit conditions will
continue” and “faster and more
significant rate rises remain a key
risk”, S&P Global credit analyst Paul
Draffin warned investors.
Lenders and borrowers are
“increasingly vulnerable to a dramatic
and sustained change in risk appetite”
and the current credit cycle “is
reaching a high that could turn
sharply”, he added.
But rather than just sleepwalking
into the next credit crisis, the US could
start running towards it.
If Donald Trump, as promised, rips
up regulation implemented to
safeguard the financial system in the
wake of the crisis, the risk of this
market could swell even further.
And the US president has made an
unfortunate habit of sticking to his
pledges of late.
Rules had stated that a leverage
level of six times total debt to earnings
before interest, taxes, amortisation
and depreciation was the red line for
companies.
But Joseph Otting, the Trumpappointed head of US regulator the
Office of Comptroller of the Currency,
said in February that banks have “the
right to do what [they] want”
regarding leveraged lending as long as
they have the sufficient capital and it
did not affect their “safety and
soundness”.
Participants in the leveraged loan
market would point to buoyant global
growth, climbing corporate earnings
and moderate default rates among
businesses as key indicators that credit
market doomsayers often do well to
ignore.
But it is when the global economy is
strong that Draffin believes investors
need to be at their most cautious.
“History shows us that the worst
debt transactions are done at the best
of times.”
GETTY IMAGES
he toxic ingredients for a
new crisis in the financial
system are already
stewing in the pot of the
leveraged loan market.
The US market for
these risky but lucrative high-yield
loans that fuel private equity buyouts
and fund companies with poor credit
ratings smashed through the $1 trillion
(£738bn) milestone earlier this month.
As interest rates rise, investors are
lured to the risky loans like moths to a
flame in the search of better returns.
But the leveraged loan market surging
past the latest milestone has stoked
fears that a new debt bubble is
emerging.
Iconic US brands, such as American
Airlines and Dell, have tapped the
leveraged loan market to fuel their
growth.
The International Monetary Fund
suggested last month that tightening
financial conditions as interest rate
rises push up borrowing costs could
lead to a “sharp rise in defaults” that
would rock the economy.
It warned that the flashing warning
signs of “late credit cycle dynamics”
emerging in the leveraged loan market
invoked grisly memories of past
excess. With up to four hikes at the
Federal Reserve lined up in 2018, rates
could climb too quickly for debt-
hungry companies to cope. The IMF’s
report found that lower-quality
companies are enjoying unfettered
access to credit at a time when ratings
evaluating the financial health of firms
are declining.
Although it can be argued that this
finding could reflect a more cautious
approach from credit rating agencies
since the financial crisis, flimsy loan
terms have also allowed companies to
stretch earnings projections to their
limit, to allow them to easily grab their
next fix of debt.
The amount of new loans issued
with a credit rating of single-B or
lower, junk territory, has surged from
25pc to 75pc in a decade while
protections for investors have
declined amid a clamour for highyield leveraged loans. Credit ratings
agency Moody’s warned that a
“seemingly insatiable” demand for
The Eccles Building in Washington DC, which houses the US Federal Reserve. It is thought the Fed could raise interest rates four times this year, placing pressure on heavily indebted businesses
The populist Grillini–Lega
coalition’s anti-system
beliefs have the potential
to smash the euro project
I
By Ambrose Evans-Pritchard
f Italy’s neo-anarchist
“Grillini” had combined with
anti-euro Lega
nationalists two or three years
ago to form an insurgent
government, it would have set
off panic in the bond markets.
Yet now that this twin-headed
populist hydra is upon investors, risk
spreads have barely moved. Yields on
two-year Italian bonds ended last
week at minus 0.10pc.
Foreign funds are willing to pay
Grillini-Lega management a custodial
fee to look after their euros.
Bond purchases by the European
Central Bank and negative rates have
enveloped Italy with an enormous
comfort blanket.
“Most investors think there is a
snowball’s chance in hell that the ECB
will let Italy go down, because it is the
end of the European project if that
happens,” said Nicholas Spiro from
Lauressa Advisory.
The ECB has soaked up €300bn of
Italian debt, buying time for the
country to claw its way out of a
debt-deflation trap.
The average borrowing cost was
3.11pc in 2012: it was 0.69pc last year
– low enough to put the debt trajectory
on a gently declining path from a peak
of 133pc of GDP.
Italy has clawed back a current
account surplus of 2.8pc of GDP. It has
pulled off an “internal devaluation”
within the eurozone, albeit at the cost
of a deeper depression than the 1930s.
There is no immediate catalyst for a
crisis.
Not everybody is sanguine. Fitch
cut Italy’s rating last year to BBB citing
a “persistent track record of fiscal
slippage”, leaving the country “more
exposed to potential adverse shocks”.
HSBC warns that the economic
recovery has been flattered by
short-term effects.
The country has to refinance debt
equal to 17pc of GDP next year, leaving
it vulnerable to a funding shock. “The
end of QE poses a threat to Italy,” it
said.
Yet the collective market sentiment
is that Italy – and the euro project – is
out of the woods.
The calculus is that the Lega –
Grillini hotheads can be tamed. Rome’s
mandarin class knows how to smother
awkward newcomers with beguiling
patronage, drawing them into the
eternal casta.
Luigi di Maio, the young “chief
executive” of Five Star’s 40,000-strong
online movement (it has no leader as
such), is already courting all the old
devils: Brussels, Italy’s Confindustria,
and global bond funds, hoping that
they will forgive five years of incessant
vilification.
Whatever the Lega – Grillini duet
may be promising in their joint
“contract for government” – and they
are still promising the moon – the final
policies will be whittled down. That at
least is the fond hope.
It overlooks the elemental question
of how such an “anti-system”
government will respond to pressure
when the next global storm hits –
perhaps in 2019 – without the ECB
shield still in place.
Matteo Salvini, the Lega strongman
and soon to be Italy’s co-leader,
warned investors after the elections in
March that they now face a different
kind of Italy.
“We couldn’t give a damn about
bond spreads. It is ‘No’ to Berlin, ‘No’
to Paris, and ‘No’ to Brussels: Italians
are going to decide for Italy from now
on,” he said.
Mr Salvini has concluded – after
watching the Greek fiasco – that it is
too dangerous for a debtor country to
leave the euro alone, but he has not
altered his view that monetary union
is the work of the devil. He has merely
TIZIANA FABIANA/AFP/GETTY
Italy is a ‘eurozone accident waiting to happen’
A mural depicts Five Star leader Luigi Di Maio, left, kissing Matteo Salvini, the Lega leader
shifted tactics. The Lega now aims to
bring about “Italexit” by subtle means,
subverting EMU from within.
“The euro is and remains a failure. It
is clear in our minds that the system of
monetary union is destined to end,
and therefore we wish to prepare for
that moment,” he said.
These preparations are sketched
into the Lega – Grillini document. It
calls for a study of “minibots”,
perpetual treasury notes used to inject
liquidity, initially by covering €70bn of
state arrears to households and
contractors.
Designed by Claudio Borghi, the
Lega economics chief, it is intended to
be a creeping lira – or the Medici
“florin”, as he calls it – a parallel
currency that slowly breaks the
monetary control of the ECB.
“When the time comes we can
switch to this new currency. It can be
done electronically,” he once told this
newspaper.
His goal is to set off a chain of events
that leads to German withdrawal as
the “cleanest” way to end what he calls
the “infernal instrument of the euro”.
Five Star have their own variant with a
“fiscal certificate”.
The ideas have converged with the
“minibot”. It is not the first order of
business but it sits there as a looming
menace, ready to be activated when
the political need arises.
The Grillini posture on Europe
remains a mystery. Their roots are
deeply Eurosceptic, mingled with
Manichean vigilante populism and a
techno-utopian repudiation of the
power structure.
The movement is still in thrall to its
“Guarantor”, Beppe Grillo, the anti-EU
comedian, even as Mr di Maio pursues
his charm offensive and promises that
“this government poses no threat to
our relations with the EU”.
The suspicion is that Lega – Grillini
coalition is paying lip service to fiscal
rectitude.
It finesses targets by “dynamic
scoring” and by counting on a
turbo-charged fiscal multiplier. The
whole thrust of policy is a rejection of
the EU spending rules and the Fiscal
Compact. It is a “eurozone accident
waiting to happen”, says
Eurointelligence.
The measures agreed by the
coalition include: a flat tax with bands
of 15pc and 20pc, costing up to 2pc or
3pc of GDP in lost revenue; the
cancellation of VAT rises, costing
0.8pc of GDP; and the repeal of the
Fornero pension reforms, threatening
Italy’s long-term solvency.
Plans for a “basic income” will be
made contingent on the search for
work. “Nobody will be paid to sit at
home on the couch,” said Mr di Maio.
The scheme is less ambitious than
the original Five Star proposal worth
3pc of GDP. But it will not come cheap.
“This is all going to cost a huge sum
of money,” said Lorenzo Codogno,
ex-chief economist at the Italian
Treasury and now at LC Macro
Advisors.
He has learned from hard
experience that investor confidence in
Italian debt can vanish overnight.
“Markets could move suddenly and
unexpectedly. I fear it is just a matter
of time.”
The trouble may not surface as long
as the global expansion lives on. What
is clear is that when the next
downturn does arrive, the political
chemistry in Italy will be entirely
different from the crisis of 2011 to 2014.
Italians will not tolerate another
round of EMU austerity overkill, let
alone another technocrat Monti-style
government imposed by Brussels.
While there is no public clamour for
the lira, there is no love for the euro
either.
It is widely felt that monetary union
is a German regime that has trapped
their country in a bad equilibrium,
depriving them of the sovereign
tools needed to confront the postLehman slump.
Markets may have learned a false
lesson from the failed “Greek Spring”.
Syriza Leftists were never
Eurosceptics.
They wanted to secure a bail-out on
softer terms and made the mistake of
trying to blackmail the EU by
threatening a euro break-up.
Italy does not need a bail-out. It is a
net contributor to the EU budget. It is
infinitely larger.
If subjected to the “Syriza
treatment”, the new government
might set in motion a chain of events
that smashes the euro project. This is a
new possibility that investors have to
calibrate.
Optimists may or may not be right
that Italy’s economy is strong enough
to withstand the rigours of monetary
union in the next recession, but that is
the wrong political discussion.
The relevant question is whether
the Lega – Grillini duet will wish to
keep Italy in the euro if it means
submitting to German contractionary
demands.
The answer is probably no, as well
as for bank equities and euro currency
futures.
***
6
Monday 14 May 2018 The Daily Telegraph
Business
New twist in Kazakh
row with tycoons
A MULTI-BILLION pound row between the state of Kazakhstan and two
Moldovan energy tycoons will play out
in an English courtroom later this year
after a High Court judge quashed the
latter’s efforts to have the case
dismissed.
Anatolie Stati and his son Gabriel
have successfully petitioned for several countries to freeze $22.6bn
(£16.7bn) worth of assets belonging to
the oil-rich central Asian country, including 40pc of its sovereign wealth
fund, in a bid to force it to pay $500m
they won in an arbitration case against
it in 2010.
But they tried to back out of an attempt to freeze its assets in England in
February after a judge said there was
“prima facie” evidence the pair had
won their initial case with fraudulent
claims.
In a ruling published on Friday, Mr
Justice Robin Knowles ruled the case
would proceed as planned in October,
dismissing the Statis’ claims they could
not afford to continue with the action
and no longer needed to as they had already succeeded in freezing enough
Kazakh assets in other countries.
The dispute relates to two businesses the pair and their companies Ascom Group and Terra Raf Trans
Traiding acquired in 1999, which held
licences in Kazakhstan’s Borankol and
Tolkyn oilfields.
They claim they were forced to abandon the assets after a campaign of harassment by the country’s government,
including excessive inspections and
audits and spurious legal action against
directors.
The 2010 arbitration, in Sweden,
found in their favour, demanding Kazakhstan pay out $500m, including
$199m in construction costs, as recompense. But the country, which continues to deny wrongdoing, has so far
failed to pay up, even after the Moldovans succeeded in freezing billions of
dollars worth of its assets in Belgium,
the
Netherlands,
Sweden
and
Luxembourg.
It has since alleged that the arbitration was swayed by fraudulent evidence from the Statis, who it has
accused of exaggerating the value of
their investment in the projects.
Marat Beketayev, Kazakhstan’s justice minister, said: “We are confident
that justice will eventually be served.”
A spokesman for the Statis said they
“respect the decision of the English
court but consider it flawed in a number of material aspects”. They will be
seeking to appeal. Anatolie Stati started
Ascom, Moldova’s largest oil and gas
company, in 1994.
Khan fund battles luxury Islamic bond row ends
developers for first time after $700m Dana deal
London Mayor Sadiq Khan has used a
new £250m fund aimed at shielding
plots from being developed for luxury
homes for the first time. The land fund
bought two thirds of the site used by St
Ann’s Hospital in north London. Plans
had been made to build 470 homes,
14pc of which would have been
affordable, but the Mayor will now
build 800, with half being affordable.
Energy producer Dana Gas will settle
with its Islamic bond investors thanks
to a $700m agreement which ends a
long-running legal battle. The UAEbased firm had argued changes in
Islamic financial practice since the
bonds were issued made them invalid
and threatened not to redeem them. But
now, the sukuk holders will be able to
exit at 90.5 cents on the dollar.
Dior and Fendi owner
adds to its catwalk Lyst
Tills still not ringing as
consumer data dips
The luxury goods giant LVMH, owner
of brands including Christian Dior and
Fendi, is set to be the largest investor in
a multi-million pound fundraising by
UK-based fashion search engine Lyst.
Reports of the deal first emerged on Sky
News, which suggested LVMH’s
investment could signal an intention to
buy Lyst outright in the future.
Better weather failed to spur consumer
spending in April, as it fell for a second
consecutive month. Visa’s UK
Consumer Spending Index showed a
2pc dip in April on an annual basis, the
same as March’s drop. Consumer
spending has now fallen in 11 of the past
12 months on this measure, meaning
2018 could be the worst year since 2012.
Lloyds goes green with
British Land set to win
£2bn of cut-price lending out over real estate rival
Lloyds Banking Group has poured £2bn
into green initiatives by offering
companies discounted finance to invest
in electric cars and low-carbon energy.
Firms can use the Clean Growth
Finance scheme to invest in improving
energy efficiency, recycling rates and
cutting water usage. HSBC and JP
Morgan have similar larger schemes.
BLOOMBERG
By Jack Torrance
BUSINESS BULLETIN
Astana, the capital of Kazakhstan, which is in a legal dispute with two energy tycoons
British Land is set to outpace its rival
Land Securities in updates to the City
this week. Investor concerns are rising
due to the duo’s high retail exposure
amid the high street gloom. Both report
annual results to end-April this week,
with British Land’s net asset value set to
rise to 940p (2017: 915p) but Land
Securities’ staying flat at about £14.18.
Share prices www.telegraph.co.uk/shares
Mkt Cap
© 2018 Tradeweb Markets LLC. All rights reserved. The
Tradeweb FTSE Gilt Closing Prices information contained
herein is proprietary to Tradeweb; may not be copied or
re-distributed; is not warranted to be accurate, complete or
timely; and does not constitute investment advice. Tradeweb
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from the use of this information.
Government Securities
Amount
Issued £m Stock
Rmd
Yield
(£m)
Stock
Price (p) Cvr
Yld
Mkt Cap
(£m)
1219.1
Engineering / Industrial
Stock
Price (p) Cvr
Lancashire Hldg ● 605½
16654.9 Legal & General
279½
Yld
Mkt Cap
(£m)
Stock
Price (p) NAV
Yld
-2.4
1.8
735.3
JPM Japanese ●
456
499
1.1
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5.5
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JPM Japan Sm Cos 433
502
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1267½ 1325
1.8
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Stock
Price (p) Cvr
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Stock
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Local Shopp REIT
32¾
3897.7
989
1.6
2.4
1364.9
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195¾
1311
2.4
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McKay Secs
269
3.4
3463.2
BBA Aviation ●
335⅜
0.9
355.7
Mucklow A J
562
4.0
755.8
Clarkson ●
2500
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300.8
Raven Russia
45⅜
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Northgate
381⅝
147.0
Raven R C R Prf
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338.4
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JPM Small Cos
1235
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1186½
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302
304
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26120.2 Anglo Amer
1859⅜
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1875
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121
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1045½
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339
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242.3
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1792½ 2023
3.3
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37234.6 HP $
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615
684
2.8
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512⅜
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1565
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Price
NAV
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981⅜
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291
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211
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245½
248
1.7
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124
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2416
2.4
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34¾
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Town Centre
288
524
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Merchants Tst
523*
551
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247
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7381.6
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3112
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823
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48½
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860½*
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Allianz Tech Trust 1410
1377
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791
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6821.2 Treas 2½% IL 24359.61
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Bankers Inv ●
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894
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5890
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4841.2 Treas 4⅛% IL 30358.28
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715
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259
272
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BlckRck Grt Euro
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2334
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36685.3 Barclays
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294⅛
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65952.2 Diageo
522.0
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4629
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3465
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21771.0 Ass Brit Fds
2750
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871½
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318
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532
590
1.7
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2799.2
Tate & Lyle ●
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601
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790
874
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189
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2.5
1389.6
Fidlty Chna Sp Sits ● 252
290
1.0
3930.6
Investec ●
586¾
2.2
4.0
923.8
Fidelity Euro V ●
222½*
249
2.0
—
212.6
Fidelity Japan V
156¾
170
—
0.9
2.8
715.4
Fidelity Sp V
270*
276
1.7
1472.2
IP Group ●
139
293.2
Liontrust
580
13.9
Lon. Fin. & Inv.
15419.3 Lon Stock Ex
44½
3.2
2.5
1325.5
Finsbury Gwth ●
793*
787
1.8
4431
2.8
1.2
3692.2
Foreign & Col ●
681
688
1.5
3091.5
Man Group ●
191⅝
1.4
4.2
342.2
F&C Cap & Inc
340
338
3.1
3757.5
NEX Group ●
989½
31.7
1.1
1147.9
F&C ComProp ●
143⅝
142
4.2
1429.9
Paragon ●
548½
1715.1
Provident Fin ●
677¼
2.7
2.9
71.7
F&C Mgd G
204
205
—
—
59.2
F&C Mgd I
138
137
4.1
1282.6
Rathbone Bros ●
2500
1.5
2.4
275.1
F&C Priv Eq Ord
372
349
3.8
331.2
S&U
2760
1.9
3.8
827.3
F&C Glob SmCo ● 1385
1410
0.9
7788.7
Schroders
6.8
1.2
5682.4
Barratt Dev
561¼
1.4
7.7
4166.4
Bellway
3388
2.8
3.9
5634.6
Berkeley Grp
4200
4.3
2.6
391.4
Boot H
294
4.0
2.7
2.2
2.9
7552.0
4461.9
ConvaTec Grp ●
39600 39084 1.4
4139½
Gas & Water
302⅜
Crest Nicholson ● 491¼
1.6
878.1
Balfour Beatty ●
1262.0
1885
Perpetual Inc & Gr ● 369
2.1
2085.8
—
—
887.2
540
3446
1.9
3.3
87.8
107.1
172.7
84⅛
39
3.2
463*
5.3
480½
EnQuest
215
BlackRock Latin
2.5
Breedon Group
463.2
BlckRck Inc&Grth Inv206
182.3
138
Costain
7.5
50.0
1.9
Alumasc
510.0
—
2.9
2.2
Healthcare
1406.1
240⅝
1.9
2520
49.9
●
564½
Cairn Energy ●
142¾
Coca‑Cola HBC
8253.5
228⅝
1.4
1.8
352.4
F&C UKHighIncTst 101
F&C UKRealEstInv 106
Hend Alt Strat
Hend Div Inc Tst
Hend High Inc
277
91⅛
188
113
107
343
87
191
373
4.3
0.8
5.2
—
4.7
4.8
5.1
301.3
Fullers ‘A’
940
3.1
2.0
387599.8 JP Morgan Ch $
113⅞
2.0
3.2
790.5
Go-Ahead Grp ●
1833
2.0
5.6
338809.2 Johnson&John $
126⅜
2.7
0.1
2.6
5057.1
GVC Hldgs ●
875½
-0.4
3.4
6303.8
95¾
2.1
4.2
318
1.5
1.0
14300.8 IAG Intl Cons Air 698
4.4
2.8
17943.5 Marathon Oil $
21
1.0
2.5
Warehouse REIT
100½
97
2.5
9091.1
Intercont Hotels 4768
2.8
1.6
129546.4 McDonalds $
165
2.4
1.7
Workspace Gp ●
1128
2.0
2354.1
Mandarin
1.5
1.2
157598.0 Merck $
58⅝
3.3
0.5
682.1
Marston’s ●
107⅝
1.9
7.0
747114.1 Microsoft $
97¼
1.7
0.9
1162.5
Mitchells&But ●
271⅝
3.0
1.8
206080.4 Pfizer $
35¼
3.9
2.7
2027.8
National Ex ●
396⅜
1.9
3.4
183817.2 Procter & Gamble $ 73⅛
3.9
1.3
2.1
0.9
Mkt Cap
(£m)
666.7
Stock
Scot Invest ●
Price (p) NAV
848*
941
Yld
2.4
3576
5.2
0.4
290.0
Hend Intl Inc
164*
164
3.1
7146.8
Scot Mortgage
508½
489
0.6
Mediclinic Int
691¼
3.9
1.1
709.7
Hend Smaller Co
950
1038
2.0
184.6
Sec Tst of Scot
169¼
182
3.5
1298
2.5
2.0
83.8
Hend Opp
1047½ 1267
1.9
84.6
Seneca Global
176½
174
3.6
906.8
Herald Inv ●
1305
1464
—
240.9
Stand Life Eq Inc
490
498
3.8
719.4
HgCapital
1927½ 1892
2.4
1312.2
TR Property ●
413½
421
2.7
Mkt Cap
(£m)
Stock
101521.0 Royal D Shell B
351.9
Soco Intl
Price (p) Cvr
2710½
106
0.8
-6.7
Yld
5.1
5.0
Pharmaceuticals
66864.5 AstraZeneca
5279
2582.3
HICL Infrastructure ●144¼ 147
5.4
2020.3
Tmpletn Em Mt ●
748
862
1.1
2558.6
BTG ●
662
1805½
1.7
2.2
608.8
ICG Enterprise Tst 879
970
2.4
226.2
Troy Inc & Gr
78⅜
78
3.4
2814.0
Dechra Pharma ●
2750
1568.1
Genus ●
186⅝
7.0
6014.6
PaddyPwrBet
7105
1.3
2.8
22324.4 Rockwell $
177¾
—
2530.5
Playtech ●
797⅜
2.0
4.0
99111.4 United Tech $
123⅞
2.3
2.0
622
1.4
2.5
683.7
Rank Group ●
175
2.2
4.3
244553.8 Wal Mart Strs $
82⅞
2.5
1.6
Debenhams
22⅞
1.4
12.7
624.5
Restaurant Gp
310⅝
0.9
5.6
151437.2 Walt Disney $
101⅝
1.7
4.5
608.1
Dignity
1216
4.7
2.0
7617.5
29⅞
3.3
0.6
2581.2
Dixons Carph ●
222⅞
2.3
5.0
1193.3
Dunelm ●
591
1.6
4.5
218.3
Findel
252½
Brown N
202¼
26.4
Carpetright
37
8413.4
Dairy Farm
280.7
—
1065.2
Greggs ●
1053
1.8
3.1
765.0
Halfords ●
384¼
1.6
4.6
3130.2
Howden Joinery ●
508
2.7
2.2
6388.7
Kingfisher
297¼
2.0
3.6
397.9
Lookers
100¾
3.1
3.9
4765.4
Marks & Spen
293¼
0.4
6.4
5974.5
Morrison (WM)
253⅝
2.2
2.4
34.1
Mothercare
7839.7
Next
5542
1.7
4.5
3678.8
Ocado ●
554⅜
386.0
Pendragon
27¼
20
—
—
2.4
5.7
1500.1
Saga ●
133⅞
1.4
6.7
6733.1
Sainsbury J
306½
1.3
3.3
2204.6
Smith WH ●
2002
2.1
2.5
2230.0
Sports Direct ●
415¼
246⅝
—
4.9
1.2
715¼
1.5
3.8
10953.2 Ashtead Gp
Aggreko ●
2231
3.6
1.3
3861.8
Babcock Intl ●
763¾
2.2
3.7
1539.2
BCA Marketplace ● 193
0.7
3.7
7508.6
Bunzl
2235
2.0
2.1
822.2
Capita ●
123¼
-4.4
9.0
61.1
Carillion #
14¼
220.2
Charles Taylor
289
1.2
3.8
143.4
Communisis
68⅜
2.1
3.9
537.7
De La Rue
525
1.6
4.8
6504.3
DCC
7290
2.1
1.6
1204.9
Essentra ●
458¼
2.1
4.5
15931.0 Experian
1736
2.1
1.8
13928.0 Ferguson
5656
2.7
2.0
—
15727.2 Ryanair
1353¼
—
884.7
Stagecoach ●
154¼
0.5
7.7
2090.3
Thomas Cook ●
136⅛
1.3
0.4
1765½
1.7
3.2
1218.5
Wetherspoon ●
1155
4.3
1.0
18966.8 Akzo Nobel €
75⅛
3.3
1.3
7761.9
Whitbread
4228
2.4
2.4
55491.9 BMW €
92⅛
4.3
2.6
AIM
5.4
64¾
2.9
1.8
268.3
BrooksMacdonald 1940
1.0
2.2
42489.6 Deutsche Post €
34⅜
3.3
1.9
4.4
Cambria Africa
1¼
0
—
67946.0 Deutsche Tele €
14¼
4.6
0.9
506.8
Central Asia Met
288
1.3
5.7
50365.7 Heineken €
87½
1.7
2.3
129.1
Ceres Power
12¾
148486.1 LVMH €
293⅝
1.7
2.0
119.2
Churchill China
2.3
32069.1 LafargeHolcim SFr 52⅞
3.8
2.7
148.1
Cohort
361½
1.2
2.1
11833.3 Lufthansa €
25⅛
3.2
4.8
1293.5
Dart Group
870½
9.6
0.6
30106.0 Nokia OYJ €
5⅜
3.6
1.7
6.4
Deltex Medical
—
21381.0 Michelin €
119⅛
3.0
2.6
52.7
Elecosoft
68
4.2
0.9
36721.1 Pernod Ricard €
138⅜
1.5
2.2
166.9
Finsbury Food
128
2.3
2.4
18169.0 Peugeot €
20⅛
2.6
4.1
44.1
Futura Medical
36½
—
33068.2 Philips (Kon) €
35⅛
2.3
1.9
—
98175.0 Siemens €
115½
3.2
1.8
34522.3 Societe Gen €
42¾
5.1
1.3
1087½
—
2.4
1¼
22.2
Gaming Realms
43.4
Gattaca
134¾
7¾
1.2
14.8
513.9
Highland Gold
158
1.4
6.6
30.6
Hornby
24⅜
135.3
Inland Homes
66⅜
954.6
IQE
126
831.9
James Halstead
400
2.3
Kellan Gp
0⅝
4.2
53⅜
4.8
1.2
16⅜
4.0
1.3
49988.2 Volkswagen €
169⅜
2.3
2.6
Price
Cvr
Yld
3.3
—
19.4
LPA Gp
156½
5.3
1.7
Recent issues
322.5
M&C Saatchi
390
0.4
2.4
Mkt Cap
94.1
Miton Group
54½
2.3
2.6
40.3
Mpac Group
200
31.1
MS Intl
186
454.1
Numis
361.0
Rosenblatt Gp
110
—
1.1
4.4
173.2
Urban Exposure
105
—
424
2.3
2.8
2223.3
Vivo Energy
185
—
Oakley Capital
176¼
243
2.6
8.1
OneView Group
9¾
9.0
Prime People
76
2.6
6.6
1.4
0.9
0.5
1.5
4195.5
G4S
270⅜
1.6
3.6
711.3
Restore
574
2709.8
Hays ●
186¾
2.6
1.8
173.3
Rockhopper Exp
37⅞
Homeserve ●
762
1.5
2.1
38.8
Share
27
—
—
3.8
2513.2
—
8240.7
Intertek Group
5106
2.5
1.4
77.5
Sinclair Ph
15⅜
—
1.2
0.8
2295.2
IWG ●
252
2.2
2.3
43.4
SRT Marine Sys
34
—
3.4
207.8
Invesco Asia Trust 293
332
1.5
150.8
UIL Ord
168½
263
4.5
2548
2.2
1.0
520.4
Johnson Serv
142
2.5
2.0
116.5
StatPro
1.9
3.4
169.2
Invesco Inc Gth Tr 289
329
3.8
52.2
UIL Fin ZDP 18
159½
155
—
72723.2 GlaxoSmKline
1466⅜
0.4
5.5
544.9
Menzies J
652
0.7
3.1
28.5
Sterling Energy
13
1834.2
Grafton Gp ●
772½
3.5
2.0
40554.5 Reckitt Benck
5756
5.3
2.9
123.4
InvesPerp Enhc Inc 74¾
74
6.7
55.8
UIL Fin ZDP 20
143
130
—
3174.3
Hikma ●
1317½ -10.3
1.9
701.1
MITIE Gp
191⅝
-39.4
0.7
159.6
Tribal Gp
81⅜
851.8
Marshalls ●
427¼
1.5
3.3
969.8
1188
2.8
2.5
9.8
InvesPerp Bal Rk
140½
141
—
63.0
UIL Fin ZDP 22
126
112
—
3354.3
Indivior ●
461⅛
—
5928.2
Rentokil
321⅝
9.6
1.2
5.7
Union Jack Oil
0⅛
614.6
Morgan Sindall
1374
2.6
3.3
67.4
InvesPerp Sel UK E 186½*
191
3.5
500.7
Utilico Emerg
213½
243
3.3
5.7
Premier Vet
37
—
518.0
Ricardo Gp
970
2.4
2.0
78.3
Walker Green
110½
31.5
Nth Midland Con
310
1.2
1.9
69.8
InvesPerp Sel Gbl E 206*
210
3.3
1939.2
Witan ●
1088
1107
2.1
37120.8 Shire
0.6
543.7
Robt Walters
720
3.6
1.7
6.1
Xtract Resources
8701.0
Persimmon
2795
1.1
8.4
172.1
InvesPerp UK Sm Co524*
540
4.0
214.9
Witan Pacific
340
388
1.6
816.3
SIG ●
138
-2.7
2.7
474.7
Young & Co - A
Worldw HealthTr ● 2510
2531
0.9
—
234.7
2.0
3.5
The Alternative Investment Market is for young
and growing companies. Shares may carry higher
risks than those with a full quotation, and may be
difficult to sell.
Americans
BSD Crown
19½
95.4
CML Micro
567½
3.1
955.8
Laird
195½
266.7
Microgen
438
5671.5
Electricals
—
910.1
JPM American ●
1.3
344.3
JPM Asian
14.0
0.6
21.4
JPM Brazil Inv
63¾
75
1.3
2.6
1.4
223.9
JPM Chinese
307
362
0.5
Micro Focus Intl 1300
0.7
5.7
419.1
JPM Claverh’se
764*
783
3.6
Media
405½*
429
1.4
1254.2
366
406
4.2
Net Asset Values © 2018 Morningstar Estimated
at previous day’s close see www.Morningstar.co.
uk.
178.9
Dialight
550
—
7356.8
Sage Gp
679
1.8
2.3
267.5
JPM ElecManGth
825
847
1.5
Mkt Cap
314.2
discoverIE Grp
440
0.6
2.0
714.5
Spirent
116¾
1.2
2.6
85.1
JPM ElecManInc
117
120
4.1
(£m)
4923.9
Halma
1297
2.4
1.1
5.1
JPM ElecManCsh
100½
102
0.3
135.4
3839.6
Renishaw ●
5275
2.6
1.0
1091.5
JPM Emerg Mkt ●
883
1001
1.2
2430.9
688.6
XP Power
3580
1.9
Insurance
2.2
5583.6
Admiral
21782.6 Aviva
Electricity
Property
1419.4
Assura ●
59½
1531.8
Big Yellow Gp ●
965½
3.0
6821.0
Brit Land
694
4.3
994.0
CLS Hldgs ●
244
Price
Cvr
Yld
390.0
Cap&Regional
54¼*
Bloomsbury
179¾
1.5
3.8
2446.3
Capital&Count ●
288⅛
Daily Mail ‘A’
720½
4.3
3.2
3507.6
Derwent Ldn ●
3145*
Stock
680.0
JPM Eur Sm Cos
425
463
1.1
1417.1
Euromoney ●
1298
1.2
2.4
1976.7
Gt Portland Est ●
701¾
1940½
1.0
5.9
227.8
JPM Eur Gwth
312½
343
2.2
6262.4
Informa
760
1.8
2.7
1329.3
Grainger ●
318⅝
542⅝
1.3
5.0
166.7
JPM Eur Inc
163¾
182
3.5
6923.7
ITV
172
1.3
4.5
2739.9
Intu Props ●
202¼*
1094.7
Serco Group ●
99⅝
3292.9
Travis P ●
1306
4.2
6.1
-0.1
2.6
21530.5 BT Group
217
1.3
7.1
6.7
1782.0
Inmarsat ●
388⅝
2.0
3.8
0.5
529.0
KCOM Group
102⅜
0.8
5.9
4.3
1530.3
TalkTalk ●
133½
1.5
3.0
17.2
3.7
Telecommunications
1.5
817.1
Telecom Plus ●
56046.6 Vodafone
Mkt Cap
(m)
177½
-1.2
1.6
1.3
1.2
3.8
4.0
1597½
3.2
1.2
Young & Co - N/V 1225
2.9
1.6
—
—
1¾
—
Stock
Price
Cvr GrsYld
39747.6 21st Cent Fox A $
37¾
1.0
2.3
1042
2.4
4.8
9977.2
53½
—
—
210⅛
-1.5
6.3
87516.0 Amer Express $
101¾
1.4
2.5
313001.9 BankAmerica $
30⅞
1.6
3.7
199574.8 Boeing $
342⅝
2.0
2.2
92460.0 Caterpillar $
154⅝
2.0
1.2
6.9
Alcoa $
3266.3
Beazley ●
619½
1.8
1.8
412.2
JPM Gbl Gth & Inc 319½
316
3.8
7193.1
Pearson
921⅜
2.9
1.8
4457.2
Hammerson ●
561¼
333¾
-3.0
3.7
5095.8
DirectLineIns
370⅝
0.9
9.6
379.9
JPM GEMI
128
136
3.8
251.1
Reach
83⅞
4.0
6.9
459.0
Helical
387
3.9
2.2
28399.8 Nat Grid
846¼
5.1
5.3
4328.1
Hiscox ●
1508
0.3
1.9
157.3
JPM GL Conv
97⅛
99
4.6
16730.6 RELX
1592
2.1
2.5
12451.5 H K Land
532
11.9
2.8
88535.0 Brit Am Tob
3860
9.4
5.1
248711.0 Chevron $
130⅛
3.4
1.2
14278.3 SSE
1406½
1.7
6.6
2860.6
Jardine Lloyd ●
1306
1.6
2.6
743.5
JPM Indian ●
709
821
—
4332.9
4779
2.7
1.2
7249.2
4.4
26375.6 Imp Brands
2765½
0.8
6.4
18743.4 Coca-Cola Euro $
38⅝
3.2
1.1
1354.8
Drax Group ●
Rightmove ●
Land Secs
977¾
4.5
Tobaccos
Stock
88.1
1.1
25.2
(£m)
—
130
3.1
1.1
2.7
63328.1 UBS AG SFr
246⅜
7.8
5.5
1.6
141778.6 Total €
McBride
3.5
11⅞
110⅝
2.8
PZ Cussons ●
1.1
Suez Environ €
23530.7 Thales €
—
1.3
7347.6
—
1056.4
645½
2.7
67
43415.1 Danone €
237.3
195¼
3.3
71732.6 Daimler €
6.7
Redrow ●
1.5
2.0
2.2
2.2
Taylor Wimpey
2.8
222¾
1.3
2.0
6399.0
16½
44541.3 Continental AG €
1520
3.3
2387.1
12743.5 Carrefour €
Arbuthnot
0.9
4062½ 13.7
Europeans
226.3
2704
Information technology
Xerox $
10370.3 TUI AG
22777.2 CRH
Superdry ●
Manpower $
0.3
573.1
1831.8
NMC Health
Burberry
-0.2
109¼
2656
5.2
4.8
1.7
4.0
4.5
Support services
5095.8
Household goods
0.0
—
Foot Locker $
141
24126.2 Tesco
7443.9
11356.2 Smith & Nep
Oil & Gas
Travel & Leisure
2.6
Retailers
1417.8
Carr’s Grp
9271.6
50932.3 Unilever
Vedanta Res ●
112575.0 BP
130.5
255.2
Construction
0.8
RSA
Aberdeen New India452½
Banks
2.0
6708.9
Aberdeen Diversified 122
3.3
147⅛
0.8
267.3
2.2
1.8
109910.7 Honeywell $
4.3
400.8
1.3
1.4
2.2
1435
2.6
2.1
3.3
189½
Cropper J
2.8
314
14½
218416.8 Home Depot $
135.8
Mining
3.3
1510
126458.5 Gen Electric $
4.1
1.4
Senior ●
3.4
609
548
Ultra ●
3.6
515
1668½
1317.0
272
JPM Russian
Smiths Gp
1125.6
1.6
262.5
Smith (DS)
2.6
3.3
2.4
6603.2
1.4
42⅜
2.0
5888.4
3.5
5003.4
1929
1.81
-19.6
3.7
49995.0 Prudential
1.84
836
1.2
1.4
3.10
236⅞
—
631
4.0
3.18
Qinetiq ●
—
77½
25201.4 Treas 4¾% 38 149.58
1343.8
22⅝
Coats Group ●
Phoenix ●
29761.9 Treas 4¼% 36 137.10
15548.4 Rolls‑Royce
34790.6 Fiat Chrysler $
1103.6
77¾
—
4.6
—
Severfield
1.4
1.5
2.6
100
233.2
0.8
0.5
4.0
94½
1.71
208
2.3
81¾
JPM Mlti-Ass
3.23
117½
67⅜
345861.9 Exxon Mobil $
JPM Mid Cap
88.0
35440.5 Treas 4¼% 32 131.57
Chemring
156235.4 DowDuPont $
2.9
301.8
6.3
Mondi
Cobham ●
3.0
2.7
7343.0
2809.4
2.5
2.7
1.51
582.1
1.9
-0.7
4.18
3.4
119⅞
795½
143.66
1.2
1.4
21603.1 Dr Pepper $
3.9
259¾
19027.7 Treas 6% 28
634⅜
Yld
2.7
12810.4 Old Mutual
10283.4 Melrose Ind
20254.4 BAE Systems
Price (p) Cvr
3128.4
1.23
Yld
Stock
3.2
4.01
Cvr
(£m)
62½
Transport
1.9
124.58
Price
Mkt Cap
54554.9 Colgate Palm $
2.1
35076.5 Treas 5% 25
Stock
Yld
2.9
181.4
(£m)
—
434
0.82
Mkt Cap
42
910½
6.57
Aerospace & defence
Price (p) Cvr
27.0
Castings
Price
The share prices, price-earnings ratios and dividend yields
below are supplied by Interactive Data (Europe) Ltd. The
yields are calculated using historic dividend payments divided
by the closing share price multiplied by 100.
Stock
1.0
Bodycote ●
121.69
Treas 2½% IL 20361.70
(£m)
3.1
189.4
24072.0 Treas 8% 21
6579.0
Mkt Cap
1358
1743.2
Flat
Yield
Index Linked Securities
Yld
23344.3 Sky
Bold FTSE100 Stocks
* Ex-dividend
§ Ex-rights
●
FTSE250 Stocks
† Ex-scrip
# Suspended
‡ Ex-all
Cover relates to the previous year’s dividend.
Yields are net of basic rate tax.
Data is provided for information purposes only and is
not intended for trading purposes. Speak with a
financial advisor before using any data to make
transactions.
***
The Daily Telegraph Monday 14 May 2018
7
Business
Burberry seeks to get back on trend after strategy fears
TOM REES
THE WEEK AHEAD
EAD
The fashion brand will join
the likes of Dignity, CYBG
and Royal Mail in updating
the markets this week
Today
The turnaround effort at funeral
service provider Dignity will be back
under the spotlight to kick off this
week’s packed corporate diary.
Dignity shares halved in valuation
earlier this year following a disastrous
profit warning, and the company has
slashed its prices to entice customers
away from its undercutting
competitors. It said in April that
trading has improved following an
increase in deaths but investors will be
looking for stronger signs that
recovery is on a firm footing.
Interim results
Diploma, Victex
Trading update
Centrica, Dignity
ALAMY STOCK PHOTO
figures after its challenger banking
rival made a £1.6bn all-share takeover
bid last week.
CYBG has offered 1.13 of its shares
for each Virgin share, giving it a 36.5pc
stake in the combined group.
After making just a small dent in the
big four banks’ market share, CYBG
believes that the merged group could
offer SME customers a “genuine
alternative”.
Virgin Money is mulling over the
takeover approach but some City
analysts believe that CYBG’s current
offer undervalues the company.
Full-year results
BTG, DCC, Land Securities, Vodafone
Interim results
CYBG, easyJet
Trading update
Hargreaves Lansdown, Spirax-Sarco
Engineering
Economics
Labour figures (UK), GDP growth
second estimate (EU)
Royal Mail will present its final figures under boss Moya Greene later this week
the company’s first under its new
management team but Berenberg
warned that trading is unlikely to have
accelerated in its fourth quarter.
Burberry sales struggled in the
previous quarter as a surge in tourists
snapping up luxury goods following
the pound’s post-Brexit slump slowed.
Mr Gobbetti insisted that it was still
on track to meet its full-year profit
guidance but will be hoping to impress
investors to help reverse a 9.7pc share
price slide since unveiling the
revamped strategy.
Wednesday
Shares in trench coat maker Burberry
are still reeling from new boss Marco
Gobbetti’s major strategy shift and the
FTSE 100 fashion house has now lost
the backing of revered Belgian
billionaire Albert Frère.
The activist investor dumped a
6.6pc stake last week, unsettling
investors still to be won over by
Burberry’s plan to tap the luxury
market. The full-year figures will mark
Tomorrow
Virgin Money investors will be taking
extra interest in Clydesdale and
Yorkshire Banking Group’s interim
Full-year results
Burberry
Interim results
Brewin Dolphin, Marston’s, Mitchells
and Butlers, SSP
Trading update
Coats, Crest Nicholson, Galliford Try,
Mondi, National Express
Economics
Housing data (US), industrial
production (US), CPI (EU)
Economic week ahead
her final full-year figures at the parcel
deliverer with its shares hitting an
all-time high on Friday.
After shepherding the firm through
its controversial privatisation and
resolving a bitter pensions dispute
with workers, Ms Greene will step
aside as chief executive in June. With
letter volumes expected to continue to
decline and strong competition in the
UK parcel market, Royal Mail still
faces “plenty of external pressure”,
according to Hargreaves Lansdown’s
Nicholas Hyett.
Full-year results
3i, British Land, Experian, Investec,
Mothercare, National Grid, Royal Mail,
Sophos
Interim results
Countryside, Euromoney Institutional
Investor, Grainger, Thomas Cook
Trading update Just Group
Economics
Construction output (EU)
An official
estimate of
productivity
levels for the
first quarter of
2018 will be
released today,
following
decidedly soft
figures for the
three months to
March so far.
Following the
Bank of
England’s
decision to hold
off on an interest
rate rise it will
be closely
watched along
with
unemployment
levels, in a bid to
determine how
swiftly slack in
the UK economy
is being used up.
The central
bank’s
policymakers
will be quizzed
by MPs on their
decision to hold
off from raising
rates on
Tuesday. UK
Friday
Copycat drug maker Hikma
Pharmaceuticals will be looking to
rebound after swinging to a loss last
year amid fierce competition in the
generics market.
The company is hoping to secure
approval in the US to launch a copycat
version of GSK’s asthma drug Advair
but its shares have plunged following
lengthy delays.
Trading update
AstraZeneca, Hikma Pharmaceuticals
Thursday
Royal Mail boss Moya Greene will face
Market data
Unit trusts & open-ended investment companies prices www.telegraph.co.uk/funds
World market indices Friday close
Name
Index
Ç Australia
6216.40
+0.50
+0.01pc
È Brazil
Bovespa
85220.23
-640.97
-0.75pc
È China
Shanghai Composite
3163.26
-11.15
-0.35pc
CAC General
5541.94
-4.01
-0.07pc
È Germany
Ç Hong Kong
Mid
Sell
Change
Buy on day
Change
All Ordinaries
È France
Init chge
DAX
13001.24
-21.63
-0.17pc
Hang Seng
31122.06
+312.84
+1.02pc
Name
Init chge
Sell
Mid
Change
Buy on day
3.00 2441.15 2593.17 +23.55
AXA Investment Managers UK
Limited
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
9416.35
+55.40
+0.59pc
22758.48
+261.30
+1.16pc
Ç Russia
RTS
1193.98
+14.35
+1.22pc
Straits Times
3570.17
+32.58
+0.92pc
Amer Gwth Acc
5.25
625.1
+3.90
Madrid SE
1039.96
+2.58
+0.25pc
Biotech Acc
5.50
171.4
+0.20
Emerg Mkts Acc
5.25
276.1
+2.90
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
European Acc
5.25
916.8
+3.40
Unit Trust
Financial Acc
5.25
*698.6
+6.50
Global Opp Acc
5.25
*1478.0
+16.00
Wealthbuilder
Global Opp Inc
5.25
*1304.0
+14.00
Investment Funds (OEIC)
Global Tech
5.25
118.1
+1.20
SMI Index
8993.51
+9.41
+0.10pc
Dow Jones
24831.17
+91.64
+0.37pc
È USA
Nasdaq
7402.88
-2.09
-0.03pc
Commodities summary Friday close
Price
È Gold
per troy oz
È Silver
Change
-2.13
$1318.94
-0.16pc
£12.29
-0.11
-0.92pc
È Krugerrand
£975.58
-8.01
-0.81pc
Health Acc
5.50
*1825.0
+14.00
È New Sovereign
£224.30
-2.14
-0.95pc
Japan Acc
5.25
612.3
È Maples
£971.52
-7.62
-0.78pc
Managed Balanced Acc
5.25
399.3
per oz
Mid
Change
Buy on day
Mid
Change
Buy on day
75.27
+0.50
Jupiter Eco Inc
–
*389.10
+2.92
M&G Dividend A Acc
4.00
699.16
+1.57
5.00
178.0000
+0.70
JPM Global Macro Opps A Inc 3.00
74.57
+0.50
Jupiter Emerg Euro Opps
–
212.01
+5.00
M&G Episode Growth A Inc
4.00
*62.04
+0.41
Multi-Mgr Inc&Gwth A Inc
5.25
155.7000
+0.50
JPM Global Uncons Eq A Acc 3.00
1372.0000
+16.0000
Jupiter European
–
2249.18
+10.41
M&G Episode Income A Inc
4.00
*130.76
+0.9
Multi-Mgr Mangd A Acc†
5.00
*283.4000
+1.20
JPM Global Uncons Eq A Inc 3.00
101.8000
+1.1000
Jupiter Euro Inc Acc
–
82.97
+0.50
M&G Episode Income A Acc
4.00
*172.39
+1.19
Multi-Mgr Mangd A Inc†
5.00
*276.1000
+1.10
JPM Japan A Acc
3.00
483.1000
+8.6000
Jupiter Euro Inc Inc
–
56.92
+0.34
M&G Global Dividend A Inc
4.00
*211.86
+1.61
Sterling Bond Acc†
4.25 *219.7900 229.2800
…
JPM Japan A Inc
3.00
116.3000
+2.1000
Jupiter Euro Special Sits
–
427.83
+2.38
M&G Global Dividend A Acc
4.00
*291.02
+2.21
Sterling Bond Inc†
4.25 *64.6200 67.4000
…
JPM Multi-Asset Income A Acc 3.00
*95.5200
+0.3900
Jupiter Fin Opp
–
*645.96
+6.44
M&G Glbl Emrgng Mkts A Inc 4.00
272.24
+2.76
Strategic Bond A Inc
4.00
*122.4000
+0.10
JPM Multi-Asset Income A Inc 3.00
*65.1700
+0.2700
Jupiter Fund Of Inv Trusts
–
*261.58
+1.98
M&G Glbl Emrgng Mkts A Acc 4.00
294.7
+2.98
UK Absolute Return A Acc
5.00
158.7000
…
JPM Multi-Asset Inc A Mth Inc 3.00
*65.1400
+0.2700
Jupiter Global Emg Acc
–
71.58
+1.04
M&G Glbl High Yld Bd A Inc
3.00
*49.95
+0.1
UK Alpha A Acc†
5.25
157.8000
+0.90
JPM Multi-Man Gwth A Acc
3.00
1031.0000
+9.0000
Jupiter Global Eq Inc Acc
–
72.70
+0.61
M&G Glbl High Yld Bd A Acc
3.00
*131.25
+0.26
UK & Irish Small Co A Acc
5.00
681.1000
-1.20
JPM Multi-Man Gwth A Inc
3.00
943.5000
+8.8000
Jupiter Global Eq Inc Inc
–
63.64
+0.53
M&G Global Macro Bd A Inc
3.00
*82.78
+0.22
UK Equity Income A Inc
5.00
*656.3000
+2.70
JPM Natural Res A Acc
3.00
660.9000
+9.0000
Jupiter Global Managed Acc
–
236.96
+1.95
M&G Global Macro Bd A Acc
3.00
*125.86
+0.33
UK Index A Acc
–
649.9000
+4.00
JPM Natural Res A Inc
3.00
46.3100
+0.6300
Jupiter Global Managed Inc
–
227.77
+1.88
M&G Global Themes A Inc
4.00
900.57
+1.06
UK Tracker A Acc
–
292.3000
+1.90
JPM Sterling Corp Bd A Grs Acc 3.00
*92.5000
+0.1500
Jupiter Growth & Inc
–
*104.91
+0.74
M&G Global Themes A Acc
4.00
1399.98
+1.65
US Growth A Acc
5.00
1055.0000
+8.00
JPM Sterling Corp Bd A Grs Inc 3.00
*55.2000
+0.0800
Jupiter Income
–
593.65
+1.76
M&G Managed Growth A Inc 4.00
*112.5
+0.65
JPM UK Dynamic A Acc
3.00
214.5000
+1.2000
Jupiter India Fd
–
123.32
+0.57
M&G Optimal Income A Inc
3.00
*149.39
+0.17
3.00
*211.09
+0.22
Multi-Mgr Inc&Gwth A Acc
Nikkei
Ç USA
Change
Buy on day
JPM Global Macro Opps A Acc 3.00
No 1, Poultry, London EC2R 8JR. 020 7415 4130
S&P CNX500
Ç Switzerland
Mid
+0.22
–
Ç India
Ç Spain
Change
Buy on day
Init chge
Multi-Mgr Divrsfd A Acc
Ç Japan
Ç Singapore
Mid
85.8000
Name
Discretionary Unit Fund
Maitland Discretionary Inc
Fidelity International
3.50
140.0
+1.2
wage growth
will also be
closely watched
after pay packets
enjoyed their
first month of
positive real
growth in
February.
Economists
are now
expecting pay
growth
excluding
bonuses to
nudge up to
2.9pc, its highest
level in just
under three
years.
Eurozone
figures for
industrial
production and
growth for the
first quarter of
the year will be
revealed on
Tuesday, and the
latest crop of US
numbers for the
same measure
will also be
released, a day
later on
Wednesday.
Sell
†Available as an ISA
Name
Init chge
Sell
Name
Init chge
Sell
Name
Init chge
Sell
Cash Fd Y
–
100.01
…
JPM UK Dynamic A Inc
3.00
169.1000
+0.9000
Jupiter Int Financials
–
101.49
+1.14
M&G Optimal Income A Acc
+7.90
Cash Fd Y Accum.Units
–
100.37
…
JPM UK Equity Core E Acc
–
*375.9000
+2.3000
Jupiter Japan Inc Fd Acc
–
121.68
+2.66
M&G Property Portfolio A Inc
+1.90
Income Funds
JPM UK Equity Core E Inc
–
*64.3300
+0.3900
Jupiter Japan Inc Fd Inc
–
95.28
+2.08
M&G Recovery A Inc
4.00
148.67
+0.54
–
117.41
117.41
…
È Platinum
per oz
£672.71
-2.32
-0.34pc
È Palladium
per oz
£730.03
-7.22
-0.98pc
Managed Income Inc
5.25
*142.1
…
JPM UK Equity Gwth A Acc
3.00
150.2000
+0.6000
Jupiter Merlin Bal Prtfo Acc
–
186.96
+1.28
M&G Recovery A Acc
4.00
347.78
+1.28
grade A
£5106.99
-28.14
-0.55pc
Managed Income Acc
5.25
*995.4
+0.30
Enhanced Inc Fd
3.50
110.1
+0.4
JPM UK Equity Gwth A Inc
3.00
134.7000
+0.5000
Jupiter Merlin Bal Prtfo Inc
–
130.60
+0.89
M&G Strategic Corp Bd A Inc 3.00
75.25
+0.05
high grade
£15494.72
+51.86
+0.34pc
Monthly Inc Inc
5.25
*264.3
+1.10
Extra Income Fd
3.50
27.55
+0.05
JPM UK Higher Inc A Acc
3.00
1137.0000
+7.0000
Jupiter Merlin Conserv Prtfo Acc–
58.43
-0.01
M&G Strategic Corp Bd A Acc 3.00
116.37
+0.07
£1732.46
+24.09
+1.41pc
special high grade
£2282.15
-6.07
-0.27pc
Monthly Inc Acc
5.25
*642.6
+2.50
Moneybuilder Bal
–
50.11
+0.13
JPM UK Higher Inc A Inc
3.00
591.6000
+3.7000
Jupiter Merlin Conserv Prtfo Inc–
50.53
-0.02
M&G UK Inc Distribution A Inc 4.00
801.77
+2.34
high grade
£1678.96
-36.46
-2.13pc
UK Growth Acc
5.25
315.2
+1.10
Moneybuilder Inc
–
36.42
+0.08
JPM UK Sm Cos A Acc
3.00
505.8000
+2.3000
Jupiter Merlin Grth Prtfo Acc –
416.43
+3.07
M&G UK Inc Distribution A Acc 4.00
7294.64
+21.23
Growth & Income Funds
È Copper
Ç Tin
Ç Lead
È Zinc
È Aluminium
Ç Nickel
£10351.95
+69.08
+0.67pc
UK Select Opps R Inc
5.25
*1985.0
+9.00
1472.00
+19.00
+1.31pc
per tonne
£146.90
-0.55
-0.37pc
UK Select Opps R Acc
5.25
*3641.0
+16.00
Jul settlement
$77.12
-0.35
-0.45pc
UK Smllr Cos Acc
5.25
*312.8
+0.30
Ç Baltic Dry Index*
È Wheat
È Brent Crude
*Copyright Baltic Exchange Information Services Ltd.
AXA IM Funds www.axa-im.co.uk
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
JPM America Eq A Acc
3.00
92.0400
+0.8000
JPM UK Sm Cos A Inc
3.00
96.5600
+0.4400
Jupiter Merlin Grth Prtfo Inc –
404.71
+2.98
M&G UK Infl Lkd Corp A Inc
3.00
*115.04
+0.22
JPM America Eq A Inc
3.00
92.0400
+0.8100
JPM UK Strat Eq Inc A Acc
3.00
*198.8000
+1.5000
Jupiter Merlin Inc Prtfo Acc
–
*301.42
+0.98
M&G UK Infl Lkd Corp A Acc 3.00
*118.67
+0.22
Moneybldr Div
3.50
261.8
+0.9
JPM Asia Growth A Acc
3.00
216.4000
+2.3000
JPM UK Strat Eq Inc A Inc
3.00
*116.9000
+0.9000
Jupiter Merlin Inc Prtfo Inc
–
*135.44
+0.44
N.A.A.C.I.F. Inc
–
*88.0
+0.45
Moneybldr Gwth
–
82.10
+0.45
JPM Asia Growth A Inc
3.00
119.3000
+1.3000
JPM Uncons Bond A Acc
3.00
*72.1000
+0.0700
Jupiter Merlin WW Prtfo Acc –
298.57
+2.75
N.A.A.C.I.F. Acc
–
*8750.25
+44.66
Jupiter Merlin WW Prtfo Inc –
298.55
+2.75
Jupiter Monthly Inc Acc
–
*118.12
+0.29
Growth Funds
Exchange rates Friday close
£ > € Rate 1.1347 Change +0.09¢ £ > $ Rate 1.3553 Change +0.84¢
Tourist £1= Sterling £1=
Australia
J.P. Morgan Asset Management
Aus $
1 Euro =
1 Dollar =
1.6977
1.7961
1.5830
1.3253
Pan Euro HY Bond Inc
5.25
*32.19
+0.01
Pan Euro HY Bond Acc
5.25
*104.8
…
American
3.50
3828
+28
Jupiter Monthly Inc Inc
–
*31.32
+0.08
Amer Sp Sits
3.50
1544
+17
Jupiter N.American Inc Acc
–
152.08
+1.67
†CAR - Net Income reinvested.
Natwest Investment Funds
(RBS Collective Investment Funds Ltd)
PO Box 249, York YO90 1ZY
0117 940 3848
Canada
Can $
1.6414
1.7328
1.5271
1.2786
European
3.50
2312
+19
Jupiter N.American Inc Inc
–
126.71
+1.39
Denmark
Krone
8.0446
8.4532
7.4498
6.2374
European Opps
3.50
526.0
+2.9
Jupiter Responsible Inc Fd Acc –
*118.87
+1.36
Balanced Inc
5.00
*328.90
…
Global Special Sits
3.50
3956
+34
Jupiter Responsible Inc Fd Inc –
*75.41
+0.86
Balanced Acc
5.00
*422.00
…
Japan
3.50
379.1
+8.2
Jupiter Strategic Bond Acc
–
*97.26
+0.10
Equity Income
5.00
*349.80
…
Japan Smaller Cos
3.50
329.6
+7.6
Jupiter Strategic Bond Inc
–
*63.89
+0.07
Extra Income
5.00
*108.60
…
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Global Focus
3.50
Index UK A Acc
–
BNY Mellon Investment Funds (ICVC)
Special Sits
Sterling Income Shares
Euro
€
1.0834
1.1347
…
0.8372
HK $
10.0600
10.6384
9.3758
7.8498
India
Rupee
80.0700
91.1982
80.3742
67.2925
Israel
Shekels
4.3449
4.8343
4.2606
3.5671
Yen
Hong Kong
Japan
140.5600
148.2304
130.6375
109.3750
Kuwait
Dinar
…
0.4087
0.3601
0.3015
New Zealand
NZ $
1.8053
1.9460
1.7149
1.4359
Norway
Krone
10.3200
10.8324
9.5467
7.9930
Pakistan
Rupee
146.9900
156.6466
138.0548
115.5850
Riyal
4.7349
5.0827
4.4794
3.7504
Saudi Arabia
Singapore
+0.14
Growth
5.00
*392.70
…
52.06
+0.13
High Yield
5.00
*126.60
…
3.50
4161
+12
Jupiter UK Growth
–
356.41
+5.04
Intntl Growth
5.00
*499.60
…
South East Asia
3.50
1412
+14
Jupiter UK Smaller Cos
–
375.29
+1.57
3.50
304.3
+2.1
Jupiter UK Special Sits Inc
+0.76
31.8500
Insight Eq Inc Booster
0%
*131.57
+0.46
Target 2020
4.3872
3.6732
Insight Glob Abs Ret Inc
0%
*111.12
+0.32
†CAR - Net income reinvested
0.8813
0.7379
Insight Glob Multi-Strat Fd
0%
*124.70
+0.58
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
Insight Inflat-Link Corp Bd
0%
*107.35
+0.15
Glob Income
5.00
160.33
169.02
+1.52
Long-Term Global Equity
0%
258.92
+1.85
Growth Fd
5.00
433.68
458.98
+1.62
Newton Asian Income
0%
*198.10
+1.31
Fundsmith LLP
PO Box 10846, Chelmsford, Essex, CM99 2BW.
0330 123 1815
www.fundsmith.co.uk enquiries@fundsmith.co.uk
10.2637
8.5932
1.3551
1.1943
1.0000
Thailand
Baht
38.6100
43.1647
38.0416
Dirham
4.6539
4.9780
£
…
…
1.1944
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
3.50
66.35
+0.21
Liontrust Investment Funds
Marks & Spencer Unit Trust
Management Ltd
Change on month
Year
Newton Cont European
0%
273.76
+1.06
RPI (1987=100)
Mar 278.30
+0.10
+3.3pc
Newton Global Dyn Bd
0%
*101.64
+0.01
RPIX (Target 2.5pc)
Mar 278.80
+0.20
+3.4pc
CPI (2015=100 target 2pc)
Mar 105.00
+0.10
+2.5pc
Newton Glb High Yld Bd
0%
*59.71
+0.09
Halifax house price index
Apr 715.10
-3.1pc
+2.2pc
Newton Glb Inc Stg Inc
0%
*194.68
+0.88
Fundsmith Equity T Acc
–
367.96
+3.04
JPM Div Gth A Net ACC
Newton Glb Opps
0%
288.84
+2.23
Fundsmith Equity T Inc
–
341.63
+2.82
JPM Emg Euro Eq A Acc
Newton Intnl Bond
0%
233.83
+0.52
Newton Multi-Asset Bal
0%
198.26
Newton Mult-Asset Div Ret
0%
Newton Mult-Asset Gwth
Money
Bank Rate
0.50pc
Nationwide Base Mortgage Rate
Overnight
0.47pc
US Fed Funds
7 day
0.48pc
US Long Bonds Yld
3.11pc
1 month
0.50pc
European repo rate
1.25pc
3 months
0.65pc
European base rate
0.00pc
6 months
0.76pc
2.50pc
1.50-1.75pc
Major price changes FTSE 100 Week on week
172
13.72pc
Ç PaddyPwrBet
Risers 80
Volume
Ç ITV
61.89m
Ç Royal Bk Scot
31.50m
294⅛
8.05pc
Ç Rio Tinto
4.79m
4224
3.66pc
1.00m
5542
7.74pc
Fallers 19
Volume
Close
Change
Ç Next
Ç Glencore
Ç Ashtead Group
Ç BHP Billiton
Ç Evraz
0.10m
+0.33
*182.27
11.6459
1.2914
9.02m
69.83
0%
11.1700
Franc
Ç G4S
+0.36
Jupiter US Sm&Md Cap Ret Acc –
Insight Eq Inc Fund
Krona
Change
+0.46
75.71
Target Funds
Switzerland
Close
*199.63
UK Select Acc
+0.15
Sweden
Inflation
–
Jupiter US Sm&Md Inst I Acc –
+1.36
*92.62
12.2525
1.3553
53.49
–
127.54
1.3354
14.6344
1.2895
–
Jupiter Strategic Res Inc
0%
1.5950
16.6053
$
Jupiter Strategic Res Acc
0%
1.8098
15.6500
USA
+26
+0.7200
Insight Corporate Bd
1.6836
Rand
UK
1993
111.7300
Boston Co US Opp Fund
$
South Africa
UAE
BNY Mellon Fund Managers
270⅜
7105
3.80pc
3.72pc
55.23m
386⅛
7.25pc
È BT Group
68.11m
217
-7.62pc
1.70m
2231
6.90pc
È Centrica
34.26m
147⅛
-4.85pc
15.35m
1711¼
6.86pc
È Burberry
1.91m
1805½
-3.71pc
5.99m
512⅜
6.40pc
È Compass
4.72m
1508
-3.33pc
Ç Imp Brands
2.82m
2765½
6.37pc
È Randgold Res
1.24m
5890
-2.64pc
Ç Anglo Amer
7.30m
1859⅜
6.17pc
È Admiral
0.81m
1940½
-2.49pc
Ç Kingfisher
7.04m
297¼
5.73pc
È Severn Trent
2.19m
1976
-1.40pc
Ç Royal Mail
6.97m
631
5.38pc
È Sky
1.59m
1358
-1.06pc
Ç Shire
2.95m
4062½
5.36pc
È Fresnillo
0.99m
1297
-0.92pc
Ç Hargrve Lans
0.66m
1889½
5.21pc
È Brit Amer Tob
4.01m
3860
-0.72pc
Ç Antofagasta
4.18m
1045½
4.97pc
È Natl Grid
8.29m
846¼
-0.56pc
Mid
Change
Buy on day
3.00
*263.6000
+1.5000
JPM Uncons Bond A Inc
3.00
199.2000
+4.5000
JPM US Eq Inc £ Hdg A Inc
JPM Emg Euro Eq A Inc
3.00
43.9900
+0.9900
JPM US Eq Inc A Acc
+1.07
JPM Emg Markets A Acc
3.00
228.6000
+2.5000
155.91
+0.47
JPM Emg Markets A Inc
3.00
97.3800
0%
860.44
+5.58
JPM Emg Mkts Inc A Acc
3.00
Newton Oriental
0%
682.40
+4.76
JPM Emg Mkts Inc A Inc
Newton Real Return A
0%
113.67
+0.30
Newton UK Equity Fund
0%
*893.00
+3.42
Newton UK Inc
0%
*68.51
+0.20
Newton UK Opps
0%
339.82
+1.68
Janus Henderson Investors
PO Box 9023 Chelmsford, CM99 2WB
Enquiries: 0800 832 832
Website: www.janushenderson.com
Change
Buy on day
3.00
*56.7000
+0.0500
High Income Inc
–
*111.4
111.4
+0.4
3.00
*118.3000
+0.9000
High Income Acc
–
*256.1
256.1
+0.9
3.00
*175.5000
+1.6000
UK Select Port Inc
–
360.8
360.8
+2.3
JPM US Eq Inc A Inc
3.00
*141.2000
+1.3000
UK Selection Port
–
653.8
653.8
+4.2
+1.0800
JPM US Select A Acc
3.00
166.2000
+1.8000
UK 100 Co’s Fund Inc
–
228.2
228.2
+1.8
*74.5900
+0.9700
JPM US Select A Inc
3.00
164.0000
+1.7000
UK 100 Co’s Fund Acc
–
393.6
393.6
3.00
*59.0000
+0.7700
JPM US Sm Cos A Acc
3.00
680.6000
+6.0000
W’wide Man Inc
–
512.7
+2.4
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
222.6000
+1.0000
JPM US Sm Cos A Inc
3.00
178.2000
+1.5000
W’wide Man Acc
–
822.5
+3.8
JPM Euro Dyn (ex-UK) A Acc 3.00
228.5000
+2.4000
Init chge
Sell
Name
Init chge
Sell
JPM Euro Dyn (ex-UK) A Inc
3.00
102.5000
+1.1000
JPM Europe A Acc
3.00
1499.0000
+12.0000
…
JPM Europe A Inc
3.00
83.2900
+0.6800
JPM Euro Smaller Co A Acc
3.00
797.4000
+6.6000
+0.50
JPM Euro Smaller Co A Inc
3.00
103.3000
+0.9000
Jupiter Unit Trust Managers Ltd
M & G Securities Ltd
1533.0000
+5.00
JPM Global Bd Opps A Grs Acc –
*54.0300
+0.0700
207.8000
+1.40
JPM Global Bd Opps A Grs Inc –
*48.8000
+0.0700
The Zig Zag Building, 70 Victoria Street, London,
SW1E 6SQ
020 3817 1000
PO Box 9039, Chelmsford, CM99 2XG
Enq: 0800 390 390. UT Deal: 0800 328 3196
5.00
1141.0000
Carvetian Capital
Management Limited
Asian Dividend Income Inc
5.00 *109.4200 114.9500
Cautious Managed A Acc
5.00
*271.4000
+0.90
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Enquiries: 0845 850 0255
Cautious Managed A Inc
5.00
*154.7000
China Opps A Acc
5.00
Emerg Mkts Opps A Acc
5.00
FENIX Balanced Fd
5.00
*158.8
…
European Growth A Acc†
5.25
240.4000
+1.40
JPM Global Bond A Gross Acc 3.00
262.1000
+0.4000
Charibond Inc
–
*122.74
Generation Fd
5.00
792.7
+5.70
European Sel Opps A Acc
5.00
1683.0000
+8.00
JPM Global Bond A Gross Inc 3.00
203.3000
+0.2000
Jupiter Abslt Rtn
–
54.61
+0.08
Charibond Acc
–
*3964.72
-1.0
Consistent Unit Trust
Management Co Ltd
Fixed Int Mthly Inc A Inc
4.25 *21.6700 22.6100
…
JPM Global Eq Inc £ Hdg A Acc 3.00
*84.7700
+0.6900
Jupiter Asian Fd
–
930.08
+7.12
Charifund Inc
–
*1629.83
+8.74
Global Care Growth A Inc
4.50
*299.8000
+3.00
JPM Global Eq Inc £ Hdg A Inc 3.00
*56.3700
+0.4600
Jupiter Asian Inc Fd Acc
–
133.05
+1.63
Charifund Acc
–
*25241.23
+135.26
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Equity Inc A Inc†
5.25
62.3000
+0.48
JPM Global Eq Inc Fd A Acc
3.00
*100.2000
+1.0800
Jupiter Asian Inc Fd Inc
–
122.98
+1.50
M&G Corp Bond A Inc
3.00
*40.21
+0.02
Global Growth Acc
4.25 3125.5500 3260.1799
…
JPM Global Eq Inc Fd A Inc
3.00
*80.7200
+0.8800
Jupiter China Acc
–
144.12
+1.08
M&G Corp Bond A Acc
3.00
*69.39
+0.03
Global Strategic Cap Acc†
5.00
244.2000
+1.40
JPM Global HiYld Bd A Grs Acc 3.00
*110.4000
+0.1000
Jupiter China Inc
–
138.47
+1.03
M&G Dividend A Inc
4.00
62.79
+0.14
Ç Sage Group
4.39m
679
4.78pc
È Mediclinic Intl
1.62m
691¼
-0.40pc
4.11m
1718
4.69pc
È Utd. Utilities
4.81m
766⅜
-0.34pc
Ç Johnson Matt
0.47m
3465
4.49pc
È Whitbread
0.60m
4228
-0.28pc
Ç Scot Mort Inv Tst 3.55m
508½
4.41pc
È Land Secs
2.89m
977¾
-0.23pc
Unit Tst Inc
0%
53.41
54.22
+0.32
Global Technology A Acc
5.00
1794.0000
+18.00
JPM Global HiYld Bd A Grs Inc 3.00
*36.4000
+0.0500
Jupiter Corp Bond Inc
–
56.55
+0.10
Unit Tst Acc
0%
137.7
139.9
+0.8
Multi-Mgr Abs Ret A Acc
5.00
*141.7000
+0.30
JPM Global HiYldBdAGrsMthInc3.00
*36.4000
+0.0500
Jupiter Dstrbtn Acc
–
*102.75
+0.31
Practical Invest Inc
5.00
241.9
259
+0.5
Multi-Mgr Active A Acc†
5.00
*228.6000
+1.00
JPM Global Macro Bal A Acc
3.00
*72.9700
+0.2800
Jupiter Dstrbtn Inc
–
*59.42
+0.17
Practical Invest Acc
5.00
1280
1371
+2
Multi-Mgr Distbn A Inc
5.25
136.7000
+0.70
JPM Global Macro Bal A Inc
3.00
*63.9200
+0.2500
Jupiter Dstrbtn & Grth Inc
–
*125.71
+0.68
24.33m
214½
4.30pc
È DCC
0.49m
7290
-0.21pc
Ç Unilever
2.97m
4139½
3.98pc
È GlaxoSmKline
7.85m
1466⅜
-0.19pc
Ç 3i
2.13m
981⅜
3.85pc
È Vodafone
56.09m
210⅛
-0.19pc
Ç Halma
0.90m
1297
3.84pc
È Barratt Dev
6.95m
561¼
-0.07pc
+3
+8.00
Asia Pac Cap Gwth A Acc
Ç Easyjet
Ç Barclays
Kings Meadow, Chester, CH99 9UT
0870 333 1835
Mid
Name
-0.04
Initial charge:
This charge in percentage terms is included in the purchase
price of the units. It is levied by the unit trust manager to cover
administrative costs and commissions.
* Denotes Ex-dividend
8
***
Monday 14 May 2018 The Daily Telegraph
Small Business Connect
telegraph.co.uk/connect/small-business
Partners
‘Our work is
about imagining
what the future
will look like’
Three tips
on how
to upsell
effectively
Selling add-ons and extras
needn’t be pushy – focus
on customers’ needs and
personalise the experience
By Hajra Rahim
ASKING shoppers who are about to
spend money with you to buy extras, or
something else that’s more expensive,
isn’t easy; it can seem pushy and if done
wrong, may put people off shopping
with you altogether.
Here, experts and business owners
share their tips for nailing the upsell.
The co-founder of global design agency
Territory Studio on how its small but
dedicated team sets it apart from rivals
D
avid Sheldon-Hicks has
worked on some of the
biggest films ever
made, with Avengers:
Infinity War and Blade
Runner 2049 on the
books of his design agency, Territory
Studio. But it wasn’t a Hollywood
blockbuster that first inspired him to
get into the world of visual effects; for
that, he can thank the clay character of
a much smaller series.
“I always knew that I would go into
animation, having spent my early
years creating stop-motion Morph
videos on an old camera,” says the
co-founder, whose studio specialises
in visualising futuristic technology for
films, brands and video games. “A lot
of our work is about imagining what
the future will look like.”
A trained graphic designer, SheldonHicks worked for lots of agencies
before deciding to start his own. “I got
to experience how different
companies did things and realised that
while there was lots of great work
going on, none of them were doing
what I wanted to do,” he says,
referencing how he desired to
combine design and technology for a
broad range of clients.
So in 2010, he teamed up with an old
friend, Nick Glover, to launch
Territory Studio out of his spare room.
Soon after, they secured an office in
Clerkenwell. “We grew early on
through a lot of tenacity, energy and
passion for the work,” says the
executive creative director, whose first
film project was Ridley Scott’s Alien
prequel, Prometheus, which required a
lot of complex screen graphics.
He did such a good job that he was
recommended for another – Kathryn
Bigelow’s political thriller about the
hunt for Osama bin Laden, Zero Dark
Thirty. “She was surprised that all of
our graphics were there live on set and
not done through green screen and
post-production,” remembers the
co-founder, whose creations could be
used by the actors live.
It was a completely new way of
working and Bigelow was so
supportive of it that she and the film’s
team became big advocates of
Territory’s work, which led to further
recommendations and projects for
titles including sci-fi thriller Ex
Machina and Mission Impossible:
Rogue Nation.
The studio’s size also proved useful
when it came to these commissions.
“Working on a film can be a detached
‘It’s about finding people
who can do things better
than me; listening is really
important as a leader’
creative process for a director,” adds
Sheldon-Hicks. “They’re dealing with
a massive hierarchy of big teams, so
they’re not always having close
conversations with the people directly
working on their film.”
Being so small, Territory Studio was
agile and flexible enough to make its
team available whenever the directors
wanted to talk. “That also provides a
great education for our team,” says the
business owner. “We learn so much
from those conversations – you can’t
pay for a training course with Steven
Spielberg, but to have weekly phone
Know the customer’s needs
Research your customers to find out
when they require more of your
product or service, advises Lesley
Bambridge, founder of marketing
consultancy We Mean Business.
“Gather as much information as you
can wherever you have access to your
audience, so ask questions on social
media or when handing out samples
about when and why they would use
your product or service,” she explains.
“This information will give you clues as
to when is the right time to sell more.”
She gives the example of a healthy
drinks brand that may find out that
customers are consuming its products
after several weekly gym sessions. To
increase sales, it could create an offer
aimed at this group, where they have a
week’s worth of products delivered to
their home.
It’s these data-driven insights that
will help you avoid finding sales in
ways that are detrimental to your
business, such as regular discounts,
added Ms Bambridge.
EDDIE MULHOLLAND FOR THE TELEGRAPH
MATTHEW CAINES
Create urgency and try
to personalise
David Sheldon-Hicks, the co-founder of Territory Studio, has worked on major films including Zero Dark Thirty and Blade Runner 2049
calls with him is of serious value to us
as a business.”
Putting a team in place has proved
the toughest challenge. “It’s about
finding people who can do things
better than me; every employee that
I’ve got here now can do the job better
than I could when I was doing it,” says
Sheldon-Hicks. “Listening is really
important as a leader,” he states,
caveating that you’ve got to be
prepared to action the views and
opinions of the people you bring in.
Sheldon-Hicks also looks for a
variety of skills in Territory Studio
applicants: “Our strategy is to look for
generalists with a specialist interest,
so someone who’s a designer but has a
real interest in technology.”
Bringing those bonus disciplines
in-house is vital if the studio is to stand
out in terms of its creative work, he
explains, because employees that all
look the same in terms of their
background and skills will produce the
same work. “It’s how we innovate,
which enables us to take on our
competitors, many of whom are very
big,” says the co-founder. “We have to
do things differently and have a point
of difference – and the only way that
we can do that is through the skills
that we have in-house.”
Currently, the company has 40
full-time staff and an annual turnover
of £7m. Its clients include Amazon,
Intel, Land Rover, McLaren, Virgin
and more. It’s also global, with a
presence in San Francisco, New York
and Los Angeles, with a new team
being set up in Vancouver.
Selecting a new location is all about
a city’s wider culture. “San Francisco
was our first move, because we looked
at Silicon Valley and saw such a strong
convergence of technology and
entertainment, with Netflix and so on,”
says Sheldon-Hicks.
“We always send someone quite
senior, who has been with the
business for years, to go over and team
up with a local producer, for example,”
he adds, explaining that it’s all about
bringing together your and the
location’s culture, knowledge and
ways of working – and not stamping
yours down without consideration.
“The strategy has worked really
well for us; our growth in San
Francisco has matched London.”
In terms of what’s next for SheldonHicks, he’s currently preparing for a
session at Clerkenwell Design Week,
where he will be discussing the central
London district’s evolution as a
creative hub. Part of the strength of its
creative output is how businesses in
the area are so supportive of each
other. “We’ve partnered up with a lot
of them, rather than competing,”
explains the co-founder, who thinks
it’s a “pretty amazing time” to be
working in the space that he is, with
consumers demanding more from
their video games, films and TV shows.
“It feels like something of a
renaissance, because audiences really
care about high-quality production
values.”
Telegraph Small Business Connect is a
specialist community dedicated to
helping small business owners and
directors – find out more at
tgr.ph/smeconnect
Bruce MacInnes, chairman of online
fashion retailer BrandAlley, says that
creating a sense of scarcity around
products will motivate shoppers to buy
them. He says: “When customers add
products to their basket, we reserve
them exclusively for 15 minutes and a
clock starts counting down in the
corner – after that, other shoppers can
buy the reserved items in their
basket.”
He adds that a combination of
attractive prices, and limited time and
quantities will increase the incentive
for customers to buy.
Crucially, he says, upselling is about
personalising the shopping experience;
don’t offer the same things to every
customer. For example, BrandAlley will
show the most relevant alternative and
additional products to customers based
on their browsing behaviour.
Options upfront
For John Martin, owner of pizza
restaurant Dough & Brew, selling
extras isn’t an afterthought; it’s a
proactive sales strategy.
“If we can sell the idea of the dessert
before the customer orders their main,
they will often adjust the order to save
room for it,” he says.
The same goes for side items, but this
only works best before a customer has
looked at the menu, so give them the
options upfront, adds Mr Martin.
Raising a firm’s public profile is not
just about grabbing column inches
SIR JOHN
TIMPSON
ASK JOHN
Straight-talking common
sense from the front line
of management
Q
John, do you have any tips for
securing column inches? My
small firm can’t afford a PR agency,
so it’s just me firing out cold emails
to journalists, with no luck so far.
A
Like you, I don’t retain a PR
agency, but when I did, it taught
me to think beyond the anniversaries,
launches and surveys. You know the
sort of thing: “less than 50pc of people
brush their teeth every evening” and
“the most popular house name in
Leicestershire is The Oaks” – surveys
that try to get a name-check for an
estate agent or toothpaste brand.
I confess that I once published a
report revealing that people in
Plymouth had the biggest feet in the
UK, with the smallest in Cardiff and
Glasgow. Fortunately, the press release
was issued on a very quiet news day.
With nothing going on, reporters were
sent scampering to interview owners
of extreme-sized feet.
It can work the other way; I once
organised a press conference on the
morning after Ronald Reagan was
elected president – no one turned up.
Regard journalists as your friends;
you want publicity and they need
copy, but it must be interesting. You
may think that your latest product is
fascinating, but the media are more
attracted by stories about people. Your
new packaging may get a small
mention, but human stories can
produce double-page spreads.
Everyone dreams of hitting the
headlines with a strong message that
immediately increases sales, but those
sorts of dreams seldom come true.
Many times have I raced to the
newsagent to see how a press release
has been received or whether an
interviewer saw me in a favourable
light. The articles, if they appear at all,
are seldom as good as you hope and
occasionally do more harm than good.
You get a better chance with radio
and television; even if your part is
edited, you can still put things in your
own words.
But don’t make it sound like an
advert – treat interviews like natural
conversation.
I started with local radio, doing
consumer phone-in programmes
during the Seventies. It was a good
way to build some broadcasting
confidence without talking to
hundreds of thousands of listeners.
It also gave me the courage to say
yes when asked to pick up the phone
to a journalist or appear on live TV.
But you’re always taking a risk. I
was inches away from looking a
complete fool when I appeared on the
alumni edition of University Challenge
and as a Question Time panellist.
You don’t make those appearances
for publicity; the challenge is to prove
that you have the courage to turn up
and survive the ordeal.
My biggest break was 12 years ago,
when I was asked to start writing this
column, following a regular magazine
series and the occasional piece for
another newspaper. Writing about
how you do business may give you the
publicity that you want, so accept
invitations to write for your local
newspaper or sit on an expert panel at
a school careers forum – you never
know where it might lead.
Above all else, have a positive story
to tell. Some say that there’s no such
thing as bad publicity, but tell that to
TSB or Cambridge Analytica.
PR can do a lot of good, but it’s
much more helpful to a business that
already has a recognised reputation
based on a caring culture.
I’m being trolled on social media
Q
by a customer who, admittedly,
got some bad service after being one
of 12 people to win a limited edition
product.
They missed out due to our error,
but what should we do?
A
Let’s face it, you screwed up; you
couldn’t even count to 12. It’s a
mistake that has been punished
because the person who missed out
appears to be a very tricky customer.
Say a very big sorry and offer the
best free package that you feel is
appropriate, but don’t enter into a
negotiation; if your best offer isn’t
enough, you can assume that this
person prefers complaining to a fair
settlement.
Having made a generous offer, your
conscience will be clear, so forget the
matter and be patient. Eventually, the
customer will get fed up and turn their
attention to complaining about
another injustice in their life.
Sir John Timpson is chairman of the
high street services provider Timpson.
Send him an email at
askjohn@telegraph.co.uk
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