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DJIA 16198.41 À 0.12% Nasdaq 4292.06 À 0.10% Stoxx Eur 600 337.70 g 0.20% FTSE 100 6799.15 g 0.46% DAX 9661.73 g 0.39% CAC 40 4396.91 g 0.40% Euro 1.3669 g 0.58% Pound 1.6647 g 0.29% Hang Up on Conference Calls PERSONAL JOURNAL 29 EUROPE EDITION VOL XXXII NO 20 $1.75 (C/V) - KES 250 - NAI 375 - £1.70 WSJ.com THURSDAY, FEBRUARY 27, 2014 Credit Suisse ConcedesTax Misconduct BY JOHN LETZING AND ALAN ZIBEL Associated Press FRACAS IN CRIMEA: Pro-Russian protesters, right, clash with pro-Ukraine Crimean Tatars in front of a local government building in Simferopol, Crimea, on Wednesday The Kiev uprising has fueled talk of separatism in the region Related articles on pages 6, and 15 Russia Flexes as Ukraine Regroups BY LUKAS I ALPERT MOSCOW—President Vladimir Putin ordered surprise military exercises for 150,000 troops in Russia, including some based about 300 kilometers from Ukraine, where Inside the ouster of the president has left a political vacuum The test of combat readiness applies to ground, air defense and tank units as well as Russia’s Northern and Baltic fleets It is among the largest such exercises the country PBOC is steering the yuan lower to gain more trading flexibility News Analysis Wireless firms near European consolidation Heard 32 backed President Viktor Yanukovych, whose whereabouts remains unknown Since pro-Western protesters in Ukraine overthrew Mr Yanukovych last weekend, Russia has recalled its ambasPlease turn to page A Look at ‘Magical Tux,’ Mt Gox’s Geek-in-Chief BY ELEANOR WARNOCK AND TAKASHI MOCHIZUKI LinkedIn CEO Jeff Weiner wants to build a global bazaar for finding work, recruiting talent and sector news Interview 20 has undertaken in recent years, and comes amid rising displeasure in Moscow with developments in Ukraine Also on Wednesday, protest leaders named a “government of national unity,” to replace the ousted Russia- TOKYO—Mark Karpelès arrived in Japan in June 2009 with his cat and his hard drives Less than five years later, the Frenchman faces accusations his company has lost hundreds of thousands of dollars for customers of his bitcoin exchange, Mt Gox, where all transactions have been halted and users remain unable to access their money Mr Karpelès describes himself on his LinkedIn profile as primarily “a technical geek.” His profile cites “a long experience in company creation,” but the snowballing popularity of bitcoin and the resulting growth in Mt Gox’s customer base appear to have raised challenges that were more than the company, under the 28-year-old from a suburb of Dijon, in eastern France, could handle On Wednesday, a day after Mt Gox shut down, dealing the most severe blow yet to the bitcoin world, Mr Karpelès issued a terse statement on the exchange’s website “I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues,” the statement said Those who have followed Mr Karpelès’s rise and fall close up describe him as softspoken and mild-mannered— “geeky but kind,” as one per- son who knows him put it They also say he is a talented software developer Computers have indeed been part of Mr Karpelès’s life since he was very young, according to a 2007 French documentary His comments in the film together with a charting of his online presence—he has blogged under the handle “Magical Tux” and posted on Facebook, LinkedIn and Twitter—paint a portrait of an inquisitive mind “I can’t imagine a life without computers,” he said in the documentary, which mentions Mr Karpelès but foPlease turn to page 26 Japanese regulators will examine bitcoin 26 Credit Suisse Group AG Chief Executive Brady Dougan told lawmakers the bank “regrets very deeply” having aided American tax evasion, but said the misconduct was mostly limited to a small group of employees at Switzerland’s second-largest bank In an often tense hearing, Mr Dougan faced repeated questioning from Sen Carl Levin (D., Mich.), chairman of the U.S Senate’s Permanent Subcommittee on Investigations, on the scope of the bank’s activities to recruit U.S customers and why the bank appears to be relying on Swiss secrecy laws to avoid sharing information about those accounts with U.S authorities Mr Dougan, a normally reserved American, mostly maintained a calm demeanor during the hearing despite often brusque queries from Mr Levin At one point the CEO stopped short and blinked in surprise after being cut off by the subcommittee chairman “You’re not cooperating with us, hiding behind a [bank secrecy] law which applies in Switzerland, but which doesn't apply here, and yet you want to business here,” Mr Levin said Mr Dougan said Credit Suisse is limited by those Swiss laws from providing data—including client names—to the U.S Justice Department The Justice Department has been investigating the bank, which may agree to a significant settlement this year, since 2011 The CEO added the bank’s past help to U.S clients seeking to hide assets was mostly provided by a core group of between 10 and 15 bankers that “went to great lengths to disguise their bad conduct.” The testimony came a day after the subcommittee said the Swiss bank, second in size only to UBS AG in terms of assets, aggressively sought to Please turn to page 24 Currency trader FXCM agrees to fines, refunds… 24 Oracle Cloud Applications HCM Human Capital Recruiting Talent CRM Sales Service Marketing ERP Financials Procurement Projects Supply Chain More Enterprise SaaS Applications Than Any Other Cloud Services Provider Copyright © 2013, Oracle and/or its affiliates All rights reserved | Thursday, February 27, 2014 AM IM UK SW FR IT SP TK BR PL IS AE THE WALL STREET JOURNAL GR PAGE TWO PBOC Has Guided Yuan Down for Broader Range What’s News— i i i i i i Business & Finance World-Wide n Airbus Group NV, emboldened by strong financial results and an order backlog, is turning its back on its longtime European backers and will rely less on government support 17 n Rome’s strained finances are forcing the city to confront unpalatable choices—such as cutting public services or raising taxes—to gain time as it searches for ways to close a yawning budget gap n The popularity of “The Lego Movie” may be coming at just the right time for the Danish toy maker, as the company is expected to report an abrupt slowdown in its U.S business for 2013 17 n Anheuser-Busch InBev is taking its cost-cutting knife to Grupo Modelo SAB, the Mexican brewer it acquired control of last year 19 n Westfield Group, one of the world’s biggest owners of shopping malls, said it may list in the U.S or London after a planned breakup of its global mall empire 19 BY LINGLING WEI n Syrian government forces ambushed and killed dozens of rebels in a Damascus suburb, saying the rebels were part of a new offensive to squeeze the capital 10 n Hezbollah vowed to retaliate for an Israeli airstrike that hit one of its bases near Lebanon’s frontier with Syria 10 n Germany’s constitutional court struck down a 3% threshold for political parties to be elected to the European Parliament n Citigroup Inc., which owes its survival to the U.S government, has spent the years since the 2008 financial crisis quietly building an army of veterans in top Washington jobs 25 n Administration lawyers have presented the White House with options for restructuring the NSA’s phone-surveillance program, from ditching the controversial collection altogether to running it through the telephone companies n China and global companies are taking new steps to fulfill the country’s ambitions for electric cars, as it remains well behind its target to roll out low-emission vehicles 23 n U.S authorities are investigating the flow of funds from Gabon to the U.S to determine whether any assets are traceable to public corruption in the central African country n Singapore is pulling out all the stops to build its own version of Silicon Valley as it attempts to create a startup hub for Southeast Asia 22 n The former editor in chief of Ming Pao, a prominent Hong Kong newspaper, was stabbed and has been hospitalized, police said 11 European Pressphoto Agency What’s Online Beijing Smog Alarm Coverage with a slideshow at WSJ.com/China BEIJING—China’s central bank engineered the recent decline in the country’s currency to shake out speculators as it prepares to allow a wider trading range for the tightly tethered yuan, according to people familiar with the central bank’s thinking In the past week, the People’s Bank of China has been guiding the yuan lower against the dollar It has done so by setting a weaker benchmark against which the yuan can trade It has also intervened in the currency market by directing state-owned Chinese banks to buy dollars, according to traders The moves brought the yuan, also known as the renminbi, to its weakest level in seven months and represent a reversal of the practice for most of last year, when the central bank kept pushing the yuan higher against the dollar, even as the currencies in other emerging-market countries tumbled Money has been pouring into China— sometimes, analysts have said, by circumventing currency controls— to take advantage of the seemingly unstoppable rise By guiding the yuan weaker, the PBOC intends to thwart shortterm speculators betting on a continued rise and to introduce greater two-way volatility into its trading “The PBOC is testing the market as it prepares to widen the yuan’s trading band,” said one of the people familiar with the bank’s thinking While it is a short-term move, making the yuan behave more like a market-driven currency fits into a broader plan to restructure the economy so that it is less dependent on investment and exports Though increasingly important in international trade, the yuan isn’t freely convertible The central bank sets the value, permitting the yuan to fluctuate within a controlled range against the dollar Currently, the PBOC allows investors to push the yuan’s value 1% in either direction from that set rate in daily trading Many analysts and economists expect the central bank to expand that range this year by allowing the currency to move up or down by 2% daily The last time the band was widened was in April 2012, when it was increased to 1% from 0.5% Surging inflows of capital have been complicating Beijing’s efforts to manage the economy, contributing to soaring property prices and injecting excess cash into the financial system The central bank and commercial banks bought nearly $45 billion worth of foreign exchange in December, the fifth consecutive month of net purchases A weaker yuan could also help exporters, whose goods would be cheaper in the U.S and other foreign markets The PBOC decided to tamp down expectations for one-way appreciation in the yuan and curb speculative trading during a twoday currency-policy meeting that ended Feb 18, the people said At the meeting, a deputy In the Band China’s currency is tethered to a trading range set by the central bank How many yuan one dollar buys 6.00 yuan 6.05 Trading band 6.10 Daily low Daily high 6.15 Note: Inverted scale to show the weakness of the yuan Source: Thomson Reuters Eikon The Wall Street Journal Daily high and low represent dollar strength 6.20 6.25 Dec 2013 governor, Hu Xiaolian, called for greater efforts to prevent risks from cross-border capital flows and joined other officials in expressing concern about “hot money” inflows, according to a PBOC statement issued after the meeting The PBOC also decided to expand the yuan’s trading band this year in an “orderly” manner, the statement said, as it moves toward making the yuan a freer currency On Feb 19, the day after the meeting, the yuan started its recent slide, falling to the lowest level in almost two months The yuan ended at 6.1248 per dollar on Wednesday in mainland trading, barely changed from the closing of 6.1266 Tuesday The currency has fallen 1.2% against the dollar since the beginning of this year, a dramatic move for a currency that often barely budges and that gained 2.9% in 2013 The slide added to jitters among investors already anxious about a slowing Chinese economy and touched off concerns about a selloff of yuan in offshore markets Chinese officials sought to calm nerves Wednesday “The movement in renminbi is due to an adjustment of trading strategy by main market participants,” China’s foreignexchange regulator said in the government’s first comments, published on the regulator’s website “The yuan fluctuations are normal compared to volatility in developed and emerging market currencies,” the regulator said “Don’t read too much into them.” Following the comments, the yuan reversed course and strengthened slightly PBOC officials have said in the past that the yuan is nearing its fair-market value, or “equilibrium level,” meaning the chances of any drastic movements in the currency are limited Widening the trading range won’t eliminate the PBOC’s grip on the currency, because the central bank will still maintain the daily reference rate for the yuan Nonetheless, the potential change would be an important step toward establishing a marketbased exchange-rate system, in which the yuan would move up and down just like any other major currency The exchange-rate reform is part of China’s plan to overhaul its financial sector, elevate the country’s status in the international monetary system Jan ’14 Feb and someday, according to some Chinese officials, rival the U.S dollar as the de facto global currency A freer yuan may also help China deflect foreign complaints about its currency policies The U.S and others have pressed Beijing for years to relax its hold on the yuan, allowing it to rise in value and boost Chinese consumer demand China has long resisted calls for a free float, preferring a gradual approach out of concern that drastic measures would destabilize its capital markets or hurt the country’s powerful export market A move to widen the yuan’s trading range would come as China’s juggernaut economic machine is slowing down, leading to questions of whether leaders might try to stimulate growth and help struggling companies The yuan “has appreciated all these years and probably won’t go too much higher from now on,” said Du Hanbing, who runs a business in the southern city of Shenzhen that makes embossing machines and sells them in the U.S and Canada “I’m more concerned about foreign demand and my customers’ ability to pay me these days.” —Liyan Qi and Wynne Wang contributed to this article SUBSCRIBE TODAY CALL +44 (0) 20 3426 1313 VISIT wsjeuropesubs.com/wsje THE WALL STREET JOURNAL EUROPE (ISSN 0921-99) 222 Grays Inn Road, London, WC1X 8HB FOR ISSUES RELATED TO SERVICE: CALL +44 (0) 20 3426 1313 EMAIL subs.wsje@dowjones.com WEB service.wsje.com Advertising Sales worldwide through Dow Jones International Frankfurt: 49 69 29725 390; London: +44 20 7573 4060; Paris: 331 40 17 17 01 Printed in Belgium by Concentra Media N.V Printed in Germany by Dogan Media Group / Hürriyet A.S Branch Germany Printed in Switzerland by Zehnder Print AG Wil Printed in the United Kingdom by Newsprinters (Broxbourne) Limited, Great Cambridge Road, Waltham Cross, EN8 8DY Printed in Italy by Telestampa Centro Italia s.r.l Printed in Spain by Bermont S.A Printed in Israel by Jerusalem Post Group Printed in Turkey by Dunya Super Veb Ofset A.S Printed in Poland by Polskapresse Printing Division Registered as a newspaper at the Post Office Trademarks appearing herein are used under license from Dow Jones & Co ©2013 Dow Jones & Company All rights reserved Editeur responsable Tracy Corrigan M-17936-2003 Registered address: Avenue Cortenbergh 60, 1040 Brussels, Belgium THE WALL STREET JOURNAL Thursday, February 27, 2014 | NEWS NATO Ministers Warn Afghans on Exit BY JULIAN E BARNES BRUSSELS—A meeting of allied defense ministers opened Wednesday with a renewed warning to Afghanistan that the North Atlantic Treaty Organization would withdraw its forces by the end of the year without a signed security agreement, along with a promise to help Ukraine pursue democratic overhauls NATO Secretary-General Anders Fogh Rasmussen said the alliance is ready to establish a training mission to advise the Afghan security forces after the end of 2014, but said with- out a legal framework to protect troops, international forces would leave Afghan President Hamid Karzai has so far declined to sign a bilateral security agreement with the U.S Such an accord is a prerequisite for NATO to agree on a status-offorces pact with the alliance that would offer legal protections to international troops serving in Afghanistan “Our preferred option is to stay, with a training mission to advise, assist, train the Afghan forces,” Mr Rasmussen said “If we don’t get the legal framework we will have to Sold exclusively in Louis Vuitton s tores and on louisvuitton.com Download t he Louis Vuitton pass app to reveal exclusive content withdraw everything.” Mr Rasmussen’s remarks, and his frustration, echoed the message from President Barack Obama and other U.S officials on Tuesday U.S officials said they would seek to conclude the security agreement with Mr Karzai’s successor and meanwhile step up planning for a possible withdrawal from the country “Time is of the essence,” Mr Rasmussen said “It appears Mr Karzai isn’t ready to sign the security agreement.” Mr Rasmussen said NATO would continue its negotiations with the next Afghan president Afghan elections are scheduled for April, although a runoff could mean the voting results aren’t settled for months more NATO ministers are also set to discuss the situation in Ukraine, where street protests drove the proRussian government from power Ukrainian officials are due to attend the summit and discuss the security situation “Ukraine is a close and longstanding partner to NATO And NATO is a sincere friend of Ukraine We stand ready to continue assisting Ukraine in its democratic re- forms,” Mr Rasmussen said He said restarting membership talks would be up to Ukraine, but signaled that the alliance was in no hurry to expand further “I think there are more urgent priorities to address right now,” he added NATO has discussed membership for Ukraine, but hasn’t invited it to become a member, amid reservations among some allies Former President Viktor Yanukovych said in 2010, soon after he took office, that Ukraine wouldn’t pursue NATO membership The defense ministerial meeting is scheduled to last two days | Thursday, February 27, 2014 THE WALL STREET JOURNAL EUROPE NEWS Rome’s Woes Hand Renzi First Setback Snag to Central Government Transfer Leaves Eternal City Teetering on Bankruptcy; Cuts to Jobs, Services Loom ROME—The Eternal City, now teetering on the brink of a Detroitstyle bankruptcy, has served Italy’s new prime minister his first major political headache On the first day of his premiership, Matteo Renzi had to withdraw a decree, promulgated by his predecessor, that would have helped the city of Rome fill an €816 million ($1.17 billion) budget gap, after filibustering by opposition lawmakers in the Parliament on Wednesday signaled the bill had little likelihood of passing As a result, Rome’s city fathers must now face unpalatable choices—such as cutting public services, raising taxes or delaying payments to suppliers—to gain time as they search for ways to close a yawning budget gap If it fails, the city could be placed under an administrator tasked with selling off city assets, such as its utilities “It’s time to stop the accounting tricks and declare Rome’s default,” said Guido Guidesi, a parliamentarian from the Northern League, which opposed the measure Rome’s mayor, Ignazio Marino, a U.S.-trained transplant surgeon, rode to electoral victory last year on promises to vanquish nepotism, improve basic services and bolster tourism in the city center with initiatives such as keeping the Imperial Forum illuminated and open all night Instead, he has been battling to hold together the budget On Wednesday, he signaled he had no intention of presiding over deep cuts, while the head of the city council warned of the broader impact of Rome’s financial troubles “A default of Italy’s capital city would trigger a chain reaction that could sweep across the national economy,” said Mirko Coratti, head of Rome’s city council said on Wednesday European Pressphoto Agency BY CHRISTOPHER EMSDEN Rome Mayor Ignazio Marino, who rides his bike to work, faces tough choices in trying to close the city’s budget gap The heart of the mayor’s plan has been an appeal for a €485 million transfer from the central government to compensate Rome for the extra costs it incurs in its role as a major tourist destination, the nation’s capital and the seat of the Vatican “Rome is unique compared with other cities” and deserves state support because of huge numbers of visitors who use services but don’t contribute much to the economy, Mr Marino said in a recent interview But even before the government of Enrico Letta fell this month, the proposed transfer had prompted complaints that the aid was unfair, given the dire straits of other cities Rome has long struggled to balance its books Because of its dearth of industry, the city depends heavily on trash-collection levies and the sale of bus and subway tickets It struggles much more than other European cities to collect either one About one in four passengers on Rome’s public transit system doesn’t buy tickets, costing around €100 million in lost revenue annually, compared with just 2% of passengers on London’s public transit network Meanwhile, employee absenteeism at Rome’s public-transit and trash-collection agencies runs as high as 19%, far above the national average Just six years ago, some €12 billion in city debts was transferred to a special fund subsidized and guaranteed by the national government in a move aimed at giving Rome a fresh start But Italy’s economy has shrunk by almost 10% since then, eroding the tax base just as national austerity programs pushed extra costs onto local governments Even before the withdrawal of the “Save Rome” decree, Mr Marino was facing unpalatable choices He has already raised cremation and cemetery fees and plans to centralize city procurement, which he says will save €300 million a year Now, without the transfer from the central government, he may be forced to impose income and property tax surcharge—already among the highest in the country—and to cut salaries to the city’s 20,000 employees or trim city services such as child-care centers or job-training programs The political fallout could be se- vere The mayor of Taranto, a southeast city that defaulted on millions in debt in 2006, has suffered some of the lowest poll ratings in the country after cutting back services Mr Renzi, who was the mayor of Florence until becoming prime minister, is expected to promulgate a new decree for Rome soon, but the terms are unclear The new prime minister has said he intends to give local administrations more budget leeway Draconian measures could also exacerbate Rome’s historic struggles to cope with its growth and to balance the needs of its historic city center—which hosts around 10 million tourists a year—with a poorly served periphery Rome’s population has grown tenfold since the mid-19th century Few tourists see the city’s sprawling outskirts, but they are home to more than 80% of Rome’s 2.6 million residents Nearly 400,000 people live beyond the capital’s busy ring road, most of them unserved by public transit and forced to drive to work Rome has 978 cars per every 1,000 city residents, more than twice the rate of Paris and almost three times that of London Recent heavy rains caused large-scale damage, exposing the need for major maintenance of the city’s road network If basic services aren’t improved, “people will just leave…and Rome ends up like Venice,” which today has a small and aging city population, says Francesco Rosso, a geologist who for 20 years has suffered a three-hour commute into the center Tourism is an important source of revenue but no panacea Rome’s share of tourism is only half the level of Florence’s per capita, according to Pierluigi Testa, head of a civic advocacy group And conference tourism—a lucrative niche— has grown only 12% in Rome since 2000, compared with 52% globally, Mr Marino says German Court Eases Party Entry to Europe Parliament BY HARRIET TORRY BERLIN—Germany’s constitutional court struck down a 3% threshold for political parties to be elected to the European Parliament, a ruling that could pave the way for more fringe, single-issue and extremist parties to win seats in a May vote The court found Germany’s law requiring that parties win at least 3% of the vote to the European Union’s legislative body violates the constitution, saying it harms voters and parties Although Wednesday’s ruling applies only in Germany, it could have a tangible impact on the assembly because the country, the bloc’s most populous, fills 13% of the European Parliament’s seats It adds to other factors that analysts say could challenge the dominance of large, mainstream parties in the body Pollsters are already predicting more success in parliamentary elections for marginal parties across Europe In many countries that share the euro, voters have grown angry at established parties and European institutions after four years of painful economic crises This is less true in Germany, where the economy has remained strong Yet the ruling will make it easier for small German parties that are hostile to the EU, such as the Alternative for Germany, or AfD, and several neo-Nazi parties, to win seats The ruling comes despite the EU urging members to set thresholds of up to 5%, a move meant to keep fringe parties from slowing debate A fractured European Parliament could find it difficult to generate majorities and reach compromises with other EU institutions This could cripple the already slow and complex European legislative process and potentially discredit Europe’s only directly elected assembly “This is a catastrophic decision,” said Manfred Güllner, head of Germany’s Forsa polling group “Without a threshold, democracy does not work We saw that in the Weimar Republic And we see that today at the [German] municipal level, where thresholds have been largely abolished.” Assemblies elected via pure proportional representation, Mr Güllner said, “get captured by malcontents who don’t any work and use their mandates as public platforms It’s a dictatorship of minorities.” Germany has been extremely concerned about checking the power of extremists since the end of the Nazi era There is still a 5% hurdle for national legislative elections, set up in the postwar constitution to prevent parties such as those on the far-right from getting a hold on national politics But the new ruling said this denied some voters equal rights “Every eligible voter’s vote must have the same value and the same legitimate chance of success,” Andreas Vosskuhle, president of the Karlsruhe-based Constitutional Court, said as he delivered Wednesday’s decision “It can’t be assumed by implication that the flexible building of majorities practiced un- til now would be notably hindered by the election of new parliamentarians from smaller parties.” Nineteen small parties, including the Pirate Party and far-right NPD, and more than a thousand citizens filed suit after the Bundestag, the lower house of the German parliament, introduced the 3% hurdle in 2013 That followed the Karlsruhe court’s rejection of an earlier 5% hurdle for European elections in 2011 Wednesday’s ruling poses a chal- Open to All German parties no longer have to poll above a threshold to enter the European Parliament, giving fringe parties that fell short of the 5% threshold in 2009 the chance to win seats Germany’s 2009 European Parliament election results Christian Democrats Social Democrats Greens Free Democrats Left 37.9% of votes (42 seats in Parliament) 20.8% (23) 12.1% (14) 11.0% (12) 7.5% (8) Free Voters Republicans Animal Protection Party Pirates The Grey 1.7% 1.3% 1.1% 0.9% 0.2% Others 5.5% Below the 5% vote threshold (no seats in Parliament) Source: European Parliament The Wall Street Journal lenge for conservative Chancellor Angela Merkel’s government—a socalled grand coalition of the largest center-left and center-right parties Although opinion polls suggest the two parties will get a higher proportion of the votes than at the last European elections in 2009, they could end up with fewer seats Parties that scored below the threshold represented more than 10% of the total vote in the most recent election Given the rise of the AfD, the conservatives are “fishing on the fringes of the right [wing],” said Gero Neugebauer, a political scientist at Berlin’s Free University “The large [parties] can only lose, and the smaller ones can try to win.” The Social Democrats’ parliamentary floor leader, Thomas Oppermann, said his center-left party “wants to everything so that extreme and right-wing German parties have no place in the new European Parliament.” The European Parliament passed a resolution in late 2012 encouraging member states to establish minimum thresholds to “effectively safeguard the functionality of parliament.” Fourteen of 28 member states have some kind of threshold —Gabriele Steinhauser contributed to this article THE WALL STREET JOURNAL Thursday, February 27, 2014 | Let’s Brighten the Many Faces of Global Energy Poverty 3.5 billion people in the world lack adequate access to energy million people — one every eight seconds — die each year from energy poverty Untold millions around the world must choose between paying for food or power Energy poverty It’s the world’s number one human and environmental crisis It holds people and societies down, cripples health and damages the environment Access to energy is an essential gateway to modern living, longer lives and powerful economies That’s why Peabody Energy is working to build awareness and support to end energy poverty, increase access to low-cost electricity and improve emissions using today’s advanced clean coal technologies We call it Advanced Energy for Life Because clean, modern energy is the solution for better, longer and healthier lives Together we can brighten the faces of billions by improving energy access for all Be part of the solution in your community and around the world Visit AdvancedEnergyForLife.com Campaign powered by Peabody Energy Sources: International Energy Agency World Energy Outlook 2012; World Bank 2012; CIA World Factbook 2012; “Fires, Fuel & the Fate of Billion: The State of the Energy Impoverished,” Gautam N Yadama, 2013 | Thursday, February 27, 2014 THE WALL STREET JOURNAL UPHEAVAL IN UKRAINE Ukrainians Rush to Get Out of Local Currency BY ANDREY OSTROUKH AND ALEXANDER KOLYANDR Associated Press A Russian armored personnel carrier on the street this week in Ukraine’s Black Sea port of Sevastopol, which is home to a major Russian naval base ProtestsStokeTensioninCrimea BY PAUL SONNE SIMFEROPOL, Ukraine—Thousands of Crimean Tatars descended Wednesday on Crimea’s parliament to shout down Russian nationalists, emerging as a bulwark for Kiev’s new pro-Europe powers as separatist sentiment in the region grows Crimea—a Black Sea peninsula that belonged to Russia until 1954 and remains dominated by ethnic Russians—has swiftly become the epicenter of a backlash against the Kiev protesters who toppled President Viktor Yanukovych As his opponents build a new government, some of the more radical Russian locals in Crimea are demanding the autonomous region secede or once again become part of Russia But Crimean Tatars—indigenous Muslims who account for about 12% of Crimea’s population of two million people—are the exception Their strained relations with Russia go back centuries, and many bristle at the idea of their homeland moving farther into Moscow’s orbit Many traveled to Kiev during the demonstrations to support the pro-Europe camp In Crimea, they have become the most powerful local advocates for recognizing the new powers and remaining part of Ukraine “The Crimean Tatars are the key problem for the Russian nationalists,” said Ihor Semyvolos, executive director of the Association of Middle East Studies in Kiev and an expert on the region On Wednesday, Ukraine’s acting interior minister, Arsen Avakov, said his main task was to prevent the outbreak of armed conflict in Crimea He said his instructions to all police and security personnel in the region were clear: “Don’t provoke any sort of conflict or armed standoff with civilians at any cost.” The tension was palpable Wednesday on the square in Simferopol “Crimea is Ukraine!” thousands of Tatars shouted while waving Ta- tar and Ukrainian flags outside the regional legislature, where officials held talks on Crimea’s tumult The Tatars raised their voices and whistled to drown out an opposing crowd of Russians waving Crimean and Russian flags and chanting “Russia!” and “The fascists won’t come!” “Our biggest demand is to not allow a split of Ukraine,” said Elmira Baranova, a 40-year-old Crimean Tatar from Fedosiya, who arrived at the Simferopol rally wrapped in a Ukrainian flag Ms Baranova said the Tatars wouldn’t “allow Russia to break up Ukraine and take away Crimea.” Refat Chubarov, the Crimean Tatar leader, has called for people promoting separatism to be prosecuted and has said Crimean Tatars won’t tolerate a breakup of the country Still, pro-Russian sentiment in Crimea runs strong, and the rise of a more nationalist Ukrainian leadership after the collapse of Mr Yanukovych’s government last weekend has alienated some local Russians and fueled talk of separatism Violence in Crimea has remained limited to a few street scuffles, but the atmosphere is tense A Russian businessman has taken control as de facto mayor of Sevastopol, home to the Russian fleet, and called the new powers in Kiev illegitimate The speaker of the Crimean parliament floated the idea of secession late last week, though he has since toned down his rhetoric and vowed to fight for more autonomy Some ethnic Russians have signed up to militias in recent days, saying they must protect their cities from what they describe as bandits who have taken power in Kiev Many local Russians express concern about the role Ukrainian nationalists from the country’s west played in toppling Mr Yanukovych They worry that under the nationalists’ influence, the new government will pursue policies that drive Ukraine away from Russia and crack down on the use of the Russian language A large swath get their news from Russian outlets, some of which have focused on such fears “I don’t want to unite with bandits and fascists who will tell me what language to speak or where my place is,” said Elena Sokolova, a 36year-old computer programmer from Simferopol, who was chanting “Russia!” from atop a planter at the rally on Wednesday She said Crimea is oriented toward Russia and should be allowed to decide its own fate “They aren’t letting us have a referendum,” Ms Sokolova complained “They haven’t let us have one for 10 years.” The opposition forces that have emerged victorious in Kiev have tried to quell the panic among such Russians in Crimea Oleh Tyahnibok, the leader of Ukraine’s ultranationalist Svoboda party, played a leading role in the Kiev uprising but has said The presence of Tatars suggests Crimea wouldn’t break away easily he won’t take a formal position in the new government He has urged Crimeans to disregard what he called fear-mongering about a ban on the Russian language, as well as false rumors about the supposed arrival of far-right nationalist hoodlums in Crimea Still, some decisions by the new provisional powers in Kiev already have stoked anger in the southern region, including the disbanding on Wednesday of the Berkut, a special national antiriot unit that Mr Yanukovych’s government ordered onto Kiev’s main square to quell the protests Berkut officers—many imported to the capital from Mr Yanukovych’s regional strongholds, including Crimea—have become targets of public wrath across much of Ukraine after their clashes with protesters left dozens dead last week The decision rattled many in Crimea who have greeted the injured Berkut returning from Kiev as heroes Russian activists here say Mr Yanukovych sent the forces to Kiev without proper defenses and subjected them to abuse from protesters before abandoning and embarrassing them Thousands turned out to a funeral last weekend in Simferopol for some of the local riot police who died in the Kiev clashes The new Sevastopol mayor, Alexei Chaly vowed Wednesday to retain the Berkut in the Crimean city The presence of the Tatars in Crimea, though, suggests the region wouldn’t break off without a struggle For centuries, Tatars controlled the Black Sea peninsula under the Crimean Khanate, a protectorate of the Ottoman Empire before Catherine the Great annexed the region for Russia in 1783 The Russian Empire later fought against the Ottomans, France and Britain over the territory in the 1850s Crimean War, a conflict famous in part for the role played by British nurse Florence Nightingale In 1954, Soviet leader Nikita Khrushchev transferred Crimea from Russia to Ukraine, then both Soviet republics The peninsula stayed part of independent Ukraine after the Soviet Union’s collapse in 1991, despite its majority-Russian population Today, many Crimean Tatars still harbor deep resentment against the Kremlin, because of they were deported en masse to Central Asia on the orders of Joseph Stalin out of paranoia that they would join with the Nazis and create a fifth column Mr Semyvolos of the Association of Middle East Studies in Kiev says long-term peace in Crimea depends on negotiations among local leaders that take into account the welfare of the Tatars MOSCOW—Ukrainians are deluging local banks with inquiries about switching their funds into safer dollars and euros amid a record-breaking slide in the country’s currency The Ukrainian arm of the Russian lender Alfa Bank extended its working hours Wednesday to help deal with demand A local branch of Russia’s Sberbank said ordinary Ukrainians were concerned about the devaluation “People in Ukraine really prefer foreign currency deposits these days,” Sberbank said by email The dollar Wednesday shot above 10 against the hryvnia for the first time, in parallel with a slump in the Russian ruble A Ukrainian central bank official said it was dropping its increasingly ineffective efforts at supporting the currency The local banking association suggested a temporary limit of $1,000 per person for daily foreigncurrency purchases The central bank said it wasn’t considering limits on cash withdrawals, though many banks already limit withdrawals from their ATMs Ukraine is facing a “horrifying economic crisis,” said acting President Oleksandr Turchynov He blamed the previous government and corruption for the malaise Ukraine is reeling from violent protests and the political vacuum left after the ouster of President Viktor Yanukovych The cratering currency presents further problems Terms of a bond that Russia bought from the country as part of an aid deal in December state that Ukraine’s debt pile should not represent more than 60% of its annual economic output As the hryvnia slides, dollar-denominated debt becomes more expensive to repay, ratcheting that ratio higher Tim Ash, an analyst at Standard Bank in London, said that while the dollar traded at around 8.30 against the hryvnia, the debt ratio stood at 42% “However, at an exchange rate of 10, this ratio increases to 46% of GDP,” he said “There may well be other claims on the sovereign out there, so the danger is that the ratio may already be above 50%.” Asked about the threshold, Russia’s finance minister Anton Siluanov said that “if the covenants are violated, then we enter talks about the execution of our agreement.” He didn't elaborate The ruble also hit record lows, accelerating its plunge after Russian President Vladimir Putin ordered military exercises in a region close to Ukraine As a more easily tradable currency, the ruble was bearing some strain as a proxy for the hryvnia, analysts said “All the mess in the ruble is linked to Ukraine,” said Pavel Demeshchik, a dealer at ING Bank in Moscow To be sure, there are signs that demand for dollars and euros in Ukraine could wane—foreign currency is getting staggeringly expensive and it is often difficult to match buyers and sellers “People see the rate and walk away,” said a cashier at OTP Bank close to Maidan, Kiev’s central square where the antigovernment protest started in late November THE WALL STREET JOURNAL Thursday, February 27, 2014 | UPHEAVAL IN UKRAINE Civic Activists Nominated For Government ‘of Unity’ Associated Press BY JAMES MARSON Pro-Russia protesters shout slogans Wednesday during a small demonstration in Donetsk in the eastern part of Ukraine Russia Tests Its Troops Continued from first page sador from Kiev, suspended a $15 billion bailout package, and threatened to raise natural-gas prices and impose trade sanctions Russia’s Prime Minister Dmitry Medvedev said Monday that the situation posed a threat to Russian interests in the former Soviet republic Russia’s Defense Minister Sergei Shoigu said that the exercise had been planned months ago and had nothing to with the unrest in Ukraine—in which more than 80 people were killed in clashes with police last week Another senior defense official told local news agencies that the ministry didn’t see the unrest in Ukraine as a reason to delay the exercise But the timing of the show of strength is certain to heighten concerns over the possibility of military intervention in Russian-speaking regions of Ukraine, particularly Crimea, where the Russian Black Sea Fleet is based U.S Secretary of State John Kerry said Russia needed to “be very careful” in its next steps “We are not looking for confrontation But we are making it clear that every country should respect the territorial integrity here, the sovereignty of Ukraine Russia has said it would that and we think it’s important that Russia keeps its word,” he said on NBC television Tense, competing protests between pro-Russian and pro-Western residents erupted on Wednesday in Simferopol, the regional capital, where the local parliament discussed Crimea’s future “What kind of signal does this send to the most-extreme factions on the ground? This is likely only to inflame passions rather than cool them,” said Eugene Rumer, director of the Russia program at the Washington-based Carnegie Endowment for International Peace The announcement of the military exercises sent the ruble to new lows against the euro and Russian exchanges tumbling The last large-scale, militaryreadiness test was held in May and involved 160,000 soldiers, tanks and aircraft in Siberia Russia also staged a test of 80,000 soldiers in February 2013, as well as several smaller drills in the Black Sea and in central Russia Senior Russian officials in recent days have said that military intervention wasn’t on the table; “Such a scenario is impossible,” Valentina Matvienko, the head of Russia’s upper house, said Wednesday But Andrey Klimov, deputy chairman of the international affairs committee in Russia’s Parliament, said Russia had a responsibility to protect its military assets in Ukraine “The Russian army must be prepared to use our forces to protect its own bases even if there is just a 1% probability that something might happen to our people there,” he said Defense ministers from the North Atlantic Treaty Organization, meeting in Brussels, offered their support for “Ukrainian sovereignty and independence, territorial integrity, democratic development and the principle of inviolability of frontiers.” At a news conference, NATO Secretary-General Anders Fogh Rasmussen didn’t explicitly criticize the mili- tary drill, nor did he address the prospect of Ukraine joining NATO— something Russia opposes But he reiterated the allies’ position that Kiev should be able to make its own security arrangements “Every nation has an inherent right to decide for itself when it comes to alliances and foreign and security policies,” he said The newest military tests involve units in Russia’s Western and Central military districts Russia is broken into four large military districts spanning from the Far East to its European borders The western district is based in St Petersburg and stretches from Russia’s western arctic to its border with Ukraine and Belarus The central district is based in Yekaterinburg and stretches from Siberia to just west of the Ural Mountains The exercises began Wednesday and are scheduled to last until Monday They will be conducted in two parts, Mr Shoigu said The first will involve spot checks of combat readiness The second will involve operational and tactical exercises with the 6th Army, based in St Petersburg; the 20th Army, based in Voronezh, some 300 kilometers from the Ukrainian border; and the 2nd Army in Samara, near the Kazakh border “The Supreme Commander [Vladimir Putin] has ordered a test of the ability of our troops to respond in crisis situations that threaten the military security of the country including terrorist, biological and man-made threats,” Mr Shoigu said, according to the Interfax news agency —Julian E Barnes contributed to this article KIEV, Ukraine—Protest leaders tapped civic activists for a “government of national unity,” moving to stave off criticism that veteran politicians were maneuvering to retake power following last week’s ouster of Russia-backed President Viktor Yanukovych Candidates for Ukraine’s new government—including the owner of an auto-repair shop and a journalist—on which Parliament will vote Thursday, were presented to a mix of cheers and boos among thousands of people at a “national assembly” on Kiev’s main square, the center of three months of protests that saw at least 80 killed Arseniy Yatsenyuk, a 40-year-old former economy minister and leader of the Fatherland party, was proposed as prime minister His government, if confirmed, will face severe challenges, underlined Wednesday when the national currency, the hryvnia, fell to multiyear lows of more than 10 to the dollar Ukraine’s foreign-currency reserves have dropped to $15 billion, and the interim government has said it would put together a program of overhauls to secure a loan program from the International Monetary Fund as quickly as possible Russia, which backed Mr Yanukovych with a $15 billion bailout offer in December, has indicated it is unlikely to hand over any more cash “We need to renew trust in the government The government needs to return the trust of creditors and investors,” Parliamentary Speaker and Acting President Oleksandr Turchynov told the crowd The new government will also have to face down anger in pro-Russian regions of the country, including the southern Crimean peninsula, where hundreds of supporters of greater autonomy and closer ties with Russia clashed with Crimean Tatars, who strongly support an in- dependent Ukraine The new government may not last long Not only does it face huge challenges, but it also will likely be reformatted after presidential elections in May The president and Parliament share responsibility for naming ministers “Whoever joins the cabinet, it will be a kamikaze government They have to deal with such a mess, and take unpopular steps,” said Vasyl Yariv, a business coach who was on the square Many posts in the proposed government went to activists and civic leaders who have led protests since late last year Demonstrations began after the government shelved a partnership deal with the European Union in favor of closer ties with Russia, but swiftly grew into a broader outcry against corruption and police abuses In a nod to those demands, muckraking journalist Tetyana Chornovol, who has investigated top politicians, was proposed as head of an anticorruption bureau, with unclear powers Dmytro Bulatov, the leader of a group of car owners who led protest convoys, was put forward as minister for youth and sport Mr Bulatov appeared on stage Wednesday missing part of his ear, which he says was severed when he was tortured after being kidnapped in January by a group of unknown men Olha Bohomolets, a doctor who helped coordinate the medical center, could become deputy prime minister for humanitarian affairs “I want to promise you that if in this government I see corrupt schemes, I’ll come onto the Maidan and coordinate the medical center again,” she said, referring to the protest square —Alexander Kolyandr and Lukas I Alpert contributed to this article Zuma Press Fatherland party head Arseniy Yatsenyuk was nominated to be prime minister European Union and the U.S Deliberate Over Money for Ukraine The European Union pledged to move fast to draw up financial assistance for Ukraine but officials said privately it could be days—or even weeks—before the bloc announces an aid package EU foreign-policy chief Catherine Ashton met senior EU colleagues Wednesday afternoon to define the kind of assistance Brussels could offer On a visit to Kiev earlier this week, she discussed the issue by phone with International Monetary Fund Managing Director Christine Lagarde, an EU official said In Washington, Secretary of State John Kerry said the U.S is considering providing Ukraine $1 billion in loan guarantees and additional financial support through a new IMF bailout package He also pressed Ukraine’s new government to begin instituting economic overhauls Olivier Bailly, a spokesman for the European Commission, said the Europeans were working at full speed to get “clearer ideas on the different options as soon as possible.” EU enlargement chief Stefan Füle told lawmakers the EU had raised expectations in Ukraine and must now keep its promises However, a senior French official said Western countries should wait until after Ukraine holds presidential elections in May before pledging large-scale assistance In Brussels, officials said they could work out by next week the maximum amounts EU institutions could give But people familiar with the planning said no package is imminent First, the EU wants to see what economic overhauls and anticorruption measures the new Ukrainian government commits to Second, the bloc wants its contribution to come as part of a broader, internationally agreed package "We are not shying away from taking a lead role," said one of the officials, but Europe on its own does "not have the means to what is necessary," the person said Officials have already spelled out some of the resources the EU could give The EU's executive currently has €610 million ($834 million) set aside to help Ukraine deal with financial challenges—an amount that could rise to €1 billion this year if the new government adopts credible economic policies This type of assistance is usually tied to an IMF deal, something that could take weeks or months to negotiate However, a senior EU official said if the Washington-based lender agreed to a fast-track bridge loan with Kiev, it could unlock the EU money —Laurence Norman and Stacy Meichtry | Thursday, February 27, 2014 THE WALL STREET JOURNAL U.S NEWS President Proposing Upgrades to Roads, Rails BY JARED A FAVOLE European Pressphoto Agency One recommendation for phone surveillance at the National Security Agency, whose Maryland headquarters are shown above, would be to end the program Surveillance Revamp Weighed BY SIOBHAN GORMAN AND DEVLIN BARRETT WASHINGTON—Administration lawyers have presented the White House with four options for restructuring the National Security Agency’s phone-surveillance program, from ditching the controversial collection altogether to running it through the telephone companies, according to officials familiar with the discussions President Barack Obama in January asked U.S intelligence agencies and the attorney general to report by March 28 on alternatives for revamping the program in a way that would take it out of the NSA’s hands The Office of Director of National Intelligence and the Justice Department have provided the options ahead of schedule, these people said None of the three options for relocating the data have gained universal favor But failure to agree on one of them would leave only the option of abolishing the program, which would be a setback for intelligence agencies and other backers of the surveillance effort Of the three options for relocating the data, two of them—with phone companies or another government agency—appear most technically possible Under the current program, the NSA collects millions of U.S phone records from three phone companies, which former officials have identified as AT&T Inc., Verizon Communications Inc and Sprint Corp Since the start of revelations about NSA surveillance last year by former NSA contractor Edward Snowden, the phone-records program has sparked the most controversy Some lawmakers and government officials have defended it as critical to fighting terrorism, while others argue it amounts to a massive violation of constitutional rights Obama administration officials have sought to preserve the collection of phone records in a way that raises fewer concerns about privacy One way of doing that would have the phone companies retain the data, officials said The NSA would then tell the companies when it needs searches of call records concerning specific phone numbers the agency believes are connected to terrorism The companies would provide the results to the NSA Under this model, the NSA would only collect the data that comes in response to the search, rather than millions of unrelated American phone records Several lawmakers have proposed legislation on Capitol Hill that would take this approach But telecommunications companies oppose this option Phone companies likely would demand liability protection and possibly other conditions to avoid outside demands for data—for instance, for run-of-the-mill legal cases such as divorce proceedings Already, some criminal defendants have sought access to the NSA records, claiming the data could help show their innocence The phone-company option is also opposed by the chairman of the House intelligence committee, Rep Mike Rogers (R., Mich.), who told The Wall Street Journal this week that the proposal doesn’t have enough support for committee approval and a House floor vote Phone companies have not yet been consulted on options, a telecommunications-industry official said A second option presented to the White House would have a government agency other than the NSA hold the data, according to a U.S official Candidates for this option could include the Federal Bureau of Investigation, which some current and former intelligence officials have recommended Another possibility floated in policy circles was turning the program over to the custody of the Foreign Intelligence Surveillance Court, which oversees the phone-data and other NSA surveillance programs, but judges have balked at an expanded role for the court A third option would be for an entity outside the phone companies or the government to hold the data, officials said This approach has been criticized by privacy groups who say such a third party would just become an extension of the NSA and would provide no additional privacy benefit A final alternative would be to scrap the phone-data program and instead bolster investigative efforts under current authorities to obtain the information about possible terrorist connections some other way, an official said Mr Obama acknowledged this approach in his January speech, but said “more work needs to be done to determine exactly how this system might work.” Caitlin Hayden, a spokeswoman for the White House National Security Council, declined to speak about specific proposals None of the three options for relocating data have gained universal favor She said that since the president’s Jan 17 speech unveiling surveillanceoverhaul measures, the Justice Department and intelligence agencies have worked on developing options “They have kept us abreast of their progress, and we look forward to reviewing those options,” she said “Beyond that, I’m not in a position to discuss the details of an ongoing process.” Mr Obama will consult with Congress and will seek legislation, as needed, she added Two of the options echo recommendations of the president’s review panel, which issued a report in December that proposed the NSA phone program be overhauled so the data be held by either the phone companies or a third party In his January speech, Mr Obama said both of those approaches “pose difficult problems.” Retaining the data at the phone companies, he said, “could require companies to alter their procedures in ways that raise new privacy concerns.” Establishing a third party to hold the data, he said, could be even more difficult “Any third party maintaining a single consolidated database would be carrying out what’s essentially a government function, but with more expense, more legal ambiguity, potentially less accountability, all of which would have a doubtful impact on increasing public confidence that their privacy is being protected,” he said Separately on Tuesday, the Justice Department notified a convicted terror suspect that NSA bulk-data surveillance had been used against him before he pleaded guilty to a charge of attempted material support for terrorism The defendant, an Albanian immigrant named Agron Hasbajrami, pleaded guilty in federal court in Brooklyn in 2012, after he was accused of sending more than $1,000 to someone in Pakistan to finance terrorism Since the revelations about NSA spying, the government has notified two criminal defendants that they intended to offer evidence derived from NSA interception of electronic communications The Hasbajrami notification marks the first time such a notice has been given to a defendant who has already pleaded guilty, officials said The letter notifying Mr Hasbajrami noted that he was still seeking to have his conviction vacated Mr Hasbajrami’s attorney, Steve Zissou, said he would seek more information about the surveillance of his client Patrick Toomey, a lawyer at the American Civil Liberties Union, said the new filing shows “warrantless surveillance has played a role in more criminal cases than the government has ever before admitted, and the government has been improperly withholding that fact from defendants for years.” President Barack Obama on Wednesday was expected to propose spending $302 billion to repair the U.S.’s roads and transit systems, one of the few areas where both Democrats and Republicans agree the government needs to spend more money Though revamping America’s infrastructure has garnered bipartisan support, Congress for years has grappled with how to pay for it On Wednesday, House Ways and Means Committee Chairman Dave Camp (R., Mich.) released a plan to overhaul the tax code that included $126.5 billion in spending for highways and other infrastructure Mr Obama wants to pay for his four-year plan by, among other things, closing tax loopholes and changing how businesses are taxed, the White House said It is unclear, however, exactly which loopholes Mr Obama wants to close and whether they would gain lawmakers’ support House Speaker John Boehner (R., Ohio) said he and Mr Obama discussed the country’s infrastructure problems when they met Tuesday, their first one-on-one meeting in over a year, but didn’t come to an agreement “We’ve got to find the funding mechanism to fund our infrastructure needs and so the hunt has been under way for the last year and a half to find that funding source I wish I could report to you that we’ve found it, but we haven’t,” Mr Boehner said at a news conference Wednesday One idea that has been floated is paying for the upgrades by raising fuel taxes The U.S.’s 18.4-cent-a-gallon gas tax and 24.4-cent-a-gallon diesel-fuel tax haven’t been raised in 20 years They are a major source of funding for highway repairs Highway upgrades sometimes are paid for by transferring money from the Treasury Department’s general fund Mr Boehner said he doesn’t think Republicans could support that Another proposal that has been discussed, which is supported by Sen Rand Paul (R., Ky.), would pay for infrastructure upgrades by making changes to the tax code to encourage U.S companies operating internationally to bring money kept overseas back home The president also is expected to announce the start of a $600 million competition for grants aimed at roads, ports and transit systems Mr Obama’s plans are aimed at putting Americans back to work He will tell Congress that if it doesn’t find money to support the Highway Trust Fund, 700,000 jobs will be put at risk The Highway Trust Fund is supported by the gas tax and other revenue and could have difficulty meeting all of its obligation in the second half of this fiscal year, the nonpartisan Congressional Budget Office said Wednesday Infrastructure projects have long been on Mr Obama’s list of priorities Recently, Vice President Joe Biden traveled to ports in Illinois, Texas and the Panama Canal to highlight their importance —Kristina Peterson contributed to this article THE WALL STREET JOURNAL Thursday, February 27, 2014 | WORLD NEWS U.S authorities are investigating the flow of funds from Gabon to the U.S to determine whether any assets are traceable to public corrupBy Joe Palazzolo, Christopher M Matthews and Drew Hinshaw tion in the central African country, according to a law-enforcement document and people familiar with the matter As part of a broader effort to address possible foreign graft, Homeland Security agents and Justice Department prosecutors have searched for assets in the U.S linked to Gabonese President Ali Bongo and his family, as well as his chief of staff, Maixent Accrombessi, these people said Prosecutors could seek to seize assets they believe are ill-gotten The case puts Gabon in the cross hairs of U.S policy in Africa President Barack Obama is looking to increase trade and military ties with stable African partners like Gabon, an economy growing at about 7% this year But the Justice Department is taking a harder tack against corruption on the continent Two U.S Senate probes into the movement of foreign assets into the country since 1999 concluded that Mr Bongo’s late father, Omar, who ruled the country for 41 years, used his position to amass a personal fortune during Gabon’s oil boom The current U.S probe came to light last year after customs officials at Los Angeles International Airport said they found more than $150,000 in the luggage of a onetime hairdresser and aide to Mr Bongo Agents seized the money from the man, Derek Ashby, because he hadn’t disclosed the full amount on currency forms, according to documents filed in federal court in California in July In September, federal agents raided the Pennsylvania home of lobbyist Joseph Szlavik, weeks after he allegedly transported cash from Gabon to the U.S., said people familiar with the matter Prosecutors are investigating whether Messrs Szlavik and Ashby violated any criminal laws, according to the law-enforcement document Bringing bulk cash into the U.S is legal, as long as the person carrying it declares the proper amount Agence France-Presse/Getty Images U.S Probes Fund Flows From Gabon Gabonese President Ali Bongo, seen in Tunisia earlier this month and states whether they are carrying it on someone else’s behalf Money-laundering laws prohibit any person from knowingly engaging in a financial transaction that involves the proceeds of corruption Mr Ashby told agents he hadn’t bothered to count all of the cash he was carrying because he was trans- porting it from Gabon to Mr Bongo’s estranged wife in Los Angeles, Inge Collins, according to court documents “He was just unaware of the total amount he was provided,” said Michael R Kilts, a lawyer for Mr Ashby Mr Szlavik declined to comment through his lawyer, Aitan Goelman Neither man has been charged with a crime Since 2000, Ms Collins has received millions of dollars in cash payments and wire transfers from Mr Bongo and through Messrs Ashby and Szlavik, said a person familiar with the matter Mr Bongo’s office said this month that it was aware of the probe of his associates but received word from the U.S State Department this month that neither the president nor his government is under investigation by U.S authorities It added that the policies of the elder Bongo’s presidency outlined in the prior Senate investigations “are not the policies of the current presidency” or the rest of the government A State Department spokesman declined to comment, as did a Justice Department spokesman U.S Attorney General Eric Holder announced a new asset-forfeiture program in 2010 aimed at “combating large-scale foreign official corruption.” From 2011 to 2012, Gabon held a United Nations Security Council seat and helped push through two of Mr Obama’s most difficult U.N votes: sanctions against Iran’s nuclear program and support for the removal of Libyan leader Moammar Gadhafi In 2011, Mr Bongo asked the U.S Treasury for help training Gabonese auditors to investigate corruption there, said Eric Benjaminson, then U.S ambassador That same year, Mr Bongo had a 50-minute conversation with Mr Obama in the White House in which the U.S leader expressed his desire for the Gabonese to increase anticorruption efforts, said Mr Benjaminson, who was in the room Mr Bongo agreed, but said he faced challenges in uprooting a long tradition of corruption in the country, said Mr Benjaminson A White House spokesman declined to comment Ms Collins, who has also been contacted as part of the investigation, said she was cooperating and denied any wrongdoing 10 | Thursday, February 27, 2014 THE WALL STREET JOURNAL WORLD NEWS BY MARIA ABI-HABIB AND SAM DAGHER BEIRUT—The Syrian government said its forces ambushed and killed dozens of rebels near Damascus, alleging they were part of a new offensive to squeeze the capital and pressure the regime to accept a political solution to the war There were conflicting reports over who was killed Wednesday in a desert area on the fringes of the rebel-held suburb of Eastern Ghouta, which has been under siege by Syrian forces for more than seven months Syrian state news agencies said all the 175 dead were rebels from the al Qaeda-linked Nusra Front They reported the fighters came through southern Syrian from neighboring Jordan, where rebels say they are receiving sophisticated weapons from Gulf Arab states, including shoulder-fired missiles capable of taking down jets The opposition said some of the dead were civilians trying to escape a siege The opposition said the dead included some rebel fighters, but were mostly civilians trying to escape the siege of Eastern Ghouta, where activists have reported starvation and medical care is scarce for the 500,000 residents State TV showed images of bodies piled up and foreign passports from Saudi Arabia, Iraq and other countries Rebels said recently that they have begun to receive more sophisticated weapons for the first time, including antitank guided missiles and Manpad antiaircraft missiles They said the aid was in preparation for the new offensive to push into Damascus from southern Syria in hopes of forcing President Bashar al-Assad’s regime to accept a political settlement The plan arose out of frustration with the regime’s refusal to discuss a political compromise at the recent Geneva peace conference An activist from Eastern Ghouta contradicted the government’s account, saying those killed were actually heading out of Eastern Ghouta, not into it, and going in the opposite direction to Quneitra in southwestern Syria near Israel A pivotal battle for fighters trying to reach Damascus has been raging around Quneitra for about a week “More than 40 Syrian fighters were killed and 15 escaped from the Syrian army ambush while they were trying to get out of Eastern Ghouta,” the activist said “They were heading to Quneitra to fight there.” The Army of Islam, an Islamist rebel group which is powerful in the area near the ambush, said the government killed 45 people, mostly civilians, who were trying to get out of Eastern Ghouta The Army of Islam is part of an alliance of religious rebel groups knows as the Islamic Front Susan Ahmad, an activist in Eastern Ghouta, said dozens of Syrian civilians and fighters wanted to leave because they didn’t want to die of hunger “They tried to run away from the government siege.…They were shelled and later Assad’s forces shot the wounded.” Several opposition groups including the U.K.-based Syrian Observatory for Human Rights said the ambush was carried out mainly by members of the Iranian-backed Lebanese militia Hezbollah The group has been actively fighting alongside the Syrian regime for close to a year, particularly around Damascus and other parts of central Syria —Mohammed Nour Alakraa contributed to this article Hezbollah Vows It Will Retaliate for Israeli Strike BY NOUR MALAS BEIRUT—Hezbollah vowed it would retaliate for an Israeli airstrike that damaged one of its bases near Lebanon’s frontier with Syria, raising the specter of a wider conflict along the country’s already-volatile southern and eastern borders The Shiite militant and political group said Wednesday that Israeli warplanes struck one of its positions late Monday near the eastern town of Janta in the Bekaa Valley, which borders Syria Hezbollah denied reports that the raid on the base resulted in casualties and damage to artillery and rocket batteries The statement by Hezbollah, broadcast over its Al Manar television station, was the first public acknowledgment in Lebanon that the Israeli raid had targeted Lebanese territory It raised fears, politically explosive here, that this small nation might be dragged further into the conflict in Syria and into renewed conflict with Israel, its powerful neighbor and enemy to the south Hezbollah, which fought the Israeli armed forces to a draw in 2006 in southern Lebanon, showed few worries “This aggression won’t stand without a response,” the group said The threat, about 36 hours after the attack, came after local media reported that some Hezbollah fighters had been killed in the airstrike and that trailers carrying missiles had been the target Israel refused to confirm or deny that it carried out Monday’s raid But the deputy commander of its Northern Command reserves said Hezbollah had little choice but to confirm the attack on one of its bases “I assume that Hezbollah realized it could no longer deny the event after the entire world around it had reported it,” Eyal Ben Reuven, a reserve major general in the Israeli army, told Israel Radio The general said Hezbollah was unlikely to attack Israel because it was already preoccupied in Lebanon and Syria, where, along with Iran, it has joined sides with President Bashar al-Assad to put down the rebellion there —Joshua Mitnick in Tel Aviv contributed to this article Associated Press Syrian Regime Says It Killed 175 Rebels India’s naval chief, Admiral D.K Joshi, who resigned Wednesday hours after a fire on a nuclear-powered submarine India Naval Chief Quits After Latest Mishap BY SANTANU CHOUDHURY NEW DELHI—India’s naval chief resigned Wednesday, taking “moral responsibility” for a series of accidents that struck the navy in the past year, including a submarine mishap Wednesday that has left two crew members missing The resignation and the accidents come as India—the world’s biggest importer of weapons—is working to upgrade its defense capabilities to face a more assertive China, as well as its longtime rival, Pakistan Admiral D.K Joshi’s resignation came hours after a fire broke out aboard a submarine during a training exercise Two submariners went missing and seven others were hospitalized for the effects of smoke inhalation INS Sindhuratna, a Sovietbuilt diesel-powered sub, was about 75 kilometers off the coast of Mumbai The whereabouts of the two submariners wasn’t known as three sections of the sub haven’t yet been inspected due to fears that fire could restart, Commander Rahul Sinha, a naval spokesman, said “The submarine is disabled and at sea We expect it to be brought to Mumbai dockyard early tomorrow morning,” he said The resignation was accepted with immediate effect, the defense ministry said The vice chief of naval staff Vice Admiral R K Dhowan will officiate as the new naval chief until a successor is announced, it said In January, another submarine, INS Sindhugosh, ran aground off Mumbai in low tide, and a few other warships ran aground India has about 15 submarines The air force flies mostly Soviet-era MiG planes, several of which have crashed in recent years, killing their pilots The army is trying to buy advanced tanks and guns The most damaging of the naval incidents took place in August when 18 sailors died after explosions and a fire rocked a Russia-built submarine, INS Sindhurakshak, in a Mumbai naval dockyard The Indian government asked the navy to conduct comprehensive checks of weapons and safety on board all its submarines since last year’s incident Despite the heightened focus on safety, ships belonging to the Indian Navy have run aground or were damaged after hitting underwater objects in recent months A minesweeper reportedly caught fire while undergoing repairs in a dockyard In November, the navy commissioned its second aircraft carrier to bolster its blue-water presence The INS Vikramaditya can carry more than 30 planes, including Russianmade MiG-29K and U.K.-built Sea Harrier fighter jets, as well as Ka- mov, Sea King, Dhruv and Chetak helicopters “It is a challenging situation for the navy,” said C Uday Bhaskar, a retired Indian Navy commodore and former director of the National Maritime Foundation “It is time for us to take a deeper look into the higher edifice of delays in defense modernization and induction of new equipment in India.” China, which fought a war with India in 1962, has begun a rapid modernization drive of its navy It has also been venturing away from its home waters, with warships sent on antipiracy patrols off Somalia and on voyages between the islands of Japan into the Pacific Ocean Tensions between China and India, the world’s two most-populous nations, have intensified, particularly along their disputed Himalayan border India has grown increasingly concerned about China’s presence in the Indian Ocean region, with Beijing funding the construction of ports in Pakistan and Sri Lanka India is spending about $30 billion a year to buy new aircraft, missiles, planes and other defense equipment to modernize the Sovietvintage equipment of its armed forces One key defense project is the potential acquisition of 126 Rafale fighter jets from Dassault Aviation S.A of France for an estimated value of more than $10 billion Drug Use Eyed in Death of Navy SEALs BY COSTAS PARIS Drug use is suspected in the deaths of two former U.S Navy SEALs who worked as security guards on a container ship moored in the Seychelles, police said late Tuesday The two men, identified as Jeffrey Reynolds and Mark Kennedy, both 44 years old, were found dead last week in their cabin on the Maersk Alabama, operated by Danish container-shipping giant Maersk Line, a unit of A.P Moller-Maersk A/S The Seychelles police statement said an autopsy on the bodies of the two men concluded that they died of “respiratory failure with suspicion of a heart attack.” “The police preliminary investigation report includes suspicion of drug use, as indicated by the presence of a syringe and traces of heroin which were found in the cabin,” and fluid samples from the men’s bodies are being sent to Mauritius for forensic analysis, the statement said Mr Reynolds and Mr Kennedy worked for Virginia-based maritime security firm Trident Group, formed in 2000 by former SEALs to provide protection against pirate attacks “Trident Group continues to monitor the situation with our fallen operators Assumptions are being reported about this situation without the benefit of any fact-based information,” Trident Group Chief Executive Thomas Rothrauff said in a statement on the company’s website The U.S.-flagged Maersk Alabama operates off the east coast of Africa, one of the highest-risk areas for pirate attacks The ship was seized by Somali pirates in the same waters in 2009 Her then-captain, Richard Phillips, was taken hostage on a lifeboat and was rescued three days later, when U.S Navy snipers shot dead the three pirates holding him The 2013 film “Captain Phillips,” starring Tom Hanks as the captain, is based on the incident 18 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BUSINESS & FINANCE ITV Bulks Up Production Arm Prosecutors In the U.K Charge Four Journalists BY SIMON ZEKARIA BY ALEXIS FLYNN Associated Press LONDON—ITV PLC Wednesday hailed the performance of its U.S business and said its fast-growing production arm is seeking more deals, as the U.K media company reported a 27% jump in its yearly profit One of ITV’s most popular shows, “Downton Abbey,” is co-produced by Carnival Films, part of Comcast Corp.’s NBCUniversal, and PBS’s Masterpiece series, both based in the U.S But to insulate itself from advertising markets ITV Studios is spending to create its own television shows, such as the British drama “Mr Selfridge,” for its own channels and to sell to overseas broadcasters ITV Studios also is expanding by pursuing acquisitions in the U.K., as well as the U.S., where it is now a top-five independent content producer “If [the right opportunities] come up, then we will go for them,” said Chief Executive Adam Crozier In the past year and a half, ITV has bought U.S production companies Thinkfactory Media, Gurney Production and High Noon Entertainment Last week, it acquired New York-based DiGa Vision “If you look at our American business, our revenue doubled last year and tripled since 2010,” said Mr Crozier The U.K.’s biggest over-the-air commercial broadcaster, which also shows music competition “The X Factor,” said 2013 net profit rose to £326 million ($544 million) from £256 million in 2012 Revenue increased 9% to £2.39 billion Nonadvertising revenue gained 17% to £1.21 billion, and revenue from ITV Studios rose 20% to £875 million The company said it expects ‘Downton Abbey,’ above, is one of ITV’s most popular series, but the broadcaster aims to create more of its own shows advertising revenue from its channels, which rose 2% last year, to climb 2% in the first three months of this year Its advertising revenue also is set for a boost this summer from the FIFA soccer World Cup “The television-advertising market continues to show signs of improvement,” Mr Crozier said ITV proposed a full-year dividend of 3.5 pence, up 35% from a year earlier and a special dividend of pence—valued at £161 million— in line with last year “Our financial position has been transformed,” Mr Crozier said Jane Anscombe, analyst at Edison Investment Research, said ITV’s strategic approach is paying off ITV, which is four years into a five-year plan to generate half its revenue from sources other than traditional television-advertising spots, is also pushing its digital-me- dia presence to capture tablet and smartphone users, as well as sponsorship deals The company expects online, pay and interactive to post double-digit revenue growth this year, helped by the launch of the pay drama channel ITV Encore Mr Crozier ruled out ITV bidding for U.K over-the-air peer Channel 5, which is up for sale “We are not looking at Channel 5,” he said BUSINESS BRIEFS INSURANCE Swiss Life Chief Executive: Products Are Tax Compliant The chief executive of Swiss Life Holding AG said on Wednesday that the insurer’s private placement life insurance products were tax compliant and not designed to attract untaxed assets owned by U.S clients Bruno Pfister said that, from the end of 2008, Zurich-based Swiss Life had only accepted U.S customer assets for the product, which is often referred to as PPLI, if they were tax compliant The company stopped taking new business from U.S clients in 2012, he said Swiss Life hasn’t been contacted by U.S authorities with regard to the PPLI business, he added “We consider our PPLI portfolio to be tax compliant,” Mr Pfister said “It has never been our goal to attract untaxed assets.” Switzerland’s PPLI providers were the subject of a Wall Street Journal report this week that said the U.S Justice Department and Internal Revenue Service are scrutinizing the use of the product, which blends banking and insurance by linking the value of a client’s policy to assets held in a Swiss bank account The U.S authorities are examining whether Americans used Swiss insurance products to hide assets, the WSJ reported, citing people with knowledge of the matter Mr Pfister’s comments came as Swiss Life said full-year net profit surged to 781 million Swiss francs ($880 million) in 2013, up almost 700% from 98 million Swiss francs a year earlier The performance was driven by a 5.4% increase in premiums and policy fees and a 1% reduction in group costs Neil MacLucas CONSUMER GOODS Tupperware Expects Its Sales To Rise in Emerging Markets Tupperware Brands Corp Chief Executive Rick Goings said Wednesday he expects at least 80% of the company’s revenue to come from emerging markets by 2019, up from about 60% in the fourth quarter, driven by a swelling middle class in countries such as Indonesia, China and Brazil In an interview with The Wall Street Journal, Mr Goings said the Orlando, Fla., company is growing fastest in markets where women are looking for opportunities to earn a living Tupperware relies on a largely female sales force of 2.9 million to sell its brightly colored food-storage containers to friends and family through house parties The expected growth “is not driven by how poorly Western markets are doing,” said Mr Goings “It’s driven by where the people are.” In the fourth quarter of 2013, Tupperware’s net sales rose 1% to $717 million, while earnings rose 20% to $89.7 million, as strength in emerging markets offset weakness in developed countries such as the U.S Emerging markets made up 63% of Tupperware’s sales in the latest quarter Indonesia is Tupperware’s largest market In the fourth quarter, Tupperware’s sales there climbed 33% Sales in China were up more than 20% and sales in Brazil up 19% Kathy Chu Online>> For more breaking news, go to WSJ.com/Business and follow @wsjbusiness on Twitter LONDON—British prosecutors said four journalists—three of them from News Corp’s Sun newspaper— have been charged with misconduct in public office, a move that puts a fresh spotlight on journalistic practices at a newspaper that is part of Rupert Murdoch’s media giant Reporters from News Corp’s daily the Sun—Tom Wells, Neil Millard and Brandon Malinsky—have all been charged with misconduct in public office, the Crown Prosecution Service said Tuesday Graham Brough, a journalist who used to write for the Trinity Mirror Group title the Daily Mirror, was also charged News U.K., News Corp’s U.K newspaper unit, declined to comment A spokesman for Trinity Mirror said the company wasn’t prepared to comment immediately News Corp also owns Dow Jones & Co., the publisher of The Wall Street Journal All four men were arrested as part of Operation Elveden, a police probe into alleged corrupt payments by journalists to police officers, in exchange for tips and stories Former police officer Sam Azouelos and former corrections officer Reggie Nunkoo were also charged with the same offense, said prosecutors Prosecutors and the police didn’t disclose any other details of the alleged offenses Attempts to reach the six individuals charged weren’t successful The men have yet to enter pleas, which could happen at subsequent hearings Operation Elveden was launched to run in parallel with investigations into phone hacking, or the illegal interception of voice-mail messages, and computer hacking Separately, former News Corp employees including Rebekah Brooks and Andy Coulson, both of whom once edited News Corp newspapers, are facing charges related to alleged phone hacking, bribery and obstruction in a continuing trial at London’s Central Criminal Court They and five other defendants have pleaded not guilty to the charges The charges are centered around allegations of phone hacking at News Corp’s now-closed News of the World tabloid Ms Brooks and Mr Coulson both served as top editor at that paper Ms Brooks also edited the Sun The men charged in the Elveden inquiry are to appear March 10 before Westminster Magistrates Court INDEX TO BUSINESSES Businesses This index of businesses mentioned in today’s issue of The Wall Street Journal is intended to include all significant reference to companies First reference to the companies appears in bold face type in all articles except those on page one and the editorial pages ABB .23 Agricultural Bank of China 23 Airbus Group N.V 17,21 Andreessen Horowitz 22 Aneka Tambang 21 Anheuser-Busch InBev.19 Apple 17,20 Arbaya Energi .21 AT&T BAIC Motor 23 BlackBerry 20 Boeing 21 BYD 23 Carlsberg .19 Carlyle Group 19 Citigroup 25 Comcast 18 Credit Suisse Group 24 Daimler 23 Deere 12 Dongfeng Motor Group 32 Dow Chemical .12 DuPont 12 Facebook 22 Financial Conduct Authority 24 FireEye 24 Freeport-McMoRan Copper & Gold 21 FXCM 24 General Electric 24 Goldman Sachs Group 25 Google 20,22 Grupo Modelo .19 Heartland Payment Systems 24 Hebei Iron and Steel Group 23 Heineken .19 Honda Motor .32 ITV .18 Japan Post Group .23 Joyful Frog Digital Incubator 22 Juniper Networks .32 Lego .17 LinkedIn .20 Mars 22 Maxim Asset Management 19 Microsoft .20 Mondelez International22 Monsanto 12 Mt Gox Newmont Mining 21 News Corp 18 Nissan Motor 32 Nokia 20 Orion Group 22 Oshkosh 31 Palo Alto Networks 32 Prime Meridian 13 PSA Peugeot Citroën 32 Rakuten .22 Red Dot Ventures .22 Renault S.A 32 Rolls-Royce Holdings 21 Samsung Electronics 20 Sprint Target 24 Telefonica Deutschland 32 T-Mobile Austria 32 T-Mobile Germany 32 United Rusal .21 United Technologies 21 Veolia Environnement 19 Verizon Communications Viber Media 22 Viki 22 Wells Fargo & Co 24 Westfield Group 19 Westfield Retail Trust.19 WhatsApp 22 Corrections Amplifications The Straits Exchange Foundation, Taiwan’s semiofficial organization that handles affairs with China, was incorrectly referred to as Strait Exchange Foundation in a World News article Feb 12 about talks between China and Taiwan Readers can alert the London newsroom of The Wall Street Journal to any errors in news articles by emailing wsjcontact@wsj.com or by calling +44 (0)20 7842 9901 THE WALL STREET JOURNAL Thursday, February 27, 2014 | 19 BUSINESS & FINANCE ABInBev Net Gets Boost Westfield Weighs Stock-Listing Spot FromGrupoModeloCuts BY ROSS KELLY BY MATTHEW DALTON Anheuser-Busch InBev's sales volume by region, in millions of hectoliters North America 25 50 75 100 Latin America North Asia Pacific Latin America South Western Europe Mexico Central and Eastern Europe Global export and holding companies Source: the company The Wall Street Journal AB InBev, led by CEO Carlos Brito, above, posted a 45% gain in quarterly profit techniques before the deal had been officially completed Those techniques involve scrutiny of each budget item The process requires managers to justify every cost anew The company also uses its significant size to negotiate favorable deals with suppliers AB InBev management is hoping to achieve $1 billion in annual cost cuts by the end of 2016 at Grupo Modelo Analysts say the company might manage to achieve all those savings by the end of 2015 The U.S., AB InBev’s biggest market, was a weak spot Volume in the brewer’s North American division, which is mainly the U.S., fell 1.8% in the fourth quarter and 2.4% over all of 2013 “We expect an improvement in the industry volume trend in 2014, driven by a stronger economy,” Chief Financial Officer Felipe Dutra said The year is off to a rough start, because of heavy snowfall in the U.S., Mr Dutra said The soccer World Cup in Brazil, AB InBev’s second-largest market, is likely to help sales The company estimates the event could boost volumes by one to two percentage points in Brazil for the year AB InBev also plans to sell Corona, Grupo Modelo’s main beer, in more markets outside Mexico “It is a very exciting brand,” Chief Executive Carlos Brito said Veolia CEO Wins Backing From Board BY GÉRALDINE AMIEL AND INTI LANDAURO PARIS—Veolia Environnement SA’s board Wednesday endorsed Chairman and Chief Executive Antoine Frérot, marking the second time in two years the head of the water and waste utility has successfully resisted pressure to step down Subject to shareholder approval in May, the board said it would appoint Mr Frérot for four more years The decision represents a victory for the executive, who had come under pressure from one of the group’s biggest shareholders, the Dassault family, which owns a 6.3% stake Veolia has been hard hit by the economic crisis in Europe, which 125 2013 2012 Reuters LEUVEN, Belgium—AnheuserBusch InBev NV is taking its costcutting knife to Grupo Modelo SAB, the Mexican brewer it acquired control of last year AB InBev, the world’s largest brewer, said Wednesday that it has already managed to shave hundreds of millions off the brewer’s annual costs since it completed the $20 billion purchase of the half of Grupo Modelo it didn’t already own in June last year The brewer of Budweiser, Stella Artois and Bud Light also posted a 45% increase in fourth-quarter profit, driven in part by cost cutting at Grupo Modelo The gain came despite weak beer sales throughout much of AB InBev’s brewing empire, reflecting the still-shaky state of the global economy Volume sold by the company fell 2% in the most recent quarter, compared with a year earlier AB InBev’s fourth-quarter net profit totaled $2.52 billion, up from $1.74 billion a year earlier Several one-time items helped the latest result, including the return of excess funds that the company had contributed to its employee-retirement plan in Brazil A 15% decline in financing costs also contributed to the improved profit Shares in AB InBev rose 2.8% to €76.34 ($104.93) in Brussels “In extreme markets with hiccups, they managed to perform well,” said Kris Kippers, an analyst at Petercam in Brussels “It is striking how different they are from their colleagues.” Heineken NV and Carlsberg A/S have struggled to increase profits in the face of flagging beer sales AB InBev’s revenue rose slightly to $11.71 billion, from $11.62 billion The latest result was mainly attributable to revenue growth in Brazil, where price increases and strong sales of premium beers helped offset bad weather and high food-price inflation that sapped the public’s disposable income In Mexico, earnings before interest, taxes, depreciation and amortization rose 44% to $575 million The brewer said it achieved $360 million in annual synergies from Grupo Modelo in the final seven months of last year A further $75 million came from applying AB InBev’s cost-cutting Sales Go Flat has eaten into its long-term financing while calling into question some of its most profitable waste and water contracts in Europe The utility has moved to restructure its businesses and geographical exposure, while selling some assets in the U.K and the U.S Veolia shares are trading at a fifth of their value six years ago Against this backdrop, Dassault shareholders pushed for a change of leadership, according to a board member and people familiar with the matter “The Dassault family has been frustrated with the returns,” the board member said The dissent against Mr Frérot was first reported earlier this month by French magazine Le Point, which said Dassault shareholders were seeking to replace Mr Frérot with David Azéma, a senior official currently managing the French agency that oversees government stakes in private companies But on Tuesday, Mr Azéma told Reuters he was “not a candidate for the position.” Mr Azéma didn’t respond to several requests for comment The French government, Veolia’s largest shareholder with a 9.3% stake, was set to support Mr Frérot at Wednesday’s board meeting, the board member said Mr Frérot already faced an attempt to unseat him two years ago with pressure from some members of the board In the end, the board endorsed Mr Frérot and his strategic plan SYDNEY—Westfield Group, one of the world’s largest owners of shopping malls, said it may list in the U.S or London after a planned breakup of its global mall empire The separation plan is expected to tie the company’s fortunes more closely to glitzy new projects such as a retail wing of New York’s World Trade Center The 95-year-old company may first need to overcome some investors’ concerns, though, about the terms of a deal that will have it jettisoning many older properties to focus on tonier developments in Los Angeles and New York “We’re going to look at listing the company in New York, London or here in Australia—all of them are under consideration,” Westfield Group Chief Executive Peter Lowy said in an interview Wednesday The breakup plan, disclosed in December, calls for Westfield to sell its remaining 50% interest in Australian and New Zealand malls to Westfield Retail Trust, which was formed in 2010 to house its more-mature local assets The listed trust, to be renamed Scentre Group, will own 47 malls in Australia and New Zealand, leaving Westfield Group with 39 centers in the U.S and five in the U.K and Europe valued at $18 billion The deal aims to unlock the value of its U.S and European assets, which have a higher proportion of new developments and thus more upside potential The properties in Australia, where the Lowy family started the company in 1959, are seen as more of a stable yield play Shareholders are due to vote on the plan in May Westfield Group shareholders will get 1,000 shares in the new Westfield Corp and 1,246 shares in Scentre Group for every 1,000 shares in Westfield Group that they own Shareholders in the retail trust will get a combination of cash and shares, terms some investors have suggested may need to be sweetened to win their endorsement “A number of large investors have expressed their opposition to the current terms,” said Winston Sammut, managing director of Sydney-based fund manager Maxim Asset Management, which owns shares in both Westfield and Westfield Retail Trust “I’m aware a number of mediumsized institutional investors are also of the same mind It’s not over yet.” Mr Lowy played down the prospect of an amended deal He said recent talks among management and investors had been positive Westfield on Wednesday reported a net profit for the year through December of 1.60 billion Australian dollars (US$1.44 billion), down 6.7% from the previous year Hurt by the slower growth profile of its older malls and the end of a long mining boom in Australia, which has shaken consumers’ confidence, Westfield returned a total of just 31% over five years, compared with over 250% for Simon Property Group Inc and Taubman Centers Inc., according to SNL Financial The company Wednesday said it would sell another batch of U.S malls valued at about US$1 billion Rubenstein Doubtful Over Buyout-Shop Tax Change BY MIKE SPECTOR BERLIN—Carlyle Group LP cofounder David Rubenstein said U.S lawmakers are “unlikely” to take up legislation this year that could potentially increase taxes on deal profits reaped by private-equity managers Mr Rubenstein’s comments came after the chairman of the U.S House Ways and Means Committee, Republican Dave Camp of Michigan, said Congress should “clean up” the treatment of private-equity firms’ share of deal profits, called “carried interest.” These profits are currently treated as capital gains and taxed at a lower rate than ordinary income “We can clean up provisions like carried interest that allow certain private-equity firms to get the investment-income tax rate on what anyone else would call normal wage income,” Mr Camp said in an opinion piece published Wednesday in The Wall Street Journal outlining a series of tax-reform proposals But Mr Rubenstein, whose firm is based in Washington and who is often viewed by private-equity watchers as an authority on national politics, said various factors would likely prevent any measures from taking hold anytime soon Montana Democrat Max Baucus, previously the chairman of the Senate Finance Committee, was just confirmed as the U.S ambassador to China, lowering the chances that chamber will take up such legislation, Mr Rubenstein said In addi- tion, a term limit will force Mr Camp to relinquish his committee chairmanship in the House next year, he said “It’s unlikely that will get into law,” Mr Rubenstein said of Mr Camp’s proposal before an audience at the SuperReturn International private-equity conference in Germany’s capital “I don’t think there is likely to be any tax-reform legislation passed by this Congress at all.” Private-equity-firm managers, including Mr Rubenstein and founders of other large buyout firms, have argued that carried interest they receive after investing in a company and later selling it should be treated as a capital gain Proponents of taxing these profits at a higher rate contend the money is compensation for services private-equity managers render when working on companies they take private The carried-interest debate bubbled up in the wake of the recession and financial-overhaul law later taken up on Capitol Hill But the issue so far hasn’t been addressed in any legislation passed by Congress Still, many private-equity managers expect at some point to receive the more stringent tax treatment Meanwhile, Mr Rubenstein said sovereign-wealth funds will soon become the largest contributors of investment capital to private-equity firms, surpassing giant pension funds Sovereign-wealth funds currently manage about $5.4 trillion, a number that will exceed $8 trillion by 2020, he said 20 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BUSINESS & FINANCE LinkedIn Updates Profile, Looks to China BY REED ALBERGOTTI WSJ: Who are LinkedIn’s potential users in China? Mr Weiner: There’s at least three ways to think about economic opportunity in China One is Chinese citizens—people living in China looking for economic opportunity A second are multinational [corporations] looking to expand their presence and hire the right talent to that successfully And then you’ve got companies that have had significant success in China that are expanding and are looking to identify and hire the right talent to make that expansion successful…It’s not just about multina- WSJ: Is all of this new content going to increase the amount of time individuals spend on the site? Mr Weiner: We actually generated more posts in the first two hours of the extension of this platform than the team had forecast for that entire day…We’ve continued to see a steady stream of the volume of posts that has exceeded our expectations and the engagement on those posts are doing very well Reuters LinkedIn Corp wants to be the place where workers of the world unite, but Wall Street isn’t convinced it’s achieving its goals fast enough In the past week, the company has unveiled two initiatives that show Chief Executive Jeff Weiner’s ambition to turn the professional networking site into a global bazaar for finding work, recruiting talent and keeping current with industry news LinkedIn said last week that its 277 million users can now publish their own articles on the website, a move that potentially transforms a person’s résumé into a portfolio with essays, work samples, video clips and employment history—and fills LinkedIn’s pages with free content And on Monday the company unveiled a Chinese-language version of its site With the new site, LinkedIn aims to bring major Chinese employers and the country’s 140 million professionals onto its networking platform LinkedIn’s latest quarterly results showed steady, if slowing, growth The new initiatives could help the company stretch the amount of time users spent on the site, a measure where it has lagged behind competitors like Twitter and Facebook According to comScore, visitors spent an average of 23 minutes on LinkedIn during the month of January, a figure that has been largely flat over the last year In an interview, the 44-year-old CEO discussed the company’s latest moves, and his vision for a post-résumé world Edited excerpts: employers? Mr Weiner: People are updating their profiles when they’re not just looking for jobs Because of the way the world works today, people seeking to business with you are going to be doing a search on your name Your LinkedIn profile is going to show up at or near the top of the search results That means you get a chance to put your best professional foot forward, completely independently of whether you’re seeking a job LinkedIn CEO Jeff Weiner, shown in September, says the company’s long-term vision is to create economic opportunity for the three billion people in the global workforce The company’s latest results showed steady, if slowing, growth tionals doing business in China but about successful Chinese companies expanding their presence on a global basis WSJ: Hiring and recruiting in China is very different from the U.S.; for example, in China, recruiters and professionals are more open about salaries How will LinkedIn adapt? Mr Weiner: That’s one of the reasons we’re so excited about Derek Shen, who is our newly announced president of LinkedIn China…that’s what he’s been asked to here He’s very much taken a startup mentality and we’re not just going to be localizing in terms of language…but also thinking about how we can best meet the needs of our members in China WSJ: Is there concern on the part of the state that Chinese nationals could use LinkedIn as an organizing tool? Mr Weiner: We’ve been able to operate now in China for years Our vision is well aligned with what the Chinese government is trying to accomplish right now: creating economic opportunity in a thriving middle class WSJ: Are there any restrictions for how people on mainland China can access the site? Mr Weiner: There may be We’re expecting requests to filter content We are strongly in support of freedom of expression and we are opposed to censorship but recognize that in order to obtain a license [in China], there will be requests to filter content and that’s going to be necessary for us to achieve the kind of scale that we’d like WSJ: Tell me how that works Will someone from the Chinese government be in regular contact with you about what can and can’t go on the site? Mr Weiner: This is the first time we’re available in a local language in China, and we just recently applied for our license, so we’re going to have a much better understanding in the weeks and months ahead WSJ: Is the site hosted in China? Mr Weiner: To date, it has not been For LinkedIn members outside of China, we will not be serving their data from within China For Chinese members who live within China, we’ll be serving that data [from China] WSJ: Will a person’s essay or portfolio eclipse the importance of their résumé? Mr Weiner: From my own anecdotal experience, when I’m meeting someone for the first time, they’ll say: ‘Hey I read your latest influencer post and thank you so much for sharing,’ or ‘Here’s what I thought.’ In addition to reflecting who you are as a professional, [an article] is a really compelling way to engage with other people and potentially people that you’re going to business with It’s not just about a title and a description of your job It’s about rich media, it’s about a video of that keynote [speech] you did…it’s about the general contractor uploading not a description of the dream house they just completed, but the pictures It’s about all the expertise and the experience that you’ve gained in that job that you’re willing to share WSJ: Updating your LinkedIn profile is often read as a sign that you’re looking for work Now you’ve got a reason to update it a lot more Will that raise some eyebrows among WSJ: Advertising accounts for about a quarter of LinkedIn’s revenue With more and more content, you expect ad revenue to increase as a percentage of the total? Mr Weiner: It’s certainly possible…I think that will be in part driven through engagement and through efforts like the expansion of our publishing platform We’ve been having some success with sponsored content and specifically sponsored updates WSJ: Give us a glimpse into LinkedIn’s long-term future Mr Weiner: With regard to networks, the goal there is to connect all professionals and we’re about 277 million right now…We believe the immediately addressable opportunity is 600 million professionals Longer term, the vision is to create economic opportunity for the three billion people in the global workforce We’re mapping the global economy…a profile for every member of the global workforce; a profile for every company in the world; every job offered by those companies, whether that’s full time or temporary or for-profit or volunteer; every skill required to obtain those jobs; a presence for every university or higher education organization that can help our membership acquire the skills necessary to obtain those jobs Huawei Turns Sights to U.S Smartphone Market BY SVEN GRUNDBERG BARCELONA—Locked out of the lucrative U.S telecoms network market, Huawei Technologies Co now has its eyes trained on America’s smartphone sector Huawei Chief Executive Eric Xu told reporters at the Mobile World Congress here Wednesday that the Chinese company’s focus will shift to the U.S this year—after not releasing new devices there last year—complementing its push in Europe and Asia “We’re going to make a change this year, and we’re going to continue to launch smartphones for the U.S market,” said Mr Xu, one of three senior executives who rotate through the CEO job Mr Xu is set to hand the baton to Guo Ping by the end of next month, under the company’s six-month rotating CEO system Mr Xu said the company won’t try to challenge the positions of Apple Inc and Samsung Electronics Co in the U.S Rather, the company sees itself competing with the large number of manufacturers fighting for market share under those two giants, he said This week, Huawei took the wraps off several new, high-end smartphones and tablets One was the seven-inch MediaPad X1—a razor-thin €300 ($412) tablet, powered by Google Inc.’s Android operating system, that its executives repeatedly compared with Apple’s high-end iPad Mini Huawei’s push into the largely high-end U.S market comes as several device makers like Nokia Corp and BlackBerry Inc are turning their eyes to faster-growing, entry-level smartphone markets in places such as India and Africa While Huawei will continue to sell ultracheap Android smartphones in these markets, Mr Xu said the cheap phones aren’t its main focus Huawei’s smartphone sales largely stem from countries in Asia China alone accounts for 40% of its smartphone sales “We’re not interested in the low end of the market Only by pursuing high end can we pursue our growth,” he said Consumer devices account for an increasing part of the Chinese company’s revenue Last year, they accounted for 23%, or about $9.1 bil- lion, of its overall revenue, the company said This year, it aims to increase smartphone sales to between 80 million and 100 million devices, from 50 million last year Its range of tablets and smartphones largely run Android’s operating system The company has also joined with Microsoft Corp to make Windows Phone-powered devices Sales of these haven’t been satisfactory, Mr Xu said Currently, Huawei’s smartphone sales largely stem from countries in Asia China alone accounts for 40% of the company’s smartphone sales, while other major markets include the Middle East and Africa, Latin America and Europe In a bid to improve its brand awareness in the U.S., Huawei last year signed several sponsorship deals with the likes of U.S pop stars the Jonas Brothers The company has also recruited several foreign executives to help it transition from a lowcost maker of telecom equipment to a global maker of its own-brand products Those include Colin Giles, a former Nokia veteran, who now runs the company’s consumer group “For sure we need to build the brand, we accept that,” Mr Giles said in an interview “Also we need to improve distribution and get good at retail.” That is all the more challenging in the U.S., where lawmakers have effectively shut Huawei out of the wireless-equipment market A congressional report in 2012 concluded that Huawei posed risks to national security, alleging that the companies’ equipment could become a vehicle for Chinese spying The company has called the report misleading —Sam Schechner contributed to this article THE WALL STREET JOURNAL Thursday, February 27, 2014 | 21 BUSINESS & FINANCE Rolls-Royce Holdings Preps New Jet Engines BY MARIETTA CAUCHI The geared-turbofan technology is designed to be more efficient than the company’s most recent turbine engine terview after presenting Airbus’s full-year earnings in Toulouse, France “We haven’t made a decision on re-engining any long-range aircraft yet.” Rolls-Royce shifted away from the market for smaller engines that power narrow-body jets to focus on long-range engines for wide-bodied aircraft such as Boeing’s 787 Dreamliner and Airbus’s A380 superjumbo, along with the A350 The move followed the ending of a joint venture with Pratt & Whitney and a decision not to participate in the Airbus A320neo (for “new engine option”) modernization project Industry insiders and analysts have suggested that Rolls-Royce’s move away from the narrow-body jet market was shortsighted as demand for the short-to-medium-haul planes like the Airbus A320 family and the Boeing 737 series has triggered increased rates in production from both manufacturers Mr Enders said that John Rose, the predecessor of Rolls-Royce CEO John Rishton, “effectively managed them out of the single-aisle business because he didn’t assess the situation and our appetite for the A320neo correctly.” Rolls-Royce said Tuesday it had moved away from but “not out” of the market and if an opportunity came along to develop a new smaller engine, it would seriously consider it “But we don’t see that happening until well into the next decade,” a spokesman for Rolls-Royce said The engine company has long been separate from Rolls-Royce Motor Cars Ltd., now a unit of BMW AG —David Pearson contributed to this article Reuters LONDON—Rolls-Royce Holdings PLC on Tuesday unveiled details of its next generation of engine designs, which it hopes will be used to power long-range commercial aircraft for Airbus Group NV and Boeing Co The London-based engine maker is turning to geared-turbofan technology for the new engines They are designed to be more efficient than Rolls-Royce’s most recent turbine engine, the Trent XWB Rival Pratt & Whitney, a unit of U.S.-based United Technologies Corp., pioneered the technology The first new engine, called the Advance, is expected to be ready by the end of the decade; the other, the UltraFan, is to be ready by 2025 The UltraFan is meant to build on the Advance and offer about 10% better fuel consumption and emissions than the Trent XWB Rolls-Royce is the world’s secondlargest maker of commercial and military jet engines after General Electric Co., the exclusive supplier for Boeing’s coming twin-engine 777X That jet is due to enter service in 2020 Rolls-Royce also competes with Pratt & Whitney Rolls-Royce’s Trent XWB is the only engine used for the long-range Airbus A350, which is scheduled to enter commercial service this year Airbus Group NV’s chief executive, Tom Enders, said it was interesting that Rolls-Royce had announced plans for the new engines “The pacemaker so far has always been the airframe manufacturer,” Mr Enders said during an in- Airbus is moving to speed production of its A320 single-aisle aircraft Above, an A320 from Air Malta in 2012 Airbus Turns Back to Supporters Continued from page 17 aircraft sales But it has welcomed this funding in the past Also irking the company, Germany recently decided to scale back its orders for Eurofighter combat jets—which are made by Airbus, BAE Systems and Italy’s Finmeccanica SpA—because of domestic budget pressures Mr Enders said this contract is being renegotiated with German authorities Airbus, meanwhile, is moving to speed production of its A320 singleaisle jet, after posting a strong improvement in 2013 earnings thanks to a sharp increase in aircraft deliveries The move to a production rate of 46 A320s a month from 42 starting in 2016 was dictated by a swelling order backlog for the short-to-medium-haul planes that means that airlines ordering now are unlikely to get them before the end of the decade Boeing is also ramping up production of its competing narrowbody 737 family to 47 a month by 2017 from 42 in the first half of 2014 The company has been cautious about raising A320 production because it didn’t want to strain its supply chain when the company is preparing to launch a re-engined version of the plane in 2016 that has already captured 2,610 orders Airbus reported a 21% surge in operating income before nonrecurring items—a key indicator of the company’s underlying performance—to €3.6 billion on margin im- provements at the company’s commercial-aircraft division Its group operating profit margin increased to 6%, still shy of the 7% to 8% target set for 2015 Revenue was up 5% at €59.3 billion, and net profit rose 22% to €1.47 billion despite €913 million in charges that included €434 million against newly identified costs for the A350, which is due to go into service by the end of this year Airbus was cautious on the outlook for 2014, saying it expects a “moderate” growth in operating margin It also said that the A350 program remained “challenging” and that any delays could lead to extra provisions The A350 is at its most critical stage as the manufacturing process gets under way Rusal Plans to Build Indonesian Refinery BY ANDREAS ISMAR JAKARTA, Indonesia—Aluminum producer United Co Rusal PLC accepted Indonesia’s controversial move to restrict the export of mineral ores and said it would build a refinery to comply with the country’s new laws The laws have raised concerns among global mineral competitors But Rusal Chief Executive Oleg Deripaska said Indonesia’s stable economy would enable the country to make the transition from mining to higher-value processing Rusal is the world’s largest aluminum producer “I understand the government is now facing pressures, but I truly believe this law is a win-win and beneficial in the long run for the country,” Mr Deripaska said In addition to the broad ore-export ban, Indonesia is imposing a progressive export tax for mineral concentrates—rising each year until hitting 60% by late 2016—to force mining companies to refine the concentrates Coal is excluded from the restriction list Copper companies Freeport-McMoRan Copper & Gold Inc., the biggest taxpayer in Indonesia, and Newmont Mining Corp have said the obligation to process copper with higher purity levels was economically unfeasible and view the export tax on copper concentrates as a breach of their contracts with the government Small domestic mining companies have pressured the government to relax the rules, citing their lack of financial resources and the potential of thousands of lost jobs Though the export law was issued in 2009, slow implementation led to a belief that the government wouldn’t follow through and companies held off on investing in processing facilities It took effect in January and companies are now realizing that the government is serious, Mr Deripaska said “If you introduce the ban and then revoke it, the second time you it, people won’t believe you,” said Maxim Sokov, the first deputy CEO of En+ Group, Rusal’s singlebiggest shareholder Indonesia is a major producer of mining commodities such as nickel ore, bauxite, tin, copper and thermal coal The commodity boom in the 2000s boosted mining, but small margins—particularly for small local mining companies—contributed to land degradation that cost the government, Mr Deripaska said The ban will help pare environmental costs as small mining companies curb production and support weak aluminum prices in the medium term by lowering global supply of ores, Mr Deripaska said He warned that tight supply in the physical market could push delivery premiums, the extra cost paid by buyers to have the aluminum delivered, to more than $500 a ton by the end of the second quarter from $400-$450 a ton currently The price of aluminum, used in items as diverse as beverage cans, automobiles and aircraft, hovers around $1,700 a ton That is down from about $2,100 a ton a year ago and well below its mid-2008 peak of nearly $3,500 Mr Deripaska forecast prices for aluminum would rise to $2,500 a ton and for alumina to between $425 and $450 a ton in the next 2.5 years, estimating that global demand would rise 6% annually in the next three to four years That growth rate represents 3.5 million tons of additional demand for aluminum, Mr Deripaska said, part of the reason that Rusal signed a memorandum of understanding Tuesday to create a joint venture with Indonesian company Arbaya Energi to develop a processing facility that will turn bauxite into alumina, an intermediary product used to produce aluminum Rusal, based in Russia, didn’t provide a value for the project Indonesia’s coordinating minister for economic affairs, Hatta Rajasa, said the project might represent an investment of about $3 billion, with about half of it for the alumina plant and another half for supporting infrastructure, such as roads, ports and power plants in West Kalimantan province “We’ll conduct feasibility studies by the end of this year and after that, we can start the project The construction phase usually takes around 2.5 years,” Mr Deripaska said The annual output might reach 1.5 million tons of alumina Indonesia is a country of some 17,000 islands and home to more than 240 million people, but much of the country is minimally developed “It’s clear that Indonesia needs industrialization,” Mr Deripaska said “Domestic aluminum consumption is about 700,000 tons a year In 10 years, it can go to 2.5 million tons We like this market.” Indonesia’s vast reserve of thermal coal—used to generate steam to help turn bauxite into alumina—will make the plant efficient, he said Rusal in 2007 signed a memorandum of understanding with diversified miner Aneka Tambang to develop a 1.2-million-ton alumina plant but didn’t follow through because of the global financial crisis ADVERTISEMENT The Mart CAPITAL AVAILABLE LOAN, BANK GUARANTEE/ SBLC FOR LEASE We have Genuine provider for loan at flexible APR of 3% and BG/SBLC for lease at 5+2% Serious brokers and Borrower only We also secure funding, private lenders,project loans for 3% APR Email: robert.clapton@rocketmail.com Contact: Mr Robert Clapton Tel: + 44 777-650-6313 TRAVEL 22 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BUSINESS & FINANCE BY KATHY CHU AND LAURIE BURKITT As China’s slowing economy dents sales growth of everything from personal computers to Oreo cookies, some companies are finding growth in a surprising place: chewing gum Gum is growing at double-digit rates in China, igniting a turf battle for China’s chewers Snack food maker Mondelez International Inc entered the fray in 2012 with a sugar-free brand and a high-profile campaign with a Taiwanese celebrity Meanwhile, market leaders William Wrigley Jr., a division of Mars Inc., and Korea’s Orion Group have expanded distribution and offered flavors such as grapefruit, cucumber and tea to encourage China’s swelling middle class to chew more Rising disposable incomes in China are increasingly making gum a mainstay in the pockets of young adults, the key gum-chewing segment But companies’ aggressive marketing of gum as a way to improve oral health, increase concentration and lower stress levels is also winning over consumers In the last two years, ad spending on chewing gum has more than doubled to 7.55 billion yuan ($1.24 billion), before factoring in discounts given on advertising rates, according to Nielsen-CCData Qu Zhu, 30 years old, a Beijing investment banker, typically buys a 40-piece container of chewing gum each month “Chinese food has so much garlic,” he said “I need to freshen my breath after eating.” In a TV commercial in China for Extra gum, a man eating crispy fried noodles at a restaurant complains to the female chef that it could break his teeth She tells him his teeth aren’t good, and offers him a pack of Extra, which Wrigley promotes as “caring about teeth, caring even more about you.” While nearly all sales of packaged food have been affected by China’s weakening economy, gum is still seeing “dynamic growth” due to manufacturer promotions and rising consumer demand, according to Euromonitor analyst Vera Wang Wei Gum sales grew nearly 14% in China last year to $2.8 billion, nearly double the level of 2009 Still, annual growth has moderated since a recent 2011 peak of 20% Even as China’s economy slows, “my expectation is that gum will be quite resilient,” said Torsten Stocker, a partner at A.T Kearney, a consulting firm Gum isn’t popular with everyone Zhang Lu, a 22-year-old student in Beijing, said she’s afraid that chewing gum will build up her jaw muscles and make her face look fat “You know Chinese girls care about their shapes,” she said Michael Yeung, president of Wrigley Asia Pacific, said “there’s no science” behind this concern A rapidly expanding market for chewing gum in China comes even as the treat’s sales have weakened or even declined in mature Western markets, despite the introduction of newfangled products such as caffeinated gum The double-digit growth in China “is one of the reasons we launched there,” Mondelez Chief Executive Irene Rosenfeld told analysts in November Mondelez, after launching its Stride brand in China in the third quarter of 2012, hired Taiwanese celebrity Ke Zhen Dong as its spokesman and sponsored the popular Chi- Wrigley’s Gum Makers Enjoy Boom In China Sales Wrigley expanded distribution to encourage the Chinese to chew more nese talent show “Super Boy.” Mondelez also installed over 100,000 checkout counter displays for the gum in 10 months For the maker of Oreos, gum has been a “phenomenal success,” generating about $100 million in annual sales, said Ms Rosenfeld Confectionery company Orion said it posted sales of more than trillion won ($932 million) for the first time in China in 2012—and continued its strong growth last year—on the back of its top-selling product there: Xylitol chewing gum Orion, which also sells potato-flavored treat Yegam and Choco Pie snacks in China, first entered the market in 2003 and has been growing at a 30% annual rate in the country, it said in its 2012 annual report Because gum consumption is still low in China compared with other countries, companies see “large potential” for growth, said Cherry Dai, a project manager at SmithStreet, a consulting firm “Girls want to eat gum to stay slim,” said Ms Dai Last year, the average Chinese consumer chewed $1.80 worth of Choosing to Chew Spending on gum marketing in China, in billions of yuan* Retail gum sales, change from previous year 20% CHINA 7.5 billion 10 WORLD U.S –10 2008 ’09 ’10 ’11 ’12 ’13 2009 ’10 ’11 ’12 billion yuan = $164 million *Ad spending for TV, newspaper, magazine and radio; Figures exclude discounts given on advertising rates Sources: Nielsen-CCData (marketing); Euromonitor International gum By comparison, Britons chewed more than four times this amount, Americans more than six times and Japanese 6.5 times, according to Euromonitor The biggest challenge, gum makers say, is to convert more consumers, especially those in lower-tier cities, into habitual gum chewers The Wall Street Journal “Gum is an impulse-purchase item, and if you don’t see it, you don’t buy it,” said Mr Yeung of Wrigley, which now sells gum in more than 2.1 million stores in China, up from 1.8 million in 2008 “By making it more available in cities, it will help us grow in economically challenging times.” Singapore Aims to Become the Next Silicon Valley BY NEWLEY PURNELL SINGAPORE—Singapore is pulling out all the stops to build its own version of Silicon Valley as it attempts to create a startup hub for Southeast Asia Excited by deals such as Facebook Inc.’s $19 billion agreement last week to buy messaging company WhatsApp Inc., Singapore’s policy makers and technology entrepreneurs are betting that one day a tech giant could swoop down to grab one of its own homegrown startups Venture-capital tech investments in Singapore last year outstripped those in Japan, South Korea and Hong Kong The city state, with its population of just 5.4 million, isn’t quite Silicon Valley Singapore has yet to produce anything like a Google Inc or Facebook, much less a service like China’s messaging app WeChat, with 272 million monthly active users It has had mixed success in trying to kick start innovation in various industries including biotechnology, media and entertainment Still, investors say the technology ecosystem here is becoming more active One concern is that insufficient entrepreneurial spirit among young Singaporeans and the government’s financial largesse could inadvertently enable some startups to limp along on state funds, some analysts say In recent years, the Singapore government has been trying to fund local technological innovation by investing some 100 million Singapore dollars, or roughly US$79 million, for early-stage startups as part of the S$16 billion it has pledged for scientific research and development Well-known U.S venture-capital firms such as Andreessen Horowitz have funded local startups, including video site Viki, which Japanese online retailer Rakuten Inc bought for $200 million in September Rakuten also agreed earlier this month to acquire Cyprus-based messaging app Viber Media Inc Another Singaporean tech company attracting investors is RedMart, an online grocery-delivery service founded in 2011 that has raised more than $10 million from investors including Facebook co-founder and Singapore resident Eduardo Saverin One hotspot in Singapore’s fledgling startup scene is a seven-story, renovated factory building known as Block 71, west of downtown On a re- cent Friday evening, a few dozen technology entrepreneurs gathered to drink beer, nibble on cheese and almonds, and discuss their startups Hugh Mason, a 47-year-old British entrepreneur, says there are about 100 startups and more than $1 billion of investment under management in the building The government has been trying to fund local technological innovation In 2010, Mr Mason and his friend, 38-year-old Singapore native and anti-spam pioneer Meng Weng Wong, co-founded Singapore’s Joyful Frog Digital Incubator, which hosts frequent gatherings at its headquarters in Block 71 Mr Wong, decked out in a threepiece suit and carrying the company’s green stuffed frog mascot Smoochy on his shoulder, moved about the room, introducing out-oftown visitors to regular attendees A sign read, “Silicon Valley isn’t a place It’s an idea.” ’13 Venture capital invested in Singaporean tech companies by funds last year totaled $1.71 billion While that is behind China’s $3.46 billion, it is ahead of Japan, South Korea and Hong Kong, according to data from Asian Venture Capital Journal of Hong Kong PricewaterhouseCoopers LLP and the National Venture Capital Association put venture funding for software companies alone in the U.S at $11 billion last year Still, funding devoted to Singapore’s tech companies, including from the government, skyrocketed last year to account for 19% of funding for Asia—up from just $27.3 million, or 0.3%, in 2011 Brad Templeton, a Silicon Valley-based Internet pioneer who consults with Google on self-driving cars, said while Singapore’s tech scene seems more active now than it was in previous years, he added that “too much government can hurt a startup community rather than help it.” In its policies, Singapore’s government has attempted to mimic Israel, which has developed a robust technology industry over the years One government program designed to assist early-stage startups is the “Technology Incubation Scheme,” which began in 2010 Under that program, the government co-invests as much as 85% of capital in select startups, capped at the equivalent of S$500,000 Technology incubators—organizations that provide mentoring and physical space—pitch in the remaining 15% and are allowed to buy out the government’s stake after three years There are now 15 incubators and more than 100 startups participating in the program “In the past, I might have funded two or three startups a year Now I’ve been doing one a month,” said Leslie Loh, who heads Singaporean venture-capital firm Red Dot Ventures, which was launched in 2011 Douglas Abrams, who has worked in Singapore’s technology venturecapital industry since 2000, said there has been a marked increase in the value of Singaporean “exits”— when startups are acquired or sell stock to the public Mr Abrams, now chief executive of technology venture-capital firm Expara, said that last year some 20 companies had exits totaling more than S$400 million, compared with about S$50 million in previous years THE WALL STREET JOURNAL Thursday, February 27, 2014 | 23 BUSINESS & FINANCE China Lights Electric-Car Spark China and global companies are taking new steps to fulfill the country’s ambitions for electric cars, which so far have exceeded Beijing’s grasp By Colum Murphy in Shanghai and Joanne Chiu in Hong Kong Chinese auto makers BYD Co and BAIC Motor Co on Wednesday won approval from Beijing’s municipal government to sell electric cars in the city Shares of BYD, which is partially backed by Warren Buffett, jumped 9.6% in Hong Kong BYD’s all-electric e6 crossover has been sold mainly in the southern Chinese city of Shenzhen, where the company is based Most of the vehicles operate as taxicabs and buses Meanwhile, Switzerland’s ABB Ltd said it would make and market home, wall-mounted, electric-car chargers in China, part of an effort to address a lack of charging stations and other infrastructure necessary if electric cars are to hit China’s roads in serious numbers Chunyuan Gu, ABB’s China chairman and president, said he believed demand for cars and charging equipment will take off after a slow start “Either you believe or you don’t believe,” he said “What’s difficult to predict is how fast the volume will come.” China’s government wants 500,000 hybrid and electric vehicles on its roads by next year and five million by 2020 But only around 17,600 such vehicles were purchased in China last year, including hybrid and pure-electric cars and buses It is likely that no more than 50,000 such vehicles are in use in China China long has said it wanted to lead the world in developing and selling electric cars, in part to reduce its reliance on oil and improve air quality Big sections of China again were covered by thick, polluted air this week, in large part because of automotive emissions Global automotive companies have been drawn to China’s vast potential; the country recorded about 22 million auto sales last year Electric-car maker Tesla Motors Inc last month said it would sell its Model S sedan in China starting around $120,000 Tesla is aiming its car at the luxury segment But Mr Gu said government incentives were needed if Beijing wanted to reach the mass market China in September rolled out an incentive program under which buyers of electric cars can receive up to 60,000 yuan, or about $9,800, in subsidies Buyers of certain gasoline-electric hybrids can get up to 35,000 yuan Some local governments also offer incentives Building a suitable charging infrastructure also is a must if elec- Underpowered China’s electric-vehicle market is still in its infancy SALES IN NUMBER OF VEHICLES Electric-only vehicles Plug-in hybrids 2011 2012 2013 5,579 Not available 11,375 1,416 14,604 3,038 Total passengercar sales 14.5 million 15.5 million 17.9 million Source: China Association of Automobile Manufacturers The Wall Street Journal trical vehicles are to take off, Mr Gu said ABB this month announced a six-year agreement to supply home, wall-mounted fast chargers for Denza cars Manufactured by a joint venture of BYD and Germany’s Daimler AG, the Denza will go on sale this year Denza didn’t respond to requests for comment “I am very confident that once China overcomes all these hurdles, the volumes will increase faster than we can project,” Mr Gu said ABB reported a “solid perform- ance” in China for last year, despite “a mixed business climate and market environment.” China revenue rose 7.7% to $5.6 billion as the company benefited from the country’s greater emphasis on stable economic growth and low-carbon, sustainable development ABB invested $136 million in China last year BYD this week also received approval to sell its plug-in hybrid, the Qin, in Shanghai as part of a trial The company declined to provide details about plans for rolling out its vehicles in Beijing and Shanghai BAIC couldn’t be reached for comment BYD was a pioneer in developing electric cars in China, but has struggled to win international recognition for its green-vehicle technology A Beijing government official said the city would provide a subsidy for the sale of BYD’s e6 cars even though they are built in Shenzhen The official said Beijing aimed to have in place around 1,000 charging units in some 100 stations throughout the city by year-end, up from 20 stations today “It was previously mission impossible for ordinary consumers to use BYD’s electric cars in Beijing because of the many approvals that needed to be got,” said Leping Huang, an analyst at Nomura —Rose Yu in Shanghai contributed to this article Japan Post Outlines Plan on Way to IPO TOKYO—Japan’s postal system, which runs one of the world’s biggest banks as well as Japan’s largest insurer, announced a nearly $13 billion investment plan Wednesday that it said would pave the way for a public stock offering next year A share offering of Japan Post Group, which government officials have said could raise some $40 billion, would be one of the largest ever But much remains uncertain, including whether the publicly traded company could engage in bread-and-butter financial businesses such as corporate and mortgage lending To entice global investors, Japan Post needs to demonstrate how it would pivot away from its more than centurylong history as a rule-bound government entity, said Ed Rogers, chief executive officer of the Tokyobased Rogers Investment Advisors “The prospect of a Japan Post [initial public offering] immediately poses the question of what kind of mandate or mission such a privatized company with trillions in assets would have,” Mr Rogers said “Certainly, as an entity responsible to shareholders, it cannot simply afford to let the cash sit idle.” Japan Post Chief Executive Taizo Nishimuro said Wednesday that he wanted to be ready for a listing by March 2015, and suggested that the government could set the framework as soon as this summer Officials have said they envisioned listing two-thirds of the group “We haven’t agreed on anything, including whether only Japan Post Holdings will be listing or its two financial units will also be listing,” Mr Nishimuro said as Japan Post announced its first medium-term business plan The business plan included only modest steps into new areas Japan Post said it would look at expanding Bloomberg News BY ATSUKO FUKASE Japan’s postal system covers the country by motorcycle and truck—not to mention 24,000 outlets Officials have estimated an IPO could raise $40 billion its e-commerce activities and developing more commercial real estate to take advantage of its vast nationwide landholdings Much of the nearly $13 billion in investment over the next three years is aimed at polishing up Japan Post’s basic operations and facilities, which often lag behind those of private competitors Nearly $5 billion is earmarked for upgrading the group’s computer systems The huge investment will likely give Japan’s economy a boost, but it is also feeding worries among private-sector banks and insurers They cite the potential for unfair competition from an institution with 24,000 outlets in all corners of Japan Last year, the American Chamber of Commerce in Japan expressed concern about Japan Post’s bank and insurance units expanding their presence Some companies stand to gain from a more business-oriented Japan Post In July, American Family Life Assurance Co., the company known for the Aflac duck, formed an alliance with the Japanese group to sell cancer insurance at post offices To put Japan Post’s size in perspective, on the list of Fortune Global 500 companies, it is No 13 in revenue behind nine oil or resource companies, two auto makers and Wal-Mart Stores Inc In Japan, only Toyota Motor Corp is larger by revenue Japan Post has improved its balance sheet with the help of cost cuts, recording a net profit of nearly $4 billion in the nine-month period ended in December However, that profit came overwhelmingly from its banking business, while its postalservice and insurance business were only slightly in the black Japan has privatized several former state-owned monopolies in recent decades, including the state railway and, telephone company The publicly listed descendants of those monopolies generally have held their own, giving the government confidence to move ahead with a listing of Japan Post to raise funds for reconstruction of areas hit by the 2011 earthquake and tsunami Government officials offered the $40 billion estimate for the Japan Post IPO size last year If it is that size, the listing would be larger than the current record holder for an IPO, the 2010 offering of Agricultural Bank of China Ltd at $22.1 billion Any offering of that size is bound to get global investors’ attention, but getting their money is another matter Many in the market say Japan Post’s allure will depend on its ability to free itself from restrictions long imposed by its stateowned status The postal bank is barred from making major loans and can’t accept deposits of more than ¥10 million, a little less than $100,000 Japan Post has plowed most of its depositors’ funds—70% of its nearly $3 trillion in assets—into Japanese government bonds, making it the largest creditor of the Japanese government “Unless Japan Post announces a more-specific business plan before the IPO, it may be difficult to attract investors next year,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management In an interview last October, Mr Nishimuro, the Japan Post chief executive, said the group would have more freedom to enter new businesses if the government reduced its share below 50% “I have to say that’s our main purpose for a listing,” he said But the 78-year-old CEO, who earlier led Toshiba Corp and the Tokyo Stock Exchange, acknowledged that the company still had a public role to play and said he wouldn’t close unprofitable post offices He said the company had a duty to maintain services that people need Fund managers say that if interest in Japan Post from individual and institutional investors flagged, government organizations, including public pension funds, would likely absorb a big chunk of shares Steelmaking Expansion Undermines Beijing’sAim BY CHUIN-WEI YAP BEIJING—China’s largest steelmaking province has been adding twice as much new production capacity as it has shut down, underscoring a challenge for Beijing’s campaign to reduce overcapacity and air pollution Official efforts to eliminate outmoded steel capacity in Hebei province haven’t been effective so far, a senior official with a unit of Hebei Iron and Steel Group Ltd., China’s largest mill, said Wednesday Up to the end of last year, steel mills in Hebei were adding new capacity at a pace of around 30 million tons a year, twice the average 15 million tons of outdated capacity that the government wants to shut each year until 2017, said Wang Jiguang, marketing director at Hebei Iron and Steel’s sales unit The central government has identified eliminating industrial overcapacity as a priority for this year, seeing the problem as a wasteful drag on growth Hebei is a proving ground for the campaign An industrial province the size of Oklahoma that surrounds the nation’s capital, Hebei accounts for a quarter of China’s steel and has been in the government’s cross hairs for contributing to an unruly steel market and filthy air Steel-making capacity in Hebei was growing even as Beijing was urging steelmakers nationwide to restrain “the blind expansion of capacity.” “This target of eliminating 15 million tons of outdated capacity a year, compared to our addition of new capacity of 30 million tons a year, indicates that the speed of elimination is not quite fast enough to digest the outdated capacity,” Mr Wang said Mr Wang’s remarks, made publicly in an apparently unscripted address to a conference attended by industry executives from around the world, reflect an unusual degree of candor from an official about the government campaign President Xi Jinping made an example of Hebei officials last fall during a televised Mao-style “self-criticism” session, getting them to admit they had pursued growth at the expense of the environment and other concerns China’s steel industry is deeply entrenched in its economy In Hebei alone, job losses could run as high as 200,000 if all state-required cuts are carried out, according to some analysts’ estimates So far, the local government has used showy displays of demolishing old steel factories, taking down 6.8 million tons in November and 8.2 million tons in February However, these facilities had already stood empty for more than a year, Mr Wang said “It’s just the smaller, more outdated steel facilities that have been shut,” Mr Wang said The statebacked China Iron and Steel Association corroborated Mr Wang’s view in an earlier interview Steel factories have increasingly become a target for official ire amid intense pollution Hebei suspended steel production this week as it sought to help Beijing roll back heavy smog Mr Wang said the central and local governments’ efforts to cut steel capacity would likely succeed only “in a few years.” 24 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BUSINESS & FINANCE Companies Pay Up Forex Trader FXCM For Cybersecurity Settles U.K Allegations BY DANNY YADRON BY JENNY STRASBURG AND MAX COLCHESTER LONDON—Foreign-exchange trading firm FXCM Inc agreed to pay fines and refunds totaling almost £10 million ($16.7 million) to settle allegations by a U.K financial regulator that the company withheld profits from clients and failed to inform British authorities that it was under investigation in the U.S The Financial Conduct Authority said that U.K units of FXCM withheld £6 million from customers on foreign-exchange transactions between August 2006 and December 2010 The regulator said the broker pocketed profits when exchange rates moved in its customers’ favor while a trade was in process, but it passed on losses that occurred on other trades FXCM, which is based in New York and is publicly listed on the New York Stock Exchange, is a dominant broker in online foreign-exchange trading for retail clients and serves banks, hedge funds and other asset managers The company in 2012 sought to boost its institu- tional-trading business by investing in, and trading with, an electronictrading platform called FastMatch, in partnership with Credit Suisse Group AG In trades with retail customers, FXCM matches orders electronically with quotes from more than a dozen banks and other socalled market-making firms As part of its settlement, FXCM agreed to pay £4 million in fines plus almost £6 million to refund money to U.K clients In a statement, FXCM played down the impact on customers as “typically very limited,” with individual traders suffering an average hit of $3.70 apiece because of the practices over the four-year period addressed in the settlement “It’s not like this was a major source of profit,” FXCM Chief Executive Drew Niv said in an interview Wednesday, adding that FXCM operated similarly to competitors when it pocketed price improvements instead of crediting customers FXCM changed its practices in 2010 to pass along those price improvements to customers, Mr Niv said “This is how the system was set up As far as we were concerned at the time, the customer traded with us, and we hedged,” Mr Niv said “The only thing we held back on was the price improvement We still gave the customer the best price out of multiple market makers.” FXCM said it had provisioned $15 million in the third quarter of 2013 for this matter The FCA became aware of the practice in 2011 But it was unaware that U.S authorities had begun their own probe into the matter a year earlier In 2011, FXCM agreed to pay more than $14 million to settle allegations from U.S market regulators that the company had failed to supervise customer accounts As a result, regulators said, FXCM customers suffered detrimental pricing on trades FXCM’s failure to alert the FCA breached requirements that businesses be open and cooperative with the U.K regulator “I’m not contesting that,” Mr Niv said, adding that an FXCM executive at the time responsible for informing the British regulator mistakenly “thought he had.” Continued from first page help Americans hide funds in undeclared Swiss accounts In a report released Tuesday, the subcommittee described the bank as a willing participant in its clients’ attempts to evade taxes, saying it set up a branch at Zurich’s airport so customers could attend to banking en route to ski vacations On Wednesday, Mr Levin opened the hearing by noting that despite an ongoing crackdown, “the sad truth is that the era of bank secrecy is not over.” Mr Levin said that as U.S authorities began scrutinizing the bank in 2008, Credit Suisse initially promised it would “clean up” its business with Americans But, Mr Levin said the bank moved slowly to address the issue and “was holding back about how bad the problem was.” Mr Levin and other lawmakers also expressed frustration with the DOJ for failing to act more aggressively to make Credit Suisse accountable In written remarks prepared for Wednesday’s hearing, however, two top DOJ officials defended their strategy for pursuing U.S tax evasion, saying the agency has pressed charges against 73 holders of offshore accounts and 35 bankers since 2009 Credit Suisse is one of about a dozen Swiss banks under DOJ investigation for allegedly helping American clients hide assets using Swiss accounts Since 2008 the bank said it has wound down many U.S accounts, with the exception of a remaining 3,500, and has stopped taking new American clients for its Swiss private-banking business Mr Levin repeatedly asked why Credit Suisse won’t provide information about customers the bank recruited within the U.S Mr Dougan and three other executives, including the bank’s general counsel, said the bank can’t provide extensive information about U.S clients until the Senate ratifies Agence France-Presse/Getty Images CEO Concedes Bank Misconduct CEO Brady Dougan is sworn in before a Senate panel on Wednesday an amended 2009 double-taxation treaty between the U.S and Switzerland The bank has noted the protocol already has been approved by the Swiss Parliament The Senate has yet to ratify the agreement amid opposition from one lawmaker, Sen Rand Paul (R., Ky.) A spokeswoman for Mr Paul didn’t immediately respond to a request for comment Credit Suisse executives also were quizzed at length about evidence in the Senate report that bank management may have sought to artificially bolster the performance of its Swiss private-banking business in financial reporting for 2012 by augmenting its so-called net new assets figure Like other Swiss banks, Credit Suisse has seen money generally flow out of its Swiss private bank from clients in many regions as those international customers seek to comply with laws at home Credit Suisse executives acknowledged at the hearing that it is conducting an internal review of the matter There is so far no indication figures were inaccurately reported to the public, they said “I’m not trying to minimize it,” Mr Dougan said, “but it’s a detail.” Mr Levin quickly responded: “You may call it a detail, I’d call it something investors would presumably look at.” The Senate report estimates Credit Suisse had at one time some 22,000 American clients, storing 12 billion Swiss francs ($13.5 billion at current exchange rates) at the bank The report notes that clients associated with about 1% of the American accounts have been identified to U.S authorities Mr Dougan and his colleagues testifying Wednesday said a significant portion of the U.S.-linked assets cited in the report have been deemed tax compliant The executives also said more than a third of the accounts cited in the report held less than $10,000 In early 2009, Credit Suisse rival UBS reached a deferred prosecution agreement with the DOJ, admitted to helping American clients evade taxes and agreed to pay $780 million UBS ultimately handed thousands of names of clients to U.S authorities Credit Suisse is expected to eventually reach a settlement with the DOJ that exceeds the amount paid by UBS Few know the costs of hacking better than Robert Carr Since cybercriminals gained access to more than 100 million credit- and debit-card numbers from Heartland Payment Systems Inc in 2007, Mr Carr, its chief executive, has quadrupled his security budget Heartland also paid $150 million in fines and legal costs from the breach and suffered damage to its reputation as a payment processor “We’ve done a lot of things since the breach that we didn’t before the breach,” Mr Carr said in a recent interview, pointing to reducing the number of computer systems that process valuable card data, while adding more encryption and system-monitoring tools Heartland’s experience underscores long-standing questions over the costs and benefits of cybersecurity The Obama administration stoked the debate earlier this month by issuing new guidelines urging companies in important industries such as energy, banking and telecommunications to more to protect and monitor their networks, and to train employees Some business groups criticized the proposal, saying it would push them to spend money for uncertain benefits Increased spending might not make sense for an individual firm, they say, even if it might make the nation safer The White House proposal is “propublic and not procommercial,” said Larry Clinton, president of the Internet Security Alliance, a business group whose members include General Electric Co., Wells Fargo & Co and Verizon Communications Inc Cybersecurity measures must be cost-effective for an individual company, or be “supported by some sort of economic incentive,” he said Mr Clinton said the interconnected global economy creates “massive economic incentives to be insecure.” For instance, lengthy international supply chains can offer savings for manufacturers, but can open doors for hackers The same goes for sprawling, interconnected internal networks that allow companies to manage assets from afar The vulnerability has been on display recently, as retailers disclosed thefts of customer data In the most prominent example, Target Corp said hackers stole 40 million credit- and debit-card numbers, along with passcodes, from its stores The thieves gained access to Target’s cash-register systems through a refrigeration contractor in Pennsylvania Obama administration officials say they understand companies’ concern “The amount of cash you have doesn’t change,” said Phyllis Schneck, the Department of Homeland Security’s deputy undersecretary for cybersecurity Ms Schneck said Washington’s guidelines will prompt “some really hard discussions” in board rooms about the risks of cyberattacks The debate will be joined this week at the annual RSA Conference, the equivalent of the Detroit auto show for the anti-hacker industry More than 400 cybersecurity companies will display their wares at the San Francisco event Companies wrestle daily with the question of how much security is enough Global cybersecurity spending by critical infrastructure industries was expected to hit $46 billion in 2013, up 10% from a year earlier, according to Allied Business Intelligence Inc “Large and small companies perform cost-benefit analyses for every dollar spent,” lobbyists for the wireless and cable industries wrote in a December letter to the government on the issue For instance, after Iran-linked hackers began attacking U.S bank websites in 2012, the industry began to invest more heavily in computer security, a former U.S official said And after RSA, the security division of EMC Corp., suffered a breach in 2011, higher up executives became more involved in cybersecurity risk calculations, RSA’s Executive Chairman Art Coviello said in a recent interview with The Wall Street Journal Here’s part of the problem: It is a lot cheaper to hack than defend a hack For $1 million, Richard Bejtlich, chief security strategist at FireEye Inc and a former cyber investigator for the U.S Air Force, said he could assemble a team that could hack into nearly any target But $1 million wouldn’t be nearly enough for a company to defend itself Complete security is “not something most people can afford, let alone anyone can afford,” Mr Bejtlich said He agrees with other executives who say that if the government wants businesses to improve cyberdefenses, it should subsidize the cost, with tax breaks, for example In a 2005 note to clients, Gartner Inc analyst Avivah Litan estimated for every $5.62 businesses spend after a breach, they could spend $1 beforehand on encryption and network protection to prevent intrusions and minimize damage Today, she says, the ratio is about the same But Ms Litan says she is often rebuffed when she pitches corporate boards on bolstering cyberdefenses “They say it costs more to secure the system than to suffer the breach,” said Ms Litan, who declined to name clients but works with retailers Target, for example, spent heavily on cybersecurity, according to former employees and people familiar with retailer networks Last summer, it brought in consultants from the Chertoff Group, a Washington firm with close ties to national-security agencies, to review its security and interview the company’s intelligence analysts, former employees said Chertoff’s findings, delivered to the company last fall, couldn’t be learned Target security staff warned about possible weak spots in its payment-card system before the breach, people familiar with the matter said, but the warnings were waved off as the holiday-shopping season approached Target declined to comment So did a half-dozen companies contacted to discuss their approach to cybersecurity after suffering a high-profile breach, highlighting the sensitivity of the issue Mr Carr, the Heartland executive, says businesses face a careful balancing act “You can spend an infinite amount on security,” Mr Carr said “Where you draw the line?” THE WALL STREET JOURNAL Thursday, February 27, 2014 | 25 MARKETS Citi Alumni Are a Force in Washington BY STEPHANIE ARMOUR AND SHAYNDI RAICE director of the Office of Management and Budget, have gone from government posts to Citigroup The ascension of Citigroup officials to top government jobs marks a significant turnabout for the bank, which saw its reputation tarnished in the wake of a $45 billion government rescue during the financial crisis in 2008 The bank has spent the years since the crisis trying to rebuild its image by installing a new chief executive, fully repaying its government funds and hiring dozens of Washington lobbyists For some, Citigroup is replacing Goldman Sachs Group Inc as Wall Street’s farm team for Washington’s big leagues “Goldman’s tried to keep a low profile They’ve been vilified for so long, so they’re not a good choice J.P Morgan isn’t a good pool either, they’ve been tarnished Citi is different,” said Stavros Gadinis, assistant professor of law who focuses on financial regulation at the University of California at Berkeley The recent round of appointees were originally recruited to Citigroup from top government and economic posts, part of a push by former executives, including ex-Chairman Robert Rubin, himself a former Treasury secretary, and former Chief Executive Vikram Pandit to hire government of- WASHINGTON—While many other banks have faded from view in Washington’s power circles, Citigroup Inc is becoming more prominent Several alumni of the bank, which was bailed out by U.S taxpayers during the financial crisis, hold top jobs in government and at the Federal Reserve—a sign that Citigroup’s reputation is on the mend after the lows touched during the 2008 turmoil But some lawmakers and advocacy groups are raising concerns that Citi’s newfound favor with government gives it inordinate sway within the Obama administration The White House declined to comment At least five former Citigroup officials now hold top jobs in Washington, including Treasury Secretary Jacob Lew, U.S Trade Representative Michael Froman and the Treasury’s Nathan Sheets, who is awaiting confirmation as undersecretary for international affairs Stanley Fischer, who was previously a vice chairman at Citigroup, was nominated in February to be the Federal Reserve’s next vice chairman, while Marisa Lago is now Treasury’s assistant secretary for international markets and development Some, like Peter Orszag, former NAV GF AT LB DATE CR NAV n ALEXANDRA INVESTMENT MANAGEMENT AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD 2155.22 —%RETURN— YTD 12-MO 2-YR NS NS NS n BANC INTERNACIONAL D'ANDORRA BANCA MORA Avgd Meritxell 96, Andorra la Vella Andorra Ph +376.884884 www.bibm.ad Andfs Anglaterra Andfs Borsa Global Andfs Emergents Andfs Espanya Andfs Estats Units Andfs Europa Andfs Franca Andfs Japo Andfs Plus Dollars Andfs RF Dolars Andfs RF Euros Andorfons Andorfons Alternative Premium Andorfons Mix 30 Andorfons Mix 60 UK GL GL EU US EU EU JP US US EU EU GL EU EU EQ EQ EQ EQ EQ EQ EQ EQ BA BD BD BD EQ BA BA Some are raising concerns that Citigroup has inordinate sway within the Obama administration objective and the hope was that people like this reinforced the institution’s reputation as the strongest in the world in thought leadership.” However, another person said it was “absurd” to suggest that the bank knew that those high-profile hires would later go back into government and help boost Citigroup’s image But the bank did offer pay packages to some officials that rewarded a return to high-profile government AND AND AND AND AND AND AND AND AND AND AND AND AND AND AND 11/16 02/25 11/02 02/25 02/25 02/25 02/24 02/25 10/22 02/25 02/25 02/25 12/31 02/25 12/19 GBP EUR USD EUR USD EUR EUR JPY USD USD EUR EUR EUR EUR EUR 8.47 6.73 14.77 15.96 21.11 8.11 10.98 666.56 9.66 12.24 11.73 15.80 109.45 10.43 8.96 2.8 1.0 -20.4 13.0 1.0 7.7 0.2 -4.5 2.3 0.7 0.6 0.9 16.9 1.1 4.4 3.6 11.0 -19.2 50.2 24.6 28.3 17.7 25.0 3.0 0.2 1.4 3.0 16.9 5.9 7.1 14.9 5.7 -4.7 24.9 14.3 13.7 13.7 21.4 6.2 1.4 1.7 3.0 8.3 3.8 -2.5 FUND NAME NAV GF AT LB DATE CR GH FUND S GBP GH Fund S USD GH Fund USD Hedge Investments Leverage GH USD MultiAdv Arb CHF Hdg MultiAdv Arb EUR Hdg MultiAdv Arb GBP Hdg MultiAdv Arb S EUR MultiAdv Arb S GBP MultiAdv Arb S USD MultiAdv Arb USD OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT OT CYM CYM GGY GGY GGY JEY JEY JEY JEY JEY JEY JEY 01/31 01/31 01/31 08/16 01/31 01/31 01/31 01/31 01/31 01/31 01/31 01/31 GBP USD USD USD USD CHF EUR GBP EUR GBP USD USD 163.37 183.43 318.33 158.48 148.62 100.74 112.34 122.34 126.73 133.92 144.88 212.29 0.6 0.6 0.5 NS 0.9 0.8 0.8 0.8 1.0 0.9 0.8 0.8 7.8 7.8 6.5 NS 11.1 3.6 4.0 4.4 5.3 5.6 5.2 4.1 7.6 7.6 6.4 3.6 10.7 3.9 4.2 4.7 5.6 6.0 5.7 4.5 OT OT OT OT OT OT OT OT OT OT OT EQ EQ EQ EQ EQ EQ OT OT OT OT OT JEY JEY JEY JEY JEY JEY JEY JEY GGY GGY GGY 01/31 01/31 09/28 09/28 06/30 06/30 04/30 04/30 01/31 01/31 01/31 EUR USD USD EUR EUR USD EUR USD USD EUR GBP 97.06 181.80 151.22 82.99 127.84 135.07 104.69 105.31 126.86 114.61 122.37 -0.4 -0.4 3.4 2.8 -3.4 2.0 1.3 1.5 -2.6 -2.2 -2.6 4.9 5.0 -2.4 -3.0 -1.3 4.3 -9.5 -8.8 -12.0 -12.0 -12.0 4.0 4.7 -5.5 -5.9 2.2 5.1 -1.9 -1.7 -8.6 -8.6 -8.5 85.86 8577.68 9032.12 79.01 121.37 10807.34 11130.39 96.94 102.83 22.7 -9.3 4.6 -12.2 -9.0 3.5 17.9 -0.9 -4.6 -25.9 -8.4 11.0 -11.1 -8.8 5.1 25.6 0.7 -4.1 -22.7 0.3 13.2 -1.0 8.1 11.3 23.9 8.4 6.9 n HSBC Uni-folio Asian AdbantEdge EUR Asian AdvantEdge Emerg AdvantEdge Emerg AdvantEdge EUR Europ AdvantEdge EUR Europ AdvantEdge USD Real AdvantEdge EUR Real AdvantEdge USD Trading AdvantEdge Trading AdvantEdge EUR Trading AdvantEdge GBP NAV —%RETURN— YTD 12-MO 2-YR n CG Portfolio Fund Ltd NAV OT OT CYM 06/07 GBP 25839.68 5.3 10.9 9.8 n HSBC Trinkaus Investment Managers SA n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 E-Mail: funds@hsbctrinkaus.lu Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg Telephone: 352 - 47 18471 CAM-GTF Limited OT OT MUS 02/14 USD 337077.84 n Citadele Republikas square 2a, Riga, LV-1522, Latvia Citadele Eastern Europ Bal EU BD LVA 02/25 EUR Citadele Eastern Europ Bd EU BD LVA 02/25 USD Citadele Russian Eq EE EQ LVA 02/25 USD 16.61 20.44 19.87 1.5 -20.1 -2.3 0.2 0.2 -11.6 1.4 2.1 -14.0 5.8 5.9 -7.7 n DJE INVESTMENT S.A internet: www.dje.lu email: info@dje.lu phone:+00 352 269 2522 fax:+00 352 269 25252 DJE Real Estate P DJE-Absolut P DJE-Alpha Glbl P DJE-Div& Substanz P DJE-Gold&Resourc P DJE-Renten Glbl P LuxPro-Dragon I LuxPro-Dragon P LuxTopic-Aktien Europa LuxTopic-Pacific OT OT LUX 02/26 EUR OT OT LUX 02/26 EUR OT OT LUX 02/26 EUR OT OT LUX 02/26 EUR OT EQ LUX 02/26 EUR EU BD LUX 02/26 EUR AS EQ LUX 07/20 EUR AS EQ LUX 07/20 EUR EU EQ LUX 02/26 EUR OT OT LUX 02/26 EUR n HERMITAGE CAPITAL MANAGEMENT LTD Tel: +7501 258 3160 www.hermitagefund.com The Hermitage Fund GL EQ JEY 03/12 USD 4.31 255.08 187.79 280.70 130.89 150.73 144.57 140.29 20.37 19.62 -0.7 1.3 -3.4 -0.8 7.9 1.3 -8.5 -8.8 0.0 -1.6 -8.0 8.0 7.4 7.1 -15.4 2.8 5.0 4.4 7.4 -8.6 -6.9 7.9 5.3 9.3 -18.9 4.5 7.6 7.0 5.6 -0.7 963.12 4.5 105.6 HSBC Trinkaus Golden Opportunities Prosperity Return Fund A Prosperity Return Fund B Prosperity Return Fund C Prosperity Return Fund D Renaissance Hgh Grade Bd A Renaissance Hgh Grade Bd B Renaissance Hgh Grade Bd C Renaissance Hgh Grade Bd D OT JP EU EU EU EU EU EU EU OT BD BA BA BA BA BA BA BA LUX LUX LUX LUX LUX LUX LUX LUX LUX 02/25 12/06 12/06 12/06 12/06 12/06 12/06 12/06 12/06 USD JPY JPY USD EUR JPY JPY USD EUR -23.2 n MP ASSET MANAGEMENT INC Tel: + 386 587 47 77 MP-BALKAN.SI MP-TURKEY.SI EE OT EQ SVN 08/12 EUR OT SVN 02/24 EUR 19.29 33.54 -1.9 -7.4 -8.4 -29.9 n HORSEMAN CAPITAL MANAGEMENT LTD T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com n MERIDEN GROUP Horseman EurSelLtd EUR EU EQ GBR 01/31 EUR 349.13 4.3 31.3 29.1 Tel: + 376 741 175 Fax: + 376 741 183 Email: meriden@meriden-ipm.com Horseman EurSelLtd USD Horseman Glbl Ltd EUR Horseman Glbl Ltd USD EU EQ GBR 01/31 USD GL EQ CYM 01/31 USD GL EQ CYM 01/31 USD 349.13 577.71 577.71 NS NS NS n HSBC ALTERNATIVE INVESTMENTS LIMITED T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com HSBC ALTERNATIVE STRATEGY FUND Special Opp EUR Special Opp Inst EUR Special Opp Inst USD Special Opp USD OT OT OT OT OT OT OT OT GGY GGY GGY GGY n HSBC Portfolio Selection Fund GH Fund CHF Hdg GH Fund EUR Hdg (Non-V) GH Fund GBP Hdg GH Fund Inst USD GH FUND S EUR OT OT OT OT OT OT OT OT OT OT jobs, in some cases giving big payouts upon leaving Mr Froman got a $2 million payment from Citigroup in recognition of his service and for waiving rights to investment fund holdings when he left the bank to join the Obama administration last year Mr Froman told the Senate he would donate those funds to charity Mr Froman no longer holds Citi stock or interests in any Citigroup funds, according to the Office of the U.S Trade Representative “If a company offers financial incentives to go into government service, does that compromise the real or perceived independence of the individuals while in public service?” Sen Charles Grassley (R., Iowa) said in an emailed statement “It doesn’t appear that the Obama Administration adequately considers whether hiring so many people from the same firm, including those who have received financial incentives to join the Administration, keeps enough distance between the government and the private sector that has an interest in government regulations.” The addition of Obama administration officials with Citigroup on their résumé is troublesome because it can give a public perception of undue influence, said Michael Smallberg, an investigator with the Project on Government Oversight A spokeswoman said Citigroup is “proud that many of its current and former people have been dedicated public servants to their home countries.” There is little evidence the connections have helped so far, in part because Wall Street remains under stiff scrutiny and toughened rules in the wake of the 2010 Dodd-Frank law Citigroup, along with all big banks, is subject to higher capital requirements and the Volcker rule ban on proprietary trading Citigroup has made it easier for those heading to the public sector to continue compensation arrangements that can be worth millions of dollars As part of a long-standing policy, employees who voluntarily leave for a full-time paid career in government, charity or education post are still on schedule to receive a full award of their deferred stock and deferred cash annual incentive awards, according to a 2013 Citigroup quarterly report filed with the Securities and Exchange Commission Those who leave for other jobs forfeit the portions that aren’t yet ready to be cashed in And the bank says it accelerates the vesting of outstanding compensation in cases where there may be conflicts of interest INTERNATIONAL INVESTMENT FUNDS Advertisement FUND NAME ficials who could raise the bank’s international profile, said people involved in the effort Citigroup sought out economic, regulatory and business leaders who could work easily with overseas CEOs, the people said “A lot of the people that now are serving or used to serve in senior positions were part of a very conscious effort,” said one of the people “The GGY GGY GGY GGY CYM 12/31 03/31 03/28 12/31 01/31 01/31 01/31 01/31 01/31 EUR EUR USD USD CHF EUR GBP USD EUR 122.21 88.51 123.18 129.13 125.95 140.23 154.96 133.63 156.05 14.2 0.7 4.2 14.0 0.5 0.5 0.5 0.6 0.6 NS NS NS NS NS NS 14.2 -0.3 18.5 14.0 Antanta Combined Fund Antanta MidCap Fund Meriden Opps Fund Meriden Protective Div EE EE GL GL EQ EQ OT EQ AND AND AND AND 02/21 02/21 02/05 11/24 USD USD EUR EUR 208.41 353.52 22.68 NS.00 -0.7 -2.1 0.0 -2.8 -22.8 -15.4 -11.2 NS -10.9 -4.7 -19.2 -17.2 -11.0 NS 17.0 13.3 10.6 17.3 6.7 6.3 6.9 7.3 7.7 6.1 6.0 6.7 7.0 7.2 FUND NAME NAV GF AT LB DATE CR Pictet-Brazil Index-P USD Pictet-CHF Bonds-P Pictet-China Index-P USD Pictet-Clean Energy-P USD Pictet-Digital Comm-P USD Pictet-Eastern Europe-P EUR Pictet-Em Corp Bds-P USD Pictet-Em Loc Curr Dbt-P USD Pictet-Em Mkts Hgh Div-P USD Pictet-Em Mkts Index-P USD Pictet-Em Mkts Sust Eq-P USD Pictet-Emerging Markets-P USD Pictet-Envir Megatr Sel-P EUR Pictet-Eu Equities Sel-P EUR Pictet-EUR Bonds-P Pictet-EUR Corp Bds Ex Fin-P Pictet-EUR Corporate Bonds-P Pictet-EUR Government Bonds-P Pictet-EUR High Yield-P Pictet-EUR Inflation Lkd Bds-P Pictet-EUR SM-Term Bds-P Pictet-EUR ST High Yld-P Pictet-Euroland Index-P EUR Pictet-Europe Index-P EUR Pictet-European Sust Eq-P EUR Pictet-Generics-P USD Pictet-Glo Bds Fundamental-P USD Pictet-Glo Em Currencies-P USD Pictet-Glo Emerging Debt-P USD Pictet-Glo Megatrend Sel-P USD Pictet-Greater China-P USD Pictet-High Dividend Sel-P EUR Pictet-India Index-P USD Pictet-Indian Equities-P USD Pictet-Japan Index-P JPY Pictet-Japanese Eq Opp-P JPY Pictet-Japanese Eq Sel-P JPY Pictet-Latam Index-P USD Pictet-Latin Am Loc Curr Dbt-P USD Pictet-Pac (ExJpn) Idx-P USD Pictet-Piclife-P CHF Pictet-Premium Brands-P EUR Pictet-Quality Gl Eq-P USD Pictet-Russia Index-P USD Pictet-Russian Equities-P USD Pictet-Security-P USD Pictet-Short-T Money Mkt CHF-P Pictet-Short-T Money Mkt EUR-P Pictet-Short-T Money Mkt JPY-P Pictet-Short-T Money Mkt USD-P Pictet-Small Cap Europe-P EUR Pictet-Sov ST Money Mkt-P EUR Pictet-Sov ST Money Mkt-P USD Pictet-Timber-P USD Pictet-US Eq Grwth Sel-P USD Pictet-US Eq Value Sel-P USD Pictet-US High Yield-P USD Pictet-USA Index-P USD Pictet-USD Government Bonds-P Pictet-USD Short Mid-Term Bds-P Pictet-Water-P EUR Pictet-World Gvt Bonds-P EUR PTR-Banyan-P USD PTR-Corto Europe-P EUR PTR-Kosmos-P EUR PTR-Mandarin-P USD OT CH AS OT OT EU OT OT GL GL GL GL OT EU EU EU EU EU EU EU EU EU EU EU EU OT OT OT GL GL AS OT EA EA JP JP JP GL OT AS OT OT GL EE EE GL CH OT OT OT EU OT OT GL US US US US US US OT OT OT OT OT OT OT BD EQ OT EQ EQ OT OT EQ EQ EQ EQ OT EQ BD BD BD BD BD BD BD BD EQ EQ EQ EQ OT OT BD EQ EQ OT EQ EQ EQ EQ EQ EQ OT EQ OT EQ EQ EQ EQ EQ MM OT OT OT EQ OT OT EQ EQ EQ BD EQ BD BD OT OT OT OT OT OT LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/26 02/25 02/25 02/26 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/26 02/25 02/25 02/26 02/26 02/26 02/26 02/25 02/25 02/26 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/25 02/20 02/25 02/25 02/26 USD CHF USD USD USD EUR USD USD USD USD USD USD EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR USD USD USD USD USD USD EUR USD USD JPY JPY JPY USD USD USD CHF EUR USD USD USD USD CHF EUR JPY USD EUR EUR USD USD USD USD USD USD USD USD EUR EUR USD EUR EUR USD NAV 62.82 466.13 98.14 87.02 214.42 316.48 100.96 176.56 106.00 233.65 90.79 493.06 122.07 543.20 476.40 133.02 179.04 139.14 221.76 117.05 132.18 116.05 116.83 149.42 190.90 212.25 128.85 103.81 310.17 212.30 381.45 129.97 81.76 305.39 12634.66 6978.00 10628.71 71.88 136.63 363.03 906.54 124.98 124.07 74.47 60.75 168.26 124.24 137.73 10127.72 132.31 865.61 102.68 102.02 150.76 174.10 185.84 145.68 157.53 581.09 125.84 198.96 132.59 95.94 131.26 107.01 103.29 Data provided by: —%RETURN— YTD 12-MO 2-YR -8.4 1.2 -6.8 1.9 3.9 -8.3 1.1 -1.2 -5.4 -4.6 -6.2 -5.2 0.8 -0.8 2.5 1.7 1.6 2.5 1.9 1.0 0.6 1.0 2.6 3.0 3.6 11.2 0.6 -1.1 1.1 4.2 -5.0 1.1 -1.8 1.0 -6.2 -6.9 -7.9 -8.5 1.3 1.1 0.8 -1.8 0.2 -9.8 -10.9 2.0 0.0 0.0 0.0 0.0 5.4 0.0 0.0 0.1 2.7 -0.5 1.9 0.0 1.7 0.2 1.6 2.8 -6.5 4.6 0.5 -2.7 -23.5 1.4 -2.8 32.1 41.0 -14.2 -1.7 -12.7 -8.1 -7.8 -11.3 -6.4 12.6 7.3 3.3 3.2 3.8 4.5 10.7 -1.8 2.2 6.1 23.3 19.5 18.2 35.3 -3.3 -4.5 -3.9 27.4 0.2 12.3 -7.5 -0.9 28.6 27.9 25.7 -21.4 -15.0 0.6 5.3 14.5 16.0 -11.9 -9.8 22.0 0.0 0.0 0.0 0.2 30.8 -0.1 0.1 8.7 35.3 22.7 6.2 25.7 -1.7 0.2 12.3 -3.5 -9.2 16.1 1.2 7.1 -21.2 2.4 0.4 13.2 23.0 -5.1 NS -3.7 NS -3.7 NS -4.3 10.7 10.5 6.2 4.5 6.1 5.8 12.9 0.7 2.6 7.0 17.1 15.6 14.4 24.6 -1.1 -1.8 3.0 18.5 2.5 13.4 -4.3 -2.2 23.5 25.1 21.8 -15.4 -5.3 7.8 6.9 12.8 NS -10.0 -8.6 14.5 0.0 0.0 0.0 0.2 23.9 -0.1 0.1 14.8 18.7 15.2 8.3 17.7 0.2 0.3 11.8 -1.8 -4.5 16.0 1.6 3.7 FUND NAME NAV GF AT LB DATE CR n Pictet Funds (Europe) SA, ROUTE DES ACACIAS 60, CH-1211 GENEVA 73 Tel: + 41 (58) 323 3000 Web: www.pictetfunds.com Pictet-Abs Ret Gl Div-P EUR Pictet-Agriculture-P EUR Pictet-Asian Eq ExJpn-P USD Pictet-Asian Loc Cur Dbt-P USD Pictet-Biotech-P USD GL OT LUX OT OT LUX OT OT LUX AS BD LUX OT EQ LUX 02/25 02/25 02/26 02/26 02/25 EUR EUR USD USD USD 114.17 150.01 180.11 143.84 669.57 0.3 -1.9 -2.1 0.9 20.9 -3.3 -1.0 1.3 -7.2 76.1 -0.9 3.8 1.7 -1.9 45.7 OT JP OT OT EQ EQ EQ EQ IRL IRL IRL IRL 02/25 02/26 02/25 02/25 USD USD USD USD n Hemisphere Management (Ireland) Limited Discovery USD A Elbrus USD A Europn Conviction USD B Europn Forager USD B Latin America USD A GL OT EU EU GL OT OT EQ EQ EQ CYM CYM CYM CYM CYM 12/31 01/31 01/31 01/31 06/30 USD USD USD USD USD 23.73 21.18 33.77 33.12 3.9 -6.2 19.1 19.0 32.8 11.6 72.3 71.7 15.1 5.9 46.6 46.0 101.35 10.10 161.54 324.09 NS.00 NS NS 0.3 2.6 NS NS NS 1.1 11.7 NS NS NS 5.3 11.9 NS —%RETURN— YTD 12-MO 2-YR Paragon Limited USD A EU EQ CYM 12/31 USD NS.00 12.7 12.7 14.2 UK Fund USD A OT OT CYM 04/13 USD 157.94 1.8 NS NS n PT CIPTADANA ASSET MANAGEMENT Tel: +6221 25574 883 Fax: +6221 25574 893 Website: www.ciptadana-asset.com Indonesian Grth Fund GL EQ BMU 02/19 USD 154.09 13.0 -16.5 -10.2 n THE NATIONAL INVESTOR PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae MENA Special Sits Fund OT OT BMU 01/31 USD 1127.97 1.1 5.8 6.7 MENA UCITS Fund OT OT IRL 02/20 USD 1393.41 7.5 30.0 19.1 UAE Blue Chip Fund OT OT ARE 02/20 AED 10.81 15.9 81.3 52.9 13497.00 -6.1 37.6 26.4 16540.00 -4.0 50.9 34.9 n YUKI MANAGEMENT & RESEARCH n YMR-N Series YMR-N Growth Fund JP EQ IRL 02/26 JPY n Yuki Asia Umbrella Series Yuki Rebounding Gro Fd JP EQ IRL 02/26 JPY n Yuki Mizuho Series Yuki Mizuho Jpn Dyn Gro JP EQ IRL 02/26 JPY 5757.00 -6.4 35.9 25.6 Yuki Mizuho Jpn Inc JP EQ IRL 02/26 JPY 10062.00 -3.5 27.6 21.4 Yuki Mizuho Jpn Lg Cap JP EQ IRL 02/26 JPY 6178.00 -8.2 25.3 18.1 Yuki Mizuho Jpn LowP JP EQ IRL 02/26 JPY 18651.00 -5.4 49.4 33.8 Yuki Mizuho Jpn Val Sel AS EQ IRL 02/26 JPY 9171.00 -4.1 50.2 38.2 n OTHER FUNDS For information about these funds, please contact us on Tel: +44 (0) 207 842 9694/9633 Medinvest Plc Dublin OT EQ IRL 09/30 USD NS.00 n WINTON CAPITAL MANAGEMENT LTD Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301 Winton Evolution EUR Cls H Winton Evolution GBP Cls G Winton Evolution USD Cls F Winton Futures EUR Cls C Winton Futures GBP Cls D Winton Futures JPY Cls E Winton Futures USD Cls B GL GL GL GL GL GL GL n POLAR CAPITAL PARTNERS LIMITED International Fund Managers (Ireland) Limited PH - 353 670 660 Fax - 353 670 1185 Global Technology Japan Fund USD Polar Healthcare Class I USD Polar Healthcare Class R USD NAV OT OT OT OT OT OT OT CYM CYM CYM VGB VGB VGB VGB 01/31 01/31 01/31 01/31 01/31 01/31 01/31 EUR NS.00 GBP NS.00 USD NS.00 EUR 245.63 GBP 267.48 JPY 17199.60 USD 876.58 NS 1.3 -4.4 -3.1 -3.1 -3.1 -2.4 -2.4 -2.3 -2.4 7.2 7.6 7.6 3.8 4.1 4.4 4.2 1.5 1.9 1.8 0.9 1.3 1.0 1.2 INDICES FUND NAME NAV ——————%RETURN —————— GF DATE CR NAV 1-WK 1-MO 1-Q 1-YR 2-YR n ARIX ABSOLUTE RETURN INVESTABLE INDEX Feri Institutional Advisors, www.feri.de ARIX Composite Gross USD OT OT GBR 01/31.00 USD1603.72 0.1 5.8 6.1 NAV OT CYM 06/07.00 GBP25839.68 5.3 10.9 9.8 n CG Portfolio Fund Ltd OT Data as shown is for information purposes only No offer is being made by Morningstar, Ltd or this publication Funds shown aren’t registered with the U.S Securities and Exchange Commission and aren’t available for sale to United States citizens and/or residents except as noted Prices are in local currencies All performance figures are calculated using the most recent prices available 12-month and 2-year returns may be calculated over 11- and 23-month periods pending receipt and publication of the last month end price For information about listing your funds, please contact: Lauren Berkemeyer tel: +44 20 7572 2102; email: lauren.berkemeyer@dowjones.com 26 | Thursday, February 27, 2014 THE WALL STREET JOURNAL MARKETS Japan Looks at Bitcoin BY TAKASHI MOCHIZUKI also addressed the matter, saying, “I think the Japanese government will make a proper assessment” on the regulation of bitcoin Mt Gox stopped all transactions on Tuesday, and its website went blank The site later came back, carrying only a message that said the halt in operations was only “for the time being in order to protect the site and our users.” On Wednesday, Mt Gox’s chief executive officer said in a fresh message on the site that he remains in Japan and is working hard to find a solution to Mt Gox’s recent troubles He also asked clients whose funds have been stuck to refrain from getting in touch “I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information Please visit this page for further announcements and updates,” Mark Karpèles said in the statement Attempts to reach Mt Gox representatives in Tokyo were unsuccess- TOKYO—Japan’s chief government spokesman and a member of the central bank’s policy board said authorities were looking into the regulation of bitcoin, a day after Tokyo-based bitcoin exchange Mt Gox shut its website and halted trading Compared with regulators in many other advanced economies, Japanese regulators have been relatively silent on bitcoin But Wednesday, after Mt Gox’s abrupt closure underscored the risks of a virtual currency, several of them started speaking Wednesday morning, Japan’s top government spokesman, Chief Cabinet Secretary Yoshihide Suga, said the government was looking into the matter, collecting information through the Financial Services Agency, the Ministry of Finance and the police “The government will take measures if necessary once we have an assessment of the situation,” he said Later Wednesday, Bank of Japan policy board member Koji Ishida ful Wednesday Earlier in the week, an FSA spokesman told The Wall Street Journal that bitcoin exchanges “aren’t subject to our regulatory oversight.” In similar comments recently, the Bank of Japan said it “isn’t in a position” to regulate bitcoin exchanges, while the Ministry of Finance said such supervision isn’t its job Contacted again Wednesday, officials at the FSA, Finance Ministry and the Bank of Japan all said they hadn’t changed their stance on the issue A Tokyo Metropolitan Police spokeswoman said she didn’t have enough information to comment Some investors with bitcoins tied up at Mt Gox had sought guidance from authorities about protection for customers of the exchange but say they have received no clear answers —Toko Sekiguchi and Tatsuo Ito in Tokyo, Christopher M Matthews in Los Angeles and Neelabh Chaturvedi in London contributed to this article Continued from first page cuses more broadly on geeks He said he sometimes didn’t move from his room for days “In real life, if I want to talk to someone on the subway, I’m just a nobody But when I am on the Internet, I am Magical Tux,” he said in the film Even now, people in the bitcoin community refer to him by that name On a blog last updated in 2012, which appeared to have been taken down by early Thursday in Tokyo, a person identified as Magical Tux indicated an interest in quantum physics and writings on the existence of alternative worlds He wrote in one posting from March 2010 that he had been up till a.m reading about theories that “are giving an extra role to conscious beings, even making them immortal.” But Mr Karpelès also showed a domestic side online, posting cat photos and bragging about his skills at baking apple pie In 2006, he uploaded a how-to video on YouTube, outlining a more-than-seven-hour process for pie baking In the documentary, in part produced by French broadcaster Canal Plus, he spoke to the camera in a messy room, surrounded by comic books and computers A black Tshirt he wore said, “There’s no place like 127.0.0.1.”, referring to the number used to redirect a computer connected to the Internet to itself, or home, in other words An anime fan, he went to Japan for a monthlong visit in 2007 Back in France, he triumphantly announced on his blog that he had wowed one Japanese girl with his iPhone, a product that wasn’t then on sale in Japan By 2009, he said he was planning a move to Tokyo and posted a blog entry in Japanese “I computerrelated work (a programmer); my goal is world domination,” it said Soon after he arrived in Japan, Mr Karpelès got interested in bitcoin “One of my customers requested bitcoin as payment in 2009,” he said in an email interview with The Wall Street Journal on Feb 17 Less than half a year after his arrival, he founded Tibanne Co The name of the company, which would Bloomberg News Meet Mt Gox’s Geek-in-Chief Mark Karpelès in Tokyo last April His bitcoin exchange, Mt Gox, has struggled come to operate one of the world’s pre-eminent bitcoin platforms, was close to that of Mr Karpelès’s white-and-orange cat, Tibane Mr Karpelès’s Twitter feed indicates that in the early days, Mt Gox was like any other small tech startup The team went out for burgers together, and McDonald’s deliveries were common People close to the company called the atmosphere of the Mt Gox offices “free-spirited” and said the company’s growth was a surprise As bitcoin caught on, Mt Gox expanded At one point, it handled 80% of bitcoin trades At the Mt Gox offices in Tokyo’s Shibuya neighborhood, sometimes called “Bit Valley,” a staff of around 30 handled the requests and questions of customers, which last year reached one million in number With the growth came new headaches The first whiffs of trouble came in May last year U.S regulators said the exchange wasn’t properly registered in the U.S In June, Mt Gox registered there as a money-services business People close to Mt Gox say that throughout the recent turmoil, Mr Karpelès was stressed but tried to protect employees He hasn’t responded to repeated requests by The Wall Street Journal for comment since the Feb 17 email interview On Feb 7, Mt Gox halted withdrawals, blaming a technical glitch Two weeks later, the exchange had become synonymous with the risks associated with a virtual currency Some investors have recounted losses of hundreds of thousands of dollars Executives in the wider bitcoin community took pains to separate Mt Gox’s issues from the industry as a whole In a YouTube video posted Wednesday, Roger Ver, a Tokyobased bitcoin entrepreneur, said the issue was caused in part by “poor programming skills” on the part of Mt Gox.” A flaw in the software used by all bitcoin exchanges potentially made possible fraudulent withdrawals Other exchanges appear not to have been harmed by this, but Mt Gox has had to halt operations Mr Ver, who helps connect players in the bitcoin community and has known people at Mt Gox for several years, spoke bluntly, saying the bitcoin turmoil “was caused by a single mismanaged company, not by any problem with bitcoin itself.” The entrepreneur, who handles business development for Blockchain.info, a provider of so-called bitcoin “wallets,” confirmed his remarks in the YouTube video to The Wall Street Journal As for Magical Tux, his last Twitter post was on Jan 12 It was a response to a customer complaint about web-hosting services provided by Tibanne, the company that operates Mt Gox Ukraine Ills Trump Solid German Data BY CHIARA ALBANESE tactical trading and stock-picking market.” The political tensions in Ukraine continued to rattle European markets The Ukrainian hryvnia plunged against the dollar, while the country’s dollar bonds weakened after efforts to form a new government were delayed until Thursday The hryvnia was quoted at around 10.40 to the dollar late in Europe, a roughly 2% decline on the day and almost 10% this week Typically the central bank sells dollars whenever the dollar-hryvnia rate strays much above The developments in Ukraine weighed on sentiment in neighboring Russia, where the ruble again hit an all-time low against the euro-dollar basket The dollar strengthened against major rivals on the back of the housing report Late Wednesday in New York, the euro was fetching $1.3683, down from $1.3745 late Tuesday, while the dollar was trading at ¥102.42 from ¥102.24 The British pound weakened to $1.6664 from $1.6681 as the U.K.’s gross domestic product increased 0.7% in the last three months of 2013 from the previous quarter, matching the preliminary estimate, according to data from the Office for National Statistics U.S Treasury prices were boosted by a $35 billion sale of fiveyear notes that drew the highest demand in more than a year The benchmark 10-year note rose 8/32 in price to yield 2.675.% In commodity markets, gold fell $14.80, or 1.1% to $1,328.20 a troy ounce on the Comex division of the New York Mercantile Exchange, snapping a three-day winning streak Crude oil climbed 76 cents, or 0.7%, to $102.59 a barrel on Nymex Gold prices have been marching higher since the start of the year, as investors focused first on worries about slower economic growth in the U.S and then on signs of trouble in emerging markets Gold is considered by some as a haven in times of financial-market stress Political instability in Eastern Europe outweighed a strong report on German consumer confidence Wednesday, sending European stock markets lower The Stoxx Europe 600 index slipped 0.2% to 337.70, after closing the previous session at its highest level since January 2008 The U.K.’s FTSE 100 lost 0.5% to MARKET 6799.15 and France’s REPORT CAC 40 fell 0.4% to 4396.91 Germany’s DAX slipped 0.4%, to 9661.73, despite a rise to 8.5 points in the forwardlooking GfK consumer-climate indicator for March The result marked a seven-year high “Investors may be reluctant to chase share prices higher in the short-term with indexes approaching technically overbought territory European equities have rallied by more than 6% in the past three weeks, regaining all the ground lost in January,” said Ian Williams, strategist at Peel Hunt in London In the U.S., stocks ended the day in the black but the S&P 500 retreated from record levels for a third-straight session The Dow Jones Industrial Average rose 18.75 points, or 0.1%, to 16198.41, while the S&P 500 was barely higher at 1845.16 At its session peak Wednesday, the index rose to 1852.73, above its all-time closing high of 1848.38 but short of its alltime intraday high of 1858.71 The Nasdaq Composite Index rose 4.48 points, or 0.1%, to 4292.06 A report on the U.S housing market, showing that new-home sales climbed 9.6% in January, and better-than-feared reports from some retailers helped support stocks early in the session, but trading wasn’t broadly bullish, traders and investors said Volume was “kind of light,” said Joseph Greco, managing director of trading with Meridian Equity Partners And while the housing report was encouraging, “it’s much more a Fund Scorecard EUR Government Bond Funds that invest primarily in government or government-backed agency securities denominated or hedged into the relevant currency Ranked on % total return (dividends reinvested) in Euros for one year ending February 26, 2014 Leading 10 Performers FUND FUND RATING * NAME 1 1 NS NS FUND MGM'T CO LEGAL CURR BASE DELOS Income NBG Asset EURGRC - Domestic Bond Fd A Management M.F.M.C ALPHA Greek Alpha Asset EURGRC Bonds Management A.E.D.A.K Geniki Alpha Trust Mutual EURGRC Domestic Bond Fund Fund Management S.A Eurobank EFG Eurobank Fund EURLUX (LF) Greek Gov Bd Fd Mgmnt Company (Lux) S.A Kathrein Raiffeisen EURAUT EuroCoreGovernmentBondIT Kapitalanlage-G.m.b.H R Souverain Rothschild Cie EURFRA Eurorecovery C Gestion Fon Fineco G.I.I.C Fineco EURESP Interés I FI Lyxor ETF Lyxor EURFRA Bono10YMTSSpainGovBdCEUR International Asset Management iShares iShares EURIRL Spain Government Bond Amundi ETF Amundi EURFRA GvtBd LR EuroMTSInvGrd NOTE: Changes in currency rates will affect performance and rankings KEY: ** 2YR and 5YR performance is annualized NA-not available due to incomplete data; NS-fund not in existence for entire period YTD % Return in $US ** 1-YR 2-YR 5-YR 11.61 46.15 71.88 10.68 12.77 45.97 48.91 0.23 12.91 43.47 82.49 6.72 11.46 42.01 81.74 NS 1.73 30.40 24.73 NS 6.41 17.32 24.14 NS 3.59 16.92 10.93 NS 5.84 15.68 NS NS 3.88 12.44 NS NS 3.36 10.19 9.79 NS Source: Morningstar, Ltd Oliver’s Yard, 55-71 City Road London EC1Y 1HQ United Kingdom www.morningstar.co.uk; Email: mediaservice@morningstar.com Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001 THE WALL STREET JOURNAL Thursday, February 27, 2014 | 27 GLOBAL MARKETS LINEUP Major stock market indexes Stock indexes from around the world, grouped by region Shown in local-currency terms Close PERFORMANCE Percentage change Yr.-to-date PREVIOUS SESSION Region/Country Index Net change EUROPE Stoxx Europe 600 337.70 -0.69 Stoxx Europe 50 2972.32 -1.85 Euro Zone Euro Stoxx 321.88 -1.14 -0.35 Euro Stoxx 50 3148.19 -9.29 Austria ATX 2676.98 -6.15 Belgium Bel-20 3055.80 14.09 Czech Republic PX 1019.77 -9.79 Denmark OMX Copenhagen 657.12 -5.38 Finland OMX Helsinki 7522.44 -42.88 France CAC-40 4396.91 -17.64 Germany DAX 9661.73 -37.62 Hungary BUX 17794.88 41.19 Ireland ISEQ 5103.62 -47.04 Italy FTSE MIB 20398.10 -75.07 Netherlands AEX 398.64 -2.13 Norway All-Shares 609.19 0.54 Poland WIG 52983.97 -703.83 Portugal PSI 20 7254.24 -87.69 Russia RTSI 1286.07 -20.30 -1.55% 2.9% -0.20% 52-wk 18.7% Region/Country Spain Close 10224.30 0.39 0.09% 4.5 19.8 26.70 0.31 4.0 14.0 BIST 100 61503.04 -620.8 -9.3 -20.7 FTSE 100 6799.15 -31.35 0.7 8.4 1419.35 -3.73 -2.0 4.5 SPX/ASX 200 5437.00 3.20 Shanghai Composite 2041.25 7.04 Hang Seng 22437.44 120.24 S&P BSE Sensex 20986.99 134.52 14970.97 -80.63 -0.54 -0.50 Sweden OMX Stockholm Switzerland SMI -0.29 1.3 22.5 Turkey -0.23 5.1 11.5 U.K 4.5 21.7 ASIA-PACIFIC DJ Asia-Pacific TSM 3.1 2.7 Australia 16.1 32.6 China -0.57 2.5 22.5 Hong Kong -0.40 2.4 21.4 India -0.39 1.1 27.2 Japan Nikkei Stock Average -0.95 -0.81 -4.1 -3.7 Singapore Straits Times 3088.25 36.7 South Korea Kospi 1970.77 31.2 AMERICAS DJ Americas 464.43 18.9 Brazil Bovespa 46603.31 17.3 Mexico IPC 38675.12 -348.53 -1.31 3.3 15.5 -1.19 10.6 20.7 -10.9 2.45%18.52 2.99 17.72 3.05 13.47 3.17 19.15 2.39 19.37 2.99 13.07 3.33 18.44 3.24 21.17 3.80 17.32 3.61 8.55 1.93 19.85 7.9 -3.5 -11.8 0.54 -3.7 -0.6 0.65 -0.9 9.6 -8.1 33.0 -2.5 -5.3 0.35 -16.0 -0.37 -0.53 0.09 Note: Americas index data are as of 3:00 p.m ET -2.0 -1.7 -0.20 -0.3 20.0 -0.24 -9.5 -18.2 -9.5 -11.1 0.30 -0.89 Sources: SIX Financial Information; WSJ Market Data Group MSCI indexes PERFORMANCE (euros) Last Daily 52-wk Global TSM Global DOW Global Titans 50 Dev Europe TSM Developed Markets TSM S&P BMI Emg Markets S&P Europe 350 S&P Euro Europe Dow BRIC 50 U.S TSM Kuwait Titans 30 -c 1.6 0.06 -112.60 1.1 -0.26 -0.91 -0.8 -0.46 5.91 7.5 -1.00 -15.37 12.4 0.23 -0.91 S&P Dow Jones Indices Price-toDividend earnings yield* ratio* S&P Dow Jones Index 52-wk 28.1 442.67 14.4 23.5 0.46% Net change -18.20 8532.99 1.8 2.4 -0.06 PERFORMANCE Percentage change Yr.-to-date 3.1 -0.18 PREVIOUS SESSION Index IBEX 35 1698.81 224.66 1375.62 1364.68 1434.24 362.49 0.31% 13.7% 0.34 8.8 -0.17 17.6 -0.35 22.5 -0.21 18.2 0.50 -14.1 PERFORMANCE (U.S.dollars) Last Daily 52-wk 3240.01 2467.64 229.48 3470.15 3272.90 243.77 1689.47 1698.54 2081.75 472.67 19565.83 203.42 -0.06% -0.10 -0.08 -0.60 -0.05 -0.08 -0.76 -0.94 -0.69 0.09 0.40 -0.18 Price-toDividend earnings yield* ratio* S&P Dow Jones Index 16.7% 18.6 13.5 23.9 19.6 -8.1 22.7 27.8 23.2 -10.4 23.8 3.8 6.35%14.98 6.71 14.35 3.29 29.14 2.16 19.16 2.50 17.18 3.29 21.22 3.97 22.93 1.94 13.55 Developed and emerging-market regional and country indexes from MSCI as of February 26, 2014 PERFORMANCE (euros) PERFORMANCE (U.S.dollars) Last Daily 52-wk Last Daily 52-wk Turkey Titans 20 -c Global Select Div Asia/Pacific Select Div 283.18 U.S Select Dividend -d S&P Glb Nat Resources 1993.13 Islamic Market Islamic Market 100 Islamic Turkey -c Sustainability Europe 110.86 S&P Glb Infrastructure 1508.36 Luxury DJ-UBS Commodity -p 118.13 628.12 251.92 0.86% -8.2% 331.21 1244.21 0.01 2708.51 -6.4 2779.26 3020.66 3838.60 -0.29 166.54 16.1 -0.15 6.9 2330.27 2063.76 -0.34 133.51 -2.5 -0.98% -0.64 0.37 0.27 -0.39 0.17 0.11 -0.85 -0.77 -0.56 -0.39 -0.34 -21.0% 13.4 -4.3 21.7 -2.4 17.1 18.1 -12.1 21.1 11.5 17.2 -2.3 Price-toDividend earnings yield ratio MSCI Index LOCAL-CURRENCY Last PERFORMANCE Daily YTD 52-wk 2.50% 16 MSCI ACWI* 408.34 -0.03% -0.1% 2.50 17 World (Developed Markets) 1,669.41 -0.07 0.5 15.0% 18.8 2.40 17 World ex-EMU 203.02 -0.07 0.2 18.4 2.40 17 World ex-UK 1,679.44 -0.09 0.4 19.3 3.10 16 EAFE 1,938.47 -0.36 1.2 14.9 2.70 11 Emerging Markets (EM) 955.54 0.30 -4.7 -10.6 3.30 16 EUROPE 115.34 0.01 2.9 16.6 3.20 18 EMU 202.18 -0.07 2.3 21.5 3.20 18 Europe ex-UK 124.20 0.15 3.2 18.7 USD GBP CHF SEK RUB NOK JPY ILS EUR DKK CDN AUD Europe Value 117.40 -0.12 3.4 17.5 Europe Growth 109.06 0.15 2.3 15.6 23 Europe Small Cap 277.19 0.25 6.3 34.8 EM Europe 258.26 -1.48 -6.0 -17.4 13 UK 2,012.55 -0.53 1.0 8.3 3.30 U.S.-dollar and euro foreign-exchange rates in global trading 13 3.70 Source: S&P Dow Jones Indices 21 3.60 Cross rates 4.20 2.40 2.30 *Fundamentals are based on data in U.S dollar Footnotes: a-in US dollar b-dividends reinvested c-in local currency Note:All data as of p.m.ET 17 Nordic Countries 212.00 0.52 5.1 16.6 -4.8 Australia 1.1160 1.8579 1.2510 0.1712 0.0310 0.1839 0.0109 0.3171 1.5255 0.2044 1.0038 3.70 764.94 -0.87 -3.5 Canada 1.1117 1.8507 1.2462 0.1705 0.0309 0.1832 0.0109 0.3159 1.5196 0.2036 0.9962 3.00 18 South Africa 1,138.55 -0.37 0.1 13.3 Denmark 5.4596 9.0887 6.1198 0.8374 0.1516 0.8998 0.0533 1.5514 7.4627 4.9109 4.8920 3.00 13 AC ASIA PACIFIC EX-JAPAN 459.04 -0.16 -1.9 -4.0 1.80 16 Japan 760.64 1.21 -5.5 31.1 3.40 China 58.92 -0.45 -6.6 -10.0 1.50 16 India 802.66 0.23 -1.8 3.1 1.20 10 Korea 571.01 0.81 -3.1 0.9 2.90 16 Taiwan 300.41 0.25 -0.7 6.5 1.90 19 US BROAD MARKET 2,114.30 0.11 0.4 24.8 1.50 30 US Small Cap 3,290.31 0.03 1.9 31.5 3.20 14 EM LATIN AMERICA 2,922.08 1.66 -8.7 -25.8 Euro 0.7316 1.2179 0.8200 0.1122 0.0203 0.1206 0.0071 0.2079 0.1340 0.6581 0.6555 Israel 3.5191 5.8583 3.9446 0.5398 0.0977 0.5800 0.0344 4.8102 0.6446 3.1654 3.1533 Japan 102.3698 170.4179 114.7483 15.7016 2.8422 16.8720 29.0898 139.9288 18.7505 92.0809 91.7279 Norway 6.0674 10.1006 6.8011 0.9306 0.1685 0.0593 1.7241 8.2936 1.1113 5.4576 5.4367 Russia 36.0178 59.9598 40.3730 5.5244 5.9362 0.3518 10.2349 49.2325 6.5972 32.3978 32.2735 Sweden 6.5197 10.8536 7.3081 0.1810 1.0745 0.0637 1.8527 8.9118 1.1942 5.8644 5.8420 Switzerland 0.8921 1.4851 0.1368 0.0248 0.1470 0.0087 0.2535 1.2194 0.1634 0.8025 0.7994 U.K 0.6007 0.6733 0.0921 0.0167 0.0990 0.0059 0.1707 0.8211 0.1100 0.5403 0.5383 U.S 1.6647 1.1209 0.1534 0.0278 0.1648 0.0098 0.2842 1.3669 0.1832 0.8995 0.8960 Source: ICAP Plc Commodities Currencies Prices of futures contracts with the most open interest EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia Derivatives Berhad; LIFFE: London International Financial Futures Exchange; COMEX: Commodity Exchange; LME: London Metals Exchange; NYMEX: New York Mercantile Exchange;ICE-EU: ICE Futures Europe *Data as of February 25, 2014 ONE-DAY CHANGE Commodity Exchange Last price Net Percentage Corn (cents/bu.) Soybeans (cents/bu.) Wheat (cents/bu.) Live cattle (cents/lb.) Cocoa ($/ton) Coffee (cents/lb.) Sugar (cents/lb.) Cotton (cents/lb.) Rapeseed (euro/ton) Cocoa (pounds/ton) Robusta coffee ($/ton) CBOT CBOT CBOT CME ICE-US ICE-US ICE-US ICE-US LIFFE LIFFE LIFFE Copper ($/lb.) Gold ($/troy oz.) Silver ($/troy oz.) Aluminum ($/ton)* Tin ($/ton)* Copper ($/ton)* Lead ($/ton)* Zinc ($/ton)* Nickel ($/ton)* COMEX Crude oil ($/bbl.) Heating oil ($/gal.) RBOB gasoline ($/gal.) Natural gas ($/mmBtu) Brent crude ($/bbl.) Gas oil ($/ton) NYMEX COMEX COMEX LME LME LME LME LME LME NYMEX NYMEX NYMEX ICE-EU ICE-EU 459.75 1397.50 605.25 145.150 2,931 177.75 17.67 86.26 394.75 1,827 1,999 -1.50 10.25 -12.75 2.750 10 1.50 -0.01 -1.09 5.00 -18 3.1945 1328.90 21.270 1,755.00 23,150.00 7,055.00 2,132.00 2,045.00 14,245 -0.0325 -13.80 -0.731 13.00 55.00 -6.50 11.00 12.00 45 102.54 3.0390 2.9855 4.546 109.50 923.50 0.71 0.0044 0.0139 -0.145 -0.01 0.25 -0.33% 0.74% -2.06 1.93 0.34 0.85 -0.06 -1.25 1.28 0.33 -0.89 -1.01 -1.03 -3.32 0.75 0.24 -0.09 0.52 0.59 0.32 0.70 0.14 0.47 -3.09 -0.01 0.03 *Twenty-four developed and 21 emerging markets Source: MSCI London close on Feb 26 Per U.S dollar In U.S dollars Per U.S dollar In U.S dollars AMERICAS Year high Year low 465.00 1,397.75 620.00 145.300 3,002 181.25 18.08 90.44 398 1,871 2,045 414.50 1,247.50 553.75 135.375 2,636 112.50 14.92 82.60 349 1,674 1,575 3.4110 3.1775 1,345.60 1,203.70 22.215 19.030 1,813.00 1,686.50 23,175.00 21,410.00 7,422.00 7,051.00 2,242.00 2,097.50 2,110.00 1,964.00 14,730 13,425 103.45 3.0901 3.0394 5.2090 110.82 940.50 91.48 2.8758 2.7831 3.8580 104.75 890.00 Sources: SIX Financial Information; WSJ Market Data Group WSJ.com>> Russia Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com Also, receive email alerts that summarize the day’s trading in Europe and Asia To sign up, go to WSJ.com/email Per euro In euros Argentina peso-a 10.7740 0.0928 7.8821 0.1269 Euro zone euro 1 0.7316 1.3669 3.2136 0.3112 2.3510 0.4254 1-mo forward 1.0000 1.0000 0.7316 1.3669 Brazil real EUROPE Per euro In euros Canada dollar 1.5196 0.6581 1.1117 0.8995 3-mos forward 1.0000 1.0000 0.7316 1.3669 Chile peso 766.90 0.001304 561.06 0.001782 6-mos forward 0.9999 1.0001 0.7315 1.3670 Colombia peso 2812.12 0.0003556 0.0500 Ecuador US dollar-f Mexico peso-a 2057.30 0.0004861 Czech Rep koruna-b 27.345 0.0366 20.005 1.3669 0.7316 1 Denmark krone 7.4627 0.1340 5.4596 0.1832 18.2060 0.0549 13.3192 0.0751 Hungary forint 310.51 0.003221 227.16 0.004402 Peru sol 3.8416 0.2603 2.8105 0.3558 Norway krone 8.2936 0.1206 6.0674 0.1648 Uruguay peso-e 30.759 0.0325 22.503 0.0444 Poland zloty 4.1764 0.2394 3.0554 0.3273 U.S dollar 1.3669 0.7316 1 Russia ruble-d 49.233 0.02031 36.018 0.02776 8.68 0.115210 6.35 0.157480 Sweden krona 8.9118 0.1122 6.5197 0.1534 Switzerland franc 1.2194 0.8200 0.8921 1.1209 Venezuela bolivar ASIA-PACIFIC Australia dollar 1.5255 0.6555 1.1160 0.8960 1-mo forward 1.2192 0.8202 0.8919 1.1212 1-mo forward 1.5287 0.6542 1.1184 0.8942 3-mos forward 1.2185 0.8207 0.8915 1.1218 3-mos forward 1.5348 0.6515 1.1229 0.8906 6-mos forward 1.5442 0.6476 1.1297 0.8852 Turkey lira U.K pound China yuan 6-mos forward 1.2175 0.8214 0.8907 1.1227 3.0644 0.3263 2.2419 0.4461 0.8211 1.2179 0.6007 1.6647 0.8213 1.2176 0.6008 1.6643 8.3724 0.1194 6.1252 0.1633 Hong Kong dollar 10.6080 0.0943 7.7607 0.1289 India rupee 84.9251 0.0118 62.1300 0.0161 3-mos forward 0.8216 1.2171 0.6011 1.6636 11640 0.0000859 6-mos forward 0.8222 1.2162 0.6015 1.6624 2.6529 Indonesia rupiah 15910 0.0000629 Japan yen 1-mo forward 139.93 0.007146 102.37 0.009769 1-mo forward 139.91 0.007148 102.35 0.009770 MIDDLE EAST/AFRICA Bahrain dinar 0.5152 1.9408 0.3769 3-mos forward 139.86 0.007150 102.32 0.009773 Egypt pound-a 9.5135 0.1051 6.9599 0.1437 6-mos forward 139.78 0.007154 102.26 0.009779 Israel shekel 4.8102 0.2079 3.5191 0.2842 Malaysia ringgit-c 4.4931 0.2226 3.2871 0.3042 Jordan dinar 0.9678 1.0332 0.7081 1.4123 New Zealand dollar 1.6482 0.6067 1.2058 0.8293 Kuwait dinar 0.3853 2.5953 0.2819 3.5475 2055.06 0.0004866 1503.45 0.0006651 Pakistan rupee 143.517 0.0070 104.995 0.0095 Lebanon pound Philippines peso 60.970 0.0164 44.605 0.0224 Saudi Arabia riyal 5.1265 0.1951 3.7505 0.2666 Singapore dollar 1.7309 0.5777 1.2663 0.7897 South Africa rand 14.8304 0.0674 10.8497 0.0922 5.0207 0.1992 3.6731 0.2723 South Korea won 1456.97 0.0006864 1065.90 0.0009382 Taiwan dollar 41.422 0.02414 30.304 0.03300 Thailand baht 44.538 0.02245 32.583 0.03069 United Arab dirham a-floating rate b-financial c-government rate c-commercial rate d-Russian Central Bank rate Source: ICAP Plc 28 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BLUE CHIPS & BONDS Major players & benchmarks Dow Jones Industrial Average Below, a look at the Dow Jones Stoxx 50, the biggest and best known companies in Europe, including the U.K LAST: 16198.41 YEAR TO DATE: OVER 52 WEEKS Stoxx Europe 50: Wednesday's best and worst Previous close, in local currency Company Country Industry Volume Anheuser-Busch InBev Belgium Brewers 2,300,703 STOCK PERFORMANCE Previous session 76.34 s 18.75, or 0.12% t 378.25, or 2.3% s 2,123.04, or 15.1% High YTD -1.2% 2.79% P/E: 16 52-week Sweden Telecommunications Equipment 7,202,453 84.20 1.32 7.3 5.9 Switzerland Industrial Machinery 4,998,722 22.65 1.21 -3.5 8.6 Sanofi SA France Pharmaceuticals 2,429,752 75.36 1.13 -2.3 6.3 GlaxoSmithKline United Kingdom Pharmaceuticals 7,464,453 1,691 0.96 4.9 15.9 Tesco United Kingdom Food Retailers & Wholesalers 36,667,361 326.00 -2.5 -10.7 Credit Suisse Group AG Switzerland Banks 8,473,479 27.50 0.8 12.2 Schneider Electric France Electrical Components & Equipment 1,942,801 64.03 -2.26 1.0 13.7 -2.74% -2.48 Deutsche Telekom Germany Mobile Telecommunications 12,006,052 12.38 -2.02 -0.4 United Kingdom Banks 45,055,452 253.15 -1.84 -6.9 16000 50–day moving average 15500 51.9 Barclays 16500 t Telefon L.M Ericsson B ABB 17000 Close Low 9.4% -14.8 15000 .And the rest of Europe's blue chips Company/Country (Industry) Volume BASF 2,623,682 Germany (Commodity Chemicals) Telefonica S.A 16,954,632 Spain (Fixed Line Telecommunications) Roche Holding Part Cert 1,416,017 Switzerland (Pharmaceuticals) Standard Chartered 4,359,598 United Kingdom (Banks) Total 4,156,863 France (Integrated Oil & Gas) Nestle 4,832,102 Switzerland (Food Products) SAP 1,934,925 Germany (Software) UBS 9,527,738 Switzerland (Banks) Daimler 2,322,017 Germany (Automobiles) BG Grp 8,130,549 United Kingdom (Integrated Oil & Gas) Novartis AG 6,516,762 Switzerland (Pharmaceuticals) HSBC Hldgs 21,951,541 United Kingdom (Banks) Allianz SE 1,035,930 Germany (Full Line Insurance) ENI 12,533,718 Italy (Integrated Oil & Gas) Zurich Insurance Group 473,482 Switzerland (Full Line Insurance) British American Tobacco 2,418,275 United Kingdom (Tobacco) Siemens 1,739,183 Germany (Diversified Industrials) Financiere Richemont 948,457 Switzerland (Clothing & Accessories) BP PLC 21,231,256 United Kingdom (Integrated Oil & Gas) L'Air Liquide 671,404 France (Commodity Chemicals) Latest, in local currency 14500 STOCK PERFORMANCE Latest YTD 52-week 83.81 0.88% 8.2% 11.48 0.61 -3.0 20.7 273.00 0.52 9.6 28.8 1,290 0.39 -5.2 -26.3 46.56 0.32 4.5 25.2 66.80 0.30 2.3 3.6 58.50 0.29 -6.1 -1.7 18.45 0.27 9.0 25.6 67.35 0.27 7.1 48.4 1,100 0.23 -15.2 -4.1 75.00 0.20 5.3 20.4 627.10 0.02 -5.3 -12.0 131.00 0.5 26.4 17.48 -0.1 0.6 268.50 -0.04 3.9 Company/Country (Industry) 16.3% 7.6 3,174 -0.08 -2.0 -0.11 -2.6 22.4 88.65 -0.17 -0.2 20.3 506.80 -0.24 3.8 14.1 99.12 -0.24 -3.6 Unilever CVA 2,949,779 Netherlands (Food Products) Royal Dutch Shell A 2,804,434 United Kingdom (Integrated Oil & Gas) AstraZeneca 1,578,851 United Kingdom (Pharmaceuticals) 115,459,412 Lloyds Banking Group PLC United Kingdom (Banks) Banco Santander S.A 23,545,457 Spain (Banks) BHP Billiton 5,716,358 United Kingdom (General Mining) Vodafone Group 95,804,879 United Kingdom (Mobile Telecommunications) BNP Paribas 2,928,662 France (Banks) National Grid 5,337,647 United Kingdom (Multiutilities) Banco Bilbao Vizcaya Argn 13,024,043 Spain (Banks) Reckitt Benckiser Grp 1,120,278 United Kingdom (Nondurable Household Products) Rio Tinto 4,529,912 United Kingdom (General Mining) Bayer 1,523,396 Germany (Specialty Chemicals) Unilever 4,482,585 United Kingdom (Food Products) Diageo 4,121,465 United Kingdom (Distillers & Vintners) Glencore Xstrata PLC 26,373,971 United Kingdom (General Mining) ING Groep 8,740,996 Netherlands (Life Insurance) Deutsche Bank 4,844,888 Germany (Banks) AXA 6,894,120 France (Full Line Insurance) Moet Hennessy Louis Vuitt 961,326 France (Clothing & Accessories) -7.2 96.69 Volume 8.9 Latest, in local currency 29 STOCK PERFORMANCE Latest YTD 52-week 28.81 -0.38% -1.6% -0.39 1.2 2.4 4,075 -0.49 14.0 38.3 80.83 -0.49 2.5 52.1 6.59 -0.53 2.2 22.0 1,917 -0.60 2.6 -8.0 245.25 -0.69 0.01 46.4 59.04 -0.77 4.2 41.7 830.00 -0.78 5.3 16.2 9.09 -0.85 1.6 27.7 5,005 -0.89 4.4 13 20 27 Jan 10 17 14.6 -0.92 -0.1 -1.6 -0.97 -1.4 -5.4 1,874 -1.19 -6.3 -4.5 329.85 -1.24 5.5 -13.9 10.53 -1.31 4.2 75.2 35.06 -1.39 1.1 0.3 19.08 -1.55 -5.6 45.1 135.15 -1.60 1.9 Volume, in millions AT&T AmExpress Boeing Caterpillar Chevron CiscoSys CocaCola Disney DuPont ExxonMobil GenElec GoldmanSachs HomeDpt Intel IBM JPMorgChas JohnsJohns McDonalds Merck Microsoft Nike B Pfizer ProctGamb 3M TravelersCos UnitedTech UtdHlthGp Verizon VISA ClA 35.9 2,447 Symbol T AXP BA CAT CVX CSCO KO DIS DD XOM GE GS HD INTC IBM JPM JNJ MCD MRK MSFT NKE PFE PG MMM TRV UTX UNH VZ V 31.5 3.7 4.1 3.7 5.0 39.0 14.7 5.2 3.4 6.7 26.3 3.5 8.4 16.9 3.3 20.9 4.6 3.4 7.3 34.5 3.2 20.3 6.8 2.4 1.7 2.0 4.3 93.4 1.8 WMT 7.7 Stock -2.6 -0.94 3.4 Sources: SIX Financial Information Credit derivatives Spreads on credit derivatives are one way the market rates creditworthiness Regions that are treading in rough waters can see spreads swing toward the maximum—and vice versa Indexes below are for five-year swaps Markit iTraxx Indexes Index: series/version Mid-spread, in pct pts Mid-price Europe: 20/1 Eur High Volatility: 20/1 Europe Crossover: 20/1 Asia ex-Japan IG: 20/1 Japan: 20/1 SPREAD RANGE, in pct pts since most recent roll Maximum Minimum Average Coupon 0.01% 1.04 0.69 0.81 0.01 1.61 1.01 1.23 Stora Enso 2.65 110.16 0.05 4.08 2.65 3.23 98.44 0.01 1.57 1.24 1.38 0.01 0.97 0.68 0.82 Note: Data as of February 25 In percentage points Spreads Spreads on five-year swaps for corporate debt; based on Markit iTraxx indexes 3.00 Index roll 2.00 Asia ex-Japan IG t 1.00 Latest Points $32.00 89.68 126.68 97.26 115.58 21.94 37.87 80.10 65.47 95.90 25.31 162.53 81.69 24.81 184.19 56.69 90.98 95.91 56.24 37.45 78.44 31.97 77.86 132.95 83.42 115.94 75.96 46.30 226.12 –0.17 –0.23 –0.10 0.85 0.61 0.10 0.10 –0.11 0.55 –0.41 0.04 –0.40 0.71 0.19 0.96 –0.34 –0.13 –0.71 0.34 –0.09 0.33 0.07 –0.26 0.02 0.08 0.05 0.64 0.01 –0.99 74.89 1.54 –1 Sept Oct Nov Dec Jan Feb 2013 2014 Source: Markit Group WSJ.com>> Follow the markets throughout the day, with updated stock quotes, news and commentary at WSJ.com Also, receive emails that summarize the day’s trading in Europe and Asia To sign up, go to WSJ.com/Email –0.54% –0.26 –0.08 0.88 0.53 0.46 0.26 –0.14 0.85 –0.43 0.14 –0.25 0.88 0.77 0.52 –0.60 –0.14 –0.73 0.60 –0.24 0.42 0.24 –0.33 0.02 0.10 0.04 0.85 0.02 –0.44 2.10 CHANGE, in basis points Yesterday Yesterday Five-day 28-day 205 –8 –16 –50 CASINO GUICHARDPERRACHON 113 –4 –5 –5 SCANIA 44 –2 –13 –16 Bca Pop di Milano Soc Coop 263 –9 –13 –25 LADBROKES 313 –10 –8 –12 METRO 114 –4 –2 Holcim 116 –4 –10 Valeo 87 –3 –6 Yesterday Yesterday Five-day 28-day Landbk Baden Wuertbg 77 PostNL 137 14 –5 Bay Landbk Giroz 106 11 12 Telefonica 136 –1 –18 –2 Publicis Groupe 37 –1 Deutsche Bahn 38 Rio Tinto 90 –10 –11 LVMH Moet Hennessy Louis Vuitton 53 –3 Centrica 75 Grohe Hldg 60 Societe Television Francaise 68 –2 –2 –2 ATLANTIA 92 –3 –7 –12 Source: Markit Group Australia CHANGE Percentage And the most deterioration CHANGE, in basis points 99.73 101.20 21 Source: WSJ Market Data Group Showing the biggest improvement 101.33% 1.35 14 At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and how much a seller demands to sell-protection from default on an issuer's debt The snapshot below gives a sense which way the market was moving yesterday 0.71 0.75 Feb Credit-default swaps: European companies 1.06 t Tracking credit markets & dealmakers 31 DJIA component stocks WalMart 3,408 100.35 24 Note: Price-to-earnings ratios are for trailing 12 months -1.9% 2,189 Dec Europe: Bank revenues from equity capital markets Behind every IPO, follow-on or convertible equity offering is one or more investment banks At right, investment banks historical and year-to-date revenues from global equity-capital-market (ECM) deals n Equity capital markets n Debt capital markets (both in billions, left axis) 75% ECM as a percentage of total (right axis) t 50 25 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Dealogic THE WALL STREET JOURNAL Thursday, February 27, 2014 | 29 PERSONAL JOURNAL Help! I’m on a Conference Call: How to Get Things Done The Juggler Fails to hit ‘mute’ while multitasking; everyone can hear the sounds of typing, chewing, barking dogs or screaming toddlers The Coach Manages the flow of conversation toward a planned goal, noting when the conversation goes off-topic BY SUE SHELLENBARGER The conference call is one of the most familiar rituals of office life—and one of the most hated Abuses are rife People on the line interrupt others, zone out or multitask, forgetting WORK & to hit “mute” while FAMILY talking to kids or slurping drinks Sales executive Erica Pearce has seen teleconferences interrupted by home FedEx deliveries, crying children and the sound of a co-worker vacuuming his house “Nobody could hear,” she says of the cleaning As leader of the meeting, she said into the phone, “If you’re vacuuming, I appreciate that, and you’re welcome to come to my house afterward But you need to be on mute.” Another conference call ended when a participant put his line on hold, starting a stream of elevator music, says Ms Pearce of Scotts- The Monopolizer Thinks through solutions out loud, talking endlessly without regard for other participants dale, Ariz., a global account executive for a software company Conference-call complaints are so widespread that a recent comedy video showing how ridiculous conference-call behavior such as secretly playing solitaire would look “in real life” has drawn more than six million views But conference calls aren’t going anywhere; they are too useful for businesses dealing with farflung workplaces, flexible schedules and a clampdown on businesstravel expenses Time spent in audio conferences in the U.S is expected to grow 9.6% a year through 2017, according to Wainhouse Research, a Boston market-research firm; about 65% of all conferencing is still done by audio calls There are ways to fix the problems For instance, meeting leaders must set firmer ground rules than they for face-to-face meetings and tighter, more explicit agendas Leaders also have to The Host Explains the faceto-face joking or visual displays in the meeting room so that remote participants understand and don’t feel left out The Lurker Blindsides other participants by sitting through entire calls without announcing his presence until the end, if at all work harder to get participants talking, both by asking more questions and by listening more Many conference calls are split between people in a conference room and others on a muddysounding call-in line This often makes remote participants “feel like second-class citizens, like, ‘The cool kids are here,’ ” says Laura Stack, author of “Execution Is the Strategy.” She advises leaders to have all participants say their names when they speak so remote callers know what’s going on If someone cracks a joke and the room bursts into laughter, the leader should “let the others know who said what and repeat the joke,” says Ms Stack, a Denver productivity consultant and trainer One of the biggest problems with virtual meetings is that it is hard for participants to build rapport with each other, a hurdle cited by 75% of 3,301 businesspeo- The Interrupter Fails to adapt to communication delays and repeatedly breaks in while others are speaking Illlustrations by Robert Neubecker Rambling, Multitasking or Zoning Out Are Among Abuses in Ritual of Office Life ple surveyed in 2012 by RW3, a New York culture and leadership training company The absence of nonverbal cues such as facial expressions makes many people hesitant to speak up and makes it harder to pay attention In the survey, 71% of participants cited a lack of participation by others as a problem with virtual meetings To build relationships, Ms Pearce takes time during the teleconferences she leads to have participants who don’t know each other introduce themselves, explain their roles in the project at hand, and tell what they want out of the meeting, she says For teleconferences, agendas and goals should be clearer and more explicit than for face-to-face meetings “You need to script them more tightly” to keep people’s attention from wandering, says Daniel Mittleman, an associate professor in computing and digital media at DePaul University, Chicago Teleconferences requiring interaction should be seven to nine people, experts say Meeting leaders should talk less than in face-to-face meetings and listen more, says Paul Donehue, president of Paul Charles & Associates, a Londonderry, N.H., sales-management consulting firm For a problem-solving teleconference, for example, a leader might talk 40% of the time and listen 60%, compared with a 55%-to-45% ratio when meeting face-to-face for the same purpose, Mr Donehue says Leaders should spend as much time on preparing questions to ask participants as on writing the agenda, Mr Donehue says He advises leaders to use a form with spaces to note comments by individual participants during the meeting This helps leaders listen closely and hold participants’ attention by citing their earlier input Managing conflicts is harder in teleconferences Not everyone can sense when a silent participant is frustrated or angry “There’s sometimes a little passive-aggressiveness in that silence,” Ms Stack says “Some people just check out, thinking, ‘OK, you dummies, go ahead and that I’m going to sit here on mute.’ ” She suggests posing a question: “ ‘Jane, you’re kind of quiet What are your thoughts?’ You sometimes get an explosion,” but this can get important issues out in the open, Ms Stack says Participants can help meetings run more smoothly by volunteering to serve as moderator, keeping people on-topic and sticking to time limits Divvying up moderating and note-taking duties can free meeting leaders to participate and keep people engaged, Ms Stack says Some managers encourage any participant to moderate, breaking in if a speaker wanders off-topic and asking that everyone stick to the agenda, says Steven M Smith, senior consultant in Seattle for SolutionsIQ, a management consulting and training firm Time-zone differences can irritate people who have to rise at midnight to meet with colleagues in the U.S., says Michael Schell, chief executive officer of RW3 “It’s important to move the meeting times around” to be fair, he says Also, meetings should start promptly; taking 10 minutes to get coffee might seem normal at a.m in New York, but it can seem disrespectful to a colleague in Australia who got out of bed to join the call, Mr Schell says Videoconferencing can solve some of the problems The technology is increasingly inexpensive and easy to use, and a growing number of applications, such as Vidyo and Blue Jeans Network, can connect users on a variety of devices, including webcams, laptops, tablets or smartphones, says David Coleman, founder and managing director of Collaborative Strategies Inc., San Mateo, Calif The technology can create other challenges, though Mr Smith says participants who aren’t tech-savvy often consume valuable meeting time getting used to unfamiliar systems Videoconferencing also can make people self-conscious Many people avoid video, Ms Stack says, because they don’t want to put on makeup or change their workout clothes “I cannot tell you how many times I’ve heard people say, ‘I don’t know what’s wrong with my webcam I can’t get it to work, so I’m just going to be here in voice,’ ” she says Email sue.shellenbarger@wsj.com 30 | Thursday, February 27, 2014 THE WALL STREET JOURNAL SPORTS HEARD ON THE PITCH Leading From the Rear: South Korea’s Other Title After a respectable 14 podium appearances in Vancouver’s 2010 Winter Olympics, South Korea’s outlook was bright going into the 2014 Games The Koreans weren’t able to live up to expectations, earning only eight medals in Sochi, but they were the best in the world in one unfortunate category: finishing last For the third consecutive Olympics, The Wall Street Journal awarded lead, tin and zinc medals to the three worst performers to complete a given event (based on time or score of last-place finishers in every Olympic event; no disqualifications or nonfinishers were counted) South Korean Olympians finished in the bottom three places in an astounding 19 different events, more often than any other participating country Canada came in second with 16 medals, with the U.S (15) earning the third most not-so-precious medals Since the U.S and Canada have large Olympic delegations, it isn’t entirely surprising to see such large pools of Olympians finish all over the field of competition: These two countries earned 28 and 25 real medals, respectively, in Sochi Poland has no such excuse Despite its much smaller Olympic delegation, Poland finished with 14 of our dubious medals, while taking home only six real ones —Ryan Wallerson HEARD ON THE FIELD Bangladesh’s Anamul Haque watches India captain Virat Kohli bowl in Wednesday’s Asia Cup match in Fatullah Kohli scored a century as India won by six wickets Cricket’s Big Three Hog the Crease BY RICHARD LORD The restructuring approved at the International Cricket Council board meeting in Singapore on Feb made it abundantly clear who is in charge of world cricket: the England and Wales Cricket Board, Cricket Australia and the Board of Control for Cricket in India The plan, which is almost certain to be rubber-stamped at a full board meeting in June, hands over widereaching powers to two subcommittees, the Executive Committee and the Financial and Commercial Affairs Committee, which include representatives of the Big Three Each one will also feature two other representatives from the remaining seven national associations, and their decisions still have to be ratified by the main ICC board But two, of course, is not enough to vote down three; while the chances of the main board stamping on measures proposed by the Big Three are unlikely—particularly given that BCCI President N Srinivasan just became ICC chairman The Pakistan Cricket Board and Sri Lanka Cricket, traditionally two of the BCCI’s closer allies, were the only boards to abstain in Singapore, while previously skeptical boards including Cricket South Africa and the Bangladesh Cricket Board were won over with concessions As well as the altered committee structure, the proposed World Test Championship involving the top four teams has been ditched and replaced with a reprieved Champions Trophy The idea of two-tier Test cricket has also been shelved, with a route created for associate nations to potentially become Test-playing nations on a promotion and relegation basis And last to be thrown on the scrap heap is the Future Tours Program— which was bound to happen once boards started ignoring it—replaced with legally binding bilateral series agreements The new rules also give the Big Three a larger slice of the game’s global revenues On the face of it, that sounds fair enough: they, in particular India, are the game’s most lucrative markets, contributing its big-spending audiences Getting the power to decide almost everything about the game based on any financial metric, however, isn’t fair enough at all Of course money will tend to equal power, but this implies that a team or nation’s contribution to a sport is solely about how much revenue it generates It’s a reductive definition of sport that misses the whole point of the enterprise, and risks reducing cricket to just another commodity The intangibles with a sport like cricket are bigger and more important than with almost any other product, but ruthless and singleminded pursuit of short-term financial gain could accidentally strangle the goose that lays the golden egg Top-level international cricket doesn’t have many teams, but it has shrewdly maximized its resources by forcing those teams to all play each Getty Images; Reuters (above) ICC Restructuring Gives Leading Nations Even More Say Over Running of Game BCCI President N Srinivasan other, based on the FTP, keeping the smaller nations competitive with a decent share of the financial spoils and making for more rewarding international competition Now, the big, rich teams would be free to just play each other all the time The Big Three claim—and other boards such as the West Indies Cricket Board have supported their view—that the new proposals will benefit everyone financially, reasoning that everyone’s slice of the pie grows if the pie itself keeps growing at the rate it has thanks to mediarights deals This presupposes that the recent spike in cricket’s popularity, fed al- most entirely by India, will continue But while benefiting financially might be great for a cricket board, it’s not much use to the fans if it comes, as it currently sometimes does for certain boards, at the cost of its best players actually playing for the country Potentially shorn of players, games and revenue, they risk withering away, at which point the already small number of teams playing at the highest level will be reduced even further Only a couple of things are certain in all this One is that for the immediate future, the Big Three, and in particular India, will continue to get richer In growing their power, which is in fact a formalization of something that’s been happening for a while, they have secured their own short-term financial bounty What happens in the longer term, and what happens to the other boards, remains to be seen The other is that cricket has put itself decidedly on the wrong side of history where governance is concerned Two years ago, a report by former Lord Chief Justice of England and Wales Lord Woolf, commissioned by the ICC, proposed moving in entirely the opposite direction, toward best-practice modern standards of corporate governance and transparency With its new structure, described by Woolf as “a really alarming position for the future of cricket,” the ICC has decided to go the other way, thereby creating an uncertain future for itself New Bannister Trophy Will Honor Historic Mile The 60th anniversary of Roger Bannister breaking the four-minute mile will be marked with races over the distance in London The 84-year-old Bannister will be patron of the May 24 event that will see 30 races finishing in front of Buckingham Palace The winner of the senior men’s race will be awarded the new Sir Roger Bannister trophy, and there will be runs for children, families, seniors and wheelchair athletes “The mile has a wonderful symmetry as a race, neither too short nor too long,” Bannister said on Wednesday “And I’m looking forward very much to being involved with this event.” In an achievement that stands as one of the seminal moments in track history, Bannister covered four laps on a cinder track in minutes, 59.4 seconds on May 6, 1954, in the English city of Oxford At the time, many thought the feat was an impossible one —Associated Press Associated Press Miler Roger Bannister hits the tape to beat minutes in 1954 THE WALL STREET JOURNAL Thursday, February 27, 2014 | 31 Agence France-Presse/Getty Images OFF THE WALL A long line of snow plows clears the runway at Stockholm’s Arlanda Airport, where airport crews take pride in their 50-year record of keeping the airport open despite long and snowy winters Try Plowing Through Six-Month Winters BY DANIEL MICHAELS round-the-clock shifts, like firefighters, and hustle at the first irports in much of the sight of snow Helsinki airport last world get occasional snow, closed in 2003, for 30 minutes, beand North America has cause of snow and air-traffic-contaken a beating this season But in trol problems Like other Nordic Nordic countries, where winter can airports, it frequently cuts capaclast six months and airplane deicity and cancels some flights ing starts in August, skill at operAnother Nordic secret: pushing ating through sleet, snow and producers for absurdly powerful frost is vital for business and is a equipment Oslo Airport runs two point of pride of the world’s largest self-proStockholm’s Arlanda Airport pelled snowblowers, built by Norsets a goal of never succumbing to wegian airport-equipment maker winter “That’s also the sport of Øveraasen AS Only two other of it,” says Arlanda operations head the TV2000 units operate at airLena Rökaas ports; they, too, are in Norway Her team spends months conThe 2,000-horsepower maducting off-season drills But when chines can shoot 10,000 tons of her squad’s big day came in Desnow an hour more than 45 meters cember, the Swedish manager worfrom the tarmac “It’s like throwried she and her colleagues ing a car every second,” says Henwouldn’t be able to handle what ning Bråtebæk, operations director was coming at them at Oslo Airport Undaunted, her crew headed Helsinki Airport pushed Finnish out in tight formation as if “getsnow specialist Vammas in the ting ready for battle,” Ms Rökaas 1990s to develop some of the first says They plowed relentlessly machines able to plow, sweep and ahead and protected a perfect 50blow snow simultaneously Several year record: Arlanda stayed open of these machines can clear a rundespite getting way in about 10 socked by more minutes, a job that than a third of a a generation ago meter of snow took half an hour Swedish crews Back then, runwax nostalgic way clearing reabout a 1968 blizquired many differzard when Arlanda ent machines was the only WestOpening scenes of Øveraasen plow ern European airthe 1970 disaster port operating and film “Airport” arriving planes parked on one of show assorted tractor-size vehicles its two runways “It’s a lovely tackling a blizzard, including some story,” says Arlanda spokeswoman that spit fire to melt ice Susanne Rundström Today, all-in-one cleaners are Nordics call it “snowhow,” a about as long as a locomotive mix of massive machines, finely Most have two mighty engines, honed plowing patterns and conone for motion and the other to stant practice sweep and blow They can run for “We consider ourselves almost hours without stopping—and Norworld champions,” says Heini Nodics keep going ronen-Juhola, vice president for “They don’t go for breaks— aviation and safety at Helsinkithere’s big pride in that,” says Ms Vantaa Airport Helsinki has develRökaas in Stockholm of her drivoped more than 20 clearing rouers, who mainly use Swiss snow tines, each linked to specific equipment from Aebi Schmidt weather conditions Ms NoronenHolding AG “Someone goes out Juhola considers the playbook “our and gives them coffee.” big secret.” The machines can run for so As at other Nordic airports, long that producers have to worry Helsinki’s 120 maintenance people about drivers’ comfort Vammas spend summers choreographing boasts that its cabs are so cozy, equipment They usually clean tarwith their heated seats, frost-resismacs with diagonal rows of vehitant windows, stereo speakers and cles, sometimes referred to as a vibration-free suspension, that opconga line Each machine shoves erators are comfortable in T-shirts snow to the vehicle behind it and Over the past decade, combinaultimately off the edge of the runtion machines have caught on at way Drivers follow their maneuairports across Canada and the vers precisely so air controllers, U.S After a crippling winter storm who also know the routines, can in 2011, frequently sweltering Daltime arriving and departing flights las-Fort Worth Airport bought 10 down to the minute Vammas machines for about $1 “It’s like dancing,” says Ms Nomillion each Vammas was acronen-Juhola quired by Fortbrand Services Inc In winter, her crews work of Plainview, N.Y., in 2010 It manu- A factures Vammas machines in Finland and in the U.S “They look very cool,” says airport spokesman David Magaña When snow was forecast in December, the airport prepared to unleash its yellow monsters Unfortunately, what arrived was sleet that landed and froze, creating “a hockey rink from here to Tennessee,” says Mr Magaña With snowplows offering little help against ice, nearly 90% of flights were canceled for a day Still, versatile Nordic machines have been so popular that other big vehicle makers have jumped in American truck maker Oshkosh Corp., based in wintry Wisconsin, touts its new multifunction machine as “a rolling 81,000-pound Swiss Army Knife.” Product man- ager Les Crook boasts that its joystick control, covered in buttons for each function, “is just like a Game Boy.” Not to be outdone, Øveraasen last year unveiled a new product line with the curvy lines of a sports car and cabs that rise like a cherry-picker to give drivers greater visibility “The futuristic design is a real eye-catcher,” says an Øveraasen brochure Bård Eker, whose industrial-design firm Øveraasen hired for the new line, says his company refrained from making the look too futuristic for fear of scaring off customers While big equipment helps get the job done, veterans say quality snow time is critical Oslo Airport, for example, gets hit on average 60 days each winter “We get a lot of practice,” says Mr Bråtebæk But this year, as the U.S has experienced a Nordic winter, Northern Europe has been unusually warm That worries Ms Rökaas in Stockholm “The worst thing for these people is when there is no snow,” she says of drivers, who she fears might get bored and quit As for the future, officials are counting on snow and dreaming up new ways to prepare “We would love to have a roof on the airport,” says Ms NoronenJuhola in Helsinki “It’s a great idea.” Online>> Watch a video on Nordic ‘snowhow’ at WSJ.com/OffTheWall 32 | Thursday, February 27, 2014 THE WALL STREET JOURNAL HEARD ON THE STREET Email: heard@wsj.com FINANCIAL ANALYSIS & COMMENTARY U.K May Lift Rates First There and Back U.K quarterly GDP, cumulative change from 2008 peak 0% –2 –4 –6 –8 ’08 ’09 ’10 ’11 ’12 ’13 Source: Office for National Statistics The Wall Street Journal rising rates Policy makers have been keen to emphasize that they don’t want to take any chances with a recovery that could falter without solid foundations But the latest crop of U.K GDP data, which provide more information on the sources of demand, should help put some fears to rest Both net trade and investment made positive contributions to growth of 0.7% in the fourth quarter In particular, business investment—for so long the missing piece of the puz- The Bank of England Bloomberg News It isn’t a race, and there are no prizes for winning But the Bank of England looks like it will be first out of the blocks among its major global peers in raising interest rates On the face of it, that might be surprising, The U.K has been a laggard in the recovery from the global financial crisis Even now, the level of gross domestic product is 1.4% below its 2008 peak in real terms But the economy finally appears to have bounced back decisively in 2013, and shows few signs of flagging For the BOE’s peers, the picture is more nuanced The U.S Federal Reserve is still extricating itself from its bond-purchase program Far from tightening policy, it is still supplying stimulus, albeit at lower levels The Bank of Japan is engaged in a herculean effort to boost inflation And the European Central Bank may yet be forced to loosen policy, although its main strategy appears to be simply to buy time for disinflationary pressures to abate True, the BOE has been aggressive in efforts to push back against expectations of zle—rose 2.4% on the quarter and 8.5% on the year Revisions to previous figures show that business investment has been rising for four consecutive quarters, BNP Paribas notes, an outcome that chimes much better with surveys of business activity and confidence The net trade contribution, however, was less impressive, due to a fall in imports rather than burgeoning exports The U.K continues to run a large trade deficit Still, if this picture can be continued, it points to a more sustainable growth picture Survey data such as the purchasing managers’ indexes have suggested a strong start to 2014, although poor weather may yet hurt firstquarter growth And the gradual recovery in Europe may help boost the U.K further given that the euro zone is such an important trade partner All of that appears to be emboldening some members of the BOE’s Monetary Policy Committee: Martin Weale last week was the first to put a time frame on the first rate increase, suggesting it could come in spring 2015 Some economists even expect an increase this year, on the basis that slack in the economy is smaller than the BOE assumes True, inflation is quiescent at present But the risk is that holding rates low for too long causes capital to be misallocated and stokes further problems in the housing market An emergency setting for monetary policy is increasingly looking at odds with the state of the U.K economy —Richard Barley OVERHEARD The taper—and taper talk—hurt For the first time since the financial crisis, the balance sheets of U.S banks ended the year with an aggregate unrealized loss on so-called available-for-sale securities, according to the Federal Deposit Insurance Corp.’s latest quarterly banking profile Wednesday Banks began 2013 showing unrealized gains of more than $35 billion on these securities Taper talk from the Federal Reserve, which pushed long-term bond yields higher, eroded those gains to just $907 million by the end of the third quarter The banks ended the fourth quarter showing unrealized losses of $8.1 billion While the reappearance of this particular ghost of the financial crisis isn’t exactly welcome, it shouldn’t strike horror in investors This time, the unrealized losses are driven by rising interest rates rather than credit impairment and fears of default As the bonds held in the portfolios mature, the losses will reverse Some losses run deeper than others The Case Against Look Out for Mobile-Deal Strings Palo Alto’s Stock The outcomes of patent-infringement lawsuits are notoriously difficult to predict But for investors in Palo Alto Networks, they could be even costlier to ignore How much they are ignoring it is a good question The company’s share price jumped nearly 23% over roughly a two-week period, between some favorable pretrial decisions in a case brought by rival Juniper Networks and the start of the trial this Monday The stock got another 4.3% lift that day after Palo Alto posted its fiscal secondquarter results, which included a 46% jump in revenue from the same period last year and an upbeat outlook This particular case has a twist in that it involves the co-founder of Palo Alto, who is listed as an inventor on several of the patents at issue in the case Nir Zuk was the chief technology officer at NetScreen Technologies until it was acquired by Juniper in 2004 for about $4 billion He stayed with Juniper for about a year before leaving the company to get Palo Alto up and running Juniper claims Mr Zuk incorporated its technology into Palo Alto’s products, which Palo Alto denies Palo Alto also hit back with its own pat- ent-infringement suit against Juniper last year In the trial that began Monday, Juniper is seeking an injunction on the products in question Palo Alto said in its quarterly filing this week that it doesn't believe a loss is “probable.” But there is a range of possible outcomes to the case that are short of a “loss” that may not be fully factored into Palo Alto’s generous valuation For example, the company could end up paying a royalty to Juniper for use of the technology Palo Alto is still a relatively small firm, with revenue projected to hit about $573 million for the current fiscal year, against a market capitalization of almost 10 times that Walter Pritchard of Citigroup has a $49 price target on Palo Alto based in part on a projected 2% royalty rate stemming from the case; that price target is more than 30% below Palo Alto’s current market value Trading at about 135 times forward earnings, Palo Alto’s shares already are baking in strong business growth with few hazards on the road ahead Court cases, though, have a certain knack for creating surprise potholes —Dan Gallagher Consolidation among cellphone operators remains the plat du jour in Europe The Continent’s antitrust watchdog is expected to rule on proposed takeovers in Germany and Ireland this spring; other markets such as Italy look ripe for deals But eliminating a competitor may not always have the desired effect of more stable prices Regulators face a tough balancing act On the one hand, taking out a competitor so prices can rise should help operators justify muchneeded investment; Europe badly trails the U.S and Asia in its rollout of fourth-generation wireless networks But regulators also have a duty to ensure operators don’t grow merely at the expense of higher prices and lesser-quality services for consumers For investors in European wireless operators, that makes the key uncertainty what kind of remedies regulators might impose to permit more deals So far, the test case is Austria Hutchison 3G Austria bought Orange Austria in December 2012, reducing the number of mobile operators in the country from four to three One remedy was to reserve spectrum for a new entrant But the price of wireless services in Austria is the lowest in Europe, which meant the offer didn’t garner any interest Prices have since started to rise after increases kicked in in October Germany could prove different The European regulator is expected to approve Telefónica Deutschland’s takeover of E-Plus, bringing together the two smallest German operators by sub- The key uncertainty is what kind of remedies regulators might take to permit more consolidation scribers In theory, remedies could be lighter because Germany already has a low concentration of mobile-operator brands: Mobile operators and other service providers that Call Waiting German mobile-operator market share by subscribers Telefónica Deutschland/E-Plus (combined) 38% T-Mobile 33% Vodafone E-Plus 29% 21% Telefónica Deutschland 17% *As of June 2013 Source: Citigroup The Wall Street Journal don’t own their own wireless networks, so-called virtual network operators, have a 20% share of the German market, the highest in Europe, notes Citigroup But if Germany is forced to seek a new entrant, there could be takers Germany is Europe’s biggest market by mobile subscriptions and data prices are high T-Mobile Austria charges €17 ($23.37) while T-Mobile Germany charges €96 for the same type of smartphone plan, according to a report last May from consultants Rewheel Like Austria, Germany also might demand that an acquirer offer better access terms for virtual operators So far, these haven’t taken off in Austria But in Germany, if access terms are set low enough and are open to all virtual operators, the potential for price cuts is high, says Citigroup The European telecom sector has seen valuation multiples increase by more than 25% over the past year on hopes that consolidation will bring gains The sector now is valued at 5.7 times forecast 2014 earnings before interest, taxes, depreciation and amortization Acquirers such as Telefónica Deutschland will see the benefit of large cost savings But if remedies imposed by regulators work to keep prices down, investors might not reap the same gains elsewhere —Renée Schultes WSJ.com/Heard ChinaCars FindBalm InFrench Partner Coming to the aid of a downtrodden French car company today will help China’s No auto maker prepare for an uncertain tomorrow Investors watched nervously as Dongfeng Motor spent $1.1 billion for a 14% stake in PSA Peugeot Citroën, matching an investment by the French state Dongfeng’s Hong Kong-listed shares have fallen 6% since official news of the deal last week But in exchange for the cash, Dongfeng has actually extracted key benefits, especially cooperation with the more experienced French car maker on research and development Dongfeng, which runs a joint venture with Peugeot in China, now can access technology such as an innovative drivetrain that uses compressed air to save on fuel That is important because Dongfeng is playing catch-up on this front It has invested less than the typical global car maker in R&D, acting more like a contract manufacturer, assembling cars based on the technology developed by its main joint-venture partners Peugeot, Nissan, Honda and, soon, Renault This strategy has worked because rules restrict foreign car makers from owning more than 50% of ventures in China, giving locals leverage to share profits without investing big on technology and design Yet this regulation may not last A Chinese commerce ministry official said last year that reviewing the 50% rule should be on policy makers’ agenda, meaning the locals and their products could have to compete head-to-head with the foreign makers at some point Dongfeng has just bought itself insurance against this Meanwhile, with $4 billion in cash on its balance sheet as of last June earning measly interest, making a bet on Peugeot seems worth the risk for Dongfeng Investors, however, aren’t giving it credit At 6.2 times forward earnings, its stock is the cheapest of all Hong Kong-listed car makers And Dongfeng’s investment will yield considerable returns should Europe’s car cycle turn positive, as many expect What at first blush seems like a risky French adventure may just turn out to be a profitable affair —Abheek Bhattacharya ... 0.03069 United Arab dirham a-floating rate b-financial c-government rate c-commercial rate d-Russian Central Bank rate Source: ICAP Plc 28 | Thursday, February 27, 2014 THE WALL STREET JOURNAL BLUE... major general in the Israeli army, told Israel Radio The general said Hezbollah was unlikely to attack Israel because it was already preoccupied in Lebanon and Syria, where, along with Iran, it... enthusiastic about the results THE WALL STREET JOURNAL Thursday, February 27, 2014 | 13 Ryan Donnell for The Wall Street Journal IN DEPTH Mr Nelson uses tractor-mounted computers to help make