09 04 2015

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OPINION:
Indonesia
Thwarts Its
Sea Ambitions
Page 10
IN DEPTH Pages 12-13
ASIA EDITION
**
VOL. XXXIX NO. 153
(India facsimile Vol. 6 No. 212)
THURSDAY, APRIL 9, 2015
WSJ.com
Shell, BG
To Create
Gas Giant
Islamic State Release Over 200 Yazidi Hostages in Iraq
BY SELINA WILLIAMS
AND SARAH KENT
REUTERS
Members of the minority Yazidi sect released by Islamic State hug each other on the outskirts of Kirkuk on Wednesday. The militants
released 227 women, children and elderly Yazidi civilians it had held hostage since August, a Peshmerga commander said. Page 5
Cybersecurity Reinforced in Asia

BY NEWLEY PURNELL
SINGAPORESpending to
defend against cyberattacks is
picking up speed in Asia, and
the growth rate could outpace
the global average this year.
The latest development underscoring the trend: the
US$810 million acquisition of
Inside
U.S.-based cybersecurity provider Trustwave Holdings Inc.

by Singapore Telecommunications Ltd., Southeast Asias
biggest telecom company by
revenue.
The
deal,
announced
Wednesday, follows recent
high-profile breaches of companies such as Home Depot
BY GABRIELE PARUSSINI
Secretary of Defense
Ash Carter says the
U.S. is concerned
Chinas land
reclamation efforts
could have a military
dimension.
Asia News.................3
Cash floods into Hong
Kongs stock market,
sending the benchmark
index soaring.
Business..................15
Inc., health insurer Anthem

Inc. and Sony Corp.s Sony Pictures Entertainment Inc. Hackers also targeted Malaysia
Airlines website in January.
In March, South Korean investigators said state-owned Korea Hydro & Nuclear Power
Co. and its business partners
were targeted in cyberattacks
aimed at stealing internal data

that included plant blueprints
and employees personal information. Korea Hydro operates
South Koreas 23 nuclear reactors.
Executives and analysts in
Asia say they are increasingly
contemplating their digital dePlease turn to page 6
Despite Push by India,

Not All Poor Find Banks
MUMBAIFirozaben, a
nurse at an upscale clinic
here, opened an account at
the state-owned Bank of Baroda Ltd. in December, attracted by the
FINANCING promise of an
FUTURE overdraft provision and accident- and life-insurance policiesall for no fee, courtesy
of a government program to
bring Indias masses into the
banking system.
The same month, Mohammad Assalam Ansari, a tailor,
traveled to an account-opening boot camp run by the
bank. He says he had to pay
100 rupees before a clerk
would give him an application
THE
SK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
Australia: A$6.00(Incl GST), Brunei: B$8.00, China: RMB28.00, Hong Kong: HK$23.00(Incl Macau), India: Rs100.00, Indonesia: Rp25,000(Incl PPN), Japan: Yen620(Incl JCT), Korea: Won4,000,
MCI (P) NO. 124/10/2014
Malaysia: RM7.50, Pakistan: Rs140.00, Philippines: Peso100.00, Singapore: S$5.00(Incl GST), Sri Lanka: Slrs500(Incl VAT), Taiwan: NT$110.00, Thailand: Baht80.00, Vietnam: US$4.50
KDN PP 9315/10/2012 (031275)
Fidelitys New Chief

Confronts Market Shift
form. Despite this, he says his

application was rejected; he
isnt sure why.
Their stories reflect both
the promise and the weakness
of an ambitious program by
Prime Minister Narendra
Modi to widen access to financial services to the countrys poor. The goal is to make
India less cash dependent,
shrink the black economy, reduce corruption and boost
growth.
The government labels the
programcalled the People
Money Scheme, or Jan Dhan
Yojanaa resounding success, saying 135 million new
bank accounts have been
opened, well above the target
for 75 million at the programs launch in August.
Crediting incentives and a

system of local agents acting
as bank branches, Mr. Modi
claims that now virtually every household in India has a
bank account.
The program, known as
PMJDY in India, even earned
a Guinness World Record for
opening the highest number
of bank accounts in one week.
Economists have lauded
the program. Whats extraordinary about the scheme is its
drive and speed, said Kabir
Kumar, a financial-inclusion
expert at CGAP, a World Bankbacked think tank. Nothing
like this has ever been atPlease turn to page 14
Modi plan brings short-term
pain for lenders........................ 14
LONDONPetroleum giant
Royal Dutch Shell PLC has
agreed to buy BG Group PLC
for about $70 billion, in a deal
that would create the worlds
largest producer of liquefied
natural gas amid a historic
downturn in energy prices.
The
deal
announced
Wednesday, confirming an
earlier report by The Wall
Street Journal, brings together two companies that
have been buffeted by a sharp
drop in oil and gas prices
since last summerslashing
the cost of a barrel of Brent
crude, the global benchmark,
from $114 to less than $60. It
would be among the largest
oil-and-gas deals of the past
20 years, according to Dealogic.
If approved by shareholders and regulators, the acquisition would make Shell the
worlds largest LNG producer,
Shell CEO Ben van Beurden
said on a conference call. The
purchase of BGs assets also

would put it at the forefront
of the competition among big,
international oil companies to
dominate the global liquefied
gas market, including BGs
first rights on U.S. LNG exports in early 2016. Liquefied
natural gas, or LNG, is
shipped on specialized vessels
around the world.
Shell believes that, by
around 2020, the combined
group would have two strategic growth businessesdeep
water and integrated gas
that potentially could each
generate $15 billion to $20
billion of cash flow from operations a year, the company
said in a statement. BG has
valuable oil fields off the
shore of Brazil and gas plays
off of East Africa and on
shore in Australiaassets
that many analysts said were
too big for BG to handle.
The whole idea is that we
turn the company on the back
of this deal into a much more
focused company, very, very
Please turn to page 6
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 2015, Oracle and/or its affiliates. All rights reserved.
2 | Thursday, April 9, 2015
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* *
THE WALL STREET JOURNAL.
PAGE TWO
Whats News
Inside
Capital Account:
Postcrisis banking risk
casts shadow. 5
AGENCE FRANCE-PRESSE/GETTY IMAGES
An Indian Sikh priest, center, carries the Sikh holy book during a procession to the Golden Temple in Amritsar on Wednesday, on the eve of the birth anniversary
of the ninth Sikh Guru, Teg Bahadur, who was born in Amritsar in 1621 and was executed on the orders of Mughal Emperor Aurangzeb in Delhi in 1675.
Business & Finance

n Daimlers Mercedes-Benz
joined the ranks of high-end car
brands manufacturing small luxury vehicles in China, seeking new
avenues for growth. 15
n Eni has emerged as the only international oil company still
pumping near capacity in wartorn Libya, helped by protection
from militias and tribes secured
by its local partners. 16
n Alibaba proposed an injection
of assets into its unprofitable
movie arm, sending shares in the
entertainment business soaring. 17
n Snapdeal.com of India said
that it has bought mobile-payments company FreeCharge, for

an undisclosed amount. 17
n Tech companies clashed with
Australian lawmakers over alleged
tax avoidance ahead of a meeting
of G-20 finance ministers that
aims to build global cooperation to
close corporate-tax loopholes. 17
n Tesla is upgrading the slowerselling version of its Model S electric sedan, equipping it with a
more capable battery, all-wheel
drive and a bigger price tag. 19
n Mylan proposed acquiring Perrigo in a cash-and-stock transaction that would value the maker
of generic drugs at $205 a share,
or about $30 billion. WSJ.com
n Chinas top two insurers, China

Life and Ping An, are buying a majority stake in a $500 million Boston project, their first investment
in U.S. commercial real estate. 22
n Manulife reached a multiyear
deal of more than $1 billion that
will allow the Canadian firm to
distribute insurance products
through Singapore lender DBS
Groups branches in Asia. 23
World-Wide
n Dzhokhar Tsarnaev, a former
college student who admitted he
helped carry out the 2013 Boston
Marathon bombings, was convicted
of charges including using weapons of mass destruction, setting
the stage for the jury to decide if

he should get the death penalty.
n A white police officer who shot
a black man in North Charleston,
S.C., was charged with murder after law enforcement reviewed a
bystanders video.
n The U.S. raised Indias aviation-safety ranking after more
than a year of effectively barring
the South Asian nations airlines
from adding new flights to the
U.S. because of concerns about Indias regulatory oversight. 5
n China plans to build a naturalgas pipeline from Iran to Pakistan
under a deal to be signed during
President Xis visit to Islamabad
this month.
ONLINE TODAY
Video
live.wsj.com
Scientists say they

have created an
aluminum-ion
battery that solves
many of the
problems with
lithium-ion and
alkaline batteries.
China Real Time
wsj.com/chinarealtime
Photos of the Day
Indonesia
wsj.com/indonesiarealtime
Fishermen in
Lombok are hooked
on a new mobile
app that helps them
spot the best places
to fish.
Sweetheart deals, a
Dodge car and a
cemetery feature in
the trial of a
Chinese official
known as Mayor
Bulldozer.
Images behind the stories

making news world-wide
wsj.com/photosoftheday
Life & Style:

Marketers join music
festival frenzy. 7
Personal Technology:
The smartwatch
finally makes sense. 18
THE WALL STREET JOURNAL
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Thursday, April 9, 2015 | 3
WORLD NEWS: ASIA
U.S. Resists Chinas Construction at Sea
BY FELICIA SCHWARTZ
TOKYOU.S. Secretary of Defense Ash Carter said the U.S. was

concerned by Chinas land reclamation efforts in the South China Sea
and by the possibility that construction there has a military dimension.
Speaking to reporters after
meeting Japanese Defense Minister
Gen Nakatani on Wednesday, Mr.
Carter said the U.S. prioritizes stability in the Asia-Pacific and wants
to ensure no changes in the status
quo are made coercively and that
territorial disputes, which are longstanding, are not militarized.
China has embarked on a dramatic expansion of construction of

artificial islands on disputed South
China Sea reefs, which defense experts say could form a network of
island fortresses to help China control most of the South China Sea.
Chinese officials have defended the
construction work as necessary and
lawful.
The U.S. generally avoids taking
sides in such matters but is concerned by Chinas activities in disputed portions of the South China
Sea, Mr. Carter said.
While we dont take a stand in
any of those territorial disputes, we
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take a strong stand against militarization of those disputes.

Mr. Carter is in Asia this week
for meetings with counterparts in
Japan and South Korea, where his
aim is to demonstrate the U.S. commitment to these alliances as China
flexes more muscle in the region.
Asked about Mr. Carters remarks, Chinas Foreign Ministry said
the U.S. is ignoring Beijings commitment to resolve territorial disputes with Southeast Asian countries through dialogue. At a media
briefing in Beijing, Foreign Ministry
spokeswoman Hua Chunying urged
the U.S. to do more things and say
more that can contribute to regional

peace and stability.
Messrs. Carter and Nakatani also
discussed a review of U.S.-Japan defense guidelines, which is in the final stages and will be released this
month before Japanese Prime Minister Shinzo Abe meets President
Barack Obama in Washington on
April 28. The allies are reviewing
these guidelines for the first time
since 1997, with the goal of giving
Japan a larger role in maintaining
security in East Asia.
When the guidelines are completed, the U.S. and Japan will expand cooperation in missile defense,
surveillance and maritime security,

among other areas.
Messrs. Carter and Nakatani discussed construction of a replacement facility for the U.S. Futenma
airfield on the southern Japanese island of Okinawa. Mr. Nakatani said
he and Mr. Carter agreed that relocating the base to another part of
the island is the only solution to
closing the facility, which is located
in a heavily populated area. Many in
Okinawa, including its governor, oppose construction of the replacement base in a less populated region
and want to see the facility moved
off the island altogether.
**
WORLD NEWS: ASIA
China Seeks to Ease

Growing Labor Unrest
Bank of Japan Turns Back

Call to Cut Easing Target
BY TAKASHI NAKAMICHI
AND TATSUO ITO
A worker last month blames bruises

on police after protests in Zhongshan.
March to curb the practice of not
paying wages for migrant workers.
The government is acknowledging the reality of rising worker unrest and wants to make this a bigger priority, said Wang Jiangsong,
a professor at the China Institute of
Industrial Relations in Beijing. But
it also lacks specifics on implementationit remains to be seen how
this would work on the ground.
Communist Party spokesmen
and spokeswomen referred queries
to the Party Central Committees
General Office but declined to provide its contact information. Other
numbers for the office rang unanswered. The State Council, Chinas
cabinet, referred queries to the
Ministry of Human Resources and
Social Security, which didnt respond to a request to comment.
Labor unrest in China rose over
the past year as the countrys
growth decelerated to 7.4% in 2014,
Japan Posts a Large

Current-Account Surplus
BY ELEANOR WARNOCK
TOKYOJapan posted its biggest

current-account surplus in almost
3 years in February, the Finance
Ministry said, helped by the higher
value in yen terms of income from
overseas investments and a smaller
trade deficit.
The surplus in the current account, the broadest measure of Japans trade and other money flows
with the rest of the world, stood at
1.44 trillion ($12 billion) in February before seasonal adjustment, the
data showed, the highest since September 2011. That was slightly
above economists forecasts and the
eighth consecutive month in the
black.
The large surplus is evidence
that Japan has again solidified its
position as a large external creditor,
after experiencing a string of
monthly current-account deficits at
the end of 2013. At the time, Japans
trade deficit was widening, but has
shrunk more recently.
The smaller trade deficit isnt
really due to a rise in foreign demand and demand for exports, but
more that a fall in oil prices has
helped push down the value of imports, said Meiji Yasuda Life Insurance Co. chief economist Yuichi Kodama.
The fall in oil prices is equal to

a tax reduction for Japan, and is
positive for the overall economy, he
added.
Japans trade deficit narrowed
75% in February from February
2014, Wednesdays data showed, to
143.1 billion. The value of imports
fell 6.2% on year, while exports rose
0.4%.
A fall in the value of the yen
against other major currencies has
increased the value of returns on
overseas investments when repatriated. That also contributes to current-account surpluses.
The primary income surplus in
February was up 27.5% on year to
1.86 trillion, the largest figure for
the month on record.
The Finance Ministry said an increase in interest income from overseas bondholdings and income from
direct investments abroad helped
the surplus.
The weaker yen has also brought
a record number of tourists to Japan, pushing the nations tourism
account surplus to a record 63.3
billion in February. That figure measures spending by foreign tourists in
Japan against spending by Japanese
travelers abroad. A record 1.39 million foreign tourists visited Japan in
February, according to the Japan
National Tourist Organization.
Trouble at Work
Reported strikes are on the rise in

China as slowing economic growth
fuels unrest, while social media make
labor protests more visible.
700 incidents
600
500
400
300
200
100
0
2012
13
14
15
Note: As of March 1
Source: China Labor Bulletin
its slowest pace in more than two

decades. Strike occurrences more
than doubled last year to 1,378, according to China Labour Bulletin, a
Hong Kong-based watchdog.
Kersten Zhang
contributed to this article.
TOKYOThe Bank of Japans internal split widened as Gov. Haruhiko Kurodas toughest critic on the
policy board officially called for a
steep reduction of its aggressive
monetary stimulus.
Board member Takahide Kiuchi
called Wednesday on the BOJ to immediately cut its annual asset-purchase target by almost half to 45
trillion ($375 billion) a year. His proposed figure was below the BOJs
initial target range of 60 trillion to
70 trillion set two years ago.
The BOJs board voted down his
proposal by 8-1, keeping its asset
purchases at 80 trillion.
Mr. Kiuchi is so far the lone dissenting vote on the policy board, but
his proposals reflect growing tension among central bankers over
whats known as Mr. Kurodas bazooka shot of monetary easing, first
unleashed in April 2013 in an attempt to defeat deflation. Since the
BOJ expanded its asset purchases in
October, some officials, including
Mr. Kiuchi, have become more concerned about potential side effects,
especially destabilizing the bond
market or creating bubbles.
Mr. Kuroda dismissed Mr. Kiuchis proposal. We are in the middle of making the utmost efforts to
achieve our 2% price-stability target
at the earliest possible time, Mr.
Kuroda said at a news conference.
It is too early to have debate over
exit strategies.
The asset purchases, mostly of
Japanese government bonds, have
helped drive the yen to long-term
lows and Japanese stocks to multiyear highs. The Nikkei Stock Average
ended up Wednesday at 19789.81,
the highest close in 15 years. But the
banks favored inflation gauge fell
back to zero in February, raising
concerns among some BOJ officials
Australia Weighs Oil-Policy Plan

BY ROSS KELLY
SYDNEYIn the last line of defense against a global oil supply

shock, Australia has long been the
weakest link.
It is the only country among the
29 members of the International Energy Agency without enough oil in
storage to cover net imports for
three months, having failed to meet
that requirement since 2009. Last
year, Australia had just 59 days of
backup supplies.
That could change under Australian government plans due to be
outlined later this yearalbeit at a
significant cost.
In an energy white paper released Wednesday, Australia said
any move to become compliant
would require several billion dollars
of investment in fuel stocks and
storage infrastructure over a decade. A decision on how to address
this compliance issue will be made
by the government in 2015, the paper said.
The IEA was founded in response
to the global oil crisis in 1973, when
oil-importing countries were hit
hard by an embargo on crude-oil
sales imposed by several Middle
Eastern exporters. It aimed to help
member countries ride out major
disruptions to oil supply by coordinating the release of emergency oil
stocks to the market.
While many countries invested

heavily in the construction of oilstorage facilities, Australia lagged
behind. Instead, it has mostly relied
on oil stockpiles owned by major
companies to meet its IEA obligations since joining in 1979.
As recently as 2012, the IEA
raised concerns that this policy left
Australia increasingly vulnerable to
a supply shock, while limiting its
ability to assist other countries in
need. Australias oil production fell
17% to 416,000 barrels a day in
2013its lowest level since 1972
and demand has been creeping
higher.
A representative for the IEA

wasnt available to comment on the
white paper.
To be sure, Australia isnt lacking in energy sources. The country
is on course to overtake Qatar as
the worlds biggest exporter of liquefied natural gas by tanker, and
ranks only behind Indonesia among
global exporters of coal.
The government white paper
also didnt sound any alarms about
the countrys oil security, citing the
depth, liquidity and diversity of international crude and fuel markets
and arrangements to source oil or
fuel from tankers out at sea.
REUTERS
BEIJINGAs slowing growth fuels labor unrest in the worlds second-largest economy, Chinas leadership is pushing to foster harmony
across its increasingly agitated
workforce.
In a recent directive, top Communist Party and government officials called on party cadres and bureaucrats to make the construction
of harmonious labor relations an
urgent task, to ensure healthy
economic development and to consolidate the partys governing status.
The policy paper, issued late last
month, has circulated widely among
Chinese labor scholars, lawyers and
activists, who say it signals Beijings growing concern that festering labor tensions could soon
threaten social stability or even
weaken the partys grip on power.
With China currently in a period of economic and social transition and labor relations having become increasingly pluralistic, labor
tensions have entered a period of
increased prominence and frequency, and the incidence of labor
disputes remains high, the paper
said, according to a copy reviewed
by The Wall Street Journal.
It cited problems including unpaid wages to Chinas legions of migrant workers, growing protests
and other issues.
Labor scholars say the paper
The Communist Party Central
Committee and the State Councils
opinion on the construction of harmonious labor relationsmarks a
rare move by Beijing to formally
outline policy priorities for tackling
worker unrest. It comes after Premier Li Keqiang pledged in early
ASSOCIATED PRESS
BY CHUN HAN WONG
that their policies may result in distortions in financial markets before

their inflation target is achieved.
Mr. Kuroda didnt appear to
share such concerns. Monetary easing has worked well to improve the
economy, he said, noting a narrowing supply-demand gap, rising nominal wages and relatively solid inflation expectations.
Once oil prices recover from
their recent slide, Japans annual inflation rate will reach 2% by the
middle of next year, he said. Also,
there is no unduly bullish sentiment in the financial markets, with
share prices reflecting strong corporate earnings, he said.
That Mr. Kiuchi remains the only
no vote on the board means a significant monetary-policy shift seems
unlikely anytime soon. Three board
members who voted against additional action in October along with
Mr. Kiuchi have since agreed to continue with the policy and have voted
with Mr. Kuroda, albeit reluctantly.
But with the BOJs actions having
only a limited impact on inflation so
far, Mr. Kiuchis proposal to slash
the purchases could stimulate debate over how the bank should wind
down its stimulus program, said
Takeshi Minami, chief economist at
Norinchukin Research Institute.
With Mr. Kuroda holding a majority within the board, market participants remain focused on when
the central bank will expandrather
than reduceits stimulus.
Only two of 41 economists polled
in a survey by the Japan Center of
Economic Research released in early
March said the bank can meet its inflation goal by June 2016. About half
of the economists polled said they
expected the BOJ to implement additional easing sometime this year.
Still, Mr. Kuroda signaled further
action isnt on the table yet. What
we perceived as risks as of late October have been resolved, he said.
Workers walk the grounds of a converted oil-storage facility near Sydney.
WORLD NEWS
[ Capital Account ]
Squeezing risk
out of the
economy can be
like pressing down
on a water bed:
The risk often reemerges elsewhere. So it goes
with efforts to make the financial
system safer since the financial
crisis.
Officials have forced banks to
bulk up their capital buffers, ditch
dangerous lines of business and
pay more than $100 billion in
penalties for bad behavior. As a
result, risky activity is migrating
to the shadow banking system,
where different threats may be
growing.
Shadow bank is a catch-all
label for any entity that supplies
credit but doesnt fund itself with
deposits as banks do. Lightly
regulated at most, they have long
played a vital, innovative role in
the U.S. Between 1980 and 2008,
banks share of the supply of
credit to businesses and
households in the U.S. fell from
44% to 20%. The rest came from
finance companies, asset-backed
securities, investment banks,
institutional fund managers and
government-sponsored enterprises
such as Fannie Mae and Freddie
Mac.
Shadow banks were central to
the mortgage bubble. Subprime
mortgages were originated largely
by lightly regulated firms, bundled
into securities and sold to opaque
funds financed with short-term
IOUs. When the subprime bubble
popped, many died or shrank.
Conventional banks have only
partly filled the gap. Instead, the
primary beneficiaries have been
other kinds of shadow banks, such
as exchange-traded funds and
private-equity funds. The shift,
according to an International
Monetary Fund report issued
Wednesday, stems from tighter
regulations on banks, rising
compliance costs, and banks
deleveragingreducing the ratio
of their loans to the capital they
have to absorb losses.
In some cases, this makes the
GETTY IMAGES
BY GREG IP
In the wake of the mortgage crisis, traditional banks have pulled back from
lending to homeowners. Here, a foreclosed home in Miami in 2010.
financial system safer. Because
most alternative lenders lack the
safety net of deposit insurance or
access to emergency cash from
the Federal Reserve, they pay
more to borrow. That is reflected
in what they charge their
customers: stiff interest rates,
tough conditions and short
maturities.
Alternative lenders usually
depend more on equity from
shareholders or partners than do
banks, and are thus less leveraged.
Business-development
companies, for example, which
make loans to small and midsize
companies, typically use as much
equity as debt. Private-equity
funds make loans that are pooled
into collateralized loan
obligations and sold to investors.
In other cases, the effect on
the financial systems stability is
more ambiguous. Mutual funds
and exchange-traded funds now
rival banks as suppliers of credit,
in particular leveraged loans to
highly indebted companies. Total
bond-fund holdings world-wide
last year totaled $9.6 trillion, up
25% from 2008, according to the
IMF. Mutual funds leveraged
loans have shot up 60% to $151
billion in the U.S., and by 223%, to
$126 billion, in the eurozone.
These funds also finance
themselves with shareholders
equity. But theres a wrinkle:
Open-ended funds usually allow
share redemptions at the end of
each day, and sometimes during
the day. If shareholders redeemed

en masse, the effect would be
similar to a run on a bank. While
the fund wouldnt fail as a bank
would, it might have to liquidate
its investments.
The IMF notes these funds
increasingly favor hard-to-sell
securities such as emergingmarket and corporate junk bonds,
concentrate their bets and copy
each other. This could generate
contagion: As one fund dumps its
holdings, it drives down the value
of other funds assets, triggering
more redemptions and
liquidations. The IMF found that
big outflows from mutual funds
that invest in emerging-market,
high-yield and municipal bonds
tend to depress those bonds later
returns.
Regulators have responded by
tightening oversight of shadow
banks, for example, by forcing
some to submit to bank-like
regulation.
But that may not be enough.
The financial-services industry is
a shape-shifter, Paul Tucker, a
former deputy governor of the
Bank of England, warned last year.
It continuously seeks out gaps in
the rules, leaving policy makers
in a game of catch-upa game
that sooner or later the
authorities would lose.
As policy makers tighten the
regulatory net around banks, they
should keep this dynamic in mind,
lest they end up with safer banks
and a less safe financial system.
FAA Lifts Ranking

For India Air Safety
BY SANTANU CHOUDHURY
NEW DELHIThe U.S. raised Indias aviation-safety ranking after

more than a year of effectively barring the South Asian nations airlines from adding new flights to the
U.S. because of concerns about Indias regulatory oversight.
During a visit Wednesday to Indias capital of New Delhi, U.S.
Transportation Secretary Anthony
Foxx announced that the Federal
Aviation Administration has lifted
Indias status a notch to Category 1,
confident that it has taken sufficient
measures to address the FAA concerns that had led to Indias downgrade in January 2014.
The new status will allow the
only two Indian carriers that fly to
the U.S.Air India Ltd. and Jet Airways (India) Ltd.to increase the
number of their flights to the U.S.
The U.S. commends the government of India for taking corrective
action to address the safety oversight issues, said Mr. Foxx in a
statement, which didnt detail what
India had done to address U.S. concerns.
Indian authorities said Wednesday they addressed 12 concerns that
were raised by the FAA in December
2014, including hiring 51 additional
flight-safety inspectors and starting
a new process for certifying the 34
operational flight-training schools
in the country.
Additionally, India initiated last
year a new procedure for issuing
operational permits to airlines in
the country, officials in the countrys Directorate General of Civil
Aviation said.
The downgrade had meant that
pre-existing flights from Air India
and Jet Airways had to deal with increased scrutiny from FAA inspectors in the U.S. And the two carriers
were barred from starting new
flights to the U.S. through codesharing with a U.S. airline.
The new ranking is a positive
development, as the downgrade was
embarrassing, said Kapil Kaul,
South Asia chief executive at CAPACentre for Aviation, an industry
consultancy.
With a sharp rise in the number
of flights, particularly in developing
markets, the FAA and others are
concerned that regulatory and
safety infrastructure arent keeping
up with industry expansion.
Last years FAA downgrade had
BLOOMBERG NEWS
Postcrisis Banking Risk

Casts Darkening Shadow
U.S. Transportation Secretary Anthony

Foxx said the FAA raised Indias rank.
put India on a list of 11 countries
including Indonesia, Philippines and
Bangladeshthat had Category 2
status. The FAA upgraded the Philippines to Category 1 in April 2014.
Safety experts say that in many
parts of Asia, budget constraints,
limited technical expertise and nagging personnel shortages have hampered government safety initiatives.
In February, a report from the International Civil Aviation Organizationa United Nations agency that
sets nonbinding safety standards for
carriers
and
regulatorssaid
roughly one-third of commercialplane crashes in Asia in 2008
through 2012 to some extent involved deficiencies in regulatory
oversight.
This week South Korea started
banning new flights by charter and
budget airlines from Thailand after
ICAO raised certain safety concerns
about Thailands aviation safety.
South Korea followed Japan, which
had barred charter flights from
Thailand.
While the FAA upgrade gives the
two Indian airlinesand potentially
othersmore freedom to increase
the number of flights to the U.S., the
airlines didnt say when and if they
would be taking advantage of the
opportunity.
A spokesman for state-run Air
India said it doesnt have an immediate plan to expand from the three
daily flights it operates to the U.S.
Welcoming the FAA decision, a
spokesman for Jet Airways, which
has seven weekly flights to the U.S.,
said Wednesday evening that the
upgrade is a positive development
for the Indian aviation sector.
Andy Pasztor
Islamic State Releases Yazidis in Iraq

BY MATT BRADLEY
AND GHASSAN ADNAN
BAGHDADIslamic State militants have released 227 women,

children and elderly members of
the minority Yazidi sect who had
been held captive since August, according to an Iraqi Kurdish military
commander.
The insurgents handed over the
captives to Kurdish military forces
known as Peshmerga in al-Hamira,
a town about 30 miles south of the
Kurdish-held city of Kirkuk. It followed days of negotiations between Kurdish fighters and the
Sunni extremist group Islamic
State, with Sunni tribal sheiks from
the city of Hawija serving as intermediaries, said Wista Rasool, a
Peshmerga commander.
Since Islamic State went on a
blitz through north and western

Iraq last summer, they have singled
out Yazidis for persecutionkilling
those who refused to convert to Islam and taking hundreds of young
Yazidi girls as war brides and sex
slaves.
The insurgents threats to massacre thousands of Yazidis in
northern Iraq last summer
prompted a U.S.-led coalition to begin launching airstrikes against Islamic State. That was the beginning of Americas first armed
intervention in Iraq since it withdrew troops in December 2011 following a nearly nine-year occupation of the country.
It was unclear whether the release of the captives heralds a
change in attitude toward the religious minority, an ancient faith
based in the plains and mountain
ranges of northern Iraq.

Islamic State has become known
for persecuting and killing some
religious minorities who refuse to
convert to their austere interpretation of Islam.
Islamic State has released Yazidi captives once before, when it
turned over 200 elderly and disabled civilians to Kurdish forces in
January. The Yazidis released
Wednesday traveled from the city
of Sinjar, the scene of fighting between Peshmerga and Islamic
State, to the city of Tel Afar, then
to Mosul before they were finally
handed over to Peshmerga units on
the outskirts of Kirkuk, said Mr.
Rasool. Those released appeared to
be in good health, Mr. Rasool said.
But Peshmerga forces were still
transporting the captives to hospitals for checkups.
We are pleased to announce

the admission of
Jean-Marc Crepin
Luxembourg
Michael R. Keller
New York
Jean-Pierre Paquin
New York
as Partners of our firmeffective January 1, 2015

new york beijing boston charlotte chicago
denver dublin grand cayman hong kong
krakw london luxembourg new jersey
philadelphia tokyo wilmington zrich
www.bbh.com
FROM PAGE ONE
The deal would shore up Shells weakening reserves while playing to its technological strengths in taking over BGs assets.
Shell, BG in Deal to Create

Worlds Top LNG Producer
Continued from first page

strong in gas and very, very strong
in deep water, Mr. van Beurden
said.
The deal was first broached in a
March 15 meeting between Mr. van
Beurden and BG Chairman Andrew
Gould, almost five weeks after Helge
Lund had taken up the post as BGs
new CEO.
It was very simple. I called Andrew up and we had a very good
and constructive discussion about
the idea and it very quickly seemed
to make sense to both of us, Mr.
van Beurden said.
People familiar with the matter
said Shell had been preparing for
months to make a move for BG,
spotting an opportunity as falling
oil prices compounded the decline in
BGs share price as the company
failed to meet its production targets.
Mr. van Beurden said Shell had
looked at BG on and off for more
than a decade.
Shell will pay a 50% premium to
BGs closing share price Tuesday of
910.4 pence ($13.5), with the offer
consisting of 383 pence in cash and
0.4454 Shell B shares, giving BG
shareholders a 19% stake in the
combined company. The deal is expected to close in early 2016, Mr.
van Beurden said, with no major
competition issues foreseen.
Mr. van Beurden said the company would pay a dividend of $1.88
a share in 2015 and at least the
same in 2016. A share-buyback program of at least $25 billion is
planned for 2017 to 2020.
However, while Shell and BG
both trumpeted the benefits of the
deal, some analysts were skeptical.
Shells track record of executing
on acquisitions has not exactly been
stellar over the past decade, said
Michael Hulme, commodities fund
manager at Carmignac Gestion. To
assume that Shell can pay a 50%
premium for BG, and extract significant synergies, deliver value for
shareholders, and maintain a dividend on an expanded shareholder
base would require a more-thanhealthy degree of optimism.
Seeking a Boost
BG swung to a loss after a big asset

write-down
Prot/loss
$5 billion
...but Shell is looking at a BG takeover

to lift its gas production.
Gas production in billion
cubic feet per day
Exxon
4
3
11.1
Shell
9.3
BP
7.1
1
Chevron
0
-$1.04
1
2009
10
11
12
13
14
BG
Sources: S&P Capital IQ (prot/loss); the companies (production)
Shares in Shell closed 5.3% lower

in London on Wednesday, while BG
stock ended 32% higher.
For Shell, the deal would shore
up its weakening reservesthe company replaced only 26% of the oil
and gas it extracted last yearwhile
playing to its technological
strengths in taking over BGs assets.
It also would allow Shell to reduce
its exploration spending at a time of
low crude prices, Mr. van Beurden
told analysts.
Shell Chief Financial Officer Simon Henry said the deal wasnt designed to be profitable at any particular oil price. Mr. van Beurden
said the company would focus on
paying down its debt, and the deal
would be the springboard for a
more ambitious phase of portfolio
restructuring and refocusing.
BG, which emerged in 1997 from
the breakup of British Gas, has had
a tough time in recent years, with
its shares falling by about 30% from
a peak last spring.
Investors have been disappointed
after it failed to deliver on promises
of production growth. BG said in
February it was writing down the
value of its oil-and-gas assets by
5.2
2.1
nearly $9 billion as it adjusts to the

plunge in oil prices since last summer.
BGs Mr. Gould said he remained
confident in the companys longterm prospects, but felt the offer
from Shell would allow BG to return
shareholder value more quickly.
Mr. Gould said Mr. Lund, who
joined BG from Norways Statoil ASA
on Feb. 9, would remain CEO of BG
to ensure a smooth transition
should the deal be completed and
would then probably move along.
Mr. Lund wasnt available to
comment. Mr. Gould said he was
speaking to staff at BGs headquarters in Reading, which is about 42
miles from London, and calling investors.
Bank of America advised Shell on
the deal. Slaughter and May; Cravath, Swaine & Moore LLP; and De
Brauw Blackstone Westbroek provided legal advice to the company.
Goldman Sachs Group Inc. and
Robey Warshaw LLP were BGs financial advisers. Freshfields Bruckhaus Deringer provided legal advice
to BG.
Justin Scheck

fenses in light of more-frequent attacks.
U.S. cybersecurity company FireEye Inc. said in a March report that
across the Asia-Pacific region, 37% of
its customers were targeted by advanced malware attacks and other
disruptions between July and December. The percentage was 60% in Hong
Kong and 52% in South Korea. The
global average was 27%.
Companies globally and specifically in Asia are now investing more
to build up their cyberdefenses, said
Lyon Poh, head of information-technology assurance and security at
consultancy KPMG in Singapore. This
has led to opportunities for cybersecurity firms and we believe that
more will look to Asia for growth,
he said.
Research firm Gartner in January
projected global information-security
spending would rise 7.6% this year to
$79.9 billion and 36% by 2018 to $101
billion. Throughout the Asia-Pacific
region, spending is forecast to increase 9.7% this year to $17.9 billion.
It is projected to rise 45% from 2014
to $23.8 billion by 2018.
SingTels deal follows FireEyes
purchase of closely held cybersecurity company Mandiant Corp. for $1
billion last year. In 2013, Cisco Systems Inc. purchased U.S. security
company Sourcefire Inc. for $2.7 billion.
U.S. President Barack Obama last
week moved to kick off a new program of sanctions against those outside the country who participate in
cyberattacks against U.S. companies,
government bodies or individuals.
The Singapore government is also
devoting more resources to defenses
against cybersecurity. The city-state
last week launched a new body, the
Cyber Security Agency of Singapore, that will focus on national
strategies and work to boost the local cybersecurity industry.
We aspire to be a global player
in cybersecurity, said Chua Sock
Koong, SingTels group chief executive, outlining the companys rationale for purchasing Trustwave. We
have established a strong security
business in the region, both organically and through strategic partnerships with global technology leaders.
Chicago-based Trustwave said it
has more than three million subscribers globally and 1,200 employees in 26 countries. Trustwave provides services that allow companies
to outsource their security needs
rather than handle them in-house,
specializing in threat and vulnerability management.
One global cybersecurity company looking for growth, especially
in Asia, is Palo Alto Networks Inc. of
Santa Clara, Calif. The companys
Asia-Pacific head, Steve Redman, said
On the Rise
Estimated information-security
spending
North
Western
AsiaAmerica
Europe
Pacic
UP 35%
$40 billion
UP 28%
UP 45%
30
20
10
0
2014 15 18
Note: 2015-2018 are projections

Source: Gartner
in an interview on Tuesday at its Singapore office that of the companys

more than 22,000 customers, about
4,000 are in Asia.
Globally, the company is adding
about a couple thousand customers
a quarter, but the number in Asia is
growing at a faster rate than in other
regions, he said.
Mr. Redman said the biggest
breaches globally have been in the
U.S., because hackers often target the
richest companies, but he added that
some Australian companies have also
suffered from attacks, though they
had been less destructive than those
in the U.S.
Palo Alto Networks has been hiring about 50 people a quarter in
Asia, and is expanding its Singapore
office, which is the companys AsiaPacific headquarters, into an adjacent
floor, he said. The company has more
than 2,000 employees world-wide.
The company also has offices in
Australia, New Zealand, Greater
China, India, Japan, South Korea and
across Southeast Asia. It is experiencing strong demand in countries
such as Thailand, Malaysia and Singapore, and Mr. Redman said China
and India are important because of
their large markets.
The biggest challenge in boosting
business in Asia, he said, is existing
legacy environments where companies that have invested large sums of
money in their current defensive setups can be resistant to new products
and services. I think Asias still behind the U.S., in terms of cybersecurity awareness, Mr. Redman said.
But were way ahead of where we
were.
Palo Alto Networks in March
posted better-than-expected results
for the second quarter amid increased demand for its services, and
its shares have more than doubled
over the past year.
For the quarter ended Jan. 31,
Palo Alto Networkss revenue rose
54% to $217.7 million, after jumping
more than 50% in the previous two
quarters, though the company posted
a loss of $43 million.
REUTERS
BLOOMBERG NEWS
Asia Raises Defenses

Against Cyberattacks
SingTel is acquiring U.S.-based Trustwave Holdings, a cybersecurity provider.
More Tiger Than Tiger

YOUNG GOLFERS LEARN TO THINK LIKE WOODS PAGE 8
Thursday, April 9, 2015
asia.WSJ.com
Marketers Join Music Festival Frenzy

[ #THIS ]
BY ELIZABETH HOLMES
Heineken House at Miamis Ultra festival, left, gave visitors views

of the stage. Nordstrom, above, gave out dry shampoo at Austin,
Texas-based South by Southwest. Other festivals sponsors
offered air conditioning and cellphone charging.
CLOCKWISE FROM TOP LEFT: HEINEKEN; NORDSTROM; BILLY FARRELL AGENCY; H&M; BILLY FARRELL AGENCY
For two weekends this month,

the Empire Polo Club in the southern California desert will be filled
with a marketers dream: throngs
of influential, open-minded and
ready-to-spend millennials with
plenty of time to kill.
Brands are following these desirable consumers to the
Coachella Valley Music and Arts
Festival. Sponsors lure attendees
into amenity-laden tents, with airconditioning to provide a respite
from the hot sun and a place to
charge a cellphone. Then they try
to wow these would-be shoppers
with flashy displays, elaborate
new product pitches and plenty of
freebies.
Fashion retailer H&M has a
360-degree mirrored selfie station and offers attendees chances
to try Oculus virtual-reality headsets. Sephora is offering a do-ityourself makeup bar with its private-label beauty brand and a
vending machine that dispenses
free products to people who post
a photo to Instagram with a designated hashtag. And Absolut Vodka
will be serving up specialty draft
cocktails as it unveils its new illuminated limited-edition bottle.
We want to be part of the moment, says Joao Rozario, vice
president of marketing for Pernod
Ricard U.S.A., which includes Absolut.
To reach the hundreds of thousands of sought-after consumers
found at Coachella and other music festivals such as South by
Southwest, Bonnaroo Music and
Arts Festival and Lollapalooza,
brands are paying a sizeable sum.
Official sponsorship fees can
range from tens of thousands of
dollars to well over a million dollars, says Jim Andrews, a senior
vice president at IEG, a sponsorship consulting firm. The price of
producing the festival activities
can be two or three times the cost
of the fees.
Beyond the usual beverage and
snack sponsors that have long
played in this space, festivals are
now attracting fashion, beauty
and technology companies. And
there is a push for all corporate
involvement to be much more experiential, rather than hanging a
few banners around festival
grounds.
The activations, as the onsite offerings are known in marketer parlance, are often clever.
Garnier, the beauty brand owned
by LOral, offers complimentary
hair washing and styling at Bonnaroo, held in June on a farm in
Manchester, Tenn. It stocks festival campgrounds with free samples of hair products and gives
away dry shampoo and wet towelettes to attendees.
The big draw, many marketers
say, is the festival schedule that

leaves ample downtime for roaming the grounds. Unlike a sporting
event, where spectators sit in a
seat for a few hours and then
leave, festivalgoers come for a
weekend. Almost two-thirds stay
overnight for the festival, according to Live Nations Festival Report, based on a survey of festival
attendees conducted in October
2014.
Music festivals are

the perfect place to
have extended exposure
with a captive audience, says Ali Goldstein, senior vice president of marketing at
Garnier U.S.
Festivalgoers are ready to
spend, and not just the hundreds
of dollars most multiday festival
passes cost. About eight in 10 at-
Singer Katy
Perry and
designer
Alexander
Wang,
far left,
at H&Ms
Coachella
party last
year, above.
A robe from
the H&M
Loves
Coachella
collection
sold at the
festival, left.
tendees purchased something in
preparation for the event, according to the Live Nation report. Two
thirds bought clothes, while half
bought shoes.
The timing of
these festivals fills
what was once a
blank space in marketers calendars.
There are now dozens held at key
times like spring
break and continuing into summer.
Brands say there
is no shortage of attendees looking to
be entertained.
Your base point is
these people with
very open minds. They are there
to have fun, says Elizabeth
Hayes, vice president of merchandising for Sephora Collection, the
private label beauty brand from
Sephora. This year, its second as
the official beauty sponsor of
Coachella, Sephora is pushing
more out-there beauty looks, like
ombre lipstick, for the fashion-forward attendees.
Heavily invested companies are
also looking for ways to extend
the experience beyond the handful
of days of the festival itself. Last
year, H&M threw a star-studded
party at Coachella to announce its
future collaboration with designer
Alexander Wang. This year, it is
designed a capsule collection,
dubbed H&M Loves Coachella,
that began selling at 350 stores in
North America in mid-March,
three weeks before the festival begins. A handful of pieces will be
sold exclusively at the festival.
You can prolong the whole activity, says Daniel Kulle, president
of H&M North America.
Festival organizers are quick to
point out that the most effective
sponsors fulfill a need. Courtney
Trucksess, director of sponsorships for C3 Presents, which produces Lollapalooza and Austin
City Limits Music Festival, among
other events, urges marketers to
think: What things can you add
Please turn to next page
LIFE & STYLE
How Tiger
Killed Tiger
JAMIE SQUIRE/GETTY IMAGES
Woodss ascent back to the top is

steeper because of the cadre of
aspiring clones he spawned
Tiger Woods hits a tee shot during a practice round for the Masters on Tuesday.
BY BRIAN COSTA
Augusta, Ga.
Just in time for the Masters, Tiger Woods appears in a new Nike
commercial this week. It portrays
Rory McIlroy as a boy, watching
Woods on television, idolizing him,
emulating him and finally, teeing off
alongside him.
But as Woods returns from a
two-month break, the scary thing
isnt that the 25-year-old McIlroy
has gone from fawning over him to
outplaying him. Its that the same
spot easily could have featured any
one of a dozen or so golfers around
McIlroys age.
In his quest to win another major, Woods faces myriad potential
obstacles, among them self-doubt, a
reconfigured swing and a balky
back. But even if he overcomes all
that, his ascent back to the top of
the leaderboard will be steeper because of the cadre of aspiring clones
he spawned.
Though McIlroy stands above the

rest, as the world No. 1, his age
group is increasingly brimming with
talent. It includes 26-year-old Rickie
Fowler, 27-year-old Jason Day and
three younger players who have
won tournaments this year: Patrick
Reed, 24; Brooks Koepka, 24; and
Jordan Spieth, 21, who tied for second place here last year.
I won the Masters when Jordan
was still in diapers, Woods said
Tuesday. Woods won his first Masters in 1997.
The influence of Woods can be
seen in just about all of them, from
McIlroys devotion to weight training to Reeds usual Sunday attire:
red shirt, black pants, just like
Woods. And while not all of them
play like Woods, they have all
learned to think like Woods.
They dont just believe they can
win the Masters. They expect to.
Its unique the way the mentality is now, Koepka said. I think Tigers changed that, the way he was
so mentally focused and mentally

driven. We all just aspired to be
him, and I think thats kind of more
of what youre seeing now.
Their confidence isnt merely a
sign of youthful exuberance. The
PGA Tour is shifting younger. Between 2012 and 2014, players under
age 25 won 18 tournaments, triple
the number that did so in the previous three years. The average age of
major winners in this decade is just
over 31 years, according to Stats
LLC, younger than in any decade
since at least the 1960s.
At a time when Woods, 39, is
having enough trouble aging gracefully on his own, he faces stiffer
competition than ever from his impersonators.
Tigers demise is all about his
game, said Hank Haney, Woodss
former swing coach. But these guys
make the climb back up the mountain much more difficult, and you
can certainly make a case that he
showed them the way.
The blueprint begins in the junior golf ranks, where Woods

emerged as a prodigy in the 1980s.
At the time, there were only a handful of junior golf programs in the
country, according to the American
Junior Golf Association.
Today, there are hundreds of
state, regional and national programs. Spieth, a Dallas native,
played on a Texas circuit called the
Legends Junior Tour as a young
teen.
With more experience on
tougher courses at earlier ages, top
golfers arrive in college more polished. Some already have their own
entourages: swing coaches, personal
trainers, sports psychologists and so
on. Tiger made all of that real for
this generation, said John Fields,
the longtime golf coach at the University of Texas, where Spieth
played.
More than anything, Woods popularized the idea of golf as a fitness
sport. The result is a legion of admir-
ers who train harder and, aided by

advances in club technology, hit the
ball farther than their predecessors.
In 2001, when Woods won the
Masters for his fourth consecutive
major victory, he was one of only
four golfers on the PGA Tour who
averaged more than 295 yards off
the tee. Last year, there were 49
such players.
Guys are in better shape, guys
are swinging harder and the equipment now accommodates for
greater speed, Phil Mickelson said.
The effect on Woods is twofold.
For one thing, his power is no longer exceptional. In 2013, his last
year resembling a full season,
Woods ranked just 49th in driving
distance. He averaged 293.2 yards.
It also makes it more difficult for
Woods to sacrifice any distance for
the sake of accuracy, even at a time
when his drives have been wildly erratic. Hes driving the ball terribly,
yet he hasnt resorted to hitting 3woods, Haney said. He hasnt resorted to hitting irons off the tee.
And I think the reason for that is
McIlroy hits his driver a lot, and if
you want to be the best, you have to
match the best.
But the same zeal for bulking up
that Woodss younger competitors
have mimicked to their advantage
may also now make it more difficult
for Woods to stay on the course.
The question of whether Woods
took his workout habits to an unhealthy extreme has been an open
debate.
A few years ago, it wouldnt have
seemed far-fetched to imagine
Woods and McIlroy as they appear
in the commercial: competing as
equals, even as Woods approaches
his 40th birthday. But Woodss injuries have fueled the idea that the
stress he put on his body caught up
with him.
Former world No. 1 Greg Norman
said Woodss physical breakdown
might change the expected career
arc for the generation that now
mimics him.
You shift into the modern era,
and there are these kids that are
bigger, stronger, faster, Norman
said. So now is that longevity still
going to be same? Were seeing the
answer to that is no.
As for the current state of his
golf game, Woods declared on Tuesday his game ready for tournament
competition.
I feel like my game is finally
ready to compete at the highest
level, he said. I had to have all the
facets of my game come around, and
they all have.
A Brands Dream: Festival Fans in Need of an Outlet
Continued from previous page

that enhance their experience and
make it easy for them? She also
reminds them that attendees top
priority is to listen to music with
their friends.
Fulfilling needs makes the
sponsorship useful, rather than intrusive, says Jane Prior, executive
vice president of global brand
strategy and development for Vita
Coco. The beverage company has
a presence at many festivals, including as the official coconut water of Lollapalooza.
You have these guys dancing
their lives away in the heat and
humidity, says Ms. Prior. They
discover the brands during this
point of need. That is different
than an insurance company looking to piggyback on the trendiness of festivals, Ms. Prior added.
I really think consumers see
through that.
It is also important to tweak
the experience based on the
crowd, festival organizers say.
Take the Heineken House, the
branded structure the beer maker
erects at a variety of live events
each year. Its tailored to where
it is and who the consumer is,
says Pattie Falch, director of sponsorships and events for Heineken
U.S.A.
At Ultra Music Festival in Miami last month, Heineken catered
to the electronic dance music
crowd with two-story structure
and activities meant to make
guests feel like they were DJs, including control of the fluorescent
lighting. But when the Heineken
House opens at Coachella this
weekend, it will take on a more
house-party feel, with a hedgelined outdoor space.
New festivals are cropping up

and looking to differentiate from
the pack. Rock in Rio U.S.A. in
May is the first U.S. staging for
the recurring global festival. Vice
President Roberta Medina says
the event, taking place on a paved
area on Las Vegas Boulevard over
two weekends, is a little bit more
sophisticated, making note of the
full-service bathrooms offered instead of the usual portable toilets.
I joke our camping area is MGM
Resort and Hotels, she says. The
MGM Resorts International Grand
Hotel and Casino is one of 18
sponsors that have signed on so
far, Ms. Medina says.
Mercedes-Benz is Rock in Rios
official automotive sponsor, marking the first time the luxury automaker has sponsored a U.S. festival. It is a more refined
experience, says Stephanie Zim-
mer, the head of brand experience

marketing for Mercedes-Benz
U.S.A. Not that theres anything
wrong with festivals where you
camp in a field.
Music festivals are the

perfect place to have
extended exposure with a
captive audience.
Ali Goldstein, Garnier U.S.
Along with the naming rights

for a stagecalled the MercedesBenz Evolution Stagethe car
company will construct a series of
ramps for attendees to ride in a
chauffeured G-Class SUV to simulate going up and over a moun-
tain.
As part of a broader push to
improve its offerings for younger
customers, Nordstrom is testing
the waters at a handful of festivals this spring, including South
by Southwest, in Austin, Texas,
McDowell Mountain Music Festival in Arizona last month and
Stagecoach in California this
month.
One of its three pods offers
screen-printing of T-shirts and
tote bags. Another allows for
beauty touch-ups with dry shampoo.
Our core customer is definitely going to these festivals,
says Jennifer Jackson Brown,
Nordstroms corporate merchandise manager for young customer.
This is a big part of her life and
we felt it was important for us to
be where she is.
OPINION: REVIEW & OUTLOOK
Obamas Visa Double Game
he day after President Obama issued his executive orders on immigration last year, he told a highschool audience in Nevada that he acted
to help correct a fundamentally unfair
system that punishes people who play
by the rules, families who try to come
here the right way and business owners who are doing the right thing by
their workers.
On April 15 well find out if he means
it. Thats the day a stay on a federal
judges ruling throwing out the Labor Departments authority to administer H-2B
visas is set to expire. If the Obama Administration doesnt get its act together,
the whole program could be thrown into
limbopunishing precisely the people
the President claims he wants to help.
H-2B visas are for nonagricultural jobs
that are temporary or seasonal, and
where unemployed Americans cant be
found to fill them. These people ought to
be the easiest to welcome to this country,
because they come here legally, do work
Americans wont do, arent interested in
citizenshipand they support American
jobs and enterprises. One catch: Big Labor hates guest-worker programs.
And, lo, the Obama Administration has
used its authority to impose ever more

We saw a similar scenario in 2007
rules that make the approval process for when Senators Ted Kennedy and John
H-2B visas more complicated and diffi- McCain were making the tough comprocult. Now it is lining up with labor activ- mises necessary to produce a bipartisan
ists who want the program killed.
immigration bill. Senator Barack Obama
Heres how the game is working in said he supported immigration reform.
Florida. The Migrant Farmworker Justice But when it came time to act, Mr. Obama
Project sued the Labor Department on voted for a poison-pill amendment that
behalf of Gabriel Perez, a
sunset the guest-worker
busboy in Palm Beach. Mr.
provision
after
five
Siding with unions
Perez claimed Labors
yearswhich
Kennedy
instead of workers
H-2B regulations dont
vigorously opposed begive him, an American,
cause he knew it undertrying to follow
enough protectionand
mined the bill. As indeed
the law.
that Labor doesnt have
it did when the Obamathe legal authority to issupported
provision
sue these regulations. On
passed.
March 4, federal Judge M. Casey Rodgers
Regarding H-2Bs, the Administration
agreed and enjoined Labor from enforc- could fix its legal problem by moving its
ing its rules.
ruleseven the bad onesfrom Labor to
It might appear Labor is the victim Homeland Security. Instead, Labor rehere, losing because Congress didnt give sponded to the judges ruling by shutting
the authority it expressly gave Labor down H-2B visas altogether. Homeland
over H-2A agricultural visas. But many Security followed the next day.
who depend on H-2B visas suspect that
This provoked a sharp letter from 13
whats really going on is an Administra- Senatorsfive Democrats and eight Retion winking at litigation designed to publicansto Labor Secretary Thomas
strangle this program. Mr. Obamas his- Perez and Homeland Security Secretary
tory suggests this hostility to guest Jeh Johnson. The Senators said they
workers is no accident.
were shocked by the decision. Their
message was unmistakable: Get your fannies in gear and fix this thing.
Shortly afterward, Labor asked Judge
Rodgers for a stay. In granting it, the
judge hinted that she too had her
doubts about Labors sincerity, pointing
out that the department should have
known this was coming given she had
ruled the same way on the same point
in another case in December. [I]t is
disingenuous, she wrote, to suggest
that the court, rather than DOL, is
somehow responsible for DOLs lack of
a contingency plan here.
Now the Administration says it will
have a new fix in place by April 30, which
suggests it may be planning to complicate the regulations even further. This is
nonsense. All Homeland Security needs
to do is put in place clear and simple
rules that make it easier for law-abiding
employers to hire law-abiding workers.
There is no excuse for not having it
ready by April 15 when Judge Rodgerss
stay expires.
Mr. Obama is good at playing the politics of immigration to make Republicans
look bad. If only he were willing to buck
Big Labor in ways that help individual
workers.
Putin and the Dissident
s a deputy in the Russian Parliament, Ilya Ponomarev cast last

years sole vote against the Kremlins annexation of Crimea. For this and
other thought crimes, his face was plastered on a Moscow billboard labeling him
a national traitor and his bank accounts
were frozen. For most of the past year he
has been living abroad.
But in Vladimir Putins Russia, a bucket
of political revenge is never enough. So
this week Parliament voted to strip Mr.
Ponomarev of his parliamentary immunity. This effectively forces him into exile,
since his immunity was the only thing In 2012 he took a prominent role in the
that had been standing in the way of be- street protests against Mr. Putins tainted
ing hit with trumped up
election to a third presicriminal charges of taking
dential term. He cast the
The Kremlin gets
illicit payments. The tactic
sole vote against Mr. Purevenge on a lone critic tins 2013 gay propais a Kremlin favorite,
which it has used against of its Crimea land grab. ganda law, and he also led
former Yukos CEO Mikhail
a successful effort to stop a
Khodorkovsky and dissilaw that would effectively
dent blogger Alexei Nahave criminalized street
valny.
protests.
Mr. Ponomarevs real crime is that he
Since leaving Russia last year, he has
has been outspoken in denouncing Mr. Pu- worked to energize the Russian diaspora
tin, both inside and outside the country. to form the intellectual and political basis
of a democratic opposition. As he told us

last month, Mr. Putin cannot be president
forever, and Russia will need a viable liberal alternative to the thugocrats vying to
take charge of the Kremlin.
Many of us now are in the U.S., and
Kremlin is comfortable with it, he wrote
us Tuesday in an email. But we will get
more organized and we will be backas
it happened already not once and not
twice in Russian history. And we will not
feel sorry for those who initiated that
farce in State Dumaformerly Russian
parliament.
The Rand Paul Difference
and Paul on Tuesday became the

latest GOP candidate to formally
announce his campaign for President, promising to be a different kind
of Republican. That can be a good or
bad difference, depending on whether
the first-term Kentucky Senator is talking about smaller government or some
of his nostrums about national security.
In virtually every area of domestic
policy, Mr. Paul is a fresh, energetic
voice enriching the public debate. Most
corners of the Republican Party these
days have an appetite for a return to a
government restrained by the Constitution, as Mr. Paul put it in Louisville
Tuesday.
That is a much-needed message after
two terms of an Obama Presidency that
has bent or broken traditional restraints
on the raw use of executive power. With
his libertarian pedigree, Mr. Paul brings
more credibility than some of his competitors to this cause.
Mr. Paul also understands that Republicans cant regain the White House
without doing better among young vot-
ers and minorities. His instincts on such fense spending, but these days hes
things as criminal-justice reform are a promising a national defense robust
good start.
enough to defend against all attack,
But his decision to court the race- modern enough to deter all enemies, and
baiting Rev. Al Sharpton, as he did with nimble enough to defend our vital intera meeting in the Senate dining room, is ests. For those generalizations to mean
counterproductive. Mr. Sharpton is in- anything, it takes money.
vested in the old politics
Senator Pauls turnof racial division and will
around on defense spendHes sound on
knee-cap Mr. Paul when it
ing no doubt reflects a
domestic reform,
serves his purposes. Mr.
recognition that President
Paul would do better to
Obama is likely to bebut worrying
engage and elevate a new
his successor a
on national security. queath
generation of black leadworld of disorder. If so,
ers.
the Senator needs to tell
Senator Paul says he
voters how he would hanwill run on a flat tax, a good idea that dle the world differently than Mr.
could also set him apart from some of Obama.
his competitors who will be more cauHis public statements suggest
tious. The flat tax isnt a new idea but it strongly that he has an a priori aversion
is a good one that would increase eco- to U.S. intervention, a belief independent
nomic growth and reduce the sort of fa- of what is happening in the world. At
voritism that lets the rich and powerful times some U.S. intervention is essential
use politicians to game the tax code.
when no other option exists to quell
Mr. Pauls views on national security growing threats.
arent nearly as consistent. He began his
It isnt clear the Senator understands
Senate tenure arguing for cuts in de- this, as when he distorts the history of
Syria as an example of intervention gone

awry. He said in a Senate floor speech
last September that U.S. support for
anti-Assad rebels was responsible for
arming Islamic State and the al Qaeda
offshoot al Nusrah. The truth is that the
Syrian civil war exploded into a regional
and global threat after Mr. Obama chose
not to intervene while also leaving Iraq.
On surveillance by the National Security Agency, Mr. Paul is to the left of Mr.
Obama. In his announcement Tuesday,
he said as President he would end Mr.
Obamas vast dragnet by executive order and on day one end this unconstitutional surveillance. But the surveillance is constitutional and the dragnet
is a myth, as we assume his competitors
will point out in Super PAC ads.
Senator Paul has real political skills
and an interesting mind that have
helped him gain a hearing from voters.
We expect hell enliven the debate and
force his competition to sharpen their
own views, and well see how much difference GOP voters want in their 2016
nominee.
**
OPINION
BY CAMERON WHITE
Jakarta
On paper, Indonesia should be
a major global player. It has the
fourth-largest population in the
world, a rich supply of natural resources and a strategic location
between the Indian and Pacific
oceans, with more than half the
worlds international shipping
passing through its waters. Yet
since gaining independence from
the Dutch in 1949, Indonesia has
focused more on building unity
among its roughly 17,000 islands
than on expanding its influence
over the outside world.
Despite aspirations to play

a role in global maritime
affairs, Indonesia still has
a lot of work to do at home.
Thus observers were heartened by President Joko Widodos
declaration in Naypyidaw, Burma,
last November that Indonesia
would become a global maritime
fulcrum. The former Jakarta governor said he would develop the
countrys maritime capabilities so
it could become an effective axis
between the Indian and Pacific
oceans, promoting peace and
commerce while also balancing
major powers like India, China
and the U.S.
Five months later, the results
are mixed. Instead of promoting
engagement with neighboring
countries, the new policy seems
to be mostly about further nation-building through internal
trade. And some elements even
appeal to nationalism at home by
cracking down on foreign fishing

boats in Indonesian waters.
There have not been clear
documents detailing the points of
the policy, says Shafiah Muhibat,
a senior researcher at Jakartas
Centre for Strategic and International Studies. And if youre trying to analyze the policy based on
what has been done so far, you
can only tell that the policy is inward-looking.
That inward focus is likely due
to the dire state of Indonesian infrastructure. Limited sea and air
links between Indonesias islands
inflate the costs of domestic
tradeits more expensive to ship
an orange from Kalimantan to
Java than from China.
And while Indonesias decision
to cut fuel subsidies has freed up
some $8 billion for domestic projects, maritime needs have to
compete with many other priorities. Coordinating Minister of
Maritime Affairs Indroyono Soesilo has stated that Indonesia requires roughly $6 billion to develop its ports alone.
One possible source of investment is China. Last month President Widodo visited Beijing to
seek infrastructure funds, ultimately making a joint declaration
with Chinas President Xi Jinping
saying the two countries would
work to develop a maritime
partnership. Indonesia could also
benefit from Chinas nascent Asia
Infrastructure Investment Bank.
That doesnt mean Indonesians
are without qualms about Chinese
money. Citing previous instances
where the Chinese built shoddy
power plants in Indonesia,
Sarwono Kusumaatmadja, a senior adviser at the Transformasi
public-policy center and former
minister of maritime affairs and
DIMAS ARDIAN/BLOOMBERG NEWS
Jakartas Ambitions at Sea
TRYING TO MAKE WAVES President Joko Widodo, right, wants to make Indonesia
a fulcrum between the Indian and Pacific oceans.
fisheries, says that quality needs
to be guaranteed. We still have
the opportunity to pick and
choose, he adds.
That depends on who else is
willing to come to the table. Indonesia has a reputation for corruptionit ranked 107 out of 175 on
Transparency Internationals 2014
Corruption Perceptions Index.
Foreign investors also remain
wary of regulations they deem
unfriendly, including requirements to partially divest from Indonesian enterprises relatively
quickly.
You have an investment climate in which legal certainty,
contract certainty and regulatory
certainty are all problematic,
says Lin Neumann, managing director for the American Chamber
of Commerce in Indonesia. So in
order to free up significantly
more investment in infrastructure
than what they have nowat
least from Western companies
thats going to take real regulatory reform, and thats going to
take a while.
Dewi Fortuna Anwar, the vice
presidents deputy for political affairs, says that the process has
begun. The government is aware
that requiring foreign firms to
file tens of forms with various
government offices is bad practice. The more desks you have to
visit, the more palms you have to
grease, she says. Thus the government has made a priority of
establishing a single-route investment policy with fewer forms
and hurdles.
President Widodo is also
working to restructure Indonesias coast guard, a relatively
young institution. Previously 12
different government agencies
shared responsibility for monitoring the nations waters. The result was lax enforcement that
benefitted smuggling and illegal
fishing. Now enforcement functions are being streamlined
though that has led to turf battles.
Each ministry feels that it
has the legal right [to enforce]

protected by law, says Ms. Anwar. Bureaucracy is very protective of its privileges. But she
suggests this is not just an Indonesian problem. China has gone
through this process. Malaysia
has as well.
Some agencies have been especially zealous in pursuing their
respective agendas. Maritime Affairs and Fisheries Minister Susi
Pudjiastuti last December ordered
the sinking of Vietnamese vessels
illegally fishing in Indonesian waters. The tactic was a hit at
home, helping Ms. Pudjiastuti
garner the highest approval rating of any cabinet member. But it
reminded neighboring countries
that Indonesian nationalism can
inspire provocative, perhaps even
reckless policies.
To President Widodos credit,
his domestic reforms should enable Indonesia to eventually play
a larger regional role. Improving
infrastructure and providing a
friendlier investment environment will increase ties to the
global economy. Creating a professional coast guard will increase confidence in the security
of Indonesian waters.
But the presidents maritime
fulcrum policy is still far from
global. Indonesia sits on the
doorstep of growing disputes in
the South China Sea, while Japan
is making overtures in the region
toward prospective strategic partners. Taking the lead in promoting stability in the surrounding
oceans will be a daunting task for
the young democracybut also
incredibly necessary.
Mr. White is a Princeton in Asia

fellow with The Wall Street Journal Asias editorial page.
Full Employment at Rolling Stone

BY EDWARD KOSNER
The self-referential little world
of journalism has been discombobulated, first by Rolling Stones
Web-busting November expos of
gang-rape at the University of Virginia, and now by a 13,000-word
evisceration of the article by a Columbia Graduate School of Journalism team headed by Dean Steve
Coll, formerly a top editor at the
Washington Post.
Jann Wenner, who founded
Rolling Stone nearly a half-
Paul Beckett, Asia Editor

Miguel Gonzalez Jr., Senior Editor
David Holland, News Editor
Hugo Restall, Editorial Page Editor
Tomasz Rustowski, Institutional Sales
Anjali Kapoor, Marketing
Simon Wan, IT
Mark Rogers, Advertising Sales
Jacky Lo, Circulation Sales
Stuart Wood, Operations
Mark Pope, Publisher
Published since 1889 by
Dow Jones and Company

2015 Dow Jones & Company. All Rights Reserved
century ago as a rock n roll journal, commissioned the report after the magazine had to repudiate
the article when its single source,
a UVA junior, turned out to be, to
put it kindly, a fabulist.
Mr. Wenners action suggested
to the unsophisticated that his
magazine had needed to grapple
with such complex issues that
only a searching analysis by the
nations leading journalism academy could tease out the hard
lessons of the fiasco. Mr. Coll inadvertently reinforced Mr. Wenners
ingenious approach by delivering a
report that was 4,000 words longer than the original article: a
hammer to squash a gnat.
Journalism is plainly a fallible
craft that, like any sustained
human activity, is prone to imperfection. And any conscientious
scrutiny of journalism designed to
save it from itself is a worthy
undertaking. But the whole Rolling
Stone episode is a ludicrous and
pretentious exercise in journalistic
self-regard.
The original article, by Sabrina
Rubin Erdely, who has also written
for such estimable magazines as
the New Yorker and GQ, told the
story of a coed, called only
Jackie, who supposedly was
gang-raped on a broken glass coffee table by seven male students at
a UVA fraternity house and the inadequate response by her friends

and the school.
It turned out that Jackie was
essentially the only source for the
whole piece, which neatly synced
with widespread legitimate concern about sexual abuse of women
on campus and, not coincidently,
The repudiated article

was nothing more than
elementary journalistic
malpractice.
earned Rolling Stone more Internet hits than any noncelebrity
article in the magazines long
history. Jackies tale collapsed
when the Washington Post,
among others, actually reported
her story and found it full of
holes.
For all the hand-wringing,
there are no deep journalistic issues involved in the article. Any
decent text editor on a magazine
or desk editor on a newspaper
would have taken one look at the
manuscript, asked a few questions
of the writer, and bounced it back
with a growly check it out!
Ms. Erdely never could find
Drew, the alleged mastermind of

the rapes, or Jackies friends, also
given pseudonyms, nor did she
ask detailed questions of the fraternity or UVA officials that might
have raised red flags about the
authenticity of Jackies account.
On any professionally run publication, editors would have directed
the writer to do these elementary
tasks long before the article was
submitted for editing, fact-checking and legal review.
This is not a case like Jayson
Blair of the New York Times,
Stephen Glass of the New Republic or Janet Cooke of the Washington Post, where a writer
slipped phony stories past credulous editors. Nor does it deal with
genuinely perplexing issueslike
balancing national security against
the publics right to know, or privacy in the digital ageso popular
at journalistic symposiums.
Rather, A Rape on Campus
was nothing more than elementary
journalistic malpractice committed
by the writer, her text editor, the
managing editor and proprietor
Wenner, who, according to the
Columbia report, read an early
version of the piece and raised no
objections. The fact-checker, who
identified some problems but was
waved off by her superiors, is
probably the only one in the chain-
of-command who did her job.

Mr. Colls report documents
how the magazine flouted basic
journalistic standards and suggests ways that sensitive stories
like campus rape can be better
covered. It properly puts the
responsibility for getting the
story right not on sources that for
any number of reasons can prove
unreliable, but on the journalists
who, at a minimum, are paid to
not get it wrong.
In the aftermath, incredibly
enough, no Rolling Stone editor or
the offending writer was fired, and
the magazine proclaimed that none
of its procedures needed rethinking. That is a bigger indictment of
big-time journalism today than
anything in Mr. Colls investigation.
Mr. Kosner is the former editor

of Newsweek, New York magazine, Esquire and the New York
Daily News, and the author of a
memoir, Its News to Me (Da
Capo Press, 2006).
Comments? The Journal
welcomes readers responses to
all articles and editorials. It is
important to include your full
name, address and telephone
number. Please send letters to
the editor to: Letters@WSJ.com
OPINION
BY HENRY KISSINGER
AND GEORGE P. SHULTZ
The announced framework for
an agreement on Irans nuclear
program has the potential to generate a seminal national debate.
Advocates exult over the nuclear
constraints it would impose on
Iran. Critics question the verifiability of these constraints and their
longer-term impact on regional and
world stability. The historic significance of the agreement and indeed
its sustainability depend on
whether these emotions, valid by
themselves, can be reconciled.
Debate regarding technical details of the deal has thus far inhibited the soul-searching necessary
regarding its deeper implications.
For 20 years, three presidents of
both major parties proclaimed that
an Iranian nuclear weapon was
contrary to U.S. and global interestsand that they were prepared
to use force to prevent it. Yet negotiations that began 12 years ago as
an international effort to prevent
an Iranian capability to develop a
nuclear arsenal are ending with an
agreement that concedes this very
capability, albeit short of its full capacity in the first 10 years.
Mixing shrewd diplomacy with
open defiance of United Nations
resolutions, Iran has gradually
turned the negotiation on its head.
Its centrifuges have multiplied
from about 100 at the beginning of
the negotiation to almost 20,000
today. The threat of war now constrains the West more than Iran.
While Iran treated the mere fact of
its willingness to negotiate as a
concession, the West has felt compelled to break every deadlock with
a new proposal. In the process, the
Iranian program has reached a
point officially described as being
within two to three months of
building a nuclear weapon. Under
the proposed agreement, for 10
years Iran will never be further
than one year from a nuclear
weapon and, after a decade, will be
significantly closer.
Inspections and
Enforcement
The president deserves respect
for the commitment with which he
has pursued the objective of reducing nuclear peril, as does Secretary
of State John Kerry for the persistence, patience and ingenuity with
which he has striven to impose significant constraints on Irans nuclear program.
Progress has been made on
shrinking the size of Irans enriched stockpile, confining the enrichment of uranium to one facility
and limiting aspects of the enrichment process. Still, the ultimate
significance of the framework will
depend on its verifiability and enforceability.
Negotiating the final agreement
will be extremely challenging. For
one thing, no official text has yet
been published. The so-called
framework represents a unilateral
U.S. interpretation. Some of its
clauses have been dismissed by the
principal Iranian negotiator as
spin. A joint European Union-Iran
statement differs in important respects, especially with regard to
the lifting of sanctions and permitted research and development.
Comparable ambiguities apply
to the one-year window for a presumed Iranian breakout. Emerging
at a relatively late stage in the ne-
gotiation, this concept replaced the

previous baselinethat Iran might
be permitted a technical capacity
compatible with a plausible civilian
nuclear program. The new approach complicates verification and
makes it more political because of
the vagueness of the criteria.
Under the new approach, Iran
permanently gives up none of its
equipment, facilities or fissile product to achieve the proposed constraints. It only places them under
temporary restriction and safeguardamounting in many cases
to a seal at the door of a depot or
periodic visits by inspectors to declared sites. The physical magnitude of the effort is daunting. Is
the International Atomic Energy
Agency technically, and in terms of
human resources, up to so complex
and vast an assignment?
In a large country with multiple
facilities and ample experience in
nuclear concealment, violations
will be inherently difficult to detect. Devising theoretical models of
inspection is one thing. Enforcing
compliance, week after week, despite competing international crises and domestic distractions, is
Mixing shrewd diplomacy

with defiance of U.N.
resolutions, Iran has turned
the negotiation on its head.
another. Any report of a violation is
likely to prompt debate over its
significanceor even calls for new
talks with Tehran to explore the issue. The experience of Irans work
on a heavy-water reactor during
the interim agreement period
when suspect activity was identified but played down in the interest of a positive negotiating
atmosphereis not encouraging.
Compounding the difficulty is
the unlikelihood that breakout will
be a clear-cut event. More likely it
will occur, if it does, via the gradual
accumulation of ambiguous evasions.
When inevitable disagreements
arise over the scope and intrusiveness of inspections, on what criteria are we prepared to insist and
up to what point? If evidence is imperfect, who bears the burden of
proof? What process will be followed to resolve the matter
swiftly?
The agreements primary enforcement mechanism, the threat
of renewed sanctions, emphasizes a
broad-based asymmetry, which
provides Iran permanent relief
from sanctions in exchange for
temporary restraints on Iranian
conduct. Undertaking the snapback of sanctions is unlikely to be
as clear or as automatic as the
phrase implies. Iran is in a position
to violate the agreement by executive decision. Restoring the most
effective sanctions will require coordinated international action. In
countries that had reluctantly
joined in previous rounds, the demands of public and commercial
opinion will militate against automatic or even prompt snap-back.
If the follow-on process does not
unambiguously define the term, an
attempt to reimpose sanctions
risks primarily isolating the U.S.,
not Iran.
The gradual expiration of the
framework agreement, beginning in
a decade, will enable Iran to be-
STATE DEPARTMENT/ZUMA PRESS
The Iran Deal and Its Consequences
After nuclear negotiations were completed in Lausanne, Switzerland, April 2.

come a significant nuclear, industrial and military power after that
timein the scope and sophistication of its nuclear program and its
latent capacity to weaponize at a
time of its choosing. Limits on
Irans research and development
have not been publicly disclosed
(or perhaps agreed). Therefore Iran
will be in a position to bolster its
advanced nuclear technology during the period of the agreement
and rapidly deploy more advanced
centrifugesof at least five times
the capacity of the current model
after the agreement expires or is
broken.
The follow-on negotiations must
carefully address a number of key
issues, including the mechanism for
reducing Irans stockpile of enriched uranium to 300 from 10,000
kilograms, the scale of uranium enrichment after 10 years, and the
IAEAs concerns regarding previous
Iranian weapons efforts. The ability
to resolve these and similar issues
should determine the decision over
whether or when the U.S. might
still walk away from the negotiations.
The Framework
Agreement and
Long-Term Defense
Even when these issues are resolved, another set of problems
emerges because the negotiating
process has created its own realities. The interim agreement accepted Iranian enrichment; the new
agreement makes it an integral
part of the architecture. For the
U.S., a decade-long restriction on
Irans nuclear capacity is a possibly
hopeful interlude. For Irans neighborswho perceive their imperatives in terms of millennial rivalriesit is a dangerous prelude to
an even more dangerous permanent fact of life. Some of the chief
actors in the Middle East are likely
to view the U.S. as willing to concede a nuclear military capability
to the country they consider their
principal threat. Several will insist
on at least an equivalent capability.
Saudi Arabia has signaled that it
will enter the lists; others are likely
to follow. In that sense, the implications of the negotiation are irreversible.
If the Middle East is proliferated and becomes host to a plethora of nuclear-threshold states,
several in mortal rivalry with each
other, on what concept of nuclear
deterrence or strategic stability
will international security be
based? Traditional theories of deterrence assumed a series of bilateral equations. Do we now envision
an interlocking series of rivalries,
with each new nuclear program
counterbalancing others in the region?
Previous thinking on nuclear

strategy also assumed the existence of stable state actors. Among
the original nuclear powers, geographic distances and the relatively
large size of programs combined
with moral revulsion to make surprise attack all but inconceivable.
How will these doctrines translate
into a region where sponsorship of
nonstate proxies is common, the
state structure is under assault,
and death on behalf of jihad is a
kind of fulfillment?
Some have suggested the U.S.
can dissuade Irans neighbors from
developing individual deterrent capacities by extending a U.S. nuclear
umbrella to them. But how will
these guarantees be defined? What
factors will govern their implementation? Are the guarantees extended against the use of nuclear
weaponsor against any military
attack, conventional or nuclear? Is
it the domination by Iran that we
oppose or the method for achieving
it? What if nuclear weapons are
employed as psychological blackmail? And how will such guarantees be expressed, or reconciled
with public opinion and constitutional practices?
Regional Order
For some, the greatest value in
an agreement lies in the prospect
of an end, or at least a moderation,
of Irans 3 decades of militant
hostility to the West and established international institutions,
and an opportunity to draw Iran
into an effort to stabilize the Middle East. Having both served in
government during a period of
American-Iranian strategic alignment and experienced its benefits
for both countries as well as the
Middle East, we would greatly welcome such an outcome. Iran is a
significant national state with a
historic culture, a fierce national
identity and a relatively youthful,
educated population. Its re-emergence as a partner would be a consequential event.
But partnership in what task?
Cooperation is not an exercise in
good feeling; it presupposes congruent definitions of stability.
There exists no current evidence
that Iran and the U.S. are remotely
near such an understanding. Even
while combating common enemies,
such as Islamic State, Iran has declined to embrace common objectives. Irans representatives
(including its Supreme Leader)
continue to profess a revolutionary
anti-Western concept of international order. Domestically, some senior Iranians describe nuclear negotiations as a form of jihad by
other means.
The final stages of the nuclear
talks have coincided with Irans intensified efforts to expand and en-
trench its power in neighboring

states. Iranian or Iranian client
forces are now the pre-eminent
military or political element in
multiple Arab countries, operating
beyond the control of national authorities. With the recent addition
of Yemen as a battlefield, Tehran
occupies positions along all of the
Middle Easts strategic waterways
and encircles archrival Saudi Arabia, a U.S. ally. Unless political
restraint is linked to nuclear restraint, an agreement freeing Iran
from sanctions risks empowering
Irans hegemonic efforts.
Some have argued that these
concerns are secondary, since the
nuclear deal is a way station toward the eventual domestic transformation of Iran. But what gives
us the confidence that we will
prove more astute at predicting
Irans domestic course than
Vietnams, Afghanistans, Iraqs,
Syrias, Egypts or Libyas?
Absent the linkage between nuclear and political restraint, traditional U.S. allies will conclude that
the U.S. has traded temporary nuclear cooperation for acquiescence
to Iranian hegemony. They will increasingly look to create their own
nuclear balances and, if necessary,
call in other powers to sustain
their integrity. Does the U.S. still
hope to arrest the regions trends
toward sectarian upheaval, state
collapse and the disequilibrium of
power tilting toward Tehran, or
does it now accept this as an irremediable aspect of the regional
balance?
Some advocates have suggested
that the agreement can serve as a
way to dissociate the U.S. from
Middle East conflicts, culminating
in the military retreat from the region initiated by the current administration. As Sunni states gear
up to resist a new Shiite empire,
the opposite is likely to be the case.
The Middle East will not stabilize
itself, nor will a balance of power
naturally assert itself out of Iranian-Sunni competition. (Even if
that were our aim, traditional balance-of-power theory suggests the
need to bolster the weaker side,
not the rising or expanding power.)
Beyond stability, it is in Americas
strategic interest to prevent the
outbreak of nuclear war and its
catastrophic consequences. Nuclear
arms must not be permitted to turn
into conventional weapons. The
passions of the region allied with
weapons of mass destruction may
impel deepening U.S. involvement.
If the world is to be spared even
worse turmoil, the U.S. must develop a strategic doctrine for the
region. Stability requires an active
U.S. role. For Iran to be a valuable
member of the international community, the prerequisite is that it
accepts restraint on its ability to
destabilize the Middle East and
challenge the broader international
order.
Until clarity on a U.S. strategic
political concept is reached, the
projected nuclear agreement will
reinforce, not resolve, the worlds
challenges in the region. Rather
than enabling U.S. disengagement
from the Middle East, the nuclear
framework is more likely to necessitate deepening involvement
thereon complex new terms. History will not do our work for us; it
helps only those who seek to help
themselves.
Messrs. Kissinger and Shultz are

former secretaries of state.
IN DEPTH
New Fidelity CEO Faces Shift

Toward Passive Investments
BY KIRSTEN GRIND
Boston
ESSDRAS M. SUAREZ/THE BOSTON GLOBE/GETTY IMAGES
bigail Johnson was so eager for change

at mutual-fund giant Fidelity Investments that she once tried to oust her
own father as CEO, according to executives at
the time. A decade later, Ms. Johnson is finally
in charge, and she appears no less willing to
shake things up.
Ms. Johnson, 53 years old, is quietly reshaping the company that Edward Ned
Johnson III, 84, built into a money-management behemoth that oversees the retirement
plans of millions of Americans. Since she took
over as CEO in October, she has cut costs and
overhauled units that are losing money, replaced heads of underperforming divisions
and pushed the company into businesses her
father long resisted.
But some current and former Fidelity executives and analysts question whether Ms.
Johnson has the vision to drive the company
forward, or will be a big enough catalyst for
change.
The privately held Fidelity, with about $2
trillion in assets under managementa measure of investments in Fidelitys own productshas long been known for mutual funds
run by star stock pickers. But in recent years,
it has lost customers and market share to rivals emphasizing so-called passive investments that mimic indexes for a fraction of the
cost of the typical mutual fund. Fidelity, the
No. 2 mutual-fund firm ranked by assets under
management, said in February that investors
pulled $16 billion from its stock mutual funds
in 2014, double the amount of the previous
year, while No. 1 Vanguard Group, which specializes in passive funds, took in an industryrecord $216 billion.
Other business lines at Fidelity are performing well, and the company reported record annual revenue in 2014. Assets under administrationa measure that includes other
funds and products the company offersrose
to a record $5.06 trillion on the back of Fidelitys retirement business. The company said
its retirement business added new large employers in 2014, including American Airlines
and Deutsche Bank, boosting assets under administration.
But because of its longtime focus on mutual funds, Fidelity is searching for an identity
at a critical moment in its almost 70-year history.
Ms. Johnson has tried bold action in the
past. In 2004, as president of the firms assetmanagement division, she tried to get other
family members to vote her father out of the
top job over disagreements with some of his
business decisions, according to executives at
the time. The secretive effort was unsuccessful, and Mr. Johnson, who is still Fidelitys
chairman, didnt hold it against his daughter,
the people said. Fidelity declined to comment
on the move.
So far as CEO, Ms. Johnson has taken particular aim at streamlining the private-equity
division that houses some of Mr. Johnsons pet
projects, including a struggling tomato farm.
Meanwhile, she is pushing for more growth in
the firms international fund business, where
in January she replaced the leadership. And in
an effort to woo high-end clients, Ms. Johnson
is building out the companys wealth-management division, an area that Fidelity minimized
under her father, said people familiar with the
matter.
But investment trends that have been shifting for the past decade put Fidelity in a tricky
spot. Investors have pulled money from actively managed U.S. equity fundsrun by
portfolio managers who choose investments
each year since 2006, totaling about $700 billion in outflows, according to fund research
firm Morningstar Inc. During that time, they
Abigail Johnson faces a wave of customers moving into passively managed funds. Shown here in 2012, Ms. Johnson rarely makes public appearances.
IN DEPTH
Shifting Terrain
Investors have plowed money into U.S. stock funds

that track a benchmark while pulling money from
funds run by professional managers
Net ow
draining cash from Fidelitys actively managed

stock funds, like Contrafund, its largest.
$200 billion
$8 billion
Contrafunds net ow
Passively managed
100
Actively managed
4
0
100
BROOKS KRAFT/CORBIS
4
8
12
200
2004 05 06 07 08 09 10 11 12 13 14
2004 05 06 07 08 09 10 11 12 13 14
Source: Morningstar
have poured about the same amount into passively managed stock-index funds and exchangetraded funds, a popular type of fund that tracks
an index. Passively managed equity funds are
now about 17% of all mutual funds, compared
with about 11% 10 years ago, according to Morningstar.
Some current and former Fidelity executives
and analysts said the company has lost business
in part because Ms. Johnson has played down
this shift.
Despite the numbers, Ms. Johnson believes
investors push into passive funds is a temporary trend and will reverse when performance
improves, according to executives who are familiar with her thinking. She believes its cyclical, said Brian Hogan, president of Fidelitys equity division.
Many analysts and industry executives disagree. I cant come up with a scenario that says
active funds are going to get a disproportionate
share [of investor money] again, said Todd
Rosenbluth, director of mutual-fund and ETF research at S&P Capital IQ.
Ms. Johnson started at Fidelity in the 1980s
as a stock analyst, and has served as president
since 2012. As president, she initially opposed
launching the firms own ETFs, believing the
company could better add value through actively
managed funds. Ms. Johnson partially reversed
course last year, and Fidelity launched its first
three ETFsbut avoided the typical index-tracking model and kept them actively managed.
The decisions have been costly. ETFs saw record inflows of $241 billion in 2014, according to
fund-research firm Morningstar, and some analysts said Fidelitys rivals already dominate the
ETF market. While Fidelity offers passively managed index funds, the company hasnt marketed
them heavily to investors.
Ms. Johnson and her father declined to comment for this article. But interviews with more
than a dozen current and former colleagues, clients and investors paint a picture of two different leaders. While both are intensely private billionaires who dislike any displays of their
considerable wealth, Ms. Johnsons quiet, methodical approach to running the business is a
sharp departure from a patriarch known as a
combative visionary who often made personal
and professional decisions quickly.
Mr. Johnsonwhom employees refer to as
the chairmanpresided over a period of massive growth at Fidelity, building the company
that he took over from his father in 1977 with
about $5 billion in assets under management to
about $2 trillion in assets today. He did it in part
by taking what were widely seen as risks. In the
1980s, he insisted that Fidelity start selling rivals mutual funds despite strong objections by
executives who said it would eat away at the
funds Fidelity was running on its own. The move
ultimately was a boon to Fidelity as customers by
the thousands used the firms brokerage to buy
those funds, executives said. Obsessed with technology, Mr. Johnson made sure Fidelity was the
first mutual-fund firm to host a website in 1995.
Mr. Johnson also developed a reputation for
impulsive acquisitions. An avid art collector who
owns several hundred grandfather clocks, he
once had an entire two-story house disassembled
in China and flown, in more than 2,000 pieces, to
a museum in Salem, Mass., according to people
familiar with the move.
At Fidelity, he bought an organic tomato farm
in Maine, employing about 200 workers in a
quest to produce a year-round, perfect-tasting

tomato. The farm has struggled in recent years
after a massive whitefly infestation, said people
familiar with the matter.
Executives got a glimpse of how different
things would be under Ms. Johnson during one
of her first meetings as chief executive last fall,
when she stood before her top lieutenants and
posed a question: If you had $300 million to
spend on the business, what would you invest it
in?
Executives were taken aback, according to
people in attendance, mostly because they had
grown accustomed to a boss who often made decisions without consulting many people. The
question sparked discussion on everything from
how to increase the number of women investors
to a possible expansion into robo-advising, or offering automated online financial guidance.
Current and former executives said that despite her quiet demeanor and considered approach, there is an uncompromising side to Ms.
Johnson. They describe instances in which she
has moved out executives working for her who
have challenged her leadership.
Her critics say she is too focused on operations, and hasnt been willing to take big risks
like her father. While she is known to efficiently
operate businesses within the company, she has
trouble thinking outside the box and will sometimes get too focused on minutia, according to
two executives who have worked with her. She
sometimes, for example, will ask for multiple reports on a new business line or product before
agreeing to go forward, a move that can bog
down the process, these people said.
But Ms. Johnsons long history at the company is a benefit, said Jim Lowell, who follows
the company closely through his independent
newsletter, Fidelity Investor. She knows every
aspect of Fidelitywhos making it work, and
who isnt.
A Fidelity spokesman said the firm has been
marketing its active equity funds through advertisements and client communications more in the
past year. He said Ms. Johnson is constantly
looking long term at the company and carries
on the Fidelity tradition of innovation and continuous improvement.
Ms. Johnson, trim with short brown hair and
glasses, got her M.B.A. from Harvard and started
at Fidelity in 1988 as a 26-year-old stock analyst.
Big Money
Fidelitys assets hit a record last year. The

narrower category of assets under
managementlimited to Fidelity productshas
grown more slowly.
$5.058 trillion
$5 trillion
All other assets
Assets under
management
4
3
2
1
0
2008
09
10
Source: the company
11
12
13
14
In 2004 Ms. Johnson, right, appeared with her father, Edward Ned Johnson III, at a Fidelity event.
She eventually ran multiple divisions including
asset management and Fidelitys retirement business. An executive reshuffle in 2012 led to her
appointment as president and put Ms. Johnson
in line to take over.
Ms. Johnson, whose net worth is estimated
by Forbes at $13.2 billion, and Mr. Johnson,
whose net worth is estimated at $7.3 billion, give
away millions of dollars a year to charities in
Boston through several foundations, but almost
always anonymously, people who know them
said. The Johnsonsincluding Ms. Johnsons sister, Elizabeth, who doesnt work at Fidelity, and
her brother, Edward, who works at a Fidelityowned real-estate companycontrol 49% of the
company, while Fidelity employees own the other
51%.
In some ways, Ms. Johnson takes after her father. They are known for their deep distaste for
publicity and often avoid industry events or take
on minimal roles at them, the people said. On an
evening here in late January, a group of the citys
civic and financial leaders gathered at Ms. Johnsons new apartment on the top two floors of an
upscale hotel in Bostons Back Bay neighborhood,
according to a person in attendance. The event,
for the Boys and Girls Club of Boston, was the
first opportunity for many in attendance to get
to know Ms. Johnson in her new role. Yet for
much of the night, she sat quietly at a table while
her husband, venture capitalist Christopher McKown, a board member for the charity, spoke of
the evenings chosen cause and chatted up
guests.
She doesnt need to be one of those rock star
CEOs, said Michael Wilens, a Fidelity director.
If you walked into a room, you wouldnt know it
was Abby Johnson.
Both Johnsons place a premium on customer
and employee relations. While many large financial-services firms cut costs when building call
centers, Mr. Johnson spent big over the years. He
installed an ornate water feature with small
rocks and a pond in front of one Fidelity call center in Covington, Ky., and visited the Lady Bird
Johnson Wildflower Center for inspiration on another in Westlake, Texas. At the Texas call center,
Fidelity owns a herd of longhorn steers that
roam the grounds, said Michael Clark, a former
Fidelity executive who said he worked closely
with the Johnsons.
He felt like people worked so hard, and so
long, that he wanted them to be very proud of
where they worked, Mr. Clark said.
Ms. Johnson, meanwhile, spends a significant
amount of time meeting with the rank-and-file in
Fidelity branches and offices outside of Boston.
On a trip last October to one Fidelity office, an
employee presented her with a Halloween pumpkin ornately carved with her portrait, much to
her delight, said one executive who witnessed
her reaction.
Joseph Tucci, chief executive at EMC Corp., a
longtime Fidelity client, said he has worked extensively with Ms. Johnson over the years. Shes
very understated, he said. You definitely want
to find out what Abbys thinking. Its probably
well worth knowing.
Ms. Johnsons approach at Fidelity has at
times meant reassessing what her father built
over nearly four decades at the helm. That is
playing out most prominently in Fidelitys littleknown private-equity division, Devonshire Investors. The division, with nine companies that employ 17,000 people world-wide, houses many of
Mr. Johnsons extraneous investments over the
years, including the tomato farm. For years it

was protected by an unspoken rule that a Johnson never foray into projects overseen by another family member.
But some of the companies havent fared well.
Between about 2007 and 2012, for example, Fidelity plowed about $1 billion into ProBuild, a
large U.S. materials supplier, as it struggled in
the face of the U.S. housing downturn, said one
former senior ProBuild executive. Mr. Johnson
didnt appear troubled by the spending, viewing
the firm as a testing ground for technology that
he thought would disrupt the housing industry,
the executive said. That included a failed attempt
to build a robotic machine to replace humans
during roof framing.
Just months into her reign, Ms. Johnson
launched a review of some businesses within Devonshire Investors that have been losing money,
said people familiar with the matter. She has
convened meetings to discuss majority-owned
Colt Group SA, a London-based telecommunications company whose stock price and earnings
have been flat in recent years, said a person familiar with the meetings. Its not unusual for a
person in her position to be looking at businesses
like ours, a Colt spokesman said.
Those actions have cheered some Fidelity insiders, who felt the division had grown too unwieldy, with stakes too large in some companies,
said people familiar with the matter.
Ms. Johnson has disagreed with her father in
the past. In addition to the proxy fight, the two
thought differently several years ago over
whether Fidelity should launch its own ETFs or
partner with an already-established provider, according to people familiar with the matter. Mr.
Johnson initially believed Fidelity should try its
hand, while Ms. Johnson thought it would be
hard to compete with larger, more established
players. She persevered, and Fidelity in 2013 expanded an existing partnership with rival BlackRock Inc. to offer BlackRocks funds on Fidelitys
brokerage platform.
While the partnership has been successful,
some analysts said Fidelity lost out on investor
inflows that would have boosted its own asset
base and come with higher management fees.
Meanwhile, Fidelitys bread-and-butter mutual funds continue to suffer despite some good
performance. Fidelitys largest stock fund, the Fidelity Contrafund, run by well-known manager
William Danoff with $112 billion in assets under
management, saw outflows of $11 billion in 2014,
its fourth straight year of outflows, according to
Morningstar. The Fidelity Magellan fund, made
famous by stock picker Peter Lynch, has shrunk
in asset size from a peak of $106 billion in 1999
to $17 billion last year, according to Morningstar.
Executives in charge of the firms U.S. stock
funds said Ms. Johnson has no plans to make
changes to the division, believing that the strong
performance of the funds, about 80% of which
the company says are beating their benchmark,
eventually will woo investors back. Other Fidelity
executives share her view.
Ms. Johnson has sought to position the company as a larger financial-services firm, away
from its mutual-fund heritage. The problem is,
not enough people know that, said Mr. Lowell,
the newsletter editor.
Fidelity is the poster child for active management, he said. Theyve got to propel the argument for active management. As the head of
Fidelity, she needs to figure out a way to deliver
a better message.
**
MICROFINANCE
Bank Push Has Skeptics
BY GABRIELE PARUSSINI
PAOLO BOSONIN/THE WALL STREET JOURNAL (2)

tempted before.
But skeptics also say it isnt
clear to what extent Mr. Modis plan
has reached the unbanked: Many of
the new accounts were opened by
people who already had accounts to
take advantage of government freebies. And tales abound of bribeseeking officials blocking access for
some of the very people the program was designed to reach.
Rajesh Aggarwal, a director at
the program, acknowledged both issues and said steps to address them
had reduced the frequency of customers opening duplicate accounts
and the number of people turned
away from banks.
A Baroda spokesman said the
bank doesnt charge to open accounts, and that it reports instances
of illegal charges to authorities.
Finance ministry officials say
those asked to pay a bribe can call
widely advertised helpline numbers.
We run a wide-ranging campaign
to encourage people to report such
accidents, said Finance Secretary
Hasmukh Adhia, who reports to the
finance minister on the program.
Ms. Firozaben, the nurse, who
goes by only one name, says she already had an account at a different
bank when she visited Bank of Baroda in December. Banks require
identification documents to open
new accounts, but only one form of
IDIndias Aadhaar number, a
unique 12-digit identifier linked to
biometric datais linked to a customers bank account in a way that
allows for a cross-check to rule out
the opening of a duplicate account.
Ms. Firozaben says she couldnt remember which documents she used
to open the Bank of Baroda account.
The government plans to give
every citizen an Aadhaar number by
the end of the year, but Indias Supreme Court has ruled that having
one cant be made mandatory.
It isnt known how many of the
accounts opened under Mr. Modis
program belong to people who
didnt have one already, said A.P.
Hota, head of the interbank platform that supervises Indias retail
payment systems. Experts and employees at large government banks
estimate that between one-third and
two-thirds of new accounts may
have been opened by people with
existing accounts.
The data from the program simply reveal the number of accounts
opened, said Amy Jensen Mowl, a
researcher who specializes in financial inclusion at the Institute for Financial Management and Research,
a social-research group in Chennai.
We have yet to determine how
many households remain excluded.
KPMG said in a report on the
program that the lure of insurance
and an overdraft facility may have
prompted people to open multiple
accounts in various banks. The consultancy pointed at account duplication as one of the main challenges
to Indias financial-inclusion program as it obfuscates whether the
plan is reaching the unbanked.
Mr. Aggarwal acknowledged that
many accounts may have been
opened by people who already had
access to banking services, especially in the programs first weeks.
More than a third of new accounts
were opened in the month that followed the launch.
In addition, misunderstandings
over the overdraft provision in the
early days of the program led many
poor people to believe that accounts
would come already loaded with
cash. Disillusion may cause many to
Above, agent Mohammed Yahiya

gives a woman a receipt after she
opened a bank account last month.
Right, Jahanoor Bibi Shaikh says she
had to pay to apply for an account.
leave newly opened accounts dormant, financial-inclusion experts
say. That was a problem after previous programs.
Meanwhile, some of the people
Mr. Modis program was intended
forIndias poorsay they still
have no access to banking.
Mr. Ansari, 38 years old, lives in
Mankhurd, a slum on the edge of
Mumbais largest dumping ground,
a one-hour bus ride away from the
affluent southern districts of the nations biggest city. As a tailor, he
earns 7,000 rupees a month, or
about $113, supplying unstitched
garments to other tailors, and has
no savings.
Mr. Ansaris application to open
an account was turned down. He
said he doesnt know why identity
documents he supplied werent seen
as sufficient. Mr. Ansari says he had
tried to obtain an Aadhaar number,
but that employees running an enrollment camp asked him for a 1,000
rupee bribemoney he didnt have.
Today, Mr. Ansari still doesnt
have a bank account. I ended up
with nothing, he said. The Baroda
spokesman said Mr. Ansari should
have been able to open an account
with documentation he provided.
Jahanoor Bibi Shaikh, a 47-yearold housewife, lives in the same settlement as Mr. Ansari. She shares a
one-room hut with her eight family
members, including her chronically
ill husband, who has been unable to
work for 12 years.
The Shaikh family, originally
from Bihar, lives off the wages of
their 18-year-old son, Ramzan, who
makes up to 10,000 rupees a month
as a laborer.
Enticed by the promise of free
insurance, Mrs. Shaikh had high
hopes for opening a bank account.
For years, she had stored up
money in a box at home to cover the
bribes commonly associated with
obtaining identity documents. She
says she paid 500 rupees for a Permanent Account Number, an identifier issued to all Indian taxpayers,
and 2,000 rupees for a birth certificate. Both these documents are accepted forms of identification for
opening new accounts under Mr.
Modis program. Mrs. Shaikh hasnt
applied for an Aadhaar number.
She says she applied for a bank
account at a State Bank of India Ltd.
boot camp in December, and that
employees asked for 100 rupees to
register her application.
My account is still not open,
she said. Im waiting to hear back.
Manju Agarwal, an SBI manager,
said that paperwork for opening ac-
Access Plan Brings

Costs, Customers
To Indian Lenders
counts is free. Its beyond my comprehension that a customer is asked

to pay when he opens an account,
she said, commenting on Mrs.
Shaikhs account of her experience.
One rationale behind Mr. Modis
plan was that it would allow the
government to dole out support directly to the people most in need,
rather than through costly subsidies
for staples such as fuel.
On April 1, the government
stopped subsidizing the retail price
of liquefied- petroleum-gas cylinders, which most Indians use for
cooking. The price increased by
40%, with subsidies now being
wired directly into LPG customers
bank accounts. Billions of dollars
worth of other subsidiesfrom
scholarships to housing benefits
will be transferred as cash directly
into bank accounts this year, a government official said.
But if the poor have trouble cutting through red tape to open accounts, they may miss out on the
subsidies altogether.
Barkat Ullah Kahn, a day laborer
who earns about 14,000 rupees a
month, recently applied for an account with SBI after setting aside
enough money to pay for a connection for gas cylinders at his home.
Without an account, he will miss out
on the governments subsidies.
He carried with him his Aadhaar
number, a Permanent Account Number card and a ration card as proof
of identity, yet he says his application was still turned down.
Mr. Adhia, the finance secretary,
said such occurrences arent common. There will always be a small
amount of this kind of complaints
for such a huge program, he said.
As for Mr. Kahn, he isnt sure
why he was unsuccessful. They
didnt give me any reasons, he said.
Ms. Agarwal, at SBI, said she didnt
understand why someone like Mr.
Khan would be turned away.
Kenan Machado
MUMBAIThe Indian governments push for financial inclusion

may have an undesired side effect:
putting an extra burden on publicsector banks, which are already coping with problems including a
mounting pile of bad debt.
In order to bring a larger share
of Indians into the formal financial
system, the government has pushed
the lending institutions it controls
to open millions of new accounts.
While some elements of an incentive
plan intended to attract customers
are funded by the government and
by interbank entities such as the
National Payments Corp. of India,
the cost of building the architecture
and running the programat a loss,
initiallyis falling on the shoulders
of lenders.
Wednesday, the government
launched a bank with initial capitalization of 200 billion rupees ($3.2
billion) to regulate and fund microfinance institutions lending to small
businesses and individuals.
Third-quarter earnings at Indian
banks, released in February, showed
that their bad-debt burdens have
climbed to more than 4% of their
loan portfolios. And with more loans
going sour, the banks have put more
money aside to offset losses. That
has hurt profits.
State Bank of India Ltd., Indias
largest bank, opened about 34 million accounts under a program
backed by Prime Minister Narendra
Modi, increasing by about 16% the
number of accounts it manages. Every time a customer withdraws
money from another banks cash
dispenser, whether under the new
access program or not, SBI bears a
cost of 18 rupees (about 30 cents).
SBI said all banks bear such costs.
The cost SBI had to shoulder to
reach targets assigned by the government under the financial-inclusion plan has been about $113 million, said two people familiar with
the banks operations. Upgrading its
staff and operations to manage the
direct transfer of gas subsidies to
account holdersa program for
which it acts as the conduit because
the countrys largest resellers of liquefied petroleum gas are all SBI clientshas cost the bank an additional $5 million, the two people
said. The total cost has so far
reached a quarter of SBIs profit in
the three months to Dec. 31.
An SBI spokesman declined to
comment on details of the cost.
In any business model, there are

costs that are incurred upfront
while the revenue and profits flow
only subsequently, the spokesman
said. All banks have incurred costs
to acquire customers.
The direct-benefit system for gas
went live nationwide April 1, and
SBI estimates the number of transactions related to the program will
reach eight million a day, driving
costs up. Over the course of the
year, the government plans to channel funds in a range of areas that
are now provided as indirect subsidies straight into peoples accounts.
Bank of Baroda Ltd., one of the
largest state-run banks, has opened
9.3 million accounts since August ,
according to the website of the inclusion program; it was still opening
around 30,000 accounts a day last
month. The cost of opening each
bank account ranges from 100 rupees to 150 rupees, said Bhuyan Gagan Bihari, who oversees the inclu-
Every time a customer

uses another banks
ATM, State Bank of India
bears a cost of about 30
cents.
sion program at the bank. According
to Wall Street Journal calculations,
that would bring the total cost for
opening the new accounts to $19.8
million. Mr. Bihari agreed with the
figure, but pointed out $226 million
has been deposited to the accounts.
Some see risks in some of the
plans features, mainly the inclusion
of overdraft facilities in the new accounts. People may simply overdraw
their accounts, leaving banks with
little recourse, they say.
It is a possibility that the overdraft facility could end up as bad
loans for banks as the scheme does
not spell out how the banks can collect debt, said a KPMG report.
KPMG noted that, on its own, the
governments decision to pay benefits into peoples bank accounts,
rather than as indirect subsidies,
cant make the accounts sustainable
or profitable.
The initial cost of setting up the
architecture will be a burden for
banks, said Hatim Broachwala, a
Mumbai-based analyst with Nirmal
Bang Securities. But three years
from now it should be neutral.
Bank Burden
Indias nancial inclusion program means extra costs for public-sector banks.
Percentage of new accounts opened by institution
State Bank of India
24.95%
Punjab National Bank
7.47
Bank of Baroda
6.86
Central Bank of India
6.14
Bank of India
6.03
Canara Bank
United Bank of India
5.12
4.56
Union Bank of India
3.57
Syndicate Bank
3.45
UCO Bank
3.42
Source: Indian government
As of 12 p.m. ET
Euro 1.0817 0.01%
Yen/US$ 119.95 g 0.27%
Yen/A$ 92.49 0.74%
Oil 51.47 g 4.65%
Gold 1204.00 g 0.55%
Apple Watch Review: Finally,

Smartwatches Make Sense
3-month Libor 0.27120
Chinese Insurers Buy

Their First Piece of U.S.
PERSONAL TECHNOLOGY 18
Thursday, April 9, 2015
10-year Treasury g 9/32 yield 1.921%
MARKETS 22
THE WA L L STR E ET JOU RNAL.
asia.WSJ.com
A Surge in Hong Kong

Stock Connect rule change opens floodgates from mainland
COLUM MURPHY/THE WALL STREET JOURNAL
BY GREGOR STUART HUNTER
Daimler started making its GLA compact SUV at a Chinese plant on Wednesday.
PremiumCarBrands
Go Smaller in China
BY COLUM MURPHY
BEIJINGDaimler AGs Mercedes-Benz joined the ranks of premium car brands manufacturing
small luxury vehicles in China, seeking new avenues for growth as demand for ritzy rides ebbs.
Chinese consumers usually
equate auto luxury with big cars, but
as the nations economy slows,
growth for larger luxury vehicles
has eased significantly. Last year,
the broader market for high-end
cars in China grew around 22%,
down from 43% in 2011, according to
consultancy IHS Automotive, which
expects growth of only 14% this
year.
Small Wonders
Sales of luxury vehicles in China

400,000
Forecast
300,000
200,000
100,000
0
2010 11 12 13 14 15
83% 85% 46% 60% 22%
Year-on-year percentage change
Source: IHS Automotive
To sustain growth, high-end auto

makers are turning to locally produced smaller vehicles such as the
Audi A3, BMW X1 and Land Rover
Evoque.
Many buyers of smaller luxury
cars are first-time buyers, and auto
makers are hoping that by luring
them early, they will become longterm loyal customers.
Prices of Audi AGs A3 Sportback
start around 185,000 yuan (about
$30,000), whereas the next-size-up
A4L sells for around 273,000 yuan,
according to prices listed on Audis
Chinese website.
Local production also fits with

Chinas policy goals of promoting
the countrys auto industry.
Daimler started production
Wednesday on its GLA compact
sport-utility vehicle at a new plant
just outside Beijing dedicated to
producing a range of such small luxury vehicles.
Hubertus Troska, the member of
Daimlers board of management responsible for China, said he expected China-made versions of the
GLA to contribute significantly to
Mercedes-Benzs
future
sales
growth.
Daimler said Wednesday that
first-quarter sales of its MercedesBenz cars in China rose nearly 17%
to 78,183 cars, outpacing growth in
Europe and the U.S., which posted
growth of 16% and 7.6%, respectively.
Producing the smaller luxury
cars in China means Audi, BMW AG
and Daimler can avoid import duties
of 25% for the vehicles, allowing the
companies to sell the cars more
cheaply. Almost all imported cars
also face a value-added tax of 17%.
BMW began producing its premium compact X1 SUV in China in
2012. The company is also planning
to add a locally produced smaller
luxury car in the future, but it declined to provide specifics.
Last year, more than 1.8 million
high-end cars were sold in China, up
from 1.5 million the previous year,
according to data from consultancy
Automotive Foresight.
Sales of premium compact cars,
including imported vehicles, reached
318,000 cars in 2014, up 60% from
the previous year, according to IHS
Automotive analyst Lin Huaibin,
who forecasts the segment will grow
22% this year.
With more car companies producing in China, locally made cars
are expected to account for an ever
increasing proportion.
IHS data shows around 70% of
the cars in the segment are currently made in China, but expects
that to increase to 83% by the end of
this decade.
Please turn to page 19
Cash flooded into Hong Kongs

stock market on Wednesday, sending the benchmark index to its highest close since 2008, as demand
from mainland buyers soared.
The robust activity marked a
turnaround for the trading link between Shanghai and Hong Kong,
known as the Shanghai-Hong Kong
Stock Connect, which has seen lackluster demand since opening five
months ago. Hong Kong has historically been one of Asias biggest and
most-traded markets, but has underperformed the more-restricted
Shanghai market this year.
The main catalyst for the renewed buying was a decision by
regulators in Beijing last month to
allow Chinese mutual-fund managers to buy directly through Stock
Connect, rather than through an existing quota system, said Stephen
High Tide
HK$250 billion
Trading volume on the

Hong Kong stock exchange
reached an all-time high
Wednesday as mainland
money ooded in and the
market soared.
200
150
100
50
0
1986
90
00
Source: Thomson Reuters
Ma, senior portfolio manager at

Lloyd George Management.
Thats triggered fund flows
meaningfully for the first time, he
said.
The Hang Seng Index jumped
10
15
3.8% to 26236.86, led by a 12% gain

for Hong Kong Exchanges & ClearPlease turn to page 21
Heard on the Street: Investors may
come to rue this day.......................... 28
inside the house of cline

with the wall street journal
tomorrow.
2015 Dow Jones & Company, Inc. All rights reserved. 3DJ3454
BUSINESS & FINANCE
How Eni Keeps Pumping Oil in Libya
To ward off widespread violence, the Italian energy producer banks on its long history and local ties in the country
Italian energy giant Eni SpA has
emerged in recent weeks as the only
international oil company still
pumping near capacity in war-torn
Libya, helped by protection from
militias and tribes secured by its local partners.
Libyas security risks have crippled the efforts of rival oil companies such as Total SA of France,
Repsol SA of Spain and Marathon
Oil of the U.S., which have said they
have suspended production onshore
in the North African country.
The dangers have intensified in
the past month with the rise of terrorist network Islamic State in
Libya, a new risk in a nation that
fractured after the 2011 ouster and
death of dictator Moammar Gadhafi.
Some of the countrys oil fields were
left in ruins by attacks last month
by gunmen who have allied with Islamic State.
So far, Enis operations through
its partners have largely been
spared in the fighting between an
Islamist group of militias called
Libya Dawn that controls the capital
of Tripoli, and an internationally
recognized government in the city
of Baida, thanks to security arrangements struck on its behalf, according to people familiar with the matter.
In the nations northwest corner,
an Eni pipeline carrying around 10%
of Italys natural gas supplies sits
near a jihadist training camp but is
protected by a militia called Western Shield that is part of Libya
Dawn, said Libyan officials and a
Western security official.
At the Sahara outposts of Enis
local joint-venture, a local nomadic
people called the Tubus have been
hired to provide security, Libyan officials said.
And to help ensure smooth operations at the Wafa field in Libyas
south, Enis local partners have
hired youths in Zintan, a city allied
with Libya Dawns rival in Baida,
and militias drawn from the city are
aiding with protection, according to
a Libyan oil official and the Western
security official.
Eni is holding the stick in the
middle, said the Libyan official, using a rough translation for an Arab
phrase about cultivating both sides.
An Eni spokesman said the company has no agreements with any
militias in Libya. Eni declined to
BY ERIC SYLVERS
AND BENOT FAUCON
An Islamist group of militias called

Libya Dawn secured the perimeter of
the Mellitah Oil & Gas terminal in
western Libya on Jan. 6.
make an executive available for an
interview. The company has said it
has evacuated its staff from Libyas
mainland.
Its operations there are run by
Mellitah Oil & Gas, a 50-50 joint
venture between Eni and Libyas National Oil Co. Bonatti, an oil-services company that works with Mellitah and has some of the last
Western expatriates still working in
Libya, helped secure some of the security arrangements, said people familiar with the matter.
Representatives for Mellitah and
Bonatti declined to comment.
Doing business in high-risk countries has been part of Enis portfolio
since it emerged onto the international energy scene in the early
1950s when then-Chairman Enrico
Mattei set the goal of ensuring Italian energy independence.
Eni, Italys largest company by
sales and market value, is among
the 10 biggest oil-and-gas companies in the world by revenue and is
the largest Western producer in Africa.
That size has made Eni a de
facto arm of Italian foreign policy.
CEO Claudio Descalzi earlier this
Leveraging Libya
Eni's oil and gas production in selected countries,

in thousands of barrels of oil equivalent per day
Libya
300
Egypt
Italy
Nigeria
Congo
200
100
0
09
11
13
Source: the company
year was part of an official Italian

delegation sent to Cairo to discuss
the situation in Libya.
The relationships have helped
Eni produce 240,000 barrels a day
of oil equivalent, which includes gas
production, in Libya last year and
300,000 a day in early 2015, by far
the most of any company there.
Eni now accounts for about a
third of Libyas oil-and-gas production compared with less than a fifth
before Gadhafis death, according to
figures released by Eni and the Libyan government.
Eni has been operating in Libya
for more than 50 years, much more
than the other European oil companies, and it is easy to imagine that
in that time they have made the
contacts that now make it possible

to coexist with some of the militias, said Alberto Tonini, the head
of the masters degree program in
Mediterranean studies at the University of Florence.
Other companies have generally
arranged for security directly
through Libyas National Oil Co.,
Libyan officials said.
Some of their fields, much of
them in the central Sirte region,
were the scene of devastating attacks last month.
Striking security deals with Libyan militias is a risky strategy,
said Geoffrey Howard, a Libya analyst at Control Risks, speaking generally. The membership of local militias changes often, and some could
be accused later of human rights

abuses or of being connected to terrorists, he said.
The proliferation of nonstate
actors [in Libya] makes it increasingly complex to do business, Mr.
Howard said.
Eni also has benefited from the
fact that many of its operations are
offshore, an area not yet touched by
the violence roiling Libya.
Onshore fighting has targeted
the oil industry. In March, militants
attacked a remote field in the desert, decapitating eight Libyan
guards and kidnapping nine foreigners.
A similar attack in February led
to the killing of 12 Libyan and foreign oil workers. Damage to oil facilities could take months to fix.
Mellitahs oil-and-gas complex in
the northwest, where a crucial pipeline carries natural gas to Italy, underscores the dangers for Eni.
It is about 7 miles east of a
training camp of the Tunisian
branch of jihadist group Ansar alShariah.
The camp was initially for fighters joining Islamic State in Syria
and is now focused on attacks in
North Africa, according to a Western security official.
At the complexs dock on the
Mediterranean Sea a boat stands
ready to whisk workers to safety.
The assumption is that gun or
mortar fire would be heard when an
attack started at the gates to the
plant and the workers would have
time to run to the boat that would
take them to safety, said a person
briefed on the plans.
Eni declined to comment.
The unraveling of Libya has special resonance in Italyjust 315
miles away across the Mediterraneanbecause of the countrys
proximity and their long and intertwined past.
Italy occupied its southern
neighbor for 30 years at the beginning of the 20th century, and the
countries commercial relations go
beyond oil and gas.
Salini Impregilo, Italys largest
general contractor, had to abandon
seven
commissionsincluding
building a highway, airport and conference centerlast year worth
about $2 billion because of safety
concerns.
Finmeccanica, the Italian space
and defense company, and Italys
aviation authority have suspended
contracts there as well.
INDEX TO BUSINESSES AND PEOPLE

Businesses
This index of businesses

mentioned in todays
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.
Accelyst Solutions........17
AIA Group.....................23
Air India..........................5
Alcoa ............................. 20
Alibaba Group...............17
Alibaba Pictures Group 17
Anthem...........................1
Apple...................17,18,28
Aviva ............................. 23
Bank of Baroda...............1
Barclays.........................20
Bayerische Motoren
Werke.........................15
BG Group....................1,20
BHP Billiton..................17
Bonatti..........................16
British Gas......................6
China Cinda Asset
Management..............28
China CNR.....................21
China Communications
Construction..............21
China Life Insurance
Group..........................22
Cisco Systems ................ 6
Citigroup ....................... 23
Computime Group ........ 28
CSR................................21
Daimler..........................15
DBS Group Holdings.....23
Eni ................................. 16
Fidelity Investments....12
Finmeccanica ................ 16
FireEye ............................ 6
FreeCharge....................17
GDF Suez S.A...............20
Google...........................17
Haitong International
Securities Group........21
Hanergy Thin Film Power
Group..........................28
Heineken.........................8
Hennes & Mauritz..........7
Home Depot....................1
Hong Kong Exchanges &
Clearing.................15,28
HSBC Holdings ............. 23
Jet Airways.....................5
J.P. Morgan Chase........23
Korea Hydro & Nuclear
Power...........................1
L'Oreal.............................7
Malaysia Airlines............1
Manulife Financial........23
Mellitah Oil & Gas........16
Mercedes-Benz.............15
Morgan Stanley............23
Mylan N.V. .................... 20
NetDragon Websoft.....28
Palo Alto Networks........6
Pernod Ricard USA.........7

Perrigo...........................20
Ping An Insurance........22
Prudential ..................... 23
Repsol ........................... 16
Rio Tinto.......................17
Royal Dutch Shell......1,20
Sands China..................28
Sequoia Capital.............17
Shell................................1
Singapore
Telecommunications....1
Snapdeal.com................17
Sofina............................17
Sony ................................ 1
Standard Chartered......23
Tesla Motors............19,20
Tishman Speyer
Properties..................22
Total..............................16
Trustwave Holdings ....... 1

Youku Tudou.................17
People
This index lists the

names of businesspeople and government
regulators who receive
significant mention in
Todays Journal.
Chow, C.K......................21
Descalzi, Claudio .......... 16
Henry, Simon..................6
Hulme, Michael...............6
Kodama, Yuichi...............4
Kwan, Thomas..............21
Ma, Stephen ................. 15
Minami, Takeshi.............4
Musk, Elon....................19
Speyer, Rob...................22
Tedder, Ryan.................28
Troska, Hubertus..........15
Van Beurden, Ben...........1
Corrections Amplifications
The U.S. labor-force participation rate
in March was 62.7%. A World News article Monday about the U.S. economy incorrectly gave the rate as 67.8%.
Jason Pomeroy, founding principal of
Singapore-based eco-architecture firm
Pomeroy Studio, said in an interview
that the best airline seats are First
class, first rowI assume. A Road Warrior column in the March 6-8 edition
about his travel tips incorrectly gave his
response as The first row in first class.
BUSINESS & FINANCE
BEIJINGChinese e-commerce
giant Alibaba Group Holding Ltd.
on Wednesday proposed an injection of assets into its unprofitable
movie arm, sending shares in the
entertainment business soaring.
By Gillian Wong in Beijing
and Chester Yung
in Hong Kong
REUTERS
Hong Kong-listed Alibaba Pictures Group Ltd. said its parent proposed folding its online movie-ticketing and its movie production
crowdfunding businesses into the
struggling Alibaba Pictures unit.
Alibaba Pictures Hong Kongtraded shares, which were halted
March 24, rose 37% when they resumed trading on Wednesday.
Alibaba Pictures announcement
didnt specify the business units being discussed for the asset injection.
However, a person familiar with the
proposed transaction said the businesses are Alibabas Taobao Movie
ticketing website and Yule Bao, a
platform that allows Chinese investors to financially back movies. Both
services were launched last year.
Alibaba Group sees the integration of the businesses as a way to
couple its strength in e-commerce
and its user base of hundreds of
millions of people with the production function of its filmmaking subsidiary, the person said. The proposed injection, if carried out,
would create a new business model
for filmmaking that traditional production companies in China lacked,
the person said.
If the integration goes through,
it could bolster the value of Alibaba

Groups investment in the movieproduction firm, which has been
saddled with problems. Alibaba Pictures was created when Alibaba
Group bought a 60% stake in the
Chinese movie studio ChinaVision
Media Group and changed its name.
In December, Alibaba Pictures said
an independent analysis of the
movie companys past financial reports found that the company misstated taxes and the financial impact of convertible bonds. It blamed
oversight by previous management.
Alibaba Pictures reported fullyear earnings last week that showed
that revenue fell by almost twothirds and that it incurred a loss of
417 million yuan ($67.2 million).
The deal is a good one from a
movie-industry standpoint because
it combines the movie-financing
arm of the business with the revenue-generating ticket-sales operations, said Forrester Research analyst Bryan Wang in Beijing. But is
this going to add significant value to
Alibabas other businesses, like its
online businesses? Mr. Wang said.
Probably not.
Alibaba said in an emailed statement that Alibaba believes that integrating these two businesses complements Alibaba Pictures existing
lines of business and helps realize
Alibaba Groups vision of making
digital media entertainment available to our customers anywhere
anytime.
Alibaba Pictures said no binding
offer has been put to the company
by its parent at this stage and that
no agreements have been reached.
Alibaba Pictures shares jumped 37% in Hong Kong on plans to support the unit.
Snapdeal Buys Payments Site

BY DHANYA ANN THOPPIL
Snapdeal.com, one of Indias
largest e-commerce companies, said
Wednesday that it has bought mobile-payments company FreeCharge
for an undisclosed amount.
New Delhi-based Snapdeal is a
brand controlled by Jasper Infotech
Pvt., which counts SoftBank Corp. of
Japan and eBay Inc. as investors. It
has about 40 million users and
100,000 merchants selling things as
diverse as cellphones and cars on its
site. It hopes the acquisition of
FreeCharge will give it an edge in its
rivalry in India with Flipkart Internet Pvt. and Amazon.com Inc.
The deal will help Snapdeal offer all our customers access to the
widest selection of products and
services online, said Kunal Bahl,
Snapdeals co-founder and chief executive.
The company wouldnt disclose
details of the transaction, but one

person familiar with the deal said
the acquisition cost $450 million in
a mix of cash and equity.
Mumbai-based FreeCharge is
controlled by Accelyst Solutions
Pvt. and is backed by U.S.-based
venture firm Sequoia Capital, Belgiums Sofina SA and others.
FreeCharge has more than 20
million users, who use the site to
top up their mobile-phone accounts
and pay utility bills. More than 85%
of FreeCharges transactions come
through mobile phones. About half
of its customers have their creditcard details stored on the site,
which makes them particularly attractive as potential customers for
Snapdeal.
The acquisition comes as Internet usage is rising in India. Asias
third-largest economy had more
than 300 million Internet users at
the end of last year.
Alibaba to Bolster
Motion Picture Arm
From left, Microsofts Bill Sample, Googles Maile Carnegie and Apples Tony King at Wednesdays tax hearing in Sydney.
Tech Firms, Australia

Clash on Tax Practices
BY ROB TAYLOR
Technology companies including Apple Inc. and Google Inc.

clashed with Australian lawmakers
over claims of tax avoidance ahead
of a meeting of Group of 20 finance ministers in Washington,
D.C., seeking to build cooperation
to close corporate-tax loopholes.
With Australia considering a
U.K.-style Google Tax in its May
12 budget to combat the alleged diversion of profits to lower-tax jurisdictions overseas, local technology executives appeared on
Wednesday before upper-house
senators in Sydney to answer
questions about how they managed
their Australian taxation.
In a heated exchange that began
three days of national hearings,
Apple Australian Managing Director Tony King and Google Australia
Managing Director Maile Carnegie,
as well as Microsoft Corp. Corporate Vice President of Worldwide
Tax Bill Sample, denied having detailed knowledge of any strategies
to shift profits elsewhere.
In the cases of Apple and
Google, that included complex arrangements used by the two companies.
Mr. King, in particular, faced
torrid questioning after seeking
additional time to answer queries
about whether the company channeled money overseas from local
revenue of six billion Australian
dollars (US$4.58 billion) last year.
Apple reported an Australian tax
bill of A$80.3 million.
Are you serious? Youve come
to this inquiry on aggressive tax
minimization and you were not expecting a question like that? said
independent senator Nick Xenophon. I find it extraordinary that
you cant tell us that.
Australias conservative government has helped steer global efforts to combat tax avoidance,
making the issue a priority last
year for its leadership of the G-20
largest economies. It also supported efforts by the Organization
for Economic Cooperation and De-
velopment to close loopholes allowing companies to adopt legal

structures designed to shift profits
offshore to low tax jurisdictions.
The countrys tax office has
sought to increase cooperation
with counterparts, including in the
U.S., Canada and China, to exchange information as international concern mounts about corporate-tax arrangements, while
also auditing multinational companies in Australia.
Authorities are watching efforts
by the European Union to crack
down on tax avoidance in an effort to recoup some of an estimated A$5 billion a year that Australian
Senate
Economics
Committee Chairman Sam Dastyari
said was being minimized,
evaded, structured out of our
economy.
Australian
Treasurer
Joe
Hockey also will attend this
months G-20 gathering of finance
ministers and central-bank gover-
setting up our marketing organization in Singapore and BHP Billiton

pays income tax in Australia on a
substantial portion of the revenue
earned by the marketing operations as required under Australian
tax law.
A Rio Tinto representative declined to comment about the coming Senate hearing, and in relation
to questions about its Singapore
marketing unit referred to comments the companys Australia
Managing Director Phil Edmands
made to the Australian Financial
Review. The Singapore commercial center provides a range of sophisticated commercial services
for which it receives an armslength fee in the same manner as
any third party would expect to receive for undertaking those activities, the newspaper quoted Mr.
Edmands as saying.
Ms. Carnegie, of Google Australia, told lawmakers that she was
legally unable to reveal detailed
Australia is considering a U.K.-style Google Tax

in its May 12 budget to combat claims of diversion
of profits to lower-tax jurisdictions overseas.
nors in Washington, D.C., where
multinational tax problems are expected to be discussed, a spokeswoman said.
Australian news reports this
week said tax officials were chasing global mining companies BHP
Billiton Ltd. and Rio Tinto PLC
which were due to appear before
lawmakers Friday and have Australian rootsfor allegedly shifting
billions of dollars in iron-ore profits through marketing units based
in Singapore.
BHP Billiton is the largest tax
payer in Australia and takes its tax
obligations very seriously, the
company said on Wednesday in an
emailed statement, referring to the
news reports regarding its Singapore marketing strategy. Tax
treatment was not the driver in
tax information behind Googles

tax bill of A$7.1 million on profit of
A$46 million in 2013, but that
most tax was paid in the U.S.,
where intellectual property and
most of the companys development risk were based.
As I understand it, I would be
contravening U.S. disclosure laws
if I declared what the revenue is in
Australia, she said.
Mr. King said Apples Australian
unit paid all taxes owed under local law, including sales tax on
products purchased from offshore
divisions of the company.
Apple Australia buys the products we sell here and we pay Australian tax on the profit of those
sales, he told lawmakers.
Rhiannon Hoyle
CORPORATE NEWS
The Smartwatch Finally Makes Sense

[ Personal Technology ]
The Apple
Watch puts the
iPhone in its
proper placeyour
pocket.
Ive got a
utilitarian view of the years mosthyped piece of bling. Sapphire
crystal and $10,000 gold alloy
arent what make the Apple Watch
the first smartwatch worth buying.
Whats valuable is your time.
The Apple Watch is a computer
built to spend it better. And if you
can tolerate single-day battery life,
half-baked apps and inevitable
obsolescence, you can now wear
the future on your wrist.
Smartphones gave us the
wondrous ability to take the
Internet anywhere. But theyre not
always productive. In fact, theyve
become like cigarettes, leaving us
itching for the latest affirmation
from Instagram or Twitter. I found
I spend 4.3 hours each day
looking at my phonegood grief,
even on vacation.
So the company that invented
the iPhone has a solution: Buy
another gadget! That irony didnt
escape me a week ago when I
began wearing an Apple Watch, on
loan before they become available
on April 24. Do I really need
another connected screen blinking,
beeping and buzzing all day?
Ive found the Apple Watch
isnt a replacement for the iPhone,
but its the right screen for many
important things. I only look at it
in blips, for rarely more than five
seconds. It shows me the weather
with one finger swipe. It gets
physical, gently tapping my wrist
when something important needs
my attention and lighting up when
I lift my arm to look. It nudges
when Ive been sitting too long.
This description may either
strike you as helpful or
oppressive. It has made me more
present. Im less likely to absentmindedly reach for my phone, or
feel compelled to leave it on the
table during supper.
With the Apple Watch,
smartwatches finally make sense.
The measure of their success
shouldnt be how well they suck
you in, but how efficiently they
help you get things done. Living
on your arm is part of that
efficiencyas a convenient
display, but also a way to measure
your heart rate or pay at a cash
register. This is a big idea about
how we use technology, the kind
of idea we expect from Apple.
Which isnt to say that this
ANGELA DECENZO FOR THE WALL STREET JOURNAL
BY GEOFFREY A. FOWLER
Apples smartwatch, due out this month, has its shortcomings but at least will mean less reaching for your smartphone.
first Apple Watch will appeal to
all iPhone owners, or even a
significant fraction of them.
Shrinking a computer onto a wrist
required many compromises. The
Apple Watch turns some of these
into opportunities for smart ideas.
Others still need refinementand
a reason for many to wait for an
Apple Watch 2.
One big challenge Apple
conquered is making its wrist
computer small and stylish
enough to wear without a nerdy
pocket protector. My colleague
Joanna Stern and I agree the
Apple Watch is a fine watch for
both men and womena standard
previous smartwatches couldnt
meet. Yet the $1,000 steel 42mm
version I tested is still a bit
thicker than Id want, as tall as a
stack of six quarters. And you
cant soap it up in a shower,
though a little rain wont hurt it.
The battery lives up to its allday billing, but sometimes just
barely. Its often nearly drained at
bedtime, especially if Ive used the
watch for exercise. Theres a
power-reserve mode that can
make it last a few hours longer,
but then it only shows the time.
The Apple Watchs screen does
an adequate job outdoors, but less
so in the direct sun. Most of the
Apple Watchs screens feature
white text on a black background,
which helps some.
The Apple Watch doesnt have
cellular connection, so youll need
a companion iPhone nearby for
many of its functions to work.
Sometimes, though, that
arrangement is painfully slow: The
maps app, surely the answer to
wandering pedestrians dreams, is

so slow it makes me want to pull
out my paper Rand McNally.
The watch does work (a little)
away from the phone. When
youre around a known Wi-Fi
network, the watch can tap
directly into it. When the iPhones
at home, you can still use Apple
Watch to track your heart rate
and progress during a run or use
it for Apple Pay.
Perhaps the biggest limitation
for a wrist computer is us
humans. Most of us, save a few
yogis, arent comfortable holding
our arms up for very long. Its
here that Apple applies its design
expertise for its boldest idea:
Minimizing the time you spend
touching the Apple Watch.
This emphasis on quick
interactions requires you to learn
a new sign language. Alerts and
information appear only when you
need them, and then disappear on
their ownno need to dismiss
them. Instead of pinching to
zoom, theres a digital crown to
turn. And theres two ways to tap
on the screen, regular and force
touch, which shows more
options. In return, there are new
sensations, such as a mechanism
that gently taps your wrist. Its far
more discreet than the rattle of a
vibrating phone.
You can grok all of this in an
hour or two, but youll definitely
want someone to show it to you.
Once I learned the basics, I found a
surprising number of things I could
do faster or better on my wrist
than by pulling out my phone:
Making sure I dont miss that
email from mom, or another VIP.
Dictating a text message.

Communicating an emotion,
either through a set of cheesy
animated iconsIm talking jazz
hands in mime glovesor tapping
with two fingers to literally share
a simulation of your heartbeat.
Maybe well get to blow a kiss in
Version 2.
Buying something: Tap twice
on the watchs side button to
activate Apple Pay.
Checking on the weather or
news through glances, available
by swiping up from the bottom of
the screen.
Asking virtual assistant Siri a
question.
Controlling music, and
sometimes even video, on my
phone, Bluetooth headset or Apple
TV.
Taking a photo: A wrist app
gives a live view of your iPhones
high-quality rear cameraso you
can set the phone up for a better
selfie.
Answering a call: Talking to
your wrist might look funny, but
its a remarkably good
speakerphone, and you can switch
over to your iPhone mid-call if
youd like.
Its worth noting that doing
much of this around other people
calls for new rules of etiquette, or
at least new tolerance. When is it
OK to speak to your watch?
(People thought I was talking to
them when I was actually trying
to dictate.) Is it appropriate to
peek at a wrist alert during a
meeting with your boss? What
about on a date?
The Apple Watchs design
diligence also includes things it
doesnt attempt to do. The Apple

Watch has no Web browser, no
keyboard and no way to reply to
emails, though you can flag and
delete them.
Yet the Apple Watch isnt quite
the gatekeeper to my digital life
that I wanted. Take app alerts
theres a fine line between being
in the know and having your wrist
jiggle all day. It never got horrible
for me, because Apple lets you
assign VIP status to individual
contacts and specify which apps
can trigger alerts. But setting up
all of this is a tediousand
unfortunately ongoingchore.
Its here that I missed some of
the intelligence of Google (and its
services, all absent) on the Apple
Watch. Googles Android Wear
still floods your wrist with
annoying alerts and trails the
Apple Watch OS in design. But
Apple should find out what Gmail
knows, and suggest contacts who
might be alert-worthy based on
how much Ive connected with
them before.
The big reason many people
even many Apple fanswill skip
the Apple Watch is that its too
new. There isnt yet a world of
apps and services beyond Apples
own, with independent
developers sparks of genius
showing us all the things a
smartwatch can be.
In fact, apps have been the
biggest disappointment of my
Apple Watch experience. Apple
says more than 1,000 Watch apps
have been submitted, but only
about three dozen have been
available to test.
Aside from some apps that
deliver fresh news headlines,
including the Journals, as well as
ones from the New York Times,
CNN and Flipboard, not enough
felt useful. Appswhich download
to the watch automatically if
youve installed them on your
iPhoneare relegated to a
secondary launch screen thats
attractive but harder to use, a
cluster of tiny circles that you
have to zoom in on and fish out,
like some weird game.
Still, in these early sketches of
an experience, I can already
imagine so much more. Id like for
the Apple Watch to be my train
ticket and my office key, for
starters.
For now, the Apple Watch is
for pioneers. I wont pay the
$1,000 it would cost for the model
I tested, only to see a significant
improvement roll in before too
long. But I plan to pay $400 for
the 42mm Sport version once its
on sale. Thats worth paying for a
front-row seat for whats next in
tech.
What the Apple Watch Does Best:Make You Look Good
BY JOANNA STERN
Theres a reason
we dont wear the
same clothes two
days in a row, try
to avoid the
temptations of
McDonalds and Ben & Jerrys, keep
a regular hair appointment and
make it to the gym as often as
possible. Its the same reason wed
consider buying an Apple Watch:
We like to look our best.
After over a week of living
with Apples latest gadget on my
wrist, I realized the company isnt

just selling some wrist-worn
computer, its selling good looks
and coolness, with some bonus
computer features. Too many
features that are too hard to find,
if you ask me.
Like many Apple products of
the past decade, the watch is a
status symbol, a sign of wealth and
taste. But unlike a MacBook or an
iPhone, this Apple product works
to help you lookand feelgood.
There are so many things the
watch can do, so many menus and
features you must spend time
figuring out, that for better or

worse, you end up shaping your
own experience. Some may find
usefulness in hailing Ubers with a
tap on the wrist, or transmitting a
heartbeat to a beloved. My
colleague Geoffrey Fowler
explored the Apple Watch as a
gateway to the iPhone for many
quick activities. I sought a simpler
experience, turning it into a
stylish watch to keep me on
schedule and a workout
companion to keep me moving.
I know what youre thinking:
Cant I just buy a $150 fitness
tracker for that? Sure, but it

might end up in a drawer. The
Apple Watch succeeds where the
fitness trackers have failed. Not
only does it provide more
accurate data and a platform with
big promise, but its an accessory
I love to wear all day long.
The Workout
On Sunday morning, I went for

a 2-mile run. But instead of looking
like a marionette with an iPhone in
hand and earbuds hanging from
my head, I ran with just the
stainless-steel, 38-millimeter
watch, attached via a $50 blue

sport band to my wrist.
Years ago, the iPod liberated us
from jogging with a giant
Discman. Apple now has the
potential to change the workout
again. With Bluetooth earbuds
paired directly to the watch,
Taylor Swift blaring in my ears
and the sun shining on my face, I
ran for 21 minutes, burning 156
calories. When I ended up at
Whole Foodsno phone, no wallet
I bought an iced latte by just
tapping my wrist to the reader.
Please turn to next page
* *
CORPORATE NEWS
Teslas Model S
Gets an Upgrade
BY MIKE RAMSEY
AppleWatch MakesYou Look Good

battery make it past 10 p.m. on days
that I exercise?
The Workday
When not working out, I immediately change into the Milanese Loop.
(I guess I like my wristbands like I
like my chicken: Milanese.) Of all of
Apples bands, it best matched my
simple J. Crew style. The 38-mm
Apple Watch with that band costs
$650.
The band is so comfortable that
most of the time I didnt even know
the watch was there. Thats a far cry
from the Microsoft Band (which left
imprints on my wrist), or Fitbits
Surge (which left a rash) or the
Moto 360 (which looked like a sundial on my thin wrist).
Yet like those, the watch tried to
keep me moving all day. Apple
Watch goes beyond step-counting by
reminding users of activity, exercise
and stand-up goals. You set daily
goals and it tracks your movement,
displaying your progress in a threering graph. Throughout the day, it
issues reports, or spurs you into action.
I appreciated the activity updates,
even the awards for hitting milestones. If I could hang up the 200%
Move Goal award I received for
reaching a target twice in a day, I
would. But the prompts to stand up
every hour got downright annoying.
I dont stand enough, I know, but I
dont plan to change that in the middle of a meeting, or after Ive burned
300 calories at SoulCycle. (I did leap
out of my seatwhen I found out
how to turn the stupid prompts off.)
Apple has proved on its first shot
here that it can collect accurate data,
but its having a harder time giving
genuine suggestions for improving
your fitness and health. Apps from
Fitbit, Jawbone or Polar provide better insights, and even those apps
arent exactly great at this. I dont
mind being nagged, but make it relevant. Nag me to run farther than last
time, or get back to SoulCycle when
I havent gone for two weeks.
JARRARD COLE/THE WALL STREET JOURNAL
Continued from page 18

The downside of leaving the
iPhone at home is that the watchs
Exercise app doesnt track distance
as accurately and third-party running apps rely on the phones GPS.
You also have to use Apples Music
app since Spotify, Rdio and others
arent yet on the watch. (Warning:
You must use iTunes to sync the
playlist, which can be detrimental to
your well-being.)
In my rigorous 45-minute SoulCycle spinning classes, the watchs
sport band hugged my wrist snugly,
enabling a surprisingly accurate
heart-rate reading. It stayed within
five beats of my trusty Polar cheststrap monitorstill the closest you
can get to an EKG, according to my
tests.
At the end of three workouts,
both the Polar and the watch reported similar average beats per
minute. Thats far more accurate
than the Fitbit Charge HR and Microsofts Band. Apples sport band
isnt the most stylish, but it is the
one you want for working out. With
the looser steel Milanese Loop
band, the watch struggled to lock
in on my heart rate. Changing
bands before a workout is a fairly
fast process. Actually snapping the
sport bands little clasp to your
wrist, however, makes you wish for
a third hand.
Ideally, the watch would automatically kill off notifications during workouts so your arm doesnt
vibrate so much; in reality, you
need to put it on Do Not Disturb
mode, which requires too much futzing. Even getting to the Exercise
app is a challenge, it being one of
many tiny circular icons on the
watchs app screen that makes me
wish my fingers were the size of
toothpicks.
There are other frustrations:
Why is there an Exercise app on the
watch, but the data lives in the
iPhones Activity app? Why must I
click save to keep a record of a
workout? And why cant the watchs
When the watch face is off, it is unassuming until you start to tap at the screen.
The Apple Watch also got me to

move in the way watches always
have: It kept me aware of the time
and the worlds demands on mine.
During the workday, I used the Modular watch face, which displays the
time, my next meeting and icons for
weather, my activity and battery
life. Calendar notifications also have
been hugely helpful on my wrist.
Email and text message alerts, however, have been a mixed bag. They
tend to feel more like an interruption than a vital heads-up.
After Work
The Apple Watch has been the

most helpful to me as a plain, old
regular watch, though Ive now
proven that even the highest tech
watch wont solve my lifelong problem of being chronically 10 minutes
late.
In fact, last week, as I was running late for dinner with my wife
and some friends, I still found time
to change into my evening watch
face: an animated butterfly that
changes colors when you pull up the
screen. I love that you can customize the colors and details of the
watch faces, though I do wish I
could personalize it more with photos or backgrounds.
Going out with the watch has
given me added confidence. It looks
nice. The steel body and mesh band
match almost any color I wearadmittedly, mostly black.
Even when the watch face is off,
the black sapphire-crystal screen
looks elegant. It is unassuming until
you start to tap at the screen and
people take notice. One stranger
told me she liked my watch, not
even knowing it was the Apple
Watch. People who can identify it
immediately ask if I like it, and if
they should buy one.
Ive told most: No.
Wait, what? you ask. I
thought you liked this thing! I do.
But every time I gaze down to admire it, I start seeing how the next
one will look better. You could say
the same about many fashion objects, but watches should be timeless (ironically). Unlike the Cartier
I got for college graduation, the
original Apple Watchs beauty will
soon fade. Unless you opt for the
cheapest $350 sport version, you
should really wait for the future.
(And even cheaper than that, printing one out.)
The body is bound to get thinner; the edges could stand to be less
rounded. It isnt just the aesthetics,
either. Soon, we wont have to
charge the battery every night, the
software wont ever get stuttery and
those health sensors will get even
more accurate. When was the last
time Apple didnt improve first-gen
hardwares performance while making it sleeker?
The Apple Watch makes you look
good. But the next one is bound to
make you look even better.
The new base model

could give a boost to
Teslas sales.
The new base model will also include the equipment needed to use
the companys U.S.-wide network of
superchargers that allow drivers to
recharge for free in 30 minutes or
less. Now standard equipment, that
hardware used to be an option on
base models.
The 70D version has a top speed
of 140 miles an hour and acceleration to 60 mph in 5.2 seconds. It
doesnt include the insane
acceleration button that generates
additional torque in the P85D model.
Tesla also added a few new colors.
The car also comes with a suite of
sensors and cameras and safety
features that include forward
collision braking, and with a
forthcoming software update, will
allow the car to drive itself on the
highway.
CARLOS OSORIO/ASSOCIATED PRESS
The Apple Watch goes beyond step-counting and reminds you of your activity, exercise and stand-up goals for the day.
Tesla Motors Inc. is upgrading

the slower-selling version of its
Model S electric sedan, equipping it
with a more capable battery, allwheel drive and a bigger price tag.
The move comes as the Palo Alto,
Calif.-based auto maker is racing to
meet a steep sales target set for
2015 and down the road. Tesla said
on Friday it sold a record 10,300
cars in the first quarter, but it needs
to pick up the pace and average
15,000 vehicles a quarter to hit this
years 55,000 goal.
The introduction of the new base
model could give a boost to Teslas
sales ahead of the launch of the
Model X sport-utility vehicle in the
second half of the year.
Tesla will immediately stop selling
the $71,000 Model S with a 60kilowatt-hour battery that has served
as its base model for most of the
cars history. A new $75,000 version,
carrying a 70-kilowatt-hour battery
and capable of driving 15% further on
a charge, will be sold in its place.
Global Equities Research analyst
Trip Chowdhry said the move should
drive more sales. He estimated that
about 10% of Teslas sales have come
from the base, 60-kilowatt-hour
model. He said he believes the announcement means Tesla is beginning to benefit from economies of
scale on motors and batteries and
can afford to make the move without
hurting profit.
Mark Spiegel, a hedge-fund manager for Stanphyl Capital Partners LP
who has a short-interest position on
Tesla shares, said Tesla is cutting its
margins in favor of driving up demand. This is essentially a $6,250
price cut on the S85D, he said in an
email. No company would ever put
through this kind of a price cut if demand were truly not a problem.
Tesla has insisted that demand remains strong for its cars.
The new car, dubbed 70D, will be
sold along with 85-kilowatt-hour
versions of the Model S. While Tesla
doesnt break out specific numbers,

the company has said the higher-end
version handily outsells the departing 60-kilowatt-hour version.
This is the second time since the
Model S went on sale in 2012 that
Tesla has discontinued its lowestrange offering. Teslas original 40kilowatt-hour version had a range of
around 150 miles, but the company
quickly stopped selling it as it was
seen as being too limited.
Tesla said the 70D is a more
competent offering. Capable of 240
miles on a charge, it is equipped
with all-wheel-drive, which is a coveted feature in Northeastern U.S.
and in Europe.
The 70D could be an attractive
alternative to the 85-kilowatt-hour
version starting at $82,500 (the one
not equipped with all-wheel drive).
All-wheel-drive is a $5,000 option on
the 85 kilowatt-hour version.
Teslas upgraded Model S, called the 70D, comes equipped with all-wheel drive.
Luxury Cars Go Smaller in China

Continued from previous page
For Audi, sales of such cars in
the first two months of this year accounted for 23% of its China sales,
compared with 14% in the year-earlier period.
In the first two months of this
year, Audi sold close to 20,000 vehicles in this segment, up 88% from a
year earlier.
Jochen Siebert, managing director of consulting firm JSC Automo-
tive, said he doesnt see a boom in

compact luxury vehicles.
The time is not right, he said,
adding that the middle-income earners who would buy such cars are
particularly susceptible to economic
slowing and a cooling of Chinas
property market.
It could take a decade before
the small luxury car market takes
off, even in the best case scenario,
he said.
MARKETS
Swiss 10-Year Yield: Below 0%

BY EMESE BARTHA
AND CHIARA ALBANESE
tively pay for the privilege of buying

it. But no other country has previously stretched this out as long as
10 years. Yields fall when prices rise.
Mexico, meanwhile, is thought to
be the first borrower from outside
the euro area to issue 100-year euro
debt.
Given the prospect of sustained
monetary-policy easing by the ECB
for the foreseeable future, issuing
long-term paper denominated in euros makes sense from a borrowers
perspective. We expect this trend to
strengthen, said Salman Ahmed,
global fixed-income strategist at
Lombard Odier Investment Managers.
Switzerland sold a total of 377.9
million Swiss francs ($391.2 million)
of bonds maturing in 2025 and
2049. On the 10-year slice, the yield
was -0.055%, compared with 0.011%
on its most recent similar bond two
months ago.
In the post-issuance secondary
Europes plunging borrowing

costs marked two milestones on
Wednesday, with Switzerland becoming the first country ever to issue 10-year debt that gives investors
a yield of less than 0%, and Mexico
lining up a rare deal to borrow euros that it will repay a century from
now.
Bond prices across Europe have
rocketed this year in response to the
European Central Banks huge bondbuying stimulus package, delivering
bumper returns for existing bondholders and cheap deals for borrowers, but crushing yields for new investors.
Several European countries inside and outside the eurozone have
sold government debt with up to
five years of maturity at negative
yields, which means investors effec-
market, Swiss bonds maturing up to

11 years in the future already trade
with yields under 0%. But such low
yields at the initial point of sale illustrate well the world we live in,
said Jan von Gerich, chief strategist
at Nordea, referring to collapsing
yields on debt amid widespread
stimulus from central banks around
the world.
In January, Switzerlands central
bank scrapped its upper limit on the
value of the franc and cut deposit
rates to -0.75%. Swiss bonds are
likely to remain attractive to investors as long as yields stand above
that level.
The combination of deflationary
fears and aggressive central-bank
action has caused investors to accept the reality of negative-yield
bonds, said Jeffrey Sica, chief investment officer of U.S.-based Circle
Squared Alternative Investments. An
auction with a negative yield sig-
nals a lack of confidence from investors that the economy will be growing in the short term.
Mexicos deal, which was set to
wrap up later Wednesday, is expected to give investors a yield of
about 4.5%. The country has previously sold century bonds in sterling
and in dollars.
With euro rates in negative terrain, Mexican sovereign risk looks
pretty attractive, particularly in
these terms, said Marco Oviedo,
chief economist for Mexico at Barclays. He expects a healthy demand
from European investors.
Borrowers from around the
world, including Berkshire Hathaway Inc. and Coca-Cola Co., have
been drawn to the cheap funding in
euros. Local borrowers have also
feasted on the cheapest-ever deals.
French utility GDF Suez SA issued
bonds in March with no guaranteed
regular payments to investors.
Nazi-Built Resort Seeks a Resurrection

PRORA, GermanyOn a 2.8-mile
stretch of sun-drenched coastland in
this small seaside town stands the
remains of what was once among
the Nazis most ambitious construction projects: Prora. The sprawling
complex of nearly identical buildings was envisioned as a workingclass vacation spot for up to 20,000
people before the regime put the
project on hold in 1939.
Now, after decades of decay, the
site operated by the Third Reich, the
Soviets and the East Germans over
the years is being converted into
hotels and apartments. The developers bet: that thousands of vacationers will flock to the complex on the
Baltic Sea island of Rgen, one of
Germanys most picturesque destinations.
Christa Moog, a Berlin writer,
paid 310,000 ($337,000) last year
for an 820-square-foot apartment.
She plans to move in this fall.
I am happy to see that this
building is being made into nice vacation apartments. It was always ruins, said Ms. Moog, who also runs
a literature-themed hotel in the
leafy Berlin neighborhood of Friedenau. The buildings were built in
a dark, bad time. Now they are being transformed, she said.
With Germanys economy solid,
the property market booming and
interest rates near record lows,
some German developers and investors are starting to look to architectural relics of the Third Reich for
opportunities. From Proras massive
resort to air-raid bunkers in Bremen
and Munich, some abandoned Naziera buildings are finding new uses
as living quarters.
The moves have sparked controversy. As the ravages of time are
forcing Germans to decide what to
do with the Nazis surviving architectural heritage, historians and developers are asking whether these
vestiges are fit for commercial development, should be turned into
places of remembrance, or should be
left untouched.
Some believe it is inappropriate
to reclaim the Prora project, part of
the Third Reichs strength through
joy program for promoting working-class holidays.
It was part of the system, said
Sabine Sakuth, a guide at the Prora
Documentation Center, a local history museum. It was one of the Na-
STEFAN SAUER/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY TODD BUELL
Investors are redeveloping Nazi-era buildings like these, shown in 2011, on the
German Baltic Sea island of Rgen. It hasnt come without controversy.
Pricing Higher
Property-market indexes in Germany,

change since 2008
30%
Residential 26%
25
20
15
Commercial
8%
10
5
0
2008 09
10
11
12
13
14
Source: Bulwiengesa AG
zis sharpest weapons, she said, referring to strength through joy.

But the conditions for redevelopment are ripe. Germanys property
market has soared in recent years as
lower interest rates make borrowing
more affordable. Residential real-estate prices have increased by about
5% annually the past few years, after a decade and a half of stagnation, according to real-estate consultancy Bulwiengesa AG.
Prora was to be a landmark of
Nazi rule and architecture. All of the
rooms were supposed to face the
water. When its cornerstone was
laid on May 2, 1936, Robert Ley, one
of Hitlers top associates, gave the
main speech, which was broadcast

on radio.
The drab slabs later housed Soviet and then East German soldiers
before being handed over to the
German army following reunification in 1990. The army abandoned
the site soon thereafter and decay
began to set in. The government
eventually sold the buildings off in
blocks starting in 2004.
The German property firm Irisgerd is pouring more than 70 million into the block it purchased in
2012. It hopes to complete its conversion to apartments by midsummer of next year. In all, more than
70% of the units have been sold,
said Bernd Wolf, a sales representative.
The economic conditions are
playing a decisive role for people,
said Ulrich Busch, an adviser for
Prora Solitaire, which owns part of
another block. They want to invest
for old age, and returns on [bank]
deposits are at about zero.
Christian Schierwater, a tax adviser from the German city of Celle,
bought an apartment in Prora that
he plans to rent out for part of the
year. A tax benefit for investing in
property under historical preservation protection, and a desire to get
a place near the water, outweighed
his initial misgivings about the
buildings history.
We looked for something on the
Baltic Sea, near the beach, he said.
When you look around, there isnt

a lot of choice.
Other Nazi-era buildings also are
faring well on todays property market. In the cities of Bremen and
Hamburg, an architectural firm has
been working for more than a decade to transform old air-raid bunkers into residential housing.
Claus Freudenberg, one of the
architects involved, said he wasnt
just making housing for the rich.
We have fully normal people as
customers.
In Munich, the property developer Euroboden has put 5 million
into renovating a bunker building
into four apartments and office
space. Eurobodens owner, Stefan
Hglmaier, said putting big windows
into the over six-feet-thick walls
showed in the truest sense of the
word that Germany is now an open
and democratic society.
Some buildings have a harder
time shaking their past. One of
these is the Bogensee villa outside
Berlin, once used as a getaway by
Nazi propaganda minister Joseph
Goebbels.
Although the city of Berlin has
tried for many years to reinvent the
property as a school, a hotel and a
clinic it has failed to sell it.
The history is a big problem,
said Marlies Masche, a spokeswoman for the agency selling the
property. We simply dont want the
object to fall into the wrong hands.
U.S. Shares
Advance;
Oil Sinks on
Supply Data
BY SAUMYA VAISHAMPAYAN
U.S. stocks rose Wednesday but

pared early gains as a slide in oil
prices weighed on energy shares.
The Dow Jones Industrial Average was up 37 points, or 0.2%, at
17913 in midday trading. The Dow
had risen as much
ABREAST OF as 101 points earTHE MARKET lier.
The S&P 500
rose six points, or 0.3%, to 2082.
The Nasdaq Composite gained 38
points, or 0.8%, to 4949.
Oil prices fell further Wednesday
after U.S. inventory data showed the
largest one-week increase in crude
supplies since 2001. Crude-oil futures fell 4.6% to $51.48 a barrel.
Energy stocks in the S&P 500 fell
0.7%, among the biggest sector decliners. Those stocks had been
slightly higher before the supply
data.
Investors were looking ahead to
a release Wednesday afternoon of
the minutes from the Federal Reserves March 17-18 policy meeting,
which was expected to shed light on
the debate at the Fed about when to
raise interest rates. At that meeting,
the central bank opened the door to
raising rates as early as June, while
indicating it is in no hurry to do so.
Low interest rates have contributed
to the six-year bull run in stocks, as
they make returns on other assets
less appealing.
Comments from Fed officials this
week, including Fed Governor Jerome Powell and William Dudley,
president of the Federal Reserve
Bank of New York, suggested that
even when the Fed begins to raise
rates, the pace of increases is likely
to be slow. That is an environment
in which stocks can continue to
gain, said David Lefkowitz, senior
equity strategist at UBS Wealth
Management Research.
The market wants to be comfortable that any pivot to higher interest rates is not going to jeopardize the recovery, he said.
Economic reports have indicated
a slowdown in growth at the start of
the year. Now, investors are waiting
for earnings reports from companies
to see how they performed in the
first quarter. Given the dollars drag
on results at multinational companies and low oil prices weighing on
profits at energy companies, expectations are low. Analysts surveyed
by FactSet expect earnings at S&P
500 companies to fall 4.9% from a
year earlier, according to FactSet.
Alcoa was to report first-quarter
earnings Wednesday after the closing bell, unofficially marking the
start to the reporting season.
In deal news, Mylan has proposed buying generic-drug maker
Perrigo in a cash-and-stock transaction that would value the company
at $205 a share. The bid is worth
about $30 billion based on Perrigos
share count of 147 million as of
March 30. Mylan shares jumped 15%
and Perrigo shares soared 23%.
Tesla Motors is upgrading the
base model of its Model S electric
sedan, giving it a better battery and
all-wheel drive. Shares rose 2.1%.
European stock markets were
mixed. The Stoxx Europe 600 added
0.1% to end at 404.66, its highest
level since 2000. Germanys DAX
slipped 0.7%.
INTERNATIONAL INVESTOR
Sharp Reversal for Stock Connect
Funds that are fairly representative of the U.S. large-cap equity market. At least 75% of total assets are
invested in equities. Ranked on % total return (dividends reinvested) in U.S. dollars for one year ending
April 08, 2015
Leading 10 Performers
FUND FUND
RATING * NAME
NS
NS
NS
NS
NS
NS
Hong Kong Exchanges & Clearing jumped 12% as trading on the bourse soared.
before retreating, closing the day up
0.8% at 3994.81, its fifth consecutive
day of gains.
That was even as global investors yanked 3.5 billion yuan ($565
million) out of the mainland Chinese
market through Stock Connect, the
highest outflows to date and a potential sign they were shifting back
to Hong Kong. Still, the frenzied
pace of buying in Hong Kong was
unnerving to some.
Mr. Ma said buyers werent differentiating between high- and lowquality stocks, with the market rallying across the board. They were
just buying up everything. Hopefully itll return to sanity after 4
p.m., he said, referring to the closing time of Hong Kongs market.
Among the most-active Hong
Kong-listed stocks on Wednesday
were infrastructure-related companies. Chinas two railway companies,
CSR Corp. and China CNR Corp.
which received government ap-
Data as shown is for information purposes only. No offer is being made by

Morningstar, Ltd. or this publication. Funds shown arent registered with the
U.S. Securities and Exchange Commission and arent 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.
FUND NAME
NAV
GF AT LB DATE CR
n AHW CAPITAL MANAGEMENT

Tel (+49) 1805 - 23 82 82
www.ahw-capital.com
AHW Top-Div.Int.
GL
EQ LUX 07/29 EUR
NAV
46.59
%RETURN
YTD 12-MO 2-YR
-8.9
-8.2
-2.7
n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT

Concentra AE
Industria AE
InternRent AE
EU EQ DEU 04/07 EUR

EU EQ DEU 04/07 EUR
EU BD DEU 04/07 EUR
114.21
112.73
48.30
22.4
19.3
10.4
27.2
23.3
21.4
23.1
19.9
6.9
n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866

Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
CAM-GTF Limited
OT
OT MUS 04/02 USD 327673.27
-3.6
-1.6
-11.5
FUND NAME
NAV
GF AT LB DATE CR
American Growth Fund AA

American Growth Fund AA (HKD)
Asia Total Return Fund AA Inc
Asia Total Return Fund AA
Asia Total Return Fund AA (HKD) Inc
Asia Value Dividend Equity Fund AA
Asia Value Dividend Equity Fund AA Inc
Asian Equity Fund A
Asian Equity Fund AA
Asian Sm Cap Equity Fund AA
Asian Small Cap Equity Fund AA (HKD)
China Value Fund A
China Value Fund AA
Dragon Growth Fund A
Dragon Growth Fund AA (HKD)
Emg Eastrn Europe Fund A
Emg Eastrn Europe Fund AA
European Growth Fund A
European Growth Fund AA
Global Contrarain Fund AA
Global Property Fund AA
Global Resources Fund AA
Greater China Opportunities Fund AA
Healthcare Fund AA
India Equity Fund AA
International Growth Fund A
International Growth Fund AA
Japanese Growth Fund A
Japanese Growth Fund AA
Latin America Equity Fund AA
Russia Equity Fund AA
Strategic Income Fund AA
Taiwan Equity Fund AA
Turkey Equity Fund AA
U.S. Bond Fund AA
U.S. Bond Fund AA (HKD)
U.S. Bond Fund AA (HKD) Inc
U.S. Bond Fund AA Inc
U.S. Sm Cap Equity Fund AA
U.S. Special Opportunities Fund AA
U.S. Special Opportunities Fund AA (HKD)
U.S. Special Opportunities Fund AA Inc
U.S. Tsy Inf-ProtSec Fund AA
US
US
AS
AS
AS
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
EU
EU
EU
EU
GL
OT
GL
AS
OT
EA
GL
GL
JP
JP
GL
EE
OT
AS
OT
US
US
US
US
US
US
US
US
OT
EQ
EQ
BD
BD
BD
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
OT
EQ
OT
BD
BD
BD
BD
EQ
BD
BD
BD
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
Indonesian Grth Fund
CP Global Alpha Fund

OT
CP Multi-Strategy Currency Fund OT
CPS-Master Priv Fund
GL
OT WSM 04/08 USD

OT CYM 03/12 USD
OT WSM 04/08 USD
n HSBC Trinkaus Investment Managers SA

E-Mail: funds@hsbctrinkaus.lu
Telephone: 352 - 47 18471
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
JP
EU
EU
EU
EU
EU
EU
EU
BD
BA
BA
BA
BA
BA
BA
BA
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
12/06
12/06
12/06
12/06
12/06
12/06
12/06
12/06
JPY
JPY
USD
EUR
JPY
JPY
USD
EUR
121.44
111.79
148.36
US
EQ LUX 04/07 USD
17.7
33.5
17.8
NS
12.7
11.5
Advertisement
FUND NAME
8577.68
9032.12
79.01
121.37
10807.34
11130.39
96.94
102.83
n MANULIFE GLOBAL FUND TEL:(852)2108 1110

Internet:http://www.manulifefunds.com.hk
American Growth Fund A
13.5
NS
2.3
29.43
-9.3
4.6
-12.2
-9.0
3.5
17.9
-0.9
-4.6
-8.4
11.0
-11.1
-8.8
5.1
25.6
0.7
-4.1
0.3
13.2
-1.0
8.1
11.3
23.9
8.4
6.9
GL
NAV
04/07 USD
04/07 HKD
04/07 USD
04/07 USD
04/07 HKD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 HKD
04/07 USD
04/07 USD
04/07 USD
04/07 HKD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 USD
04/07 HKD
04/07 HKD
04/07 USD
04/07 USD
04/07 USD
04/07 HKD
04/07 USD
04/07 USD
EQ BMU 03/25 USD
1.67
10.48
0.96
1.00
10.06
1.72
1.06
3.39
1.09
2.41
9.75
9.30
2.91
2.16
10.46
3.45
1.48
11.09
0.80
0.96
1.06
0.82
1.09
1.97
1.50
4.77
1.10
3.42
0.88
0.91
0.46
1.10
1.66
0.83
1.23
10.05
10.03
1.01
1.18
0.93
9.56
0.93
1.31
163.94
%RETURN
YTD 12-MO 2-YR
1.3
1.2
0.4
0.5
NS
4.4
5.1
9.4
9.3
14.3
14.2
9.1
9.1
10.1
10.0
8.0
7.9
6.3
6.3
2.6
4.7
1.8
9.5
5.2
10.9
3.1
3.0
12.1
12.0
-4.6
24.1
1.8
10.1
-11.9
1.7
NS
1.6
1.7
4.6
2.1
2.1
2.1
2.0
10.8
NS
1.7
NS
NS
12.5
NS
6.6
6.3
4.0
NS
22.5
22.2
17.2
16.8
-18.6
-18.7
-4.2
-4.4
3.6
15.5
-18.8
NS
20.8
38.5
6.5
6.2
13.3
13.1
-15.7
-14.2
2.0
11.2
-7.4
4.0
NS
NS
NS
4.3
-2.4
NS
NS
2.4
16.7
NS
-0.6
NS
NS
10.5
NS
9.2
9.0
8.7
NS
14.5
14.2
19.3
18.9
-12.2
-12.3
9.2
8.9
6.6
7.5
-8.1
NS
21.2
22.8
13.8
13.5
6.6
6.4
-12.4
-12.0
1.2
10.9
-13.8
2.2
NS
NS
NS
11.5
3.5
NS
NS
-3.3
11.1
17.0
-3.1
-3.4
-7.7
FUND NAME
NS
NS
NS
NAV
GF AT LB DATE CR
NAV
n ALEXANDRA INVESTMENT MANAGEMENT

Tel: +1 212 301 1800 Fax: +1 212 301 1810
AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD
2155.22
%RETURN
YTD 12-MO 2-YR
NS
NS
NS
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
go, but were very encouraged by

this news, C.K. Chow, chairman of
Hong Kong Exchanges & Clearing,
told reporters after the close of
trading. He reminded investors to
be cautious with their investments.
Elsewhere, there was little reaction in Tokyo to the Bank of Japans
expected decision to stand pat on its
current policy. The Nikkei Stock Average rose 0.8% to 19789.81, for its
fourth gain in the past five sessions.
It has added 4% over the span.
NAV
%RETURN
YTD 12-MO 2-YR
n THE NATIONAL INVESTOR

TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae
OT BMU 02/26 USD
OT IRL 04/02 USD
OT ARE 04/07 AED
1012.08
1297.00
10.80
4.7
-1.5
4.3
-9.7
-10.5
-6.9
-2.2
9.6
31.3
OT OT CYM 03/31 USD

OT OT USA 10/31 USD
OT OT CYM 01/31 USD
NS
129.92
102.66
4.3
2.4
11.3
5.7
3.2
11.3
6.3
3.8
0.7
% Return in $US **
1-YR 2-YR 5-YR
5.10
19.47 23.42 11.69
6.71 18.60 22.34 12.81

1.39
17.49 20.83 13.73
4.76
16.23 17.46 10.40
2.21
15.91 19.72 11.75
2.13
15.16 18.27 15.20
1.24
14.81 15.66
NS
0.75 14.64 17.65
NS
2.01
14.36 17.53 12.30
0.84
14.31 18.08 13.80
Source: Morningstar, Ltd

1 Olivers 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 U.S. dollar moved down after

the BOJs midday announcement,
but was still above its prior-day
level, changing hands at 119.89 in
late Asian trading.
In Sydney, a recovery in iron-ore
and oil prices helped lift resources
stocks as Australias S&P/ASX 200
gained 0.4% to 5948.20.
In South Korea, the Kospi index
rose 0.5% to 2056.43, while in India
the BSE Sensex rose 0.7% to
28707.75.
NAV
GF AT LB DATE CR
FUND NAME
GC Hi Yield Inc-ClsA MDIs EUR H
Hi-Div Stk Cls A1
Hi-Div Stk Cls A2 MDIs
Hi-Div Stk Cls A2 MDIs AUD H
Hi-Div Stk Cls A2 MDIs CAD H
Hi-Div Stk Cls A2 MDIs GBP H
Hi-Div Stk Cls A2 MDIs HKD
Hi-Div Stk Cls A2 MDIs NZD H
Intel-China Converg Fund-A Units
Intel-Chinese Mainland Foc Fund
VP Classic-A Units
VP Classic-B Units
VP Classic-C Units
VP Classic-C Units AUD H
VP Classic-C Units CAD H
VP Classic-C Units NZD H
VP Taiwan Fund
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
AS
AS
AS
OT
OT
OT
OT
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
04/02 EUR
04/02 USD
04/02 USD
04/02 AUD
04/02 CAD
04/02 GBP
04/02 HKD
04/02 NZD
04/02 USD
04/02 USD
04/02 USD
04/02 USD
04/02 USD
04/02 AUD
04/02 CAD
04/02 NZD
04/02 USD
NAV
10.08
78.14
11.95
10.93
10.96
10.44
10.92
10.94
165.60
44.78
289.64
131.50
16.59
13.52
13.35
13.39
16.30
%RETURN
YTD 12-MO 2-YR
NS
4.7
4.7
5.4
4.9
NS
4.7
5.4
12.7
10.2
8.5
8.3
8.4
8.9
9.1
9.0
5.7
NS
16.0
16.1
18.4
16.9
NS
16.0
18.4
36.7
32.0
29.6
29.0
29.4
34.0
32.3
32.7
-1.0
NS
9.6
9.4
NS
NS
NS
NS
NS
18.2
14.5
16.3
15.7
16.0
NS
NS
NS
10.2
n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263

China A-Share Fund Cls A AUD H
China A-Share Fund Cls A AUD UnH
China A-Share Fund Cls A CAD H
China A-Share Fund Cls A EUR H
China A-Share Fund Cls A GBP H
China A-Share Fund Cls A GBP UnH
China A-Share Fund Cls A HKD H
China A-Share Fund Cls A HKD UnH
China A-Share Fund Cls A NZD H
China A-Share Fund Cls A NZD UnH
China A-Share Fund Cls A RMB (CNH)
China A-Share Fund Cls A USD
China A-Share Fund Cls A USD H
China Greenchip-A Units
China Greenchip-A Units AUD H
China Greenchip-A Units CAD H
China Greenchip-A Units NZD H
China Greenchip-A Units USD
China Greenchip-A2 QDIs Units
GC Hi Yield Inc-Cls A MDIs AUD H
GC Hi Yield Inc-Cls A MDIs CAD H
GC Hi Yield Inc-Cls A MDIs NZD H
GC Hi Yield Inc-Cls P HKD Acc sh
GC Hi Yield Inc-Cls P HKD MDIs sh
GC Hi Yield Inc-Cls P MDIs SGD H
GC Hi Yield Inc-Cls P USD Acc sh
GC Hi Yield Inc-Cls P USD MDIs sh
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
OT
OT
OT
OT
OT
OT
OT
OT
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
04/02 AUD
04/02 AUD
04/02 CAD
04/02 EUR
04/02 GBP
04/02 GBP
04/02 HKD
04/02 HKD
04/02 NZD
04/02 NZD
04/02 CNH
04/02 USD
04/02 USD
04/02 HKD
04/02 AUD
04/02 CAD
04/02 NZD
04/02 USD
04/02 HKD
04/02 AUD
04/02 CAD
04/02 NZD
04/02 HKD
04/02 HKD
04/02 SGD
04/02 USD
04/02 USD
13.05
12.20
12.22
12.97
12.47
12.37
13.06
13.18
12.41
11.22
13.46
13.12
13.03
65.10
11.12
11.05
11.24
10.96
12.02
9.22
9.23
9.34
11.81
8.97
9.65
11.91
9.02
FUND NAME
NAV
GF AT LB DATE CR
Platinm-Emancipation
Platinm-Equity Plus
Platinm-Gbl Dividend
Platinm-Nordic
Platinm-Premier
Platinm-Turnberry
OT
OT
GL
OT
OT
OT
EQ
OT
EQ
OT
OT
BD
CYM
USA
CYM
CYM
CYM
USA
05/31
05/29
03/31
10/31
12/31
02/28
USD
USD
USD
SEK
USD
USD
NAV
105.47
35.02
NS
NS
NS
60.14
n WINTON CAPITAL MANAGEMENT LTD

Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
Platinm-All Star
Platinm-All Weather
Platinm-Dynasty
YTD
Franklin US
Franklin Templeton
USDLUX
Focus A Acc $
Investment Funds
AB US
AllianceBernstein
USDLUX
Thematic Research A USD (Luxembourg) S. r.l.
Fidelity
Fidelity (FIL Inv
USDLUX
America A-USD Mgmt (Lux) S.A.)
Franklin US
Franklin Templeton
USDLUX
Equity A Acc $
Investment Funds
Fidelity
Fidelity (FIL Inv
USDLUX
AmericanDiversifiedA-USD Mgmt (Lux) S.A.)
PIMCO GIS
PIMCO Global
USDIRL
StocksPlus Inst Acc Advisors (Ireland) Limited
AB SICAV
AllianceBernstein
USDLUX
Select US Equity A (Luxembourg) S. r.l.
db
db x-trackers
USDLUX
x-trackers S&P 500 1C
PineBridge
PineBridge
USDIRL
American Equity Y Investments Ireland Ltd
db
db x-trackers
USDLUX
x-trackers MSCI USA 1C
NAV
GF AT LB DATE CR
TNI MENA Special Sits Fund OT

TNI MENA UCITS Fund
OT
TNI UAE Blue Chip Fund
OT
LEGAL
CURR. BASE
FUND MGM'T CO.
12.7
NS
11.7
12.9
8.2
16.4
12.2
14.2
7.6
NS
14.0
14.4
12.4
6.9
7.2
6.8
8.2
6.8
6.9
3.8
3.0
4.1
3.1
3.0
3.2
3.1
3.1
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
9.1
NS
NS
NS
NS
9.2
6.6
4.6
7.7
4.1
4.1
NS
4.2
4.2
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
11.3
NS
NS
NS
NS
NS
NS
NS
NS
2.2
2.3
NS
2.3
2.3
[ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] Advertisement
n PLATINUM CAPITAL MANAGEMENT

Tel: +44 207 024 9840, www.platinumfunds.net
1.4
NS
proval to mergeeach surged more

than 40%.
China Communications Construction Co. rose 15%, while Haitong Securities, a brokerage firm,
jumped 19%.
Turnover in Hong Kong eclipsed
the previous all-time high by more
than HK$40 billion and was almost
three times the average daily turnover recorded during the first two
months of the year. Trading through
Stock Connect accounted for
HK$37.4 billion, or 14.9%, of the
days total turnover, according to
exchange data.
To date, net inflows into Shanghai have totaled 122.3 billon yuan
since Stock Connect began Nov. 17,
representing almost half of the 300
billion yuan aggregate limit. But
flows into Hong Kong have been
much weaker, reaching just 15% of
the 250 billion yuan quota.
Stock Connect is barely five
months old and it has a long way to
n PT CIPTADANA ASSET MANAGEMENT

Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com
n CP CAPITAL ASSET MANAGEMENT LIMITED

www.cpgbl.com
US Large-Cap Blend Equity
JEROME FAVRE/BLOOMBERG NEWS
Continued from page 15

ing, the citys stock-exchange operator. Turnover on the bourse rose to
a record 250 billion Hong Kong dollars (US$32.25 billion), as trading
resumed after a three-day holiday in
Hong Kong during which Shanghais
market rallied steadily.
Leading the gains were Hong
Kong listings of Chinese companies
that have been outrun by an explosive rally on the mainland over the
past few months, leaving them 28%
cheaper, on average, than their
Shanghai-listed counterparts.
A gauge of these shares, the
Hang Seng China Enterprises Index,
rose 5.8% to 13396.59 on Wednesday, the best one-day performance
in four years.
Inflows from the Chinese mainland through Stock Connect on
Wednesday hit the 10.5 billion yuan
limit on net purchases of shares for
the first time since launching in November.
The enthusiasm also stemmed
from signs that the Chinese government is taking steps to bolster the
countrys sluggish economy. Officials fleshed out details over the
weekend for ambitious plans to better connect the economy with the
rest of Asia, Africa, the Middle East
and Europe with more roads, railways, ports and other projects.
These policies have started to
change the markets psychology, as
well as expectations of Chinas economy, said Thomas Kwan, chief investment officer at Harvest Global
Investments, a Chinese asset-management company. All of a sudden,
people are waking up to the fact
that things have changed a lot.
The Shanghai Composite Index
briefly crossed the 4000 threshold
Fund Scorecard
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
OT
OT
OT
OT
OT
OT
OT
CYM
CYM
CYM
VGB
VGB
VGB
VGB
02/27
02/27
02/27
02/27
02/27
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EUR 1425.23
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YTD 12-MO 2-YR
0.2
-18.2
-1.8
2.6
-55.9
-1.2
-8.5
-63.7
-6.4
4.7
-66.0
-3.0
5.7
-45.6
-0.4
1.2
-44.3
NS
3.3
3.3
3.2
2.8
2.8
2.6
2.7
20.9
21.3
20.6
17.0
17.4
17.0
16.8
15.2
15.6
15.3
11.5
11.8
11.8
11.6
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MARKETS
Chinese Insurers Buy First Piece of U.S.

Chinas two largest insurance
companies are making their first investment in U.S. commercial real estate, buying a majority stake in a
$500 million project in Boston, according to a person briefed on the
transaction.
The investment by China Life Insurance Group Co. and Ping An Insurance Co., along with New York developer Tishman Speyer Properties,
marks the latest sign that Chinese insurance companies are becoming a
force in global real-estate investment.
The Boston development includes a 13-story office building and
a nine-story condominium tower
with 100 units. The project in the
citys Seaport District will take up
most of Pier 4, which was known for
Anthonys Pier 4, a popular restaurant that closed two years ago amid
plans for redeveloping the site.
Rob Speyer, co-chief executive of
Tishman Speyer, confirmed China
Life and Ping Ans participation in
the deal, but declined to disclose
the size of their stakes. A person
briefed on the deal said each insurer
was taking a one-third stake, while

the other third would be owned by
a Tishman Speyer fund that will be
the managing partner of the venture. China Life and Ping An didnt
respond to requests for comment.
Until 2012, the Chinese government prohibited Chinas insurance
companies from buying foreign
property. Now they are joining other
Chinese investors in becoming increasingly active in U.S. and European markets. Both China Life and
Ping An have acquired property in
London, but they havent bought in
the U.S. before.
So far in 2015, Chinese insurance
companies have purchased $2.5 billion in foreign property, more than
they have purchased in all previous
years combined, according to Real
Capital Analytics. Overall, Chinese investors in 2014 bought $13.6 billion
in foreign real estate, down slightly
from $15.3 billion in 2013 but still
well above the $5.4 billion they
bought in 2012, Real Capital said.
Beijing has been encouraging Chinese companies to venture abroad
and has loosened foreign-exchange
controls and administrative procedures in recent years. The govern-
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Getting Active
Chinese insurers have bought more

foreign real estate this year than in the
previous two years combined.
$2.5 billion
$2.49
2.0
1.5
TISHMAN SPEYER PROPERTIES
BY PETER GRANT
AND ESTHER FUNG
1.0
0.5
0
A rendering of the Boston site.

ment in 2012 capped insurers realestate assets at 15% of their total
assets. In 2014, the insurance companies regulator, the China Insurance
Regulatory Commission, increased
that threshold to 30%. The moves allowed insurers to invest in mature
commercial and office building properties in prime locations abroad.
The companies have enormous
0
2010
0
11
0
12
13
14
15*
*Through April 6
Source: Real Capital Analytics
buying power. China Life Insurance

Co. is the countrys largest insurer by
premiums, while Ping An Insurance
Group ranks second. Overall, Chinese
insurers total assets reached 10.55
trillion yuan ($1.7 trillion) as of the
end of February, up 70% from the
same month three years ago.
For Tishman Speyer, the Boston

transaction shows that its China
strategy is paying off. The firm entered the China market as a developer there, but lately also has been
using the contacts it has made to
team up with Chinese investors in
U.S. deals. Tishman Speyer in 2012
sold a building it developed in
Chengdu to Ping An for an undisclosed amount. Weve made relationships in China both with investors and with tenants that have paid
dividends in other parts of the
world, Mr. Speyer said.
Tishman Speyer owns about
three million square feet of office
space in Bostons financial district.
Run by Mr. Speyer and his father,
Jerry Speyer, Tishmans signature
assets include Rockefeller Center
and the Chrysler Building in New
York, So Paulos Torre Norte and
OpernTurm in Frankfurt.
The Pier 4 project in Boston is
its first development in the Seaport area. The firm acquired the
site last year and is planning to
complete the office portion of the
project in the second half of 2017
and the condo tower in the first
quarter of 2018.
MARKETS
Manulife to Sell Insurance Through DBS
BY RICK CAREW
HONG KONGManulife Financial Corp. has reached a multiyear

deal valued at more than $1 billion
that will allow the Canadian firm
to exclusively distribute its insurance products through Singaporean
lender DBS Group Holdings Ltd.s
branches across Asia.
The deal with DBS, signed
Wednesday, is the latest by a
global insurer seeking access to
one of the worlds fastest-growing
life-insurance markets. Banks
across Asia have been fetching
high prices for multiyear exclusive
access to their branch networks,

giving insurers a way to increase
their sales quickly in the region.
Prudential PLC last year renewed a distribution partnership
with Standard Chartered PLC.
That followed AIA Group Ltd. and
Citigroup Inc. inking a multibillion-dollar deal for AIA to distribute its insurance products through
Citigroups Asia-Pacific retail
branch network in late 2013. HSBC
Holdings PLC sells its own insurance products through its banking
network.
The terms of the DBS deal include a one-time, upfront $1.2 bil-
lion payment from Toronto-based

Manulife to DBS, with additional
variable payments to be made
based on the performance of the
partnership, the two companies
said in a joint statement. The
agreement is known as a bancassurance deal, which means the insurance products are distributed
through a banks branch network
rather than through individual insurance agents.
The duration of the agreement
is an industry standard 15-year
contract covering Singapore, Hong
Kong, China and Indonesia, the
statement said.
Manulife is taking over from

U.K. insurer Aviva PLC, which was
previously the primary distributor
of insurance products via the DBS
network across Asia. The contract
between Aviva and DBS wasnt renewed, though Aviva participated
in the bidding process for the new
contract, a person familiar with the
situation said.
Global insurers are eager to increase their sales across Asia as
penetration rates for insurance
products remain low relative to
more mature markets.
Manulife currently operates
across 12 markets in Asia and has
more than 57,800 agents in the region, according to its annual report.
Manulifes Asia operations recorded $1.3 billion in insurance
sales last year, an increase of 31%
over its 2013 insurance sales,
which totaled just more than $1
billion.
Asia accounted for 18% of Manulifes total premiums and deposits
last year and 13% of its total assets
under management, according to
its annual report.
Morgan Stanley advised DBS
on the deal, and J.P. Morgan
Chase & Co. advised Manulife.
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BUSINESS OPPORTUNITIES
BLUE CHIPS & BONDS

Dow Jones Asia Titans: Wednesday's best and worst...
Major players &

benchmarks
At right, a look at the Asia Titans, the biggest and best known
companies in Asia. Below, some of the Dow Jones Titans indexes
of biggest and most liquid stocks in individual countries and regions
Giants around the world

Dow Jones Country Titans
Previous session
INDEX PERFORMANCE
Year-to-date
52-week
Italy
-0.69%
24.0%
Germany
-0.63
22.5
23.6
France
-0.30
20.5
17.3
Netherlands
-0.55
20.2
28.2
Sweden
-0.64
16.4
25.3
China 88
1.98
16.1
89.8
-0.67
14.3
14.8
Spain
Hong Kong
U.K.
Singapore
2.46
8.4
-0.004
-0.21
0.50
0.29
-4.7%
Brazil
1.91
-7.5
China Life Insurance
Hong Kong
Life Insurance
China Mobile
Hong Kong
Mobile Telecommunications
10.0%
8.9
12.5
Retail
0.61
8.8
19.6
Constructn Mat
0.05
8.1
-6.1
Auto & Parts
-0.12
2.2
Health Care
0.30
6.6
18.9
Chemicals
-0.25
6.0
4.6
Real Estate
0.53
5.9
15.7
Food & Bev
-0.26
4.5
6.8
Pers H'hold Gds
0.07
4.2
Telecomm
0.13
4.1
Global 50
-0.06
0.4
3.0
Technology
0.25
0.2
12.6
Arab 50
0.11
48.8
20.8
9.32
6.9
8.6
193.66
11.80
5.55
-6.8
13.0
China Construction Bank
Hong Kong
Banks
738.46
6.89
5.03
23.0
8.5
Taiwan Semiconductor ManufacturingTaiwan
Semiconductors
$49.47
143.00
-2.05%
20.2
1.4
Tokio Marine Holdings
Japan
Property Casualty Insurance
3.68
4,691
-1.66
54.6
19.3
Komatsu
Japan
Commercial Vehicles Trucks
5.46
2,470
-1.36
14.5
-8.0
Nissan Motor
Japan
Automobiles
9.54
1,209
-1.23
33.1
14.3
Toyota Motor
Japan
Automobiles
7.22
8,372
-0.45
53.6
10.8
6.51
...And the rest of Asia's blue chips

Volume
in millions
Company/Country (Industry)
AIA Group
50.63
Hong Kong (Life Insurance)
Bank of China
709.72
Hong Kong (Banks)
Industrial Commercial Bank of China 662.90
Hong Kong (Banks)
Tencent Holdings
36.67
Hong Kong (Internet)
POSCO
0.29
Korea (Iron Steel)
Reliance Industries GDR
0.34
United Kingdom (Exploration Production)
Woodside Petroleum
2.78
Australia (Exploration Production)
Sun Hung Kai Properties
5.22
Hong Kong (Real Estate Holding Development)
Takeda Pharmaceutical
2.19
Japan (Pharmaceuticals)
Rio Tinto
4.44
Australia (General Mining)
Nomura Holdings
27.83
Japan (Investment Services)
Shin-Etsu Chemical
1.93
Japan (Specialty Chemicals)
Seven I Holdings
3.31
Japan (Broadline Retailers)
Samsung Electronics
0.16
Korea (Semiconductors)
Japan Tobacco
4.54
Japan (Tobacco)
BHP Billiton
4.34
Australia (General Mining)
KDDI
5.17
Japan (Mobile Telecommunications)
Mitsui Co.
8.59
Japan (Industrial Suppliers)
Mitsubishi UFJ Financial Group
74.94
Japan (Banks)
Honda Motor
3.69
Japan (Automobiles)
8.3
3.7
-11.2
-4.5%
6.61
297.80
6.5%
7.7
23.3%
Integrated Oil Gas
Dow Jones Regional Sector Titans

1.45%
109.60
YTD
66.0%
Exploration Production
-27.8
2.25
34.75
52-week
6.87%
Hong Kong
9.5
Tiger 50*
37.35
Hong Kong
-8.6
Asian 50
$128.25
STOCK PERFORMANCE
Previous session
PetroChina
8.6
1.1
Previous
close, in
local currency
CNOOC
7.4
3.1
South Korea
Industry
4.9
3.3
Turkey
Country
7.3
5.8
0.28
Switzerland
9.1%
Volume
in millions
Company
*Asia excluding Japan

Source: SIX Financial Information
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week
YTD
Company/Country (Industry)
51.75
4.86%
38.0%
20.3%
4.84
4.76
37.9
10.8
6.05
3.42
22.7
6.9
154.50
3.14
47.4
37.3
253,000
2.64
-18.8
-8.2
27.40
2.62
-13.3
-2.8
35.07
2.04
-10.8
-7.7
123.00
1.65
23.2
4.0
6,045
1.61
33.7
21.0
57.00
1.51
-12.5
-1.7
724.80
1.44
15.6
5.0
7,942
1.35
36.8
1.0
5,280
1.21
38.9
21.1
1,479,000
1.16
7.9
11.5
3,933
1.00
23.2
18.2
30.74
0.95
-19.9
4.7
2,863
0.79
61.2
12.5
1,616
0.78
13.2
-0.3
794.00
0.76
46.5
19.5
4,076
0.73
18.7
15.6
Latest,
in local
currency
Volume
in millions
Sumitomo Mitsui Financial Group

7.16
Japan (Banks)
Wesfarmers
1.45
Australia (Home Improvement Retailers)
East Japan Railway
0.79
Japan (Travel Tourism)
Nippon Telegraph Telephone
1.80
Japan (Fixed Line Telecommunications)
SoftBank
6.60
NTT DoCoMo
5.71
Mitsubishi
4.43
National Australia Bank
3.45
Australia (Banks)
Westpac Banking
3.78
Australia (Banks)
Canon
4.05
Japan (Electronic Office Equipment)
Woolworths
5.43
Australia (Food Retailers Wholesalers)
Itochu
5.65
Hon Hai Precision Industry
32.27
Taiwan (Electrical Components Equipment)
Nippon Steel Sumitomo Metal
31.25
Japan (Iron Steel)
Mizuho Financial Group
137.77
Japan (Banks)
Commonwealth Bk Australia
1.71
Australia (Banks)
Australia New Zeald Bkg
3.21
Australia (Banks)
Hyundai Motor
0.58
Korea (Automobiles)
Fanuc
1.08
Japan (Industrial Machinery)
Hitachi
20.46
Japan (Electronic Equipment)
STOCK PERFORMANCE
Latest 52-week
YTD
4,709
0.69%
14.6%
7.6%
43.85
0.67
1.0
5.1
10,355
0.53
40.1
13.5
7,683
0.52
47.4
23.7
7,120
0.42
-1.9
-1.2
2,173
0.35
40.7
22.9
2,461
0.31
34.5
11.0
39.45
0.31
11.4
17.4
39.76
0.25
14.6
19.9
4,470
0.22
42.5
16.4
29.05
0.21
-19.1
-5.3
1,327
0.15
16.7
2.7
93.70
0.11
21.3
6.6
301.60
-0.07
11.3
0.2
214.60
-0.19
7.3
6.0
94.00
-0.22
21.3
9.7
36.79
-0.30
8.7
14.6
161,000
-0.31
-33.9
-4.7
27,115
-0.40
53.7
35.9
823.90
-0.41
13.6
-8.5
Sources: SIX Financial Information; WSJ Market Data Group
Tracking
credit
markets &
dealmakers
Credit derivatives
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.
Markit iTraxx Indexes
Showing the biggest improvement...
Index: series/version
Mid-spread,
in pct. pts.
Mid-price
Europe: 23/1
Eur. High Volatility: 20/1
Europe Crossover: 23/1
Asia ex-Japan IG: 23/1
Japan: 23/1
Coupon
SPREAD RANGE, in pct. pts.

since most recent roll
Maximum Minimum
Average
CHANGE, in basis points
102.28%
0.01%
0.57
0.55
0.56
0.48
101.91
0.01
0.84
0.48
0.62
Kirin Hldgs
21
...
Kowloon Canton Rwy
45
2.54
111.57
0.05
2.68
2.54
2.62
Sumitomo Elec Inds
42
...
Tohoku Elec Pwr
48
...
...
1.10
99.50
0.01
1.15
1.10
1.12
ITO YOKADO
30
AEON
70
0.57
102.22
0.01
0.60
0.57
0.58
Toyota Mtr
21
Kobe Stl
70
...
Bk of China
In percentage points
Spreads
Index roll
2.00
1.50
Asia ex-Japan IG
t
1.00
Spreads on
ve-year swaps
for corporate
debt; based on
Markit iTraxx
indexes.
And the most deterioration
CHANGE, in basis points
0.56
Note: Data as of April 7
NOTICE TO READERS
All statistics published in
The Wall Street Journal
Asia from markets outside
the Asian-Pacific region
reflect preliminary data.
Credit-default swaps: Asian companies
Spreads on credit derivatives are one way the market rates

creditworthiness. Regions that are treading in rough waters
can see spreads swing toward the maximumand vice versa.
Indexes below are for five-year swaps.
Yesterday Yesterday Five-day 28-day
Yesterday Yesterday Five-day 28-day
124
Swire Pac
112
...
Sapporo Hldgs
47
...
Tokyu
25
...
...
SK Innovation
76
HYUNDAI Mtr
68
NIPPON STEEL SUMITOMO

METAL
45
TOSHIBA
48
ACOM
81
...
Petroliam Nasional BHD

Petronas
122
14
Mitsui
45
Sony
70
19
Source: Markit Group
0.50
Australia
0
Oct. Nov. Dec. Jan. Feb. Mar.
2015
2014
Source: Markit Group
Behind Asia's deals: Bank revenue rankings, Global

Behind every IPO, bond offering, merger deal or syndicated loan is one or more investment banks. Here are
investment banks ranked by year-to-date revenues from recent deals.
share
Equity
capital markets
$1,517
8.5%
25%
32%
30%
Goldman Sachs
1,442
8.1
24
20
52
Bank of America Merrill Lynch
1,162
6.5
23
32
31
13
Morgan Stanley
JPMorgan
WSJ.com>>
Follow the markets throughout the day, with updated

stock quotes, news and commentary at WSJ.com/Email.
Also, receive emails that summarize the days trading in
Europe and Asia. To sign up, go to WSJ.com.
PERCENTAGE OF TOTAL REVENUE

Debt
Mergers &
capital markets
acquisitions
Revenue,
in millions
Loans
13%
1,108
6.2
27
30
36
Citi
980
5.5
21
38
33
Barclays
836
4.7
20
40
26
14
Deutsche Bank
819
4.6
23
40
25
12
Credit Suisse
648
3.7
27
38
21
14
Wells Fargo Securities
514
2.9
22
44
14
21
Source: Dealogic
GLOBAL MARKETS LINEUP

Commodities
Currencies
Prices of futures contracts with the most open interest
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia
Derivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Metal Exchange; NYMEX: New York Mercantile Exchange;
ICE: IntercontinentalExchange *Data as of April 7, 2015
Year
ONE-DAY CHANGE
Commodity
Exchange
Last price
Net
Percentage
high
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)
378.50
972.00
524.75
152.225
2,792
135.80
13.05
67.04
365.00
1,952
1,794
-4.50
1.00
-1.25
-0.100
14
-6.15
0.28
0.62
1.25
unch.
-12
2.7335
1204.20
16.470
1,785.00
16,800.00
6,025.50
1,887.50
2,135.50
12,625
-0.0295
-6.40
-0.370
11.00
145.00
42.50
22.50
34.00
-350
51.48
1.7252
1.7814
2.624
58.05
527.25
-2.50
-0.0586
-0.0795
-0.056
-2.11
-12.25
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 ($/ton)*
COMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
Crude oil ($/bbl.)

Heating oil ($/gal.)
RBOB gasoline ($/gal.)
Natural gas ($/mmBtu)
Brent crude ($/bbl.)
Gas oil ($/ton)
NYMEX
NYMEX
NYMEX
NYMEX
ICE-EU
ICE-EU
418.25
1,067.00
607.50
158.250
3,023
187.40
16.27
67.18
374
2,029
2,077
-1.17%
0.10%
-0.24
-0.07
0.50
-4.33
2.19
0.93
0.34
unch.
-0.66
Year
low
367.00
951.25
478.25
138.575
2,671
128.75
11.91
57.95
340
1,857
1,685
0.62
0.87
0.71
1.21
1.62
-2.70
56.75
1.9384
1.9795
3.2000
64.42
584.25
-4.63
-3.29
-4.27
-2.09
-3.51
-2.27
AMERICAS
Per euro
9.5626
0.1046
8.8399
0.1131
3.3355
0.2998
3.0834
0.3243
Canada dollar
1.3529
0.7392
1.2510
0.7994
661.81
0.001511
611.80
0.001635
2697.00 0.0003708
2492.93
0.0004011
Ecuador US dollar-f
1.0817
0.9245
Mexico peso-a
16.1315
0.0620
14.9137
0.0671
Peru sol
3.3513
0.2984
3.0980
0.3228
Uruguay peso-e
27.909
0.0358
25.800
0.0388
U.S. dollar
1.0817
0.9245
6.81
0.146880
6.29
0.158888
Venezuela bolivar
Australia dollar
1.4027
0.7129
1.2968
China yuan
6.7105
0.1490
6.2034
0.1612
Hong Kong dollar
8.3830
0.1193
7.7506
0.1290
67.2920
0.0149
62.2120
0.0161
India rupee
Indonesia rupiah
14012 0.0000714
129.75
0.007708
119.95
0.008337
200.43
0.004990
185.73
0.005384
Macau pataca
8.6372
0.1158
7.9852
0.1252
Malaysia ringgit-c
3.9255
0.2547
3.6292
0.2755
New Zealand dollar
1.4276
0.7004
1.3200
0.7576
Pakistan rupee
110.225
0.0091
101.895
0.0098
Philippines peso
48.129
0.0208
44.460
0.0225
1.4654
Singapore dollar
South Korea won
WSJ.com>>
Close
ASIA-PACIFIC
DJ Asia-Pacific TSM
1561.62
22.02
Australia
SPX/ASX 200
5960.70
34.70
China
Shanghai Composite
3994.81
33.43
Net change
26236.86
S&P BSE Sensex

Jakarta Composite
5486.58
-36.71
Japan
Nikkei Stock Average
19789.81
149.27
Topix
1588.47
9.92
Malaysia
Kuala Lumpur Composite
1850.31
-6.20
New Zealand
NZSX-50
5859.72
4.28
Pakistan
KSE 100
31887.30
286.57
Philippines
PSEi
8052.69
-45.99
Singapore
Straits Times
3460.68
-4.94
South Korea
Kospi
2059.26
12.23
Taiwan
Weighted
9571.97
-69.93
Thailand
SET
1544.86
-4.67
EUROPE
Stoxx Europe 600
404.66
0.32
Stoxx Europe 50
3500.29
2.16
S&P Dow Jones Indices

2.30% 20.29
2.80 17.43
2.85 16.24
2.25 16.46
2.20 17.00
3.05 21.70
2.70 15.30
3.08 12.19
3.08 10.97
2.37 12.80
2.58 11.80
1.26 21.62
Last
Global TSM
Global DOW
Global Titans 50
Asia/Pacific TSM
S&P BMI Asia Pac Emg Mkts
Dev Europe TSM
S&P BMI Emg Markets
Asian Titans 50
BRIC 50
S&P BMI China
China Offshore 50
Shanghai -c
3441.47 21.99
2576.24 15.40
240.28
0.64
1562.42 22.82
182.99
2.07
3314.60
6.15
266.14
5.16
156.55
2.36
539.95 16.69
533.82 29.18
5020.16 216.96
540.35
3.28
0.59
0.84
3.80
191.16
Indonesia
Net
change
1.43%
961.22
28707.75
Price-toDividend earnings
yield*
ratio* S&P Dow Jones Index
PERFORMANCE
Percentage change
Yr.-to-date
PREVIOUS SESSION
Index
India
U.S.
Australia
Britain
Canada
China
Euro
Hong Kong
India
Indonesia
Japan
New Zealand
South Korea
Malaysia
Philippines
Singapore
Switzerland
Taiwan
Thailand
US$
0.771
1.492
0.799
0.1612
1.082
0.129
0.0161
0.0001
0.008
0.758
0.0009
0.276
0.022
0.738
1.038
0.032
0.031
1.3549
0.7381
1094.64
0.0009135
143.87 0.0069507
133.01
0.0075182
Taiwan dollar
33.636
0.02973
31.097
0.03216
Thailand baht
35.240
0.02838
32.580
0.03069
1.935
1.037
0.209
1.403
0.167
0.0208
0.0001
1.081
0.983
0.0012
0.357
0.029
0.957
1.346
0.042
0.040
0.670
0.517
0.536
0.108
0.725
0.086
0.0108
0.0001
0.006
0.508
0.0006
0.185
0.015
0.495
0.696
0.022
0.021
C$
1.251
0.965
1.867
0.202
1.353
0.161
0.0201
0.0001
0.010
0.948
0.0011
0.345
0.028
0.923
1.298
0.040
0.038
1.956
0.5113
1.8081
0.5531
Croatia kuna
7.602
0.1315
7.029
0.1423
0.9245
1.0817
27.406
0.0365
25.334
0.0395
Euro zone euro

Czech Rep. koruna-b
Denmark krone
7.4728
0.1338
6.9082
0.1448
Hungary forint
297.48
0.003363
274.88
0.003638
Iceland krona
147.49
0.006780
136.36
0.007334
Norway krone
8.6945
0.1150
8.0377
0.1244
Poland zloty
4.0142
0.2491
3.7108
0.2695
0.01868
Russia ruble-d
57.913
0.01727
53.541
Sweden krona
9.3503
0.1069
8.6440
0.1157
Switzerland franc
1.0422
0.9596
0.9633
1.0381
Turkey lira
Ukraine hryvnia
2.7981
0.3573
2.5870
0.3865
25.3809
0.0394
23.5150
0.0425
0.7249
1.3796
0.6701
1.4924
2.6523
U.K. pound
MIDDLE EAST/AFRICA
Bahrain dinar
0.4079
2.4519
0.3770
Egypt pound-a
8.2551
0.1211
7.6312
0.1310
Israel shekel
4.2542
0.2350
3.9331
0.2543
Kuwait dinar
0.3255
3.0722
0.3009
3.3231
Oman sul rial
0.4163
2.4019
0.3849
2.5980
Qatar rial
3.938
0.2539
3.641
0.2747
Saudi Arabia riyal
4.0576
0.2465
3.7510
0.2666
South Africa rand
12.7644
0.0783
11.8005
0.0847
3.9733
0.2517
3.6730
0.2723
United Arab dirham
-0.66%
0.76
0.07
0.91
-0.57
-0.14
0.60
-0.73
-0.30
Daily
0.64%
0.60
0.27
1.48
1.14
0.19
1.98
1.53
3.19
5.78
4.52
0.61
4.4%
3.0
0.7
9.6
9.7
6.3
6.7
10.1
9.5
15.2
11.4
25.7
5.3%
2.4
2.6
9.5
7.4
-4.9
3.2
6.6
8.5
22.9
23.9
95.8
10.2%
9.7
8.1
7.0
6.7
9.7
0.6
5.9
-1.0
9.9
9.0
23.8
Euro Stoxx
Euro Stoxx 50
YUAN
6.203
4.783
9.258
4.959
6.711
0.800
0.0997
0.0005
0.052
4.700
0.0057
1.709
0.139
4.579
6.440
0.200
0.190
EURO
0.925
0.713
1.380
0.739
0.149
0.119
0.0149
0.0001
0.008
0.700
0.0008
0.255
0.021
0.682
0.960
0.030
0.028
HK$
7.751
5.976
11.566
6.196
1.249
8.383
0.1246
0.0006
0.065
5.872
0.0071
2.135
0.174
5.721
8.046
0.249
0.238
RUPEE
62.212
47.972
92.842
49.736
10.029
67.292
8.027
0.0048
0.519
47.132
0.0568
17.142
1.399
45.920
64.582
2.001
1.910
-26.09
874.21
2.60
14.9
9134.47
10.33
26.5
France
CAC-40
5136.86
-14.33
5.0
11.5
Germany
DAX
12035.86
-87.66
13.4
38.4
Italy
FTSE MIB
23578.70
-127.64
AEX
497.16
-5.87
11.1
38.1
Netherlands
5.1
-0.3
Russia
RTSI
988.30
17.06
5.2
15.6
Spain
IBEX 35
11655.5
-75.00
-0.8
10.2
Switzerland
SMI
9247.82
-12.93
11.4
22.2
Turkey
BIST 100
82799.38
333.49
6937.41
-24.36
514.09
1.68
2.8
7.8
U.K.
FTSE 100
7.5
3.0
AMERICAS
DJ Americas
2.8
7.2
Brazil
Bovespa
54240.49
511.33
3.2
11.8
Argentina
Merval
11396.65
-13.41
Mexico
IPC
45081.89
94.02
yield*
ratio* S&P Dow Jones Index
90.870
0.1096
33.050
2.696
88.528
124.520
3.857
3.682
3742.63
OMX Copenhagen
0.06
108.00
9814.00
11.83
3569.38
291.36
9561.56
13447.53
419.58
397.61
-1.77
OMX Helsinki
21.2
YEN
119.946
92.490
178.980
95.898
19.336
129.750
15.476
1.9281
0.0093
383.61
Denmark
19.7
RUPIAH
12954.00
9988.83
19331.90
10355.33
2088.21
14011.69
1671.39
208.22
Net change
Finland
18.1
3.75 28.75
Euro Zone
0.0012
0.364
0.030
0.974
1.370
0.042
0.041
WON
1094.64
844.08
1633.59
875.12
176.46
1184.02
141.23
17.60
0.08
9.13
829.30
301.62
24.60
807.91
1136.34
35.20
33.60
52-wk.
-0.46%
20.0%
18.5%
-0.69
18.9
17.8
0.30%
29.5
39.2
0.11
17.7
23.1
20.2
16.1
-0.72
22.7
26.8
-0.54
24.0
8.8
17.1
23.5
25.0
-17.3
13.4
11.2
-0.28
-1.17
1.76
-0.64
-0.14
0.40
-0.35
2.9
9.8
-3.4
12.0
5.7
5.3
1.4
9.9
0.33
0.95
-0.12
0.21
8.5
5.1
32.8
75.7
4.5
10.2
European and Americas index data are as of 12:00 p.m. ET. Sources: SIX Financial Information; WSJ Market Data Group
Last
Shenzhen -c
610.63
U.S. TSM
21887.38
Global Select Div
243.02
Asia/Pacific Select Div 309.47
Hong Kong Select Div -c 203.75
U.S. Select Dividend -d 1423.28
Islamic Market
2983.10
Islamic Market 100
3282.80
Islamic China/HK Titans 30 2062.60
Sustainability Korea -c 1428.42
Brookfield Infrastructure 3587.95
DJ Commodity
552.29
NZ$
1.320
1.018
1.970
1.055
0.213
1.428
0.170
0.0212
0.0001
0.011
PERFORMANCE
Percentage change
Yr.-to-date
PREVIOUS SESSION
89.8
16.5
1.98 21.22
2.31 18.79
2.08 12.98
Close
23.5
0.08
0.68%39.04
1.89 22.18
6.10 14.33
6.98 13.73
Index
9.1
12.9
0.63
-0.33
9.4%
Region/Country
10.2
4.4
0.67
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
9.5%
52-wk.
Net
change
-3.45
99.82
1.45
5.08
3.07
-1.00
17.49
17.40
54.13
9.19
22.11
-3.07
Daily
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
-0.56% 40.0% 86.2%

0.46
2.2
11.3
0.60
1.5
-6.3
1.67
-0.1 -10.7
1.53
4.5
3.5
-0.07
-0.3
10.6
0.59
4.2
7.1
0.53
3.1
8.0
2.70
19.1
21.0
0.65
3.7
-0.8
0.62
0.3
6.7
-0.55
-1.5 -24.7
23.9%
14.7
5.1
-0.6
1.6
16.2
9.6
10.7
8.5
-3.0
11.4
-10.5
Source: S&P Dow Jones Indices
U.S.-dollar and euro foreign-exchange rates in global trading

A$
1.297
Per euro
Bulgaria lev
a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate.
Source: Tullett Prebon
*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET.
Cross rates
0.6824
1184.02 0.0008445
In euros
Stock indexes from around the world, grouped by region. Shown in local-currency terms.
Region/Country
Hang Seng
EUROPE
12954 0.0000772
Japan yen
Per
In
U.S. dollar
U.S. dollars
Per
In
In euros
U.S. dollar
U.S. dollars
Per euro
0.7711
Kazakhstan tenge
Sri Lanka rupee
Hong Kong
In
U.S. dollars
ASIA-PACIFIC
Sources: SIX Financial Information; WSJ Market Data Group
Major stock market indexes
Per
U.S. dollar
Argentina peso-a
Colombia peso
44.03
1.5550
1.5188
2.5830
50.10
462.75
Follow the markets throughout the day with updated stock quotes, news and commentary at at
WSJ.com. Also, receive email alerts that summarize the days trading in Europe and Asia. To sign
up, go to WSJ.com/Email
In euros
Brazil real
Chile peso
2.9145
2.4200
1,309.00 1,142.40
18.535
15.260
1,889.50 1,746.50
19,750.00 16,400.00
6,247.00 5,369.00
1,894.00 1,698.00
2,196.50 2,005.00
15,540
12,425
-1.07
-0.53
-2.20
London close on April 8
RINGGIT PH. PESO

3.629
44.460
2.799
34.283
5.416
66.403
2.901
35.544
0.585
7.173
3.926
48.129
0.468
5.741
0.0583
0.7147
0.0003
0.0034
3.025
0.371
2.749
33.687
0.0033
0.0406
12.260
0.082
2.679
32.841
3.767
46.154
0.117
1.431
0.111
1.366
S$ S FRANC
1.355
0.963
1.045
0.743
2.022
1.438
1.083
0.770
0.218
0.155
1.465
1.042
0.175
0.124
0.0218
0.0155
0.0001
0.0001
1.130
0.0080
1.027
0.730
0.0012
0.0009
0.373
0.265
0.030
0.022
0.711
1.406
0.044
0.031
0.042
0.030
TW$
31.097
23.979
46.408
24.861
5.013
33.636
4.012
0.4999
0.0024
0.259
23.559
0.0284
8.569
0.699
22.953
32.282
0.954
BAHT
32.580
25.122
48.621
26.046
5.252
35.240
4.204
0.5237
0.0025
27.162
24.683
0.0298
8.977
0.732
24.048
33.821
1.048
Source: Tullett Prebon
MSCI indexes
Developed and emerging-market regional and country indexes
from MSCI as of April. 08, 2015
yield
ratio MSCI Index
2.40% 18
MSCI ACWI
LOCAL-CURRENCY
Last
431.32
PERFORMANCE
Daily
YTD
0.01%
3.4%
52-wk.
4.9%
5.4
2.40
19
World (Developed Markets) 1,764.24
0.01
3.2
1.80
25
World Small Cap
337.14
0.40
5.2
3.1
2.40
19
Kokusai (World ex-Japan) 1,774.64
0.03
2.5
4.8
2.90
18
EAFE
1,895.36
-0.24
6.8
-1.1
2.60
13
Emerging Markets (EM)
1,006.26 -0.04
5.2
1.2
2.90
14
AC ASIA PACIFIC EX-JAPAN 494.14
-0.21
5.8
5.1
2.50
13
AC Far East ex-Japan
564.63
-0.17
6.6
9.2
1.70
17
Japan
970.69
1.24
12.0
31.4
2.80
11
China
73.35
0.00
11.1
23.4
1.30
20
China A (China Domestic)
4,234.77
2.21
25.3
97.5
2.70
13
Hong Kong
14,504.78
0.00
6.3
12.7
1.30
20
India
1,083.91
0.29
6.7
27.4
1.40
11
Korea
562.18
0.02
4.8
-2.5
3.10
17
Malaysia
646.54
0.74
4.9
-1.8
3.40
14
Singapore
1,808.32
0.32
2.1
8.0
2.80
15
Taiwan
355.12
0.31
3.5
13.6
2.80
17
Thailand
541.38
1.31
3.7
11.8
4.40
16
Australia
1,212.81
0.53
9.7
9.8
4.30
20
New Zealand
114.40
0.26
0.8
0.1
1.90
21
US BROAD MARKET
2,367.62
0.27
1.7
10.7
3.10
19
EUROPE
137.69
1.88
18.0
21.0
Source: MSCI
SCANNING THE GLOBE

Dow Jones Industrial Average
Nasdaq Composite Index
P/E: 16
s 42.24, or 0.24%
LAST: 17917.66
YEAR TO DATE:
OVER 52 WEEKS
s 94.59, or 0.5%
s 1,480.48, or 9.0%
High
Close
Low
50day
moving average
16
23
30
6
Feb.
13
20
27
Mar.
13
20
27
P/E: 20
s 6.24, or 0.30%
LAST: 2082.57
YEAR TO DATE:
OVER 52 WEEKS
s 213.03, or 4.5%
s 765.18, or 18.3%
s 23.67, or 1.1%
s 210.39, or 11.2%
18500
5050
2200
18000
4900
2100
17500
4750
2000
17000
4600
1900
16500
4450
1800
16000
9
S&P 500 Index
P/E: 23*
s 38.85, or 0.79%
LAST: 4949.08
YEAR TO DATE:
OVER 52 WEEKS
4300
2
Apr.
16
23
30
6
Feb.
13
20
27
Mar.
13
20
27
1700
2
Apr.
16
23
30
6
Feb.
13
20
27
*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months
Stock
Volume,
in millions
Symbol
Latest
CHANGE
Points
Percentage
AmExpress
Apple
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
AXP
AAPL
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
3.4
21.9
1.3
2.2
3.6
10.3
3.5
1.9
1.1
7.5
9.5
0.8
1.6
8.6
1.1
5.0
3.1
1.9
5.9
11.9
1.3
10.9
3.3
0.7
0.7
1.1
0.9
8.6
2.7
$78.65
125.76
153.15
80.39
106.81
27.52
40.77
106.51
71.56
84.33
25.00
193.25
115.44
31.34
162.10
61.13
100.26
96.41
57.60
41.25
100.69
34.66
82.61
166.08
107.30
117.66
118.31
49.23
66.69
0.32
0.25
0.83
0.15
1.73
0.13
0.24
1.07
0.11
1.42
0.02
0.86
1.14
0.07
0.03
0.28
0.16
0.06
0.17
0.28
1.08
0.12
0.22
0.13
0.04
0.17
0.96
0.51
0.89
0.41%
0.20
0.54
0.19
1.59
0.49
0.59
1.02
0.15
1.66
0.08
0.45
1.00
0.24
0.02
0.45
0.16
0.06
0.30
0.67
1.08
0.35
0.27
0.08
0.04
0.14
0.82
1.05
1.36
WalMart
WMT
3.6
80.95
0.45
0.56
13
20
27
2
Apr.
Sources: WSJ Market Data Group; Birinyi Associates
U.S. stocks: most active...
DJIA component stocks
Mar.
Stock
Volume,
Symbol in millions
VelocityShares3x
RiteAid
BankAm
SPDR S&P 500
iShMSCIEmgMarkets
PetrlBra ADS
iShChinaLarge-Cap
Mylan
Apple
ProSharesUltVIXST
Alcoa
AlibabaGroupADS
PSUltBloombergCrd
BrcliPathVIX ShFut
VelocityShares3xLg
UWTI
RAD
BAC
SPY
EEM
PBR
FXI
MYL
AAPL
UVXY
AA
BABA
UCO
VXX
UGAZ
ADRs of Asian companies*

CHANGE
Points
Percentage
Latest
49.4
47.9
42.8
37.1
34.8
34.2
32.6
28.9
21.9
19.2
17.6
17.6
17.3
16.7
15.5
$2.61
8.92
15.70
207.93
42.40
7.00
49.20
67.24
125.76
13.37
13.60
85.07
7.73
24.12
2.21
0.48
0.23
0.23
0.65
0.84
0.09
2.83
7.67
0.25
0.35
0.17
2.86
0.89
0.33
0.10
15.54%
2.65
1.52
0.31
2.02
1.38
6.10
12.87
0.20
2.57
1.27
3.48
10.34
1.35
4.33
44.2
8,125.9
494.9
3.1
668.7
$5.51
3.21
11.79
2.61
20.05
2.39
1.17
2.18
0.40
2.96
76.60%
56.83
22.68
18.10
17.32
YANG 1,081.7
UWTI 49,433.8
FLML 1,231.3
FXP
148.6
PSTR 1,244.0
$6.25
2.61
16.54
28.78
3.90
1.40
0.48
2.34
3.99
0.45
18.30%
15.54
12.39
12.18
10.34
52-WEEK
High
Low
$25.32 $19.39
251.99 147.23
13.24
8.31
69.74 40.74
71.66 44.48
30.50
15.16
6.72
5.13
73.91 42.92
121.00 64.92
6.03
3.63
11.88
2.33
11.00
1.04
37.27 25.03
63.97 39.27
29.59
15.93
12.17
7.26
5.97
1.51
18.20
12.79
15.48
8.85
5.55
3.79
11.62
4.88
18.43 13.08
36.02
28.61
11.79
2.44
52.61
36.11
9.17
6.30
51.80
35.71
202.33 124.16
8.12
5.47
150.80 101.64
Biggest gainers...
KngtnWrlsSltn
AirMediaGpADS
Yanzhou ADS
ChinaYidaHolding
Zep
KONE
AMCN
YZC
CNYD
ZEP
...Biggest losers
DirexionChBear3X
VelocityShares3x
FlamlTch ADS
ProShXinhuaChina25
PostRockEnergy
Volume,
Symbol in OOOs
Stock
TaiwanSemi
Baidu ADS
ICICI Bk ADS
CtripInt ADS
ChinaMobile
SiliconMotionADS
MitsuUFJ ADS
BHPBillitonADS
NeteaseADS
AU Optrncs
ChinaFinOnADS
GeneticTechsADS
InfosysADS
HDFC Bnk
SonyADS
Yanzhou ADS
Novogen ADS
ChinaUnicomADS
AluCpChina
SemiMfgInt ADS
KongzhongADS
LGDisplayADS
HondaMtr ADS
VimicroIntlADS
ShinhanFinADS
SiliconwareADS
TataMtrs ADS
Cnooc ADS
AdvSemiEnggADS
PtroChna ADS
TSM
BIDU
IBN
CTRP
CHL
SIMO
MTU
BHP
NTES
AUO
JRJC
GENE
INFY
HDB
SNE
YZC
NVGN
CHU
ACH
SMI
KZ
LPL
HMC
VIMC
SHG
SPIL
TTM
CEO
ASX
PTR
CHANGE
Latest Points Percentage
4,585.7
3,373.2
2,887.6
2,303.9
1,323.9
1,111.0
1,003.3
992.4
842.6
738.8
724.6
720.6
716.4
706.7
639.4
600.7
553.3
550.1
395.3
392.3
353.5
340.3
326.2
316.4
291.7
284.6
276.0
267.6
264.4
251.2
$23.25
212.60
10.51
63.27
71.50
29.70
6.60
46.74
117.20
4.80
5.01
4.30
35.70
60.05
29.42
11.81
4.58
17.85
15.43
5.54
6.02
14.12
33.81
9.13
36.13
8.19
45.55
155.59
7.07
124.00
0.14
8.73
0.08
2.06
4.83
1.96
0.02
0.02
5.20
0.03
0.24
0.10
0.63
0.05
0.45
2.20
0.38
0.85
1.60
0.53
0.40
0.03
0.05
0.52
0.53
...
0.34
7.04
0.06
8.26
0.62%
4.28
0.72
3.37
7.24
7.07
0.30
0.05
4.64
0.62
5.03
2.27
1.80
0.08
1.55
22.90
9.05
5.00
11.57
10.58
7.12
0.21
0.15
6.04
1.44
...
0.74
4.74
0.91
7.14
*Most active American depositary receipts tracked by Dow Jones

Source: WSJ Market Data Group
Global government bonds
Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
and 10-year government bonds around the world. Data as of 12 p.m. ET
Country/
Maturity, in years
Yield
SPREAD OVER TREASURYS, in basis points

Latest
Previous
Month Ago
Year ago
Previous
YIELD
Month ago
Year ago
6.000
Australia 2
1.793
126.9
128.4
119.8
226.8
1.804
1.925
2.667
3.250
10
2.338
42.5
47.2
40.4
141.1
2.360
2.649
4.094
Belgium 2
-0.192
-71.6
-70.6
-86.8
-12.3
-0.186
-0.141
0.276
10
0.343
-157.0
-153.7
-171.7
-49.5
0.352
0.529
2.188
0.250
France 2
-0.179
-70.3
-68.5
-85.3
-12.8
-0.165
-0.126
0.271
0.500
10
0.447
-146.6
-141.9
-154.6
-61.7
0.470
0.699
2.066
0.000
Germany 2
-0.275
-79.9
-77.7
-92.7
-22.4
-0.257
-0.200
0.175
0.500
10
0.161
-175.2
-172.9
-189.4
-112.2
0.159
0.351
1.561
1.500
Italy 2
0.084
-44.0
-43.2
-54.7
35.2
0.088
0.181
0.751
3.750
10
1.206
-70.8
-69.8
-92.9
54.0
1.191
1.316
3.223
0.100
Japan 2
0.019
-50.5
-49.9
-71.8
-31.3
0.021
0.009
0.086
0.400
10
0.360
-155.3
-152.7
-186.0
-206.3
0.361
0.385
0.620
2.500
Netherlands 2
-0.221
-74.4
-71.3
-86.6
-15.9
-0.193
-0.139
0.240
2.000
10
0.251
-166.2
-161.2
-179.5
-77.6
0.277
0.450
1.907
4.200
Portugal 2
-0.010
-53.4
-51.1
-54.1
76.4
0.009
0.187
1.162
4
3
One year ago
3.500
2.600
5%
2
s
Coupon
U.S. Treasury yield curve
The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.
Tuesday
month(s)
2 3 5 710
years
maturity
30
1
0
Month
to-date
TOTAL RETURN
Ryan Index
Yield to
maturity
Modified
duration
Quarter
to-date
30-year Treasury
10-year Treasury
7 Year Treasury
Five-year Treasury
Ryan Index
3 Year Treasury
Two-year Treasury
1 Year Treasury
Six-month Treasury
Ryan Cash Index-a
Three-month bill
2.529%
1.893
1.667
1.328
1.467
0.865
0.522
0.214
0.102
0.088
0.020
20.85
8.89
6.55
4.80
7.67
2.96
1.97
0.98
0.50
0.45
0.25
0.30 %
0.36
0.31
0.25
0.25
0.15
0.08
0.05
0.03
0.02
0.01
0.30 %
0.36
0.31
0.25
0.25
0.15
0.08
0.05
0.03
0.02
0.01
5.49 %
3.03
2.69
2.08
2.55
1.19
0.63
0.22
0.10
0.09
0.03
26.50 %
10.33
7.29
4.33
8.42
2.24
1.15
0.43
0.21
0.18
0.06
One-month bill
0.015
0.08
...
...
0.01
0.02
a-Performance of a cash investment
Year
to-date 12-month
Source: Ryan ALM
Key money rates

Latest
Latest
52 wks ago
Prime rates
Euro Libor
One month
-0.02857%
52 wks ago
0.21857%
U.S.
3.25%
3.25%
2.85
3.00
Three month
0.00857
0.29000
Offer
Eurodollars
One month
Three month
Bid
0.2300%
0.1300%
0.3000
0.2000
2.875
10
1.611
-30.3
-26.3
-49.3
122.4
1.626
1.752
3.907
Canada
3.800
Spain 2
0.069
-45.5
-45.0
-58.8
20.5
0.070
0.140
0.604
Japan
1.475
1.475
Six month
0.06929
0.38986
Six month
0.3900
0.2900
Britain
0.50
0.50
One year
0.19500
0.55100
One year
0.6500
0.5500
1.600
10
1.196
-71.8
-71.0
-95.9
52.4
1.178
1.286
3.207
ECB
0.05
0.25
3.750
Sweden 2
-0.334
-85.8
-85.3
-86.4
22.6
-0.333
-0.136
0.625
Switzerland
0.50
0.50
Euribor
One month
-0.02100%
0.25100%
Australia
2.25
2.50
Three month
0.01600
0.32700
U.S. discount
0.75%
0.75%
2.500
10
0.380
-153.4
-148.2
-141.5
-57.2
0.406
0.831
2.111
Hong Kong
5.00
5.00
Six month
0.08500
0.42600
Fed-funds target
0.00
0.00
1.000
U.K. 2
0.578
5.4
4.5
-32.3
25.8
0.565
0.404
0.657
One year
0.19500
0.59900
Call money
2.00
2.00
Overnight repurchase rates

U.S.
0.21%
2.750
10
1.608
-30.6
-29.5
-27.0
1.3
1.593
1.975
2.696
0.500
U.S. 2
0.524
...
...
...
...
0.520
0.727
0.399
2.000
10
1.914
...
...
...
...
1.888
2.245
2.683
Libor
One month
Hibor
One month
0.18015%
0.15040%
0.23643%
0.20929%
Three month
0.27375
0.22730
Three month
0.38643
0.37500
Six month
0.39840
0.32650
Six month
0.53643
0.55032
One year
0.68560
0.55300
One year
0.84000
0.86571
Latest
Euro zone
n.a.
52 wks ago
0.08%
n.a.
Sources: WSJ Market Data Group, SIX Financial Information, Tullett
MARKETS LINEUP
Moving the
markets
Asian index movers
At right, Japans benchmark stock index

and the biggest movers among the
larger Asian stocks indexes and stocks
Wednesday. Below each index are its
most actively traded stocks. The charts
show the percentage change in each
indexs or stocks value, rather than the
point change, for purposes of comparison. The index level or stock price is
indicated on each axis. All indexes and
stocks are shown in local currency terms.
Nikkei Stock Average
Japan
19789.81
0.76% or 149.27
Buying in large-cap shares such as

Aeon and Takashimaya pushed the
market higher. There was little reaction
to the BOJs decision to stand pat.
Follow the markets throughout the

day, with updated stock quotes, news
and commentary at WSJ.com.
Also, receive emails that summarize
the days trading in Europe and Asia.
To sign up, go to WSJ.com/Email.
Volume
in millions
Close
137.77
215
MitsuUFJFin
74.94
Unitika
44.18
Toshiba
NipponStl&SmtmoMtl
Stock
Mizuho Fin
Hong Kong
26236.86
3.80% or 961.22
A record level of funds flowed into the

market through the trading link opened
with Shanghai last year. Hong Kong Exchanges & Clearing climbed 12%.
Shanghai Composite
China
3994.81
0.84% or 33.43
The index rose for the fifth consecutive

session but concerns are growing over
how sustainable the rally will be in the
coming days.
S&P BSE Sensex

India
28707.75
0.67% or 191.16
Stocks extended gains for the fourth

straight session as banks cut lending
rates, raising hopes of a faster economic revival. Coal India jumped 5.7%.
24000
36000
4500
36000
20000
30000
3750
30000
16000
24000
3000
24000
12000
18000
2250
18000
8000
A M J J A S O N D J F M
2014
2015
WSJ.com>>
Hang Seng
Change
Net
Volume
in millions
Close
ChinaConstructnBk 738.46
6.89
Stock
12000
2014
2015
-0.4
0.19
794
0.76
BankofChina
709.72
56
unch.
Ind&Comml
662.90
33.88
486
-7
1.40
PetroChina
297.80
31.25
302
-0.2
0.07
ChinaPetro&Chem 266.00
2014
2015
Change
Net
Stock
1500
Volume
in millions
Close
Change
Net
6.74
0.08
1.20
2014
2015
Stock
12000
Volume
in millions
Close
9.91
273.90
1.85
0.68
0.37
StateBankofIndia
Change
Net
0.33
5.03
ChnPetro&Chem 1155.81
4.84
0.22
4.76
GDPowerDevelopment 818.30
4.51
0.05
1.10
ICICIBank
8.33
316.21
-1.19
6.05
0.20
3.42
ChinaMinshengBkA 765.07
10.12
0.18
1.81
ITC
8.25
344.72
4.12
1.21
9.32
0.57
6.51
CITICSecuritiesA
757.55
36.08
1.45
4.19
TataSteel
6.28
336.10
2.60
0.78
6.41
0.18
2.89
InnerMongoliaBaot 656.54
6.07
0.06
1.00
HindalcoIndustries
6.18
137.95
1.00
0.73
Asian stocks in the news

Coal India Ltd.
India
China Life Insurance Co. Ltd. Fortescue Metals Group Ltd. S-Oil Corp.
380.00 rupee Hong Kong
s 5.7% or 20.60 rupee
HK$37.35
s 6.9% or HK$2.40
India's coal ministry removed a limit on

the sales the company can conduct
through e-auctions.
The company is helping to fund a $500

million real-estate project at Boston's
Pier 4.
In rupee
In Hong Kong dollars
A M J
2014
600
J A S O N D
-0.8%
5.7%
In Australian dollars
HK$220.00
s 12.2% or HK$24.00
Refinery stocks rose after the price of

U.S. crude oil approached 2015 highs.
Regulators relaxed rules for mainland

buying of Hong Kong stocks and
triggered a surge of buying.
In won
In Hong Kong dollars
100000
300
80000
240
360
30
60000
180
240
20
40000
120
120
-5.8%
34.1%
SM Prime Holdings Inc.
Philippines
50
72,400 won Hong Kong
s 8.9% or 5,900 won
17
N.A.
5.4
2.1%
4.7%
A recovery in iron-ore and oil prices

helped lift resources stocks.
Korea
40
A M J
2014
A S O N D J F M
2015
Price-to-earnings ratio
Earnings per share, past four quarters
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Basic Materials
Coal India Ltd.
A$1.94
s 8.1% or A$0.14
480
J F M
2015
Dividend yield
Australia
Hong Kong Exchanges & Clearing
20.60 peso
t 2.1% or 0.45 peso
10
26
N.A.
1.0
A M J
2014
A S
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
China Life Insurance Co. Ltd.
-0.2%
6.9%
0.9%
7.5%
8.4%
71.7%
O N D J F M
2015
4
N.A.
3.1
4,040
t 2.2% or 90.50
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Basic Materials
Fortescue Metals Group Ltd.
-0.8%
8.1%
2.1%
2.4%
-5.8%
-65.3%
Fuji Heavy Industries Ltd. Banpu PCL
Japan
2014
2015
Thailand
30.75 baht
t 2.4% or 0.75 baht
20000
N.A.
N.A.
0.4
A M J
2014
A S O N D J F M
2015
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Oil & Gas

S-Oil Corp.
-0.8%
8.9%
2.1%
8.6%
-18.3%
16.4%
60
50
N.A.
2.0
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
Hong Kong Exchanges & Clearing
-0.2% 0.9%
12.2% 12.5%
8.4%
73.6%
Noble Group Ltd.
Catcher Technology Co. Ltd.
Singapore
S$0.91 Taiwan
TW$350.00
t 2.7% or S$0.03
t 2.9% or TW$10.50
The mall operator fell amid broad-based

selling ahead of a holiday on Thursday.
UBS issued a negative report on the firm,

which makes Subaru cars.
The coal miner fell after seven sessions

of gains.
The commodity trader said it secured a

revolving loan of $2.25 billion from
several banks.
The maker of cases for iPhones fell back

after rising 7% Tuesday, buoyed by
strong quarterly sales.
in peso
In yen
In baht
In Singapore dollars
In Taiwan dollars
A M J
2014
30
J A S
O N D J F M
2015
Dividend yield
6250
-0.2%
-2.1%
500
5000
40
1.60
400
18
3750
30
1.20
300
12
2500
20
0.80
200
31
N.A.
0.9
0.9%
2.5%
2.00
24
A M J
2014
J A S O N D J F M
2015
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
SM Prime Holdings Inc.
50
8.4%
32.9%
1250
15
N.A.
1.5
A M J
2014
J A S O N D J F M
2015
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Consumer Goods
Fuji Heavy Industries Ltd.
-0.3%
-2.2%
1.7%
2.2%
12.9%
44.5%
10
30
N.A.
4.6
A M J
2014
J A S O N D J F M
2015
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Basic Materials
Banpu PCL
-0.8%
-2.4%
2.1%
2.5%
-5.8%
11.8%
0.40
46
N.A.
1.1
A M J
2014
J A S O N D J F M
2015
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Industrials
Noble Group Ltd.
-0.5% 1.5%
-2.7% -0.6%
8.3%
-28.9%
100
15
N.A.
1.4
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Industrials
Catcher Technology Co. Ltd.
-0.5%
-2.9%
1.5%
3.9%
8.3%
55.2%
Email: heard@wsj.com
HEARD ON THE STREET

FINANCIAL ANALYSIS & COMMENTARY
WSJ.com/Heard
Hong Kong Gets Mainland Market Mojo

Mainland Chinas stock-market
fever is finally infecting Hong Kong.
The citys investors may find they
dont like everything their mainland
counterparts bring with them.
Hong Kong staged a blistering
rally Wednesday, with the benchmark Hang Seng Index rising nearly
4%. Volume was an immense 250
billion Hong Kong dollars (US$32.25
billion), three times the average
daily volume over the past year and
nearly 20% more than the previous
record volume day in October 2007,
at the height of the pre-financialcrisis bubble.
Leading the charge were mainland investors, who used up their
daily 10.5 billion yuan ($1.7 billion)
quota to invest in Hong Kong shares
through the Shanghai-Hong Kong
Stock Connect for the first time
since the program was launched in
November.
There were several causes for
the surge in cash leaving the mainland for Hong Kong. Most notably,
Chinas securities regulator an-
nounced at the end of March that

mutual funds could access Stock
Connect, which was previously limited to wealthy individual investors.
More broadly, mainland investors may suddenly see Hong Kongs
stocks as bargains now that their
hometown shares have risen so
high. Before Wednesday, shares of
Hong Kong staged a

blistering rally
Wednesday, with the
benchmark Hang Seng
Index rising nearly 4%.
the exact same company that are
dual listed in Hong Kong and Shanghai were trading at an average premium of nearly 35% in Shanghai.
Winners Wednesday included companies that trade at a big discount
in Hong Kong, such as the major
Chinese banks.
This shows Stock Connect is
starting to work as intended, allowing arbitrage between Chinese and
Hong Kong listings in a way that
should make for more rational pricing between the two markets over
time.
But its not just arbitrage. Names
that Chinese investors dont have
access to also popped, including
bad-debt manager China Cinda Asset Management, up 12%, and
Macau casino operators such as
Sands China, up 7%.
There were also pockets of speculative fervor that should worry investors. The best performers were
technology stocks, including two little-known tech companies, Computime Group and NetDragon Websoft, which rose 44% and 35%,
respectively.
It was the exchange operator itself, Hong Kong Exchanges &
Clearing, that was the most heavily
traded stock Wednesday, up 12%.
Increasing use of the Stock Con-
Apples Watch and the Tickbait Effect
It isnt clear how many people

will line up to buy the pricey Apple
Watch. But the ultramodern device
may help the technology giant with a
rather old-fashion concern: getting
more shoppers into its stores.
On Friday, Apple will begin showing off the watch in its retail stores,
along with taking preorders online.
The device will begin shipping to
customers on April 24 in nine countries, including the U.S. and China.
Shoppers will need an appointment
in the stores to actually try on the
different versions of the watch,
which start in price at $350 and
range as high as $17,000 for limitededition versions crafted in solid gold.
Those prices put Apples first
smartwatch at a fat premium to rival
products, none of which have generated much in the way of sales yet.
But while that makes forecasting actual watch sales a challenge, it is a

relatively safe bet that many shoppers will flock to Apples stores to
take a look.
And that is good for Apple, at
least if history is any guide.
The launch of the first iPad in
2010 drew big crowds to the companys stores, as people sought a
peek at the first modern tablet. Apples retail sales jumped 47% that fiscal year, with average revenue per
store rising 30%.
The company cited a halo effect, in which foot traffic for the
iPad also helped sales of the Mac, a
product that many believed would
actually be cannibalized by the new
tablet.
Apple could use a similar boost
now. Its retail business has slowed of
late, with sales increasing only 6% in

the fiscal year that ended Sept. 27,
and average revenue per store was
up only 1%. It added 21 new stores
last year, with three-quarters of them
outside the U.S.
The company no longer reports
separate results for retail, but it
clearly still has big ambitions for the
business. Apple lured former Burberry Chief Executive Angela Ahrendts in late 2013 to head its retail
efforts, and she has reportedly been
leading a redesign of the stores
ahead of the watchs debut. A redesigned MacBook also goes on sale
Friday, which may act as another lure
for shoppers.
Extra foot traffic also could help
the company meet some rather high
expectations. Wall Street expects Apples revenue to rise 24% in the cur-
nect program and higher trading

volumes will help the exchange. But
with its shares now trading at 37
times 2015 earnings, this is already
priced in.
In March, the single biggest recipient of mainland money through
Stock Connect was Hanergy Thin
Film Power, a solar-panel company
whose meteoric rise has defied
skeptical analysts and short sellers.
Curiously, though, Hanergy shares
fell nearly 5% Wednesday.
If mainland Chinas momentum
style of investing spreads to Hong
Kong, many shares may become untethered from fundamentals. It has
happened before.
In 2007, anticipation about a
Stock Connect-like program called
the Through Train, not realized at
the time, fueled a massive bubble in
Hong Kong from which it has yet to
fully recover.
Hong Kong investors may eventually rue the day this latest ride
began.
Aaron Back
OVERHEARD
For hedge funds, it isnt too late
to apologize. Ryan Tedders band,
OneRepublic, will next month headline a concert at the seventh annual hedge-fund-heavy SALT conference in Las Vegas. The band is
famed for its 2007 hit Apologizea title unlikely to spring to
the lips of hedge-fund managers
seeking novel ways to explain
years of muted performance.
The 2013 single Counting
Stars might be more appropriate,
what with the 1,800 attendees, including Daniel Loeb, founder of
Third Point; former Secretary of
State Condoleezza Rice, and the
entertainer and businessman
will.i.am. Mr. Tedder may consider
skipping the opening lines to his
ballad Stop and Stare, where he
wails, This town is colder now. I
think its sick of us. Its time to
make our move. Even ensconced
in a desert ballroom, hedge-fund
managers need no extra reminders
about their popularity.
Minding the Store
Apples annual retail sales

$25 billion
20
15
10
5
0
FY 2007
09
11
13
Note: Fiscal years end in September.

Sources: the company; Associated Press (photo)
rent fiscal year, which would be its

best showing in three years. Such
hopes rest largely on the iPhone. But
growth also is expected from the Mac
and the companys new segment that
Angela Ahrendts, Apples senior vice

president for retail and online stores
includes the iPod, Beats headphones
and other accessories. The watch, besides its other capabilities, also may
act as an expensive form of bait.
Dan Gallagher
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