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ASIA EDITION VOL. XXXVIII NO. 245 (India facsimile Vol. 6 No. 49) FRIDAY - SUNDAY, AUGUST 15 - 17, 2014 WSJ.com InsuranceTitans Wager on Asia BY ENDA CURRAN most significant insurers in Asia, and is working to grow HONG KONG—Two octoge- as well. Already, it has prop- narian insurance magnates erty-casualty operations in are making bets on Asia. War- countries including Japan, ren Buffett’s Berkshire Hath- China, South Korea, Singa- away Inc. and Maurice pore, Vietnam, Thailand, Aus- “Hank” Greenberg’s Starr tralia and Indonesia. Cos. are quietly expanding Other foreign insurers, in- their operations, hoping to cluding the U.K.’s Prudential capitalize on a fast-growing PLC and Germany’s Allianz market that they believe is SE, are also present, selling underserved by existing in- life insurance and general surers. protection policies. But ana- In recent months, the two lysts say that in general insur- have been building up their ance, outside of auto protec- presences in Asia’s general in- tion, there are large coverage surance market, a sector that gaps in areas from real estate remains dominated by local to aviation. Those underser- players though some foreign viced markets, mixed with a firms, such as France’s AXA rapidly rising middle class Reuters SA, are active here. Mr. and relatively strong eco- Well-wishers greet Pope Francis, center, upon his arrival at Seoul Air Base in Seongnam, on Thursday, accompanied by South Korean Greenberg, 89 years old, a nomic growth, have caught President Park Geun-hye, second right, who said the pontiff’s decision to make the trip demonstrated his special interest in the country. former chief executive officer the eye of Mr. Buffett and Mr. of American International Greenberg. Premiums in Asia Group Inc., completed the outside of Japan for property Pope Kicks Off South Korea Visit first foreign takeover of a and casualty insurance grew Chinese state-owned general almost 15% a year in the de- insurer last month. The 83- cade ending in 2012, com- BY DEBORAH BALL abroad and the first papal trip will hold a Mass for reconcili- the pope’s plane landed in year-old Mr. Buffett’s firm has pared with 3% in the U.S., ac- to Asia since St. John Paul II ation on the Korean peninsula. Seoul, North Korea fired three been hiring high-level execu- cording to Swiss Re. SEOUL—Pope Francis ar- went to India in 1999—in- “Korea’s quest for peace is short-range missiles into the tives from AIG and others as Last month, the Starr rived in South Korea on cluded meetings with bishops a cause close to our hearts, sea. It fired two more around it builds up its fledgling com- group, led by Mr. Greenberg, Thursday for his first trip to and South Korean President for it affects the stability of 1 p.m. local time. South Ko- mercial insurance business. completed its takeover of Asia as pontiff, kicking off a Park Geun-hye, who said the the entire area and indeed of rea’s Defense Ministry said “The insurance market in China’s Dazhong Insurance in five-day visit that will show- pontiff’s decision to make the our whole war-weary world,” the rockets, launched from Asia offers so much potential the first foreign buyout in the case the Vatican’s efforts to trip demonstrated his special he said during a meeting with North Korea’s east coast, for growth,” said Sally Yim, a country of a state-backed gen- spread the faith on a conti- interest in the country— South Korean government of- posed no danger to the pope’s senior credit officer at eral insurer. It originally held nent where just 3% of the pop- whose population is 10% Cath- ficials. (Visit WSJ.com for live Please turn to page 14 Moody’s Investors Service. a minority stake. ulation is Catholic. olic—and a desire to bring updates on the pope’s visit to “That’s why these two ty- Mr. Buffett’s Berkshire The opening day of the peace to a divided continent. South Korea.) Pope Francis telegraphs his coons are expanding here.” Hathaway has hired two se- visit—Pope Francis’ third During his stay, the pope Less than an hour before ‘best wishes’ to China...... 14 AIG remains one of the Please turn to page 14 InsideInside Walls of the Perth Mint Are a Golden Opportunity Lenovo’s Phones Gain iii Dust Worth Hundreds of Thousands; ‘Love to Have a Scrape’ In Emerging Markets BY RHIANNON HOYLE bit of mining lore, there’s gold to sell to pay for our trip.” BY JURO OSAWA predict Lenovo could become in them thar walls! It is a different story at the an even bigger player after it PERTH, Australia — Greg “The gold in the walls isn’t mint’s current gold-refining HONG KONG—Lenovo completes its acquisition of Cooke knows where gold visible. You can’t see it,” said hub near Perth airport, 15 kilo- Group Ltd. is on a fast track Google Inc.’s Motorola Mobil- worth hundreds of thousands Mr. Cooke, a gold pourer at meters away. There, the mint to become a significant com- ity handset unit, which the of dollars is hidden. But like the mint. “But the moment doesn’t allow visitors and all petitor in smartphones—not Chinese company agreed to many people in this mining you point it out to people, you employees must be vetted by just in China but also over- buy for $2.91 billion earlier city, his problem isn’t finding see their eyes darting around the police’s Gold-Stealing De- seas, taking on Samsung this year. the precious metal; it is being the room with excitement.” tection Unit—nicknamed the SStyletyle and Electronics Co. and Apple “Although China is still the able to recover it. Security is unobtrusive in “gold squad.” To get to work Inc. most important market for That’s because the gold is the melting house, which was requires passing through SuSubstancebstance Already the world’s largest our smartphone business, we in the form of dust that has decommissioned in 1990. something like airport secu- THEBESTOFFALLFASHION personal-computer maker by think we have even more op- accumulated in the brickwork Tourists seeking a fix of Aus- rity, including metal detectors, shipments, the Chinese com- portunities outside China,” of the old Perth Mint since its tralia’s gold rush history wan- while employees’ every move pany has made significant Chief Executive Yang Yuanq- founding in the 1890s at the der around the room pretty is captured by cameras. Chef Niki Nakayama: progress in smartphones. In ing said in an interview. height of one of the world’s much undisturbed though In 2011, the Perth Mint First in Her Class the second quarter, Lenovo Thanks to strong smart- great gold rushes. Decades of they are within spitting dis- produced the world’s largest not only became the No. 1 phone sales in Southeast Asia, refining resulted in tiny frag- tance of the secret hoard. gold bullion coin, weighing The Fortress smartphone maker in China, Eastern Europe and Latin ments of gold embedding “I’d love to have a scrape,” one ton and worth about Of Modernism overtaking Samsung, but was America, Lenovo said Thurs- themselves in the fabric of the said Sacha Hibbitt, a 19-year- US$50 million. The coin had the No. 4 vendor by ship- day that its net profit rose mint’s historic melting house. old student from England. “I its own security detail on a ments world-wide, according 23% to $214 million for the To paraphrase a well-known like gold, and it would be nice Please turn to page 5 WSJ.com/magazine to research firm IDC. Analysts Please turn to page 16 2 | Friday - Sunday, August 15 - 17, 2014 HK JP ID MU KO ML PH SI TL TW IN ** THE WALL STREET JOURNAL. PAGE TWO

What’s News— Inside

Asia News: Darwin embraces presence of U.S. marines. 4

European Pressphoto Agency In Depth: Israel Indian kite maker Jagmohan Kanojia displays kites, representing the colors of Indian national flag with pictures of freedom fighters and prominent political leaders, outflanks the White in his home workshop in Amritsar, India, on Thursday. The kites are made especially for India’s Independence Day on Friday. House. iii 12-13 Business & Finance appliances business, joining a group lationships between government of an energy trade group said. 21 of other potential suitors consider- advisers and private businesses. 17 iii ing a deal that could expand their n Small protests popping up out- reach in North America. 19 n Wal-Mart cut its earnings guid- World-Wide side banks and government of- ance for the year as it posted an- fices around China have cast a n China’s Fosun and French pri- other decline in traffic and flat n South Korea’s central bank cut spotlight on shadow lending. 15 vate-equity partner Ardian same-store sales. 17 its benchmark rate by a quarter dropped their offer to acquire percentage point to 2.25%, joining n As Moscow’s relations sour French resort operator Club Med, n Cisco again moved to reduce government efforts to boost growth. with the West, Russia’s energy clearing the way for a competing costs after reporting a quarter of sector is pivoting toward Asia, Italian investor. 16 little sales growth, saying it cut n A convoy of trucks that Russia with oil exports to the region about 6,000 employees. 18 says are carrying humanitarian jumping to record highs. 15 n Hyundai workers voted to walk aid for cities in eastern Ukraine off the job as early as next week n Crown Resorts posted a 66% headed toward the Ukraine bor- n China Mobile is on the lookout following a series of failed agree- jump in annual profit, as strong der, while Kiev said it was dis- for acquisitions to reverse slowing ments over wage and benefit is- earnings in Macau continued to patching its own shipments of aid. growth after the world’s largest sues at the auto maker. 18 offset weakness at its hotels and wireless carrier by subscribers casinos in Australia. 18 n A fresh cease-fire in the Gaza The People’s Money: posted a drop in first-half profit. 16 n The dismissal of a Chinese conflict appeared to be holding after China acts as cash cabinet adviser who did work on n Vietnam will likely start im- Israeli and Palestinian negotiators n Electrolux held preliminary dis- behalf of Qualcomm indicates the porting coal next year to keep up meeting in Cairo agreed to extend a departs. 15 cussions to potentially acquire GE’s confusion over rules regarding re- with rising demand, the chairman truce to give more time for talks.

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BY TREFOR MOSS ing—has sparked an impeachment The next election is slated for AND CRIS LARANO drive in Congress, though it is May 9, 2016, with Mr. Aquino due to highly unlikely to succeed. step down the following month. MANILA—Philippine President Asked on Thursday whether Mr. Vice President Jejomar Binay—a Benigno Aquino III, who has been Aquino wants a second term, presi- member of the opposition United butting heads with the Supreme dential spokesman Herminio Coloma Nationalist Alliance—is the early fa- Court over his spending program, said the president would listen to vorite for the presidency. said he is pondering changing the “his bosses, the Filipino people” in Mr. Binay on Thursday urged Mr. constitution so he can run for an- deciding “how to ensure that the re- Aquino not to take advice to try to other six-year term. forms and transformation that he run again from “quarters with Mr. Aquino said the judiciary, has begun will continue and will be- vested interests who are driven which struck down a spending pro- come permanent.” mainly by self-preservation.” gram he created to stimulate the While the public’s view of Mr. Three possibilities exist to economy, has grown too powerful Aquino’s administration has deterio- change the constitution, but the and meddles in the executive rated, it is still generally favorable: clearest route for Mr. Aquino would branch’s business. A survey released on Monday by So- be to get the backing of three-quar- “Before all of this happened, I cial Weather Stations, a Philippine ters of Congress, which his coalition admit I had a closed mind [to con- polling firm, found that 56% of peo- firmly holds, and then a majority stitutional change],” said Mr. ple were satisfied with the govern- vote in a national referendum. Aquino, who has rejected the possi- ment’s performance, while 26% were Ramon Casiple, executive direc- bility of two terms in the past. “But dissatisfied. tor at the Institute for Political Re- now I am aware of [the threat of] Presidents are limited to one six- form, a Manila-based advocacy judicial reach. Congress and the ex- year term under the 1987 constitu- group, said Mr. Aquino’s Liberal ecutive can act, but then they can tion enacted during the presidency Party lacks a strong presidential be punished at any time.” of Mr. Aquino’s mother, Corazon candidate for 2016, but he warned Mr. Aquino made his comments Aquino, who served from 1986 to that a bid to change the constitution on Wednesday to local television 1992. could “split the ruling coalition and station News5, alluding to a Su- The term limit was introduced in instigate a political battle.” preme Court decision in July that he reaction to Ferdinand Marcos’s 20- It also could create instability as overreached his authority with his year rule, which was marked by cor- Mr. Aquino tries to persuade foreign

stimulus spending. That court deci- ruption and human-rights viola- investors to pump more money into Reuters sion—which Mr. Aquino is appeal- tions. the Philippines, Mr. Casiple said. Mr. Aquino speaks at armed-forces headquarters in Quezon City on Thursday. 4 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. WORLD NEWS: ASIA

Pakistani Eyes on Australian Skies Australian bases a lure for U.S. forces

Protesters Robertson Barracks Royal Australian Airforce Base Darwin Head for Darwin port RAAF Base Tindal

RAAF Base Curtin Islamabad RAAF Base Townsville BY SAEED SHAH AUSTRALIA ISLAMABAD—Thousands of pro- RAAF Base Learmonth Air-to-air air-weapons range testers led by former cricket star Imran Khan set out on Thursday to Air-weapons range march on Islamabad, aiming to Offshore training area bring down a government they ac- HMAS Stirling naval base Ground exercise/training area cuse of stealing last year’s election. The looming confrontation has renewed the political role of the Sydney military, casting some doubt on the strength of democratic institutions Source: Department of the Prime Minister and Cabinet in a nuclear power that has seen CPL Craig Barret/Commonwealth of Australia/Agence France-Presse several coups and has been ruled by The Wall Street Journal Seven nations are participating in the Pitch Black combat exercises in Darwin. the army for half its history. Dubbed a “Freedom March” by Mr. Khan, the caravan of cars and buses began on Thursday afternoon from the eastern city of Lahore, the Darwin Embraces U.S. Marines provincial capital of Punjab and the power base for Prime Minister Nawaz Sharif. Mr. Khan’s following BY ROB TAYLOR “I know that everybody wants to Australia’s government, mean- Northern Australia, for its part, was bolstered by cleric Tahir ul see as many visits from U.S. ships as while, is working on a new strategic appears happy to participate. Al- Qadri, who is leading thousands in a DARWIN, Australia—U.S. war- they can have,” Australian Defense blueprint to be completed by next though Darwin has boomed in re- separate demonstration on the road planes are thundering across the Minister David Johnston said year that will aim to better align the cent years, largely due to energy in- from Lahore to Islamabad. Despite tropical sky here every day this Wednesday at Robertson Barracks, a Australian and U.S. presences in the vestments nearby, it has only about some fiery rhetoric, leaders have week as they participate in one of sprawling army base on a dusty north, already home to more than 135,000 people. said the protests will be peaceful. Asia’s biggest air combat exercises. scrub plain just outside of Darwin, 15,000 Australian personnel and It has vast, largely unpopulated “You have to fight for freedom, Their presence also points to the where around 1,150 Marines are liv- support staff—two-thirds of the areas ideal for carrying out live-fire you have to snatch freedom,” Mr. growing importance U.S. and Aus- ing and working from beige huts Australian army’s total combat drills. It is close enough to the rest Khan told the crowd as his march tralian defense officials place on known locally as “dongas.” power. A force posture review in of Asia that it can serve as a useful began. “We will reach Islamabad this remote port city, and its rugged The U.S. is focused on getting 2012 recommended placing more staging ground for humanitarian or and there, we will see the dawn of a Outback surroundings, as Washing- the Marines deployment up to full military assets in northern Austra- other missions. Yet it is far-enough new Pakistan.” ton looks for more places where it force—expected in 2016—and “get- lia, nearer to the billions of dollars- away that it remains relatively insu- The 300-kilometer journey nor- can expand its military footprint in ting U.S. Air Force aircraft out here worth of oil and gas deposits off the lated from enemy missile launches. mally takes about five hours by ve- Asia without triggering too much of in more numbers and more fre- country’s northwest seaboard, in- And unlike places such as Oki- hicle, but with the slow-moving a backlash. quently,” U.S. Marines Liaison Of- cluding ones involving Chevron nawa in Japan or parts of the Philip- demonstrators aren’t likely to reach The U.S. is gradually ramping up ficer Col. Javier Ball said in an in- Corp. and other U.S. companies. pines, U.S. military personnel re- the capital before Friday morning. the number of Marines at a base terview Thursday. The possibility of main generally popular. Ahead of the protest, which coin- outside of Darwin, after President more naval visits was a “good idea,” “We’d love to see more of them,” cided with Pakistan’s Independence Barack Obama announced plans in he added, though he said it wasn’t Canberra is working on says Ruth Dargan, a bartender at Day, the government had used ship- 2011 to eventually rotate 2,500 of yet approved. the Shenannigans Irish pub in one ping containers to seal off roads in them through the area for six U.S. Secretary of State John plans to better align with of Darwin’s shopping districts, pop- both Lahore and Islamabad to hin- months every year. And as senior Kerry and Defense Secretary Chuck U.S. forces in the north. ular with visiting U.S. sailors and der the marches, while gasoline has U.S. officers tour the area this week Hagel and their Australian counter- Marines for pints of Kilkenny cream also been in short supply. for the biennial Pitch Black military parts, Foreign Minister Julie Bishop ale. “They come in small groups. The government said on Thurs- exercises, which bring together and Mr. Johnston, signed an agree- They are polite. They’ll buy the day, however, that it would allow fighter aircraft from seven nations, ment this week that called for the The moves come as Washington whole bar a pint.” both protest rallies to travel to Is- it is becoming clearer that both the two sides to share costs of addi- seeks to expand its presence in Asia To maintain support, the Penta- lamabad. At the start of this month, U.S. and Australia want to do more tional barracks, mess halls and as part of its touted “pivot” to the gon has crafted a public-relations the government had authorized the in the area—and other parts of Aus- training facilities in northern Aus- region, aimed at reassuring allies approach whereby only groups of military to deploy hundreds of sol- tralia, as well. tralia. about America’s staying power there six or fewer Marines may leave Rob- diers in Islamabad to bolster civilian Both countries have ruled out U.S. officials have also said they as China’s military and economic ertson Barracks at a time to avoid law enforcement. the idea of permanent bases on Aus- would like Australia to participate might grows. But U.S. officials have drawing attention around water- Political insiders said the mili- tralian soil. But Washington and in an Asia missile ballistic shield it to tread lightly to avoid raising front bars and shops. tary was playing a mediating role Canberra have said in recent months is developing with Japan, a move alarms in Beijing, which has ex- “Before they came there was between the protesters and the gov- they are considering additional de- that some military analysts say pressed skepticism over the U.S. some apprehension. Right or wrong, ernment. In particular, some politi- ployments of American aircraft would likely include the use of a so- shift in the region. they had a reputation for trouble to cians have pointed to a meeting on through northern Australia, as well phisticated Australian radar net- Col. Ball said there was no link quash, and they have quashed it,” Wednesday between the army chief, as potentially bringing more U.S. work that is believed to be capable between additional Australian de- says longtime Darwin government Gen. Raheel Sharif, Interior Minister warships and submarines to Austra- of detecting stealth aircraft and ployments and regional concerns worker Tricia Marcato. “People have Chaudhry Nisar Ali Khan, and Shah- lian ports. missile launches far away in Asia. over a more-assertive China. been pleasantly surprised.” baz Sharif, the chief minister of Punjab and the prime minister’s in- fluential brother. After the meeting, the interior minister said “the armed forces of Afghan Election Rivals Remain at Odds Pakistan are not involved in this en- tire issue at all.” The military didn’t BY NATHAN HODGE runoff to produce a clear winner led pose anything on us.” by the next president,” he said in a respond to a request to comment. to a political standoff that brought Mr. Kerry met the candidates press briefing Tuesday. “Until we The protesters also appear to be KABUL—New strains emerged in the country close to civil war. last week to encourage them to stick amend the constitution, the position looking to the military. Mr. Khan is Afghanistan’s delicate political tran- Gov. Atta Mohammad Noor of to a political deal that would pave of the CEO solely depends on the demanding early elections and the sition, just a week after U.S. Secre- northern Balkh province was at the the way for an inclusive govern- discretion of the president.” resignation of Mr. Sharif, but as he tary of State John Kerry traveled to center of the deepening crisis: In ment, with the losing candidate se- Added Mr. Ghani: “It’s not called has a majority in Parliament, ana- Kabul for the second time in a early July, he declared he would lecting a chief executive officer in a a government of dual authority or a lysts said only military intervention month to defuse a political crisis only recognize an Abdullah-led gov- new administration. coalition, it’s called a government of can bring this about. Mr. Khan, in a concerning who will take over from ernment, raising fears of secession. The defining of that post has national unity.” television interview Tuesday, said President Hamid Karzai. In an interview Thursday, Gov. sparked contention between the two U.S. and international officials he wanted a government of techno- As the vote audit for a disputed Atta warned that Mr. Abdullah’s sup- camps as they discuss the imple- say Afghanistan needs a new gov- crats to oversee a new election. election remains painfully slow and porters would take to the streets if mentation of the political deal and ernment before a North Atlantic At a ceremony in the city of a crucial deadline looms, fresh sug- Mr. Ghani was declared the winner. A try to resolve major differences Treaty Organization summit the Quetta on Thursday, Mr. Sharif, ap- gestions of political fraud have Ghani victory, he added, would be about how to forge a national unity first week of September, when pearing with the general, said in a emerged, along with provocative seen as a foreign imposition. government. member states will decide whether speech: “Can there be a bigger free- comments from a key player. “We have accepted the agree- Mr. Ghani said this week that the to commit to a post-2014 training- dom march than Pakistan’s civil and Former Foreign Minister Abdul- ment to have a national unity gov- chief executive officer would serve and-assistance mission after the military leadership sitting together lah Abdullah and former Finance ernment, and the results should be at the president’s pleasure, suggest- withdrawal of combat troops at the to celebrate Pakistan’s Independence Minister Ashraf Ghani are vying to transparent,” he said. “We support ing the new post could be dismissed end of this year. Day?” succeed Mr. Karzai, who must step these two points but we do not see as easily as it could be created. —Ehsanullah Amiri —Qasim Nauman down after more than a decade in honesty in our counterpart. It’s “The position of CEO is deriva- and Habib Khan Totakhil contributed to this article. power. But the failure of a June 14 clear that the world should not im- tive from a decree by the president, contributed to this article. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 5 WORLD NEWS: ASIA Top U.S. Military Officer Visits Vietnam

BY VU TRONG KHANH AND TREFOR MOSS

HANOI—The U.S.’s top-ranked military officer met his Vietnamese counterpart here Thursday, as the U.S. capitalizes on tensions between China and its Asia-Pacific neighbors to revamp its own regional alliances. Gen. Martin Dempsey became the first chairman of the Joint Chiefs of Staff to visit the Southeast Asian country since the Vietnam War. Vietnam’s Defense Ministry said in a statement that he and Gen. Do Ba Ty, the chief of General Staff of the Vietnam People’s Army, dis- cussed future cooperation between the American and Vietnamese mili- taries. The move is the latest initiative on the part of Washington and its Asian allies to boost the defense ca- pabilities of Southeast Asian coun- tries—notably Vietnam and the Phil- ippines—that are struggling to stand up to China in their territorial disputes in the South China Sea. Gen. Dempsey told reporters in Hanoi that traveling to Vietnam had become a top priority for him. His visit came a week after Sen. John McCain, also in Hanoi, said he

hoped the U.S. would begin easing Reuters its restrictions on lethal arms ex- Gen. Martin Dempsey, the U.S.’s top-ranked military officer, reviews the honor guard during a welcoming ceremony at Vietnam’s Defense Ministry in Hanoi. ports to Vietnam as early as next month. ton and Tokyo have been warming between Vietnamese and Chinese initiative raised fears that the pat- was proceeding with the purchase While cutting-edge U.S. weap- in recent years, while its ties with vessels and triggered riots in Viet- tern of regular flare-ups would con- of 10 new patrol boats from Japan, onry may be beyond Vietnam’s fi- China have come under severe nam that left at least three Chinese tinue, as Beijing asserts its claims in funded by a $181 million loan pro- nancial means, military analysts say strain. The U.S. and Vietnam forged nationals dead and hundreds of for- the face of complaints from South- vided by Tokyo. Hanoi is interested in acquiring closer ties last summer when Viet- eign-owned factories damaged. The east Asian countries. South Korea also said in June used American systems such as P-3C namese President Truong Tan Sang drilling rig was moved out of the The Philippines, like Vietnam, that it planned to donate a second- Orion surveillance planes, which the visited the U.S., while Tokyo and Ha- contested area last month. has responded to what it regards as hand warship to Manila. Seoul had U.S. is in the process of retiring. noi signed a strategic pact in March In early August, China rejected Chinese aggression by seeking to earlier secured a $410 million order Vietnam has also begun accept- and pledged to expand joint mari- U.S. and Philippine proposals at the improve its military capabilities. for new fighter jets from the Philip- ing used Japanese equipment. On time security efforts. Asean Regional Forum—an annual Last month, the U.S. State Depart- pines. Aug. 1, Japan announced that it Vietnam’s concerns about China’s meeting of Asian foreign and de- ment said it had approved a Philip- Gen. Dempsey is scheduled to would give Vietnam six secondhand rising power sharpened in May, fense ministers, held this year in pine request for the sale of two sec- meet Vietnamese Prime Minister vessels, which could be converted when Beijing deployed an oil rig to Myanmar—for a freeze on poten- ondhand C-130 Hercules transport Nguyen Tan Dung and Defense Min- into patrol boats. waters claimed by Vietnam. The de- tially provocative acts in the South aircraft to Manila for $61 million. ister Phung Quang Thanh later in Hanoi’s relations with Washing- ployment led to tense encounters China Sea. China’s dismissal of the This week, Manila also said it his visit, which concludes Saturday. Japan Protests Drill At Perth Mint, Walls Are Golden Continued from first page where it was established, excluded recent roadshow around Europe and the melting house. By Russia in Pacific Asia, even though it takes heavy- “It is important that works to lifting equipment to move it around. heritage places are undertaken with BY YUKA HAYASHI forces and units of the district,” Col. When 14 of the 15 old furnaces in care to try to protect the elements Alexander Gordeyev, a spokesman the Perth Mint’s melting house were that tell the individual stories of a TOKYO—Tokyo lodged a protest for Russia’s eastern military district, scrapped, they were crushed and place,” said State Heritage Office with Moscow after Russia began a told Interfax. around 18 kilograms of gold was re- Executive Director Graeme Gammie. large-scale military exercise at a Through several summit meet- covered, worth around US$800,000 That includes protecting old wood- northern Pacific island chain that ings over the past year and a half, at today’s prices. That inspired work and even original paint. Japan also claims, a further setback Mr. Abe had established personal management to look a little higher, Disappointed prospectors should for Prime Minister Shinzo Abe’s ties with President Vladimir Putin. sending a young worker up for days draw comfort from the fact that bumpy efforts to strengthen ties Officials in Tokyo had hoped to scrape the ceiling for gold. gold is found in plenty of unusual with the northern neighbor. such efforts would result in more “It is one of those old corrugated places—from termite mounds to the Japan’s foreign ministry said it economic cooperation, particularly roofs, so we got a young kid on a human body. summoned a top official from the in the energy sector, as well as cherry picker, hoisted him up with a Greg Cooke, harvester of gold dust Last year, Australian scientists Russian embassy on Wednesday to progress in the island dispute. But wire brush and told him to start found that eucalyptus trees in the complain about the military drill, the conflict in Ukraine has prompted scraping,” said Mr. Cooke. He recov- grees Celsius, it caused the gold to Outback were drawing gold particles which began Tuesday. Tokyo said Japan to follow the suit of Western ered an extra 1.5 kilograms. vaporize and lodge itself in the up from the soil via the trees’ root that the event was taking place nations and impose additional sanc- Around the time the mint was brickwork. system and depositing them in their around the four islands north of tions against Russia, casting a founded in the 1890s, thousands of In the 1950s, officials became so leaves and branches. Alas, these Hokkaido that are known as the shadow over the relationship. people were working on gold depos- worried by the scale of the losses nuggets are only about one-fifth the Northern Territories in Japan and “This is utterly unacceptable for its in Western Australia. Among that they installed a device in the diameter of a human hair. the southern Kurils in Russia. The our country,” Mr. Abe told reporters them was a young American engi- mint’s main smokestack to catch Back at the old mint, Mr. Cooke dispute over the island chain has when asked about the military drill. neer named Herbert Hoover, who gold dust. says the brick walls aren’t the only strained relations between the two Maritime tensions have recently managed the Sons of Gwalia mine Mr. Cooke believes there is still hidden store of gold. Officials carry countries since World War II. flared in the western Pacific as for a year before returning to Amer- more gold in the walls of the mint. out nearly 50 gold-pouring demon- The Russian Defense Ministry China has sought to reassert its ter- ica. He became the 31st president of “All I want to know is who does the strations for tour groups each week, said the exercises involved more ritorial claims in the region. Russia the U.S. in 1929. cleaning?” said Julie Bitton, 48, who and residue of the precious metal than 1,000 troops and approxi- has also increased its military activ- Nuggets unearthed in the red was visiting the mint from New that remains in the clay-and-graph- mately 100 pieces of “military hard- ity in the region. During the April- clay of the Outback were brought to South Wales. ite pots needs to be recovered. Ev- ware,” along with the participation June quarter, Japan’s air force Perth to be melted down into gold Still, harvesting the precious ery two weeks, the pots are crushed of the air force, army and a task scrambled fighter jets in response to bars or coins. metal isn’t likely to happen soon, if to recover gold worth as much as force of the Pacific Fleet, according Russian aircraft on 235 occasions, How the gold came to end up in at all. Gold’s appeal cuts little ice US$200 apiece. to Russian news agency Interfax. compared with just 31 a year earlier, the mint’s walls is explained by the with Western Australia’s heritage “We lose a gram of gold a day in The drill included a landing of Rus- according to Japan’s Self-Defense old technology. For decades, gold officers who demand the walls re- the furnace or the pots or from sian airmen from helicopters on one Forces. For the year ended March, was refined using charcoal and main untouched because of the spilling,” Mr. Cooke said. “That is an of the islands. Japan reported 359 cases of fighter coke, which were variable in tem- building’s heritage listing. This ounce a month and might not sound “These are routine exercises, a jet scrambles in response to Russian perature. When the furnaces got too year’s massive renovation of the old like a lot, but it is a lot for our ac- stage of the training of multi-service targets, up from 248 a year earlier. hot, sometimes reaching 1,700 de- mint, which stands on the same site countants.” 6 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. WORLD NEWS Locals Say Help Still Needed for Yazidis Conditions Appear to Have Improved for Group Fleeing Islamic State Offensive, but Some Remain on Mountain

BY NOUR MALAS Syria with the help of a Kurdish mi- AND JOE PARKINSON litia, or more recently, being plucked to safety in helicopter rescues. DOHUK, Iraq—Thousands of Yaz- The chaos around their plight idi refugees on an Iraqi mountain- and the complicated ways they are side still need aid, even though U.S. getting out with many players in- airstrikes and airdrops appear to volved has limited visibility across have improved conditions there, ac- the rugged mountainside and chal- cording to some local officials and lenged policymakers. families that have escaped. Mr. Colt of the U.N. refugee The U.S. on Wednesday dis- agency said the agency doesn’t have patched a small assessment team its own people in the areas affected that spent 24 hours in the Sinjar and can register the refugees only Mountains and concluded that a crossing out into Dohuk. But he said large number of the trapped mem- there was anecdotal evidence from bers of Iraq’s Yazidi religious minor- those arriving into Dohuk on Thurs- ity had already managed to flee. U.S. day that the route was now safe, and officials said the assessment makes that some families are returning to it unlikely the U.S. military will either pick up relatives en route or carry out a risky evacuation, which belongings they need. had been considered. In the Kurdish border town of U.S. President Barack Obama said Zakho, now home to thousands of Thursday that the U.S. airstrikes had displaced Yazidis, many refugees broken the siege that had trapped disagreed with Washington’s assess- the Yazidis. “The situation on the ment that those still on Mount Sin- mountain has greatly improved, and jar could leave. Americans should be very proud of Some said the route off the our efforts,” Mr. Obama said. “Be- mountain has been secured by the cause of the skill and professional- Syrian Kurdish militia called the ism of our military and the generos- People’s Protection Units, or YPG, ity of our people, we broke but that many refugees were still

the...siege of Mount Sinjar, we Associated Press too afraid to leave. helped vulnerable people reach An Iraqi Yazidi woman and her daughter take shelter under a bridge in the city of Dohuk in northern Iraq on Thursday. “The YPG are controlling it and safety and we helped save many in- ferrying people out on trucks, focus- nocent lives.” sand people there. It’s a crisis as those are living in a camp across the Zuhair Lazgeen, a Yazidi activist ing on the most vulnerable,” said The U.S. assessment appeared to long as militants are around the border in Syria and 80,000 have living in Dohuk who has relatives on Marwan Sabri, 34 years old, who surprise local Iraqi officials and dis- mountain.” crossed into Dohuk province, in the Sinjar, said thousands of people said he walked down from the appoint some Yazidis who have rela- For the past week, officials from Kurdish region of Iraq, said Ned were still left on the mountainside. mountain with 11 of his family. But tives still on the mountains. Iraq, the U.S. and international aid Colt, an agency spokesman in Iraq. Their conditions appear to have im- Mr. Sabri said there is no food on “How much can a small team of agencies have offered different esti- Just last week, the U.N. gave a rough proved, he said, except for the el- the route, and he saw “only two heli- people see in a mountain that is 64 mates on the number of Yazidis on estimate of 40,000. derly or sick. copters carrying emergency aid.” kilometers [40 miles] wide? There the mountains, which was besieged Marzio Babille, the Iraq represen- “Elderly people who can’t or pre- Hero Mirza, a 40-year-old mar- are valleys and caves where people on one side by the militant group tative for Unicef, said that in the fer not to walk cannot leave,” Mr. ket-stall owner, said that thousands are living,” said Shawkat Othman, a calling itself Islamic State. They also past two days, “high numbers have Lazgeen said. “My relatives are on the mountain were trapped or director for Dohuk city in the prov- have struggled to keep track of how been flooding out.” About 2,000 re- starting to say, you can smell the too weak to leave. Mr. Mirza said he ince of Dohuk, where thousands of many were successfully fleeing each main, he said, including some who dead people. Everywhere you go.” arrived in Zakho on Thursday carry- displaced Iraqis have sought refuge. day across different routes. don’t want to leave the mountain. The Yazidis have been escaping ing his 90-year-old mother. “I am sure they didn't see 10% of The United Nations refugee He was watching refugees being their mountain hide-outs using dif- “The corridors to walk across the Sinjar,” Mr. Othman said, referring agency said Thursday that some transported in trucks and pickups ferent ways and routes—some flee- Islamic State lines are shifting and it to the U.S. team. “There’s still a big 95,000 people have left the Sinjar across a makeshift bridge connect- ing along the base of the mountain, is very dangerous,” Mr. Mirza said. crisis in this area with several thou- area since Aug. 6. At least 15,000 of ing Iraq and Syria. others going across the border to “Many are too scared or too weak.” Euro-Zone’s Economy Stalls as Germany Weakens BY BRIAN BLACKSTONE to outside shocks from Ukraine, second largest behind Germany, felt. Recent German business sur- many major economies. AND WILLIAM HOROBIN Russia and elsewhere that could tip stagnated for a second straight veys suggest these risks are start- Japan reported a sharp contrac- it back into recession. quarter. ing to weigh heavily on sentiment. tion in the second quarter as out- FRANKFURT — The euro-zone The euro zone “will probably re- Some softness had been ex- “We’re seeing the crisis worsen put fell 6.8% following an April in- economy stalled last quarter after main stuck in stop-and-go mode,” pected in Germany. Its economy in Ukraine and Russia as well as a crease in the country’s sales tax. 12 months of weak growth, with said Peter Vanden Houte, an econo- grew sharply during the first quar- difficult political situation in the Japanese officials remain confident German output falling more than mist at ING, in a research note. ter as an unusually warm winter Middle East,” Kasper Rorsted, chief the economy will improve the rest expected, underscoring concerns The report will likely put added boosted construction, making some executive of German consumer of the year, but the drop in con- that the region is mired in a deep pressure on the European Central payback likely. Germany’s statistics products company Henkel AG, said sumer spending have raised alarms rut of high joblessness and weak Bank to do more to spur growth office Destatis said Thursday that Tuesday. “The situation remains that the government may have to consumer prices that could worsen and boost inflation, which at 0.4% net trade was a drag last quarter, volatile, and we don’t see it chang- turn to added stimulus measures amid tension in Ukraine and the is far below the bank’s target of as import growth outpaced exports. ing any time soon.” and put off a further sales-tax in- Middle East. just under 2%. The ECB has fore- In France, poor second-quarter crease this fall. Gross domestic product in the cast 2014 GDP growth of 1%, but growth has upended the govern- In China, the central bank re- 18-member currency bloc was flat analysts at consultancy Capital The meager recovery ment’s plans to bring down its bud- ported Wednesday that the broad- in the second quarter compared Economics said it would probably get deficit, only a month after Paris est measure of new lending had with the first, the European Union’s be 0.5% to 0.7%. leaves the currency bloc adopted a revised budget to try to plunged by two-thirds in July from statistics office said Thursday. That In June, the ECB cut its key in- lagging other advanced stay on track. the previous month, setting off translated into 0.2% growth in an- terest rates and introduced a new President François Hollande’s alarm bells that the world’s second nualized terms, down from the first program of cheap loans to banks economies, such as the government had been banking on largest national economy might be quarter’s 0.8% pace. European eq- that are intended to be passed on U.S. and the U.K. 1% growth this year to bring the heading for a hard landing. Ana- uity markets fell and safe-haven to businesses. deficit down to 3.8% of GDP. But in lysts argued such concerns were government bond markets rallied But some economists say the an editorial published in Le Monde overblown—July is often a down early Thursday as national figures central bank should go further and on Thursday, French Finance Minis- month for credit and June’s credit trickled out in advance of the re- engage in large-scale purchases of Construction declined, but Destatis ter Michel Sapin wrote that the growth had been exceptionally gionwide figures. public and private debt to reduce said this was due to projects being economy is now likely to grow just strong. The weak recovery leaves the borrowing costs and add to the pushed forward because of the un- 0.5% this year, and by no more than Even so, the credit figures sug- euro zone lagging other advanced money supply. usually mild winter. Both private 1.0% next year. “It is better to ad- gested that several months of economies, such as the U.S. and the The euro zone’s three largest and public consumption rose. mit what is than to hope for what “mini-stimulus” spending on infra- U.K., which have experienced economies, which account for two- Geopolitical uncertainties likely won’t be,” he wrote in the editorial. structure, transportation and infor- firmer, albeit uneven, expansions. thirds of the region’s €9.6 trillion had only a small effect on Germany Although it remains the weakest mation technology and eased li- Those economies have recouped ($12.8 trillion) GDP, failed to grow. last quarter, analysts said, given part of the global economy six quidity by the central bank hasn’t the output lost in the aftermath of German GDP shrank 0.2% from the that the crisis in Ukraine intensi- years after the onset of the finan- done much to lift the economy. In- the global financial crisis in 2008 first quarter—a bigger drop than fied last month and the effects of cial crisis, the euro zone echoed a dustrial production, for instance, and 2009. The euro zone has yet to economists had expected—and It- sanctions imposed by the U.S. and litany of similarly sour reports this increased 9%, year over year in do so and remains 2.4% below its aly’s output fell at a similar pace. EU on Russia—with countersanc- week from Asia, all pointing to July, about the same growth rate as precrisis peak, leaving it vulnerable The French economy, the bloc’s tions from Moscow—have yet to be signs of sudden weakness among it had in June. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 7 OPINION: REVIEW & OUTLOOK Beijing vs. Foreign Capitalist Roaders

i Jinping may be an economic re- should not be used as an administrative blocks because of concerns about the Chi- in China are state-owned companies. X former, but he is also proving to instrument to harm targeted companies nese government’s hacking programs. China National Petroleum, the bailiwick of be an economic nationalist. Under or serve other aims, such as administra- So Beijing has put its thumb on the the recently detained Zhou Yongkang, is his leadership, Beijing has stepped up tively forcing price reductions.” The U.S. scale to give domestic firms a leg up. For the fourth largest company in the world regulatory harassment of foreign busi- Chamber of Commerce instance, regulators are in- by revenues. Perhaps Beijing will eventu- nesses, most recently using a 2008 anti- made a similar complaint China uses antitrust vestigating automakers’ re- ally get around to deregulating the energy trust law. This may shore up the Commu- in May. as an instrument of lationships with local parts industry, but it’s more likely the attacks nist Party’s populist street cred, but it is Smart managers know suppliers that allow them on foreign firms will continue as a way to remarkably short-sighted for a leader that there is no point in economic nationalism. to control costs and ensure distract from the huge cost to consumers who is supposed to rule China for the fighting China’s govern- quality. It’s not clear how from such national champions. next decade. ment. Many have immedi- this gives them an advan- Western nations—Europeans in partic- Regulators from the National Develop- ately cut prices to placate Beijing, which tage over domestic firms. Their main of- ular—also abuse antitrust laws for protec- ment and Reform Commission have tar- only encourages more actions. fense seems to be making profits. tionist purposes, so they can’t claim some geted some big names, including Micro- The investigations are clustered in in- The offensive against foreign technol- great moral superiority. But wise leaders soft, Qualcomm, Daimler and General dustries in which foreign firms have a ogy firms is even more nonsensical. For try to keep market interventions to a mini- Motors. Agents raided offices and warned competitive advantage and Chinese firms instance, Microsoft is under investigation mum because they know that foreign com- companies not to challenge the investiga- are struggling. Chinese consumers prefer for price-gouging, but it has never made petition benefits their own economy. Mr. tions. to buy foreign brands of automobiles, a big profit in China because most copies Xi seems to believe in a zero-sum contest The heavy-handed tactics have raised which has allowed General Motors and of its software there are pirated. Beijing in which Beijing can create world-beating suspicions that this campaign is politi- others to expand quickly. In the telecom seems to treat intellectual property as an companies by hobbling the incumbents. As cally motivated. On Wednesday the Euro- equipment industry, Chinese firms such as unfair advantage rather than an asset that China’s growth naturally slows down as a pean Union Chamber of Commerce pro- Huawei have made inroads into global deserves protection. middle-income country, that is a recipe for tested the new tactics: “Competition law markets but recently encountered road- The irony is that the real monopolists mediocrity and stagnation.

Iran’s War on Journalism

oon after seizing power in Iran’s into Mr. Rezaian and Ms. Salehi’s Tehran It’s unclear what alleged crime the lamic Republic’s security apparatus for S 1979 revolution, Ayatollah Khomeini apartment, according to the New York- Tehran regime will accuse Mr. Rezaian, two decades before becoming President. vowed that in his new Islamic Re- based International Campaign for Human his wife and colleagues of committing. He cheered the bloody crackdown on the public “there would be freedom of expres- Rights in Iran. They confiscated laptops “We have no official information regard- 1999 student uprising and, a decade later, sion, pen and views for all.” It’s fair to say and other personal belongings and hauled ing the charges against them,” an Iranian the even bloodier one on the 2009 Green the regime has honored that promise only the couple to an unknown location. Mr. foreign ministry spokeswoman said on uprising. in the breach. Rezaian and Ms. Salehi haven’t been Tuesday. President Hasan Rouhani, the Then again, even if Mr. Rouhani is The regime’s latest journalistic victims heard from since. purported moderate who took office al- Mikhail Gorbachev in a turban, it’s unclear are Jason Rezaian, the Washington Post’s A likely destination is the political most exactly a year ago, hasn’t weighed in how absolving him of responsibility for Iranian-American Tehran correspondent, wing of one of Tehran’s prisons. It’s a fate on the case. cases like Mr. Rezaian and Ms. Salehi’s his wife, Yeganeh Salehi, herself a corre- shared by thousands of less-prominent Such ambiguity helps feed a media helps the cause of reform. If Mr. Rouhani is spondent for the United Arab Emirates- Iranian dissidents, including labor and narrative that the arrests are part of an as powerless as they say he is to stop the based National newspaper, and two other women’s-rights activists, novelists and effort by regime hardliners to sideline Mr. regime from persecuting journalists, then journalists, at least one of whom is re- filmmakers, Muslim converts to Christian- Rouhani and his supposedly moderate al- why should anyone believe the Iranian portedly a U.S. citizen. ity branded as apostates, and not a few lies. It’s an argument that ignores that Mr. President is fully empowered to negotiate Plainclothes agents on July 22 barged freethinking ayatollahs, among others. Rouhani served as a top director of the Is- in good faith on the nuclear dossier?

The Advocate’s Devil

rivacy and national security are of- damage was marginal. The ombudsman Gutting standing isn’t all that’s un- advocate will undermine privacy by P ten said to be in tension in the U.S. was diluted to a standing outside panel of usual, and problematic. We have learned harming the relationship between spy- surveillance debate, so congratula- amici curiae that the FISC would invite to from Edward Snowden and subsequent agency lawyers and FISC judges. He be- tions to Senator Pat Leahy for the feat of opine in cases involving novel or major declassifications that the FISC does not lieves that the FISC’s current configura- managing to subvert both at once. That’s interpretations of surveillance law. function like an ordinary court but rather tion places “additional burdens of candor the verdict of Judge John Bates, “on be- Judge Bates and likely the majority of comports itself like an executive branch on government advocates” and the advo- half of the Judiciary,” in an unusual let- his colleagues prefer that the advocate policy maker involved in interagency dis- cate may “hinder the FISC’s ability to ob- ter last week that deserves more readers. stay dead, writing that the putes. tain complete and accurate information.” The Article III courts seldom comment new mandate “would raise A judge criticizes a This merging of execu- With the seal of secrecy broken to adver- on legislation, but Judge Bates wrote in substantial legal questions surveillance bill on tive and judicial roles vio- saries, the government might become ca- his capacity as the director of the Admin- and impede the courts’ lates the separation of gey about sharing material that is sensi- istrative Office of the U.S. Courts. Even work without furthering behalf of the judiciary. powers and frustrates po- tive or complicates a surveillance more remarkably, he assails the National the interests of privacy or litical accountability. This application. Security Agency overhaul bill that the civil liberties.” The FISC is why these columns, and All true, but Judge Bates comes Judiciary Chairman is trying to push typically considers warrant applications such legal eminences as Laurence Silber- closer to identifying the real practical through the Senate as counterproductive for discrete intelligence targets, rather man and Robert Bork, opposed the FISC problem when he observes that an advo- and even unconstitutional. than conducting dorm-room seminars on process from its start in the 1970s. The cate might prompt the NSA “not to pur- Mr. Leahy is attempting to disinter the legal philosophy. He calls it “doubtful” political irony now is that the same liber- sue potentially valuable intelligence- idea of an internal “special advocate” to that an ACLU busybody “could meaning- als who created FISC now say it’s inade- gathering activities.” That objection argue against executive-branch lawyers fully assist the court in developing the quate and needs still another layer of applies equally to the FISC itself, to the in front of the secret Foreign Intelligence factual record.” “advocate” oversight. extent that the oversight Judge Bates Surveillance Court, or FISC. As endorsed Judge Bates also raises “potentially Judge Bates used to lead the FISC and heralds causes the NSA to dial down by President Barack Obama, this roving serious legal issues.” The courts are only in a notable October 2011 ruling he surveillance and collect less useful in- legal adversary would speak for no client supposed to adjudicate “cases and con- clipped the wings of one program as “in formation to avoid displeasing judges other than the nebula of civil liberties troversies” under Article III, but the ad- some respects, deficient on statutory and who will never answer to voters. and could obstruct fast-moving antiter- vocate would be certified to appeal FISC constitutional grounds.” His letter is in Maybe, then, Mr. Leahy’s main feat is ror investigations. decisions to the Supreme Court on any part the unfortunate byproduct of the to come up with something that is more National security professionals must abstract question of law, regardless of ju- FISC’s view of itself as an intelligence corrupting to the judiciary and political have convinced their boss that this devil’s risdiction. “It is unusual, to say the least, and foreign policy consultant, and he accountability than the FISC status quo. advocate was a dangerous idea, because for an inferior court to determine the even showboats that the FISC is “hardly Let’s hope Judge Bates’s remonstrance the House passed a compromise reached process or participants in Supreme Court a ‘rubber stamp.’” causes Congress to bury the devil’s advo- with the Administration in May whose proceedings.” Judge Bates argues that the special cate for good. 8 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. OPINION How to Stay in the EU on British Terms

BY SHEILA LAWLOR ers that he seeks, and can indeed has its precedents. Already differ- achieve, the radical changes they ent EU relationship categories ex- British parliamentarians are want while remaining in Europe, as ist, for example between European currently in recess, but they’re he himself wants. To that end, his states in and out of the euro zone. likely giving a great deal of thought government recently shortened the Moreover, there are many coun- to the general election next year. time EU nationals can claim unem- tries outside the EU itself which How should they play the Europe ployment benefits in the U.K. to enjoy special legal relationships in question—whether the U.K. should three months from six. But such their trading with it. remain a member of the European limited measures are unlikely to be Ultimately, treaties between a Union and on what terms—in the sufficient. single country and a bloc work be- run-up to polling day? British euroscepticism is essen- cause both sides benefit. The pres- tially pragmatic. It sees a sclerotic ent arrangements, in which Britain EU system holding back dynamic is a full (though non-euro zone) Talksmust start from a clean economies from what they do best member of the EU aren’t seen by sheet on which London’s by imposing burdensome regula- European Pressphoto Agency the majority of voters as being to tions on job-creators and encour- their benefit. And the electorate arrangement with Brussels aging people to immigrate to high- British Prime Minister David Cameron (right) and European Commission has left politicians in no doubt of would be set out going forward. income nations, not in search of President-Elect Jean-Claude Juncker. its view on the matter. But Britain high-skilled jobs, but of welfare- sells its goods to EU countries and state benefits. In Britain, for exam- but it would be open to other will be an ineffective strategy un- benefits from free-trade arrange- ple, immigrants need to earn above states, including those which less the government considers all ments with the EU. Most voters The question is especially por- £35,000 a year before they become might see it as a transitional stage the options. These must include therefore support free trade. tentous for Prime Minister David net contributors to, rather than to full membership. that of leaving the EU, if Britain’s A zero-plus strategy would al- Cameron. The Conservative leader beneficiaries of, the tax and wel- The alternative to a zero-plus aims aren’t met. Otherwise London low each side to negotiate on the has pledged that if voters return fare system. start would be to chip away at the would have no leverage and the basis of strong mutual interest to his party to power, he will renego- How, then, should the prime existing treaties. This alternative negotiations would be doomed to maintain a trade-based relation- tiate Britain’s relationship with minister go about the renegotia- wouldn’t produce satisfactory re- failure. ship. David Cameron and his col- Brussels and put the deal before tion? One of the U.K.’s leading EU- sults for Britain. Negotiations Mr. Howe’s proposal provides a leagues should see it as a practical voters in an “in-or-out” referen- law specialists, Martin Howe, has a would be long and probably incon- pragmatic course for renegotiation way to meet voters’ wishes. U.K. dum. Mr. Cameron recognizes that simple but powerful strategy he clusive, as officials in Brussels through which Britain can uphold leaders should view zero plus as an a majority of voters in Britain are calls “zero plus.” Mr. Howe pro- would argue endlessly with their its interests. It should appeal to expression of Britain’s tradition of skeptical of the EU and that more poses that negotiations start from U.K. counterparts over each clause. most euroskeptics but also to the conservative pragmatism. Its aim, voted for the United Kingdom In- zero—from a clean sheet on which Even if substantial changes are shrinking population of europhiles, after all, is simply to preserve dependence Party, or UKIP, than Britain’s arrangement with Brus- won, it is unlikely that each of the who see Britain’s long-term future what works well. his Conservative party in last sels would be set out going for- 27 members of the EU would ratify in the EU. A special category of spring’s European Parliament elec- ward. A new category of EU mem- them, as they would have to. membership which limits treaty Ms. Lawlor is director of the tions. If he can win most of the eu- bership reflecting London’s more The zero-plus strategy isn’t obligations to mutual free move- Politeia think tank in London, roskeptic vote in May, he will be limited relationship with Brussels aimed at leaving the EU but at re- ment of goods, services and capital which published Martin Howe’s back in Downing Street. could be created. Britain would be maining within it in a way that is would thus have much to recom- “Zero Plus: The Principles of EU For this he needs to assure vot- the first member in this category, acceptable to British voters. But it mend it. Such a special category Renegotiation.” Dark Lady of Letters

impossible for me to adopt the and in 1945, Mildred married rightly skeptical of Sontag’s claims occupy a large part of the book. He [ Bookshelf ] tone of unbridled admiration au- Nathan Sontag, a pilot in the Army about her own youthful brilliance. is careful to avoid unqualified thors of literary biographies usu- Air Corps. Her idealization of her childhood, praise of her creative work. Her ally adopt.” Along the way Susan became a Mr. Schreiber writes, would “serve novels (such as “The Benefactor” Even readers who have never voracious reader. She later claimed above all to promote the aura of and “The Death Kit”) and films opened the New York Review of to have read (and understood) genius in which Sontag consciously (“Duet for Cannibals” and “Brother Books, where so many of her es- most of the classics and the philos- wrapped herself later in life.” Carl”), he all but admits, are says appeared, know the name Su- opher Arthur Schopenhauer by the As a New York intellectual, she largely derivative. With respect to san Sontag. Even those who never age of 14. She entered Berkeley for became more notable for the aura her essays, he rightly touts Son- puzzled their way through “Notes a semester shortly after the family than for the genius. Poet and critic tag’s facility with complex ideas. on Camp,” her provocative 1964 ar- moved to Los Angeles but left for Richard Howard told Mr. Schreiber Her inaugural collection of essays ticle in Partisan Review that helped the University of Chicago in 1949, “Against Interpretation” (1966) define a certain ironic intellectual where she completed its rigorous proved popular largely because, as pose, will recall she was one of Great Books curriculum in just two Sontag cultivated an aura of Eliot Weinberger wrote, “cloaked in America’s most celebrated public years. genius that tipped over into a familiar and unthreatening criti- intellectuals. Sontag was famous It was at Chicago that sociology cal discourse, it finally brought the for writings on film, photography instructor Philip Rieff became en- condescension. ‘She could tenets of Dadaism and Futurism and philosophy, as well as for the amored with the 17-year-old Sontag not talk to stupid people,’ and Surrealism to Riverside Drive.” striking photographs of her that after she sat in on a lecture on She was a native voice translating appeared in publications like Vogue Freud. He took her out to dinner noted one contemporary. certain ideas of the European and Mademoiselle, which once led that evening, then breakfast and avant-garde for the American pub- Mary Ellmann to call her the “Cha- lunch the next day. The second eve- lic. nel of the arts.” Mr. Schreiber’s ning, he proposed, and the couple that Sontag “could not talk to stu- Yet in defending Sontag’s essay book, translated from the German was married 10 days later, which pid people.” The truth is that she collection “Under the Sign of Sat- by David Dollenmayer, presents an caused a stir on campus. While the couldn’t talk to anyone she thought urn” (1980), Mr. Schreiber makes a Susan Sontag: A Biography opportunity to ask what it adds up marriage was initially happy, Son- was less important than she was dubious claim: that it fared poorly By Daniel Schreiber (Northwestern, 280 pages, $35) to—aside from a sort of intellectual tag and Rieff would divorce eight and could be condescending even in America because the “challeng- glamour. And, not least, how did years later, shortly after Sontag re- toward those close to her—an as- ing subject matter was too exotic.” Susan Sontag become “Susan Son- turned from a year overseas where pect of her character Mr. Schreiber The book included pieces on the BY MICAH MATTIX tag”? she was supposed to be studying at mostly ignores in his relatively an- American social critic Paul Good- She was born Susan Rosenblatt Oxford but had moved to Paris af- ecdote-free account. According to man, French playwright Antonin When it comes to Susan Sontag, on Jan. 16, 1933, in Manhattan. Her ter only four months. In 1959, she Carl Rollyson and Lisa Paddock’s Artaud and fascism—hardly “The there are those who dislike both parents lived in China at the time, and her young son, David, moved perceptive 2000 biography of Son- Cosby Show” but not as exotic as the woman and the work and those where her father ran the Kung to New York City, where she deter- tag, she apparently once told her all that. For good or ill, Sontag who just dislike the woman. In the Chen Fur Corporation in Tianjin. mined to make it as “a writer and partner, the photographer Annie seems to have been suited most preface to his biography of Son- Her mother, Mildred, flew to New oppositional intellectual,” as Mr. Leibovitz, who had already done naturally to essays and journal- tag—the first since the essayist York to give birth but soon re- Schreiber puts it. work for Rolling Stone and Vanity ism—forms that almost by defini- and novelist died in 2004—Daniel turned to China, leaving Susan in In recounting Sontag’s early Fair, “you may turn out to be a tion are unlikely to deeply influ- Schreiber reluctantly puts himself the care of a nanny in the home of years, Mr. Schreiber calls attention photographer, after all.” Mr. ence the culture. This might help in the latter group. Writing on Son- Susan’s paternal grandparents. Su- to inconsistencies in her own ac- Schreiber rarely shows us this side explain why “the dark lady of tag, the German critic tells us, was san would see her parents only a counts. She claimed, for example, of her character, and he gives per- American letters,” so talked about both wonderful and difficult: few months each year until her fa- that she had no idea where her haps too much weight to the rosier in her time, left little substantial “Wonderful because I had the ther died of tuberculosis in 1938, family was from, even though she judgments of Sontag’s living mark. chance to immerse myself in al- and her mother returned to the knew her grandparents had emi- friends and associates he has inter- most everything Sontag had ever States. Mildred eventually moved grated from Lodz. She would later viewed. Mr. Mattix is an assistant profes- written or said. . . . Difficult, also, Susan and her younger sister to Ar- claim that she was born in Poland Mr. Schreiber’s exposition and sor in literature because Sontag’s character made it izona because of Susan’s asthma, herself. Mr. Schreiber is also occasional defense of her character at Houston Baptist University. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 9 OPINION Where ObamaCare Is Going

BY SCOTT W. ATLAS about access and medical-care prove access, quality and choices. quality in peer-reviewed academic Municipal governments have in- The liberal attraction to making journals. For instance, Americans creased spending on private-care government the sole source of diagnosed with heart disease re- contracts by 50% in the past health-care insurance has not ceive treatment with medications decade, according to Näringslivets abated even as the deficiencies in significantly more frequently than Ekonomifakta, part of the Confed- ObamaCare, a halfway move toward patients in Western Europe, accord- eration of Swedish Enterprise, a the single-payer model, have be- ing to Kenneth Thorpe in Health Swedish employers’ association. come increasingly evident. The Affairs in 2007. In Lancet Oncology Swedish primary-care clinics question is whether growing signs in that same year, Arduino Verdec- and nursing facilities are increas- of single-payer trouble overseas chia published data demonstrating ingly run by the private sector or will be enough to discourage this that American cancer patients have receive substantial public funding. country’s flirtation with socialized survival rates for all major cancers Widespread private competition medicine. better than those in Western Eu- has also been introduced into phar- rope and far better than in the U.K. macies to tear down the previous Similar examples concerning the government monopoly over all pre- The government single- deadliest and most significant scription and non-prescription payer model that liberals diseases abound in medical jour- drugs. Though Swedish economist nals. One may ask why the Com- Per Bylund calculates that the aver- aspire to for the U.S. is monwealth Fund’s health-care rank- age Swedish family already pays increasingly in trouble ings published in June don’t reflect nearly $20,000 annually in taxes

that reality. The answer lies in the Getty Images/Ikon Images toward health care, about 12% of around the world. report’s methodology, which relied working adults bought private in- heavily on subjective surveys about pected cancer waited more than 62 in spending on nonprimary care, surance in 2013, a number that has “perceptions and experiences of days—two full months—to begin going to £8.3 billion from £4.7 bil- increased by 67% in five years, The Obama administration patients and physicians.” their first definitive treatment. lion, despite significant reductions according to the trade organization showed its hand long ago with the Yet even as the single-payer sys- In response the British govern- in spending on private care attrib- Insurance Sweden. Almost 600,000 nomination of Tom Daschle, an ad- tem remains the ideal for many on ment has enlisted private care for uted to the financial crisis. Swedes now use private insurance, vocate for Britain’s socialized Na- the left, it’s worth examining how help, including most recently Britons who can afford to avoid though they are “guaranteed” pub- tional Health Service, as secretary Britain’s NHS, established in 1948, through the Health and Social Care the NHS are eager to do so. Even lic health care. of Health and Human Services in is faring. The answer: badly. NHS Act 2012. In May last year, the Nuf- with a slight decrease due to the The recent Veterans Affairs 2009. (Mr. Daschle withdrew amid England—a government body that field Trust, an independent re- 2008 financial crisis and its after- scandal, following the disastrous criticism for nonpayment of taxes.) receives about £100 billion a year search and policy institute, along math, about six million British ObamaCare rollout, was a red flag The White House installed another from the Department of Health to with the Institute for Fiscal Studies, citizens buy private health insur- about problems of nationalized outspoken NHS fan, Donald Ber- run England’s health-care system— the U.K.’s leading independent mi- ance and about 250,000 choose to health. Now concrete evidence is wick, as an interim appointee reported this month that its hospi- croeconomic research institute, is- pay for private treatment out-of- coming in from other countries (2010-11) to run the Centers for tal waiting lists soared to their sued a report on NHS-funded pri- pocket each year—though NHS in- that have tried it for decades. The Medicare and Medicaid Services. highest point since 2006, with 3.2 vate care. The report showed that surance costs $3,500 annually for reality is that the key goals for This summer, the Common- million patients waiting for treat- over the past decade the NHS, des- every British man, woman and health-care reform—reducing wealth Fund—a private foundation ment after diagnosis. NHS England perate to reduce its ever-expanding child. spending, expanding access to focused on health care that is a fa- figures for July 2013 show that rolls, has increasingly sent patients The socialized-medicine model affordable coverage, preserving vorite of progressive policy types— 508,555 people in London alone to private care. The share of NHS- is struggling elsewhere in Europe personal choice and portability of issued a report ranking the NHS as were waiting for operations or funded hip and knee replacements as well. Even in Sweden, often her- coverage, promoting competition in the best medical system among other treatments—the highest total by private doctors increased to 19% alded as the paradigm of a success- insurance markets, and maintaining those in 11 of the world’s most ad- for at least five years. in 2011-12, from a negligible ful welfare state, months-long wait excellence in medicine—do not vanced nations, including Canada, Even cancer patients have to amount in 2003-04. times for treatment routinely avail- require government to directly France, Germany, Switzerland and wait: According to a June report by In 2006-07, according to the re- able in the U.S. have been widely provide insurance or health care. Sweden. Coming in last: U.S. health NHS England, more than 15% of pa- port, the NHS spent £5.6 billion on documented. To fix the problem, care. tients referred by their general private care outside its system. the Swedish government has ag- Dr. Atlas is a physician and a Yet the Commonwealth rankings practitioner for “urgent” treatment This increased by 55% to £8.7 bil- gressively introduced private-mar- senior fellow at Stanford Univer- are contradicted by objective data after being diagnosed with sus- lion in 2011-12, including a 76% rise ket forces into health care to im- sity’s Hoover Institution. Want to Defeat ISIS? Help the Syrian Opposition

BY HADI AL-BAHRA been fighting these terrorists for forces of Assad and Iranian-backed erating the rebels’ commitment to pads) to defend homes and towns months with little to no outside Hezbollah have been making dan- democratic principles. and villages from the incessant air It is said that common foes build support. gerous advances on the opposition- We have put forth a blueprint bombardment and regime military strong partnerships. Long before We agree with America’s chair- held ancient city of Aleppo in for stabilizing and freeing Syria assaults. These weapon systems the terrorist army of the Islamic man of the Joint Chiefs of Staff, northwestern Syria. ISIS is trying to from the threats that endanger will not fall into extremist hands State of Iraq and al-Sham marched Gen. Martin Dempsey, who said re- aid the advances by pushing deeper both the Syrian people, regional al- because our forces are actively into the Iraqi city of Mosul, threat- cently that to effectively handle the into areas in the north that were lies and the West. We have pro- fighting those very extremists. We ened to exterminate the Yazidis and ISIS terrorist threat, the U.S. needs liberated during our revolution posed a scalable Syrian Rapid De- also know this because the Free Christians in Iraq, and attacked the a partnership with those who can against the regime. This ISIS ad- ployment Force, which would form Syrian Army has already benefited country’s Kurds, the Syrian Opposi- “reject it from inside out.” The U.S. vance so close to the Turkish bor- the nucleus of a larger stabilization from lethal support from the U.S., tion and the Free Syrian Army were has that partner with the Free Syr- der presents a direct threat to us force of more than 10,000 vetted demonstrating on the battlefield battling ISIS and pushing back this ian Army and the Syrian Opposi- and to U.S. interests. and trained fighters—critical to de- that it can effectively and responsi- common threat to our people. tion. feating ISIS and Assad’s killing ma- bly use U.S.-made advanced- Now more than ever, there is a To achieve this shared goal, we chine. We are also in the process of weapon systems such as the T.O.W. national-security impetus for the need quality military aid, and fast. Our warnings about the establishing offices and services in antitank guided missile. Manpads United States to support and arm We face an existential battle in terrorist group are coming the liberated areas of Syria to sup- must be the next step. the Syrian opposition to halt and Syria against the Bashar Assad re- port a political framework that will The Free Syrian Army is the tip defeat the ISIS campaign. The cur- gime that is bent on the eradication true. Please send military oversee and coordinate with a mili- of the spear in the fight against rent U.S. airstrikes in Iraq will slow of all who oppose it. The slaugh- aid before it’s too late. tary chain of command. ISIS terrorism. If properly enabled, down these Islamic extremists, but ter—more than 160,000 Syrians We welcome President Obama’s our opposition forces have the ex- airstrikes are also needed in Syria have been killed—is being con- recent initiative to support us as perience and personnel to turn the to hit at the heart of the ISIS. De- ducted on an industrial scale. Re- the genuine and vetted Syrian op- tide on the ground. Together with feating them requires the inclusion cent evidence presented by defec- The Free Syrian Army and tribal position with a proposed package the U.S., we can end the suffering in in a broader U.S.-backed effort of tors has revealed how meticulously leaders have proven to be the most of $500 million for military training Syria. In partnership, we can deal a the Free Syrian Army and the Syr- the killing has been planned by As- effective force in fighting against and equipment. This military sup- mortal blow to the terrorist threat ian tribes who already have exten- sad and his Iranian backers. ISIS and al Qaeda affiliates. On May port will be helpful in the battle facing both our peoples. But time is sive experience fighting ISIS. Yet we have enemies in common 16, Free Syrian Army units in Aleppo against ISIS, and it will save lives of the essence, as ISIS and Assad The conflict has crossed borders with the U.S. and other potential al- province announced the launch of and prevent further spread of the will exploit any delay to destroy and now threatens to destabilize lies. Before al Qaeda spawned ISIS, an anti-al Qaeda offensive titled Op- conflict regionally. those who stand against them. The the wider Middle East. ISIS could Assad’s security services provided a eration Earthquake of the North. On But this support will not be U.S. State Department recently re- not have reached Iraq and crossed haven for al Qaeda on Syrian terri- May 19, five powerful rebel coali- enough if it does not arrive quickly ferred to ISIS as “worse than al into Jordan and Lebanon had the tory—long before our revolution tions signed a “Revolutionary Cove- and match the pace of the ISIS ad- Qaeda.” Given the dire threat, what world heeded our warnings earlier against the Assad regime began in nant” denouncing “fundamentalism vance. Opposition forces will also could be worse than complacency? this year—and formed a regional 2011. We have fought ISIS and are and extremism.” On June 12, the need to be enabled with an air-de- strategy to combat this threat by fighting other al Qaeda affiliates in Free Syrian Army’s Southern Front fense capability. We need man-por- Mr. al-Bahra is president of the supporting those of us who have Syria. In the past few days, the Command released a statement reit- table air-defense systems (Man- Syrian Opposition Coalition. 10 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. BOOKS One of Us

A Spy Among Friends By Ben Macintyre Crown, 368 pages, $27

BY RICHARD DAVENPORT-HINES

Kim Philby’s duplicity has ap- palled and fascinated his compatri- ots for over half a century. During the 1940s he was an efficient, debo- nair and popular officer in the U.K.’s Secret Intelligence Service (MI6) who was expected to rise to its high- est level. All the time, though, he was spying with ruthless efficiency for Soviet Russia, remitting many damaging Anglo-American secrets to Moscow. Hundreds died because of his treachery. In his fluent but derivative biog- raphy, “A Spy Among Friends,” Ben Macintyre rehashes a familiar story. Harold “Kim” Philby was born in 1912. His father was an able linguist who became a devoted adviser of King Ibn Saud of Saudi Arabia, con- verted to Islam and was an intrepid desert explorer. Philby became a Communist sympathizer while at Cambridge University. His father was nonchalant about this radical zeal: “Excess can always be toned down later,” he said. On a visit to Vienna in 1933-34, Philby met Litzi Friedman, a Communist of Hungarian Jewish descent, whom he secretly married and who persuaded him to become a Soviet agent. One of Philby’s first as- signments for the NKVD was to rifle through his father’s papers. Mr. Macintyre suggests that al- though Philby was a sincere Commu-

nist, the impelling motive for his Popperfoto/Getty Images treachery was conceit. As the histo- NOTHING TO SEE HERE Kim Philby at a 1955 press conference in his mother’s house during which he denied being a communist. rian Hugh Trevor-Roper, who worked with Philby in wartime espi- cause if they succeeded too well. If mained for years, Mr. Macintyre nights in Moscow,” Ronald Reagan their class alienation, their revulsion onage, suggested long ago in “The he recruited the best operatives to writes, “the source of poisonous dis- said before the spy’s death in 1988. at bourgeois snobbery and their re- Philby Affair” (1968), this most his section, they might penetrate So- cord between the intelligence serv- “How profoundly he and others like jection of social distinctions. Tales deadly of the Cambridge Five was a viet intelligence and thus unmask ices.” him must be aware that the people of class stigma and subjugation were narcissist who loved the secret him; but if he hired mediocrities his Philby was extruded from MI6 they betrayed are going to be victors duly offered by William Marshall, a power of treason. Cheating people credibility in London would be jeop- with a generous payoff but kept un- in the end.” clerk in the SIS radio-communica- made him feel clever. His covert ardized. His solution was to project der close surveillance. He had no op- In addition to Philby’s self-serv- tions department, who was con- faith was not deterred by the Stalin- an image of a hard-working yet re- portunities to pass secrets to Mos- ing, party-line autobiography, “My victed of spying in 1952; by the wife ist purges of the 1930s, in which at laxed leader of a section that cow until, in 1956, MI6 fixed a cover Silent War” (1968), two of his four of George Blake, the ex-MI6 case of- least four of his Soviet controllers seemed smooth-running but was job for him as correspondent for the wives published memoirs, and there ficer in Berlin, who was uncovered were killed. The strains of his double never as successful as it promised. Observer and the Economist in Bei- have been biographical studies by as a Soviet spy in 1961; and by John life intensified his descent into high- Among other betrayals, Philby rut, where he resumed report-writ- investigative journalists, sensation- Vassall, a clerk at the British Admi- functioning alcoholism. provided Moscow with a list of the ing and analysis for the intelligence mongers, conspiracy theorists and ralty who was convicted of supply- leading Catholic anti-Nazi activists service. The KGB defector Anatoliy scholars. Mr. Macintyre, a journalist ing naval secrets to the Soviets in in Germany, who, when Soviet forces Golitsyn provided new pointers with the Times of London, gives a 1962. Philby, too, slyly reinforced in reached Germany in 1945, were de- against Philby in 1962, and shortly deft synthesis of this mass of previ- “My Silent War” the Marxist deni- Suspected of being a spy ported or shot because they were an afterward an old woman friend from ous work, but his only significant gration of “the Establishment.” for a decade before his 1963 anti-communist elite as well. He also the 1930s, who resented the anti-Is- new source is the office diaries of Similarly Mr. Macintyre depicts betrayed anti-Soviet insurgents and rael bias of his Observer articles on MI5’s deputy chief, Guy Liddell, the Philby affair as a skirmish in defection to Moscow, Kim prototype “Bay of Pigs” operations the Middle East, volunteered damn- which were released in 2012. Mr. “Britain’s never-ending, hard-fought, Philby escaped punishment in Albania, Georgia, Lithuania, Esto- ing new evidence to MI5 that he had Macintyre’s angle is to narrate the and entirely ludicrous class war.” He nia, Armenia and the Ukraine. been a Soviet spy and Communist Philby story in the context of his reiterates this simplification with the help of a smooth In 1949, Philby became MI6’s rep- recruiter. Philby was confronted in long friendships with Elliott and An- throughout his book, but although manner and loyal friends. resentative in Washington, where he Beirut by Elliott. In the interroga- gleton. The sections on Angleton he is obsessed with the English class kept Moscow informed of Anglo- tion, Elliott stressed more than once have been inflated, perhaps to in- system, he really doesn’t understand American intelligence collaboration. that he believed that Philby had crease the book’s interest to Ameri- what he calls “the minute gradations In 1939, Philby, having shed Litzi, He had drunken lunches, at first stopped spying for Soviet Russia in can readers, but show all too con- of social stratification that meant so started to live with Aileen Furse, a weekly and then every other day, 1949—that is, before he was posted vincingly that “a profound and much in Britain.” The actress-daugh- store detective. “She believes in up- with James Angleton of the CIA’s Of- to Washington. MI6 wanted no ad- poisonous paranoia” seized Angle- ter of a Montreal businessman and a bringing, the British navy, personal fice of Special Operations and subse- missions that would have to be ton after Philby’s defection and con- man whose family money came from freedom, democracy, the constitu- quently head of CIA counterintelli- shared with the CIA, no confessions taminated his work at the CIA until shipping timber are both called tional system, honor...,”here- gence. Angleton believed that he that might create pressure for extra- his forced retirement in 1974. “aristocratic,” for example. ported to his Moscow controllers. “I was extracting information from dition or public trial in America. “A Spy Among Friends” is a rol- “A Spy Among Friends” ends am certain I can cure her of these Philby, but as a result of these ses- Philby made a brief written con- licking book. Mr. Macintyre is full of with an afterword by John le Carré, confusions.” She soon became his sions, says Mr. Macintyre, Philby fession that he had been a Soviet pep and never falters in the head- who worked in MI6 at the same time second wife (there would be two produced “more valuable intelli- agent, but the British government long rush of his narrative. He makes as Nicholas Elliott. This epilogue is more) but died in her 40s gence for Moscow than at any time was reeling from the damage of sweeping generalizations (“English- based on detailed notes that Mr. le after years of heavy drinking and in his life.” other recent espionage trials. MI6 men are naturally reticent”) and Carré claims to have taken during self-medication. In 1950, Philby forewarned Guy was set on avoiding another spy peppers his text with clichés: a mili- boozy meetings with Elliott in the Philby was recruited, with the Burgess, who lodged in the base- trial that would give a propaganda tary attaché is “a whiskery old war- late 1980s. It is worth reading for a help of his Cambridge contemporary ment of his Washington home, that coup to Russia by discrediting the horse,” a German diplomat is “a lux- slightly off-color story about Gra- and fellow Soviet agent Guy Burgess, their fellow Cambridge-recruited spy London government. Elliott, doubt- ury-loving aristocrat and a ham Greene, whose great ambition into MI6 in 1940. He came to spe- Donald Maclean was about to be de- less under instructions from London, flamboyant homosexual,” and an Ox- in his secret-service days was to use cialize in counterintelligence, and in tained. When Maclean and Burgess left Beirut, leaving Philby free to es- ford don is inevitably “eccentric.” the SIS code word for “eunuch” in 1944 was appointed head of the sec- fled to Moscow, Philby was sum- cape to Russia in January 1963. He The chief defect of Mr. Macin- an encrypted telegram. This final tion charged with collecting and in- moned to London for repeated inter- remained in Moscow for a quarter of tyre’s book, however, is that he un- note somehow encapsulates Mr. Ma- terpreting intelligence on Commu- rogations. Intelligence chiefs at MI5 a century—an English gentleman in wittingly treats English society, and cintyre’s tale of masculine loyalties nist espionage and subversion. He felt sure of his guilt, but they lacked his manners, alcoholic in his habits, particularly its secret service, in and manly derring-do. faced several quandaries. If his anti- a confession to convict him. At MI6 spreading disinformation in the Marxist terms. English nationals —Mr. Davenport-Hines is the Soviet operations all failed, he he had stout defenders—notably his West and creating a myth of himself who spied for the Soviets seem to author of “An English Affair: Sex, would be fired as section head, but stalwart friend Nicholas Elliott. This as a hero of ideological constancy. have been instructed that, if caught, Class and Power in the Age of he would injure the communist disagreement about Philby’s guilt re- “How sleepless must be Kim Philby’s their statements should emphasize Profumo.” THE WALL STREET JOURNAL. ** Friday - Sunday, August 15 - 17, 2014 | 11 BOOKS Hard Political Realism From a Sex-Filled Soap Opera book’s seductee is al-Senussi’s gor- becq’s svelte and peppery prose has CIA is ruthlessly efficient, instantly The Madmen of Benghazi geous English mistress Cynthia. As finally emancipated the French from ready to plunge into action any- By Gérard de Villiers for his mission’s wider purpose—the enslavement to the cadenced solem- where needed—especially if the Vintage Crime, 261 pages, $14.95 restoration of the Libyan monarchy— nities of Racine & Co.—a very large place is dangerous and staffed by it certainly makes much more sense company from Balzac to Zola down capable killers. Thus de Villiers BY EDWARD N. LUTTWAK than the U.S. policy that was actually to most living writers—there is no added 200 titles to the already oce- attempted, which was driven by the excuse for writing as de Villiers did. anic fabulation of television series, When Gerard de Villiers died in entirely feckless hope of installing a Indeed his French prose is so me- films and leak-fueled reporting that October 2013 at 83 years old, after democracy among the decidedly pre- chanical, so flat and so replete with excites false fears all over the world having written more than 200 novels national Libyans. Franglais—“Ces types sont la crème and systematically misleads the U.S. that sold at least 120 million copies, But that is the fundamental aspect du Crime Organisé à Bangkok” and taxpayer, who keeps funding an or- everybody waited to hear the cus- of all 200 de Villiers novels that may “Tiger Trap va faire beaucoup de ganization whose operational record tomary tribute of the French Minister have actually displeased Ms. Filip- mal aux bad boys” are two of many is one of abysmal incompetence. of Culture. But Aurélie Filippetti, who petti: He writes as a hardheaded po- examples—that William Rodarmor’s If I might mention one personal has offered generous, kind words litical realist, anti-dictator in general English translation of “Madmen” is example: While I was working in the upon the deaths of numerous writers (with none of the easy liberal indul- actually better than the original. field identifying and arresting real and artists during her time in office, gence for left-wing dictators so com- You might not think so because of terrorists and their enablers, some 18 said nothing. When asked, Ms. Filip- mon among French intellectuals), ac- the string-of-cliches text: “Ibrahim loudmouths flew into town to kidnap

petti said that she preferred to re- tively anti-Communist while the Cold Asaf Hanuka al-Senussi was stark naked when he a self-described imam—a harmless main silent, but then added the sibyl- War lasted, and firmly anti-Islamist stepped out of the shower, and he oaf who was in any case a police in- line pronouncement “To choose is to since then. He is what some might would deem more accurate than the stopped dead at his bedroom door. former—chatting all the while on make sense,” which was interpreted call politically incorrect—in other official verdict, given the exception- Cynthia was sitting on the edge of their cellphones with people in the as dismissive of de Villiers. words, his books tell unvarnished ally cruel murder of Berezovsky’s thebigbed...betweenthelapels 703 area code of Langley, Va. The readiest explanation for Ms. truths that many prefer to ignore. protégé Alexander Litvinenko and his of the young woman’s Chanel suit— The chatting, by the way, was lo- Filippetti’s refusal to honor the pulp De Villiers was also a writer who own despoliation. his birthday present to her—he gistically essential: The visitors novelist’s 48 years of nonstop writ- worked very hard. He was famous for In “Madmen,” there is a passage could see her nipples straining were staying in several different ing—at least four books every year cultivating top spies and diplomats as that reads today as a most remark- against the raw-silk blouse.” But the five-star hotels so that they could since 1965—is that Malko Linge, the sources, and French intelligence offic- able anticipation: In commenting on original is decidedly worse. claim the best suites in each one. hero of all 200 books, is an Austrian ers and prime ministers read his the outflow of weapons from post- In many of de Villiers’s earlier They remained in town even after aristocrat and CIA contract agent books for coded information and Gadhafi Libya, there is a reference novels, critics found even worse the oaf was kidnapped, charging ev- who invariably encounters, skilfully analysis of events that had just oc- to two truckloads that might be things to complain about: Outra- erything on their government credit seduces and athletically beds glamor- curred or were still unfolding across headed to Gaza “but not necessarily geously blatant product placements, cards. ous women even in the most unprom- the Middle East. “Les Fous de Beng- to Hamas. Probably [to] a radical which were sometimes amazingly ex- Given the persistent silence of our ising locales, say, on the edge of the hazi” was published six months be- Salafist group there called the Jund tended. One airline certainly got its diplomats, who cohabit with the CIA Libyan desert, as he does in “Les fore the attack on the U.S. mission in Ansar Allah, that is financed by Qa- money’s worth: “in spite of the com- in overseas missions and know the Fous de Benghazi” (2012), just re- the Libyan city. There really is an al- tar, Saudi Arabia and Yemen.... fort of the DC-8 of Scandinavian Air- sad truth, a French novelist can leased in English as “The Madmen of Senussi claimant to the Libyan they’re also linked with the Egyp- lines that brought him from Copenha- hardly be blamed for covering up the Benghazi.” throne—I know him personally and tian Muslim Brotherhood’s clandes- gen to New York in six hours...the enormous gap between our reliably That an eco-leftist, feminist gov- he is a fine gent. tine branch.” That Hamas must now abundant breakfast served by the competent armed forces and the ernment official would publicly disap- All of de Villiers’s novels are set compete not only with the Iran-fi- beautiful blonde stewardess” and it CIA’s “operatives” who hardly oper- prove of soft-core porn would not be very realistically, the technical stuff is nanced Islamic Jihad (whose leader goes on and on about the amenities ate at all and usually fail when they surprising. But Ms. Filippetti is her- invariably correct and the story only has appropriately converted to in the arrival lounge and the well- do. But I cannot help thinking that de self a novelist, and the sex scenes in a slight projection of well-docu- Shi’ism) but also with ultraradical cooked beef and rare wine served on Villiers contributed not a little to the her book, “Un homme dans la poche,” mented recent events. In the last Salafists financed by the most reac- board. especial suspicion of the United are far more graphic than anything in novel he published before he died, tionary Saudi families, against their Product placements weren’t un- States that is a feature of French life. “The Madmen of Benghazi.” Set in “The Revenge of the Kremlin,” which government’s will, is in fact a sub- usual for a writer relentlessly com- What we need is another de Villiers— post-Gadhafi Libya, the book contains will be published in English in April text of the fighting in Gaza. For de mercial—by publishing his own books only this one will write a comedy se- one remarkably artless straight sex 2015—“Madmen” is the first in a se- Villiers, incidentally, all this violent he retained full profits, not just royal- ries about our intelligence services scene and one barely glimpsed les- ries of de Villiers’s novels that are be- radicalism was a logical extension of ties, and meanwhile published other that would be altogether closer to the bian tryst as de Villiers efficiently ing released in the U.S.—the death of the violence of everyday Muslim life adventure and erotic authors. Prod- truth. tells the story: Malko successfully the exiled ex-oligarch Boris Bere- in the Middle East. uct placements were also ultimately —Mr. Luttwak is the author, most protects Ibrahim al-Senussi, heredi- zovsky, officially ruled a suicide, is in- Still, as a writer de Villiers had a harmless, but for one major excep- recently, of “The Rise of China vs. tary claimant to the Libyan throne stead depicted as an assassination by serious shortcoming: The man could tion: the CIA itself. the Logic of Strategy” (Harvard, from the usual Islamist fanatics. The Putin’s agents, a version that many not write. Now that Michel Houelle- As depicted by de Villiers, the 2012).

The Legends of Mexico City lived on and off since the 1980s, to tions one sit-down interview with Mr. can president Enrique Peña Nieto (a second half of the book. Mr. Goldman The Interior Circuit grieve and recuperate. The text Ebrard—“Public security is always a political rival of Mr. Ebrard) as a cor- tags along with a reporter friend as By Francisco Goldman swings from accounts of Mr. Gold- delicate matter,” the mayor says, “Hu- rupt and incompetent authoritarian is the reporter seeks out the families of Grove, 337 pages, $26 man’s own feelings and doings in re- man development. Sustainability. The still less persuasive. If Mr. Goldman a dozen young people who were ab- cent years (such as his lunch at Ka renewing of the economy.” But other- could substantiate the rumors he al- ducted from an after-hours nightclub BY KONSTANTIN KAKAES Wong Seng) to lengthy glosses on wise his high-profile neighbor figures ludes to about Mr. Peña Nieto, it and almost certainly killed. Mexican political life. in person only minimally in the book; would be newsworthy, as would sub- “A crime like that begs impa- The most unexpected restaurant Earlier books that purported to be Mr. Goldman sees him in the crowd in stantiation of claims, which Mr. Gold- tiently for a narrative,” Mr. Goldman I’ve ever been to is a Chinese place about the city, such as Jonathan Kan- front of the building after everyone man repeats, of a “pact” between the writes. He yields to that impatience. called Ka Wong Seng. It is in a quiet, dell’s definitive 1988 “La Capital,” runs outside following a minor earth- PRI and narcotics kingpins. Mr. Gold- “The Art of Political Murder” (2007), semi-industrial area near a sunken were also dominated by politics. But quake, and makes pals with Mr. Eb- man fails to come up with evidence of his nonfiction masterpiece about the highway in an otherwise anonymous in Mr. Kandell’s case, the history had rard’s bodyguards. insinuated corruption and does not assassination of a Guatemalan bishop, working-class neighborhood of Mex- heft. Not so with the present volume. seriously attempt to evaluate Mr. took him eight years to write. His ico City. There’s no shortage of glob- As Mr. Goldman confesses, “I didn’t Peña Nieto’s efforts to reform the PRI, first novel, “The Long Night of White alized cuisine scattered through the really know what I was talking about. dismissing talk of reform as “gar- Chickens” (1992), drew on a deep- city’s wealthy quarters. Ka Wong I had never paid much attention to Ka Wong Seng looks as if it bage.” seated sense of place to celebrate Seng is different. In the middle of a Mexican politics. For years, I’d con- fell into a Chinatown Mr. Goldman devotes many pages Guatemala City as “a city with at neighborhood where finding even a sidered [Mexico City] my place of es- to recounting an episode in which he least one of everything.” Mr. Gold- sit-down taco place would be a sur- cape from, or my neutral place be- wormhole and emerged finds himself on the losing end of a man’s Tepito is, by contrast, cursorily prise, it looks as if it fell into a China- tween, the two bordering countries complete with roasted duck. drunken brawl with a busload of rich sketched. He offers a verbose but su- town wormhole and emerged intact, where before I’d spent almost all my 20-somethings, an incident he sees as perficial look at the Tepiteño cult of complete with gleaming, delicious adult life: the United States and Gua- emblematic of the impunity the sons La Santa Muerte (“Saint Death”) be- roasted duck. temala.” The neighborhoods Mr. Gold- Mr. Goldman clearly thinks a lot of of the privileged enjoy in Mexico. He fore explaining: “Many years spent in I had never understood why it ex- man dwells in and upon—the gentri- Mr. Ebrard, who is the most promi- casts the anecdote as a visit to “the Central America had long ago used up isted until reading Francisco Gold- fying areas of Condesa and Roma, nent center-leaning politician of Mex- barbaric and murderous Mexico of whatever fascination I’d once had man’s diary of Mexico City life, “The and, briefly, Coyoacán—can indeed be ico’s fractured left. Even out of office, legend and of all too dispiriting and with folk religions.” Interior Circuit,” in which he explains wonderful refuges from the wider he remains the left’s premier modern- terrifying fact.” But it comes off in- Mr. Goldman’s world-weariness is, that “the family’s real business is the world for those with the modest (by izing technocrat and a likely presi- stead how his friend Juanca warned in light of the tragedy of his personal importation of Chinese food ingredi- American standards) means needed dential candidate in 2018. I too think it would at the time, as an incident in life, understandable. But his demands ents, which they sell and deliver to to live there. But Mr. Goldman’s indif- a lot of Mr. Ebrard, but Mr. Goldman’s which the drunken Mr. Goldman is that the reader be interested in some- restaurants throughout the city and ference becomes problematic when analysis of his politics rests too nar- partly to blame: “You’d look like a f— thing that he himself is not commit- beyond.” After his wife, who was he proposes to set himself up as an rowly on his single interview and moron if you wrote that s— down.” ted to exploring (he narrates his own raised in Mexico City, died in a 2007 analyst of the political system. verges on hagiography. Mr. Goldman As Mr. Goldman muses over his reading, in New York, of Mexican accident (recounted in fictionalized In the summer of 2012, Mr. Gold- also gives Mr. Ebrard credit for some own culpability, he abruptly decides magazine articles about the kidnap- form in “Say Her Name,” his previous man moves into an apartment in the programs, such as a vitally improved to drive to Tepito, a neighborhood ping) feel self-indulgent. “ book), Mr. Goldman, the son of a Gua- same building as Marcelo Ebrard, the bus network, that were in fact estab- near the city center pervaded by a —Mr. Kakaes was the Economist’s temalan mother and American father, city’s mayor (whose term would end lished under his predecessor. labyrinthine, quasi-legal market, bureau chief in Mexico City from returned to the city, where he has that December). Mr. Goldman men- Mr. Goldman’s indictment of Mexi- which then becomes central to the 2005 to 2009. 12 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. IN DEPTH Israel Outflanks White House

BY ADAM ENTOUS Jerusalem

hite House and State Department Wofficials who were leading U.S. ef- forts to rein in Israel’s military campaign in the Gaza Strip were caught off guard last month when they learned that the Israeli military had been quietly secur- ing supplies of ammunition from the Penta- gon without their approval. Since then the Obama administration has tightened its control on arms transfers to Israel. But Israeli and U.S. officials say that the adroit bureaucratic maneuvering made it plain how little influence the White House and State Department have with the govern- ment of Israeli Prime Minister Benjamin Ne- tanyahu—and that both sides know it. The munitions surprise and previously unreported U.S. response added to a string of slights and arguments that have bubbled behind the scenes during the Gaza conflict, according to events related by senior Amer- ican, Palestinian and Israeli officials in- volved. In addition, current and former Ameri- can officials say, U.S.-Israel ties have been hurt by leaks that they believe were meant to undercut the administration’s standing by mischaracterizing its position and delay a cease-fire. The battles have driven U.S.-Is- raeli relations to the lowest point since President Barack Obama took office. Now, as Egyptian officials shuttle be- tween representatives of Israel and Hamas seeking a long-term deal to end the fight- ing, U.S. officials are bystanders instead of in their historic role as mediators. The

White House finds itself largely on the out- Bloomberg News side looking in. Mr. Netanyahu, left, looks on as Mr. Obama speaks at the White House in March. The frayed ties raise questions whether the two can effectively work together. U.S. officials said Mr. Obama had a par- ticularly combative phone call on Wednes- the war broke out in Gaza. “We have many, administration didn’t seek immediate emer- influence. U.S. officials say Mr. Kerry day with Mr. Netanyahu, who they say has many friends around the world. The United gency funding, Pentagon officials said, add- reached out to the two because they had le- pushed the administration aside but wants States is their strongest friend,” the official ing that they expected Congress to approve verage with Hamas that would be critical to it to provide Israel with security assurances said. “The notion that they are playing the the request sometime in the fall. getting the group to agree to another in exchange for signing on to a long-term United States, or that they’re manipulating Unknown to many policy makers, Israel cease-fire. deal. us publicly, completely miscalculates their was moving on separate tracks to replenish From Israel’s perspective, Mr. Kerry’s As a 72-hour pause in the fighting ex- place in the world.” supplies of lethal munitions being used in cease-fire draft reflected an approach “com- pired at midnight Wednesday, a senior American officials say they believe they Gaza and to expedite approval of the Iron pletely out of sync with Israel, not just on a Hamas official said negotiators agreed to have been able to exert at least some influ- Dome funds on Capitol Hill. governmental level but on a societal level,” another cease-fire, this one of five days. ence over Mr. Netanyahu during the Gaza On July 20, Israel’s defense ministry said Michael Oren, a former Israeli ambas- The cease-fire was holding on Thursday. conflict. But they admit their influence has asked the U.S. military for a range of muni- sador to the U.S. under Mr. Netanyahu. The frayed relations raise questions been weakened as he has used his sway in tions, including 120mm mortar shells and “The best thing that Kerry can do is stay about whether Mr. Obama and Mr. Netan- Washington, from the Pentagon and Con- 40mm illuminating rounds, which were al- out....We need time to do the job, we need yahu can effectively work together. Rela- gress to lobby groups, to defuse U.S. diplo- ready kept stored at a prepositioned weap- to inflict a painful and unequivocal blow on tions between them have long been matic pressure on his government over the ons stockpile in Israel. Hamas. Anything less would be a Hamas strained over other issues, including Mr. past month. The request was approved through mili- victory,” Mr. Oren said in the days immedi- Obama’s outreach to Iran and U.S.-backed Tensions really started to flare after Is- tary channels three days later but not ately after Israel rejected the cease-fire peace talks with the Palestinians. rael launched Gaza ground operations July made public. Under terms of the deal, the draft. Today, many administration officials say 17 and the civilian death toll started to rise Israelis used U.S. financing to pay for $3 The watershed moment came in the the Gaza conflict—the third between Israel sharply, prompting U.S. officials to com- million in tank rounds. No presidential ap- early morning in Gaza on July 30. An Israeli and Hamas in under six years—has per- plain that Israel wasn’t showing enough re- proval or signoff by the secretary of state shell struck a United Nations school in Jab- suaded them that Mr. Netanyahu and his straint. Israeli officials rejected that notion, was required or sought, according to offi- aliya that sheltered about 3,000 people. national security team are both reckless saying Hamas was using civilians as human cials. Later that day, it was reported in the U.S. and untrustworthy. shields. A U.S. defense official said the standard that the 120mm and 40mm rounds had Israeli officials, in turn, describe the U.S. officials say Mr. Netanyahu told review process was properly followed. been released to the Israeli military. Obama administration as weak and naive, them he was interested in a cease-fire from While the military-to-military relation- “We were blindsided,” one U.S. diplomat and are doing as much as they can to by- the start, but the two sides clashed over ship between Israel and the U.S. was oper- said. pass the White House in favor of allies in the process of achieving one and the play- ating normally, ties on the diplomatic front White House and State Department offi- Congress and elsewhere in the administra- ers who would take part. were imploding. For the Americans, they cials had already become increasingly dis- tion. Bracing for a longer military campaign worsened dramatically on July 25, when turbed by what they saw as heavy-handed While Israeli officials have privately told than expected, Israel approached the De- aides to Secretary of State John Kerry sent battlefield tactics that they believed risked their U.S. counterparts the poor state of re- fense Department within days of the start a draft of a confidential cease-fire paper to a humanitarian catastrophe capable of lations isn’t in Israel’s interest long term, of the ground fighting to request money for Mr. Netanyahu’s advisers for feedback. harming regional stability and Israel’s inter- they also said they believed Mr. Netanyahu more interceptors for the Iron Dome, which The Americans wanted the Israelis to ests. wasn’t too worried about the tensions. The shoots down rockets aimed at population propose changes. The U.S. didn’t intend or They were especially concerned that Is- reason is that he can rely on the firmness centers. expect the draft paper to be presented to rael was using artillery, instead of more of Israeli support in Congress, even if he After consulting with the White House, the Israeli cabinet, but that was what Mr. precision-guided munitions, in densely pop- doesn’t have the White House’s full ap- Defense Secretary Chuck Hagel told aides to Netanyahu did. U.S. officials say Mr. Netan- ulated areas. The realization that munitions proval for his policies. The prime minister submit a proposal to Congress for $225 yahu’s office breached protocol by sending transfers had been made without their thinks he can simply wait out the current million. back no comments and presenting the pa- knowledge came as a shock. administration, they say. Within the administration, the request per to the cabinet for a vote. “There was no intent to blindside any- “The allegations are unfounded,” said Is- was deemed noncontroversial because the The paper was also leaked to the Israeli one. The process for this transfer was fol- rael’s ambassador to the U.S., Ron Dermer. Iron Dome was defensive and couldn’t be media. U.S. officials say they believe the Is- lowed precisely along the lines that it “Israel deeply appreciates the support we used in Gaza ground fighting, U.S. officials raeli government publicly mischaracterized should have,” another U.S. defense official have received during the recent conflict in said. Mr. Kerry’s ideas with the intent of buying said. Gaza from both the Obama administration In meetings at the Pentagon, the State more time to prosecute the fight against Then the officials learned that, in addi- and the Congress for Israel’s right to de- Department and the White House, Israeli Hamas because Israeli officials were angry tion to asking for tank shells and other mu- fend itself and for increased funding of Iron officials told the Americans Israel had over outreach by Mr. Kerry to Qatar and nitions, Israel had submitted a request Dome.” enough Iron Dome interceptors for the cur- Turkey. through military-to-military channels for a A senior Obama administration official rent Gaza operation, but wanted to replen- Israel and Egypt had sought to sideline large number of Hellfire missiles, according said the White House didn’t intend to get ish its stocks, according to U.S. officials Qatar and Turkey—two countries that to Israeli and American officials. into a “tit for tat” with the Israelis when who attended. So with Israel’s consent, the backed Hamas—rather than increase their The Pentagon’s Defense Security Cooper- THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 13 IN DEPTH ation Agency, or DSCA, was about to release an according to U.S. diplomats. A senior Republican congressional aide Instead of being handled as a military-to- initial batch of the Hellfires, according to Is- “The U.S. is a partner in this crime,” Jibril said Israeli officials told senators they wanted military matter, each case is now subject to raeli and congressional officials. It was imme- Rajoub, a leader in Palestinian President Mah- the money sooner rather than later. He said review—slowing the approval process and sig- diately put on hold by the Pentagon, and top moud Abbas’s Western-backed Fatah party, Israel’s main purpose in accelerating the vote naling to Israel that military assistance once officials at the White House instructed the said of the decision to provide arms to Israel in Congress to before legislators’ August re- taken for granted is now under closer scru- DSCA, the U.S. military’s European Command during the conflict. cess was to provide an overwhelming “show tiny. and other agencies to consult with policy mak- Even as tensions with the White House and of support” for the military operation. A senior U.S. official said the U.S. and Is- ers at the White House and the State Depart- the State Department were spilling over, Is- The last straw for many U.S. diplomats rael clashed mainly because the U.S. wanted a ment before approving any additional requests. raeli officials worked to expedite the Iron came on Aug. 2 when they say Israeli officials cease-fire before Mr. Netanyahu was ready to A senior Obama administration official Dome money on Capitol Hill. leaked to the media that Mr. Netanyahu had accept one. “Now we both want one,” one of said the weapons transfers shouldn’t have Republican Sen. John McCain of Arizona told the U.S. ambassador to Israel, Dan Sha- the officials said. been a routine “check-the-box approval” pro- said Israeli officials told lawmakers the money piro, that the Obama administration was “not A top Israeli official said the rift runs cess, given the context. The official said the was urgently needed because they were run- to ever second-guess me again” about how to deeper than that. “We’ve been there before decision to scrutinize future transfers at the ning out of interceptors and couldn’t hold out deal with Hamas. with a lot of tension with us and Washington. highest levels amounted to “the United States for a month or more. The White House and State Department What we have now, on top of that, is mistrust saying ‘The buck stops here. Wait a sec- Sen. Lindsey Graham, a South Carolina Re- have sought to regain greater control over and a collision of different perspectives on the ond….It’s not OK anymore.’ ” publican, said Congress’s goal in approving U.S.-Israeli policy. They decided to require Middle East,” the official said. “It’s become White House and State Department offi- the money quickly on Aug. 1 was to send a White House and State Department approval very personal.” cials were worried about public reaction. message to the administration to stop calling for even routine munitions requests by Israel, —Joshua Mitnick The Palestinians, in particular, were angry, Israel out about civilian casualties. officials say. contributed to this article. U.S.’sMan in Baghdad Key to Political Deal

Brett McGurk played a lead role in the bassador to Iraq, but withdrew his nomina- Obama administration’s 2010 effort to back tion after emails surfaced documenting his Iraqi Prime Minister Nouri al-Maliki’s bid for romantic relationship with a Wall Street a second term, earning him the nickname the Journal reporter in Baghdad, who subse- “Maliki Whisperer.” quently resigned from the Journal. Republi- cans argued Mr. McGurk, who was married at By Jay Solomon the time, wasn’t fit to serve in an ambassa- in Washington dorial post. Instead, the administration ap- and Matt Bradley in Baghdad pointed him to his current post, which doesn’t require confirmation. By Sunday, the State Department official In June, Islamic State militants gained had turned against Mr. Maliki to ensure he control of Mosul, Iraq’s second-largest city. wouldn’t stymie a new political transition. U.S. officials worried the militia could quickly As the administration’s point-man on Iraq, move on Baghdad as Mr. Maliki’s security the 41-year-old diplomat has been leading the forces either didn’t fight or simply aban- U.S. pivot on Mr. Maliki and facing down the doned their posts. challenges the Obama administration has in Mr. McGurk flew to Iraq and stayed for six helping stabilize a country in political tur- weeks in a bid to rally Mr. Maliki and the moil and fighting a growing threat from the army to put up a fight against Islamic State militants calling themselves the Islamic State. militants. He told a congressional hearing Mr. McGurk, despite his midlevel title of last month that the Iraqi government didn’t deputy assistant secretary of state, has seem to initially comprehend the threat the played a central role in crafting U.S. policy in group posed. Iraq for a decade. He is now serving as the Soon, his position—and the administra- White House’s leading interlocutor to build tion’s—flipped from supporting Mr. Maliki ties with Mr. Maliki’s successor and forge a to working with Iraqi politicians to find his unified front in battling Islamic State mili- replacement, according to U.S. officials. tants. The Obama administration has denied it It was the lightning-quick advances of has overtly sought to remove Mr. Maliki. those militants since June that dramatically But Mr. McGurk, Secretary of State John altered the White House’s view of Mr. Ma- Kerry, and the U.S. ambassador to Iraq, liki’s ability to lead and the need for political Robert Beecroft, began rallying Iraqi politi- change in Baghdad, say U.S. officials. Presi- cians to put in place a new Iraqi leadership dent Barack Obama had grown convinced after Mosul’s fall, seeking to capitalize on that Mr. Maliki, a Shiite politician, had be- April parliamentary elections. come too divisive to lead his multisectarian Mr. McGurk has mixed the political country’s fight. wrangling with helping to articulate the Into this maelstrom, the Obama adminis- U.S. view on the need to fight Islamic State tration has again put Mr. McGurk, this time militants. “We have to give it everything we

with the aim of promoting a new leadership Brendan Smialowski/Press Pool have,” he told the congressional hearing in Baghdad. The actions Mr. McGurk take in Mr. McGurk, center, talking with Secretary of State Kerry in June. Mr. McGurk, despite his title of last month. the coming days will be critical to whether a deputy assistant secretary of state, has played a central role in crafting U.S. policy in Iraq for a decade. In recent weeks, the U.S. joined an un- new government coalesces in Baghdad and likely alliance of Iraqi politicians, Shiite re- how deeply the Obama administration be- “It’s not unusual that you have a point port from Iran, it calmed U.S. fears that the ligious leaders, and Mideast governments in comes involved in a country it has sought to person to run a policy,” the Obama adminis- Iraqi leader would solely rule along sectarian pushing for Mr. Maliki’s removal. Iraq’s top extract itself from. tration’s ambassador to Iraq from 2009-12, lines. Shiite cleric, the Grand Ayatollah Ali Al Sis- That role was in evidence on Sunday, after James Jeffrey, said of Mr. McGurk’s signifi- “He moved a division’s worth of force tani, has used Friday prayer settlements to Mr. Maliki gave a nationally televised speech cant role in Baghdad. “He’s very, very compe- from Anbar province all across Iraq into calls for a more “inclusive” government, warning he might deploy Iraq’s army to blunt tent.” Basra,” Mr. McGurk said in a 2010 interview similar language that Mr. McGurk and oth- his political opponents’ push for power. A lawyer by training, Mr. McGurk moved with the Council on Foreign Relations. “That ers have used in seeking to replace Mr. Ma- In response, Mr. McGurk quickly wrote a to Baghdad in 2004 as a legal adviser to the was really quite extraordinary.” liki. tweet demanding the Iraqi leader honor his U.S. government’s occupying administrative Mr. McGurk’s experience made him one of Washington’s long-term Mideast neme- country’s constitution. The State Department office, the Coalition Provisional Authority, as the few senior Bush administration officials sis, Iran, also provided the Obama adminis- official then called Iraqi politicians to make well as to the American ambassador. who transitioned into Mr. Obama’s foreign- tration with an assist in pushing for Mr. sure they weren’t being placed under house As the top Iraq officer in President George policy team. He helped the White House Maliki’s ouster. arrest, U.S. officials said. W. Bush’s National Security Council, Mr. manage a review of its Iraq policy in 2009 In June, the State Department’s No. 2 Mr. McGurk’s daylong intervention was McGurk developed a relationship with Mr. and then served as a senior adviser to the diplomat, William Burns met in Vienna with among the most aggressive steps taken by Maliki after the prime minister took office in president as the U.S. began drawing down its Tehran’s foreign minister to try to coordi- the U.S. to sever ties with an Iraqi leader the 2006. military presence.xx nate a strategy on Iraq. While U.S. officials White House appeared content to leave at the U.S. officials had struggled to find a In 2010, Mr. Maliki faced a tough re-elec- have had no follow-on meetings with Ira- helm in Baghdad just months earlier. leader from Iraq’s Shiite sect that they be- tion. Mr. McGurk’s exhaustive diplomacy nian officials, according to the State De- “The United States stands ready to fully lieved was acceptable to the country’s Sunni helped to keep Mr. Maliki in office even after partment, Mr. McGurk and others have reg- support a new and inclusive Iraqi govern- and Kurdish communities, but not overly de- his political bloc came in a narrow second ularly tracked Iran’s positions through ment, particularly in its fight against #ISIS,” pendent on neighboring Iran, said officials place in the elections, said Iraqi and Ameri- intermediaries. Mr. McGurk tweeted Monday following the who worked on Iraq policy then. can diplomats. Mr. McGurk continued to de- On Wednesday, Iran’s Supreme Leader Iraqi parliament’s naming of a prime ministe- Mr. McGurk grew so close to Mr. Maliki fend Mr. Maliki as he grew more authoritar- Ayatollah Ali Khamenei joined Mr. McGurk rial candidate, Haider al-Abadi, to succeed that U.S. Embassy staff in Baghdad called him ian, sectarian and isolated, they said. by taking to Twitter to express his support Mr. Maliki. the prime minister’s “whisperer,” said offi- Mr. Jeffrey said he didn’t see the diplomat for Mr. Maliki’s anointed successor, Mr. Mr. Maliki’s expected ouster marked a cials who worked with him during the Bush as siding with Mr. Maliki. “Anyone who Abadi. dramatic U-turn for Mr. McGurk, who critics and Obama administrations. The relationship works these things knows that for a thousand “As new PM is elected, God willing, and supporters say has had one of the most grew, despite language barriers. reasons it is the default position that you problems will be solved & govt will give a important and enduring influences on Amer- When Mr. Maliki in 2008 led a successful kind of have to try and live with whoever is good lesson to terrorists who seek sedition ica’s relationship with Mr. Maliki throughout military campaign against a rival Shiite mili- in office.” in #Iraq,” read a message on Mr. Khame- the premier’s eight-year term in office. tia, the Mahdi Army, which drew strong sup- Mr. McGurk was named in 2012 to be am- nei’s Twitter account. 14 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. FROM PAGE ONE Pontiff Arrives in South Korea, Urges Peace

Continued from first page mainly focused on religious events, cial relations for nearly 60 years and plane. North Korea often tests rock- it may offer the 77-year-old a chance have clashed over the power to nom- ets coinciding with widely watched to make a fresh statement on the inate Catholic bishops. During the events, such as visits by U.S. Presi- Vatican’s hopes to improve relations flight from Rome to Seoul, the papal dent Barack Obama in April and Chi- with China, where the government plane flew over Chinese territory. nese President Xi Jinping in July. and Holy See have clashed over the When St. John Paul II flew to the Pope Francis, who once dreamed delicate question of naming bishops. Philippines in 1995—the latest papal of becoming a missionary in Japan, He could also address the plight visit to East Asia—Chinese authori- is likely to underscore his aspira- of Christians in the Middle East and ties denied permission to enter the tions to expand the Catholic faith in some Asian countries. country’s airspace. This time, as is Asia. On Tuesday, he called for Muslim tradition when flying over a country, At the meeting with local bish- leaders to push for an end to recent Pope Francis dispatched a telegram ops, he highlighted the dynamism of atrocities by Islamic fighters in to China, invoking “the divine bless- the country’s church, which was northern Iraq. He also sent a special ings of peace and well-being upon founded by Korean scholars. envoy to Iraq this week. the nation.” “You are heirs to an impressive This trip is the third pontifical Hua Chunying, a spokesperson tradition…from being a land of mis- visit to South Korea, after John for China’s Ministry of Foreign Af- sion, yours has now become a land Paul—who called for a “great har- fairs, said the pope’s remarks were

of missionaries,” he said. vest of faith” in Asia in the third Reuters noted. Sticking with his desire to use a millennium—traveled to the country Pope Francis rode in a Kia Soul on his way to a Mass in Seoul on Thursday. “China has always been sincere locally made compact car during his twice, in 1984 and 1989. and has always been making positive visit, the pope traveled Thursday in Pope Francis’ predecessor, Pope their faith. The Vatican has ruled out any efforts to improve Sino-Vatican rela- a Kia Soul, shunning larger bullet- Benedict XVI, didn’t get to Asia at There are at least 10,000 docu- side trip by the pope to the demilita- tions. We are willing to continue proof vehicles. all during his eight-year papacy. mented Catholic Korean martyrs, a rized zone that divides the two Ko- working with Vatican through con- Since his election last year, the Pope Francis is scheduled to travel phenomenon that highlights the te- reas. structive dialogues to promote bilat- pontiff has stressed to the clergy the in January to Sri Lanka and the Phil- nacity of the small church. While in South Korea, Pope Fran- eral relations,” she said. importance of frugality and asked ippines, which is home to more than The Vatican has said North Ko- cis will meet family members of the By the end of his stay, the pope them to forgo expensive limousines. half of the region’s Catholics. rean authorities declined an invita- victims of April’s ferry disaster, in will have delivered 10 speeches, in- Scenes of the pope riding in the The central reason for the Korea tion to allow Catholics there to which about 300 people died. He cluding four in English, a rarity for a dark-colored Soul were broadcast trip is Asian Youth Day, which in- travel and join in Monday’s Mass for will also meet a small group of so- pontiff who virtually always uses live across the country, and Kia Mo- volves thousands of young Catholics peace and reconciliation on the pen- called comfort women—Korean Italian for his public appearances. In tors Corp. said it was “honored” by from 23 countries. There will be a insula. women who were forced into sexual a gesture of appreciation to the Vati- the pope’s use of the car. But the closing Mass on Sunday. North Korea, which hasn’t made slavery by Japanese troops during can staff, he has brought a Holy See choice of a compact vehicle also The pope will also preside over a any official comment on the pope’s the World War II. switchboard operator with him for complicated security arrangements ceremony on Saturday to beatify 124 visit, affords virtually no religious Attention will be paid to any the trip. for authorities and forced more road Korean martyrs who were tortured freedom, and the number of Catho- comments from the pope on the —Jeyup S. Kwaak, closures. and killed in the 18th and 19th cen- lics currently worshiping there in Holy See’s relations with China. The James T. Areddy and Olivia Geng While the pope’s agenda is turies after refusing to renounce secret is unknown. Vatican and Beijing have had no offi- contributed to this article. Pope Francis Telegraphs ‘Best Wishes’ to Chinese BY DEBORAH BALL See. The first hint came from the pa- no fewer than nine of them, one for placed a Catholic bishop under In the 17 months since being pal plane on the way from Rome to each country he traversed. house arrest. SEOUL—In the fraught relation- elected pontiff, Pope Francis has Seoul. Soon after entering Chinese But the case of China is a special The Vatican has long been anx- ship between the Vatican and China, played his cards close to his chest, airspace, Pope Francis dispatched a one. The last time a pope traveled ious to repair relations with Beijing. the smallest of signals can say a lot. saying little about relations with telegram to President Xi. “I extend to East Asia, when St. John Paul II In its quest to spread the faith in In this case, it was a telegram from China, except to reveal that he and the best wishes to your excellency flew to the Philippines in 1995, Chi- Asia, where Catholicism today rep- on high. President Xi Jinping exchanged con- and your fellow citizens, and I in- nese authorities denied permission resents a tiny slice of the popula- The Holy See and Beijing have gratulatory messages when each voke the divine blessings of peace to fly over their territory, forcing tion, China is a prize. Its huge popu- had no official relations for decades. was elected last year. and well-being upon the nation.” the papal plane into a long detour. lation and the spiritual vacuum left In a clash over who has the power As a result, the pope’s five-day On the face of it, the telegram This time, Beijing allowed Pope by eroding Communist ideology are to nominate the Catholic bishops in trip to South Korea—his first voyage amounted to little more than diplo- Francis to fly over China. The ges- a dream for Vatican evangelists. the country, the Chinese govern- to Asia—is being touted as a prime matic niceties. The pope tradition- ture is significant, particularly in As a result, the dog-whistle mes- ment claims the right to decide the opportunity for the Argentine pon- ally sends a telegram to the govern- light of the especially poor state of sage sent from the papal plane will names, while Rome regards it as the tiff to make a declaration about re- ments of the countries he flies over. relations, which have hit a low in re- surely perk up the antenna of Vati- exclusive prerogative of the Holy lations with China. On the Rome-Seoul flight, he sent cent years after Chinese authorities can- and China-watchers alike. Insurance Magnates From West Aim at Markets in Asia

Continued from first page renaming it Starr Property & Casu- already has operations in Hong C.V. Starr & Co. in Shanghai in 1919. which provides commercial prop- nior executives from AIG’s Asian op- alty Insurance (China) Co. Ltd. Kong, Japan, Australia and else- Mr. Buffett’s conglomerate, erty, casualty and other types of erations and has picked up staff (Starr China). New product lines are where in Asia, has deep links to which has long been a big player in coverage, is applying for licenses to from other companies, too, as part planned in commercial property- China. The purchase of Dazhong was insurance in the U.S., established a regulators in Sydney, Hong Kong, of ambitious plans to boost its com- and-casualty products, covering ev- made by Starr Indemnity & Liability U.S. commercial-coverage business Singapore and Europe, as well as re- mercial insurance business in the erything from political risk to food Co., part of the Starr group, which last year. It has been in the process cruiting talent from established ri- region, according to people familiar safety. can trace its roots back to Cornelius of expanding globally. Berkshire vals such as AIG, a separate person with the matter. Mr. Greenberg’s company, which Vander Starr, who founded insurer Hathaway Specialty Insurance, familiar with the matter said. “People like Warren Buffett have a very sensitive nose,” said Jona- than Zhao, head of actuarial and in- Booming Asia surance-advisory services for the | Property and casualty coverage takes off Asian-Pacific region at Ernst & Compound annual growth in premiums in decade through 2012 Young. “There is a big potential for commercial insurance in Asia that has not been captured and this is Canada 9.8% one area that could potentially push the local players out and get the in- France 7.6% ternational players in.” Germany 5.3% Mr. Greenberg’s acquisition of Dazhong turned heads in the indus- Italy 4.9% try and marked a significant expan- sion in China by the man who Japan 3.5% helped turn AIG into the world’s biggest insurer before his forced de- U.K. 3.2% parture from the company amid an accounting scandal in 2005. Since U.S. 3.0% then, Mr. Greenberg has been build- ing the Starr Cos.’ insurance opera- Asia, excluding Japan 14.5% tions across the world. Hank Greenberg Warren Buffett He has already started to re- Source: Swiss Re via Credit Suisse; Bloomberg News (photos) The Wall Street Journal structure his Chinese acquisition, As of 12 p.m. ET Euro 1.3376 À 0.07% Yen/US$ ¥102.46 g 0.02% Yen/A$ ¥95.48 À 0.17% Oil 96.09 g 1.54% Gold 1311.90 g 0.07% 10-year Treasury À 3/32 yield 2.417% 3-month Libor 0.23110 Wal-Mart Cuts Profit Outlook SAIC Motor Is As U.S. Store Traffic Weakens Ready for the Road BUSINESS & FINANCE 17 HEARD ON THE STREET 28

Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. asia.WSJ.com THE PEOPLE’S MONEY |ByWeiGu Russia’s China Acts as Cash Departs Oil Exports

China is trying to regain control of the cash flowing across Leaky Great Wall | Capital leaves China as the property market weakens To Asia its leaky borders and the effects will be felt around the world. Yuan positions for foreign-exchange purchases represent money China's central bank injects into the financial system to buy Beijing technically bans its foreign currency from its citizens. It measures the volume of capital flows. Negative figures indicate capital outflows. Hit Record BY ERIC YEP citizens from buying overseas Yuan positions for forex purchase Domestic house price growth Chinese overseas property purchases properties and stocks, and limits Yuan positions House price growth the money they 700 billion yuan 14% $16 billion Estimate As Moscow’s relations sour with can transfer the West, Russia’s energy sector is abroad to $50,000 600 12 14 pivoting to Asia, with oil exports to a year. Despite the region jumping to record highs 500 10 12 these rules, and analysts predicting a boost for 400 8 wealthy Chinese 10 some Asian energy companies. have found ways 300 6 Russia has sent more than 30% 8 to move their 200 4 of its oil exports—more than 1.2 money across the border, making 6 million barrels a day, the most them the biggest international 100 2 ever—to Asia this year, trade and buyers of properties in places like 0 0 4 analyst data showed. Around a fifth the U.S. and fueling a boom in of Russia’s oil exports went to Asia- 2 Macau’s casinos. –100 –2 Pacific in 2012, according to the In- Underground channels—such –200 –4 0 ternational Energy Agency. as the money-exchange shops 2010 ’11 ’12 ’13 ’14 2009’10 ’11 ’12 ’13 ’14 Meanwhile, Russian oil exports found across Hong Kong—have Sources: People's Bank of China, OSBO (forex purchase, price growth); Jones Lang LaSalle (overseas purchases) The Wall Street Journal to Europe via its largest pipeline flourished in recent years. Some network have fallen from a peak of Chinese banks have quietly 3.72 million barrels a day in May provided services to funnel informal money-transfer China’s gambling capital is Both of the main channels for 2012, to less than three million bar- customers’ money across the networks. Other methods are among the first to feel the chill. getting cash out in Macau are rels a day in July. border. more controversial, such as a Macau’s casino revenue fell for a being squeezed. UnionPay said in Most of the oil heading to Asia is “There seems to be a desire to Bank of China program that second straight month in July, March that its payment network shipped to China, and comes as Rus- tighten,” said Oliver Barron, head allowed clients to move large dropping 3.6% from a year earlier. has tightened checks on sia seeks to boost ties to the energy- of investment bank North Square sums abroad. Grant Bowie, chief executive suspicious transactions in the hungry region amid heightened ten- Blue Oak’s Beijing office. “The In the gambling center of officer of MGM China Holdings territory to combat money sions with Europe. While the crude government is reacting to Macau, the rich have used junkets, Ltd.—MGM Resorts laundering. oil is priced at slightly above the perceived outflows as Chinese which lend them money in the International’s China venture— Junket operators are facing Dubai benchmark, it is a plus for businessmen want to get their former Portuguese territory and said at a news conference this pressure from casinos and Asian buyers as the oil is relatively money out.” collect the debts back home. Less past week that China’s moves to regulators to disclose the names close and they get to diversify away The government has a lot of wealthy gamblers use their strengthen capital controls of their customers. from the conflict-ridden Middle leaks to plug. These include UnionPay cards, China’s only represent “a significant policy Other methods of moving East. longstanding strategies such as domestic bank card, to make fake shift” that has made Chinese money are also disappearing. The impact of sanctions on the businesses over-invoicing their purchases, pocketing the cash visitors to Macau “more Jewelry counters on casino floors, gas sector, however, remains uncer- purchases or individuals using they receive. circumspect.” Please turn to page 21 tain and energy companies have warned of higher risks. At stake is Russia and China’s $400-billion nat- ural-gas deal signed in May, which will need a separate network of Shadow-Lending Troubles Spur Protests pipelines and new exploration work to be conducted. BEIJING—Small protests popping the difficulty of pinning down who “They are clearly, in the medium up outside banks and government is responsible when something goes term, moving more barrels to Asia,” offices around China in recent days wrong. said Johannes Benigni, head of en- have cast a spotlight on shadow The Sichuan protests illustrate ergy consulting firm JBC Energy. lending, a sector providing impor- the problematic role of lightly regu- Asia isn’t just benefiting from tant alternative financing channels lated credit-guarantee companies, the arrival of more Russian crude for small firms shut out of regular which have become an important oil. Earlier this month, sanctions bank loans. component on the path to loans for were imposed on the transfer of On Tuesday, a group of investors China’s small and medium-size Western goods and technology to in the city of Chengdu, in Sichuan firms. Banks and other financial in- Russia’s oil-and-gas industry, espe- province, held a demonstration in stitutions typically require signifi- cially for exploration in deep water, front of local government buildings cant collateral, which small firms the Arctic and shale. after one of the biggest credit-guar- rarely have, to back a loan. But lend- Analysts say chief among the po- antee companies in Sichuan failed to ers are sometimes willing to extend tential Asian benefactors could be step in and cover loans to small credit if another company is willing China’s Honghua Group Ltd., one of firms it had insured. to promise to pay off the loan if the the world’s largest builders of on- A day earlier, investors staged borrower can’t. The credit-guaran- shore drilling rigs, which gets about protests outside Industrial & Com- tee companies give banks and other 12% of its total revenue from Russia mercial Bank of China Ltd. lenders peace of mind that their from companies such as Eurasia

branches in Guangzhou and Shang- Zhang Liang loans are safe, charging the bor- Drilling Co. and Eriell Group. hai. The investors, which numbered A photo taken by a protester shows investors at an ICBC office in Guangzhou. rower a small fee for the service. “Honghua can provide similar a few dozen, had been told they The banner says, ‘Swindler ICBC, pay back our blood-and-sweat money.’ An investor surnamed Gao in quality rigs as Western companies would need to wait at least 15 Chengdu said he invested 500,000 with a 20% price discount, plus months to get the payout on a trust- debt in case of default. Several in- panies act as conduits by raising yuan (about $81,000) in a small loan cheaper and more-efficient delivery company product sold at the bank. vestors said the bank had assured money to invest in assets or to company late last year, with the thanks to access by rail instead of They wanted the lender to step in to them of the product’s low risks. make loans. Some analysts have pre- funds then being lent out to small ship,” said Gordon Kwan, head of ensure payment. Neither ICBC nor the trust com- dicted that there could be a wave of businesses in the province. Mr. Gao oil-and-gas research at Nomura. “Swindler ICBC, pay back our pany responded to requests for defaults among trust companies, but said he was promised at least a 15% Other Chinese companies that blood-and-sweat money,” said a comment. so far there have been only a hand- annualized return on his invest- may benefit from Russian opera- banner outside a bank office in Regulators have long sought to ful of failures. ment, which pays off at the end of tions are Petro-King Oilfield Serv- Guangzhou. rein in the proliferation of shadow The protests, which follow other 2014. ices Ltd., which has worked on Ros- The product’s prospectus said lending amid concerns over a similar events around China in re- The lending was guaranteed by neft’s Sakhalin offshore drilling ICBC has no liability to pay back the buildup of debt. China’s trust com- cent months, serve as a reminder of Please turn to page 23 Please turn to page 20 16 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. BUSINESS & FINANCE China Mobile SeeksAcquisitions Fosun Drops

BY LORRAINE LUK Gouhua said at the company’s earn- gain growth momentum. ments will continue to weigh on the Offer to Buy ings conference. China Mobile’s net profit for the company’s earnings this year, China HONG KONG—China Mobile Ltd. “Our targets are not limited to six months ended June 30 fell to Mobile could see better growth next is on the lookout for acquisitions to those in emerging countries. We will 57.74 billion yuan ($9.37 billion) year as its leading 4G network cov- Resort Firm reverse slowing growth, its chair- also invest in companies that oper- from 63.13 billion yuan a year ear- erage is expected to boost its data man said Thursday, after the world’s ate in developed markets if they of- lier. Revenue rose 7.1% to 324.68 bil- revenue and help lure more consum- largest wireless carrier by subscrib- fer good growth opportunities.” lion yuan from 303.10 billion yuan a ers from rivals, said analysts. Club Med ers posted an 8.5% decline in first- China Mobile has already become year ago. “The network advantage China BY BLANDINE HENAULT half net profit. more active in pursuing growth op- Tencent Holdings Ltd. ’s popular Mobile is building in 4G will continue AND CHAO DENG China Mobile has been hit by the portunities beyond its saturated instant-communication application to pay dividends for the years ahead. government’s continued efforts to home market. In June, China Mobile WeChat, which allows users to send We also believe [Apple Inc.’s] iPhone PARIS—China-based Fosun In- promote competition by state-con- agreed to buy an 18% stake in Thai free voice and text messages, was 6 will be a major catalyst for sub- ternational Ltd. and its French pri- trolled companies. Being the domi- telecommunications carrier True also a drain on the company’s reve- scriber additions,” said Chris Lane, an vate-equity partner Ardian have nant player in China, China Mobile Corp. for $882 million, marking its nue from texting. To mitigate the analyst at Bernstein Research. dropped their offer for French re- was ordered to reduce the intercon- first significant overseas investment. loss in revenue, China Mobile has China Mobile only started offer- sort operator Club Méditerranée nection fees—money it receives Facing rising competition in been striving to expand its new data ing Apple’s iPhones on its new 4G SA, clearing the way for a compet- from smaller domestic rivals to con- China, the company is doubling its and multimedia content services. network in January, several years ing Italian investor and highlighting nect to its network—beginning this capital spending to $12 billion this With more than 790 million mo- behind China Unicom and China the challenges facing the global am- year. year to upgrade its network in order bile subscribers, China Mobile con- Telecom because it operates on a bitions of one of China’s largest pri- “We will continue to look for in- to provide speedier fourth-genera- trols more than 50% of the world’s less popular homegrown 3G technol- vately owned conglomerates. vestment opportunities outside in tion mobile services. China Mobile largest mobile market by subscribers. ogy standard called TD-SCDMA. More than 18 months ago, Club an active but cautious manner. We is hoping its head start in building a But the company’s results were in Mr. Xi said on Thursday the Chi- Med’s board and management unan- are interested in companies that will faster 4G network capable of han- contrast to a 26% increase in first- nese carrier would offer Apple’s new imously backed a Fosun-led offer help grow our core telecom busi- dling data-heavy applications such half earnings reported by smaller ri- iPhone to its users, but he declined that valued the company at €558 ness—for example, content and In- as video streaming and mobile val China Unicom last week. to comment on when it might be million ($746 million). Last month, ternet companies,” Chairman Xi games could help the company re- While the costly network invest- available. however, the company recom- mended a competing offer from Global Resorts, a company con- trolled by Investindustrial, a pri- Lenovo’s Phones Gain in Emerging Markets vate-equity fund managed by An- drea Bonomi. The move marks a further set- Continued from first page global market isn’t guaranteed. back in Fosun’s attempts to strike quarter through June from $174 mil- Lenovo Expands Its Reach Challenges from other Chinese ri- international deals and its aim to lion a year earlier, beating analysts’ Second-quarter market share among smartphone vendors vals that offer even less-expensive build a business model similar to expectations. phones could put more pressure on the U.S. firm Berkshire Hathaway. Revenue increased 18% to $10.4 China World-wide its profit margins, not just in China The Chinese conglomerate, which billion. but overseas, Sanford C. Bernstein made its first foray overseas by pur- Lenovo said its smartphone ship- Lenovo 12.5% Samsung 25.2% analyst Alberto Moel said. chasing an almost 10% stake in Club ments in the quarter jumped nearly Mr. Yang said Lenovo’s smart- Med in 2010, followed with the pur- fourfold in Southeast Asia and six- Xiaomi 12.4 Apple 11.9 phone business in China is profit- chase of New York’s Chase Manhat- fold in Eastern Europe, without dis- able but earns only “a little bit of tan Plaza for $725 million and the Coolpad Huawei closing figures. 11.5 6.9 money.” Profitability from smart- acquisition of a Portuguese insurer “Those are our future potential phones in emerging markets is for $1.4 billion. Huawei Lenovo 5.4 markets, so we definitely put more 11.4 higher than in China, he said. However, its attempts to make effort and more resources into those Huawei, the world’s third-largest bigger foreign purchases have pitted Samsung LG markets,” Mr. Yang said. 9.8 4.9 smartphone maker ahead of Lenovo, the company against competitive But Lenovo’s success in the Note: Period (April-June) said last month that its smartphone foreign bidders. Fosun lost out in global market also hinges on how Source: IDC The Wall Street Journal shipments in the Middle East and June to a domestic competitor for much it can benefit from Motorola. Africa in the first half of this year South Korean insurer LIG Insurance Mr. Yang said Motorola’s strength in jumped more than sixfold from a Co. and is currently trying to buy North America and Latin America, sion, posing a threat to Samsung as sweet spot,” said Counterpoint ana- year earlier, while its Latin America publisher Forbes Media LLC. as well as its intellectual property they sell affordable Android hand- lyst Tom Kang. Like most Chinese shipments rose nearly fourfold. Up- Mr. Bonomi, who owns nearly and close ties with mobile carriers sets with competitive technological handset makers, Lenovo sells smart- start Xiaomi Inc., meanwhile, is also 11% of Club Med, offered €21 world-wide, will help Lenovo be- features to millions of consumers phones that are much less expensive trying to sell more smartphones ($28.07) a share for the company, or come a more-competitive player replacing their basic cellphones than the iPhone or Samsung’s flag- abroad. 22% above Fosun’s bid. abroad. In the U.S., Lenovo plans to with smartphones. As the market ship Galaxy phones. Among Chinese PCs still account for nearly 80% Fosun and Ardian are now left concentrate on Motorola-branded for high-end smartphones becomes companies, Lenovo is the most fa- of Lenovo’s revenue, but the mobile- with an 18.5% Club Med stake. Fosun smartphones, rather than introduc- saturated, the industry’s growth is miliar brand in Southeast Asia devices business, which represents has long said that it wants to help ing phones with the Lenovo logo. being fueled by demand for inexpen- thanks to its PC business, Mr. Kang 15%, is growing quickly. In the sec- Western brands such as Club Med Motorola is unprofitable under sive models in emerging markets, said. ond quarter, Lenovo’s global smart- expand in China, taking advantage Google, but it is recovering faster such as Southeast Asia, India, Brazil While many smartphone makers phone market share was 5.4%, trail- of an increasingly sophisticated and than expected, and Lenovo contin- and Russia. outsource their production, Lenovo ing Samsung with 25.2%, Apple with wealthy consumer market on the ues to predict it can make the busi- Lenovo, for example, now holds manufactures its own handsets at 11.9% and Huawei with 6.9%, accord- mainland. ness profitable in four to six quar- 8% of the Malaysian market and 7% its huge industrial complex in the ing to IDC. In China, Lenovo became The pair haven’t ruled out “ex- ters after it closes the deal, Mr. of Vietnam’s, after having little central Chinese city of Wuhan. In- the biggest smartphone vendor by ploring any potential options which Yang said. presence in those two countries a house manufacturing has given the grabbing 12.5% of the market, while would serve Fosun’s and Club Med’s Chinese players such as Lenovo year ago, according to Counterpoint company flexibility in making rival Samsung, with 9.8%, struggled best interests,” Fosun said in a filing and Huawei Technologies Co. are Research. changes to its product lineup. with high inventories of unsold to the Hong Kong Stock Exchange stepping up their overseas expan- “They seem to have found a Still, Lenovo’s success in the phones. on Thursday. INDEX TO BUSINESSES AND PEOPLE

Businesses China Telecom...... 16 InvestIndustrial...... 16 Swire Pacific...... 18 Chambers, John...... 18 This index of businesses mentioned in China Unicom...... 16 Jones Lang LaSalle...... 21 Swiss Re...... 1 Craigie, Rowen...... 18 Cisco Systems...... 18,22 Kabam...... 28 Telstra...... 23 Foran, Greg...... 17 today’s issue of The Wall Street Journal Club Méditerranée...... 16 Kate Spade...... 17 Tencent Holdings...... 23 Greenberg, Maurice...... 1 is intended to include all significant Country Garden Holdings...... 21 Kia Motors...... 14 ThyssenKrupp...... 22 Hau Thai-Tang...... 19 reference to companies. First reference Crown Resorts...... 18,23 King Digital Entertainment...... 28 True...... 16 Ho, Lawrence...... 18 to the companies appears in bold face Daewoo Shipbuilding & Marine Kohl’s...... 22 TRW Automotive Holdings...... 19 Holley, Charles...... 17 type in all articles except those Engineering...... 20 Lenovo Group...... 1,23 Wal-Mart Stores...... 17,22 Johnson, Brian...... 19 LG Electronics...... 19 on page one and the editorial pages. Delphi Automotive...... 19 Xiaomi...... 16 Lee, Ben...... 21 Denso...... 19 LIG Insurance...... 16 Matsumoto, Takashi...... 23 London Stock Exchange Group...... 20 ZF Friedrichshafen...... 19 American International Group...... 1 Dongfeng Motor Group...... 28 Zynga...... 28 McMillon, Doug...... 17 Echo Entertainment Group...... 18 Machine Zone...... 28 Ngai, Tran Viet...... 21 Apple...... 1,16,28 Macy's...... 17 Electrolux...... 19 Packer, James...... 18 Ardian...... 16 Markit...... 20 Arista Networks...... 18 Eriell Group...... 15 Melco Crown Entertainment...... 18 People Pride, Jason...... 22 Autoliv...... 19 Eurasia Drilling GDR...... 15 MGM Resorts International...... 15 This index lists the names of business- Roth, Phil...... 22 AXA...... 1 Ford Motor...... 19 Michael Kors Holdings...... 17 people and government regulators who Sheng Jiemin...... 17 Bank of China...... 15 Fosun International...... 16 Mobileye...... 19 receive significant mention in Today’s Simon, Bill...... 17 Barclays...... 20,28 GE...... 19 Slosar, John...... 18 Prudential...... 1 Journal. Berkshire Hathaway...... 1,16 General Electric...... 19 Qualcomm...... 17 Subramanian, Savita...... 22 Bloomberg...... 20 Google...... 1 Robert Bosch...... 19 Ashe, Neil...... 17 Xia, Darren...... 21 Guangzhou Automobile Group...... 28 Yang Yuanqing...... 1 BorgWarner...... 19 RWE...... 22 Barron, Oliver...... 15 Brevan Howard Asset Management...... 20 Henkel & Co...... 6 SAIC Motor...... 28 Yim, Sally...... 1 Caxton Associates...... 20 Huawei Technologies...... 16 Samsung Electronics...... 1,19 Bonomi, Andrea...... 16 Zhang Liang...... 23 China Credit Trust...... 23 Industrial & Commercial Bank of China...15 Samsung Securities...... 20 Bowie, Grant...... 15 Zhang Xinzhu...... 17 China Mobile...... 16,23 International Energy Agency...... 15 Starr...... 1 Buffett, Warren...... 1 Zhao, Jonathan...... 14 THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 17 BUSINESS & FINANCE Qualcomm Case Sparks Debate in China

BY LAURIE BURKITT in China, where regulators are tight- earlier in the week, he was quoted ment and Reform Commission ers can have with companies, said ening enforcement of antitrust law. as saying he had been removed for makes clear that panelists can’t people who serve on government BEIJING—The rules guiding rela- The Qualcomm investigation has speaking out on behalf of foreign have overlapping roles in the public committees. Internal regulations are tionships between China’s cabinet attracted attention in recent corporations. In another state-media and private sector. complicated, the committee member advisers and private businesses are months, as China prepares to roll report, published Thursday, he de- Still, other people say potential said, adding that advisers operate in spurring debate, after the dismissal out a new fourth-generation tele- nied reports that he had been paid conflicts of interest often pop up in “a gray zone.” of a government antitrust adviser communications network that relies as much as 6 million yuan cabinet advisory panels. Committee Experts serving on government who conducted paid work on behalf on Qualcomm’s technology. Officials ($975,000) for the Qualcomm work. members frequently are also law- panels are told not to disclose infor- of U.S.-based Qualcomm Inc. have told state media that the inves- yers who represent companies or mation to the public, the person China’s State Council dismissed tigation is nearing a conclusion. academics who write industry or said. There is an understanding that Zhang Xinzhu from its antitrust ad- A Qualcomm spokeswoman said A government adviser corporate papers, an economic-arbi- advisers won’t take an antigovern- visory panel this week after learning the company hired a U.S. firm to tration committee member said. The ment stance, the person said. that he worked on a report advising provide an economic analysis re- was dismissed for work person said some members step “No one can find out the rules,” the wireless-technology company on lated to the government’s antitrust related to Qualcomm. down voluntarily if they feel their said a person serving on an eco- pricing and business strategies, ac- investigation, stating that Mr. Zhang roles are inappropriate. nomic-arbitration committee. cording to state-run news agency was one of the people engaged by “Conflict is an issue and it’s not The State Council couldn’t be China News Service. that firm. She said Qualcomm paid clearly defined in China. When it’s reached for more information on the Chinese regulators have been in- the firm its standard rates, while Some experts say that despite a not clearly defined, who do you rules. vestigating whether Qualcomm having no direct financial dealings lack of clarity from the cabinet, Mr. have to blame?” the person said. It was unclear if Mr. Zhang dis- holds monopoly power over impor- with Mr. Zhang. Zhang should have known that the China’s State Council leans on closed to the committee any rela- tant technology, a matter before the Mr. Zhang declined to comment relationship with Qualcomm was a experts—often lawyers or academ- tionship he held with corporations antitrust panel on which Mr. Zhang on his relationship with Qualcomm conflict of interest. Sheng Jiemin, a ics—for advice on such matters as or if he was required to do so. served. in a text message Wednesday, say- law professor at Peking University antitrust and economics. But the —Kersten Zhang in Beijing Qualcomm is one of several mul- ing, “The timing is terrible.” who says he is a close friend of Mr. cabinet hasn’t outlined clear restric- and Don Clark in San Francisco tinational companies under pressure In an interview with state media Zhang’s, said the National Develop- tions on the relationships its advis- contributed to this article.

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Health Costs, Weak Store Traffic Hinder Wal-Mart BY SHELLY BANJO “We wanted to see stronger concerns that efforts to improve sign up for coverage. The company store, as well as overnight stockers AND MICHAEL CALIA comps in Wal-Mart U.S. and Sam’s store merchandise and operations said it now expects to shell out an and bakery workers, bumping up Club,” Chief Executive Doug McMil- hadn’t managed to materially boost additional $500 million in health- salaries and wages by $200 million The world’s largest retailer is lon said. “Stronger sales in the U.S. sales. Meanwhile, Wal-Mart’s core care expenses related to increased from the previous year. having a hard time returning to businesses would’ve also helped our low-income customers continue to employee enrollment and higher Wal-Mart now expects to spend growth and doesn’t expect sales to profit performance.” struggle with depressed wages and costs, up from the $330 million in an extra five cents to seven cents a improve in the U.S. for much of the A rough streak of results from re- cuts in government benefits. increases it originally expected. share on e-commerce, including rest of the year. tailers is raising concerns about the “Our customers are still under “Health-care costs increased ap- building a new distribution center Wal-Mart Stores Inc. cut its health of the consumer as the econ- pressure,” Chief Financial Officer proximately $180 million versus last this year in Indiana. It previously earnings guidance for the year after omy chugs through the second half Charles Holley said. “They are con- year and were well above our initial said it expected to spend an extra it posted its seventh straight quar- of the year. The bad news came not cerned with their cost of living and estimates,” said Wal-Mart U.S. CEO two cents to four cents a share. terly decline in U.S. store traffic and just from Wal-Mart, but also from employment.” Greg Foran, who stepped into the The company also cut its online said growth in online sales would Macy’s Inc., Michael Kors Holdings Shoppers like Jessica Man- role this week following the depar- sales-growth projections for the slow. It cited sluggish consumer Ltd. and Kate Spade & Co., compa- zanares, 28 years old, continue to ture of Mr. Simon. year to “mid-20s” from 30%. Its on- spending and higher costs associ- nies that until recently had weath- pinch pennies. The company now expects full- line sales, as well as its smaller-for- ated with building new smaller-for- ered the weak demand and heavy “All the prices are going up on year earnings of $4.90 to $5.15 a mat grocery stores, have been mat stores, increased health-care ex- discounting that have plagued the gas, food, school supplies,” said the share, down from its previous range among the few positive sales drivers penses, and greater investments in industry. The Commerce Department mother of three as she compared of $5.10 to $5.45 a share. U.S. com- for the company. During the quarter its e-commerce operations. said Wednesday that spending at notebook prices at a Wal-Mart store parable-store sales in the three ended July 31, global online sales Sales excluding newly opened or U.S. retailers was flat in July. in Denver. months ending Oct. 31 should be rel- rose 24% and contributed 0.3 per- closed stores in the U.S. were flat. For the three months ended July This year, Ms. Mazanares is com- atively flat, the company said. centage point to Wal-Mart’s U.S. That was a mild improvement after 31, Wal-Mart posted a profit of paring school-supply prices between Wal-Mart said it continued to sales, excluding newly opened or five straight quarters of declines, $4.09 billion, up slightly from $4.07 the dollar-store where she is an as- spend on compliance costs, includ- closed stores. Wal-Mart brought in but nevertheless underscored the billion a year earlier. Revenue rose sistant manager and Wal-Mart. “It’s ing $43 million on costs related to a $10 billion in online sales last year. challenges facing a division that 2.8% to $120.1 billion. a little bit cheaper here, and a penny continuing investigation into alleged “We grew faster than the market, made up 60% of the retail company’s Wal-Mart investors had low ex- here and there adds up.” violations of the U.S. antibribery law but we didn’t grow as fast as we $476 billion in revenue last year yet pectations going into Thursday’s re- One unexpected headwind came and changes to its global compliance wanted to,” said Neil Ashe, who hasn’t recorded positive compara- port. The departure of U.S. chief Bill from health care, where costs are program. It also added more hours leads global e-commerce at Wal- ble-store sales since 2012. Simon earlier this month had stoked rising quickly as more employees for employees in the front end of the Mart. 18 | Friday - Sunday, August 15 - 17, 2014 ** THE WALL STREET JOURNAL. CORPORATE NEWS Cisco Says It Will Drop 6,000 From Workforce

BY DON CLARK “We will exit this year pretty Cisco, based in San Jose, Calif., is much with the same number of peo- best known for routing and switch- Cisco Systems Inc. once again ple we started the year with,” he ing systems that funnel data among moved to shed jobs after reporting a said. “Some groups will not be af- server systems and around the In- quarter of little sales growth, saying fected at all. Others will.” ternet. But the company has it will remove about 6,000 employ- Cisco said it plans to add staff in branched into new markets through ees from its payrolls. areas that include its data center, acquisitions, including television The cuts, which amount to about software, security and cloud offer- set-top boxes, videoconferencing 8% of the technology company’s ings. Mr. Chambers declined to spell and computer-security products.

global workforce, come as Cisco con- out which areas will bear the brunt The company recently announced Agence France-Presse/Getty Images tinues to struggle in emerging mar- of cuts until affected employees are plans to offer computer services to Construction work progressed in July on a Crown Resorts casino in Sydney. kets and in selling to cable compa- notified. But he acknowledged that other companies, based on a model nies and other service providers. examples could include sales repre- the industry calls cloud computing. The Silicon Valley company, sentatives in countries where reve- Cisco, whose customers include known for networking hardware, said nues are shrinking. many kinds of companies and tele- Gambling in Macau it expects to record pretax charges of Mr. Chambers said the company com vendors, is often among the as much as $700 million to cover the expects revenue in the fiscal first first to experience the effects of new costs of the restructuring, which con- quarter to be flat to up 1% from a boom-and-bust cycles. tinues a recent pattern. A year ago, year earlier. He said the company Cisco’s biggest business remains Lifts Crown Resorts the company announced plans to cut expects weakness in its service pro- switching systems. It has introduced 4,000 jobs, or 5% of its workforce. vider video business, which declined a switching system called the Nexus BY ROBB M. STEWART sinos to attract wealthy Asian gam- Cisco’s fourth-quarter financial re- 10% in the fourth period. 9000 that has been attracting or- blers. In July, Crown joined China’s sults, reported Wednesday, topped its He also expects struggles to re- ders, though Mr. Chambers has said MELBOURNE, Australia—Billion- state-owned Greenland Holdings projections and showed signs that main in the emerging markets, par- it would take some time for the aire James Packer’s Crown Resorts Group in bidding for a new casino li- the worst of a recent slowdown is ticularly China, Brazil, Mexico, India hardware to show significant sales. Ltd. posted a 66% jump in annual cense in Brisbane, competing against over. Nevertheless, the company still and Russia. On Wednesday, Cisco said the profit, as strong earnings in the a consortium featuring Echo and two hasn’t been able to return to growth. “The emerging markets lost mo- switching market declined 4% in the gambling hub of Macau continued to Hong Kong-based companies. Cisco’s fourth-quarter profit slid 1% mentum in Q4,” Mr. Chambers said. fourth quarter. Routing devices de- offset weakness at the company’s Crown also wants to open a A$1.5 on revenue that edged down 0.5%. Cisco’s shares were off 2.4% at clined 7%. hotels and casinos in Australia. billion casino-hotel complex in Syd- John Chambers, Cisco’s chief ex- $24.60 on the Nasdaq Stock Market In all, Cisco reported net income Still, Crown faces intensifying ney around 2019, pitting it against ecutive, said in an interview that the on Thursday afternoon. for the quarter ended July 26 of challenges early in the 2015 fiscal Echo’s flagship The Star casino. job reductions are designed to make Bill Kreher, an analyst at Edward $2.25 billion, or 43 cents a share, year, with Beijing’s crackdown on But with those casinos some room for adding different kinds of Jones, said Cisco is moving more compared with profit of $2.27 bil- corruption contributing to falling years away from opening, Crown re- skills rather than cutting total costs. quickly than in the past to trim costs lion, or 42 cents, in the year-earlier revenue at Macau casinos, including mains reliant on its Melco Crown Shedding employees in declining in businesses where it faces stiff period. Revenue fell to $12.36 billion one owned by the company and Hong Entertainment Ltd. venture in businesses, he said, will allow the competition, such as in switching and from $12.4 billion. Kong businessman Lawrence Ho. Macau to drive profits in the ab- company to add needed skills in routing. “The pace of change is —Tess Stynes In Australia, gamblers are tight- sence of a major turnaround in Aus- units that are growing. quicker than ever,” he said. contributed to this article. ening spending as the economy cools tralia, where it owns casino com- at the end of a long mining boom, plexes in Melbourne and Perth. and as unemployment edges higher. Crown said its share of profits On Thursday, Crown said its net from its 33.6% stake in Melco Crown profit rose to 655.8 million Australian Entertainment rose 91% on a normal- dollars (US$610.2 million) in the year ized basis to A$291.2 million, while through June from A$395.8 million a earnings before interest, tax, depreci- year earlier, when earnings were held ation and amortization on a similar back by an almost A$70 million loss basis at Crown Perth nudged up just on the sale of a stake in rival Echo 0.3%, and Crown Melbourne’s nor- Entertainment Group Ltd. malized Ebitda rose 2.8%. Normalized profit, a figure used A concern for investors is by casinos that seeks to smooth out industry data showing that casino volatility in their VIP business asso- revenue in Macau fell for a second- ciated with high-roller gamblers, straight month in July, dropping was 35% higher at A$640 million, in 3.6% from a year earlier as high roll- line with the A$636 million average ers from mainland China stayed of six analyst forecasts compiled by away. The retreat in Macau has been The Wall Street Journal. driven by the same VIP gamblers Crown has been scouting for new who powered the city’s rise to the locations and upgrading existing ca- top in recent years. Hyundai Nearer to Strike BY IN-SOO NAM The company’s 47,000 unionized workers can legally start a strike as SEOUL—Workers at Hyundai soon as next week on Friday, ac- Motor Co. voted on Thursday to cording to him. walk off the job as early as next Hyundai’s management has been week, following a series of failed ne- under pressure to reach a deal with gotiations over wage and benefit is- its workers, after General Motors’ sues. Co. Korean unit agreed last month In Korea, militant labor unions to new wage terms, including a putting down tools after wage nego- union demand that fixed bonuses be tiations have gone nowhere is com- counted as basic salary. Ssangyong mon at this time of year, hurting Motor Co., the local unit of Indian corporate profitability. sport utility vehicle maker Mahin- But this year, any significant dra & Mahindra, also struck a simi- work stoppage would prove more lar deal in late July. damaging to Hyundai, South Korea’s Following a favorable South Ko- largest auto maker by sales, which rean Supreme Court ruling in De- is reeling from an appreciating local cember, labor unions across indus- currency. tries have been demanding bonuses “We urge the company to accept and other benefits to be integrated our demand. Otherwise, we all could into ordinary pay. This would result perish together,” said union spokes- in raising the base salary, which is a man Hwang Ki-tae. sensitive issue for local manufactur- The company had no immediate ers, particularly in the labor-inten- comment on the workers’ decision. sive automotive industry, as base Hyundai union leaders are set to salary is used to calculate meet on Monday, and make a final everything from overtime payments decision on whether to go on a par- to annual pay increases and sever- tial or a full strike, Mr. Hwang said. ance pay. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 19 CORPORATE NEWS Auto-Parts Giants Search for Mergers

BY JOSEPH B. WHITE month. “The pipeline is pretty ro- The German auto company’s AND JOHN D. STOLL bust and long and deep.” Delphi, its Bulking Up salvo comes amid an era when many crosstown rival, said it expects to A merger of ZF and TRW would create one of the biggest auto parts suppliers once-massive auto suppliers are ac- DETROIT—German auto parts pull the trigger on deals ranging by 2013 sales tually pulling back from being heav- maker ZF Friedrichshafen AG’s at- from $200 million to $1 billion by ily-diversified one-stop shops. Many tempt to buy U.S. rival TRW Auto- the end of the year. suppliers, have drastically slimmed Robert Bosch motive Holdings Corp. for more The statements come amid an up- their focus on a few niche areas, and Denso than $10 billion would be the biggest tick in supplier M&A activity. To date, tried to use that expertise to Magna International deal to hit the automotive supply there have been more than $13 billion broaden their customer base. Continental chain in years, but it isn’t alone: in global auto-supply deals in 2014, China will be another driving fac- Aisin Seiki auto supplier M&A has sizzled in exceeding the $12.4 billion in deals tor in automotive supplier deals. Hyundai Mobis 2014 and industry executives are done over the entire 2013 period and Larger, diversified industrial compa- Faurecia hunting for more deals. the highest mark since 2006, accord- nies looking for a way to accelerate Johnson Controls ZF has been in talks with TRW for ing to data provider Dealogic. ZF Friedrichshafen AG growth could acquire auto parts several weeks about an acquisition In a study to be published later businesses to ride the projected ex- Lear and the parties are still apart on vari- this month, PricewaterhouseCoopers TRW Automotive pansion of the Chinese market. ous issues, people familiar with the LLP will report that while deal sizes “You really have to have that Yazaki Corp. matter said. If sealed, the deal would are shrinking slightly, far more $0 $10B $20B $30B $40B global footprint,” says Richard Wala- marry two companies with a com- transactions are getting done and Source: Automotive News The Wall Street Journal wender, head of corporate, interna- bined $37 billion in revenue, creating that trend is expected to accelerate tional and automotive practice a company roughly the size of market in 2014. European suppliers, are groups at Detroit law firm Miller leaders Robert Bosch GmbH or Ja- showing renewed vigor amid rising jump start some companies into ac- Delphi executives will also have Canfield. That’s true for U.S. and pan’s Denso Corp. It would also be sales in their core markets, and Chi- tion that may have been on the to take a step back and give far European companies that lack a better positioned to compete in an in- nese suppliers—spending the most fence about strategic M&A.” more scrutiny to a deal that exceeds presence in China or emerging dustry moving toward electrified ve- on R&D and growing fastest—are Mr. Jonas singled out Swedish $1 billion to avoid “getting big for markets, and it is true for Chinese hicles and self-driving cars. consistent drivers of deal activity. safety-parts supplier Autoliv. Last the sake of bigness,” according to firms that lack operations outside Since news of the deal emerged, Private-equity firms, meanwhile, month, Chief Executive Jan Carlson Rodney O’Neal, the company’s chief their home market, he says. Miller several major auto suppliers—includ- remain active suitors (the biggest in said “we have talked about an executive. Canfield has worked with several ing U.S.-based Delphi Automotive 2014 was the purchase of Gates Corp. amount of $1 billion or so” for a Brian Johnson, an analyst with Chinese firms that acquired North and BorgWarner Inc., and Swedish by Blackstone Group for $5.4 billion). transaction, and indicated Autoliv Barclays, said the ZF deal is de- American auto parts operations. safety-parts supplier Autoliv Inc.— ZF’s deal is expected to further may need an acquisition by year’s signed to help the private German The Chinese government’s recent have indicated they are eager to ink boost the appetite for strategic end to reach its targeted leverage company “to survive in a future moves to ease restrictions on over- deals in the second half of 2014. deals. In a note to investors, Morgan ratio. world in which electric vehicles be- seas investments are spurring more While likely smaller in scale, the Stanley auto analyst Adam Jonas Some technology suppliers, how- come the dominant vehicle.” And it shopping by Chinese companies in- transactions will be driven by similar said certain suppliers “should priori- ever, are proving to be too pricey. will take more than just one or two terested in the U.S. automotive sec- factors: easier access to financing, a tize and aggressively pursue acquisi- Mobileye NV, the maker of vehicle- small acquisitions to succeed. tor, Mr. Walawender says. desire to snap up companies with ad- tions, especially in light of a poten- sensing technology essential for “In the next five years, a battle is “The trend is for them to be vanced technology on the shelf and tial TRW+ZF combination.” driverless cars, went public this brewing in the industry,” Mr. Jonas looking at larger deals,” Mr. Wala- fears of being left behind. Like other analysts, Mr. Jonas month and now sports a market said, referring to a race to control wender says. “They have become a “We want to acquire leading- doesn’t believe the ZF deal kicks off value of nearly $7 billion. the central nervous system of a ve- lot more sophisticated as buyers.” edge technology that will drive a wave of Tier-1 auto supplier con- Mr. Carlson said Mobileye’s multi- hicle’s web of electronic compo- —Jeff Bennett growth for us,” BorgWarner Chief solidation, “but we do think that the billion-dollar valuation before the IPO nents. It is unclear how many auto and Christina Rogers Executive James Verrier said this potential big combination could wasn’t within Autoliv’s budget. suppliers have ZF-size ambitions. contributed to this article. Electrolux in Talks to Buy GE’s Appliance Business

STOCKHOLM—Swedish appli- couldn’t be immediately reached for ance manufacturer Electrolux AB comment. has held preliminary discussions Electrolux, whose home appli- about acquiring General Electric ances include Frigidaire and AEG, is Co.’s appliance business, joining a nearing the end of a restructuring group of other potential suitors con- designed to reduce overhead costs sidering a deal that could expand and revamp its manufacturing foot- their reach in North America. print. In recent years, it has been dogged by malaise in European mar- By Jens Hansegard, kets, prompting Mr. McLoughlin to Ted Mann pursue growth in Asia and North and Joann S. Lublin America. Electrolux has a history of ex- GE’s century-old appliance busi- panding through acquisitions. It ness, which along with lighting gen- made a flurry of acquisitions erated $8.3 billion in revenue last throughout the 1960s, acquired year, could help Electrolux Chief Frigidaire in 1986, bought AEG’s Keith McLoughlin’s drive to expand household division in 1994, and his company’s sales beyond Europe, bought Chilean appliance manufac- where growth has been slow. Elec- turer CTI in 2011. trolux, with $15.9 billion in 2013 A clutch of major Nordic indus- revenue, said in a statement Thurs- trial companies have been acquisi- day that it has held discussions tive in recent years amid strong un- about a possible acquisition, but “no derlying economic conditions in agreement has been reached and Scandinavian countries, including there can be no assurances that an Sweden, and many deals have been agreement will be reached.” aimed at grabbing companies with GE, looking to possibly shed a manufacturing operations or cus- profitable appliance business with tomers near the U.S. market. Swed- low margins and significant labor ish lock maker Assa Abloy AB, for costs, has also been approached by instance, has been hunting for Electrolux rivals. Other potential American acquisitions, motivated by bidders include South Korea’s LG the view that the U.S. construction Electronics Inc. and Samsung Elec- market will continue to improve. tronics Co. as well as Arcelik AS of Electrolux is doing better in Eu- Turkey, a lower-cost producer, ac- rope despite the continent’s darken- cording to a person familiar with ing economic outlook, but weakness the discussions. in Latin America was a key factor in “GE is evaluating a wide range of the company reporting a 4.8% reve- strategic options for our appliances nue decline in the second quarter. business, including discussions with Electrolux’s products include refrig- Electrolux and other interested par- erators, dishwashers, washing ma- ties,” GE spokesman Seth Martin chines, cookers, air conditioners and said, confirming Electrolux’s inter- vacuum cleaners—with many of est but not naming other parties. those products overlapping with LG, Samsung and Arcelik GE’s product lines. 20 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. MARKETS Brevan Howard Cuts Bloomberg and Markit Risk After Losses Circle a Barclays Unit BY LAURENCE FLETCHER Brevan itself is facing a testing time. Despite posting its first LONDON—Brevan Howard Asset monthly gain of the year in July, the BY TELIS DEMOS widely watched Russell 2000 ba- Management LLP’s flagship $26.5 Master fund has still lost money in 11 AND KATY BURNE Tracking Business rometer of small-stock performance. billion hedge fund has more than out of the past 15 months of trading. Some financial indexes and their London-based Markit raised $1.5 halved its risk levels this year and After what Mr. Howard described Rival financial-data providers owners. billion in an IPO in June. It increased moved back toward interest-rate as a “somewhat disappointing” year Bloomberg LP and Markit Ltd. are the stakes in its competition with trading, the specialty of its found- in 2013, the Master fund is down separately looking at acquiring the INDEX: Bloomberg Commodity Bloomberg by announcing last year ers, during a testing 2014. 3.7% so far this year, meaning it fixed-income index unit of Barclays Index Family new tools for sending instant mes- The fund, managed by billionaire could be heading for its first-ever PLC, operator of a widely used TRACKS: commodities sages, which Bloomberg has domi- Alan Howard and renowned for its calendar year of losses. benchmark for fixed-income portfo- OWNER: UBS AG nated through its terminals for many profits during the credit crisis, lost As losses have mounted, Brevan lio managers, according to people years. Bloomberg’s news service money every month in the first half has cut back exposure to currency familiar with the matter. INDEX: CDX and iTraxx competes with Dow Jones & Co., of this year, hit by losses on Japa- and equity trading and moved back Bids being discussed are about TRACKS: Derivatives publisher of The Wall Street Journal. nese equities, U.S. interest rates and toward interest-rate trading. $1 billion, said the people. Some OWNER: Markit Ltd. Markit already has a suite of currencies such as the Canadian dol- This marks a return to a key area other potential bidders still are widely used indexes of its own track- lar. of expertise for Mr. Howard who, monitoring the discussions, one of INDEX: Dow Jones Industrial ing derivatives tied to corporate and The fund has now shifted much along with Brevan’s other co-found- the people said. Average sovereign debt around the world, of its focus back toward interest- ers, was part of Credit Suisse’s de- Privately held Bloomberg and re- TRACKS: Stocks, S&P Dow Jones among other things. Derivatives are rate trading, Mr. Howard’s bread veloped-markets rates trading team. cently listed Markit both provide a Indexes contracts that pay out based on the and butter. “They’ve gone back to their wide swath of financial data and OWNER: McGraw Hill Financial Inc. performance of a separate stock, Ultralow interest rates, driven roots,” said one investor, who asked trading services to big banks, in- and CME Group Inc. bond or other instrument. down by central-bank action, have not to be named. cluding for derivatives, loans and “I really like the index business,” made life tough for macro traders. currencies. Adding the fixed-income INDEX: Russell 2000 Mr. Uggla told analysts Wednesday. “It may be that market percep- indexes would give each firm an- TRACKS: Small stocks “It’s a great recurring revenue busi- tions [of interest rates are] shifting in The reduction in risk other major link to clients. OWNER: Frank Russell Co., which ness. It plays well with our data” the U.K. and U.S.,” said a person close The prospective sale, earlier re- is being acquired by London Stock business. He also noted that to Brevan. “Opportunities in trading comes as many macro ported by Reuters, is part of Bar- Exchange Group PLC Bloomberg recently struck a strategic rates may be about to change.” funds struggle to find clays’s process of slimming down its partnership with UBS AG over the The fund has also drastically cut investment-banking footprint in INDEX: S&P 500 bank’s commodities indexes and ac- its risk levels during the first half of interesting trading ideas fixed income. The index unit, known TRACKS: Stocks quired UBS’s Australia bond indexes. the year, according to a report sent amid becalmed markets. as Index Portfolio and Risk Solu- OWNER: S&P Dow Jones Indices Barclays has dominated the index to investors and reviewed by The tions, provides some of the most business largely because fixed-in- Wall Street Journal. widely used benchmarks for mea- INDEX: U.S. Aggregate come portfolio managers have relied Its so-called value at risk—a suring the movements in prices of TRACKS: Bonds on its flagship: the U.S. Aggregate measure widely used by banks and The proportion of its risk that is corporate and government bonds. OWNER: Barclays PLC bond index. hedge funds to show exposure to in currencies has been cut to 15%, Lance Uggla, Markit’s chief execu- The index unit was something of losses—as a proportion of its net as- according to the investor report, tive, told analysts on the company’s a surprise hit for the U.K. bank, set value dropped to 0.28% at the while its allocation to interest rates earnings call Wednesday that Markit tracks rates on trillions of dollars of which took it on through its acquisi- end of June. has risen to 42%. Each accounted was interested in expanding its index loans to individuals and businesses. tion of the North American invest- That compares with 0.65% at the for about one-third of risk at the business. “We’re aware of the assets Regulators have called for transpar- ment banking and capital markets end of last year and as much as 1.2% start of the year, said the investor. that are for sale in the space, and if ent index standards and have urged business of Lehman Brothers Hold- early last year. While VAR can fall Caxton Associates LP, an $8 bil- they make sense for us, they’re defi- the adoption of reliable yardsticks. ings Inc. in 2008. Barclays held an- either because a fund manager cuts lion macro hedge-fund firm, is also nitely things we would consider,” he Unlike with stocks, which have a nual meetings with clients to hear risk, changes the way it constructs trimming its exposure to currencies said. He didn’t comment on any spe- central, liquid market for trading what changes should be made, the its trades or simply as a result of a after losses in the area weighed on cific deals and said the company and pricing, traders in the decen- people said. In November 2013, the drop in market volatility, it means its performance this year. didn’t “have anything to disclose.” tralized bond market often rely on bank added Russian ruble- and the fund’s risk is now not far from The New York-based firm has There is growing interest in in- indexes and other measures to track Turkish lira-denominated local-cur- its lowest-ever, when it dropped be- taken down more than half of its dex businesses following long-run- performance. rency government debt to the Bar- low 0.2% in early 2008 during the bets against developed-markets cur- ning regulatory probes into alleged In June, London Stock Exchange clays Global Aggregate index, and credit crisis. rencies to plow more into commodi- manipulation of financial bench- Group agreed to pay $2.7 billion for commercial mortgage bonds issued Brevan Howard declined to com- ties, investor updates indicate. marks, including the London inter- Frank Russell Co., owner of Russell and backed by U.S. agencies to the ment. Like Brevan, Caxton lost money bank offered rate, or Libor, that Investments and operator of the U.S. Aggregate Bond Index. The reduction in risk comes as for the six consecutive months to many macro funds struggle to find start the year before turning it interesting trading ideas amid be- around in July. Its main fund is calmed markets that many see as of- down about 5% in 2014. Russia Oil Exports to Asia Climb fering few bargains. According to Geneva-based Mr. Howard, one Hedge Fund Research, a data pro- of the co-founders of the firm, is vider, the average macro fund is up ranked 53rd in this year’s Sunday Continued from page 15 just 0.3% in the first seven months Times Rich List for Britain, with a projects, and drilling-pipe maker Hi- Russian Crude Exports of the year. £1.6 billion ($2.67 billion) fortune. long Holding Ltd. Around 30% of Russia's oil exports this year have gone to Asia, and are expected Western sanctions also targeted to rise. Exports via Transneft pipeline, in millions of barrels a day.* Russia’s largest shipbuilder, state- ADVERTISEMENT owned United Shipbuilding Corp., Exports to Europe Exports to Asia earlier this month for its work with 4.0 1.0 The Mart the Russian Navy. United Shipbuilding has been 0.8 3.5 trying to enter the lucrative market July BUSINESS FOR SALE BUSINESS OPPORTUNITIES for building liquefied-natural-gas 0.6 0.92 tankers, a bright spot in an other- 3.0 0.4 LOAN, BANK GUARANTEE/ wise frail shipping sector but one dominated by powerful Japanese July SBLC FOR LEASE. 2.5 FERRARI DEALERSHIP We have Genuine provider for loan at flexible and South Korean companies. 2.96 0.2 FOR SALE APR of 3% and BG/SBLC for lease at 5+2% Analysts say United Shipbuilding 1 of 37 in North America. Serious brokers and Borrower only. is a potential competitor in the LNG 2.0 0 2010 ’11 ’12 ’13 ’14 Profitable, Simple to operate. 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We are positive,” a spokesman South Korea’s Daewoo Ship- which could delay the project and fu- for Daewoo Shipbuilding said. United States Physician seeks     building & Marine Engineering Co., ture orders for Daewoo Shipbuilding. Mr. Han said that if Russian ship- established Medical Device company  in particular, is likely to benefit But sanctions against Russia’s ship- builders struggle to secure enough from sanctions against United Ship- builder may be a good excuse to place capital to enhance their competitive- or Pharmaceutical Manufacturer to       bring Wound Care product to Global building. Daewoo Shipbuilding has the remaining orders at Daewoo ness because of the sanctions, Russia       Market. Patents have recently been been the front-runner for producing Shipbuilding, said Young Soo Han, an will have no choice but to rely more ISSUED in seven countries including   tankers that can operate in harsh analyst at Samsung Securities. on overseas shipbuilders. U.S., China and E.U. 520-977-2510     Arctic environments, such as Rus- “Deals between our company and —In-Soo Nam in Seoul sia’s Yamal gas project in the Arctic Yamal stand as they are. We have so contributed to this article. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 21 MARKETS China Moves Vietnam to Import Coal in 2015 To Fill Leaks BY VU TRONG KHANH Mr. Hai didn't specify when coal hasn’t been sufficient investment in and sovereignty issues are delaying imports would begin and couldn’t be the coal-mining sector,” Mr. Ngai use of the country’s abundant gas As Money HANOI—Vietnam will likely start reached for further comment. said. “We now have to dig deeper to reserves. Renewable-energy sources importing coal next year, two years The deputy prime minister also get coal and importing is inevitable.” beyond hydropower are in their in- earlier than expected, to help gener- told state-owned coal producers to Vietnam has placed orders to im- fancy, and Vietnam’s first nuclear- Flows Abroad ate electricity to keep up with rising maximize their exploration and pro- port coal from Indonesia, Australia, power complex isn’t expected to business and consumer demand, the duction to increase output, noting India and China, Mr. Ngai said. He produce energy before 2023. Continued from page 15 chairman of an energy trade group that production is falling below the added that the first two sources are Nguyen Van Bien, deputy general where gamblers could do a quick said Thursday. government’s targets. the most promising. He said annual director of state-owned Vietnam Na- buy-and-return transaction and “Domestic coal production is Vietnam’s electricity demand is imports might rise to 40 million tons tional Coal-Mineral Industries Hold- come away with cash, have recently slowing down, while several new expected to rise by an average of by 2020 and 100 million by 2030. By ing Corp., said the recent economic been shut. coal-fired power plants will become 14% a year during the 2011-2015 pe- 2020, Vietnam should be burning 67 slowdown has dented coal-mining “These outlets were put on these operational over the next years,” riod and subsequently by 11% a year million tons of the fuel annually, investment. Mr. Bien said Vietnam prime real-estate locations for one Vietnam Energy Association Chair- through 2020, according to the from 12 million in 2012, under the has been cutting coal exports to reason—to drive the mass business,” man Tran Viet Ngai said in an inter- Asian Development Bank. government’s long-range plans. save the fuel for domestic use. said Ben Lee, managing partner of view. Coal is expected to play an in- Coal-fired plants account for 37% According to government data, IGamiX Management and Consult- Mr. Ngai made his prediction after creasingly large role in meeting that of Vietnam’s total electricity genera- Vietnam exported 12.8 million tons ing, who advises casinos. “Moving Deputy Prime Minister Hoang Trung demand. Vietnam has been relying tion capacity, and will provide 60% of coal in 2013, down 16% from a them away should thus have an in- Hai told the Ministry of Industry and solely on domestic coal, but supplies by 2020, Mr. Ngai said. year earlier and well below a recent verse relationship to the growth of Trade on Tuesday to adjust the coun- are proving harder and more costly Vietnam’s other major sources of peak of 25 million tons in 2009. Ex- business there.” try’s plan for coal imports and con- to retrieve. electricity are facing their own ob- ports are expected to fall 38% to The biggest global impact of the sider an earlier start date and larger “It’s not easy for Vietnam to in- stacles. The nation’s hydropower eight million tons this year and to crackdown will be felt in real estate. volumes, according to a statement on crease its coal output now, given that potential has almost been fully between four million and five mil- Chinese buyers have buoyed prop- the government’s website. production cost is higher while there tapped, while commercial disputes lion tons next year. erty markets from Sydney to Van- couver to London. Given the high prices of the homes involved, the buyers are certainly moving more than $50,000 out of the country. One route favored by real-estate investors that has been shut down is a money-transfer service run by Bank of China Ltd. called You Hui Tong. Bank of China has said that it has received some regulatory ap- proval for the service. China is also working on a deal with U.S. regula- tors that would force U.S. banks to disclose the assets of Chinese de- positors. The squeeze is already hitting Chinese developers working over- seas, such as Country Garden Hold- ings Co. The developer has mar- keted some of the 10,000 units in a new waterfront land development in Danga Bay, Malaysia, to mainland buyers. Country Garden’s Malaysia proj- ect, its first international foray, was lauded as a success in its 2013 an- nual report, with contract sales of 7 billion yuan ($1.13 billion). But this year, it has suffered from cancella- tions, mainly from Chinese buyers, according to people close to the matter. Some have cited difficulty in obtaining mortgages or moving funds offshore as one of the reasons for canceling. The company said in an emailed response that You Hui Tong isn’t the only overseas remittance method its Chinese buyers use. Although the impact of the closing of the service is limited, it does affect its market- ing campaign, the company said. The developer is now trying to attract buyers through discounts. It is also offering customers advice on how to get the cash needed to buy a unit out of China. During a recent visit to its sales office, about a 10- minute drive from Singapore, a saleswoman said that with the Bank of China channel closed for now, cli- ents should look into underground money-exchange channels. Some Chinese are using friends’ and family members’ transfer quo- tas to get the money they need over the border. But that practice has raised red flags, too, with global banks increasingly scrutinizing money laundering. For those who seek government approvals for big property pur- chases abroad, various regulatory bodies in China are asking detailed questions about where the money comes from and what they are buy- ing with it, said Darren Xia, China director at real-estate firm Jones Lang LaSalle. “The government isn’t turning the tap off,” Mr. Xia said. “But they don’t want it to get out of control.” 22 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. MARKETS Anxiety Can Be a Good Thing Blue Chips Stocks Rarely Sink in Periods of Carefulness; ‘You Want to Buy’ When Things Look Bad Stay Afloat; Europe Data BY E.S. BROWNING Feeling Fidgety With stock prices high and the A five-year-long rally in U.S. stocks has taken valuations higher, leaving some investors anxious. But some strategists say that’s a good sign, Disappoint globe unsettled, investors are feel- despite recent stock-fund outflows and a low level of volatility, or expected price swings. ing unusually anxious. Paradoxically, BY SAUMYA VAISHAMPAYAN that could be a fine thing for mar- S&P 500 trailing price-to-earnings ratio kets, some stock strategists say. Tuesday U.S. stocks rose on Thursday, ex- 35 Dow bull markets end Jan. 14, 2000 Oct. 9, 2007 “When everyone thinks things 17.54 tending the Dow industrials’ march look bad, that is when you want to 30 back into positive territory for the buy,” said Savita Subramanian, chief year. U.S. stock strategist at Bank of 25 The Dow Jones Industrial Aver- America Merrill Lynch. “It is when 20 age added 52 points, or 0.3%, to everyone is positive that you want 16794 in early af- Long-term average to sell.” 15 ABREAST OF ternoon trading. Historically, markets typically fall THE MARKET The S&P 500 rose apart when euphoria leads to reck- 10 eight points, or less investing, as before the collapses 0.4%, to 1955, and the Nasdaq Com- 5 of 2000 and 2008. It is less common posite Index gained 16 points, or for markets to fall hard when inves- 0 0.4%, to 44450. tors are acting cautiously. 1990 ’95 2000 ’05 ’10 Jobless claims rose by 21,000 to After some sharp price swings, 311,000 in the week ended Aug. 9, the Dow Jones Industrial Average is Longest Dow Jones Industrial Average Weekly investment flows into U.S. mutual CBOEVolatilityIndex the Labor Department said Thurs- down 3% from its July 16 record of bull markets and exchange-traded stock funds day. Economists had expected new 17138.20. On Wednesday, it rose PERIOD DAYS CHANGE $10 billion 100 claims to rise to 295,000. Separately, 91.26 points to 16651.80. It is up just U.S. import prices fell 0.2% in July 0.5% for 2014 but up 154% from its June 13, 1949– 4,565 355% 5 from June, versus projections for a March 2009 low. Dec. 13, 1961 80 0.3% decline. The Russell 2000 small-stock in- Stocks have seesawed in the past Oct. 11, 1990– 0 Wednesday dex is 5.5% below its record, which 396 month. While the Dow is now higher Jan. 14, 2000 3,381 60 12.9 dates from March. Earlier this –5 for the year, it remains below its month, the Russell was off nearly Aug. 24, 1921– July 16 record close of 17138.20. The 2,931 497 40 8%. Sept. 3, 1929 –10 mid-July swoon was sparked by a Anxiety levels have grown since surge in geopolitical risks and con- March 9, 2009– the spring of 2013, when the Federal 1,982 154 –15 Aug.6 20 cerns about how the end of the Fed- Reserve indicated it would trim the Aug. 13, 2014 –$18.5 billion eral Reserve’s easy monetary policy stimulus that has supported mar- might affect the market. Aug. 12, 1982– –20 0 kets since 2008. Aug. 25, 1987 1,838 250 JMAMJJAF 2004 ’06 ’08 ’10 ’12 ’14 “In the last 30 days, you had the Professional investors such as market topping out and you had a pension funds, insurance companies Sources: Birinyi Associates (S&P 500); Market Data Group (bull markets); Lipper (stock flows); FactSet (VIX) The Wall Street Journal nice pullback, which to me is very and hedge funds have cut stock healthy and logical,” said Bill ownership since the spring of 2013, Nichols, head of U.S. equities at bro- government data show. Investors Embarrassingly, Wall Street advice That is up from 4.5% a month ago. “It isn’t our base case, but it is kerage Cantor Fitzgerald LP. have shifted toward Treasury bonds. is a contrarian indicator. Mutual-fund data, meanwhile, in- possible something could leak over” Still, many investors say that im- The 10-year U.S. Treasury note When investment strategists are dicate the same pessimism. Mutual- from risky stocks to the broader proving economic data, especially in Wednesday yielded just 2.41%, its very bullish, it typically is a sign of fund holdings of stocks whose per- market, Mr. Pride said. the labor market, and corporate lowest level in more than a year. excess optimism. Stocks generally formance depends on strong Mr. Roth added that surveys of earnings should support stocks in Yields fall when bond prices rise. do poorly then. economic growth are the lowest futures traders and newsletter writ- the long run. “The underlying funda- Money managers are sending cli- When strategists are very bear- since 2009, Merrill said. ers suggest that some investors still mentals still warrant higher prices. ents reports discussing whether ish, stocks usually do well. “They are basically in the bun- are overly optimistic. If they panic, The market is not that expensive stocks are in a bubble. To protect Wall Street strategists today are kers from a positioning standpoint,” their selling could hurt the broad given the economic data that we’ve themselves from declines, people bearish. They recommend that in- Ms. Subramanian said. market. had,” said Robert Pavlik, chief mar- are buying options at higher rates vestors hold just 51% of their money History isn’t a perfect predictor, Others worry about valuations ket strategist at Banyan Partners. than at any time this year, said Phil in stocks, far below the average rec- of course. The current era is excep- being above their long-run average Cisco Systems said it would re- Roth, an independent market ana- ommendation of 60% over the past tional, with stocks heavily depen- and point to signs of complacency. duce about 8% of its global work- lyst. These are signs of caution, not 15 years. That is well below the peak dent on Fed support. History may be The fear gauge known as the CBOE force. The technology company re- euphoria. of 66% before stocks started to less useful than usual. Volatility Index, or VIX, was at 13 on ported a 1% drop in fiscal fourth- His conclusion: The stock market crumble in 2007. For Merrill, any And despite all the signs of ner- Wednesday, well below its long-run quarter profit and a 0.5% decline in “doesn’t show significant vulnerabil- average recommendation below 54% vousness, there still is excess in average of 20. The current bull mar- revenue, with results topping expec- ity right now.” If investors get is a buy signal. This indicator cur- parts of the market, such as social- ket is fourth-longest on record at tations. Cisco shares fell 2.7%. overly optimistic this autumn, rently forecasts a 22% stock gain in media stocks, biotechnology stocks 1,982 days. Wal-Mart Stores cut its full-year stocks could sell off, but he would the next 12 months. and junk bonds, said Jason Pride, di- Mr. Pride’s firm has turned away earnings guidance and reported its be surprised to see a big drop now, Ms. Subramanian herself fore- rector of investment strategy at from economically sensitive stocks seventh straight decline in quarterly he said. casts only half that big a gain, but Glenmede Trust, which oversees and toward those tied to dividends U.S. store traffic. Revenue rose 2.8% Merrill’s strongest indicator in the indicator has made her wonder. $26 billion in Philadelphia. or to sales of staple products. He to $120.1 billion, topping analyst es- this domain is one it has been track- Of all the indicators she follows, this He, too, thinks the broad market also shifted some money to foreign timates. Shares rose 0.4%. ing since 1984. When this indicator was the only one that accurately will rise, but the riskier stocks could stocks from areas like junk bonds. Kohl’s reported a slight improve- has been at its current level, stocks forecast a 30% gain for the S&P 500 fall further, he said. If they do, there He finds many foreign stocks more ment in second-quarter earnings, have risen 98% of the time, Ms. Sub- last year. is always the danger that investors attractively priced than U.S. stocks. with per-share results topping esti- ramanian said. Merrill also tracks the exuber- who have made big bets with bor- The most likely scenario is that mates. Sales fell 1.3% in the quarter, The indicator is based on the ad- ance of money managers, who also rowed money could sell not just the U.S. stocks will grind slowly higher, missing expectations for a 0.7% vice offered by Wall Street strate- are bearish. Its surveys show money risky stocks but also their broader Mr. Pride said. But he considers the drop. Shares rose 3.2%. gists like Ms. Subramanian. In fact, managers holding 5% of assets in holdings. That could pull down risk of a decline greater than the Data showed July retail-sales it includes her recommendations. cash, the most since June 2012. many stocks. likelihood of a big gain. growth was flat from the previous month, part of a trend that has shown slowing growth at stores and restaurants since the spring. European stocks rose despite Argentine Bonds Fall as Deal Hopes Fade data showing the euro-zone econ- omy failed to grow in the second BY NICOLE HONG Driving the bond prices lower is ple familiar with the discussions. its restructured bondholders until it quarter. German government bonds the fading optimism for a private- The country’s bonds are still pays the holdouts, which are a jumped to a record high, signaling Argentine bond prices fell to a sector solution to Argentina’s de- trading at lofty levels, considering group of hedge funds suing the that investors expect further stimu- nearly seven-week low on Thursday, fault. Late Wednesday, one of Ar- many analysts had anticipated country for full payment on bonds it lus from the European Central Bank. as hopes dimmed for a speedy reso- gentina’s holdout creditors, Aurelius prices would plummet closer to 60 defaulted on in 2001. Stocks initially fell after the data lution to the country’s default. Capital Management LP, said “there cents on the dollar after the default. Argentina has argued that it isn’t but later recovered, with the Stoxx The country’s dollar bonds due is no realistic prospect” that its But the bonds will stay under pres- in default because it deposited with Europe 600 adding 0.3% to 331.04. 2033, which were among the ones in debt dispute with the Argentine sure as the debt dispute drags on, Bank of New York Mellon the money RWE shares fell 2.1% after the default, fell to 83.25 cents on the government can be resolved with a analysts said. necessary for the interest payment German power provider’s first-half dollar early Thursday, down from 84 third-party deal. U.S. and Argentine Argentina defaulted on some of on June 26. However, BNY Mellon operating earnings fell more than cents Wednesday, according to trad- banks, including J.P. Morgan Chase its bonds on July 30, after it missed hasn’t passed the money along to 40%. ers. This is their weakest level since & Co. and Citigroup Inc., had been an approximately $539 million inter- bondholders because the U.S. judge ThyssenKrupp rose 0.4% as the June 27, traders said. The yield rose trying to reach a deal to help Argen- est payment due to its restructured warned that any bank who helps Ar- German steel products maker raised to 10.75% from 10.62%; bond yields tina pay off the debt it owes to its bondholders. A U.S. federal judge gentina process the payment would its 2014 profit outlook after swing- rise when prices fall. holdout creditors, according to peo- has ruled that Argentina can’t pay be violating a U.S. court order. ing to a profit in the third quarter. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 23 INTERNATIONAL INVESTOR Tokyo, Sydney Rise, Protests Put Fund Scorecard Spotlight MYR Allocation Funds that balance equity/bond investments for Malaysian Ringgit-based investors. The equity ButHongKongFalls component does not exceed 75% in the normal running of the fund Ranked on % total return (dividends On Shadow reinvested) in U.S. dollars for one year ending August 14, 2014 BY CHAO DENG economic data for July against pos- Leading 10 Performers AND DANIEL INMAN sibly fresh catalysts from reform. FUND FUND LEGAL % Return in $US ** Meanwhile, the Nikkei Stock Av- Lending RATING * NAME FUND MGM'T CO. CURR. BASE YTD 1-YR 2-YR 5-YR Asian stocks finished mixed erage added 0.7% to 15314.57, over- 4 Eastspring Eastspring MYRMYS 18.59 29.76 16.63 15.90 Thursday, with Japan and Australia coming a weaker-than-expected re- Continued from page 15 Investments Balanced Investments Berhad posting gains and the Hong Kong port on retail sales in the world’s Huitong Credit & Guaranty Co., 4 Eastspring Eastspring MYRMYS 14.75 27.07 17.47 15.02 market declining amid a spate of largest economy. However, trading which said in a statement on July 15 Investments Dynamic Investments Berhad earnings news. in Tokyo was thin as many traders that its chairman and other execu- 3 Hwang Hwang Investment MYRMYS 17.37 24.84 23.41 12.69 Hong Kong’s Hang Seng Index were absent for the Obon midsum- tives hadn’t been seen for more Absolute Return II Management Berhad lost 0.4% to 24801.36, as investors mer holiday. than a week. Phones rang unan- 5 MAAKL Mutual MYRMYS 21.93 17.06 18.76 began to take profit from a strong “With a more accommodating swered at both the company and lo- MAAKL-CM 16.10 Berhad run that started currency market and a lowered level cal government offices on Thursday. Flexi ASIAN-PACIFIC in early July. The of risk-off sentiment, the market “I learned from local press that 4 RHB-OSK RHB Asset MYRMYS 15.90 19.85 18.84 16.44 STOCKS index set a fresh should be more able to trend up- the executives [of Huitong] have run Smart Balanced Management Sdn Bhd high for the year ward as valuations remain cheap by away and then I knew my invest- 2 MAAKL-ML MAAKL Mutual MYRMYS 15.54 16.64 12.77 9.33 on Wednesday, after a string of most standards,” said Okasan Secu- ment was in danger,” Mr. Gao said. Flexi Berhad weak Chinese economic data that rities director Takashi Matsumoto. Besides small loan companies, 5 MAAKL HW MAAKL Mutual MYRMYS 9.24 16.59 13.52 20.22 day, including a fall in credit growth Australia’s S&P/ASX 200 hit a Huitong also guaranteed loans to Flexi Berhad in July, fueled hopes for further eco- nearly two-week high with a gain of small firms made by trust compa- 4 RHB-OSK RHB Asset MYRMYS 15.25 16.53 17.22 14.94 nomic stimulus from policy makers. 0.6% to 5548.50, as earnings there nies and banks. It isn’t clear Growth Income Focus Management Sdn Bhd In Hong Kong, Internet giant magnified a broad-based recovery. whether those investments are at 2 KAF FIRST KAF Investment MYRMYS 11.33 13.08 9.12 11.43 Tencent Holdings led a selloff in Telstra was up 2.2% in Sydney risk. FUND Funds Berhad technology stocks, falling 2.3%. The after the telecom company said it The role of banks in the sale of 2 Amanah Mutual MYRMYS 12.65 5.17 7.71 firm issued guidance for possibly would buy back up to 1 billion Aus- trust-company instruments is at the AMB 6.02 Berhad flat revenue from mobile games in tralian dollars (US$930 million) of heart of the ICBC protests. The Lifestyle Trust Today the second half of the year, even as its own shares and that net profit product that sparked the protests NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd it reported a 59% year-over-year for the year through June rose to was issued by China Credit Trust KEY: ** 2YR and 5YR performance is annualized 1 Oliver’s Yard, 55-71 City Road NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom rise in second-quarter profit. A$4.3 billion. Co. and attracted a total of 1.3 bil- NS-fund not in existence for entire period www.morningstar.co.uk; Email: [email protected] Personal-computer maker Len- Also in Sydney, gambling com- lion yuan from investors. It had re- Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001 ovo Group also fell, declining 1.4% pany Crown Resorts gained 5.6% af- quired a minimum investment of at in Hong Kong, despite reporting ter it posted a 66% jump in net least three million yuan and prom- protest. “If it wasn’t sold by ICBC, doesn’t appear on their balance solid earnings growth of 23% for the profit for the year through June, as ised around a 10% annualized re- we would not have bought the prod- sheets. Such opacity has led to un- second quarter, on the back of strong earnings in the gambling hub turn. uct, since we never heard of this certainty over the extent of the stronger personal-computer and of Macau continued to offset weak- The trust company said in July trust firm before,” he said. banking system’s exposure to trust smartphone sales. China Mobile ness at its hotels and casinos in that it would pay back investors Outstanding trust assets under products. was up 1.1%, despite a fall in first- Australia. over the coming 15 months, after management in China stood at 12.48 In recent months, several de- half profit due to regulatory policies Elsewhere in Asia, South Korea’s selling its collateral, including sev- trillion yuan at the end of June, ac- faults and near-defaults in the fi- favoring competition against state- Kospi was up less than 0.1% at eral coal mines. The original repay- cording to the government-backed nancial sector have sent jitters controlled firms and as the carrier 2063.22, Singapore’s Straits Times ment date had been in late July. China Trustee Association, more through the market. invested heavily in network up- Index was down 0.2% at 3294.83 “ICBC managers told us the than quadruple the amount of four In March, a Shanghai-based so- grades. and India’s Sensex rose 0.7% to product was safe and both the prin- years ago. lar-equipment maker failed to meet The Shanghai Composite Index 26103.23. cipal and interests are guaranteed,” A large part of the trust business interest payments on a bond, mak- was down 0.7% at 2206.47, as inves- —Bradford Frischkorn said Zhang Liang, an investor in in China involves extending loans on ing it the country’s first corporate- tors there weighed disappointing contributed to this article. Guangzhou who attended Monday’s behalf of banks in a way that bond default. —Grace Zhu

NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Taiwan Equity Fund AA AS EQ LUX 08/13 USD 1.59 7.8 17.0 13.1 Turkey Equity Fund AA OT OT LUX 08/13 USD 0.93 14.3 -4.5 1.4 U.S. Bond Fund AA US BD LUX 08/13 USD 1.25 4.0 5.2 3.1 n MANULIFE GLOBAL FUND TEL:(852)2108 1110 U.S. Bond Fund AA (HKD) Inc US BD LUX 08/13 HKD 9.98 NS NS NS Data as shown is for information purposes only. No offer is being made by Internet:http://www.manulifefunds.com.hk U.S. Bond Fund AA Inc US BD LUX 08/13 USD 1.00 NS NS NS Morningstar, Ltd. or this publication. Funds shown aren’t registered with the American Growth Fund A US EQ LUX 08/13 USD 27.69 3.2 14.4 18.9 U.S. Sm Cap Equity Fund AA US EQ LUX 08/13 USD 1.11 -2.9 9.7 11.6 U.S. Securities and Exchange Commission and aren’t available for sale to United American Growth Fund AA US EQ LUX 08/13 USD 1.58 3.0 14.1 18.6 U.S. Special Opportunities Fund AA US BD LUX 08/13 USD 1.03 4.7 8.8 12.1 n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487 States citizens and/or residents except as noted. Prices are in local currencies. American Growth Fund AA (HKD) US EQ LUX 08/13 HKD 9.90 NS NS NS U.S. Tsy Inf-ProtSec Fund AA OT OT LUX 08/13 USD 1.33 5.2 2.8 -1.8 All performance figures are calculated using the most recent prices available. Asia Total Return Fund AA Inc AS BD LUX 08/13 USD 0.99 5.3 4.9 2.4 *formerly known as China ABH Shares Fund n PT CIPTADANA ASSET MANAGEMENT Intel-Chin Mainlnd Foc AS EQ CYM 08/13 USD 37.43 1.9 10.3 13.5 Asia Value Dividend Equity Fund AA OT OT LUX 08/13 USD 1.74 13.0 16.6 19.8 NAV —%RETURN— Intel-China Converg* AS EQ CYM 08/13 USD 134.87 5.3 13.7 15.5 Asian Equity Fund A OT OT LUX 08/13 USD 3.35 4.5 14.6 16.3 Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR VP Classic - A AS EQ CYM 08/13 USD 249.21 6.0 17.2 17.9 Asian Equity Fund AA OT OT LUX 08/13 USD 1.07 4.3 14.3 16.0 Indonesian Grth Fund GL EQ BMU 08/06 USD 175.01 28.4 4.8 -2.1 VP CLassic - B AS EQ CYM 08/13 USD 113.50 5.6 16.6 17.3 Asian Sm Cap Equity Fund AA OT OT LUX 08/13 USD 2.40 10.7 15.2 26.5 VP High Dividend Stk OT OT CYM 08/13 USD 75.74 11.0 14.3 16.0 Asian Small Cap Equity Fund AA (HKD) OT OT LUX 08/13 HKD 9.72 NS NS NS China Value Fund A AS EQ LUX 08/13 USD 8.39 4.4 14.2 17.2 China Value Fund AA AS EQ LUX 08/13 USD 2.63 4.2 13.9 16.9 Dragon Growth Fund A AS EQ LUX 08/13 USD 2.02 6.3 18.7 21.6 Dragon Growth Fund AA (HKD) AS EQ LUX 08/13 HKD 9.77 6.1 18.4 21.3 n AHW CAPITAL MANAGEMENT Emg Eastrn Europe Fund A EU EQ LUX 08/13 USD 4.38 -10.7 -5.0 1.0 n SENSIBLE ASSET MANAGEMENT LIMITED Emg Eastrn Europe Fund AA EU EQ LUX 08/13 USD 1.88 -10.8 -5.2 0.8 Tel (+49) 1805 - 23 82 82 European Growth Fund A EU EQ LUX 08/13 USD 11.22 -3.1 7.0 16.6 www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948 Asia Value Formula Fd-B OT OT CYM 05/14 USD 9.39 -6.1 -7.8 1.0 www.ahw-capital.com European Growth Fund AA EU EQ LUX 08/13 USD 0.81 -3.2 6.7 16.3 AHW Top-Div.Int. GL EQ LUX 07/29 EUR 46.59 -8.9 -8.2 -2.7 Global Contrarain Fund AA GL EQ LUX 08/13 USD 0.94 1.8 6.3 5.9 Global Property Fund AA OT EQ LUX 08/13 USD 1.00 11.5 13.1 11.5 Global Resources Fund AA GL EQ LUX 08/13 USD 1.08 11.2 13.2 4.5 LIST YOUR Greater China Opportunities Fund AA AS EQ LUX 08/13 USD 1.03 NS NS NS Healthcare Fund AA OT EQ LUX 08/13 USD 1.66 6.1 15.3 21.0 India Equity Fund AA EA EQ LUX 08/13 USD 1.26 26.7 36.0 16.3 International Growth Fund A GL EQ LUX 08/13 USD 4.53 2.4 12.4 17.0 n THE NATIONAL INVESTOR International Growth Fund AA GL EQ LUX 08/13 USD 1.04 2.2 12.2 16.8 n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT Japanese Growth Fund A JP EQ LUX 08/13 USD 3.29 0.7 1.4 14.2 TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae FUNDS TNI MENA Special Sits Fund OT OT BMU 07/31 USD 1190.81 6.7 7.8 7.9 Concentra AE EU EQ DEU 08/13 EUR 86.42 -4.6 6.5 15.1 Japanese Growth Fund AA JP EQ LUX 08/13 USD 0.84 0.5 1.1 13.9 TNI MENA UCITS Fund OT OT IRL 08/12 USD 1548.54 19.4 26.5 23.9 Industria AE EU EQ DEU 08/13 EUR 93.34 3.2 11.1 12.5 Latin America Equity Fund AA GL EQ LUX 08/13 USD 1.17 10.7 9.1 2.5 Russia Equity Fund AA EE EQ LUX 08/13 USD 0.57 -14.5 -6.5 -3.2 TNI UAE Blue Chip Fund OT OT ARE 08/13 AED 12.00 28.7 48.4 54.9 InternRent AE EU BD DEU 08/13 EUR 42.31 8.4 3.8 -4.0 Strategic Income Fund AA OT OT LUX 08/13 USD 1.13 2.8 4.0 2.6 n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected] Advertisement Advertisement CAM-GTF Limited OT OT MUS 08/08 USD 355819.56 7.1 6.5 -1.3 [ALTERNATIVE INVESTMENT FUNDS www.WSJ.com]

NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR n ALEXANDRA INVESTMENT MANAGEMENT In print & online. Contact: n CREDIT PACIFIC ASSET MANAGMENT Tel: +1 212 301 1800 Fax: +1 212 301 1810 Alexandra Convertible Bond Fund I, Ltd. (Class A) OT OT VGB 08/31 USD 2155.22 NS NS NS www.creditpacific.com CP Global Alpha Fund OT OT WSM 08/14 USD 107.54 10.0 14.0 NS CP Multi-Strategy Currency Fund OT OT CYM 08/12 USD 88.88 -3.4 -7.7 -7.9 n SUPERFUND CPS-Master Priv Fund GL OT WSM 08/14 USD 130.36 6.2 5.6 10.2 For info about open funds, contact [email protected] and www.superfund.com [email protected] *Closed for New Investments n HSBC Trinkaus Investment Managers SA Superfund Cayman* GL OT CYM 08/12 USD 36.99 -3.6 -1.9 -0.9 Superfund GCT USD* GL OT LUX 08/12 USD 1615.65 -4.8 -5.6 -4.5 E-Mail: [email protected] n PLATINUM CAPITAL MANAGEMENT Superfund Green Gold A (SPC) GL OT CYM 08/12 USD 846.57 3.3 -4.1 -14.3 Telephone: 352 - 47 18471 Tel: +44 207 024 9840, www.platinumfunds.net Superfund Green Gold B (SPC) GL OT CYM 08/12 USD 740.12 2.2 -4.9 -14.8 Prosperity Return Fund A JP BD LUX 12/06 JPY 8577.68 -9.3 -8.4 0.3 Superfund Q-AG* GL OT AUT 08/12 EUR 5809.00 -4.4 -4.8 -4.0 Platinm-All Star OT OT CYM 06/30 USD 113.34 2.2 7.0 8.4 Prosperity Return Fund B EU BA LUX 12/06 JPY 9032.12 4.6 11.0 13.2 Platinm-All Weather OT OT USA 10/31 USD 129.92 2.4 3.2 3.8 n WINTON CAPITAL MANAGEMENT LTD Prosperity Return Fund C EU BA LUX 12/06 USD 79.01 -12.2 -11.1 -1.0 Platinm-Dynasty OT OT CYM 06/30 USD 91.02 -6.3 -1.5 -3.4 Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301 Prosperity Return Fund D EU BA LUX 12/06 EUR 121.37 -9.0 -8.8 8.1 Platinm-Emancipation OT EQ CYM 05/31 USD 105.47 0.2 -8.5 5.7 Winton Evolution EUR Cls H GL OT CYM 07/31 EUR 1146.06 -2.6 4.4 1.3 Renaissance Hgh Grade Bd A EU BA LUX 12/06 JPY 10807.34 3.5 5.1 11.3 Platinm-Equity Plus OT OT USA 05/29 USD 35.02 -18.2 -63.7 -45.6 Winton Evolution GBP Cls G GL OT CYM 07/31 GBP 1161.60 -2.5 4.7 1.7 Renaissance Hgh Grade Bd B EU BA LUX 12/06 JPY 11130.39 17.9 25.6 23.9 Platinm-Gbl Dividend GL EQ CYM 06/30 USD 66.50 -2.2 7.6 5.8 Winton Evolution USD Cls F GL OT CYM 07/31 USD 1461.46 -2.5 4.6 1.6 Winton Futures EUR Cls C GL OT VGB 07/31 EUR 247.99 -1.5 3.7 1.6 Renaissance Hgh Grade Bd C EU BA LUX 12/06 USD 96.94 -0.9 0.7 8.4 Platinm-Nordic OT OT CYM 10/31 SEK NS 2.6 4.7 1.2 Winton Futures GBP Cls D GL OT VGB 07/31 GBP 270.33 -1.3 4.0 2.0 Renaissance Hgh Grade Bd D EU BA LUX 12/06 EUR 102.83 -4.6 -4.1 6.9 Platinm-Premier OT OT CYM 12/31 USD NS -55.9 -66.0 -44.3 Winton Futures JPY Cls E GL OT VGB 07/31 JPY 17346.38 -1.5 3.8 2.0 Platinm-Turnberry OT BD USA 02/28 USD 60.14 -1.2 -3.0 NS Winton Futures USD Cls B GL OT VGB 07/31 USD 885.47 -1.4 3.9 2.0

For information about listing your funds, please email [email protected] or call +852 2573-7121 24 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. BLUE CHIPS & BONDS Major players & Dow Jones Asia Titans: Thursday's best and worst... Previous Volume close, in STOCK PERFORMANCE benchmarks Company Country Industry in millions local currency Previous session 52-week YTD Hon Hai Precision Industry Taiwan Electrical Components Equipment $38.76 109.00 2.83% 177.7% 36.1% At right, a look at the Asia Titans, the biggest and best known Nippon Telegraph Telephone Japan Fixed Line Telecommunications 1.67 6,771 2.03 32.2 19.6 companies in Asia. Below, some of the Dow Jones Titans indexes of biggest and most liquid stocks in individual countries and regions Reliance Industries GDR United KingdomExploration Production 0.09 33.09 1.94 16.3 13.9 Seven I Holdings Japan Broadline Retailers 1.40 4,380 1.88 21.0 4.8

Giants around the world Tokio Marine Holdings Japan Property Casualty Insurance 2.16 3,225 1.59 2.5 -8.3 Dow Jones Country Titans

INDEX PERFORMANCE Tencent Holdings Hong Kong Internet $43.48 130.10 -2.33% 76.6 31.7 Previous session Year-to-date 52-week PetroChina Hong Kong Integrated Oil Gas 77.71 10.68 -1.66 15.1 25.8 Turkey -0.18% 16.6% 5.3% China Life Insurance Hong Kong Life Insurance 34.00 23.00 -1.50 16.3 -5.2 South Africa -0.85 13.2 24.1 Hyundai Motor Korea Automobiles 0.46 230,000 -1.50 -1.3 -2.7 Canada 0.32 12.1 21.4 Hong Kong 0.26 7.3 12.3 China Construction Bank Hong Kong Banks 175.42 5.88 -1.18 -1.0 0.5 Spain -0.20 6.8 21.2 Australia -0.07 5.3 11.6 ...And the rest of Asia's blue chips Brazil 0.48 4.3 7.3 Latest, Latest, Singapore -0.17 4.0 1.4 Volume in local STOCK PERFORMANCE Volume in local STOCK PERFORMANCE Italy -0.42 3.2 11.9 Company/Country (Industry) in millions currency Latest 52-week YTD Company/Country (Industry) in millions currency Latest 52-week YTD Shin-Etsu Chemical 0.65 6,381 1.30% 2.3% 3.9% Komatsu 2.54 2,334 0.50% 2.6% 9.2% Switzerland 0.42 2.3 3.3 Japan (Specialty Chemicals) Japan (Commercial Vehicles Trucks) Sweden -0.81 1.3 6.3 Itochu 4.60 1,314 1.27 9.5 1.1 Woolworths 2.30 36.10 0.47 8.5 6.6 Japan (Industrial Suppliers) Australia (Food Retailers Wholesalers) South Korea -0.10 0.7 10.0 Taiwan Semiconductor Manufacturing 32.96 124.00 1.22 29.2 17.5 Hitachi 13.11 778.70 0.45 24.8 -2.2 China 88 -0.84 0.3 -1.2 Taiwan (Semiconductors) Japan (Electronic Equipment) NTT DoCoMo 4.19 1,808 1.20 17.0 4.8 Mizuho Financial Group 68.69 196.40 0.36 -5.6 -13.9 U.K. 0.40 -1.1% 0.9 Japan (Mobile Telecommunications) Japan (Banks) France 0.20 2.2 SoftBank 8.25 7,056 1.18 13.1 -23.3 East Japan Railway 0.53 8,291 0.35 5.8 -1.1 -2.0 Japan (Mobile Telecommunications) Japan (Travel Tourism) Netherlands 0.02 -5.3 -0.6 China Mobile 35.87 88.30 1.09 5.1 10.0 Nomura Holdings 9.76 645.20 0.34 -11.0 -20.2 Hong Kong (Mobile Telecommunications) Japan (Investment Services) Japan 0.64 -5.6 6.6 POSCO 0.16 333,000 1.06 -0.6 2.0 Mitsui Co. 5.54 1,707 0.26 20.6 16.5 Germany 0.27 -6.0 6.3 Korea (Iron Steel) Japan (Industrial Suppliers) KDDI 1.24 5,987 1.03 17.4 -7.5 Mitsubishi UFJ Financial Group 26.67 593.10 0.19 -2.0 -14.5 Japan (Mobile Telecommunications) Japan (Banks) Takeda Pharmaceutical 1.30 4,660 0.93 0.3 -3.4 Toyota Motor 4.31 6,009 0.17 -4.8 -6.4 Dow Jones Regional Sector Titans Japan (Pharmaceuticals) Japan (Automobiles) Wesfarmers 2.00 43.50 0.93 4.1 -1.2 Commonwealth Bk Australia 3.65 81.02 0.07 9.8 4.1 Australia (Home Improvement Retailers) Australia (Banks) Arab 50 0.48% 17.1% 23.9% Fanuc 0.41 17,630 0.89 16.8 -8.4 Nissan Motor 8.17 999.60 0.05 -3.8 13.1 Japan (Industrial Machinery) Japan (Automobiles) Technology -0.20 10.5 24.0 Nippon Steel Sumitomo Metal 32.78 307.80 0.85 1.3 -12.6 Australia New Zeald Bkg 4.95 32.74 ... 7.8 1.6 Real Estate -0.09 10.3 12.0 Japan (Iron Steel) Australia (Banks) Mitsubishi 3.06 2,148 0.85 11.9 6.5 Woodside Petroleum 1.83 42.07 ... 9.8 8.1 Health Care 0.69 8.5 17.3 Japan (Industrial Suppliers) Australia (Exploration Production) Utilities 0.50 7.9 10.6 National Australia Bank 5.32 34.60 0.82 9.9 -0.7 BHP Billiton 6.39 38.16 -0.21 2.2 0.4 Australia (Banks) Australia (General Mining) Tiger 50* 0.03 7.1 13.7 Canon 2.52 3,399 0.79 9.1 2.1 Samsung Electronics 0.21 1,261,000 -0.24 -3.0 -8.1 Japan (Electronic Office Equipment) Korea (Semiconductors) Oil & Gas 0.04 6.9 16.6 Sumitomo Mitsui Financial Group 4.39 4,116 0.76 -9.3 -24.1 Bank of China 303.79 3.69 -0.54 10.5 3.4 Travel & Leisure 0.38 4.1 17.6 Japan (Banks) Hong Kong (Banks) CNOOC 97.94 14.64 0.69 -0.3 1.5 Industrial Commercial Bank of China 174.08 5.25 -0.57 -0.8 0.2 Global 50 0.13 3.4 11.6 Hong Kong (Exploration Production) Hong Kong (Banks) Asian 50 0.32 1.7 5.6 Westpac Banking 6.92 33.95 0.68 7.4 4.8 Honda Motor 4.49 3,469 -0.62 -9.0 -19.9 Australia (Banks) Japan (Automobiles) *Asia excluding Japan Japan Tobacco Inc 1.88 3,521 0.66 1.6 2.9 Sun Hung Kai Properties 3.05 116.80 -0.76 19.9 28.6 Japan (Tobacco) Hong Kong (Real Estate Holding Development) Source: SIX Financial Information AIA Group 17.18 43.40 0.58 20.9 11.6 Rio Tinto 2.57 65.05 -1.03 5.9 -4.6 Hong Kong (Life Insurance) Australia (General Mining) Sources: SIX Financial Information; WSJ Market Data Group

Tracking Credit derivatives Credit-default swaps: Asian companies Spreads on credit derivatives are one way the market rates Atitsmostbasic,thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-and creditworthiness. Regions that are treading in rough waters how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a credit can see spreads swing toward the maximum—and vice versa. sense which way the market was moving yesterday. Indexes below are for five-year swaps.

Markit iTraxx Indexes SPREAD RANGE, in pct. pts. markets & Mid-spread, since most recent roll Showing the biggest improvement... And the most deterioration Index: series/version in pct. pts. Mid-price Coupon Maximum Minimum Average CHANGE, in basis points CHANGE, in basis points Europe: 21/1 0.65 101.66% 0.01% 0.81 0.56 0.66 Yesterday Yesterday Five-day 28-day Yesterday Yesterday Five-day 28-day dealmakers Eur. High Volatility: 20/1 0.77 100.98 0.01 1.11 0.68 0.86 Samsung Electrs 40 –2 ... 4 Kirin Hldgs 23 2 21 Europe Crossover: 21/1 2.69 110.11 0.05 3.11 2.19 2.62 SK Innovation 77 –3 –1 2 Sumitomo Rlty Dev 52 2 32 Asia ex-Japan IG: 21/1 1.05 99.76 0.01 1.13 0.99 1.04 Expt Import Bk Korea 60 –2 ... 4 Mitsubishi Matls 96 3 –3 –3 Japan: 21/1 0.69 101.50 0.01 0.72 0.63 0.66 Sun Hung Kai Pptys 115 –4 –6 8 Canon 19 ... 1–1 Note: Data as of August 13 Korea Dev Bk 61 –2 ... 5 Nippon Telegraph Tel 20 ...... 1 Spreads In percentage points Hana Bank 72 –2 ... 3 Komatsu 24 ...... NOTICE TO READERS CNOOC 81 –3 –5 2 Bridgestone 21 ...... Spreads on 3.00 All statistics published in Lg Electrs 84 –3 15 Mitsubishi Heavy Inds 28 ... 21 five-year swaps The Wall Street Journal Index roll 2.00 GS Caltex Oil 73 –2 –1 4 ANA HLDGS 103 1 7–9 for corporate Asia from markets outside Australia Nankai Elec Rwy 52 –1 –1 –2 Daiwa Secs Gp 79 1 11 debt; based on t 1.00

the Asian-Pacific region Source: Markit Group Markit iTraxx t reflect preliminary data. 0 indexes. Japan –1 Behind Asia’s deals: Bank revenues from equity capital markets Mar. April May June July Aug. 2014 Behind every IPO, n Equity capital markets n Debt capital markets (both in billions, left axis) Source: Markit Group follow-on or convertible equity 3 75%

offering is one or more investment t banks. At right, ECM as a percentage of total 2 (right axis) 50 investment banks historical and year-to-date 1 25 WSJ.com>> revenues from global Follow the markets throughout the day, with updated equity-capital-market stock quotes, news and commentary at WSJ.com/Email. (ECM) deals 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Also, receive emails that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com. Source: Dealogic THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 25 GLOBAL MARKETS LINEUP

Commodities Prices of futures contracts with the most open interest Currencies London close on Aug. 14 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia Per In Per In Per euro In euros U.S. dollar U.S. dollars Derivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars EUROPE ICE: IntercontinentalExchange *Data as of August 13, 2014 Argentina peso-a 11.0705 0.0903 8.2766 0.1208 Euro zone euro 1 1 0.7476 1.3376 ONE-DAY CHANGE Year Year Commodity Exchange Last price Net Percentage high low Brazil real 3.0375 0.3292 2.2709 0.4404 1-mo. forward 0.9999 1.0001 0.7475 1.3378 Corn (cents/bu.) CBOT 371.75 2.00 0.54% 517.00 358.00 Canada dollar 1.4595 0.6852 1.0911 0.9165 3-mos. forward 0.9996 1.0004 0.7473 1.3381 Soybeans (cents/bu.) CBOT 1054.00 7.25 0.69 1,279.25 1,038.75 Chile peso 772.31 0.001295 577.40 0.001732 6-mos. forward 0.9991 1.0009 0.7470 1.3387 Wheat (cents/bu.) CBOT 550.25 4.75 0.87 765.00 542.25 Colombia peso 2507.47 0.0003988 1874.65 0.0005334 Czech Rep. koruna-b 27.821 0.0359 20.799 0.0481 Live cattle (cents/lb.) CME 146.475 -0.075 -0.05% 160.750 130.900 Ecuador US dollar-f 1.3376 0.7476 1 1 Denmark krone 7.4552 0.1341 5.5737 0.1794 Cocoa ($/ton) ICE-US 3,225 -6 -0.19 3,248 2,639 Mexico peso-a 17.4861 0.0572 13.0730 0.0765 Hungary forint 312.29 0.003202 233.47 0.004283 Coffee (cents/lb.) ICE-US 186.70 -2.90 -1.53 222.60 119.90 Peru sol 3.7319 0.2680 2.7901 0.3584 Norway krone 8.2273 0.1215 6.1509 0.1626 Sugar (cents/lb.) ICE-US 15.88 -0.14 -0.87 18.91 15.72 Uruguay peso-e 31.592 0.0317 23.619 0.0423 Poland zloty 4.1796 0.2393 3.1248 0.3200 Cotton ICE-US 65.00 0.28 84.74 62.02 (cents/lb.) 0.43 U.S. dollar 1.3376 0.7476 1 1 Russia ruble-d 48.049 0.02081 35.923 0.02784 Rapeseed (euro/ton) LIFFE 322.25 0.50 0.16 386 301 Venezuela bolivar 8.49 0.117736 6.35 0.157480 Sweden krona 9.1673 0.1091 6.8537 0.1459 Cocoa (pounds/ton) LIFFE 2,030 6 0.30 2,031 1,651 ASIA-PACIFIC Switzerland franc 1.2114 0.8255 0.9057 1.1042 Robusta coffee ($/ton) LIFFE 1,946 -19 -0.97 2,216 1,568 Australia dollar 1.4354 0.6967 1.0731 0.9319 1-mo. forward 1.2111 0.8257 0.9055 1.1044 Copper ($/lb.) COMEX 3.1085 -0.0240 3.3570 2.8845 -0.77 1-mo. forward 1.4385 0.6952 1.0755 0.9298 3-mos. forward 1.2106 0.8261 0.9050 1.1049 Gold ($/troy oz.) COMEX 1313.30 -1.20 -0.09 1,390.80 1,207.00 3-mos. forward 1.4446 0.6922 1.0800 0.9259 6-mos. forward 1.2095 0.8268 0.9042 1.1059 Silver ($/troy oz.) COMEX 19.865 0.020 0.10 22.160 18.650 6-mos. forward 1.4537 0.6879 1.0868 0.9201 Turkey lira 2.8766 0.3476 2.1506 0.4650 Aluminum ($/ton)* LME 2,044.00 -7.00 -0.34 2,051.00 1,686.50 China yuan 8.2336 0.1215 6.1556 0.1625 U.K. pound 0.8013 1.2480 0.5990 1.6693 Tin ($/ton)* LME 22,525.00 unch. unch. 23,770.00 21,410.00 Hong Kong dollar 10.3672 0.0965 7.7508 0.1290 1-mo. forward 0.8015 1.2477 0.5992 1.6689 Copper ($/ton)* LME 6,917.00 -93.50 -1.33 7,422.00 6,430.00 India rupee 81.4714 0.0123 60.9100 0.0164 3-mos. forward 0.8019 1.2470 0.5995 1.6680 Lead ($/ton)* LME 2,242.50 -29.50 -1.30 2,287.00 2,033.00 Indonesia rupiah 15659 0.0000639 11707 0.0000854 6-mos. forward 0.8027 1.2458 0.6001 1.6663 Zinc ($/ton)* LME 2,305.00 -33.50 -1.43 2,410.00 1,948.00 Japan yen 137.04 0.007297 102.46 0.009760 MIDDLE EAST/AFRICA Nickel ($/ton)* LME 18,700 -255 -1.35 21,100 13,425 1-mo. forward 137.02 0.007298 102.44 0.009762 Bahrain dinar 0.5044 1.9826 0.3771 2.6518 Crude oil ($/bbl.) NYMEX 94.77 -1.97 -2.04 105.55 88.34 3-mos. forward 136.96 0.007302 102.39 0.009766 Egypt pound-a 9.5674 0.1045 7.1529 0.1398 Heating oil ($/gal.) NYMEX 2.8316 -0.0703 -2.42 3.0848 2.8220 Israel shekel 4.6446 0.2153 3.4725 0.2880 RBOB gasoline ($/gal.) NYMEX 2.5625 -0.0641 -2.44 2.8999 2.5210 6-mos. forward 136.83 0.007308 102.30 0.009775 Jordan dinar 0.9463 1.0568 0.7075 1.4135 Natural gas ($/mmBtu) NYMEX 3.941 0.079 2.05 4.8790 3.7400 Malaysia ringgit-c 4.2518 0.2352 3.1788 0.3146 Kuwait dinar 0.3791 2.6377 0.2834 3.5281 Brent crude ($/bbl.) ICE-EU 102.52 -2.54 -2.42 114.44 102.36 New Zealand dollar 1.5752 0.6348 1.1777 0.8491 Lebanon pound 2016.12 0.0004960 1507.30 0.0006634 Gas oil ($/ton) ICE-EU 864.75 -10.25 -1.17 949.25 864.25 Pakistan rupee 132.527 0.0075 99.080 0.0101 Philippines peso 58.457 0.0171 43.704 0.0229 Saudi Arabia riyal 5.0162 0.1994 3.7502 0.2667 Sources: SIX Financial Information; WSJ Market Data Group Singapore dollar 1.6656 0.6004 1.2452 0.8031 South Africa rand 14.1007 0.0709 10.5420 0.0949 South Korea won 1365.92 0.0007321 1021.20 0.0009792 United Arab dirham 4.9129 0.2035 3.6730 0.2723 Taiwan dollar 40.084 0.02495 29.968 0.03337 WSJ.com>> Thailand baht 42.604 0.02347 31.852 0.03140 Follow the markets throughout the day with updated stock quotes, news and commentary at at WSJ.com. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate. 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Major stock market indexes Stock indexes from around the world, grouped by region. Shown in local-currency terms. PREVIOUS SESSION PERFORMANCE PREVIOUS SESSION PERFORMANCE Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. ASIA-PACIFIC DJ Asia-Pacific TSM 1527.09 6.48 0.43% 5.4% 10.3% Euro Zone Euro Stoxx 308.20 0.58 0.19% -1.9% 6.6% Euro Stoxx 50 3058.16 1.99 -1.6 7.2 Australia SPX/ASX 200 5548.50 33.80 0.61 3.7 7.7 0.07 OMX Copenhagen 655.25 -1.33 15.8 26.2 China Shanghai Composite 2206.47 -16.41 -0.74% 4.3 6.0 Denmark -0.20% OMX Helsinki 7403.12 6.36 0.9 15.2 Hong Kong Hang Seng 24801.36 -88.98 -0.36 6.4 10.0 Finland 0.09 CAC-40 4205.43 10.64 -2.1 2.2 India S&P BSE Sensex 26103.23 184.28 0.71 23.3 34.8 France 0.25 DAX 9225.10 26.22 -3.4 9.3 Indonesia Jakarta Composite 5155.55 -12.72 -0.25 20.6 10.0 Germany 0.29 FTSE MIB 19480.96 -56.30 2.7 11.6 Japan Nikkei Stock Average 15314.57 100.94 0.66 -6.0 11.4 Italy -0.29 AEX 395.84 0.57 -1.5 4.3 Topix 1270.50 8.37 0.66 -2.4 10.3 Netherlands 0.14 RTSI 1231.94 11.14 -14.6 -9.2 Malaysia Kuala Lumpur Composite 1861.58 3.54 0.19 -0.3 3.9 Russia 0.91 IBEX 35 10294.8 -9.20 3.8 17.1 New Zealand NZSX-50 5062.41 7.71 0.15 6.9 11.7 Spain -0.09 Pakistan KSE 100 28505.55 Closed 12.8 20.7 Switzerland SMI 8430.10 41.39 0.49 2.8 4.4 BIST 100 77569.92 -48.64 14.4 2.6 Philippines PSEi 7061.00 74.76 1.07 19.9 7.3 Turkey -0.06 FTSE 100 6685.26 28.58 -0.9 1.5 Singapore Straits Times 3294.83 -6.58 -0.20 4.0 2.3 U.K. 0.43 South Korea Kospi 2063.22 0.86 0.04 2.6 7.2 AMERICAS DJ Americas 492.46 1.51 0.31 5.8 15.2 Taiwan Weighted 9230.61 -0.70 -0.01 7.2 17.0 Brazil Bovespa 55687.48 106.29 0.19 8.1 9.4 Thailand SET 1541.97 -2.58 -0.17 18.7 6.1 Argentina Merval 8422.80 -102.69 -1.20 56.2 116.9 EUROPE Stoxx Europe 600 331.04 1.02 0.31 0.8 7.3 Mexico IPC 44735.69 11.73 0.03 4.7 5.4 Stoxx Europe 50 2943.43 9.74 0.33 0.8 6.6 European and Americas index data are as of 12:00 p.m. ET. Sources: SIX Financial Information; WSJ Market Data Group

S&P Dow Jones Indices MSCI indexes Price-to- PERFORMANCE Price-to- PERFORMANCE Dividend earnings Net Year- Three-yr., Dividend earnings Net Year- Three-yr., yield* ratio* S&P Dow Jones Index Last change Daily to-date 52-wk. annualized yield* ratio* S&P Dow Jones Index Last change Daily to-date 52-wk. annualized Developed and emerging-market regional and country indexes 2.40%19.34 Global TSM 3349.58 8.69 0.26% 3.6% 13.7% 12.1% 1.13%23.85 Shenzhen -c 354.73 -2.72 -0.76% 8.3% 11.3% -3.8% from MSCI as of August. 14, 2014 2.82 19.55 Global DOW 2569.52 4.60 0.18 3.4 14.2 11.4 1.91 20.64 U.S. TSM 20348.73 18.49 0.09 4.8 17.0 18.4 Price-to- LOCAL-CURRENCY 2.94 15.08 Global Titans 50 240.91 0.25 0.10 3.4 12.9 13.0 5.15 16.79 Global Select Div 260.36 1.35 0.52 4.1 14.2 8.5 Dividend earnings PERFORMANCE 2.37 15.65 Asia/Pacific TSM 1527.34 6.73 0.44 5.4 10.8 6.6 5.20 16.43 Asia/Pacific Select Div 358.36 1.74 0.49 7.2 7.9 7.3 yield ratio MSCI Index Last Daily YTD 52-wk. 2.30 15.93 S&P BMI Asia Pac Emg Mkts 181.78 1.09 0.60 3.0 8.4 7.3 Hong Kong Select Div -c 206.21 -0.55 -0.27 3.2 -1.5 3.1 2.50% 17 MSCI ACWI* 422.04 -0.56% 3.3% 13.3% 3.24 20.67 Dev Europe TSM 3333.94 10.90 0.33 -1.6 10.4 10.0 U.S. Select Dividend -d 1317.78 3.09 0.23 6.5 16.5 20.2 2.50 18 World (Developed Markets) 1,708.74 -0.55 2.9 13.3 2.78 14.95 S&P BMI Emg Markets 275.52 0.42 0.15 8.2 12.1 2.6 2.12 19.72 Islamic Market 2875.87 5.60 0.20 4.9 15.6 11.7 1.90 23 323.83 -0.57 1.5 13.7 3.09 11.59 Asian Titans 50 154.78 0.54 0.35 1.7 6.1 7.8 2.40 17.80 Islamic Market 100 3162.27 4.47 0.14 5.2 17.0 14.3 World Small Cap 3.34 10.32 BRIC 50 547.56 0.47 0.09 9.1 15.6 0.4 2.62 11.30 Islamic China/HK Titans 30 1858.97 -8.33 -0.45 10.6 13.7 8.2 2.50 18 Kokusai (World ex-Japan) 1,724.42 -0.58 3.3 14.0 2.80 11.53 S&P BMI China 473.82 -3.63 -0.76 5.3 14.0 6.3 Sustainability Korea -c 1534.07 0.48 0.03 4.2 9.1 3.1 3.10 16 EAFE 1,897.75 -0.42 -0.9 10.0 3.13 10.44 China Offshore 50 4505.41 -31.52 -0.69 7.5 15.1 6.4 3.67 25.19 Brookfield Infrastructure 3619.06 18.55 0.52 13.7 21.9 16.1 2.70 13 Emerging Markets (EM) 1,070.87 -0.60 6.8 13.0 2.03 12.69 Shanghai -c 291.88 -2.36 -0.80 5.3 8.0 -4.0 DJ Commodity 669.19 -1.10 -0.16 -3.3 -5.9 -5.3 2.90 14 AC ASIA PACIFIC EX-JAPAN 506.43 -0.59 8.2 15.1 *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. Source: S&P Dow Jones Indices 2.50 13 AC Far East ex-Japan 565.14 -0.79 7.3 14.5 1.90 15 Japan 772.35 0.35 -4.1 10.3 Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 3.20 10 China 67.03 1.00 6.2 18.2 US$ A$ £ C$ YUAN EURO HK$ RUPEE RUPIAH YEN NZ$ WON RINGGIT PH. PESO S$ S FRANC TW$ BAHT 2.40 12 China A (China Domestic) 2,358.54 -0.01 2.5 9.7 U.S. 1.073 0.599 1.091 6.156 0.748 7.751 60.910 11707.25 102.458 1.178 1021.20 3.179 43.704 1.245 0.906 29.968 31.852 Australia 0.932 0.558 1.017 5.736 0.697 7.223 56.760 10909.60 95.477 1.097 951.62 2.962 40.726 1.160 0.844 27.926 29.681 2.60 16 Hong Kong 14,447.67 0.57 8.1 15.5 Britain 1.669 1.791 1.821 10.276 1.248 12.938 101.678 19543.06 171.034 1.966 1704.69 5.306 72.955 2.079 1.512 50.025 53.170 1.40 19 India 982.76 0.44 20.3 31.0 Canada 0.916 0.983 0.549 5.641 0.685 7.103 55.822 10729.40 93.900 1.079 935.90 2.913 40.053 1.141 0.830 27.464 29.191 China 0.1625 0.174 0.097 0.177 0.121 1.259 9.895 1901.89 16.645 0.191 165.90 0.516 7.100 0.202 0.147 4.868 5.174 1.00 10 Korea 592.58 1.00 0.5 8.9 Euro 1.338 1.435 0.801 1.459 8.234 10.367 81.471 15659.28 137.045 1.575 1365.92 4.252 58.457 1.666 1.211 40.084 42.604 2.90 16 656.07 0.36 -1.6 2.8 Hong Kong 0.129 0.138 0.077 0.141 0.794 0.096 7.859 1510.46 13.219 0.152 131.75 0.410 5.639 0.161 0.117 3.866 4.109 Malaysia India 0.0164 0.0176 0.0098 0.0179 0.1011 0.0123 0.1272 192.21 1.6821 0.0193 16.77 0.0522 0.7175 0.0204 0.0149 0.4920 0.5229 3.20 14 Singapore 1,755.07 -0.01 3.3 2.4 Indonesia 0.0001 0.0001 0.0001 0.0001 0.0005 0.0001 0.0007 0.0052 0.0088 0.0001 0.09 0.0003 0.0037 0.0001 0.0001 0.0026 0.0027 Japan 0.010 0.010 0.006 0.011 0.060 0.007 0.076 0.594 114.26 0.011 9.97 0.031 0.427 0.012 0.009 0.292 0.311 2.90 17 Taiwan 334.88 0.80 10.6 16.5 New Zealand 0.849 0.911 0.509 0.927 5.227 0.635 6.581 51.721 9941.04 87.001 867.13 2.699 37.110 1.057 0.769 25.446 27.046 3.10 15 Thailand 541.45 2.42 17.6 6.8 South Korea 0.0010 0.0011 0.0006 0.0011 0.0060 0.0007 0.0076 0.0596 11.46 0.1003 0.0012 0.0031 0.0428 0.0012 0.0009 0.0293 0.0312 Malaysia 0.315 0.338 0.188 0.343 1.936 0.235 2.438 19.162 3682.97 32.232 0.370 321.26 13.749 0.392 0.285 9.427 10.020 4.30 17 Australia 1,128.79 -0.24 3.2 9.2 Philippines 0.023 0.025 0.014 0.025 0.141 0.017 0.177 1.394 267.88 2.344 0.027 23.37 0.073 0.028 0.021 0.686 0.729 4.30 22 109.10 -0.06 3.9 7.0 Singapore 0.803 0.862 0.481 0.876 4.943 0.600 6.224 48.915 9401.70 82.280 0.946 820.09 2.553 35.097 0.727 24.066 25.579 New Zealand Switzerland 1.104 1.185 0.661 1.205 6.797 0.826 8.558 67.255 12926.82 113.131 1.300 1127.58 3.510 48.256 1.375 33.089 35.170 1.90 19 US BROAD MARKET 2,207.46 -0.70 4.8 15.4 Taiwan 0.033 0.036 0.020 0.036 0.205 0.025 0.259 2.033 390.66 3.419 0.039 34.08 0.106 1.458 0.042 0.030 1.063 Thailand 0.031 0.034 0.019 0.034 0.193 0.023 0.243 1.912 367.56 3.217 0.037 32.06 0.100 1.372 0.039 0.028 0.941 3.30 17 EUROPE 112.82 0.38 0.6 9.9 Source: ICAP Plc. *Twenty-four developed and 21 emerging markets Source: MSCI 26 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. SCANNING THE GLOBE

Dow Jones Industrial Average P/E: 16 Nasdaq Composite Index P/E: 22* S&P 500 Index P/E: 18 LAST: 16695.40 s 43.60, or 0.26% LAST: 4445.29 s 11.17, or 0.25% LAST: 1952.53 s 5.81, or 0.30% YEAR TO DATE: s 118.74, or 0.7% YEAR TO DATE: s 268.70, or 6.4% YEAR TO DATE: s 104.17, or 5.6% OVER 52 WEEKS s 1,583.21, or 10.5% OVER 52 WEEKS s 839.18, or 23.3% OVER 52 WEEKS s 291.21, or 17.5%

High 17250 4550 2100 Close Low 16900 4400 2000

t 16550 4250 1900 50–day moving average 16200 4100 1800

15850 3950 1700

15500 3800 1600 16 23 30 6 13 20 27 3 11 18 25 1 8 16 23 30 6 13 20 27 3 11 18 25 1 8 16 23 30 6 13 20 27 3 11 18 25 1 8 June July Aug. June July Aug. June July Aug. *Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months Sources: WSJ Market Data Group; Birinyi Associates DJIA component stocks U.S. stocks: most active... ADRs of Asian companies* Volume, CHANGE Volume, CHANGE 52-WEEK Volume, CHANGE Stock Symbol in millions Latest Points Percentage Stock Symbol in millions Latest Points Percentage High Low Stock Symbol in OOOs Latest Points Percentage AT&T T 6.7 $34.85 0.16 0.48% PlugPwr PLUG 43.0 $6.17 0.31 5.31% $23.07 $15.70 TaiwanSemi TSM 3,305.8 $20.55 0.22 1.08% AmExpress AXP 1.2 87.51 0.11 0.13 CiscoSys CSCO 41.4 24.57 –0.63 –2.52 58.85 41.35 ChinaMobile CHL 1,809.2 58.64 2.09 3.70 Boeing BA 2.8 124.27 2.29 1.88 SPDR S&P 500 SPY 29.2 195.47 0.63 0.32 229.60 132.31 Baidu ADS BIDU 1,563.9 219.01 0.42 0.19 Caterpillar CAT 1.6 105.71 0.55 0.52 SiriusXMHoldings SIRI 27.4 3.52 0.03 1.00 2.58 1.88 UtdMicro ADS UMC 1,473.1 2.13 ...... Chevron CVX 1.9 127.24 –0.36 –0.28 AdvMicro AMD 19.2 4.13 0.02 0.49 73.91 62.60 BHPBillitonADS BHP 759.4 71.14 –0.04 –0.06 CiscoSys CSCO 41.4 24.57 –0.63 –2.52 iShMSCIEmgMarkets EEM 18.5 44.59 0.03 0.08 52.48 24.94 ICICI Bk ADS IBN 699.6 52.14 2.17 4.34 CocaCola KO 2.7 40.06 0.12 0.30 Sprint S 17.6 5.70 –0.12 –2.06 43.32 21.75 TataMtrs ADS TTM 685.3 43.25 1.05 2.49 Disney DIS 3.3 88.35 0.75 0.86 BrcliPathVIX ShFut VXX 17.1 29.20 –0.69 –2.31 68.71 35.96 CtripInt ADS CTRP 595.3 66.45 –0.47 –0.70 DuPont DD 0.7 65.17 0.06 0.09 Vale ads VALE 17.1 13.39 –0.36 –2.65 21.94 15.23 SonyADS SNE 581.4 17.98 0.04 0.20 ExxonMobil XOM 2.4 98.99 –0.10 –0.10 Apple AAPL 17.1 97.31 0.07 0.07 63.20 44.81 InfosysADS INFY 441.9 58.12 –0.19 –0.33 GenElec GE 9.1 25.84 0.01 0.02 PenneyJC JCP 16.0 9.59 0.24 2.57 86.75 62.01 NeteaseADS NTES 421.1 85.49 1.43 1.70 GoldmanSachs GS 0.8 172.51 0.14 0.08 Nokia NOK 15.7 7.79 0.05 0.65 49.82 26.62 HDFC Bnk HDB 419.8 49.22 1.10 2.29 HomeDpt HD 2.9 83.63 0.51 0.61 Intel INTC 15.1 33.95 –0.15 –0.44 29.00 20.36 SKTelecomADS SKM 402.0 28.04 –0.14 –0.50 Intel INTC 15.1 33.95 –0.15 –0.44 FacebookClA FB 14.5 73.92 0.15 0.20 42.96 32.42 HondaMtr ADS HMC 382.8 34.07 –0.27 –0.79 IBM IBM 0.9 187.90 –0.05 –0.03 Twitter TWTR 14.4 45.15 1.00 2.27 6.74 5.19 MitsuUFJ ADS MTU 375.0 5.78 –0.02 –0.35 JPMorgChas JPM 3.5 56.88 0.16 0.28 9.08 5.11 SiliconwareADS SPIL 349.3 7.12 0.17 2.37 JohnsJohns JNJ 2.3 101.71 –0.03 –0.03 Biggest gainers... 6.89 4.00 AdvSemiEnggADS ASX 312.9 6.27 0.28 4.67 McDonalds MCD 3.3 93.57 –0.39 –0.42 82.32 63.71 POSCOADS PKX 258.4 81.84 1.83 2.29 Merck MRK 3.0 58.43 0.58 0.99 USEC USU 4,952.2 $6.42 1.85 40.48% 5.60 2.27 pSivida PSDV 257.6 4.70 0.12 2.62 Microsoft MSFT 9.6 44.16 0.08 0.18 Interphase INPH 689.7 2.99 0.79 35.91 27.21 10.85 SiliconMotionADS SIMO 255.7 26.38 –0.47 –1.75 Nike B NKE 0.9 77.11 –0.14 –0.18 IssuerDirect ISDR 52.6 10.92 2.04 22.95 43.00 29.50 51job ADS JOBS 176.3 35.95 0.60 1.70 Pfizer PFE 8.7 28.59 0.38 1.36 SecNtlFnl A SNFCA 96.6 5.00 0.90 21.95 13.29 1.47 PranaBiotech PRAN 165.6 2.06 0.04 1.98 ProctGamb PG 2.0 81.81 0.33 0.40 CeruleanPharma CERU 777.2 5.47 0.95 21.02 8.21 5.82 NomuraHoldingsADS NMR 157.4 6.30 –0.01 –0.16 3M MMM 0.8 142.16 0.36 0.25 17.61 11.71 ChinaUnicomADS CHU 149.9 16.64 –0.05 –0.30 TravelersCos TRV 0.5 92.12 0.85 0.93 ...Biggest losers 16.54 10.46 LGDisplayADS LPL 121.2 16.42 0.06 0.37 UnitedTech UTX 1.2 105.88 0.32 0.30 Vapor VPCO 764.0 $3.28 –0.89 –21.35% 8.20 1.61 ChinaFinOnADS JRJC 93.9 4.44 –0.08 –1.77 UtdHlthGp UNH 1.1 81.44 –0.07 –0.09 RedRobin RRGB 2,568.2 51.11 –13.44 –20.82 17.37 13.10 KT Crp ADS KT 91.4 16.49 0.15 0.92 Verizon VZ 5.7 48.90 –0.02 –0.04 Energy XXI EXXI 14,090.7 16.05 –3.60 –18.32 73.99 56.88 PhlpLngDst PHI 85.9 73.67 3.47 4.94 VISA ClA V 0.7 212.03 0.60 0.28 NoodlesClA NDLS 4,047.0 20.88 –4.33 –17.18 211.49 147.24 Cnooc ADS CEO 85.7 186.74 –0.51 –0.27 WalMart WMT 3.7 74.13 0.10 0.14 K12 LRN 1,356.1 19.03 –3.37 –15.05 14.26 8.79 WiproADS WIT 78.6 11.76 –0.02 –0.17 *Most active American depositary receipts tracked by Dow Jones Source: WSJ Market Data Group

Global government bonds U.S. Treasury yield curve Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET. and 10-year government bonds around the world. Data as of 12 p.m. ET

Country/ SPREAD OVER TREASURYS, in basis points YIELD TOTAL RETURN Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago Yield to Modified Month Quarter Year 5% Ryan Index maturity duration to-date to-date to-date 12-month 3.800 Austria* 2 0.018 -39.7 -40.5 0.059 -39.0 -6.9 0.015 0.265 30-year Treasury 3.242% 18.69 1.55 % 2.22 % 17.10 % 14.46 % 10-year Treasury 3.500 10 1.281 -113.0 -111.3 -106.6 -52.1 1.307 1.481 2.196 4 2.430 8.85 1.36 1.17 7.80 6.27 7 Year Treasury 2.054 6.42 1.28 0.81 5.01 4.46 2.750 Belgium 2 0.033 -37.5 -37.5 -40.5 -2.4 0.037 0.059 0.310 3 Five-year Treasury 1.577 4.75 0.96 0.52 2.66 2.61 2.600 10 1.395 -101.6 -98.5 -89.5 -9.2 1.435 1.653 2.625 Ryan Index 1.767 7.27 0.98 0.87 5.63 5.02 3 Year Treasury 0.883 2.95 0.45 0.27 1.14 1.53 4.250 Finland* 2 0.027 -38.1 -38.3 -44.0 -9.7 0.029 0.024 0.237 2 Two-year Treasury 0.416 1.95 0.26 0.22 0.72 0.95

3.375 10 1.283 -111.8 -110.0 1.448 s 1 Year Treasury 0.086 0.94 0.03 0.06 0.24 0.36 -112.8 -56.3 1.302 2.154 Wednesday 1 Six-month Treasury 0.056 0.50 0.01 0.02 0.09 0.15

0.250 France 2 0.049 -35.9 -34.5 -40.7 9.4 0.067 0.057 0.429 s One year ago Ryan Cash Index-a 0.055 0.44 0.01 0.02 0.10 0.16 0 1.750 10 1.400 -101.1 -98.9 -100.2 -38.0 1.431 1.545 2.337 Three-month bill 0.035 0.25 ...... 0.04 0.07 1 3 6 1 2 3 5 710 30 0.250 Germany 2 0.003 -40.5 -41.1 -43.6 -10.8 0.001 0.028 0.226 month(s) years One-month bill 0.041 0.08 ...... 0.02 0.04 maturity 1.500 10 1.015 -139.6 -139.2 -133.5 -89.1 1.028 1.213 1.826 a-Performance of a cash investment Source: Ryan ALM n.a. Greece 2 n.a...... n.a. 10 n.a...... Key money rates 4.750 Italy 2 0.444 3.6 6.6 7.1 150.1 0.478 0.535 1.835 Latest 52 wks ago Latest 52 wks ago Offer Bid 3.750 10 2.649 30.1 22.0 2.768 23.8 146.3 2.721 4.180 Prime rates Euro Libor Eurodollars 3.250 Netherlands 2 0.040 -36.8 -37.5 -41.6 -8.7 0.037 0.048 0.247 U.S. 3.25% 3.25% One month 0.08143% 0.07929% One month 0.2000% 0.1000% Canada 3.00 3.00 Three month 0.16286 0.15143 Three month 0.2500 0.1500 2.000 10 1.203 -120.8 -120.1 -111.6 -54.3 1.219 1.431 2.174 Japan 1.475 1.475 Six month 0.26357 0.26500 Six month 0.3300 0.2300 5.450 Portugal* 2 1.022 61.4 67.4 46.4 422.7 1.086 0.928 4.561 Britain 0.50 0.50 One year 0.43000 0.47714 One year 0.5800 0.4800 ECB 0.15 0.50 Euribor 4.800 10 3.514 110.3 123.4 125.0 375.6 3.654 3.798 6.473 Switzerland 0.50 0.50 One month 0.09000% 0.12800% Latest 52 wks ago 3.250 Spain 2 0.196 -21.2 -19.3 -0.8 132.1 0.219 0.456 1.655 Australia 2.50 2.50 Three month 0.19900 0.22600 U.S. discount 0.75% 0.75% 3.800 10 2.499 8.8 17.1 22.8 168.1 2.591 2.776 4.398 Hong Kong 5.00 5.00 Six month 0.29900 0.34300 Fed-funds target 0.00 0.00 One year 0.47900 0.54400 Call money 2.00 2.00 2.000 U.K. 2 0.708 29.1 36.2 0.826 30.0 10.6 0.703 0.440 Libor Hibor 2.250 10 2.439 2.8 2.1 6.0 -7.7 2.441 2.607 2.640 One month 0.15500% 0.18406% One month 0.21571% 0.20714% Overnight repurchase rates Three month 0.23360 0.26320 Three month 0.36786 0.38286 U.S. 0.08% 0.07% 0.500 U.S. 2 0.408 ...... 0.464 ...... 0.412 0.334 Six month 0.33090 0.39550 Six month 0.53929 0.54357 Euro zone 0.00 0.05 2.500 10 2.411 ...... 2.547 One year 0.55530 0.66760 One year 0.84429 0.87000 ...... 2.420 2.717 Sources: WSJ Market Data Group, SIX Financial Information, ICAP THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | 27 MARKETS LINEUP Moving the Asian index movers… markets Nikkei Stock Average Shanghai Composite S&P BSE Sensex ASX 200 At right, Japan’s benchmark stock index Japan 15314.57 China 2206.47 India 26103.23 Australia 5548.50 and the biggest movers among the larger Asian stocks indexes and stocks s 0.66% or 100.94 t 0.74% or 16.41 s 0.71% or 184.28 s 0.61% or 33.80 Thursday. Below each index are its most actively traded stocks. The charts show The benchmark advanced for a fourth Weakness in cyclical sectors, such as The index closed at a near three-week Telstra shares rose on a share buyback the percentage change in each index’s or consecutive trading day, helped by a coal mining and metal production, and high amid gains in regional markets and stronger-than-expected fiscal 2014 stock’s value, rather than the point stronger dollar and subsequent buying re-emerging concerns about the econ- and as lower inflation helped support net profit. Rio Tinto and Fortescue Met- in exporter shares. omy weighed on the market. economic optimism. als fell on lower spot iron-ore prices. change, for purposes of comparison. The index level or stock price is indicated on each axis. All indexes and stocks are 21000 3000 30000 7500 shown in local currency terms. 17500 2500 25000 6250

14000 2000 20000 5000

10500 1500 15000 3750

7000 1000 10000 2500 A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J WSJ.com>> 2013 2014 2013 2014 2013 2014 2013 2014 Follow the markets throughout the Volume Change Volume Change Volume Change Volume Change day, with updated stock quotes, news Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % and commentary at WSJ.com. Mizuho Fin 68.69 196 1 0.36 WintimeEnergy 634.15 5.16 –0.07 –1.34 HindalcoIndustries 14.03 179.75 –0.30 –0.17 Telstra 56.84 5.56 0.12 2.21 Unitika 57.50 45 unch. … InnerMongoliaBaot 324.96 5.05 –0.21 –3.99 TataSteel 8.55 535.55 1.05 0.20 FairfaxMedia 27.66 0.93 0.05 5.08 Also, receive emails that summarize NipponStl&SmtmoMtl 32.78 308 3 0.85 SichuanChanghongA 204.41 3.71 –0.13 –3.39 BharatHeavyElec 6.74 209.45 –0.25 –0.12 FortescueMetalsGrp 17.59 4.45 -0.08 –1.77 the day’s trading in Europe and Asia. MitsuUFJFin 26.67 593 1 0.19 XinhuZhongbao 184.17 3.90 –0.01 –0.26 TataMotors 6.35 481.36 7.86 1.66 MirvacGroup 10.31 1.85 0.01 0.54 To sign up, go to WSJ.com/Email. KawasakiKisen 18.18 222 3 1.37 InsigmaTechnologyA 121.13 7.62 0.42 5.83 Oil&NaturalGas 6.31 405.83 3.83 0.95 Alumina 10.10 1.49 -0.02 –1.33

Asian stocks in the news

Oriental Land Co. Ltd. Wynn Macau Ltd. Philippine Long Distance Tele. CSL Ltd. Crown Resorts Ltd. Japan ¥20,020 Hong Kong HK$31.50 Philippines 3,250.00 peso Australia A$70.42 Australia A$15.66 s 2.5% or ¥495 s 3.4% or HK$1.05 s 4.0% or 126.00 peso s 4.7% or A$3.18 s 5.6% or A$0.83

The operator of Tokyo Disneyland and The gaming sector got a boost after SJM The shares closed at their highest level Analysts upgraded their earnings The gaming concern posted a 66% jump other theme parks said it would raise Holdings reported its earnings results. since May 2013. estimates following the company's fiscal in net profit for the year through June. prices for its “After Six Passport.” 2014 report on Wednesday.

In yen 30000 In Hong Kong dollars 50 in peso 5000 In Australian dollars 125.00 In Australian dollars 25.00 24000 40 4000 100.00 20.00

18000 30 3000 75.00 15.00

12000 20 2000 50.00 10.00

6000 10 1000 25.00 5.00 A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014

Price-to-earnings ratio 23 Price-to-earnings ratio 36 Price-to-earnings ratio 20 Price-to-earnings ratio 27 Price-to-earnings ratio 19 Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Dividend yield 0.6 Dividend yield 6.2 Dividend yield 4.2 Dividend yield 1.8 Dividend yield 2.3 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Consumer Services -0.3% 1.0% 8.1% Consumer Services -0.3% 1.0% 8.1% Telecommunications -0.3% 0.6% 6.9% Health Care -0.4% 1.3% 12.2% Consumer Services -0.3% 1.0% 8.1% Oriental Land Co. Ltd. 2.5% 4.2% 23.0% Wynn Macau Ltd. 3.4% 7.3% 43.8% Philippine Long Distance Tele. 4.0% 7.8% 5.9% CSL Ltd. 4.7% 9.7% 7.0% Crown Resorts Ltd. 5.6% 3.2% 12.3%

Evergrande Real Estate Group Total Access Communication China Steel Corp. Tencent Holdings Ltd. City Developments Ltd. Hong Kong HK$3.25 Thailand 103.0 baht Taiwan TW$25.10 Hong Kong HK$130.10 Singapore S$9.78 t 1.8% or HK$0.06 t 1.9% or 2.0 baht t 2.1% or TW$0.54 t 2.3% or HK$3.10 t 2.7% or S$0.27

The shares closed at a more-than five- The company's shares are down 15% The shares ended lower following the The Internet firm forecasted possible The property developer reported a 33% week low. from a year ago. release of second-quarter earnings late flat revenue from mobile games in the drop in second-quarter net profit. Wednesday. second half of the year.

In Hong Kong dollars 6.00 In baht 200 In Taiwan dollars 40 In Hong Kong dollars 150 In Singapore dollars 15.00 4.80 160 32 120 12.00

3.60 120 24 90 9.00

2.40 80 16 60 6.00

1.20 40 8 30 3.00 A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014

Price-to-earnings ratio 3 Price-to-earnings ratio 22 Price-to-earnings ratio 24 Price-to-earnings ratio 53 Price-to-earnings ratio 14 Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Earnings per share, past four quarters N.A. Dividend yield 16.7 Dividend yield 6.1 Dividend yield 2.8 Dividend yield 0.2 Dividend yield 0.8 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Financials -0.2% 1.5% 7.4% Telecommunications -0.3% 0.6% 6.9% Basic Materials 0.0% 1.0% 5.7% Technology -0.4% 1.7% 29.1% Financials -0.2% 1.5% 7.4% Evergrande Real Estate Group -1.8% -1.5% -4.4% Total Access Communication -1.9% -1.9% -14.5% China Steel Corp. -2.1% -1.0% 1.6% Tencent Holdings Ltd. -2.3% 1.4% 75.8% City Developments Ltd. -2.7% -3.4% -8.7% 28 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. HEARD ON THE STREET

Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

SinKing SAIC Motor to Hit the Road King Digital's quarterly bookings

$700 million $500 to In the world’s largest car market, 8.8 times. one: +91-22-61456100. ACP no. F.2 (T/3) Press / 2009 FACSIMILE EDITION. $525 million* 600 the biggest ride is worth the extra Well Connected A move by Chinese officials to effort. let Hong Kong investors buy Shang- ul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper), 500 SAIC Motor's joint ventures make Global investors don’t look some of China's best-selling cars. hai stocks, and vice versa, should 400 closely at SAIC Motor, China’s big- close that valuation gap. The plan gest car maker by sales, because it Brands associated with SAIC includes letting any investor in 300 is listed on the mostly walled-off Volkswagen 15.3% Hong Kong buy from a list of desig- 200 stock market in Shanghai. But they Wuling 7.8% nated Shanghai stocks—including 100 should give it serious thought, not Hyundai 5.8% SAIC. just because of its solid earnings Changan 5.4% The program is supposed to 0 Wednesday, but also because its Buick 4.7% launch in October. Even if it is de- 2013 2014 Toyota 4.6% *Forecast scarcity to foreigners may lift soon. layed, SAIC’s 7.1% dividend yield ting Lane Media Centre Singapore 349567. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by Source: the company State-owned SAIC’s profits Nissan 4.6% makes it worth the wait. The Wall Street Journal “Candy Crush Saga” game soared 18% in the first half from the Ford 4.2% The trouble is, getting hold of year before, thanks to its enviable Chevrolet 3.7% SAIC stock now requires some do- position in China’s auto market. It is Honda 3.5% ing. Institutional investors can ac- the General Motors or Volkswagen Note: Market share January-July cess mainland stock markets King Digital’s Crown Gets of China. Actually, it is both, as the Source: Macquarie through quotas from the govern- joint-venture partner for the two The Wall Street Journal ment under the Qualified Foreign most popular brands in the country. Institutional Investor program, or Dented by Fickle Gamers Their rapidly rising sales filter di- through brokers who have those rectly to SAIC’s bottom line. SAIC raked in enough cash last year quotas. In videogames, even new plat- purchased items in its games, have Volkswagen is China’s most pop- to pay out 53% of its profits as divi- Buying SAIC shares now would forms can bring the same old prob- been declining. They are now off ular brand, commanding 15.3% of dends. Its cash flows should stay ensure enjoying the potential upside lems. 20% since peaking in last year’s the market between January and strong enough to maintain this pay- once Shanghai connects with Hong Companies such as King Digital third quarter. On the same metric, July, compared with 13.4% last year, out ratio until 2016, says Nomura. Kong and a whole new world of in- and Zynga are learning that anew. Zynga peaked earlier, in early 2012, according to Macquarie, not includ- That the stock trades in main- vestors gains access to China’s big- For all the changes that have swept and is now down 59% from that ing its Skoda and Audi units. VW’s land China, where local investors gest auto company. the business in the past few years, point. upcoming models, along with older prefer to bet on higher-growth SAIC is a play on two important videogame makers face the same ex- To remedy the problem of fickle hits like the Tiguan SUV, should firms instead of staid car makers, Mainichi Newspapers Co., Ltd., 1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seo

changes in China: Consumers flock- , Gautam Budh Nagar, Noida -201301 and PLOT No.EL208, TTC Industrial Area, Mahape, Navi Mumbai - 400710 (Maharashtra), India, Editor: Suman Dubey, ph istential challenge of how to keep an casual gamers, publishers are focus- keep it growing. The recent spate of ironically is another positive. SAIC ing to cars, and Beijing’s slow ef- audience coming back for more, ing their newest freemium titles on regulatory actions against foreign languishes at 6.4 times forward forts to pry open its closed capital hoping past hits will fund new ones. more of a hard-core crowd. This is auto makers will have minimal ef- earnings, while Hong Kong-listed markets. Investors should get ready For King, those new hits aren’t also the area to which investment fect on these companies. Dongfeng Motor goes for 7.2 times to ride both. coming fast enough to offset the de- dollars are going. With these moneymakers in tow, and Guangzhou Automobile Group —Abheek Bhattacharya cline of “Candy Crush Saga.” The Kabam, maker of games like company missed Wall Street’s reve- “Kingdoms of Camelot,” raised $120 nue forecast for the second quarter million from Alibaba last month in a Tuesday and forecast what will be late-stage round that valued the its first year-over-year bookings de- game maker at $1 billion. Machine cline for the third quarter. The news Zone, publisher of “Game of War: orporation, 3817 Mascardo St., Corner Metropolitan Ave., Pasong Tamo, Makati City. Printed in Singapore by Singapore Press Holdings Limited, 82 Gen crushed its shares, pushing them Fire Age” that is now the third top- below the $14 mark—a new low for grossing title on Apple’s App Store, a stock that went public at $22.50 is reportedly in talks for a funding in March. round that would value it around $3 The problem of big hits quickly billion. melting down is especially acute in Games like these may appeal mobile and social games, given their more to a core gamer accustomed to focus on far more fickle casual gam- spending more, although they also ers. This has played out before in have to compete with traditional other areas of the game business. game consoles in this regard. The Nintendo Wii and games like King’s saving grace has been that “Guitar Hero” were massive hits investors have better understood among those who didn’t consider this risk from the start. themselves gamers. This crowd then At its peak since its IPO in quickly fled to smartphones and March, the stock has barely traded tablets that offered compelling, over nine times forward earnings— easy-to-play games at much cheaper making it far cheaper than any

prices. other game stock, according to Fact- O Ind. Est., Tseung Kwan O, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by The

Both King and Zynga have spe- Set. The sharp selloff on Wednesday reet Journal India Publishing Pvt Ltd, 9th Flr, Tower 2, Maker Maxity, Bandra Kurla Complex, Bandra (E), Mumbai–400051 by Mr Suman Dubey at A-8 Sector 7 cialized in “freemium” games, put the multiple even lower, around meaning ones that are free to down- 7.5 times. load and play, in the hope players Still, the lack of growth across will purchase items within them. its portfolio means that low multi- Both are struggling to keep their ple is deserved. In this business, most lucrative players on board. players don’t get points for past King’s monthly unique payers, a hits. measure of those who have actually —Dan Gallagher : 235060-A) Lot 10 & 12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia. Printed in Philippines by FEP Printing C

OVERHEARD No

Japan’s dreadful second-quarter next year. Capital Economics, mean- gross-domestic-product data raise while, says that the bank likely will the specter of additional central-bank confirm the program will continue action. Yet the Bank of Japan says another year. its already-massive monetary stimu- The bank confirms each month at lus is open-ended. its policy meeting that it is continu- So why do analysts think the ing the program—expanding the bank needs to clarify its intentions monetary base by 60 trillion to 70 soon? One reason might be a BOJ trillion yen (about $587 billion to table that forecasts the size of its $685 billion) a year. balance sheet—which goes only to But in this world of forward guid- the end of this year. ance, by failing to update the fore- Economists at Barclays say that casting table, the BOJ leaves money- come October, the BOJ is likely to printing-addicted investors nervous prolong the program through June of that their fix might end. Nation Multimedia Group Public Co., Ltd., 1854 Bangna-Trad Road, (K.M. 4.5), Prakanong, Bangkok 10260. Published and printed on behalf of the Wall St Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Ltd., 1/F, 8 Chun Ying St., Tseung Kwan Publisher/Editor/Printer: Song, Pil-Ho. Printed in Malaysia by KHL Printing Co. Sdn. Bhd. (ROC W20

W5 W7 W8

CULTURE | ENTERTAINMENT | STYLE | FASHION | ADVENTURE | TRAVEL | EATING | DRINKING | MANSION Friday - Sunday, August 15 - 17, 2014 asia.WSJ.com/lifestyle Get Back in the Swing The latest golf techno-gadgets promise to make the game easier. But can the flood of data they provide help a frustrated, lapsed player reconnect with a favorite childhood sport? Page W2 othy Weinert/CESD

[INSIDE] Photo Illustration by Danny Kim for The Wall Street Journal Styling by Athanasia Nichols Grooming by Birgitte Phillipides for Malin + Goetz Model: Tim

WHOLE LOTTA HIGH NOTES LOVE FOR Kuala Lumpur’s CULOTTES music scene Fashion is finds a new embracing the beat W4 new anti-dowdy take on the cropped pants W6 RED CARPET Overseas developers court Hong Kong home buyers W11 W2 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. GEAR & GADGETS Greens Technology

How the latest golf gizmos can help you hit the ball straight Timothy Weinert/CESD

SWING STATES // HOW A SENSOR THAT CLIPS TO A GOLF GLOVE CAN MAP A PLAYER’S TECHNIQUE DOWN TO THE LAST DETAIL Capture Analyze Calculate Two accelerometers inside the Zepp Golf measure speed, To develop the algorithms that make sense of the raw The Zepp Golf figures out the speed of the club head by velocity and the direction of your hand movement, while a motion data, Zepp employed high-frame-rate video taking into account the club’s size, length and the flex of gyro tracks rotation. Roughly 1,000 data points are recorded cameras, motion-capture suits, and speed guns to track the shaft, referencing a database with specs for over each second. golfers’ swings. 10,000 clubs. Photo Illustration by Danny Kim for The Wall Street Journal, Styling by Athanasia Nichols, Grooming by Birgitte Phillipides for Malin + Goetz, Model:

BY JOANNA STERN yards to the left—smack where some fluffy pretty certain where it would land. Of ducting headphones for anxious golfers who sheep had decided to graze. Chagrined, I course, I had more time then. These days, I need help relaxing on the course, gloves that tried again. And again. Then again. only make it to the course once or twice a tell you if you’re gripping your club too here I was in Scotland, the Not since William Wallace came down year, and when I do, getting back into the tightly and the $10,000 Segway golf cart. birthplace of golf, at the first from the highlands to fight for Scotland’s in- swing of things is harder than it used to be. My needs are simple, though: I just want tee of the Queen’s Course at dependence had this countryside seen such a As a tech columnist, I know my problem to be able to hit a ball straight, even T Gleneagle’s. I made sure my spectacular array of stray projectiles. is one that gadget-makers have tried to though the golf-ball-size dust bunnies in my knees and arms were properly It wasn’t always that way for me. When I tackle for years. I receive a gazillion emails closet are the only thing my clubs have bent, my weight balanced. But when I was younger, the sport was second nature. about new golf gizmos that promise to do made contact with in the past six months. swung, my shot sailed away from the fair- Without a thought, I could send that dim- everything but fish my ball out of water Could technology help me do that? I pored way and into the tall grass at least 120 pled ball soaring through the sky and be with a deep-sea drone. There are bone-con- over the least absurd-sounding emails and THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W3 GEAR & GADGETS

took the most plausible “good-for-all-lev- els” golf gadgets to a local course. TRIPLE BOGEY // THE THREE GOLF GIZMOS WE TESTED The Instructor in Your Smartphone Naturally, in the age of self-driving cars and robotic pharmacists, there are gadgets that promise to replace the antiquated human golf instructor. Lots of devices gather data about your swing with the hopes of turning you into Jack Nicklaus. Most, like the SwingTip or Swingbyte, awkwardly latch to your club. I opted for the Zepp Golf ($150, zepp.com), a Starburst-size neon-yellow model, because it clips more discreetly to a golf glove. This Bluetooth-connected sensor delivers all sorts of information about your golf technique to a smartphone—the speed and trajectory of your club, the angle of your backswing, plus a slew of other technical- sounding golf metrics that casual players will have to look up. (Obviously, there’s an app for that: the $2 “Golf Glossary” for iPhone.) Based on this data, Zepp gives your swing an overall score. At first, I had trouble deciphering all this information. Zepp would tell me that Zepp Golf Arccos Garmin Approach S6 my swing got a failing score of 68 because When strapped to a golf glove, With the help of your smartphone’s A GPS-enabled watch puts my backswing was at 126 degrees, my hand the Zepp captures a flurry of GPS, this set of 14 sensors tracks your color maps of any of 38,000 golf plane at 5%. Thanks, but exactly how will motion-related data about each performance by club type. $399, courses on your wrist. $400, that help me make the ball go into the little swing. $150, zepp.com arccosgolf.com www.garmin.com hole? As I stood at the driving range mat and struggled to make sense of all the numbers, my improved technique—which made the and that I was still 200 away from the cup. It does more than that, however. Similar a fella named Larry came over wearing a Zepp a better teacher. Less anxious that I I doubt even Jack Nicklaus’s caddie was to the Zepp, the watch measures swing Zepp on his glove. We commiserated about would send unsuspecting fellow golfers to that precise and attentive. tempo and swing strength, though you have the complicated interface, but he showed the hospital, I ventured onto the course. The more you use Arccos, the more data to manually turn that feature on by tapping me how to access the app’s videos, which it collects about how you perform with vari- and scrolling through numerous menus, and offer tips to help you overcome the short- The Computerized Caddie ous clubs. After you’ve played a few rounds, I never quite got it to work right. But the comings in your technique. Now, not only TheArccos($399, arccos.com), which goes all that seemingly boring information can colorful maps are the watch’s selling fea- was I feeling crappy about my golf game on sale this month, is like having your very come in handy. Instead of wondering which ture. At hole 16, the birds-eye view indi- but someone else was teaching me how to own caddie, except it doesn’t carry clubs or club I should hit with (perhaps my 6 iron cated a sand trap on my left and another a use technology! polish balls. This set of 14 gumdrop-shape would do the trick?), I could base my deci- bit further up on the right. The only thing Once I mastered its quirks, the Zepp was sensors, which stick into the top of your sion on hard numbers. If I was stuck in the the watch was missing was a beverage-cart quite useful. When I hit a shot that headed rough, say, 120 yards from the green, I could call button. straight for the 150-yard flag instead of di- look up data on which club had worked best Despite its multitude of features, this is rectly at the side nets, I’d tap the corner of The app informed me that I’d under similar circumstances. no James Bond watch—in fact, 007 might the sensor to mark that swing as a “favor- The downside: Arccos only works if you have been outwitted by Goldfinger had he ite.” I could then use the app to watch an hit 193 yards. I doubt even keep your iPhone in your pocket, since the worn it. The interface is confusing, and the animated rendering and establish that Jack Nicklaus’s caddie was system relies on your phone’s GPS. I left my touchscreen is about as unresponsive as the swing as a model against which my future phone in the cart at the seventh hole, and ones on the back of airplane seats. If I attempts would be compared and graded. that precise. the app refused to acknowledge a Tiger spent as much time practicing my swing as When I hit a bad shot, the Zepp helped me Woods-worthy chip shot I’d just made. Its I did poking at the watch, I’d be a great realize that the problem was usually related sensors were also too sensitive at times. golfer, said Golf Pro Joe as I held everyone to my hand or club plane. golf clubs like thumbtacks, keeps track of When I accidentally dropped my 7 iron on up at the fourth hole. As helpful as the instructional videos your game and suggests appropriate clubs the ground, Arccos registered that as a That’s pretty much what I discovered were, they weren’t as effective as a $100, to use. It’s similar to a competing product shot. Still, the Arccos unobtrusively col- with all these gizmos: The less futz, the hourlong lesson with a pro: Joe Bush at called Game Golf, but that model requires lected helpful information about my game better the putts. And it doesn’t matter if Shackamaxon Country Club, in Scotch you to clip a vibrating beeper-like device to in real time and took care of the tedious as- that futzing is with a touchscreen or your Plains, N.J. your pants; when I used it, I was never sure pects of scoring so I didn’t have to. grip on the club. Gadgets can take you out After a few minutes of staring down my if my shots were registering or my table of the zone, but those that discreetly han- swing at the practice range, Mr. Bush de- was ready at the Olive Garden. The Digitized Guide dle the drudgery of golf—keeping score, duced that my shots would stop hooking Leveraging my smartphone’s GPS via With the Garmin’s Approach S6 watch choosing clubs—can be of help, too. With left if I “weakened my grip”—or, in other Bluetooth, the Arccos app not only figured ($400, garmin.com), the all-important the aid of GPS satellites, accelerometers words, completely changed the way I held out what course I was on, it knew I was at course map is always with you on the tee, and my teacher Joe, I started losing myself the club by rotating my bottom hand. Sure the 18th hole, 393 yards from the green. instead of being left on the golf cart’s steer- in the game again. I rediscovered the feel- enough, after a few swings, my shots were (The app has access to maps of 17,225 golf ing wheel. The Garmin puts maps of any of ing of swinging at the ball and watching it going straight. I started to remember how courses in the U.S.—which the company 38,000 international golf courses on your soar through the sky (in the right direction) good playing this sport could feel. says is all of them.) After I teed off and wrist and tells which way the flag is. That as everything just fades away. After I made those pro-guided swing drove my cart to where my ball landed, the was helpful when I found myself in the Sheep may graze comfortably near golf changes, I recalibrated the app to reflect app crisply informed me I’d hit 193 yards, rough behind a sand trap I couldn’t see over. courses again.

A SHORT HISTORY OF 21ST-CENTURY GOLF INNOVATIONS Inventors have been trying to lower the bar for beginner golfers since well before the rise of Bluetooth. Here are a few of the most creative

2001 2006 2008 2013 Putt & Reel Laser Putter The Floppy The Golf Cart Hovercraft This practice club Electronically This soft-sided “indoor golf ball” is Glide across sand traps and water or solves the problem of assisted putting intended to be a less destructive sidle up to greens without leaving having to walk over to has long been a alternative to the standard version tire marks. Ten of these $58,000 ve- the ball, bend over and golfer’s fantasy. for players who want to practice at hicles have been sold since their in- pick it up when working This one, offered home. Its crocheted exterior troduction last year. on your putting. Its golf by Restoration surrounds a hollow rubber ball filled —Chris Kornelis ball is attached to a 10- Hardware and with beads, giving it the feel of a pound (4½-kilogram) Frontgate, clips firm Hacky Sack. Each one is fishing line, and can be near the head of handmade in China, according to its retrieved using the reel. a club and shoots inventor, Adam a red laser-beam Tuttle, because 2011 guide up to 500 “I have yet to EZ Drinker Toilet Golf Kit yards away. be able to find Blue Ridge Product Solutions’ itera- a machine that tion of this washroom accessory in- can crochet cludes a contoured bath rug, seat- a sphere.” height putter, golf balls and flag.

Danny Kim for The Wall Street Journal, Styling by Athanasia Nichols, Grooming by Birgitte Phillipides for Malin + Goetz, Model: Timothy Weinert/CESD, Club: Callaway, Glove: Titleist, Pants: Maide Bonobos, Shirt: Polo Golf, Shoes and Belt: Brooks Brothers; Illustrations by Joe McKendry W4 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. CULTURE & ENTERTAINMENT

HIGH NOTES Anew generation of singers, including, clockwise from left, Cheryl Tan, Dasha Logan and Poova Plachciak, are transforming Kuala Lumpur’s club scene with fresh sounds.

BY JOHN KRICH laysian Deputy Prime Minister Muhyiddin Yassin, went abroad to study at New York’s Juilliard School. She has a YouTube channel ne is the daughter of the featuring her music videos and she recently country’s deputy prime minis- returned to Malaysia to promote her EP re- ter and another is the child of Malaysia’s cording “Aurora” with a launch party and O a local rock star from the series of concerts. 1970s. A third is from a stock- “There are so many great young women broker family. singers here now—they can do jazz, pop, They are among a growing number of anything,” says Steve Thornton, a jazz per- young Malaysian women resisting pressures cussionist who moved to Malaysia from to marry rich or earn law degrees and are New York in 1997. instead focusing on their passion for sing- Blossoming “I think this is the kind of place where if ing. The trend has turned Kuala Lumpur’s you are really talented, you’re going to have jazz and cabaret scene into a testing ground a chance. Another thing is that Malaysia has for vocalists and a source of new pop stars. a lot of fantastic looking women, and the re- “I can’t really explain the phenomenon,” cord companies are looking to package that.” says Michael Veerapen, a veteran jazz pia- These performers are following in the nist who has coached a few aspiring song- Jazz Age footsteps of Yunalis Mat Zara’ai, a trailblazer stresses. “Maybe there’s just more room known as Yuna who was signed in 2011 by a now, financially and emotionally, for these management company in Los Angeles after ladies to express themselves.” putting her music videos on Myspace. She Cheryl Tan, who worked in musical the- has released several albums since, appeared ater during her early teens, says her stock- on U.S. talk shows such as “Conan” and broker father advised against a career in fi- Kuala Lumpur’s music scene finds a new beat “Jimmy Kimmel Live!” and seen her Twitter nance and told her to pursue what she following rise to 1.1 million. really wanted to do. Ms. Tan, who counts with a group of young cabaret singers The 27-year-old, who began writing songs Sheila Jordan and Ella Fitzgerald as influ- when she was 14, lives in the U.S. Her next ences, studied music at Wesleyan Univer- tour of North America starts at the end of sity in Connecticut and performed in ven- the month. Yuna has also launched a clothing ues around New York. line with Malaysian brand November Culture. After returning to Kuala Lumpur two “There’s always pressure world-wide on years ago, the 25-year-old joined a local pi- women to choose safe careers, maybe a lit- anist to form the Malaysian Music Project, tle more so in Malaysia because there’s not which regularly performs at clubs in the so much emphasis on the arts,” says Greg capital. Henderson, an Australian record producer “I want to contribute to my own coun- in Kuala Lumpur. “But things are looser, es- try’s musical scene,” says Ms. Tan, who also pecially with the religious thing. Yuna has performs solo in Singapore. Her father has liberated women to perform pop in a even followed her musical lead and taken tudung, for instance,” he says. up drums. Janet Lee was raised in a Chinese family Dasha Logan, daughter of Loganathan Ar- in the town of Taiping in Perak state and umugam, or Loga, the late lead singer of the took a winding route to her singing career, Alleycats, is also putting on shows in Kuala having earlier worked in information tech- Lumpur and her hometown of Penang. “I nology, marketing and banking. As a child, couldn’t imagine a better place to find my she would sing “The Phantom of the Opera” voice and get mentored,” says the 26-year- songs and Natalie Cole tracks into a sham- old. Ms. Logan’s latest show—which she poo bottle. In Kuala Lumpur, she persuaded called “Stripped”—was on July 5 in Penang. a children’s choir leader to let her join, even Restaurants in Kuala Lumpur featuring though she was 19 years old. Later she got musical acts include Alexis Bistro, Mezze, her start performing at friends’ weddings. and the Bee (at Publika), while jazz mainstay “That’s where I really learned how to No Black Tie, which has open mike nights on grab an audience, when you’re not the main Mondays, is another good place to find new dish, but just the garnish,” says Ms. Lee, singing talent. No Black Tie’s founder Evelyn who earns a living from private functions Hii says many singers return to Kuala Lum- and corporate events, as well as Chinese- pur after studying music abroad and hone themed musical theater. She created the their craft in front of live audiences, forming one-woman cabaret “Shanghai Jazz” after bands and exploring their sounds. her partner died in a motorcycle accident. “The emergence of many more live mu- Poova Plachciak, 34 years old, says her sic venues, providing increased opportuni- parents weren’t overly impressed with her ties to perform for a live audience, has decision to become a singer. But now her given birth to a new generation of women mother calls herself a big fan while her law singers in the Klang Valley,” she says. lecturer father and younger brother often Jazz-oriented artists like Ms. Logan tend attend her gigs in Kuala Lumpur. to avoid television pop competitions like “Being Indian, I had to have a proper ed- Malaysian Idol and Akademi Fantasia. ucation and I was exposed to Carnatic mu- “There are a few competitions but I sic. But what really got me going as a kid wouldn’t join,” Ms. Logan says. “With so was Glen Campbell and the Carpenters,” many new venues in K.L., it’s not so diffi- says Ms. Plachciak, whose music style has cult to make it now.” evolved from earthy blues to electronica. Ms. Logan’s father, who died of cancer in She has an album on iTunes called Ticket to 2007 at the age of 54, encouraged her to Faketown and is working on another. perform. “He used to advise me about how “Although there are days when I am not to use the mike. … Even things like making confident about this journey, my love for sure I wore shoes that grounded me in case what I do keeps me going,” Ms. Plachciak of lightning.” says. “It’s the best decision I ever made,

Najwa Mahiaddin, the daughter of Ma- Wong Horng Yih (Tan); Vignes Balasingam (Plachciak) and I’m not going to look back.” THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W5 CULTURE & ENTERTAINMENT Comic Appeal

‘Old Master Q’ grabs buyers’ interest at Sotheby’s sale

BY JASON CHOW Mr. Wong gradu- ally—and reluc- tantly—ceded control SOTHEBY’S IN HONG KONG is bet- of the drawing and ting that nostalgia sells with a publishing to a stu- new exhibit featuring the original dio led by his son drawings of the iconic comic “Old Joseph Wong, an ar- Master Q.” chitecture professor Titled “Old Master Q: What the in Taipei. The youn- @#$% Is Going On?,” the exhibit, ger Mr. Wong now which runs until Aug. 29, features leads the artists and 121 works, ranging from black- also manages the and-white ink drawings of multi- business of licensing paneled comics to the colorful the “Old Master Q” covers of the biweekly publica- image. tion. Sotheby’s is selling the “My father never works on behalf of the studio be- wanted me to do it, hind the strip, though they won’t but it’s what I’ve be put on the block for auction. long wanted to do,” Popular among Hong Kongers Joseph Wong said in and the Chinese diaspora, the an interview. “He comic was created by Alphonso thought I was wast- Wong and has been a newsstand ing my time. ‘Don’t staple for more than 50 years. The do this. It’s too hard series centered on the title char- work.’ Now, he

acter, a bumbling Chinese man doesn’t say a word, OMQ ZMEDIA LTD. (2) easily identified by his traditional which means I’m do- clothes and trademark cap. Light- ing a good job.” “He’s so disorganized,” the hearted and humorous, “Old Mas- Sotheby’s curator Angelika Li, younger Mr. Wong said of his fa- ter Q” frequently commented on who has been a fan of the strip ther. “The drawings were in draw- pop culture and the fast-changing since she was a child, approached ers and boxes. Some were eaten lifestyle of modern Hong Kong. the studio early last year about by termites. Others were so yel- Born in Tianjin, China, Mr. organizing a show. She said she lowed with age. It took a lot of Wong was trained in Western art long hoped to use the Sotheby’s time to find the best works.” in Beijing before moving to Hong Hong Kong gallery for “something The 121 works on display at So- Kong in 1956 to work as an illus- really local. The comic is about theby’s range from 1968 to 1983 trator for a book-publishing com- our collective identity, our daily and in price from 50,000 to pany. The earliest “Old Master Q” lives, in Hong Kong.” 100,000 Hong Kong dollars comic strips appeared in local The Wongs gave their consent (US$6,450 to US$12,900). ‘Scholarly Contemplation’ (1981), ink and color on paper, above left; ‘Fighting for newspapers in 1962, though the and it was up to Joseph Wong to Old Master Q drawings have Seats’ (1973), ink on paper, above. (‘Seats available here!’ the waiter says.) biweekly publication didn’t appear begin the time-consuming task of rarely been offered at interna- until 1964. sifting through his father’s ar- tional auction houses in the past. rent exhibit have come from Hong this,” Joseph Wong said. “The sin- Mr. Wong stopped drawing the chives. He sought to find the best The last time was in 2012 at a Kong and afar, including many gle-line, black-and-white drawing is comic in 1997, when he was no of the early drawings, though he Christie’s sale, when three cover Chinese living in Europe and the so simple but lively, and Old Master longer able to work, but the strip found many of the earliest origi- drawings sold for HK$100,000. U.S. Q is so funny, satirical and clumsy,” continues today. The 89-year-old nals were lost to decay. Ms. Li said buyers at the cur- “There’s a certain charm to he said.

as Claire Underwood has “brought a renewed interest into this part The Race to Dress of my work, which is the founda- tion of my business.” Mr. Spacey, too, is a new fash- ion icon. Esquire Magazine has TV’s First Couple encouraged politicians to “dress like Frank Underwood, don’t be- BY CHRISTINA BINKLEY fessional women. Her character’s have like him.” clothing and haircut are closely fol- Ms. Wright, who works closely lowed on blogs and social media, with Ms. Argan in selecting her THE RACE TO DRESS Washington’s where some women post photos of character’s clothes, says she un- best-dressed couple is on. themselves at their desks in Claire- derstands why her character’s As Hollywood turns to the Em- like outfits. It’s a public reaction outfits have proven so intriguing. mys on Aug. 25, the president’s the actress welcomes, though she “It’s powerful and it’s sexy. What wife is once again a sought-after says it took her by surprise. “When man doesn’t like that in a fashion commodity. But it’s Robin my publicist told me that people woman?” asks Ms. Wright. Wright, the nation’s first lady on were blogging about it—the hair Mr. Rodriguez, who spent hours the political drama “House of and the clothes,” Ms. Wright says, in his archives working with Ms. Cards,” who is on fashion labels’ “I was like, really? Wow!” Wright and Ms. Argan, says the radar, along with her co-star The actress’ potent strong- costumes resonate because of their Kevin Spacey. woman air has made her particu- discipline. “The consistency in Brands are usually most inter- larly influential, leaving some de- dress and style makes it even more

ested in dressing younger stars. signers faintly gaga. Netflix intoxicating,” he says. “There’s But this year the 48-year-old Ms. “I just love her,” Jason Wu said DECKED OUT ‘House of Cards’ stars Robin Wright and Kevin Spacey. greater strength in being subtle.” Wright and the 55-year-old Mr. recently. He expressed a desire to Because Ms. Argan buys most Spacey present a perfect storm of dress Ms. Wright in either of the Burberry is a likely candidate moment—often deciding on a styl- of the clothes off the rack from temptations for any fashion label. labels he designs, his eponymous for Mr. Spacey, who wears the la- ists’ rack of potential looks a few department stores, the brands To begin, they’re both nominated line or Hugo Boss. “We’re talking.” bel on the show as well as on red hours before an event. aren’t always aware of their in- for best-actor Emmys for their Among the many designers carpets including the Academy “House of Cards” isn’t nomi- volvement until episodes are re- roles as the machiavellian Frank also in the running to dress Ms. Awards and Golden Globes. nated for an Emmy for best cos- leased. That’s another reason that and Claire Underwood. That means Wright is Ralph Lauren—whom Burberry lauds its good rela- tumes. Contemporary costuming is fashion brands often prefer red- that one or both could appear on she names as one of her favorites. tionship with Mr. Spacey and Ms. often overlooked in awards. But carpet dressing to working with the Emmys stage, giving some de- She has worn the label on past Argan, but most other brands the snub hasn’t affected the impact film or television studios: Red-car- signers’ duds global exposure. red carpets, including last year’s were cagey when asked if they are of the show on current fashions. pet photos get wide distribution (Netflix expects to release the third Emmys. It’s also possible that she sending clothes for the Emmys. Designer Narciso Rodriguez— and usually credit the designer. season of “House” early in 2015.) could move further upscale. Now Fashion labels are loath to admit another Robin Wright fan—says Ms. Argan says that the fash- Ms. Wright’s power wardrobe— that her character has become the that they are trying to dress a clients have contacted him about ion label Theory once called to anchored in sleek black and gray first lady, Ms. Wright has been re- star for the red carpet, for fear of looks such as a gray flannel dress find out which Theory dress Claire tailored suits and dresses—has questing more Christian Dior for being embarrassed if they aren’t that she wore on the show. The had worn in an episode. “I was made her a valuable fashion influ- the show, says the show’s costume chosen. Stars are notorious for designer, known for his minimalist like, I don’t have the tags any- encer, particularly for young pro- designer, Johanna Argan. changing their minds at the last clothing, says dressing Ms. Wright more,” she says. W6 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. STYLE & FASHION Putting the Cool in Culottes

Long thought of as dowdy and unflattering, the cropped, wide pants are suddenly the silhouette of the season

BY ALEXA BRAZILIAN more flattering than the popular midi-skirt and more streamlined and sophisticated than a summer ur closets may be dress. It’s slim over the hip and stuffed to the gills, bottom and then kicks out, so it’s but we all go great for women with bigger O through phases thighs,” said Ms. Kingham. “At the when we want to moment the culotte customer is wear just one piece of clothing. still young, fashion-forward and Over and over again. My current likes to experiment, but that will fashion fixation is a pair of cu- change.” lottes: wide-leg, fluid silk pants That shift is sure to happen as from London-based label Mother more women learn how best to of Pearl that fall just below my wear the shape. For taller, slimmer calf in a festive stripe-and-floral women, a chunky brogue or Vans- pattern. style slip-on sneaker matched with This summer, I’ve worn them a relaxed T-shirt easily nails the ga- everywhere but to bed—although mine quality that many designers they’d be perfectly comfortable (Acne Studios, Marni, Emporio Ar- there, too. For a work dinner in mani) captured on their catwalks. London, I paired them with loaf- However, a substantially high heel ers, a white shell and my favorite is the surest and sexiest way for Stella McCartney tuxedo jacket. women with less than Amazonian The breezy, cropped trousers cut a frames to make the look work. Ms. much chicer line than any full- Delaney wears hers with a vintage length suit could. At a casual pair of peep-toes with a chunky weekend party in the country, heel and thick velvet straps. “You they were easier and more elegant need to balance the proportions of than a summer dress, worn with a e/Red Model Management the wide leg with a substantial simple linen T-shirt and flat shoe, whether it’s a heel or a heavy bronze K. Jacques sandals. And flat,” she said. For the chillier for a wedding in New York this months of winter, Ms. Kingham fall, I’m planning on wearing them suggested trying culottes with a with a vintage neoprene racer- clog-type heel or a knee-high boot. back top and my favorite spindly This idea of contrast applies sandals from Manolo Blahnik. equally to what you wear on top. It seems designers are having a Anything that accentuates the similar love affair with culottes at waist and slims your torso will do the moment, even if the nicely—from a tucked-in silk but- silhouette—with its voluminous ton-down to a cropped cashmere wide leg and cropped length that crew neck sweater or a strapless can fall anywhere from just below bustier top paired with a tailored the knee to just above the ankle— jacket or skinny cardigan. is often considered tough to pull Los Angeles designer Rosetta off. (More on that later.) Getty created Bermuda-length cu- lottes—ripe for vacation or a day in the city—for her upcoming resort ‘Essentially, you can run collection, inspired by visionary artist and art dealer Betty Parsons, around frantically in who was partial to wearing shorts. them and still look “There has been this shift toward more-comfortable yet still-polished completely elegant.’ clothing as of late, and the culotte speaks to this demand,” said Ms. Getty. “My personal style is very But culottes also have many much tomboy with a feminine edge, advantages, not the least of which which in essence is what the cu- is their barbecue-to-black-tie ver- lotte embodies.” satility. They’re also transitional, Indeed, many of the designers the perfect piece to wear from who offer the silhouette in their summer into fall (and winter into collections find culottes’ can-do spring, too). This year Balenciaga, spirit most appealing. “I cycle to Rosie Assoulin and Proenza work in them—they look as so- Schouler endorsed the style for phisticated as a skirt but you can spring. French designer Chris- jump around in them if you need tophe Lemaire sent a lightweight to,” said Mother of Pearl’s Ms. A-line khaki pair down his runway Powney. Trager Delaney’s Ms. Del-

for spring and then created thick Danny Kim for Theaney Wall Street Journal, Styling by Paula Knight, Hair & Makeup by Lizfinds Christensen, Models: Ada Roth/Major Model Management and Alex Nyam culottes especially drab wool and gray-denim ver- handy when hosting one of the sions for fall. Other brands in the isn’t a conventionally sexy look. It abled horse-loving Victorian leg but falls at a rather unconven- regular dinner parties she throws fall-season culotte camp include says, ‘I don’t care and I still look women to switch from riding side- tional spot—is still a hard sell for in the garden of her London Michael Kors, Derek Lam and better than you even though saddle to western. the average woman. The shape du apartment. “They’re totally per- Marni. Chloé designer Clare you’re wearing a miniskirt.’ It’s They can also have a mumsy jour can be surprisingly flattering, fect for entertaining. You don’t Waight Keller cut them in supple androgynous but feminine at the and institutional air about them. however. “[One of] the lengths of have to worry about bending over tan leather, and Delpozo designer same time.” “People often associate them with the season hits the lower calf, to pick up a piece of chicken that Josep Font created voluminous Before its recent resurgence, school uniforms and the Brownies,” which looks really fresh and chic fell off the barbecue,” she said. variations in powder-blue and “culotte” was a bit of a dirty word said Mother of Pearl creative direc- and gives the illusion of slimmer Ms. Delaney has also designed ochre-yellow wool. in the fashion world. “It can make tor Amy Powney, who created legs because you’re just seeing the forest-green versions for female “The culotte is a little bit of an you think of 1992, when your mom printed-silk renditions for spring skinny ankle,” said Suno co-de- staffers of chef Skye Gyngell’s hotly ‘F-you’ piece,” said Lowell Dela- was wearing skorts,” said Ms. Dela- and wool versions for fall. “But the signer Erin Beatty. anticipated restaurant, Spring, ney, co-designer of the two-year- ney. The style also has costume-y silhouette actually [works for] lots Matches Fashion buying direc- opening in London’s Somerset old London label, Trager Delaney, connotations stemming from its of different body types.” tor Natalie Kingham started snap- House this fall. which has included culottes in historical connection to the “split Despite designer endorse- ping up the silhouette this past “Essentially, you can run around nearly every collection to date. skirt” (very wide-legged pants ments, the skirt-trouser hybrid— spring for the luxury London re- frantically in them,” she said, “and “It’s such a power move because it made to look like a skirt) which en- which not only adds volume to the tailer. “The reality is, they can be still look completely elegant.” THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W7 STYLE & FASHION A Cure for the Packer’s Plight

Even seasoned travelers can seize up with anxiety when it’s time to mastermind a suitcase strategy. Here, seven lessons from the road

BY JAMIE PALLOT past the sorry hordes at baggage claim. But if you’re away for more than a few days, you’re bound to f there were a Freudian hit the worn-it-already wall, which term for the way I feel be- can only be fixed by buying more fore having to pack for a stuff. George Esquivel, the Los An- I trip, it would be koffer- geles-based shoe designer and cre- krankheit (“suitcase-sick- ative director for Tumi, always ness”). My condition can perhaps checks at least one bag: “Most of be traced to a couple of trauma- my travel is for work, so I need to tizing incidents in my early man- look my best, and that means hav- hood: when an editor at the Milan ing enough possibilities.” Trust me: shows let his gaze linger over my Even if you’re traveling for plea- outfit, then sniffed “last season?”; sure as I was, the time you spend a chilly night spent in a hiking waiting for your bag will be made shelter in northern Thailand, my up for by the luxury of a few more sleep-deprived brain cycling options when dressing for dinner. through all the warm, woolly items I’d left at home. Whatever Mix High and Low the source of my infirmity, its Try to balance luxury items that textbook definition would read: make you feel good with mass- “acute anxiety caused by trying to market staples; people will notice fill a bag with the exact combina- and appreciate the high-end tion of items to ensure an opti- pieces, and you won’t stress about mum wardrobe while traveling.” the wear and tear on the other My angst levels were spiking stuff. My go-to combination is a

as I contemplated a marathon trip cream Jil Sander cotton poplin Illustration by Vincent Mahé; F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas last spring. I was to spend three jacket with a pair of J. Crew chi- weeks in Vietnam with a chef nos. They’re close enough color- HE’S A (WELL-PACKED) TRAVELING MAN // THE TOOLS FOR HAPPY TRAILS friend on a food-research mission wise to pass for a suit, and you before flying to Italy for a roman- can put the chinos through all Mesh packing cubes keep The smartest footwear A bag that turns into a Tough but stylish, this tic interlude. Then I was joining a manner of laundry facilities with- all contents organized. choice—a slip-on that can makeshift medicine suitcase has a helpful built-in three-day birthdayfest in Berlin, out worrying they’ll get ruined. Nylon Journey Packing be both casual and cabinet with a single zip. mesh divider. Topas Cabin after which I would spend a week Cube, $45, tumi.com,Dry polished. Gommino Driving Spacepak Toiletry Bag, Multiwheel Iata Suitcase, walking Spain’s Camino de Santi- Go With What You Know Pique Cotton Short Sleeve Shoes, $445, tods.com $42, flight001.com $980, rimowa.com ago pilgrimage trail from San Se- It sounds obvious, but your first Polo Shirt, $23, uniqlo.com bastian to Bilbao. Next, 10 days step should be to pull out your fa- l l ransacking Basque Country with a vorite pieces—the ones you wear band of culinary crusaders, fol- all the time and feel confident in— l l lowed by a London detour, which and select two or three that are included lunch in the members- appropriate for where you’re go- only dining room at the Houses of ing. A few people I spoke to fessed Parliament (dress code: they’ll let up to MPPD, or Multiple Packing you know when you’ve broken it). Personality Disorder: filling a bag If it’s exhausting just reading with things they rarely wear at that itinerary, think how depleting home but think will work abroad. it was to pack for it—especially Steven Learner, founder and cre- given my self-imposed single-suit- ative director of New York’s Collec- case allowance. Yet, I made it tive Design Fair, recently stocked through the trip without any major up on polo shirts for a 14-day slog breakdowns. More important, over to Zurich, Basel, Milan, Venice, and the course of several conversations London. They’re not usually part of with fellow travelers along the way, his repertoire, but he reasoned I learned I wasn’t alone. Almost ev- they’d work both casually and as eryone hates to pack; and they hate more formal attire under a jacket it in ways that go straight to the for meetings. They did neither. “I core of their being. As Tolstoy felt like a schlump,” he said. “I l l might have put it: “Every happy wasn’t that comfortable, and nei- l packer is alike; each unhappy ther did I feel properly dressed.” l Double-duty at its best: packer is unhappy in his own way.” Worth the space: a a smart tweed blazer Below, some advice from seasoned Crossover Dreams Beautiful, wrinkle-free shirts, handheld steamer that Worn with a good tailored that reverses into a field travelers, happy and otherwise. You’ll get more mileage out of the result of a specially can freshen up any jacket, inexpensive chinos can jacket. TT Reversible clothes that bridge performance finished cotton. William garment. Ultrasteam get you through several chic Wind Stretch Storm Plan, Don’t Panic and designer wear, like my be- Check Classic Fit Traveller Steambrush, $40, dinners and drinks. Slim Jacket, $4,995, There may not be a single best loved Arc’teryx Veilance Field Shirt, $115, us.thomaspink.com rowentausa.com Essential Chino, $70, jcrew.com loropiana.com way to pack, but leaving it until Jacket. It has enough pockets to the last minute is certainly the carry everything I need for flying, worst. “Don’t pack the night before from documents to iPad Mini to enough to wear on the town in a Learn to Love the Laundry drying racks on the sidewalk. I be- you leave,” said Craig Markham, sleep mask; it’s completely wind- pinch. Mr. Markham swears by his On an extended trip like mine, gan to protest; all my precious director of marketing for Firmdale and waterproof; and it’s slick Rowenta steamer; its ability to de- washing your clothes as you go is stuff, hanging out for all the world Hotel Group, which owns the enough to take bar-hopping on a wrinkle anything on the spot com- a necessity. But sometimes, it can to see? Then I caught myself: the Crosby Street Hotel in New York spring night in Trastevere. pensates for the space it takes up. lighten things up in other ways. In owner was grinning, proud of her and the new Ham Yard in London. For art dealer Edward Nahem, it’s Naples, to avoid exorbitant hotel handiwork; the Neapolitan sun- “Do it at least 24 hours ahead, then Stow Your Secret Weapons a utilitarian yet chic Brunello laundry fees, I dropped my clothes shine was bathing the street in a take a second look the next day. A One thing I’ve found indispensable Cucinelli vest with multiple pock- off at a neighborhood lavanderia. rosy glow; and a cafe next door good packer will pull something is a multi-compartment Dopp kit, ets for phone, passport, glasses, When I wandered over later to see beckoned with the prospect of a out; a bad one will put more in.” which unzips to become a hanging etc. Mr. Esquivel uses Tumi pack- if they were ready, the proprietor killer caffe freddo. I took a deep medicine cabinet. On this recent ing cubes to keep things like T- told me to check for myself, ges- breath, returned the smile and felt Check, Please trip, I also discovered Castaner es- shirts and underwear separately turing toward the street. Puzzled, my anxiety—packing-related and It’s hard to resist the allure of be- padrilles—light and flat enough to organized, and to quarantine dirty I stepped back outside and saw my otherwise—dissolve in the spring ing a carry-on crusader, striding make packing a breeze but smart laundry. belongings spread out on a row of breeze blowing off the bay. W8 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. ADVENTURE & TRAVEL

ROAD WARRIOR In Travel, Let Fate Fill In the Details

FABRIZIO CARUSO is Opera Soft- ware’s senior vice president for Asia. MOB SCENE The Singapore-based Italian Clockwise from left: spoke with the Journal about fuss- Francis Ford Coppola at free packing, chic Shanghai bars his Inglenook winery in with skyline views and undersea Napa Valley, Calif.; the fine-dining in the Maldives. Hotel Metropole Hanoi; Fred Astaire; a Ghurka How often are you up in the air? Cavalier bag. Probably three weeks in a month. Chad Keig (Coppola); Aaron Joel Santos for The Wall Street Journal (hotel); Getty Images (Astaire) I mainly travel from Singapore to 20 ODD QUESTIONS the rest of Southeast Asia, Greater China and Korea, along with trips to Opera Software’s headquarters in Europe once per quarter.

Favorite hotel? Francis Ford Coppola The Conrad in Singapore. Prior to

moving to Asia, I was frequently Opera Software THE STORY OF what got Francis Ford Coppola into jungle and write,” he said. traveling to the region from Lon- the hotel business is one of a simple plan that be- That’s not what happened. As the Coppolas im- don, and this was my hotel of fate fill in the details. came complicated. It started with the making of his proved the property, they needed caretakers. Guests choice. It practically became my Vietnam War epic, “Apocalypse Now,” released 35 were inevitable. “If you say yes enough,” he said, second home. The level of service How do you stay fit while traveling? years ago this week. Though shooting in the jungles “you’ll find yourself in the hotel business.” In 1993, is unparalleled. Even now that I I try to go to the hotel gym and of the Philippines pushed Mr. Coppola to his limits his Blancaneaux Lodge opened to the public. Over the live in Singapore, I like to go back swimming pool whenever I can, psychologically and financially, he nonetheless grew next 21 years came the Turtle Inn in Belize; La Lan- to have brunch or dinner as it is which is not very often, as travel- attached to the setting. “When you work or stay in cha on Lake Petén Itzá in Guatemala; Jardín Escon- just next door to our office. ing for work usually means that my a location for a long time, as I did, you fall in love dido in Buenos Aires; and Palazzo Margherita in his schedule tends to be quite packed. with it,” said Mr. Coppola, now 75. “David Lean, ancestral village of Bernalda, in southern Italy. Favorite airline? when he made ‘Lawrence of Arabia,’ couldn’t bear All exude casual luxury, focus on great food and Singapore Airlines is still the best Best travel experience? to leave the desert. Well, I felt the same way about wine, and reflect Mr. Coppola’s love of film. Palazzo choice for travel both in the re- A week at the Conrad in the the jungle.” Margherita’s salon was inspired by the movies of gion and the rest of the world, Maldives with my wife. It is as He later considered buying a nearby island, but at Luchino Visconti; ceiling fans in Blancaneaux Lodge though their prices are becoming close as it gets to heaven on the urging of his wife, Eleanor, found something came from the set of “Apocalypse Now.” Even if Mr. less and less attractive compared earth. One of their restaurants, closer to the U.S.—a remote, rundown lodge in Be- Coppola didn’t quite end up with his ideal writing re- to other airlines. Ithaa, sits five meters underwater, lize. “I just wanted to have a place to go off in the treat, he got something better—a great tale to tell. which means you can have a six- Best airline seats? course menu while being sur- I prefer aisle seats, especially on rounded by sharks, manta rays My first big travel experience was: a ing to buy them back. So, I have [goods] made by a wonderful long-haul flights, as I don’t like to and all sorts of tropical fish. road trip from the East Coast to this little 10-inch [25-centimeter] American company. I won’t give wake people up if I need to walk the West Coast. I may have been Eiffel Tower, and when I see it I my bag up. My wife is always say- to the restroom or to stretch my What is your worst travel experience? 11 or 12. I remember somewhere always have a laugh. ing, “Well, why don’t you get a new legs. I also try to be at the front of A weekend in Batam [Indonesia] in the middle, we stopped at an rolling bag?” But I love this one. the plane, so I can get out quickly with my wife, to try to escape A&W Root Beer stand, something On weekends I love to: stay at home and rush to my first appointment. from the hustle and bustle of the I’d never seen before. There was a in Napa, look out at the little What makes a hotel great is: sort of city. It was so bad we decided to girl working there, probably 14 birds and animals that visit me, like what makes a great wine; it’s Frequent-flier program? leave earlier than planned. years old, in her A&W clothes and and admire the trees. much more than the fruit you At the moment, KrisFlyer from hat. She had jet-black hair and drink, and the bottle and the la- Singapore Airlines is the one I use What’s left on the bucket list? was the most beautiful girl I’d One of my most memorable trips bel. It’s the story connected to it; the most. Despite having traveled to so ever seen. She looked like Snow was: when George Lucas invited the context and the history. A ho- many places, there are yet so White all grown up. my whole family to go across Can- tel is made great by the guests Favorite airport? many more to see! My top three ada with his family on the Royal who stayed there 100 years ago, Changi Airport. It takes me 30 would be: Bhutan, the place with The most underrated destination is: Canadian Pacific train. He rented and all the detail and personality minutes from landing to walking the highest happiness index in the Ireland. It’s a beautiful country, the whole train. We went from To- that developed over that time. into my apartment in downtown world; Machu Picchu for the mys- and the people are extraordinary. ronto to Vancouver in these four The Hotel Metropole in Hanoi has Singapore. terious Inca ruins; and Belize to They have such a wonderful liter- or so cars—sleeping cars and din- a wonderful story. Somerset dive in the great blue hole. ary tradition, one of warmth and ing cars, with wonderful service. Maugham stayed there. Preferred luggage? humor. Also, Irish ice cream is The trip itself had three phases of I travel with a Samsonite spinner Favorite city? among the best in the world, escalating beauty and grandeur. I still have: my old VW Westfalia. carry-on luggage that my wife It is difficult to pick a favorite as which no one knows. The first third heading west was It is like a little camper, but done gave me as a present. It’s very each city gives different sensa- absolutely beautiful. Then the sec- beautifully within a Volkswagen smooth and light when rushing tions and moods. I like London, The first time I visit a city I: like to ond part, across the plains, was bus. They were ingeniously sup- from gate to gate. where I lived for seven years, for book one of those tour buses that spectacular. The final third, plied with a refrigerator, a stove its charm and beauty, but also for stop at all the hotels picking up through Banff and on to Vancou- and several beds that can fold up, Packing strategies? the fact it is so cosmopolitan. It guests that signed up, and then a ver, was beyond spectacular. and a hammock below a pop-up I pack very lightly and only take really feels like one can discover guide talks you through all the ar- roof. I used to like to go off by the carry-on luggage. It usually takes the whole world in London. eas of the city. The second day I One of the most important business beach with my little boys in it. I me 10 minutes to pack. I fold all like to go with a car to the areas I lessons I’ve learned came from: Fred wrote while I watched the kids. items on my bed, pack my shirts Favorite restaurant/bar? found interesting. Astaire. He once told me that in special bags that my tailor The iconic M on the Bund and when he was younger, he sold the The ultimate luxury is: traveling gives me so they don’t crease, Glamour Bar in Shanghai are My favorite souvenir is from: Paris. I right for people to have Fred with family. My family is spread place trousers at the bottom, among my favorites for the great don’t have many souvenirs, but I Astaire dance studios. The schools around in different places, and shirts in the middle, rest at the food and cocktails and impressive remember when we first bought had nothing to do with him; they travel means we can get together top ... and I am ready to go. views of the Shanghai skyline. an apartment there about 25 years just used his picture and his with the kids and see the grand- Loewy and Skye in Jakarta tops ago. My kids were all thrilled, and name. And he told me that was kids and have time with them. At Which travel apps do you use? my list, and M Cafe in Manila is a they ran out along the Seine, and one of the worst decisions he ever a certain point in your life, you Google Maps is my essential for must-go on Thursday nights. Sofia came back with a little Eiffel made. If you’re going to make get the idea that if you buy a new directions. Tower. It made me think of that wine or open a hotel, you’re not car, it’s a thrill for about a week. Which city has the best taxis? wonderful Alec Guinness movie, just selling your name, you have After a while it no longer contin- What’s your best travel advice? Tokyo probably has the best taxi “The Lavender Hill Mob,” where to be personally immersed in it ues to give you that pleasure. Ma- For leisure travelers, my advice is drivers, so polite and knowledge- they attempt to smuggle gold dis- and know what you’re offering terial objects are very short lived, not to plan excessively. The best able. Despite my many visits guised as miniature Eiffel Towers, people under your auspices. but a memory with your family discoveries are made getting lost there, I still get impressed by some of which accidentally get lives forever. walking in alleys and meeting doors that open automatically. sold to a bunch of schoolgirls. My favorite luggage is: Ghurka, a —Edited from an interview with locals. It’s good to have a —Edited from an interview They then have to run around try- line of very beautiful leather by Matthew Kronsberg master plan, but let chance and by Mark Lean THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W9 EATING & DRINKING

ON WINE: WILL LYONS A Hop to Scotch Whisky Country

IMPISHLY EXCITING is perhaps the more powerful and more complex naeum Hotel and tasted a range of year it has spent in the barrel. Year Old. It has more smoke and perfect way to describe a traveler the whisky becomes. As a rule of island whisky with whisky somme- The island whiskies are obvi- there was an obvious sweet, lico- journeying through Scotch whisky thumb, the eastern Highlands pro- lier Ivo Silva. ously linked by being near the sea, rice character, but I felt it wasn’t country in midsummer. With days duce gently peated, slightly drier Unlike wine, whisky apprecia- but in taste-profile they are very as dark or dense as its name sug- that draw out long into the eve- malts; Speyside’s are the sweetest; tion takes time. A first sniff can different. I found Scapa, Arran and gested. The 18 Year Old on the ning, mild weather and wild, high- and in the west, the malts are tell you a lot, but with time in the Ledaig to be the lightest; these other hand was magnificent, with mountain beauty, it’s not difficult peated but don’t take on the over- glass it evolves, revealing layers of could almost be aperitif whiskies. smoke, vanilla and spice giving to see how a generation of Ro- whelmingly pungent, phenolic flavor. Mr. Silva says he prefers to Prophecy by Isle of Jura was pow- way to a smooth finish. mantics fell for the Highlands. The character of Islay malts. leave his whisky to relax for five erful with a dry character. Which The only downside is that you A9 runs through its heart: Once Which leaves the islands—not minutes. For aged whisky, he uses led us to Dark Origins, which we have to take a long boat ride to past Perth, it approaches the mid- a category recognized by the the scale of one minute for every tasted beside the Highland Park 18 visit the distillery. dle of Scotland, then swings Scotch Whisky Regulations 2009, northward past Loch Garry, climb- but a term that whisky writer ing more than 300 meters to the Charles Maclean says is commonly DRINKING NOW: THREE SCOTTISH WHISKIES WORTH SEEKING OUT northern shores of Loch Ericht. used by retailers and publishers. At this point, whisky lovers will This collection of distilleries, crane their necks to catch a which includes some of the most Ledaig 10 Year Old, Talisker 10 Year Old, Highland Park glimpse of Dalwhinnie. By no picturesque spots on the Scotch from the Isle of Mull from the Isle of Skye 18 Year Old, from means the first distillery in this, whisky trail, is made up of Tober- £40 ($67) £40 ($67) the Orkney Islands the largest Scotch whisky region, it mory on the Isle of Mull, Talisker £100 ($168) nonetheless stands as a landmark, on the Isle of Skye, the Arran dis- Lively, fresh and The Isle of Skye may only beyond which lie the mountains of tillery on Arran, Isle of Jura on vibrant, with citrus have one distillery but in A bright burnished gold the Cairngorms and Speyside. Jura, and Scapa and Highland and apple notes on Talisker it has one of the in the glass, the nose Unlike Islay or the Lowlands, Park on the Orkney Islands. the nose, Ledaig greats. Its 10 Year Old on this impressive the Highlands are so vast—more The last of these has just re- 10 Year Old whisky whisky has a strong gold whisky is complex, than half of all single malt whisky leased a new single malt whisky, is oak-aged. This color. A bracing, peppery, revealing more over is produced here—that it’s diffi- Dark Origins, which is aged prima- comes through on spicy nose fills the glass time. Orange peel, cult to think of one overarching rily in casks that used to contain the palate, which is a with peat smoke and toffee, butterscotch and defining characteristic. sherry—hence the dark character. little sweeter. With autumnal bonfires. It’s a vanilla all lie on a bed of One could argue that Highland Highland Park is one of my favor- lovely peaty smoke big experience in the fresh oak and a whiff malts are characterized as big and ite single malts, so to put its new and a vanilla richness, mouth with an intense, of peat smoke. The full-bodied. Certainly, the further product to the test, I visited the this is good whisky. peppery finish. finish is spicy and dry. north you travel, the sweeter, whisky bar at London’s Athe-

HALF FULL Kick Into Highball Gear

AT HEART, the highball is a stun- Dog has added its own unique ningly straightforward drink: spin, using regional sodas sourced spirit topped with sparkle, plus, from the Fizzary, a San Francisco- perhaps, a squeeze of citrus for based soda shop. good measure. Many of the new combinations Thanks to that simplicity, the add up to more than the sum of highball is having a moment. Bars their parts. Nutty oloroso Sherry are devoting entire sections of the mixed with Sidral Mundet apple menu to this drink format— soda evokes a caramel apple. though they are finding fresh Aquavit paired with Cel-Ray celery ways to elevate the highball be- soda becomes an ultra-light, re- yond classics like the gin and freshing sipper. Bitter amaro tonic and the vodka-soda. The Averna poured with Milwaukee’s growing canon of neo-highballs Dang root beer delivers an in- ranges from drinks made with ar- tensely herbal flavor bomb. “Often tisan sodas to pre-mixed cocktails we start with sodas and then add on tap. a spirit, which is backwards from Why now? Some suggest a how we create other cocktails,” backlash against years of increas- explained Trick Dog’s creative di-

ingly baroque and boozy speak- rector Morgan Schick. F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas easy-style cocktails. Others point At Playground Bar and Lounge to the growing taste for Japanese in Tucson, Ariz., beverage director whiskey. Karl Goranowski turned to high- In Japan, the highball is per- balls to quench the thirst of the haps the most popular way to con- 600 to 1,000 guests that show up Sidral & Sherry Deep Search Hi-Ball Zazarac sume the spirit, according to Sun- on a busy night. After 10 p.m., Sidral Mundet is an apple soda from Mr. Goranowski describes this drink, a From bartender Shaher Misif, this is a tory brand ambassador Neyah only highballs and draft and bot- Mexico that mixes beautifully with best-seller at Tucson’s Playground Bar lighter take on the classic Sazerac. With White. There, the preferred version tled cocktails are available. The nutty oloroso Sherry for a caramel and Lounge, as “juicy and fun.” He its whiskey-soda roots, it also bears a is a mizuwari—whiskey cut with goal: “a high-quality drink at apple effect. Sidral and other scrapped tequila for smokier mezcal, passing resemblance to the Japanese- spring or carbonated water, a close nightclub speed,” said Mr. Gora- specialty sodas can be ordered from since “raspberry and smoke work really style highball. cousin to the Scotch and soda. nowski. “But if it’s only three or soda-emporium.com or well together.” “[Highballs] are smart drinks four ingredients, you want to get sodapopstop.com. Pour 15 ml absinthe into a highball to serve,” Mr. White said. Con- the right ones and get the balance In a Collins glass, combine 30 ml glass, gently rotating glass to coat inside. sumers like them because they’re right.” Pour 60 ml oloroso Sherry into a Pierde Almas mezcal, 22 ml fresh Spill out excess absinthe. Add 2½ grams affordable and relatively light on Of course, the streamlined— highball glass, then fill glass three- lemon juice, 22 ml St. George raw sugar, 2 dashes Angostura bitters, the alcohol; bartenders love them and forgiving—nature of these quarters full with Sidral Mundet apple raspberry liqueur and 90 ml soda 2 dashes orange bitters, 60 ml rye because they are quick to serve. drinks makes them ideal for home soda (about 90 ml). Add ice. Squeeze water with ice. Stir to combine. whiskey and 3 ice cubes. Fill rest of At San Francisco bar Trick bartenders, too. “With highballs,” juice from 1 lime wedge into cocktail, Garnish with a lemon twist and serve glass with club soda and stir to Dog, founding partner Josh Harris said Mr. Schick, “there’s no way to then drop spent lime into glass. with a straw. combine. Garnish with credits Mr. White for bringing mess up.” —Adapted from Trick Dog, —Adapted from Playground Bar and lemon peel. highballs to his attention. Trick —Kara Newman San Francisco Lounge, Tucson, Ariz. —Adapted from Highball Lounge, Boston W10 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. DESIGN & DECORATING

GOING FOR THE GOLD Beds of marigolds in the walled garden at the Untermyer Gardens Conservatory in Yonkers, N.Y. Clockwise from top: Jessica Norman; Marianne Majerus; GAP Photos (3) Oh, Come On. Marigolds? Seriously?

Esteemed gardeners are revisiting the flower best known as gas-station landscaping—and revealing its long-obscured charms

BY CYNTHIA KLING project, and Rick Darke, recog- stars of the big summer display. “I tate. People were visiting again heights and bloom sizes, and nized globally as an expert on had to bite my tongue. I thought and Mr. Byrns didn’t want to undo planted 1,500 along the canals, in grasses, who uses such plants in that everything we were doing progress. “But Timothy and Marco yellows, golds, reds and oranges. ot even good taste, his naturalistic settings. would be uber-sophisticated, and were the experts, so I thought, When you mass them, said Mr. it might seem, can “The plants that are still around here Timothy and Marco were what the heck,” he said. Tilghman, it gives them greater rescue certain tools after all these years are the best of suggesting something so pedes- Turns out that Messrs. Tilgh- importance. A taller white variety, N for the sophisticated the best—that’s why they’re here,” trian,” said the architect, who ap- man and Stufano knew exactly French Vanilla, planted down the gardener. Plastic said Mr. Darke, who loves mari- parently hadn’t gotten the memo what they were doing. “Marigolds middle of each bed, makes the pots. Impatiens. Perhaps, above golds not only because his mother on the new-new gardening style. are important to Latin, Indian and whole scheme sparkle. all, the lowly marigold. and grandmother grew them, but He had reason to be concerned. Eastern cultures,” says Mr. Tilgh- While the snooty perennial It can appear fake—splashy and because their strong scent keeps After almost 70 years of neglect, man. The duo particularly liked look has been far trendier in re- eager to please, with nothing to predatory insects away. and attacks by vandals and inva- the idea of using them for a public cent years, annuals like marigolds say—until you get a snoot full of Still, Stephen Byrns, chairman sive weeds, the walled garden— garden in multi-culti Yonkers. have their advantages. Come Au- its garbagey spice smell. Certainly of the board of the Untermeyer characterized by intersecting wa- Recontextualizing such a deval- gust, perennials typically with- anyone who studied garden design Gardens Conservancy, was thrown terways, sculpture and incredible ued flower took planning, how- draw their color to survive the in the last 50 years learned to when horticulturist Timothy plantings—had only recently re- ever. Mr. Tilghman and his gar- heat while annuals are just com- avoid the marigold like the plague. Tilghman and pro-bono adviser claimed its former glory, thanks to dener, Jessica Norman, chose 13 ing into show, Mr. Tilghman said. It was considered too easy to grow, Marco Polo Stufano walked into a project put together by the Con- different marigold varieties such Consider the rose garden: lovely too common. Something to stick in his office and told him they servancy and the City of Yonkers as Janie, Inca II, Discovery and in early summer, but soon the a gas-station island in a mindless planned to cast marigolds as the to redo the entire 17½-hectare es- Cresta to get a range of colors, blooms are gone and all you see effort to enhance curb appeal. are thorned canes that look like Well, not so fast. rebar. “The dainty marigolds we Venture through the gates of // put in this spring are now proudly the walled garden at the Unter- OVERLOOKED LOOKERS OTHER BANAL BEAUTIES THE PROS LOVE displaying raucous color,” he myer Gardens Conservancy in added, “when the rest of the gar- Yonkers, N.Y., this summer and den is trying to go solid green.” you’ll encounter hundreds and The key to using annuals cre- hundreds of marigolds—not apolo- atively, said Mr. Stufano—re- gizing for themselves, either, but spected for transforming Wave planted in bold sculptural mounds Hill Garden, in the Bronx, from a punctuated by erect Japanese hol- sad mess into an arresting jewel— lies. Beds averaging 2½ meters is to forget fads. Train yourself to wide line the garden’s canals and DAY LILY QUEEN OF THE PRAIRIE BEGONIA SUMMER PHLOX just look at the plant’s essential travel around the mosaic reflect- “When I was brand new, I “It grows 6 to 8 feet [1.8 to “At my own house this “It has a long history, like qualities, its texture, form, height ing pools. Given the Indo-Persian killed everything. Then I 2.4 meters] tall, robust, very summer, I married pink marigolds, and it’s a North and color, without letting the feeling of this design, it’s almost read that day lilies were reliable, with a fluffy pink begonias with purple salvia, American native. It can be chicness factor seep into your like stepping into an ancient In- tough and easy. I ordered a flower in early summer that backed by eggplants. popped in any garden with brain. He often used ordinary dian miniature painting. bunch, stuck them in the turns chestnut brown. I like [The mix] is a real show- sun, but mine is now in plants like marigolds and thistles So who changed the marigold ground and they were so to pair it with Joe Pye stopper. Begonias come in shade and it’s still blooming in unusual ways at Wave Hill. paradigm? A new generation of happy, sexy and upfront, in weed and flat asters, other so many colors and can tol- its head off. The scent is “There is nothing too com- gardeners who champion all the most ravishing colors. competitive plants that erate full shade to sun. I that of an old-fashioned mon,” he said. “You have to look plants—particularly those that are I’ve grown them for 53 won’t push each other out.” love ‘em.” summer evening.” at a plant with fresh eyes. What is strong, hardy and don’t need a lot years but a 5-year-old could —Garden designer —Paul Keyes, landscape —Rick Darke, who’s it really about? What can it do for of chemicals to thrive. People like do it.“ Piet Oudolf, who designer in the created more than me? I tell people to think of flow- European gardening rock star Piet —Sydney Eddison, masterminded the New York area 30 gardens around ers as a great big box of Crayola Oudolf, who glorified Joe Pye author of “Gardening landscaping of the High the world crayons,” he added. “See what you weed in New York’s High Line For A Lifetime” Line in New York City have. Don’t rule anything out.” THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W11 MANSION

LONDON BID Real-estate agency Knight Frank held an event in Hong Kong to sell units in the Neo Bankside condo building, above, in London. The penthouse unit, at left, is listed for $33.3 million. Red-Carpet Real Estate

To sell condos an ocean away, developers travel to Hong Kong and throw lavish events in luxury hotels; lawyers, interior designers are standing by

BY JASON CHOW

n real estate-obsessed Hong Kong, the launch of a new luxury condo can be a red-carpet event with local I celebrities and paparazzi. In late June, photographers and gawkers gathered outside a trendy Chinese restaurant to snap photos of Archie Kao, the TV actor best known for his role in “CSI: Crime Scene Investigation,” and God- frey Gao, a top fashion model. Paying their appearance fees was Canadian developer Westbank Corp., which came to Hong Kong MIAMI I.P. Global helped pitch condos in NINE, to presell condos at Vancouver House, a where units start at $390,000. new luxury building planned in Canada. “The Chinese, whether they’re in Van- Homes teamed with international property couver, from Hong Kong or from China, firm JLL to pitch Greenland Place project, have always been important to us,” said Ian slated for completion in suburban London Gillespie, Westbank’s president and founder, in late 2015. Barratt set up shop in a hotel who estimates that 75% of his sales are to conference room for a weekend. In addition ethnic Chinese. On the first day of the com- to eager selling agents, lawyers were pres- pany’s Hong Kong event, 10 units were sold. ent to help sign deals on the spot. Interior Turning to celebrities for extra buzz is a designers were also on hand to help select sign of the growing clout of Hong Kong as finishes, and rental agents were available to an international real-estate marketplace. As discuss the condos as investment proper-

the city’s property prices continue to soar, Clockwise from top: Knight Frank (2); MESA Development; Barratt London; BIG-Bjarke Ingels/Luxigon; ties. Prices ranged from $589,000 for a investors there have shifted their focus to VANCOUVER Developer Westbank Corp. came to Hong Kong to presell condos at Vancouver House, 540-square-foot, one-bedroom condo to properties overseas. As a result, developers in rendering above on the right, which will have units ranging from $366,000 to over $18 million. $1.178 million for a two-bedroom unit. are ramping up their sales efforts with styl- Gerald Thomas, sales director of East ish events—typically at luxury hotels—to London at Barratt Homes, said about 10% to promote their latest projects. And while 15% of the company’s total sales are derived London has been the largest magnet for from overseas events, which typically cost Hong Kong buyers, cities in Australia and £100,000, or $168,000, each. the U.S. are increasingly popular. Critics say these glitzy Hong Kong Lawrence Chu, a 34-year-old Hong Kong events that sell property in London shut fund manager, bought two units at Vancou- out local British buyers. Late last year, ver House, a building with a bold, twisting many developers, including Barratt, pledged design created by Danish architect Bjarke to launch sales in their home country be- Ingels. Mr. Chu, who attended high school fore going abroad. in the Canadian city, bought a one-bedroom Hong Kong-based I.P. Global made its and a two-bedroom unit, spending about first foray into the Miami market recently, $2.014 million. The purchases, he said, will selling units of NINE, a building located help him diversify his investments and downtown with condos ranging from serve as a pied-à-terre for when he visits $390,000 to $1.2 million. Tim Murphy, the the city. “I heard about Vancouver House company’s chief executive, said about 10% before the sales started,” Mr. Chu said. “I SUBURBAN LONDON Developer Barratt Homes held an event in Hong Kong to pitch its Greenland of his clients this year have purchased more knew the story, and the developer is well Place project, rendering above. The units range from about $589,000 to $1.178 million. than one property, adding that wealthy known for nice buildings.” Asians “consider real estate an important Mr. Gillespie said 25% of the units in the among the world’s most expensive, fetching Mimi Capas, head of international mar- part of their overall investment strategy.” building have been allocated for buyers in as much as $2,500 per square foot. In addi- keting at property agency Knight Frank in Mr. Chu is one of them. In addition to Hong Kong; another 20% are targeted at tion, the government has imposed a stamp Hong Kong, said that in the past year, she his Vancouver House purchase, he has a buyers in mainland China. Condos there duty of up to 8.5% on real-estate purchases has brought about 30 projects, almost all condo apartment in London’s Notting Hill, range from $366,000 for a studio to over that aren’t an individual’s primary home. from London, for weekend sales events, at bought last year for about $1.68 million. He $18 million for the penthouse unit. Many wealthy Hong Kong buyers say which as many as 50 units have been sold. first learned about the project, called Por- Hong Kong’s heated property market, they want residences overseas for their “Anything at £600,000 [$1 million] or less, tobello Square, after visiting a sales event marked by stratospheric prices and high children who plan to go abroad for school. they have no problem buying without think- at a Hong Kong hotel last year. “Quite a few taxes, is driving some locals to shop else- Still other buyers are looking for a rental- ing too much,” said Ms. Capas. of my friends are buying,” he said. “The de- where. Hong Kong’s residential prices are property income. In late June, U.K. developer Barratt velopers are going to where the money is.” W12 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. MANSION

INSIDE STORY A King, a Nobel Laureate And the Hulk

Once an entertaining space for French royalty, a townhouse outside Paris now houses a gallerist and his funky collection of art, furniture and comic-book-inspired artifacts

BY KRISTIANO ANG 1 2

he same family has run the Paris ceramics gallery Lefebvre & Fils since 1880, selling an- T tique and modern sculptures, and decorative objects. But when Louis Lefebvre took over the family business in 2010, he made a change, shift- ing the gallery’s focus away from historic pieces and instead showcasing edgy, con- temporary work. The same dichotomy of old and new is evident at Mr. Lefebvre’s townhouse in Ver- sailles, the historic town just outside Paris. With an off-white stone exterior and tall windows, Mr. Lefebvre’s dwelling is repre- sentative of classical residential architec- ture in Versailles. It also has a long history: In the late 18th century, King Louis XVI, liv- ing at the Palace of Versailles down the street, gave it to his younger sister Élisa- beth, who used it and an adjacent building (once another wing) as a salon. In 1946, 3 when the home was functioning as an or- phanage, its residents included a young Elie Wiesel, according to “Chroniques de Ver- sailles,” a book by architectural author Denis Lemarié. None of that history weighs down the 4,000-square-foot, seven-bedroom home’s beige-and-white interior. It houses Mr. Le- febvre’s vast collection of modern art, fur- niture and comic-book-inspired artifacts, SOMETHING OLD, SOMETHING NEW 1. In the living room, objects resulting in slightly cluttered, country-liv- include a crochet chair by Marcel Wanders and yellow sculpture by 4 ing-meets-bachelor-pad vibe. “There’s a lot Xavier Veilhan 2. Louis Lefebvre 3. In the 18th century, King Louis XVI [more objects] in warehouses, but I like to gave the home to his sister Élisabeth. move things around,” said Mr. Lefebvre, 49, who sports an aging rock star’s grayish mane and whose gallery recently hosted 7 5 shows by New York-based artists Jennie Jieun Lee and Robin Cameron.

In the late 18th century, King Louis XVI, living at the Palace of Versailles down the street, gave the home to his younger sister Élisabeth, who 6 used it and an adjacent building as a salon.

The interiors of the home are plain, with COME TOGETHER 4. The dining room includes a table by Martin Szekely and white walls and light-brown flooring serv- pink light by Johanna Grawunder 5. Fornasetti plates 6. The kitchen 7. In the ing as a canvas. In a small waiting room waiting room, framed original American comics surround a sculpture by Atelier

just off the second-floor living room, Julien Fernandez for The Wall Street Journal (7) Van Lieshout. framed original American comics that Mr. Lefebvre began collecting as a teenager sur- flooring similar to that in Versailles Palace, plot is overlooked by the three-story main over with limestone and some walls were round a sculpture of a human figure sits a bust of the Incredible Hulk that was building and two slate cottages—one of restored. He also knocked openings into the slumped over a table. issued by Marvel Studios. The nearby which Mr. Lefebvre uses for storage and the house’s stairwell to let in natural light. His Littered, almost haphazardly, in the ad- kitchen, which overlooks the garden, is other that is in ruins. two sons, Lucas, 17, and Maxence, 8, visit jacent living space are pieces like a horse- equipped with a 19th-century butcher’s ta- When Mr. Lefebvre bought the townhouse most weekends and have individual bed- shoe-shaped chair made of crochet material ble and Sesame Street-themed cookie jars, for about $2.2 million in 2006, he says that rooms set aside for them. by Dutch designer Marcel Wanders; a neon which Mr. Lefebvre said were auctioned he was oblivious to much of the home’s his- For many years, Mr. Lefebvre didn’t live light-emitting table that once sat in Le Ré- from the estate of Andy Warhol. “Some of tory. He had merely been looking for a larger in the home, as it was inhabited by his then- gine’s, a Parisian nightclub; and a steel it is of high value, while some of it is of no home in Paris but couldn’t find anything romantic partner. Now that he is engaged armchair created by Ron Arad, the sculptor- value,” he said. “I’ve always liked to collect suitable within his budget. Personal history, and permanently moved back into his resi- designer. “Just don’t expect to be comfort- and my passion met my work.” however, played a role. The previous owner dence, Mr. Lefebvre plans to spend another able,” Mr. Lefebvre quipped as a guest set- The heart of Mr. Lefebvre’s property is was a longtime friend of Mr. Lefebvre’s, and $270,000 to $400,000 on improvements. He tled into Mr. Arad’s piece, which was akin the approximately 0.18-acre (0.07-hectare) he often visited as a teenager. also anticipates that his children will be to settling into a rocky rowboat. garden, a slightly unkempt space with ev- Since then, Mr. Lefebvre has spent about there more often in the coming years. Inside an unused fireplace in the dining erything from hyacinths to cypress trees $270,000 on refurbishments. The mud-and- “There’s a lot of good vibes in the area, which comes with parquet wooden sheltering the home from outside view. The sand patio leading to the garden was paved house,” he says. “It’s a happy house.” THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W13 W14 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. MANSION

FOREIGN CORRESPONDENT Londoners Cash In and Move Out

Some homeowners in the city’s prime area are selling their properties and buying in the country, where they get more square footage for less money; there’s often enough cash left over for other family expenses

COUNTRY $9.258 MILLION A contemporary house in Walton-on-Thames, 30 kilometers southwest of central London, measures about 9,500 square feet.

BY RUTH BLOOMFIELD PRIME LONDON London, could move into a thatched cottage that dates from 1570 and is on the market for be- roperty buyers in the tween $1.262 million to $1.338 U.K. are minding the million. It has four bedrooms and gap. two bathrooms in 1,832 square P A record divide be- feet. Meanwhile, for $1.345 mil- tween prices in prime lion, a buyer in prime London central London and prime country could get a one-bedroom pied-à- locations is creating a stir in the terre located on one of the grand- British capital, as buyers cash in est streets in Knightsbridge. on their city pads and swap them Some buyers are attempting to for country retreats. keep a foot in both camps. David Strong growth since 2010 Adams, managing director of John means prices in prime central Taylor London, said some owners London are 38% higher than at in prime London are downsizing the peak of the market in 2007, to a pied-à-terre and buying a according to research by estate country house as well. agency Savills, and stand at an av- Real-estate agents believe the erage £5.8 million, or $9.8 million. relative affordability of the coun- At the same time, high-end coun- tryside may not last. Real-estate try homes, which were hit hard by agents Knight Frank recorded a the downturn and have been 1.1% rise in the value of prime slower to recover, are 5.6% below country properties, those worth peak prices. $842,000 or more, in the second “There is an incredibly wide quarter of 2014. This is the sixth gap between prices, which widens consecutive price rise in a sector

the further out of London you are From top: Strutt & Parker (2); Fine and Country/Knight Frank (2) that was laid low by the recession prepared to go,” said Lucian Cook, $9.174 MILLION In Belgravia, the heart of prime London, a three-bedroom apartment with 2,057 square feet is available and brings annual price increase director of residential research at in Eaton Place. to 5.2%. Savills. “The people who have the Meanwhile, the significant real advantage are those who price growth of prime London has make the wholesale lifestyle COUNTRY PRIME LONDON been cooling off since the start of choice and move beyond London’s this year. Hugo Thistlethwayte, commuter zone.” managing director of buying London homeowners have no- agency Prime Purchase, says that ticed the price differential. A study now that price growth in prime by Hamptons International pub- London has slowed, “there is less lished in June reported a 75% an- reason to hang around” in hopes nual increase in Londoners buying of higher profits. outside the capital. In the past year, But cooling off isn’t the same more than $25 billion was spent on as collapsing, said Richard Barber, 44,000 properties—the highest vol- a partner at W.A. Ellis estate ume and value since 2007. agents who sees the current prime Some of these buyers are exit- $10.9 MILLION Built in 1586 and located 290 kilometers $11.1 MILLION A one-bedroom apartment measuring 989 London scenario as a normal cor- ing London to avoid a 7% stamp from prime London, Brereton Hall measures more than square feet is located in one of the city’s most prestigious rection to a market that has been duty levied on homes purchased 27,000 square feet, and comes with 46 hectares of land. buildings, One Hyde Park in Knightsbridge. flying for several years. for more than £2 million ($3.37 Nonetheless, Mr. Cook of million) and are opting for less ex- Current listings illustrate just ing more than 27,000 square feet. house in Walton-on-Thames, 30 Savills agrees that now could be a pensive properties in the country. how big the London-country di- Alternatively buyers could pay kilometers southwest of central smart time to escape from prime There are also fears that a new vide has become. Brereton Hall, $11.1 million for a 989-square-foot, London. In Belgravia, in the heart London. “If you are in a mind-set mansion tax may be introduced one of England’s finest historic one-bedroom apartment in one of of prime London, a three-bedroom to make a lifestyle choice,” he after next year’s general election. houses, is on the market for $10.9 prime central London’s most pres- apartment that is less than a said, “I think there is as good an The strength of the pound also million. The house, built in 1586, tigious buildings, One Hyde Park quarter of the size is listed for opportunity as there has been … has made real estate more expen- is in the county of Cheshire, about in Knightsbridge. $9.174 million. whether it is buying a bigger, bet- sive for overseas buyers, encour- 290 kilometers from central Lon- In another example, a buyer Buyers prepared to commute ter property or releasing some aging them to look for better don. Behind the imposing castel- could pay $9.258 million for a from the village of Brightling, 96 cash to pay school fees or what- value outside London. lated facade is living space total- 9,500-square-foot contemporary kilometers southeast of central ever else.” THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W15

      

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Pacific Sotheby’s International Realty Pacific Sotheby’s International Realty Sotheby’s International Realty San Francisco Brokerage +1 858.756.4328 | pacificsothebysrealty.com +1 858.775.6511 / 619.519.0964 | pacificsothebysrealty.com +1 415.296.2211 | sothebyshomes.com/sanfrancisco SHELL BEACH, CA DARIEN, CT REDDING, CT Oceanfront5BR,5bath Exquisitely maintained and Superb 24 acre estate, estate situated on 1 acre in recently updated Victorian 56 miles from New York City. the exclusively gated “The built in 1886. On the corner Totally renovated 6 BR, Bluffs.” Showcasing lavish of one of Darien’s most 14 room antique Georgian. rooms, 23’ ceilings, radiant desirable cul-de-sacs, this Pool; pool house with floor heat, elevator, wine 4to5BRgranddamewith pavilion; 2 story, 8,000 sf cellar, art gallery and massive finishedthirdfloorislocated car barn which can be easily oceanfront deck. Live the closetoshoppingandthe converted for equestrian use. quintessential California trainstation.Thebestof $5,495,000.GinnyBeasley lifestyle! $5,950,000. yesteryear blended with and Michael McKee. Linda.Wilson@ today’s modern comforts. SothebysRealty.com $1,275,000.IngridHess. Wilson & Co. Sotheby’s International Realty William Pitt Sotheby’s International Realty William Pitt Sotheby’s International Realty +1 805.801.3232 | WilsonandCoSIR.com +1 203.655.8234 | williampitt.com +1 203.249.9565 | williampitt.com WASHINGTON, CT MARCO ISLAND, FL NAPLES, FL With sweeping Lake Spectacular waterfront home Tranquil privacy, central Waramaug views, this with amazing bay views location. Key West-style just completed exquisite located walking distance t home on 2.5 acres with estate offers the highest o the beach. Gourmet 2 houses, pool, excellent level of craftsmanship kitchen, expansive windows, schools, butterfly garden, and unmatched attention pool, spa, outdoor kitchen, orchid house, lush to detail. Setting a new dock with boat and jet ski landscaping and standard in country living, lifts. $2,995,000. concrete construction. this5BRhomeoffersluxury Michelle Thomas. $1,025,000. appointments, 20+ acres michelle.thomas@ Michelle Thomas. and pool. WEB: L149662. sothebysrealty.com michelle.thomas@ $4,795,000. Rick Distel. premiersothebysrealty.com William Pitt Sotheby’s International Realty Premier Sotheby’s International Realty Premier Sotheby’s International Realty +1 860.868.6933 | williampitt.com +1 239.860.7176 | premiersothebysrealty.com +1 239.860.7176 | premiersothebysrealty.com

© MMXIV Sotheby’s International Realty Affiliates LLC. A Realogy Company. All Rights Reserved. ©2014 Summer Landscape, used with permission Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. Equal Housing Opportunity . Each office is Independently Owned and Operated except offices Operated by Sotheby’s International Realty, Inc. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W17

SARASOTA, FL HONOLULU, HI CARMEL, IN VillaSolstice,oneofthe Magnificent ocean front Extraordinary estate nestled Gulf Coast’s most amazing estate with exceptional onthe15thholeofthePete homes. Experience this attention to detail. Built Dye Bridgewater Club Golf privatetropicalresortseton on 13,056 sf of land, the Course on private Whistling two waterfront lots providing single level home features Lane. Lavish details include incredible water views. 4BRsuites,lappool breathtaking views, soaring Completewithalagoonpool, with spa and tropical ceilings, covered veranda, poolhouse,boatdockand gardens. $11,499,000. and elaborate woodwork. fishing pier. $13,800,000. Kelly Allen and Anela Chung. $1,999,000.JayO’Neil. Cheryl Loeffler and Joel Schemmel. Cheryl. [email protected] Premier Sotheby’s International Realty List Sotheby’s International Realty Encore Sotheby’s International Realty +1 941.302.9674 | Premiersir.com/id/KQ4BYR +1 808.306.7005 / 808.864.2110 | listsothebysrealty.com +1 317.848.0008 | encoresothebysrealty.com INDIANAPOLIS, IN BREWSTER, CAPE COD, MA CAPECOD,MA Can the words rustic, modern Thiswaterfronthomeoffers Newly completed custom and exquisite co-exist in the theultimatecoastalliving home in the Grand View same descriptive? Apparently experience with unparalleled Association of East Orleans. so. Elegantly nestled into an 180° views. Exceptional Five en-suite BR and exclusive, wooded 2+ acre design for entertaining. 4,227 sf of glorious living parcel, this home stands, Home offers superior space affording saltwater timeless, and perfectly craftsmanship and private views. Association landing. matched to its natural grounds with stairs to the Easy walk to Nauset Beach. surroundings. $2,895,000. sandybeach.Aspecial $2,750,000.JimTrainor Jonathan Eriksen. opportunity. $3,650,000. andEricEhnstrom. Gayle Tambolleo. [email protected] [email protected] Encore Sotheby’s International Realty oldCape Sotheby’s International Realty oldCape Sotheby’s International Realty +1 317.590.1869 | encoresothebysrealty.com +1 508.776.2580 | oldCape.com +1 508.360.2244 | oldCape.com NEW YORK, NY NEW YORK, NY NEW YORK, NY One57 – New condominium, 115 Mercer Street. Trophy Ultimate Penthouse – 1,988 sf, 2 BR, 2.5 baths, 10’7” Soho Penthouse duplex with 50 East 89th Street. ceilings, open city and river striking downtown views. Surrounded by panoramic views. 5 star hotel services, Features 2,741 ± sf interior, viewsofManhattan. garage, pool, fitness center, 2,500 ± sf exterior, 3 BR, Approximately 1,450 sf of spa and more. WEB: 0019454 3 baths. WEB: 0019577. landscaped wrap terrace. $11,995,000. $10,595,000. LR with floor to ceiling L. Summers and G. Devlin. Christopher S. Poore doors/windows, 11’ ceiling, andEyalDagan. fireplace, 3 BR, 3.5 baths. WEB: 0019155. $9,500,000. Louise C. Beit.

Sotheby’s International Realty East Side Manhattan Brokerage Sotheby’s International Realty East Side Manhattan Brokerage Sotheby’s International Realty East Side Manhattan Brokerage +1 212.606.7789 / 212.606.7729 | sothebyshomes.com/nyc +1 212.606.7676 / 212.606.7712 | sothebyshomes.com/nyc +1 212.606.7703 | sothebyshomes.com/nyc NEW YORK, NY NEW YORK, NY CHARLESTOWN, RI Estate condition classic eight- Live luxuriously in this corner Vintageoceanfrontcottage room home on Madison 2BR,2bathpenthouse on almost a half-acre. Avenue and 82nd Street. condo with a private 567± sf Pine floors, brick fireplace, High floor residence in an terrace boasting dramatic city 4 BR, 2.5 baths. A magical intimate co-op. Grand room views at the Onyx-Chelsea. presence front row on proportions and multiple Full-service boutique CentralBeach.Enjoy exposures yield breathtaking, building with full-time gorgeous private beach, pond protected views of the skyline. doorman. WEB: 0137291. access for boating, tennis, WEB: 0137225. $5,500,000. $2,200,000. Glenn Norrgard ballfield, and playground. Chris Casey. andJohnTenore. $3,195,000. RaymondA.Mott.

Sotheby’s International Realty Downtown Manhattan Brokerage Sotheby’s International Realty Downtown Manhattan Brokerage Mott & Chace Sotheby’s International Realty +1 212.810.4965 | sothebyshomes.com/nyc +1 212.431.2456 | sothebyshomes.com/nyc +1 401.741.3596 | mottandchace.com WAKEFIELD, RI KIAWAH ISLAND, SC JOHNSON CITY, TN Historic Edgewood Farm Indigo Park offers 16 LEED An oasis in beautiful East is situated in a private Certified, sustainably built Tennessee. Historic southern compound on almost five homeswithlongmarshviews 4BR,4bathhomeon2.5 bucolic acres surrounded by and innumerable luxurious acres is the perfect country stone walls, all within walking amenities available to owners. setting within minutes to the distance to the charming 2-5 BR’s available. Each home city.Pool,tenniscourt,3+car town of Wakefield. 5 BR, includes Kiawah membership garage and mountain view. gourmet kitchen, 4.2 baths, opportunities. Prices upon Price upon request. Loretta. 9 fireplaces, tennis court request. Mid Rutledge. [email protected] and skating pond make this a truly unique offering. $1,375,000. Mary Philbin. Mott and Chace Sotheby’s International Realty Daniel Ravenel Sotheby’s International Realty Mountain Sotheby’s International Realty +1 401.793.1701 | mottandchace.com +1 843.345.9137 | DanielRavenelSIR.com/IndigoPark.html +1 828.898.8965 | MountainNCHomes.com MCLEAN, VA JACKSON HOLE, WY JACKSON HOLE, WY Riverfront estate on 5.4 acres Bar B Bar Ranch. 72+ acres In tax friendly Wyoming, ofVirginiaGoldCoast. withSnakeRiverfrontage. theBarBCRanchandBar Barrel-vaulted domed This luxury lodge has direct BC East offer a variety of ceilings with 17th century Teton Views, a guest home 35+acre elevated, riverfront fireplace, Pelion stone floors andrecreationhouse.At or meadow parcels with imported from Greece. the gateway to Yellowstone. Teton views, Snake River River Room’s floor-to-ceiling Momentstothetownof and/or Grand Teton National arches overlook the Potomac. Jackson Hole. $24,750,000. Park access. #2CQ3PY. Indoorlappoolopensto Spackmans & Associates. Prices upon request. terrace. $9,995,000. [email protected] [email protected] Penny Yerks. and [email protected]

TTR Sotheby’s International Realty Jackson Hole Sotheby’s International Realty Jackson Hole Sotheby’s International Realty +1 703.760.0744 | ttrsir.com +1 307.738.8156 | JHSIR.com +1 307.739.8149 / 307.738.8156 | JHSIR.com

© MMXIV Sotheby’s International Realty Affiliates LLC. A Realogy Company. All Rights Reserved. ©2014 Summer Landscape, used with permission Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. Equal Housing Opportunity . Each office is Independently Owned and Operated except offices Operated by Sotheby’s International Realty, Inc. W18 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL.

ADVERTISEMENT Distinctive Properties & Estates MANSION

UNITED STATES Where the CEOs Are The housing markets in the U.S. with the greatest percentages of resident CEOs in the metro workforce   Percentage of residents identified as CEOs Median asking home price Bridgeport-Stamford-      Norwalk, Conn. 1.82% $569,000           Boulder, Colo. 1.45% $445,335    !"#$ %&'()**' Sebastian- Vero Beach, Fla. 1.37% $238,900

Naples-Marco Island, Fla. 1.28% $445,000

Cape Coral-Fort Myers, Fla. 1.27% $249,000

Oxnard-Thousand Oaks- Ventura, Calif. 1.21% $595,000

Fort Lauderdale-Pompano Beach- Deerfield Beach, Fla. 1.20%* $229,000

North Port-Bradenton- Sarasota, Fla. 1.20% $279,990

Barnstable Town, Mass. 1.13% $457,250

San Jose-Sunnyvale- Santa Clara, Calif. 1.10% $721,880

* For Miami-Fort Lauderdale metro area Sources: Census Bureau; Trulia (prices) The Wall Street Journal   SPREAD SHEET | STEFANOS CHEN  +      Hail to the Chiefs

                             ! " # #$ Metro areas in the U.S. with the

UNITED STATES UNITED STATES highest concentration of CEOs have one thing in common: rising prices "#$%$& %! #% '( %! #$% $) *++    hen it comes to 3,600-square-foot waterfront real estate, many Mediterranean-style home. chief executives Some move to where the ac- W in the U.S. take a tion is. Lisa Reeves, 51, the chief sunny outlook: executive of business-analytics Five of the top housing markets company GridCraft, said her home for CEOs are in Florida, including in Boulder, Colo., “is a real hotbed $ !' ' '+# Miami, Sarasota and Vero Beach. for early-stage technology.”     ,-.,, /  Spread Sheet analyzed data She and her husband, Duer       from the U.S. Census Bureau to Reeves, also a tech CEO, moved to  !      identify housing markets with the the city from the San Francisco largest percentage of resident Bay Area in the late 1990s in pur-

            CEOs in the local workforce. (This suit of new opportunities. Now census group includes legislators they live in a roughly 7,800-square- FINLAND as well as CEOs.) foot contemporary home with Top spots include Connecticut’s mountain views and plenty of out- Luxury Villa by one of the Most Beautiful Fairfield County and Boulder, door activities for their children. Lakes in the World, Colo. The markets run the gamut, “I think Boulder is the next Saimaa, Finland for $3.2 Million from urban centers to vacation kind of Silicon Valley,” said Karen Architectural gem presented in several intl ex- hibitions, built in 2007, fully equipped and fur- getaways, but they have at least Bernardi, an agent with Coldwell nished, 3 bedrooms, 2,350-square-foot (218 one thing in common: Home Banker who helped the couple m2), the whole property round 20 ac (8 ha) of prices are rising. find their home. Prices are up 6% pine wood forest. 217 miles (350 km) from “These guys didn’t get to where from last year, according to real- Helsinki, nearest airport 22 miles (35 km). they are by making poor financial estate website Trulia. Breathtaking views to the Lake Saimaa, decisions,” said Doug Grant, an In many cases, what starts as a Puruvesi. Excellent for relaxing and fishing. agent with Coldwell Banker in Na- vacation home can become essen- Area praised in WSJ 7/22/2014. Inquiries and request for a pdf brochure. ples, Fla., who says sales of $2 tially a primary residence for [email protected] million-plus, single-family homes CEOs with the flexibility to work are up 83% in the first quarter, remotely, said Stewart Young, re- compared with last year. gional director of Cape Cod for Florida is also a popular desti- LandVest. Distinctive Properties. nation because there is no individ- Towns in Connecticut’s Fair- ual state income tax—a fact that field County made the list because attracts buyers from New York of the large number of finance ex- List Your Property Today in and elsewhere, said Elena Blunt- ecutives who commute to New zer with ONE Sotheby’s Interna- York. Great schools and amenities The Wall Street Journal Asia. tional Realty in Miami. attract them, said Michelle Gen- Charles DallAcqua, the 59-year- ovesi, of William Raveis Real Es- old chief executive of Leading Re- tate in Norwalk, Conn. Call (852) 2831-2553, (65) 6415-4279 or (813) 6269-2701 sponse, a marketing-services com- Mostly, though, CEOs are at- pany, moved to Sarasota, Fla., tracted to other CEOs, said Bar- from Annapolis, Md., in part be- bara Ackerman, a Sarasota, Fla.- cause it was near one of his com- based agent with Coldwell Banker. pany’s call centers at the time. He “Once you please one CEO, they and his wife, Valerie, live in a refer you to the next,” she said. THE WALL STREET JOURNAL. Friday - Sunday, August 15 - 17, 2014 | W19 ADVERTISEMENT

NEWPORT, RI MIDDLETOWN, RHODE ISLAND WILSHIRE BLVD., LOS ANGELES, CA Meticulous restoration of an authentic classic shingle-style carriage house Oceanfront - Modern architectural masterpiece on nearly one acre at EXCLUSIVE GRANDEUR: BEVERLY WEST RESIDENCES. A luxury collection sited along the boundaries of Ballard Park refuge with beautiful woodland views. the Southern tip of Easton’s Point. Approx. 7,300 sq. ft. of dynamic design of 35 residences overlooking the Los Angeles Country Club and Beverly Hills. Five bedrooms—four with ensuite baths—stone walls, bluestone terraces, graciously appointed with panels, moldings, stone fireplaces, coffered ceilings Fully customized homes or furnished turn-key models, drawing inspiration from elegant mature landscaping, and gardens. Absolutely turn-key. Close proximity to and hardwoods. Replete with stunning two level entry hall, elegant living room the home collections of leading international designers. Beverly West is the NA New York Yacht Club and Newport Country Club. with stone fireplace, formal dining room, 2 bedroom guest quarters andblue flagship of Emaar Properties, owner of the world’s tallest building. Suites from stone patio with infinity pool. Walk to the beach. Minutes to Newport. 1,700 to 8, 215 sq. ft. - among the largest of any LA luxury condominium. $3,995,000 GustaveWhite.com $6,850,000 LilaDelman.com http://liladel.re/395tuckerman Prices from $2.3 to over $25 million

Gustave White Sotheby’s International Realty Lila Delman Real Estate International The Beverly West Residences phone: 401.849.3000 phone: 401.848.2101 email: [email protected] phone: 310.550.0581 email: [email protected]

BORDERS SEQUOIA NATL PARK, CALIFORNIA TAMPA AREA, FLORIDA Marco Island, FlorIda Florida’s Best 55+ Resort Lifestyle at Valencia Lakes – is easily MAJOR PRICE REDUCTION! Turnkey furnished, gated estate on Gulf Of Mexico! Three hours from Los Angeles. 360 acre ranch, completely fenced with accessible from both Tampa and Sarasota. A lifestyle director offers clubs, events, Moor your Yacht on 255’ of teakwood dock. An Architectural masterpiece nearly one half mile of river frontage. Swimming holes and fishing on your shows and activities in a 27,000 sq. ft. clubhouse. Enjoy pools, bistro, fitness and includes 11,662 SF and 5BD/ 9BA (6 full and 3 half) with 2 master suites. 33’ private river and separate ponds. Two attractive/furnished cabins, a separate everything from tennis to softball and more with new villas and single-family grand foyer, Mahogany pub, game room and den. 10 seat theatre, gym and spa. office/studio. Sequoia National Park views, valuable water rights, main homes from the $180’s - $400’s. Try before you buy. Unsurpassed quality and craftsmanship built around magnificent sunset views! highway frontage, partially zoned for future mixed-use development, Three Stay & Play for 3 days and 2 nights for $99! Rivers, California. One of a kind property! From the $180’s to the $400’s glhomes.com $8,500,000 cathyrogers.premiersothebysrealty.com $2,195,000 www.kaweahranch.com Premier Sothebys International Realty Bill Haxton GL Homes Cathy Rogers phone: 559.679.6990 [email protected] phone: 800.495.6406 phone: +1.239.821.7926 [email protected]

Marietta, South Carolina Brentwood, tennessee NEWPORT BEACH, CALIFORNIA Immaculate mountain view estate just minutes from Asheville, NC & This meticulously maintained French Chateau poised on 3 acres of Bayshores Bayfront. Spacious newer contemporary residence on the harbor Greenville, SC. 4BR, 4.5BA, 5800+sf. Features include an expansive master suite, picturesque rolling hills is better than a brand new house, in one of the most located in a gated community. An ideal western exposure maximizes the abundant outdoor living, breathtaking water feature & wine room with custom affluent areas and finest school districts in the country. Minutes from downtown sparkling water views. Five bedroom suites, a formal dining room and a media finishes. One membership at The Cliffs provides access to 7 championship Nashville, yet enveloped by the tranquility of a country setting. Available fully room complete the residence of approximately 5,000 square feet. Features courses, wellness centers, marinas, restaurants & more. furnished (price available upon request). include custom mahogany windows, doors and millwork, and exotic anagre, imported granites and limestone finishes. $1,995,000 CliffsLiving.com/WSJmansion $5,589,000 www.5106pickney.com $10,700,000 RobGiem.com The Cliffs Communities HÔM Sotheby’s International Realty Vince Roser Benchmark Realty Rob Giem phone: 866.411.5773 [email protected] phone: 615.693.1550 [email protected] phone: 949.933.7046 email: [email protected]

To Advertise Call: +852-2831-2552 W20 | Friday - Sunday, August 15 - 17, 2014 THE WALL STREET JOURNAL. GEAR & GADGETS

RUMBLE SEAT: DAN NEIL Jaguar F-TypeR Coupe: Go Ahead, Have a Fling

e had this dis- cussion last year, when I drove the W first Jaguar F- Type V8 S, the convertible precursor to this week’s roofed test car, the F-Type R Coupe. At the time, I suggested that if I had by some means a hun- dred grand in hand, I’d acquire the services of Jag’s oversexed con- vertible over the dignified, the im- peccable, the ever more perfecting Porsche 911 Carrera. Seriously, a Jag, of any de- scription, full stop, over any Porsche 911 Carrera? Really? The American Dental Association burned me in effigy. It’s like this: The 911 is the sports car you marry, the sports car you drive to church, the sports car that bears your children. A Porsche 911 is a car that you will let sit in your garage undriven for days at a time, for years on end, drinking the full draught of depre- ciation, because you just can’t…let go. History. Motorsports glory. In the convertible, the steeply Flawless performance. It’s all there. 2015 JAGUAR F-TYPE R COUPE raked windshield seems like an un- I knew a guy in San Francisco finished bridge span. But the who kept his 911 SC under a silver Base price: $99,000 coupe’s roof connects the line, Porsche car cover, parked on the Price, as tested: $104,975 completes the thought, and the sil- street, and he had to move it ev- Powertrain: Front-mounted supercharged houette lands elegantly at the car’s ery 12 hours to stay ahead of the 5.0-liter, DOHC 32-valve, direct-injection V8 chamfered decklid, which conceals tow trucks. It was like he was with variable cam phasing and active an active spoiler. The taillights helping the car move its bowels. exhaust; eight-speed automatic transmission; comprise lovely red LED lamps set The Jaguar F-Type R Coupe, rear-wheel drive with electronic limited-slip into a nearly vertical, Kamm-like our cool six-figure test car, is a differential. wraparound. The rear three-quar- whole different proposition. L’af- Horsepower/torque: 550 hp at 6,500 ter shot at night is insane. faire, if you will. However you see rpm/502 pound-feet at 2,500-5,500 rpm There’s historical precedent. yourself, whatever the color of the Length/weight: 176.0 inches/3,638 pounds The 1961 Jaguar E-Type FHC sky in your world, the R Coupe Wheelbase: 103.2 inches (fixed-head coupe), with its allur- has to be a temporary thing in 0-60 mph: <4 seconds ing side-hinge hatch, is rightly re- your life—a phase, your wife calls EPA fuel economy: 16/23/18 mpg, city/high- garded as sculpturally superior to it—because A) the car is so frank way/combined the E-Type’s roadster sibling. and so candidly on-the-make that Cargo capacity: 11 cubic feet If the looks of the Coupe don’t

even you, would-be man whore, Dan Neil/The Wall Street Journal (2) sell you, perhaps some finite-ele- cannot bear the attention for long. ment analysis will. According to I mean, look at it. The thrust of What’s interesting here is Let’s do the walk-around: With space occupied by Porsche Box- the company, the Coupe’s chassis hood, the broad shoulders, daring where Jaguar’s engineering staff a length (176.0 inches) that’s ster/Cayman at the low end is a whopping 83% stiffer than the roofline, the rhythmic silhouette, drew the line in the noise making, within fractions of the Porsche 911 ($60,000-80,000), and the 911 S at convertible’s load-bearing struc- the cabin glass masked Pharaoni- what they consider within estab- Carrera, the mostly aluminum F- the high end. With the 911 you are ture (33,000 newton-meters per cally in deep kohl. Easy, there, Ti- lished erogenous norms for a lux- Type Coupe is the pillarless hard- free to keep on spending until you degree of deflection, as compared ger. Buy a dude a drink. ury road car. Clearly they are not top sibling of the F-Type, the two- arrive at something like the Turbo with 18,000 Nm/deg). That’s The Porsche 911 is also a gor- getting enough love at home. This seat convertible introduced last S, nearing $200,000. enough of a difference to consti- geous, flashy car that gets a lot of thing is cray-cray Hollywood loud, year. The base Coupe sells for With either the V6 or V8 en- tute a whole different feeling car: attention. In parts of Arkansas South Beach loud, like your pretty $65,000 with a supercharged 3.0- gine, the F-Type Coupe is limited palpably harder and more resolute, they are probably reported as little sports car is warming up liter, 340-hp V6, eight-speed auto- to a close-ratio eight-speed pad- especially when higher cornering UFOs. But there is something alto- with the open-wheelers at Eldora. matic transmission and standard dle-shifter automatic transmission, loads meet dodgy pavement. gether more explicit in Jag’s Whammalammadingdong! Some- 18-inch wheels. yes, with a torque converter—not Vis-à-vis the 911? Let’s be rea- goodly hoodliness. times it feels like a lot of drama To no one’s surprise, the top- a dual-clutch automated manual sonable. The one thing about the And if the looks didn’t garner for a trip to the market. shelf F-Type R Coupe looks great, and certainly not a clutch-pedal Porsche is that you can pull one enough attention, there’s B), the You don’t have to be E.O. Wil- handles very nicely indeed, and is actuated manual transmission. But off the dealer’s lot, take it right to Jaguar’s crow-stunning sound, the son to figure out that these are respectably athletic. The lads at the shiftable auto-box (with ZF the track and know you can lap it beautiful, beastly, oak-splitting vocalizations of some kind. Mating Motor Trend clocked an R Coupe mechatronics) is superb, with au- until the tires give out. The R racket that the R Coupe is capable call? Driving around Raleigh, N.C., at 11.8 seconds and 122 mph in the tomatic rev-matching function on Coupe doesn’t inspire that kind of of making in the throes of a I did feel distinctly like a one-man quarter-mile; so among other downshift, hugely punchy and im- confidence. heated overrun, a version of heterosexual pride parade. things, the R Coupe is straight- mediate midrange response. The elephant in the garage is which I will now attempt ono- Establishing dominance? I’m line quicker than a comparably Stylistically and otherwise, the the Chevrolet Corvette Stingray, matopoeically: SPLAT! SPLAT! afraid so. There’s obviously a de- priced Porsche 911 Carrera S with F-Type Coupe is the car the F- another desperately fast, reclining Hee-dee-de-DUMP dump, rat-in- gree of leg humping in the pur- a PDK gearbox. Type always wanted to be: a sinu- nude with tailpipe histrionics. The yer-hat, rat-in-yer-hat… chase of a 550-hp British sports The R Coupe (as tested, ous fastback, a closed-cabin ver- Z51 3LT Corvette—dry-sump lubri- Now, to be clear, this sym- car that sounds like a grumpy $104,975) gets the hottest version sion of the F-Type but barely cation, electronic limited-slip dif- phony of blasting caps is an artis- Mount Vesuvius. And it’s just a of the company’s blown 5.0-liter, levitated on 20-inch black alloy ferential, cooling circuits for the tic choice on the part of Jaguar’s fact that the valets cannot long ig- direct-injection V8: The nominal wheels ($1,000 option), with rail- differential and transmission—is engineers, part of the “brand ex- nore the wheezy, supercharged output of 550 hp is 55 more than to-rail panoramic roof glass nicely track-hardened and costs perience,” to use the jargon. It’s throb of the R Coupe sitting in the the same engine in the mid-range ($1,200) that dips dramatically about $30,000 less than the R brought about through an inter- porte-cochere. F-Type S Coupe, thanks mostly to into the rear deck like the plung- Coupe. If one’s relationship with a play of engine management (fuel Another theory: It’s the lonely higher boost pressure and more ing back line of a formal gown. 911 has the high solemnity of Lu- delivery and cam phasing) and the song of the motor loon, a locating aggressive throttle mapping. Curb The F-Type Coupe’s sucked-in theran matrimony, the ’Vette is a R Coupe’s active exhaust system, beacon to a dwindling species of weight of the R Coupe is quoted waistline (the negative surfaces hookup in Ibiza. which unrestricts the silencers car enthusiasts for whom the at 3,638 pounds. That’s 6.6 pounds ahead of the rear wheels, along So go ahead, have your fling whenever rpm rises above 3,500 sound of a slat-kicking, anvil-lash- per horsepower, as compared with the lower door) presents opportu- with your British chippy or even or else whenever the computer ing V8 still means something. the Porsche’s 7.8. nities for symmetries that are un- your complaisant Yank. The 911 will thinks it would sound cool. Dudes. Am I right? The F-Type thus straddles the realized in the open-top car. still love you when you come back.