28_05_2015

VOL. XXXIX NO. 188

THURSDAY, MAY 28, 2015

OPINION:China BecomesAn AbnormalGreat PowerPage 11

Firms Return MoreCash to ShareholdersIN DEPTH Pages 12-13IN DEPTH Pages 12-13

As of 12 p.m. ET DJIA 18153.04 0.62% FTSE 100 7033.33 1.21% Nikkei 225 20472.58 0.17% Shanghai Comp. 4941.71 0.63% Hang Seng 28081.21 g 0.60% S&P Sensex 27564.66 0.12% S&P/ASX 200 5725.30 g 0.83%

(India facsimile Vol. 6 No. 247)ASIA EDITION

WSJ.com

Australia:A$6.00(InclGST),Brunei:B$8.00,China:RMB28.00,Hong

Kong:HK$23.00(InclMacau),India:Rs100.00,Indonesia:Rp25,000(InclPPN),Japan:Yen620(InclJCT),Korea:W

on4,000,

Malaysia:RM

7.50,Pakistan:Rs140.00,Philippines:Peso100.00,Singapore:S$5.00(InclGST),SriLanka:Slrs500(InclVAT),Taiwan:NT$110.00,Thailand:Baht80.00,Vietnam

:US$4.50

KDNPP

9315/10/2012(031275)

MCI(P)

NO.124/10/2014SK.M

ENPENR.I.NO:01/SK/M

ENPEN/SCJJ/1998TGL.4

SEPT1998

Walter De Gregorio, spokesman of the worlds governing body for soccer, answers journalists questions in Zurich on Wednesday afterseven officials of the organization were arrested on U.S. corruption charges ahead of its annual congress at its Swiss headquarters.

Subpoena inU.S. Names35 in China

U.S. government investiga-tors are seeking informationabout Wang Qishan, the pow-erful official leading Chinasanticorruption campaign, inconnection with their probeof J.P. Morgan Chase & Co.shiring of relatives and associ-ates of Chinese governmentofficials.

The U.S. Securities and Ex-change Commission issued asubpoena in late April to thebank requesting all of itscommunications related to 35mostly high-ranking Chinesegovernment officials. Mr.Wangs name was first on thelist in the subpoena, a copy ofwhich was reviewed by TheWall Street Journal. Prosecu-tors at the U.S. Department ofJustice also have requestedinformation about Mr. Wang,according to people familiarwith the matter.

The request for informa-tion regarding some ofChinas highest-ranking offi-

cials could strain U.S.-Chinarelations. Previous U.S. re-quests have unearthed ac-counts of Chinese governmentofficials lobbying J.P. Morganto employ relatives andfriends. According to peoplefamiliar with the probe, inves-tigators already have focusedon the banks employment ofthe son of Chinas commerceminister, Gao Hucheng, whooffered to help the bank if itlet his son hold onto his job atJ.P. Morgan, according toemails between J.P. Morganbankers. Mr. Gao also is onthe list.

Authorities are carryingout a criminal investigationinto J.P. Morgan and otherbanks regarding a law thatbans companies from bribingforeign government officials.Regulators arent investigat-ing the Chinese officialsthemselves, and there is noevidence of wrongdoing byMr. Wang, Mr. Gao or otherson the list. Neither official re-

Please turn to page 22

BY NED LEVIN

Corruption Charges Blast FIFAZURICHSwiss police ar-

rested seven FIFA officialshere early Wednesday, asSwiss and U.S. authorities un-veiled separate, sweepingprobes of alleged corruptionover more than two decadesat the worlds top governingbody for soccer.

The U.S. Justice Depart-ment said it charged nine cur-

rent and former FIFA officialsand five others on broad cor-ruption charges, accusingthem of various schemes over

24 years to enrich themselvesthrough FIFA.

Attorney General LorettaLynch said the individuals in-dicted had corrupted thebusiness of world-wide soccerto serve their interests and toenrich themselves, describ-ing the alleged scheme asrampant, systemic, and deep-rooted in the U.S. and

abroad.In a sweeping, 161-page in-

dictment that lists 25 co-con-spirators in addition to the 14named defendants, prosecu-tors describe a wide-rangingscheme that spanned decadesand involved increasinglylarge payments as soccergrew more commercially valu-


Hoteliers Daring LetterTo Premier Li Hits Home

BEIJINGTwo monthsago, a frustrated Chinese ho-telier named Wu Hai postedonline a letter to the coun-trys prime minister compar-ing private companies toslaves and entrepreneurs likehim to the forgotten offspringof prostitutes.

China, Mr. Wu wrote, is acountry dominated by bigbrothersmeaning powerfulgovernment officials andbloated state-owned enter-prises that get preferentialtreatment. After our leftcheek has been slapped by thebig brothers, we sons ofbitches can only turn ourright cheek for another slap,the letter said. When the let-ter when viral, he feared his

company would be shut down.Instead, Mr. Wu has be-

come an unlikely poster boyfor Beijings efforts to over-haul its economy in the faceof slowing growth. He has re-ceived glowing portrayals inChinas state-run media, andearlier this month he was in-vited to the Chinese leader-ships tightly controlledZhongnanhai compound inBeijing to participate in apanel among top economic of-ficials on streamlining bu-reaucracy. He has since be-come an Internet celebrity inChina and fields requests tospeak at various gatherings.

The most important thingis changing the mind-set ofthe government, Mr. Wusaid. Mind-set change isharder than concrete solu-

tions, added the 46-year-old,whose hotels are known foroffbeat themes, with en-trances based on Star Warsand guest room dcor evokingthe 2010 thriller Inception.

Mr. Wus letter to PremierLi Keqiang landed amid apush by the government toencourage entrepreneurs as itlooks to wean the countryaway from its dependence onstate spending and govern-ment control.

Economists say Chinaneeds to give greater clout toprivate capital and companiesif it wants to ensure contin-ued growth in coming years.Underscoring the urgency,Chinas economy last yeargrew at its slowest rate sincethe global financial crisis six


BY ALYSSA ABKOWITZ

By Aruna Viswanatha,Joshua Robinson,AndrewMorse

and Christopher M.Matthews

An EU proposal toresettle tens ofthousands of refugeesfrom Syria and Eritreaacross Europe meetswith strong resistancefrom somegovernments.World News...............4

Sony purchases anoptical-data-storagestartup from a formerFacebook executive.Business..................17

Inside

EURO

PEANPRESSPHOTO

AGEN

CY

Copyright 2015, Oracle and/or its affiliates. All rights reserved.

Oracle CloudApplications

More Enterprise SaaS ApplicationsThan Any Other Cloud Services Provider

ERPFinancialsProcurementProjectsSupply Chain

HCMHuman CapitalRecruitingTalent

CRMSalesServiceMarketing

Toshiba Could Shine if Mess Is ClearedToshiba shares have been

slammed by revelations of account-ing problems. If the crisis prodsmanagement to finally go all-in onrestructuring, investors could be re-warded for sticking around.

The Japanese technology group,which produces everything from el-evators to memory chips, said ear-lier this month it discovered ac-counting irregularities in three unitsof the company, mostly related toseveral infrastructure projects.

The company estimated it wouldhave to revise down operating profitin three previous years by around50 billion ($406 million), or about7% of operating profit over that pe-riod.

Last week, Toshiba said it wouldexpand its probe to look at account-ing problems at the company as awhole, underscoring for investorsthat there could be more shoes todrop. Toshiba was already a serialunderperformer even before the ac-counting scare, missing out on theJapan rally of the past two years.Shares have fallen another 15% sincethe accounting issues first came tolight.

Toshiba has been a laggard gen-erally as rivals have moved morequickly to shed struggling busi-nesses. Sony sold its personal-com-puter division last year and is focus-

ing on games and imaging sensors,while Panasonic has shifted its focusto industrial electronics.

Over the past two years, Toshibahas announced two halfhearted re-structurings each for its televisionand personal-computer divisions,when it probably should have shedthem completely. The focus of bothbusinesses has been progressivelyhacked back, with the PC businessnow mainly aimed at corporate cli-ents in Japan, and the TV businessat Japan and a few emerging mar-kets.

This piecemeal approach hasbeen tortuous for investors. The di-vision that produces TVs and PCswas still unprofitable in the ninemonths to December, even after ex-cluding one-time restructuringcosts.

Toshiba does have some excel-lent businesses to fall back on, nota-bly flash memory chips, or NAND.Once highly volatile, the NAND mar-ket has been consolidated into ahandful of profitable players, includ-ing Toshiba and Samsung Electron-ics.

The smartphone boom hasdriven demand, and a new wave ofgrowth is coming as computers andservers increasingly switch to solid-state hard drives that use the tech-nology. Bernstein Research esti-

mates that Toshiba supplies aroundhalf the NAND chips for the iPhone6.

It cant be ruled out that ac-counting irregularities extend tothis business as well. But ToshibasNAND profit margins dont look sus-picious, as they are in line with in-dustry peers. The replacement valueof Toshibas NAND plant and equip-ment alone is equivalent to 500per Toshiba share, according toBernstein analyst Mark Newman.That is a 21% premium to the cur-rent share price for the entire com-pany, though Toshiba has substan-tial debt.

The potential damage from ac-counting irregularities is alwayshard to calculate before the dustclears. It would be risky to wadeinto the shares until investors haveclarity on how bad things may get.But Japanese businesses of this sizeare rarely left to fail. And ones withgood assets even less so. Olympus,which had terrible accounting prob-lems but a thriving medical-imagingbusiness, has more than recoveredfrom a 2011 scandal.

If Toshiba management cleans upthe accounting mess, it should thenturn to cleaning up the rest of itsbusiness. Then investors mightclean up themselves.

Aaron Back

Time Warner CableIs a Pricey Bundle

Think your cable bill is expen-sive? Take a look at what John Ma-lone is paying. The Liberty Broad-band chairmans vision ofspearheading cable consolidationvia his firms investment in CharterCommunications may finally becoming to fruition. Charter saidTuesday it would buy Time WarnerCable for $195.71 a share in cashand stock.

The expectation that Charterwould swoop in after regulatoryconcerns stymied Comcasts owndeal for Time Warner Cable meantthe latters stock price already re-flected bid speculation. Yet Char-ters bid represents a 14% premium,valuing Time Warner Cable at $78.7billion, including debt. That equatesto nearly nine times 2016 earningsbefore interest, taxes, depreciationand amortization. Charter also saidit was buying closely held BrightHouse Networks for $10.4 billion.

Charters decision to pay upowes something to the fact thatshareholders have bid up its ownstock, largely in anticipation of adeal. Meanwhile, Amsterdam-listedAltice emerged last week as a po-tential rival bidder for Time WarnerCable. Altice, which said May 20 itwould buy a 70% stake in Sudden-link, aims to eventually get 50% ofits revenue from the U.S. Time War-ner Cable would have been thequickest route to that.

Charters offer likely puts TimeWarner Cable out of reach for Al-tice. But the high price also raisesthe risk level.

Charter should benefit when it

comes to purchasing content frommedia companies. Costs for each ofits own subscribers and those ofBright House should fall toward thelower rates paid by Time WarnerCable. Still, even counting the $800million in annual synergies Charterclaims, it is paying 8.3 times Ebitdafor Time Warner Cable, according toMoffettNathanson. That is 26%higher than the companys five-yearaverage.

Indeed, excitement about dealshas pushed up prices across theboard for cable assets. Beyond thetwo Charter deals, Altices Sudden-link deal valued that company atnearly 10 times 2014 Ebitda. EvenCablevision, which is for sale buthas yet to find a buyer, trades at 8.3times next years Ebitda.

Such multiples ignore structuralchallenges, including the rise ofvideo delivered directly via the In-ternet and heightened regulatoryoversight of broadband through newnet neutrality rules.

Granted, Time Warner Cable hasimproved its results somewhat oflate, adding video subscribers in thefirst quarter for the first time sincethe first quarter of 2009.

But the last time cable firmstraded at these levels, Ebitda wasgrowing at double-digit rates asconsumers upgraded to high-speedbroadband. With this trend largelyplayed out, the path to growth nowis far less clear: Time Warner Ca-bles Ebitda, for example, rose byjust 3.1% in 2014. For Charter, con-solidation may have come at toosteep a cost. Miriam Gottfried

HEARDON THE STREETEmail: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Cable StakesTime Warner Cable's ratio of enterprisevalue to forward Ebitda*

Sources: FactSet; Reuters (photo) THEWALL STREET JOURNAL.

*Earnings before interest, taxes,depreciation and amortization

10

2

4

6

8

102007

How times change.AstraZeneca shares fell Tuesday

after U.S. partner Amgen unexpect-edly pulled out of their shared devel-opment of a psoriasis drug. Somepatients had reported suicidalthoughts in studies. In the 2012 alli-ance, struck under previous chief Da-vid Brennan, Astra paid $50 millionand shouldered two-thirds of re-search-and-development spendinguntil 2014 on five drug candidates.That was when Astra was desper-ately trying to bolster its ailing pipe-line. Astra, as part of its defenseagainst Pfizer, last year said ana-

lysts saw nonrisk-adjusted peaksales of $500 million to $1.5 billionfor the psoriasis drug. Its possibledemise will hit earnings expectations.

But Astra now arguably has theopposite problem. Its oncology pipe-line is generating excitement. Thecompany needs partners for its otherpipeline drugs to help manage theburden of development costs. Astrasaid it would review the psoriasisdrugs data before deciding how toproceed. It may shy away from tak-ing on all the spending, given con-cerns. Unlike three years ago, it hasother places to put that cash. 2015 Dow Jones & Company, Inc. All rights reserved. 3DJ3484

cara delevingne,poised for stardomwith the wall street journaltomorrow.

INDEPENDENTSPIRIT

cara delevingne

2 | Thursday, May 28, 2015 HK JP ID MU KO ML PH SI TL TW IN * * THEWALL STREET JOURNAL.

ONLINE TODAY

i i iBusiness & Finance

n Japan is loosening rules onpensions, luring U.S. investmentmanagers who want to oversee aslice of the countrys trillions ofdollars of retirement money. 15

nMichael Kors posted its firstsales decline as a public company,helping send the accessoriesbrands stock down 23% in after-noon trading in New York, even asits profit increased. 16

n An Airbus jet flown by SingaporeAirlines temporarily lost power inboth engines Saturday on a flightto Shanghai from Singapore. 18

n British car maker Aston Martinwants to be perceived as a luxury

brand, hoping to attract invest-ment or a higher valuation. 16

n Broadcom is in talks to bebought by Avago Technologies, inwhat would be the latest in a re-cent string of mergers in thesemiconductor industry. WSJ.com

n Samsung Groups maneuversto tighten the corporate grip ofheir apparent Jay Y. Lee risk in-flaming concerns about corporategovernance in South Korea. 17

n Apple will likely issue about$1.6 billion of the companys firstyen-denominated bonds in June. 20

n USJ Co., operator of the Univer-sal Studios Japan theme park inOsaka, plans to list in Tokyo asearly as September. 22

n A senior Bank of England offi-cial received emails tied to an al-leged campaign to rig benchmarkinterest rates, according to evi-dence at a London trial. 22

nMcDonalds CEO said his turn-around plan will hinge on manysmall things, and the companyplans to stop disclosing monthlysales figures beginning July 1. 16

n Express Scripts is seekingdeals with pharmaceutical compa-nies that would set pricing forsome cancer drugs based on howwell they work. 15

n Investors are pouring moneyinto upscale youth hostels, bettingthat the next big market in hospi-tality will be the cost-consciousbackpacking crowd. 21

i i iWorld-Wide

n Saudi Arabia sanctioned twoHezbollah commanders allegedlyinvolved in regional terrorist op-erations, in a sign of the king-doms growing coordination withthe U.S. Treasury Department.

n Jens Stoltenberg, NATOs sec-retary-general, said in a speechthat he is deeply troubled by Rus-sias escalating rhetoric about itsnuclear weapons as well asstepped-up flights by its nuclear-capable bombers. WSJ.com/World

n The Internal Revenue Servicesaid identity thieves used one ofits online services to obtain prior-year tax-return information forabout 100,000 U.S. households. 6

Iraqi soldiers take part in a training exercise led by the Spanish army and under the guidance of the U.S. military at the Basmaya camp in Baghdad on Wednesday.

Inside

World News: Syrianoffshoot of al Qaedashifts tactics. 4

Capital Account:Negative quarterslikely in U.S. 6

Personal Technology:Why LGs Androidwatch trails Apple. 7

Videolive.wsj.com

Two daughters ofblues legend B.B.King say theybelieve he waspoisoned and areseeking a formalinquiry.

China Real Timewsj.com/chinarealtime

China has tocontend withconcerns about itslegal system in itsbattle to bringcorrupt fugitivesback to face trial.

Photos of the Day

Images behind the storiesmaking news world-widewsj.com/photosoftheday

Japan Real Timewsj.com/japanrealtime

The completion ofJapans $90 billionmaglev train is stillmore than a decadeaway, but the toyversion is availablenow for $300.

PAGE TWO

Whats News

AGENCE FRANCE-PRESSE/GETTY IMAGES

THE WALL STREET JOURNALDow Jones Publishing Company (Asia)

25/F, Central Plaza, 18 Harbour Road, Hong KongTel 852-2573 7121 Fax 852-2834 5291

www.wsj-asia.comSUBSCRIPTIONS and Address Changes, pleasetelephone our local customer service hotline, Hong Kong:800 901 216; Australia: 0011 8000 322 8482; China: 400991 1174; India: 000 800 440 1938; Indonesia: +62 213983 1281; Japan: 0120 779 868; Korea: 0030 844 0063;Malaysia: 1800 804 612; New Zealand: 0800 442 434;Philippines: 1800 1441 0033; Singapore: 1800 823 2042;Taiwan: 00801 444 141; Thailand: 001800 441 8323. Oremail: [email protected] SALES worldwide through Dow JonesInternational. Hong Kong: 852-2831 2504; Singapore: 65-6415 4300; Tokyo: 81-3 6269-2701; Frankfurt: 49 6929725390; London: 44 207 842 9600; Paris: 33 1 40 1717 01; New York: 1-212 659 2176. Or email:[email protected] appearing herein are used under license fromDow Jones & Company. USPS 337-350 ISSN 0377-9920

SUBSCRIBE TODAYwww.wsj.com/subor scan this code

THEWALL STREET JOURNAL. Thursday, May 28, 2015 | 27

Asian stocks in the news

FubonFinancialHoldingTaiwan TW$64.70

s 2.1% or TW$1.30

Positive sentiment fromdeals betweenCTBCandChinaCitic carried over toother financial shares.

2014J J A S O N D

2015J F M A M

20

40

60

80

100In Taiwan dollars

Price-to-earnings ratio 11Earnings per share, past four quarters N.A.Dividend yield 2.3

PERCENTAGE CHANGEDaily 1 wk. 52wks

Financials -0.4% -0.3% 11.5%Fubon Financial Holding 2.1% 0.5% 53.7%

BumiResourcesIndonesia 90 rupiah

s 3.4% or 3 rupiah

Three of its Singapore subsidiariesweregranted extensions from legal action bycreditors.

2014J J A S O N D

2015J F M A M

40

80

120

160

200In rupiah

Price-to-earnings ratio N.A.Earnings per share, past four quarters N.A.Dividend yield N.A.


BasicMaterials ... -0.8% -1.7%Bumi Resources 3.4% ... -57.5%

FujiHeavy IndustriesLtd.Japan 4,689.50

s 4.3% or 195

Shares of exporters,which benefit fromaweaker yen, traded largely higher.

2014J J A S O N D

2015J F M A M

1200

2400

3600

4800

6000In yen



Consumer Goods -0.2% -1.5% 12.8%Fuji Heavy Industries Ltd. 4.3% 5.9% 76.2%

CTBCFinancialHoldingCo. Ltd.Taiwan TW$23.95

s 4.6% or TW$1.05

ChinaCitic BankCorp.will acquire a 3.8%stake in theTaiwanese financialcompany.

2014J J A S O N D

2015J F M A M

6

12

18

24

30In Taiwan dollars



Financials -0.4% -0.3% 11.5%CTBC Financial Holding Co. Ltd. 4.6% 3.9% 72.7%

SumitomoElectric IndustriesLtd.Japan 1,985

s 5.1% or 97

UBS raised its target price on the stockafter the company announced amid-termbusiness plan.

2014J J A S O N D

2015J F M A M

600

1200

1800

2400

3000In yen



Consumer Goods -0.2% -1.5% 12.8%Sumitomo Electric Industries Ltd. 5.1% 6.2% 40.7%

SamsungElectronicsCo. Ltd.Korea 1,314,000won

t 3.5% or 48,000won

The conglomerate's restructuring plandoesn't guarantee family control, ananalyst at CLSAsaid.

2014J J A S O N D

2015J F M A M

500000

1000000

1500000

2000000

2500000In won



Technology -0.5% -1.1% 4.7%Samsung Electronics Co. Ltd. -3.5% -3.8% -6.6%

NCsoft Corp.Korea 201,500won

t 3.8% or 8,000won

The stock is trading above both it 20-dayand 50-daymoving averages.

2014J J A S O N D

2015J F M A M

60000

120000

180000

240000

300000In won



Consumer Goods -0.2% -1.5% 12.8%NCsoft Corp. -3.8% -7.8% 16.5%

LotteShoppingCo. Ltd.Korea 257,000won

t 4.6% or 12,500won

Sales at topSouthKorean departmentstores rose 1.3% inApril, slightlyweakerthan a recent estimate.

2014J J A S O N D

2015J F M A M

100000

200000

300000

400000

500000In won



Consumer Services -0.5% -1.3% 2.8%Lotte Shopping Co. Ltd. -4.6% -3.8% -15.0%

TataMotorsLtd.India 471.75 rupee

t 5.4% or 25.85 rupee

Consolidated net profit last quartermorethan halved andEdelweiss Securities cutits target price 16%.

2014J J A S O N D

2015J F M A M

200

400

600

800

1000In rupee



Industrials -0.1% -0.4% 10.6%TataMotors Ltd. -5.4% -6.7% 7.8%

CKHutchisonHoldingsLtd.Hong Kong HK$118.20

t 28.4% or HK$46.90

The stock has dropped 31%over the pastthree sessions to a level not seen sinceFebruary 2014.

2014J J A S O N D

2015J F M A M

50

100

150

200

250In Hong Kong dollars

Price-to-earnings ratio 5Earnings per share, past four quarters N.A.Dividend yield N.A.


Financials -0.4% -0.3% 11.5%CKHutchison Holdings Ltd. -28.4% -29.5% -11.8%

Moving themarketsAt right, Japans benchmark stock indexand the biggestmovers among thelargerAsian stocks indexes and stocksWednesday. Beloweach index are itsmost actively traded stocks. The chartsshow the percentage change in eachindexs or stocks value, rather than thepoint change, for purposes of compari-son. The index level or stock price isindicated on each axis. All indexes andstocks are shown in local currency terms.

Asian indexmovers

Nikkei StockAverageJapan 20472.58

s 0.17% or 35.10

2014J J A S O N D

2015J F M A M

8000

12000

16000

20000

24000

Volume ChangeStock inmillions Close Net %

MizuhoFin 306.54 256 6 2.40

TokyoElectric 192.44 666 21 3.26

NipponStl&SmtmoMtl 85.00 341 5 1.58

MitsuUFJFin 84.94 897 -4 0.47

Sojitz 66.72 320 14 4.58

ASX200Australia 5725.30

t 0.83% or 48.10

2014J J A S O N D

2015J F M A M

2500

3750

5000

6250

7500


FortescueMetalsGrp 18.44 2.35 0.05 2.08

Telstra 12.46 6.22 0.08 1.19

MirvacGroup 12.23 2.01 0.02 1.01

Alumina 10.72 1.70 0.01 0.59

FederationCentres 10.37 3.03 0.05 1.62

Shanghai CompositeChina 4941.71

s 0.63% or 30.82

2014J J A S O N D

2015J F M A M

1800

2700

3600

4500

5400


GDPowerDevelopment 1221.43 7.12 0.11 1.52

ChnPetro&Chem 859.66 8.10 0.16 2.02

InnerMongoliaBaot 847.92 7.14 0.03 0.42

ChinaUtdNtwkComms 709.40 8.89 0.25 2.74

HainanAirlinesA 679.73 6.03 0.16 2.73

HangSengHongKong 28081.21

t 0.60% or 168.65

2014J J A S O N D

2015J F M A M

12000

18000

24000

30000

36000


ChinaConstructnBk 337.42 7.94 0.03 0.38

BankofChina 335.04 5.39 -0.02 0.37

Ind&Comml 267.43 6.92 -0.03 0.43

ChinaPetro&Chem 123.37 7.11 -0.06 0.84

PetroChina 83.83 9.60 -0.04 0.41

Weakness in the yen continued to lendsupport to shares of Japanese export-ers, helping the index to rise for a ninthconsecutive session.

Losses on Wall Street linked to down-beat U.S. economic news appeared torattle investors. Banks and mining com-panies declined.

The market benchmark gained groundfor a seventh trading session as retailinvestors piled in. The Shanghai marketis up 53% this year.

Stocks fell despite positive news aboutChinas industrial production. Hope thatBeijing will let more cash enter marketsoutside the mainland limited the losses.

MARKETS LINEUP

WSJ.com>>Follow the markets throughout theday, with updated stock quotes, newsand commentary at WSJ.com.

Also, receive emails that summarizethe days trading in Europe and Asia.To sign up, go to WSJ.com/Email.


Hong Kongers have gathered in the citys Victoria Park for a quarter-century tomark the Tiananmen crackdown. Above, the vigil on June 4, 2013.

P HI L

I PP E

L OP E

Z /A

GE N

C EF R

AN

C E- P

R ES S

E /G

E TT Y

I MA

GE S

In Hong Kong, Tiananmen Vigil Highlights a RiftHONG KONGEvery year for a

quarter-century, large Hong Kongcrowds have commemorated the1989 crackdown on student protest-ers in Beijings Tiananmen Square.This June 4, some young HongKongers say they wont join in.

Much like in Beijing in 1989, stu-dent groups were at the forefront ofthe monthslong pro-democracy pro-tests that paralyzed much of HongKong last year and that challengedBeijing on how Hong Kong shouldelect its leader.

Unlike in Beijing, the Hong Kongprotests ended peacefully, thoughwith no visible concession from theChinese government. What the ral-lies also did was lay bare a grow-ing chasm between old and youngover Hong Kongs identity and rela-tionship with Beijing. That rift isnow playing out over the annualTiananmen vigil, with some stu-dent groups saying Hong Kongersshould focus on democratic rightsin the territory rather than on themainland.

The University of Hong Kongsstudent union will organize its ownJune 4 event to reflect on the fu-ture of democracy in Hong Kong.Separately, the Hong Kong Federa-tion of Students, the main group

leading last years protests, said thatfor the first time it wont participatein the vigil as an organization.

The student groups decision isbaffling to many democracy sup-porters in the city, who see the an-nual candlelight vigil in Hong KongsVictoria Park to remember the Ti-ananmen victims as an importantcivic dutynot least because its theonly mass commemoration of theevent in the Greater China universe.

I cannot understand [the stu-dents] thinking, said Jack Choi, a36-year-old who works in financeand has been going to the vigil onand off since 2000. Its two sepa-rate issues. Our mother is China, ifthe mother is not free, how can thechild be?

I feel very sad, said ClaudiaMo, an opposition lawmaker andformer journalist who was in Beijingduring the 1989 crackdown. Its awatershed year in my life, she said.To call the ocean of candlelightceremonial or perfunctory, its justnot fair.

But to Cameron Chan, 20, a so-cial-sciences student at the Univer-sity of Hong Kong, it is preciselythat the annual vigil has becomesuch a fixture that is the problem.

Every year its the same, wesing the same songs and watch thesame videos. For some people, going

to the vigil is a bit like clocking in,Mr. Chan said. Should we continuelooking back on a historical event,or focus on the more urgent situa-tion here now?

The sense of a local Hong Kongidentity has gathered traction sincelast years protests, which eruptedafter Beijing said only prescreenedcandidates could run to be the cityschief executive. The election planwill be put to a vote in Hong Kongslegislature in late June and is ex-pected to be rejected by pro-democ-

racy lawmakers.The organizer of the annual vigil,

the Hong Kong Alliance in Supportof Patriotic Democratic Movementsin China, has responded to criti-cisms by publishing a 40-page pam-phlet last week with answers toquestions such as, What has the Al-liance achieved in these 26 years?and Why do we need to build ademocratic China?

Does supporting building ademocratic China get in the way ofbuilding a democratic Hong Kong? It

doesnt, said Lee Cheuk-yan, a law-maker and former chairman of thegroup.

But marking a separation withthe mainland is fundamental to theidentity of young Hong Kongers,said Sam Crane, who teaches Chi-nese politics at Williams College inWilliamstown, Mass. He compared itto students in Taiwans SunflowerMovement, who have opposedcloser ties with Beijing.

Young people in Taiwan andHong Kong feel they are ethnicallyChinese but politically somethingelse, Mr. Crane said. They are sig-naling, We have to take care of ourown business.

A poll by the University of HongKong released in December foundthat of around 1,000 people sur-veyed, 67% identified themselves asHong Kongers or Hong Kongers inChina, compared with 33% whoidentified themselves as Chinese orChinese in Hong Kong. The poll saidthat those who identified as Chineseor as citizens of China were at theirlowest point since 2008.

Tiananmen exile Zhou Fengsuo,47 years old, who now lives in SanFrancisco, said in his mind the June4 vigil is part of Hong Kongs iden-tity. But I understand if young peo-ple may not want to carry [that bur-den] anymore.

BY ISABELLA STEGER

their own coast. The airstrips Chinais building in the South China Seawould help the PLA air force to sus-tain operations hundreds of milesfrom the mainland.

A recent Pentagon review ofChinas military modernizationnoted, however, China is investingin capabilities designed to defeatadversary power projection andcounter third-partyincludingU.S.intervention during a crisis orconflict.

In practice, that means hundredsof ballistic and cruise missiles posi-tioned near the coast to deter Japa-nese or American warships fromcoming anywhere near Chinese ter-ritory. China has a substantial sub-marine fleet as well, piling on morerisk for enemy ships.

The U.S. Navys Carrier Strike

WORLD NEWS: ASIA

China Tests NeighborsChinas promise to beef up its

navy to prevent further meddlingand provocative actions by rivalsin the South China Sea threatens tofuel deeper mistrust among many ofits neighbors.

The Philippines contests some ofChinas claims in the South ChinaSea, but it has virtually no modernmilitary equipment with which to

defend its maritimeterritory.

Vietnam, anotherrival claimant, is in better shape: Itis already investing in some ad-vanced capabilities, including mod-ern fighter jets, submarines andland-attack cruise missiles, all fromRussia. But even after these newweapon systems are in place severalyears from now, Beijing would stillenjoy overwhelming superiority inany confrontation with Hanoi.

But Chinas ability to overcomeits larger potential rivalsnotablyJapan and the U.S.is debatable.

The Peoples Liberation Army hasaround 2,100 fighter or bomber air-craft in its hangars, according to theU.S. Department of Defense, but onlya few hundred of those are consid-ered modern aircraft. The countrysonly aircraft carrierwhile a hugeleap forward for the Chinese navyis still seen mainly as a practiceplatform for a future carrier fleet.

Beijings plan, announced Tues-day, stirred little reaction out of of-ficials in Washington.

I dont think there were anysurprises for us in the latest whitepaper, a senior U.S. defense officialsaid. The trends described in thatpaper are trends that weve beenfollowing for some years.

Security experts said the plan re-flects Beijings increasing comfort inprojecting power in the South ChinaSea.

Still, both Chinas air and navalforces are still learning how to oper-ate and project power far away from

Group 5, based in Yokosuka, Japan,is still way ahead of the competitionwhen it comes to projecting poweracross the Asia-Pacific region. AndJapans navy, with a fast-growingsubmarine force of its own, is still amatch for Chinas.

Asked about Chinas white paperand its island construction at a Chi-nese Foreign Ministry briefing onWednesday, spokeswoman Hua Chu-nying stressed the countrys long-stated position that its claims in theSouth China Sea have adequate his-torical and legal bases.

The cause of tensions in theSouth China Sea isnt Chinas islandconstruction, she said. As we haverepeatedly said, China is conductinglegitimate, reasonable and lawfulconstruction work within its ownterritory.

BY TREFORMOSSAND GORDON LUBOLD

Aircraft carriers1 0 0

Destroyers/frigates

Submarines

Fighter/bomber aircraft

Japan PhilippinesChina

= 1

= 1

= 1

= 10

Power ProjectionsChina aims to boost its maritime forces, but it already has an edge over its rivalsin terms of the sheer size of its air and naval eets.

Sources: U.S. Department of Defense, World Air Forces 2015 report,Japan Self-Defense Force (Japan ghter) THEWALL STREET JOURNAL.

2,1002,100 353 8

7373 4747 3

5858 16

0

Vietnam

217

7

0 0

1

U.S. CarrierStrike Group

54

9

0 to 2

Burmese Lash OutOver Migrant Crisis

YANGONMore than three hun-dred people, including dozens ofmonks, took to the streets of YangonWednesday to protest growing in-ternational pressure on Myanmar toimprove the way it treats the state-less Rohingya minority at the centerof Southeast Asias migrant crisis.

The protestvociferous thoughsmallillustrates a swelling back-lash among some Burmese againstwhat they view as foreign meddlingin the countrys affairs in the run-upto national elections later this year.

Over 3,500 Rohingya refugeesand migrants from Bangladesh havewashed up on the shores of Malay-sia and Indonesia in recent weeks,many of them abandoned by human-trafficking gangs. The United Na-tions says thousands more mightstill be at sea and top diplomatsfrom the U.S. and elsewhere havepointed to Myanmars treatment ofits Muslim Rohingya population asone of the main factors encouragingmany of them to attempt the dan-gerous voyage to Malaysia.

In a news conference in Yangonlast week, U.S. Deputy Secretary ofState Antony Blinken spoke formany countries in the region whenhe said Myanmar should shouldersome blame for the crisis and worktoward providing full citizenship tothe countrys Rohingya. Its govern-ment will likely come under furtherpressure at an international meetingon how to tackle the problem inBangkok on Friday.

Demonstrators marching throughYangon, Myanmars largest city,however, wore shirts saying BoatPeople are not Myanmar, Stop Blam-ing Myanmar. Some accused theU.N. and international media of ex-aggerating the plight of the mi-grants.

Ashin Wilartha, a monk from

Dala township south of Yangon saidhe believed the protest to be ofconcern to our national affairs andhad encouraged others from hismonastery to take part. Anotherprotester, Ma Sandy, said the issueof the migrants should be a globalone. If they say it is about humanrights, why is it only us who are re-sponsible? The international com-munity should not blame Myanmaralone, she said.

The Rohingya issue is a thornyone for Myanmars government,which gradually began introducingdemocratic reforms after the mili-tary ceded its half-century-long holdon power in 2011.

Since the gradual transition todemocracy began, anti-Muslim andespecially anti-Rohingya sentimentin the country has flared. Many inthe majority Buddhist country re-gard Rohingya as illegal immigrantsfrom Bangladesh, arguing that theyshould continue to be denied citi-zenship, despite many tracing theirancestry in Myanmar back genera-tions. Scores of Rohingya werekilled in sectarian clashes in west-ern Myanmar in 2012 and 140,000others lost their homes and remainconfined to squalid camps.

Buddhist activists are now at-tempting to push Rohingya andother Muslims further to the side-lines ahead of national elections dueNovember, and many political ana-lysts say neither President TheinSeins government nor oppositionleader and Nobel laureate Aung SanSuu Kyi has stood up to their risinginfluence ahead of the vote.

Last week, the president signed apopulation-control law that human-rights groups say could be used tocurb Rohingya population growth.The law gives regional governmentsthe right to enforce birth spacingand mandate some communities toonly have a child once every threeyears.

BY SHIBANIMAHTANIANDMYOMYO

ANALYSIS

26 | Thursday, May 28, 2015 THEWALL STREET JOURNAL.

Dow Jones Industrial Average P/E: 16LAST: 18153.04 s 111.50, or 0.62%YEAR TO DATE: s 329.97, or 1.9%OVER 52WEEKS s 1,519.86, or 9.1%

*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

19000

18500

18000

17500

17000

16500

6 13 20 27Mar.

2 10 17 24 1Apr.

8 15 22May

High

Close

Low

50daymoving average

t

Nasdaq Composite Index P/E: 23*LAST: 5080.53 s 47.78, or 0.95%YEAR TO DATE: s 344.48, or 7.3%OVER 52WEEKS s 855.46, or 20.2%

5250

5100

4950

4800

4650

4500

6 13 20 27Mar.

2 10 17 24 1Apr.

8 15 22May

S&P 500 Index P/E: 22LAST: 2119.22 s 15.02, or 0.71%YEAR TO DATE: s 60.32, or 2.9%OVER 52WEEKS s 209.44, or 11.0%

2300

2200

2100

2000

1900

1800

6 13 20 27Mar.

2 10 17 24 1Apr.

8 15 22May

DJIA component stocksVolume, CHANGE

Stock Symbol inmillions Latest Points Percentage

AmExpress AXP 2.4 $80.01 0.18 0.22%Apple AAPL 25.5 131.74 2.12 1.63Boeing BA 1.3 142.66 0.14 0.10Caterpillar CAT 1.2 87.87 0.03 0.03Chevron CVX 2.8 103.26 0.03 0.03CiscoSys CSCO 8.2 29.39 0.44 1.50CocaCola KO 3.9 41.06 0.07 0.17Disney DIS 1.7 110.30 0.86 0.79DuPont DD 2.2 70.63 0.12 0.17ExxonMobil XOM 4.6 85.18 0.17 0.20GenElec GE 10.7 27.52 ... ...GoldmanSachs GS 1.2 208.55 2.17 1.05HomeDpt HD 1.9 112.24 1.31 1.18Intel INTC 9.3 33.49 0.39 1.17IBM IBM 1.5 171.64 1.51 0.89JPMorgChas JPM 4.8 66.49 0.76 1.16JohnsJohns JNJ 2.7 101.12 0.30 0.30McDonalds MCD 2.7 98.55 0.09 0.09Merck MRK 4.4 59.65 0.68 1.15Microsoft MSFT 11.4 47.37 0.78 1.67NikeB NKE 1.3 103.44 0.02 0.02Pfizer PFE 6.0 34.38 0.27 0.79ProctGamb PG 4.1 79.48 0.34 0.443M MMM 1.0 160.88 1.28 0.81TravelersCos TRV 0.6 102.18 0.58 0.57UnitedTech UTX 1.3 117.31 0.44 0.38UtdHlthGp UNH 1.2 119.62 1.38 1.17Verizon VZ 6.3 49.44 0.02 0.04VISAClA V 3.9 69.31 0.77 1.12

WalMart WMT 3.4 75.32 0.42 0.56

U.S. stocks:most active...Volume, CHANGE

Stock Symbol in millions Latest Points Percentage

MichaelKorsHldgs KORS 48.1 $46.56 14.03 23.16%SPDRS&P500 SPY 39.8 212.20 1.50 0.71BankAm BAC 31.9 16.67 0.17 1.03VelocityShares3x UWTI 27.1 3.17 0.07 2.16Apple AAPL 25.5 131.74 2.12 1.63BrcliPathVIXShFut VXX 21.2 18.76 0.63 3.25PetrlBraADS PBR 20.2 8.54 0.03 0.35FrontierComms FTR 19.0 5.23 0.31 6.30iShMSCIEmgMarkets EEM 18.4 41.88 0.18 0.42Lorillard LO 17.4 72.94 0.82 1.14iShRussell2000ETF IWM 16.1 123.85 0.61 0.49SophirisBio SPHS 15.3 1.24 0.35 40.10PwrShrsQQQ QQQ 14.7 110.36 1.16 1.06ItauUnibancoADS ITUB 13.7 11.07 ... ...AT&T T 13.3 34.82 0.15 0.43

Biggest gainers...ATRMHoldings ATRM 25.4 $3.83 1.15 42.91%GreatBasinScien GBSN 8,646.8 3.96 1.04 35.62Hydrogenics HYGS 473.4 11.05 2.03 22.51EmeraldOil EOX 6,855.0 6.11 0.90 17.27CellectisADS CLLS 1,009.6 42.05 5.60 15.36

...Biggest losersGlobeImmune GBIM 918.4 $4.00 4.24 51.46%MichaelKorsHldgs KORS 48,141.5 46.56 14.03 23.16ChinaHousngDev CHLN 16.5 1.95 0.29 12.95HarvardApparatus HART 93.3 1.93 0.27 12.44NexvetBiopharma NVET 27.5 5.12 0.66 11.42

ADRsofAsian companies*52-WEEK Volume, CHANGE

High Low Stock Symbol inOOOs Latest Points Percentage

$25.77 $19.39 TaiwanSemi TSM 5,675.9 $24.55 0.28 1.17%13.24 9.36 ICICI BkADS IBN 2,403.2 10.36 0.04 0.346.03 3.73 AUOptronicsADS AUO 2,094.9 5.74 0.31 5.7187.62 40.74 CtripIntADS CTRP 1,553.3 81.55 0.44 0.5451.80 37.11 TataMtrsADS TTM 1,286.2 37.94 0.10 0.2637.27 25.03 InfosysADS INFY 1,127.3 31.15 0.17 0.54251.99 160.80 BaiduADS BIDU 1,033.5 200.60 0.41 0.2134.12 15.99 SiliconMotionADS SIMO 716.5 33.50 1.78 5.618.12 5.68 AdvSemiEnggADS ASX 707.5 7.07 0.07 1.06

69.26 40.22 BHPBillitonADS BHP 661.0 45.13 0.05 0.1111.88 2.80 ChinaFinOnADS JRJC 644.5 5.80 0.49 7.79

150.30 69.13 NeteaseADS NTES 563.6 143.84 0.55 0.3832.95 15.96 SonyADS SNE 550.3 31.13 0.50 1.587.62 5.13 MitsuUFJADS MTU 468.8 7.31 0.01 0.151.67 0.64 Ku6Media KUTV 356.0 1.29 0.04 3.192.94 1.07 PranaBiotech PRAN 334.1 1.25 0.03 2.3417.59 12.84 KTCrpADS KT 299.2 13.35 0.06 0.4518.43 12.98 LGDisplayADS LPL 262.0 13.70 0.08 0.5826.29 13.02 ChinaLfInsADS LFC 230.4 25.40 0.38 1.4936.44 28.61 HondaMtrADS HMC 230.4 34.26 0.28 0.8275.52 47.59 ChinaMobile CHL 217.3 67.85 0.35 0.5163.97 44.84 HDFCBnk HDB 214.8 59.24 0.47 0.809.17 6.30 SiliconwareADS SPIL 200.5 8.21 0.02 0.2423.12 18.04 KoreaElecPwr KEP 177.5 20.69 0.48 2.2760.85 39.01 DrReddysLabADS RDY 168.7 55.75 0.70 1.2711.00 1.04 GeneticTechsADS GENE 164.8 3.96 0.01 0.2531.84 23.51 SKTelecomADS SKM 163.8 26.21 0.16 0.6227.25 12.76 eLongADS LONG 152.7 21.05 0.66 3.0486.99 53.14 POSCOADS PKX 142.1 54.85 0.83 1.4936.04 25.07 NipponADS NTT 128.1 34.88 0.38 1.09

*Most activeAmerican depositary receipts tracked byDowJones

Source:WSJMarketDataGroup

Global government bondsLatest,month-ago and year-ago yields and spreads over or underU.S. Treasurys on benchmark two-yearand 10-year government bonds around theworld. Data as of 12 p.m. ET

Country/ SPREADOVERTREASURYS, in basis points YIELDCoupon Maturity, in years Yield Latest Previous MonthAgo Year ago Previous Month ago Year ago

4.250 Australia 2 2.006 136.1 140.3 136.4 223.0 2.018 1.903 2.621

3.250 10 2.847 68.9 78.7 58.7 124.4 2.929 2.510 3.760

3.500 Belgium 2 -0.184 -82.8 -79.2 -74.6 -24.3 -0.178 -0.207 0.147

0.800 10 0.858 -130.1 -127.4 -158.0 -59.0 0.868 0.343 1.926

3.750 France 2 -0.163 -80.8 -78.2 -72.5 -26.0 -0.167 -0.186 0.131

0.500 10 0.848 -131.0 -128.2 -149.8 -72.5 0.860 0.425 1.791

0.500 Germany 2 -0.220 -86.4 -83.6 -79.9 -32.8 -0.222 -0.259 0.063

0.500 10 0.550 -160.8 -158.8 -175.9 -112.5 0.553 0.164 1.392

4.750 Italy 2 0.133 -51.2 -49.0 -42.7 40.3 0.125 0.113 0.794

1.500 10 1.866 -29.3 -20.1 -57.5 48.3 1.941 1.348 2.999

0.100 Japan 2 0.000 -64.5 -61.4 -54.0 -30.5 0.000 -0.001 0.086

0.400 10 0.388 -177.0 -172.0 -161.7 -192.2 0.421 0.306 0.594

0.500 Netherlands 2 -0.200 -84.5 -82.0 -75.5 -26.9 -0.206 -0.216 0.121

0.250 10 0.742 -141.6 -138.9 -169.1 -86.2 0.752 0.232 1.654

4.200 Portugal 2 0.098 -54.7 -58.1 -48.6 71.3 0.033 0.053 1.104

2.875 10 2.477 31.8 37.8 -0.3 114.6 2.520 1.920 3.662

3.800 Spain 2 0.033 -61.1 -58.6 -50.7 32.7 0.029 0.032 0.717

1.600 10 1.829 -32.9 -26.8 -60.4 36.7 1.874 1.319 2.883

3.750 Sweden 2 -0.277 -92.1 -88.4 -87.9 7.0 -0.269 -0.340 0.460

2.500 10 0.743 -141.6 -137.8 -158.2 -67.8 0.764 0.341 1.838

1.000 U.K. 2 0.690 4.5 5.9 12.4 31.4 0.673 0.663 0.704

2.750 10 1.895 -26.4 -25.3 -20.5 12.8 1.889 1.718 2.644

0.625 U.S. 2 0.645 ... ... ... ... 0.614 0.539 0.391

2.125 10 2.158 ... ... ... ... 2.142 1.923 2.516

Keymoney ratesLatest 52wks ago

Prime rates

U.S. 3.25% 3.25%

Canada 2.85 3.00

Japan 1.475 1.475

Britain 0.50 0.50

ECB 0.05 0.25

Switzerland 0.50 0.50

Australia 2.00 2.50

HongKong 5.00 5.00

Libor

Onemonth 0.18630% 0.15050%

Threemonth 0.28585 0.22985

Sixmonth 0.42500 0.32390

One year 0.75685 0.53540

Latest 52wks ago

Euro Libor

Onemonth -0.06857% 0.23500%

Threemonth -0.01286 0.28786

Sixmonth 0.05286 0.35857

One year 0.17214 0.52171

Euribor

Onemonth -0.05400% 0.25700%

Threemonth -0.01300 0.31600

Sixmonth 0.05200 0.40000

One year 0.16100 0.57300

Hibor

Onemonth 0.24043% 0.21071%

Threemonth 0.38957 0.37500

Sixmonth 0.54214 0.55071

One year 0.84186 0.86714

Offer Bid

Eurodollars

Onemonth 0.2500% 0.1500%

Threemonth 0.3300 0.2300

Sixmonth 0.4500 0.3500

One year 0.7200 0.6200

Latest 52wks ago

U.S. discount 0.75% 0.75%

Fed-funds target 0.00 0.00

Callmoney 2.00 2.00

Overnight repurchase rates

U.S. 0.13% n.a.

Euro zone n.a. n.a.

Sources:WSJMarketDataGroup, SIX Financial Information, Tullett

U.S.Treasuryyield curveThe curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.

maturity

1month(s)

3 6 1years

2 3 5 710 30

5%

4

3

2

1

0

s

One year ago

s

Tuesday

TOTALRETURNYield to Modified Month Quarter Year

Ryan Index maturity duration to-date to-date to-date 12-month

30-year Treasury 2.891% 19.79 2.93% 6.88% 2.06% 13.21 %10-year Treasury 2.135 8.94 0.68 1.54 1.08 6.067 Year Treasury 1.893 6.48 0.44 0.89 1.46 4.27Five-year Treasury 1.522 4.74 0.28 0.48 1.34 2.51Ryan Index 1.678 7.48 0.73 1.63 0.63 4.773 Year Treasury 0.981 2.92 0.07 ... 1.04 1.51Two-year Treasury 0.649 1.98 0.04 ... 0.55 0.831 Year Treasury 0.224 0.92 0.02 0.09 0.26 0.42Six-month Treasury 0.086 0.50 0.01 0.09 0.16 0.26Ryan Cash Index-a 0.084 0.43 0.01 0.05 0.12 0.19Three-month bill 0.015 0.25 ... 0.02 0.05 0.06

One-month bill 0.010 0.06 ... ... 0.01 0.02

a-Performance of a cash investment Source: Ryan ALM

SCANNING THE GLOBE


Nusra Front fighters brandish Islamist flags in Aleppo, Syria, on Tuesday.

FADIA

L-HALA

BI/AGEN

CEFRANCE-PRE

SSE/GETTY

IMAGES

Europe Plans for Migrants Under FireBRUSSELSA European Union

proposal to resettle tens of thou-sands of refugees from Syria and Er-itrea across Europe met with strongresistance from some governments,raising doubt about its prospects.

At the same time, another EUplan for dealing with its refugee cri-sisa naval operation in the Medi-terranean Sea to destroy the vesselsthat smuggling gangs use to trans-port migrantscame in for criticismfrom United Nations Secretary-Gen-eral Ban Ki-moon.

During a visit Wednesday to theheadquarters of the European Com-mission, the blocs executive, Mr.Ban said he was skeptical about anymilitary response to Europes refu-gee problem.

But he did call the commissionsplans to resettle 40,000 Syrians andEritreans arriving in Italy andGreece in other EU countries, and totake in a further 20,000 refugees, astep in the right direction.

Mr. Ban said that I encourageEU member states to show compas-sion as they consider this importantproposal to share their resettlementresponsibilities. This can enable theEuropean Union to address the dra-matically increasing flows of peoplewhile setting an example for otherregions of the world facing similarchallenges.

The plans are subject to approvalby national capitals, however, manyof which face growing anti-immi-grant sentiment among voters andsee the proposals as encroaching ontheir sovereignty.

Countries would absorb a certainnumber of refugees, calculatedbased on factors such as populationand gross domestic product.

According to three European dip-

lomats, Francewhose support willbe crucial for the proposal to passopposes the plans, mainly due to adomestic backlash against migrationstoked by the far-right National Front.

Czech Prime Minister BohuslavSobotka said that his country re-jects the setting of mandatory quo-tas, and noted that it has alreadyaccepted many refugees fromUkraine, where the war has forced1.5 million people to leave theirhomes.

We support the right of coun-tries to freely choose the scope oftheir solidarity, which we have alsodemonstrated by our decision toprovide a home for a number of Syr-ian families, Mr. Sobotka said.

Several other governments, in-cluding Spain, Poland, the Balticstates and Hungary, have also spo-ken against national quotas in thepast. The U.K., Ireland and Denmark

have special arrangements exempt-ing them from such policies.

The commission denied the pro-posed mechanism would result inquotas and stressed that the grant-ing of asylum remains a sovereignright of each member state.

We never used the word quota.All it is about is solidarity. It is thenup to member states to decide tohow many people they grant refugeestatus, EU Migration CommissionerDimitris Avramopoulos said.

To sweeten the deal, the commis-sion proposes that receiving coun-tries get 6,000 ($6,550) per refugeeaccepted.

Interior ministers from all EUcountries will vote on the plans June16. Unanimity isnt required. IfFrance and Germany support it, itwill fly, another European diplomatsaid.

The plans also include guidelines

to reassure countries such as Swe-den and Germany, preferred destina-tions for asylum seekers, that Italyand Greece will register and finger-print all migrants arriving on theirshores.

Under EU law, migrants who seekasylum have to be fingerprinted andregistered in the first Europeancountry of arrival. But in recentyears, Italy and Greece have allowedpeople to move to other EU coun-tries without being registered.

In parallel, the EUs borderagency, Frontex, said that it had ex-panded the zone of operations of itsMediterranean mission, Triton, to220 kilometers south of Sicily. Ac-cording to Mr. Avramopoulos, Tritonis now covering what Italys search-and-rescue mission Mare Nostrumcovered last year, before it was shutdown due to budgetary reasons.

Human traffickers have been tak-ing advantage of the lawlessness inLibya to launch overcrowded boatsfull of desperate migrants on peril-ous journeys across the Mediterra-nean.

Italy alone expects to see asmany as 200,000 migrants reach itsshores this year. More than 1,600people have perished already thisyear, according to aid groups.

The EU is seeking U.N. SecurityCouncil and Libyan backing for itsplan to search, capture and destroyvessels used by the smugglinggangs.

Speaking in Brussels alongside Eu-ropean Commission President Jean-Claude Juncker, Mr. Ban said any mil-itary action would have limitedeffectiveness and that destroying ves-sels could deprive migrants of one ofthe limited options for survival.

Mr. Ban said he has urged gov-ernments to tackle the migrationchallenge in a comprehensive way,

including providing legal channelsfor migration and action to tacklethe reasons people flee their coun-tries.

Of course I support...strengthen-ing the military capacity in search-ing and rescuing the people, hesaid. Our priority should be givento lifesaving.

He added there may be someother ways to tackle the smugglinggangs.

The commission is also lookingat increasing the rate of return tohome countries of people who havebeen refused asylum or other legalforms of residence.

Only 40% of the people whoshould be returned are currently be-ing sent back, according to the com-mission. Frontex will be involvedmore in organizing such returns.

The commission also seeks tosign readmission agreements withsub-Saharan countries such as Maliand Senegal by the end of 2015, toincrease the return rate. That couldspur North African countries, nota-bly Morocco, to follow suit.

The commission for the past 15years has tried to sign a readmissionagreement with the governmentthere.

The commission proposed that24,000 refugees be moved from Italyand 16,000 from Greece. It limitedthe program to people from Syria orEritrea because people from thosecountries had a high rate of winningasylum across the EU last year.

Human Rights Watch researcherJudith Sunderland called the reloca-tion proposal positive, adding that itwas disheartening to see so manygovernments come out against it.But she said that the numbers beingconsidered are far too low.

Laurence Normancontributed to this article.

BY VALENTINA POP

Migrants gather outside an abandoned hotel in Kos, Greece, on Wednesday.

ASSOCIAT

EDPR

ESS

Al Qaedas Syrian Offshoot Shifts Tactics in FightANTAKYA, TurkeyWhen a Mus-

lim cleric criticized the Nusra Frontlast year for taking over his Syriancity and raising its menacing blackflags, a representative of the jihadistgroup took to Facebook to send himan ominous message.

Oh secularist, oh infidel, thenote read. Sit quietly or your timewill come.

Yet when wider protests overNusras draconian practices and rigidreligious views soon followed incleric Murhaf Shaarawis home city ofMaraat Numan and elsewhere in Idlibprovince, the group took note. Itcurbed its threats to clerics and itsattempts to spread its brand of Islam,said Mr. Shaarawi and other currentand former residents of the province.

The response to public pressureunderscores how Nusra, the al Qaedaaffiliate in Syria that is designated aterrorist group by the U.S., the U.K.and Turkey, in recent months has in-troduced a measure of constraint andconciliation into areas of Syria whereit operates, the residents said. It iseven sometimes doing so alongsideWestern-backed rebel factions.

That has put it at odds with itsmain jihadist rival, Islamic State.While both groups seek to establisha state governed by a strict readingof Islam, Islamic State has relied onviolence or the threat of violence toachieve that goal. Nusra, on the otherhand, is seeking to win a degree ofconsent from those it rules and hasvoiced an interest in governing with

other rebel groups.Nusra, one of the strongest rebel

factions fighting President Bashar al-Assad, hasnt lost its reputation forbrutality.

Syrian rights groups accuse it of alitany of abuses against civilianssince Nusra was formed more thanthree years ago, including disappear-ances and summary executions foralleged blasphemy and collaboration.Still, the group appears to havestarted easing some its most unpopu-lar religious edicts, not least its banon the sale and smoking of ciga-rettesan especially reviled measurein a country where a majority of mensmoke.

It has also stopped requiringwomen to cover their faces and wearfloor-length robes, and has moved topunish some fighters for harassing orassaulting civilians, a resident ofMaraat Numan said.

It tried [to impose control] andfailed, thank God, said the man, whodeclined to give his name for fear hemight still be targeted for retaliationdespite the letup. Frankly, Nusra istrying to fix the mistakes it made.There is an extremist faction withinNusra, and it was the one that causedall the problems. Now they are at-tempting reconciliation with thepublic.

It is unclear how far-reaching orlasting Nusras turnabout will proveand what its aim is. Yet in the ebband flow of a war now in it fifth year,the apparent shift by al Qaedas Syr-ian branch underscores its differ-ences with its main jihadist adver-

sary, said Charles Lister, a fellow atthe Brookings Doha Center.

Islamic State is in a rush to suc-cess and a rush to impress, Mr.Lister said. Al Qaeda has alwaysplayed a longer strategic game.

Nusra has fighters throughoutSyria, but its forces are heavily con-centrated in the northwestern prov-ince of Idlib. After Nusra and otherIslamist rebel factions seized theprovinces capital from governmentforces in late March, Abu Muhammadal-Golani, Nusras leader, said his fac-tion had no interest in running italone.

We as the Nusra Front affirmour lack of interest in ruling the cityor monopolizing it without others,he said in an audio recording distrib-

uted on the Internet. Our interest isthat the city is in trusted hands thatcan mete out justice, stamp out op-pression and rule with Gods law andseek counsel.

Since then, Nusra and other rebelfactions together have re-establishedmunicipal services in the city of Idliband are forming a civilian adminis-tration. The main obstacles havebeen government airstrikes and lackof qualified city workers to replacethose who have fled, not any with-holding of cooperation from Nusra,said Baraa Halaq, a spokesman forAhrar Al-Sham, another Islamistrebel group.

Nusra is like any of the otherfactionsit hasnt differentiated it-self, Mr. Halaq said. Every faction

has a role and has a vote, but thegeneral decision is taken by consen-sus.

Before its apparent shift, Nusrasought for months to quash the influ-ence of other rebel factions and dom-inate all aspects of life in some oppo-sition-controlled areas ofnorthwestern Syria.

After largely refraining from in-terfering in the lives of civilians, itseemed driven to mimic Islamic Stateas it attacked other rebel groups,consolidated control over oppositionterritory by force and established it-self as the sole local power. Some ofits critics took to calling it the newISISanother name for IslamicStateas it took such steps as im-posing taxes and forcing shops toclose during prayer times.

The Syrian Network for HumanRights said Nusra is responsible forthe deaths of 282 civilians, including60 women and 32 under age 18, andfor the disappearances of 44 others.Some of the dead were executed foralleged blasphemy or working withthe Assad government, the opposi-tion monitoring group said.

Against this history of ruthless-ness, longtime observers of Syriasrebel factions are taking a wait-and-see attitude toward Nusras apparentshift in direction.

Is this retreat because of thebattles, or because of the peoplesoutrage and wanting to gain groundsupport? asked Rami Abdelrahman,head of the opposition monitoringgroup Syrian Observatory for HumanRights. That is the question.

BY RAJA ABDULRAHIM

WORLD NEWS


Currencies London close onMay27Per In

AMERICAS Per euro In euros U.S. dollar U.S. dollars

Argentina peso-a 9.7775 0.1023 8.9813 0.1113

Brazil real 3.4484 0.2900 3.1676 0.3157

Canada dollar 1.3585 0.7361 1.2481 0.8012

Chile peso 670.94 0.001490 616.30 0.001623

Colombia peso 2767.00 0.0003614 2542.11 0.0003934

EcuadorUS dollar-f 1.0886 0.9187 1 1

Mexico peso-a 16.7130 0.0598 15.3520 0.0651

Peru sol 3.4341 0.2912 3.1545 0.3170

Uruguay peso-e 29.252 0.0342 26.870 0.0372

U.S. dollar 1.0886 0.9187 1 1

Venezuela bolivar 6.86 0.145773 6.30 0.158696

ASIA-PACIFIC

Australia dollar 1.4120 0.7081 1.2972 0.7709

China yuan 6.7522 0.1481 6.2024 0.1612

Hong Kong dollar 8.4470 0.1184 7.7592 0.1289

India rupee 69.6050 0.0144 63.9374 0.0156

Indonesia rupiah 14373 0.0000696 13203 0.0000757

Japan yen 134.84 0.007416 123.87 0.008073

Kazakhstan tenge 201.83 0.004956 185.82 0.005382

Macau pataca 8.6873 0.1152 7.9806 0.1253

Malaysia ringgit-c 3.9767 0.2515 3.6529 0.2738

NewZealand dollar 1.5069 0.6636 1.3843 0.7224

Pakistan rupee 110.966 0.0090 101.930 0.0098

Philippines peso 48.644 0.0206 44.693 0.0224

Singapore dollar 1.4731 0.6788 1.3531 0.7390

South Koreawon 1207.18 0.0008284 1108.88 0.0009018

Sri Lanka rupee 145.93 0.0068526 134.06 0.0074593

Taiwan dollar 33.369 0.02997 30.652 0.03262

Thailand baht 36.764 0.02720 33.770 0.02961

a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate.Source: Tullett Prebon

Major stockmarket indexes Stock indexes fromaround theworld, grouped by region. Shown in local-currency terms.PREVIOUS SESSION PERFORMANCE

Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk.

ASIA-PACIFIC DJAsia-Pacific TSM 1574.41 -10.93 -0.69% 10.4% 8.2%

Australia SPX/ASX 200 5725.30 -48.10 -0.83 5.8 3.6

China Shanghai Composite 4941.71 30.82 0.63% 52.8 141.0

Hong Kong Hang Seng 28081.21 -168.65 -0.60 19.0 21.7

India S&PBSE Sensex 27564.66 33.25 0.12 0.2 12.3

Indonesia Jakarta Composite 5253.39 -67.51 -1.27 0.5 5.4

Japan Nikkei Stock Average 20472.58 35.10 0.17 17.3 39.5

Topix 1661.33 1.76 0.11 18.0 38.7

Malaysia Kuala Lumpur Composite 1755.05 -9.02 -0.51 -0.4 -6.2

NewZealand NZSX-50 5757.94 -37.92 -0.65 3.4 11.1

Pakistan KSE 100 32842.59 332.24 1.02 2.2 13.3

Philippines PSEi 7598.70 -129.80 -1.68 5.1 11.9

Singapore Straits Times 3424.94 -35.04 -1.01 1.8 4.7

South Korea Kospi 2107.50 -36.00 -1.68 10.0 4.5

Taiwan Weighted 9693.54 24.13 0.25 4.2 6.3

Thailand SET 1500.84 2.86 0.19 0.2 7.0

EUROPE Stoxx Europe 600 408.88 5.27 1.31 19.4 18.7

Stoxx Europe 50 3524.55 45.35 1.30 17.3 15.9

PREVIOUS SESSION PERFORMANCERegion/Country Index Close Net change Percentage change Yr.-to-date 52-wk.

Euro Zone Euro Stoxx 379.94 6.02 1.61% 18.9% 15.4%

Euro Stoxx 50 3682.87 63.57 1.76 17.0 13.5

Denmark OMXCopenhagen 892.51 8.18 0.93 32.2 35.1

Finland OMXHelsinki 8776.80 79.33 0.91 13.1 14.7

France CAC-40 5182.53 98.99 1.95 21.3 14.4

Germany DAX 11771.13 146.00 1.26 20.0 18.4

Italy FTSEMIB 23861.07 534.12 2.29 25.5 11.5

Netherlands AEX 503.52 7.17 1.44 18.6 23.8

Russia RTSI 1012.21 -12.95 -1.26% 28.0 -22.0

Spain IBEX 35 11431.1 190.80 1.70 11.2 6.7

Switzerland SMI 9396.24 123.56 1.33 4.6 7.9

Turkey BIST 100 84292.05 642.63 0.77 -1.7 8.7

U.K. FTSE 100 7033.33 84.34 1.21 7.1 2.8

AMERICAS DJAmericas 520.03 2.92 0.56 2.6 8.0

Brazil Bovespa 53493.06 -136.72 -0.25 7.0 2.5

Argentina Merval 10942.92 104.78 0.97 27.6 44.5

Mexico IPC 44571.17 169.77 0.38 3.3 6.2

European andAmericas index data are as of 12:00 p.m. ET. Sources: SIX Financial Information;WSJMarketDataGroup

Cross rates U.S.-dollar and euro foreign-exchange rates in global tradingUS$ A$ C$ YUAN EURO HK$ RUPEE RUPIAH YEN NZ$ WON RINGGIT PH. PESO S$ SFRANC TW$ BAHT

U.S. 1.297 0.652 1.248 6.202 0.919 7.759 63.937 13203.00 123.869 1.384 1108.88 3.653 44.693 1.353 0.951 30.652 33.770Australia 0.771 0.503 0.962 4.781 0.708 5.982 49.289 10178.19 95.500 1.067 854.84 2.816 34.453 1.043 0.733 23.630 26.033Britain 1.533 1.988 1.913 9.506 1.408 11.892 97.997 20236.24 189.870 2.122 1699.58 5.599 68.486 2.074 1.457 46.980 51.759Canada 0.801 1.039 0.523 4.969 0.736 6.217 51.250 10578.90 99.240 1.109 888.42 2.927 35.807 1.084 0.762 24.558 27.056China 0.1612 0.209 0.105 0.201 0.148 1.251 10.309 2128.69 19.971 0.223 178.78 0.589 7.204 0.218 0.153 4.942 5.445Euro 1.089 1.412 0.710 1.359 6.752 8.447 69.605 14373.45 134.840 1.507 1207.18 3.977 48.644 1.473 1.035 33.369 36.764

HongKong 0.129 0.167 0.084 0.161 0.799 0.118 8.240 1701.60 15.964 0.178 142.91 0.471 5.759 0.174 0.123 3.950 4.352India 0.0156 0.0203 0.0102 0.0195 0.0970 0.0144 0.1214 206.40 1.9373 0.0216 17.34 0.0571 0.6987 0.0212 0.0149 0.4794 0.5278

Indonesia 0.0001 0.0001 0.00005 0.0001 0.0005 0.0001 0.0006 0.0048 0.0094 0.0001 0.08 0.0003 0.0034 0.0001 0.0001 0.0023 0.0026Japan 0.008 0.010 0.005 0.010 0.050 0.007 0.063 0.516 106.59 0.011 8.95 0.029 0.361 0.011 0.0077 0.248 0.273

NewZealand 0.722 0.937 0.471 0.902 4.481 0.664 5.605 46.188 9537.80 89.460 801.06 2.639 32.286 0.977 0.687 22.143 24.395SouthKorea 0.0009 0.0012 0.0006 0.0011 0.0056 0.0008 0.0070 0.0577 11.90 0.1117 0.0012 0.0033 0.0403 0.0012 0.0009 0.0276 0.0305

Malaysia 0.274 0.355 0.179 0.342 1.698 0.252 2.124 17.503 3614.39 33.910 0.379 303.56 12.232 0.370 0.260 8.391 9.245Philippines 0.022 0.029 0.015 0.028 0.139 0.021 0.174 1.431 295.42 2.772 0.031 24.82 0.082 0.030 0.021 0.686 0.756Singapore 0.739 0.959 0.482 0.922 4.584 0.679 5.734 47.253 9757.59 91.536 1.023 819.51 2.700 33.023 0.703 22.653 24.958

Switzerland 1.052 1.364 0.686 1.313 6.523 0.966 8.161 67.246 13886.20 130.270 1.456 1166.26 3.842 47.005 1.423 32.238 35.507Taiwan 0.033 0.042 0.021 0.041 0.202 0.030 0.253 2.086 438.10 4.041 0.045 36.18 0.119 1.458 0.044 0.031 1.101

Thailand 0.030 0.038 0.019 0.037 0.184 0.027 0.230 1.895 390.97 3.668 0.041 32.84 0.108 1.323 0.040 0.028 0.908

Source: Tullett Prebon

Price-to- PERFORMANCEDividend earnings Net Year- Three-yr.,yield* ratio* S&PDowJones Index Last change Daily to-date 52-wk. annualized

0.66%44.12 Shenzhen -c 807.96 5.25 0.65% 85.3% 154.3% 35.5%1.91 22.46 U.S. TSM 22117.14 112.18 0.51 3.2 10.8 17.45.86 15.80 Global SelectDiv 241.29 -0.12 -0.05 0.8 -9.0 7.76.81 14.07 Asia/Pacific SelectDiv 311.99 -2.98 -0.95 0.7 -12.4 2.9

HongKongSelectDiv -c 208.19 -1.22 -0.58 6.8 7.4 5.9U.S. SelectDividend -d 1426.68 4.43 0.31 -0.1 8.9 16.9

1.97 21.63 IslamicMarket 2997.56 12.35 0.41 4.7 5.7 12.92.29 19.19 IslamicMarket 100 3315.64 22.16 0.67 4.2 6.4 13.91.93 13.63 Islamic China/HKTitans 30 2023.11 -7.12 -0.35 16.8 18.2 11.3

SustainabilityKorea -c 1461.07 -26.27 -1.77 6.1 0.2 1.53.64 29.28 Brookfield Infrastructure 3580.41 5.88 0.16 0.1 2.5 12.4

DJCommodity 557.70 -0.62 -0.11 -0.5 -23.2 -7.5

MSCI indexesDeveloped and emerging-market regional and country indexesfromMSCI as of May. 27, 2015

Price-to- LOCAL-CURRENCYDividend earnings PERFORMANCEyield ratio MSCI Index Last Daily YTD 52-wk.

2.40% 18 MSCIACWI 435.93 1.23% 4.5% 5.3%

2.40 19 World (DevelopedMarkets) 1,781.14 1.27 4.2 5.5

1.80 25 WorldSmall Cap 340.29 1.18 6.2 6.0

2.40 19 Kokusai (World ex-Japan) 1,788.64 1.27 3.3 4.4

2.90 18 EAFE 1,906.44 1.57 7.4 -1.6

2.50 14 EmergingMarkets (EM) 1,026.45 0.86 7.3 3.1

2.80 14 ACASIAPACIFICEX-JAPAN 508.09 -0.01 8.7 7.1

2.40 14 ACFar East ex-Japan 595.20 -0.15 12.4 14.3

1.70 17 Japan 1,020.16 0.05 17.7 42.9

2.40 13 China 83.24 1.72 26.0 43.5

1.10 24 ChinaA (ChinaDomestic) 5,245.65 2.23 55.2 144.7

2.50 15 HongKong 15,905.24 0.61 16.6 20.8

1.40 19 India 1,035.06 -0.56 1.8 21.8

1.40 12 Korea 575.97 -0.26 7.4 1.2

3.10 17 Malaysia 616.48 -0.23 -0.0 -7.2

3.30 14 Singapore 1,800.91 -0.08 1.7 4.7

2.70 14 Taiwan 360.44 0.23 5.0 14.9

2.80 17 Thailand 521.86 -0.52 -0.1 4.8

4.40 16 Australia 1,173.52 0.98 6.1 4.3

4.40 20 NewZealand 112.15 0.11 -1.2 -5.8

1.90 21 USBROADMARKET 2,391.84 1.03 2.8 11.9

3.10 19 EUROPE 136.94 -0.78 17.3 18.7

Source:MSCI

*Fundamentals are based on data inU.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&PDowJones Indices

S&PDowJones IndicesPrice-to- PERFORMANCE

Dividend earnings Net Year- Three-yr.,yield* ratio* S&PDowJones Index Last change Daily to-date 52-wk. annualized

2.83%20.98 Global TSM 3466.25 9.03 0.26% 5.1% 4.3% 13.7%2.63 19.05 GlobalDOW 2604.35 10.61 0.41 4.1 1.7 13.92.77 17.20 Global Titans 50 245.45 1.41 0.58 2.9 2.3 11.72.15 17.01 Asia/Pacific TSM 1575.51 -9.83 -0.62 10.5 7.8 11.32.10 17.41 S&PBMIAsiaPacEmgMkts 183.85 -1.45 -0.78 10.2 5.1 10.92.90 23.20 DevEuropeTSM 3340.63 23.84 0.72 7.1 -5.1 14.14.36 16.72 S&PBMIEmgMarkets 266.93 -1.05 -0.39 7.0 1.2 5.32.87 12.71 AsianTitans 50 156.77 -1.31 -0.83 10.2 4.0 10.09.24 12.47 BRIC50 548.38 -2.61 -0.47 11.2 6.1 5.52.04 14.65 S&PBMIChina 577.79 -2.12 -0.37 24.7 34.6 17.32.30 13.00 ChinaOffshore 50 5293.49 -21.98 -0.41 17.5 30.4 15.11.16 25.35 Shanghai -c 675.00 1.75 0.26 57.0 153.3 32.2

GLOBAL MARKETS LINEUP

WSJ.com>>Follow the markets throughout the day with updated stock quotes, news and commentary at atWSJ.com. Also, receive email alerts that summarize the days trading in Europe and Asia. To signup, go to WSJ.com/Email

Commodities Prices of futures contractswith themost open interestEXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: ChicagoMercantile Exchange;NYBOT: NewYork Board of Trade; MDEX:BursaMalaysiaDerivatives Berhad;MATIF:Marche a Terme International de France; LME: LondonMetal Exchange;NYMEX:NewYorkMercantile Exchange;ICE: IntercontinentalExchange *Data as of 5/26/2015.

ONE-DAY CHANGE Year YearCommodity Exchange Last price Net Percentage high low

Corn (cents/bu.) CBOT 351.50 -3.50 -0.99% 424.50 351.00Soybeans (cents/bu.) CBOT 925.25 2.75 0.30% 1,070.75 920.50Wheat (cents/bu.) CBOT 488.25 -5.25 -1.06 609.00 460.75Live cattle (cents/lb.) CME 151.150 0.525 0.35 156.300 137.950Cocoa ($/ton) ICE-US 3,130 -20 -0.63 3,181 2,671Coffee (cents/lb.) ICE-US 124.80 0.75 0.60 189.80 123.55Sugar (cents/lb.) ICE-US 11.86 -0.22 -1.82 16.40 11.83Cotton (cents/lb.) ICE-US 63.31 unch. unch. 68.13 58.87Rapeseed (euro/ton) MATIF 361.50 -1.50 -0.41 366 328Cocoa (pounds/ton) ICE-EU 2125.00 6.00 0.28 2,128 1,857Robusta coffee ($/ton) ICE-EU 1616.00 41.00 2.60 2,099 1,566

Copper ($/lb.) COMEX 2.7630 -0.0150 -0.54 2.9560 2.4245Gold ($/troy oz.) COMEX 1187.70 -0.10 -0.01 1,309.00 1,143.80Silver ($/troy oz.) COMEX 16.685 -0.061 -0.36 18.515 15.310Aluminum ($/ton)* LME 1,752.00 -13.00 -0.74 1,937.50 1,746.50Tin ($/ton)* LME 15,705.00 -120.00 -0.76 19,750.00 14,760.00Copper ($/ton)* LME 6,132.00 -69.00 -1.11 6,445.00 5,369.00Lead ($/ton)* LME 1,944.00 -13.00 -0.66 2,137.00 1,698.00Zinc ($/ton)* LME 2,185.00 8.00 0.37 2,377.00 2,005.00Nickel ($/ton)* LME 12,680 -80 -0.63 15,540 12,320

Crude oil ($/bbl.) NYMEX 58.07 0.04 0.07 63.61 47.46Heating oil ($/gal.) NYMEX 1.8806 -0.0236 -1.24 2.0622 1.5830RBOB gasoline ($/gal.) NYMEX 1.9543 -0.0296 -1.49 2.0842 1.5270Natural gas ($/mmBtu) NYMEX 2.837 -0.012 -0.42 3.1850 2.5400Brent crude ($/bbl.) ICE-EU 63.01 -0.71 -1.11 70.36 51.27Gas oil ($/ton) ICE-EU 576.00 -9.50 -1.62 628.50 474.50

Sources: SIX Financial Information;WSJMarket Data Group

Per InEUROPE Per euro In euros U.S. dollar U.S. dollars

Bulgaria lev 1.956 0.5112 1.7969 0.5565

Croatia kuna 7.580 0.1319 6.962 0.1436

Euro zone euro 1 1 0.9187 1.0886

Czech Rep. koruna-b 27.423 0.0365 25.190 0.0397

Denmark krone 7.4561 0.1341 6.8498 0.1460

Hungary forint 309.20 0.003234 284.02 0.003521

Iceland krona 147.58 0.006776 135.56 0.007377

Norway krone 8.4467 0.1184 7.7598 0.1289

Poland zloty 4.1282 0.2422 3.7921 0.2637

Russia ruble-d 56.420 0.01772 51.825 0.01930

Sweden krona 9.2574 0.1080 8.5042 0.1176

Switzerland franc 1.0352 0.9660 0.9508 1.0517

Turkey lira 2.8798 0.3472 2.6453 0.3780

Ukraine hryvnia 23.3951 0.0427 21.5395 0.0464

U.K. pound 0.7103 1.4081 0.6524 1.5327

MIDDLE EAST/AFRICA

Bahrain dinar 0.4104 2.4369 0.3770 2.6528

Egypt pound-a 8.3078 0.1204 7.6313 0.1310

Israel shekel 4.2251 0.2367 3.8810 0.2577

Kuwait dinar 0.3301 3.0294 0.3032 3.2984

Oman sul rial 0.4190 2.3867 0.3849 2.5980

Qatar rial 3.961 0.2525 3.638 0.2749

Saudi Arabia riyal 4.0824 0.2450 3.7500 0.2667

South Africa rand 13.1348 0.0761 12.0678 0.0829

United Arab dirham 3.9986 0.2501 3.6730 0.2723

Per InPer euro In euros U.S. dollar U.S. dollars


HONG KONG SPRING AUCTIONS30 May 3 June 2015Hong Kong Convention and Exhibition Centre

Viewing28 May 2 June 2015

[email protected]+852 2978 6889

Asian 20th Century and Contemporary ArtChinese Ceramics and Works of ArtChinese Classical, Modern and Contemporary Ink PaintingsFine and Rare WinesHandbags and AccessoriesImportant WatchesJewellery and Jadeite

Christies mobile site


Giants around theworld

DowJonesCountryTitansINDEXPERFORMANCE

Previous session Year-to-date 52-week

China 88 -1.17% 33.1% 126.0%

Italy 2.36 25.4 11.6

France 2.07 21.5 15.7

Netherlands 1.49 20.8 29.9

Germany 1.28 17.5 15.8

HongKong -0.73 15.6 13.6

Sweden 1.48 14.5 20.2

Spain 1.73 13.1 10.7

U.K. 1.36 7.2 2.0

Switzerland 1.29 4.9 6.8

SouthKorea -1.73 2.5 -7.1

Singapore -0.92 1.9 2.8

Turkey 0.89 -2.8% 7.0

Brazil -0.93 -10.9 -28.8

DowJonesRegional SectorTitans

Tiger 50* -1.20 13.0% 14.3

Asian 50 -0.93 10.1 4.1

ConstructnMat 1.04 9.1 -4.6

Auto&Parts 0.60 8.8 3.1

Health Care 1.07 8.7 16.4

Retail 0.57 7.4 17.9

PersH'holdGds 0.42 7.0 7.5

Chemicals 0.51 6.6 0.7

Telecomm -0.10 5.4 1.4

Media 0.59 5.2 12.4

Fincl Svcs 0.43 5.1 16.5

Global 50 0.64 3.0 2.2

Technology 0.63 2.4 10.8

Arab 50 -0.95 -5.0% -15.7

*Asia excluding Japan

Source: SIX Financial Information

Major players &benchmarksAt right, a look at the Asia Titans, the biggest and best knowncompanies in Asia. Below, some of the Dow Jones Titans indexesof biggest and most liquid stocks in individual countries and regions

DowJonesAsiaTitans: Wednesday's best andworst...

PreviousVolume close, in STOCK PERFORMANCE

Company Country Industry inmillions local currency Previous session 52-week YTD

Mizuho Financial Group Japan Banks $306.54 256.00 2.40% 29.9% 26.4%

Fanuc Japan Industrial Machinery 1.18 26,690 2.24 52.2 33.8

Canon Japan Electronic Office Equipment 5.82 4,323 1.60 29.9 12.6

Komatsu Japan Commercial Vehicles Trucks 5.32 2,615 1.59 17.0 -2.6

Nippon Steel SumitomoMetal Japan Iron Steel 85.00 341.10 1.58 19.3 13.4

Samsung Electronics Korea Semiconductors $0.35 1,314,000 -3.52% -8.3 -1.0

POSCO Korea Iron Steel 0.37 241,500 -2.82 -19.2 -12.3

China Life Insurance Hong Kong Life Insurance 39.48 39.10 -2.13 86.6 29.0

Woolworths Australia Food Retailers Wholesalers 3.24 27.94 -2.07 -25.4 -8.9

HyundaiMotor Korea Automobiles 0.81 157,000 -1.88 -31.7 -7.1

...And the rest ofAsia's blue chipsLatest,

Volume in local STOCK PERFORMANCECompany/Country (Industry) inmillions currency Latest 52-week YTD

SumitomoMitsui Financial Group 11.36 5,522 1.41% 34.9% 26.2%Japan (Banks)Hitachi 23.56 845.20 1.19 23.0 -6.2Japan (Electronic Equipment)NissanMotor 12.49 1,281 0.87 41.0 21.1Japan (Automobiles)HondaMotor 4.08 4,211 0.63 19.4 19.4Japan (Automobiles)Seven I Holdings 2.11 5,221 0.54 27.5 19.8Japan (Broadline Retailers)ToyotaMotor 8.12 8,496 0.53 51.4 12.4Japan (Automobiles)China Construction Bank 337.42 7.94 0.38 39.8 25.0Hong Kong (Banks)NomuraHoldings 23.07 824.80 0.38 21.8 19.5Japan (Investment Services)Mitsui Co. 8.22 1,745 0.37 9.9 7.6Japan (Industrial Suppliers)TokioMarine Holdings 2.16 5,057 0.08 61.8 28.6Japan (Property Casualty Insurance)HonHai Precision Industry 30.32 97.40 ... 16.8 10.8Taiwan (Electrical Components Equipment)Woodside Petroleum 3.55 36.65 -0.03 -13.0 -3.6Australia (Exploration Production)SoftBank 4.05 7,404 -0.04 2.9 2.7Japan (Mobile Telecommunications)East Japan Railway 0.80 11,475 -0.13 50.6 25.8Japan (Travel Tourism)Reliance Industries GDR 0.11 27.80 -0.18 -24.2 -1.4United Kingdom (Exploration Production)Shin-Etsu Chemical 1.48 7,559 -0.30 23.8 -3.9Japan (Specialty Chemicals)Bank of China 335.04 5.39 -0.37 48.1 23.3Hong Kong (Banks)PetroChina 83.83 9.60 -0.41 3.4 11.9Hong Kong (Integrated Oil Gas)Industrial Commercial Bank of China 267.43 6.92 -0.43 37.6 22.3Hong Kong (Banks)Mitsubishi UFJ Financial Group 84.94 896.60 -0.47 56.5 34.9Japan (Banks)

Latest,Volume in local STOCK PERFORMANCE

Company/Country (Industry) inmillions currency Latest 52-week YTD

CNOOC 58.12 12.68 -0.47% -8.2% 21.5%Hong Kong (Exploration Production)Mitsubishi 5.77 2,811 -0.50 39.6 26.8Japan (Industrial Suppliers)Australia NewZeald Bkg 6.45 32.52 -0.52 -3.5 1.3Australia (Banks)Tencent Holdings 16.38 157.90 -0.57 39.4 40.4Hong Kong (Internet)Commonwealth BkAustralia 2.22 84.13 -0.60 2.7 -1.8Australia (Banks)NTTDoCoMo 3.49 2,234 -0.71 32.1 26.4Japan (Mobile Telecommunications)ChinaMobile 16.73 105.50 -0.85 39.5 16.3Hong Kong (Mobile Telecommunications)Japan Tobacco 3.48 4,652 -0.91 36.4 39.8Japan (Tobacco)Takeda Pharmaceutical 3.17 5,953 -0.96 28.8 19.1Japan (Pharmaceuticals)Taiwan SemiconductorManufacturing 24.26 145.00 -1.02 16.9 2.8Taiwan (Semiconductors)SunHungKai Properties 5.74 135.00 -1.03 29.8 14.1Hong Kong (Real Estate Holding Development)KDDI 5.79 2,843 -1.08 45.0 11.7Japan (Mobile Telecommunications)National Australia Bank 5.91 33.56 -1.29 0.1 -0.1Australia (Banks)Westpac Banking 8.88 33.20 -1.34 -3.8 0.1Australia (Banks)Wesfarmers 2.47 43.40 -1.54 -1.4 4.0Australia (Home Improvement Retailers)AIAGroup 24.48 52.30 -1.60 36.6 21.6Hong Kong (Life Insurance)BHPBilliton 7.67 29.34 -1.61 -17.4 6.9Australia (GeneralMining)Nippon Telegraph Telephone 2.26 8,557 -1.65 42.1 37.8Japan (Fixed Line Telecommunications)Rio Tinto 1.91 57.31 -1.68 -6.7 -1.2Australia (GeneralMining)Itochu 11.63 1,698 -1.85 40.4 31.4Japan (Industrial Suppliers)

Credit derivativesSpreads on credit derivatives are oneway themarket ratescreditworthiness. Regions that are treading in roughwaterscan see spreads swing toward themaximumand vice versa.Indexes beloware for five-year swaps.

Markit iTraxx Indexes SPREADRANGE, in pct. pts.Mid-spread, sincemost recent roll

Index: series/version in pct. pts. Mid-price Coupon Maximum Minimum Average

Europe: 23/1 0.64 101.82% 0.01% 0.64 0.53 0.59

Eur. HighVolatility: 20/1 0.52 101.73 0.01 0.67 0.48 0.56

EuropeCrossover: 23/1 2.85 109.73 0.05 2.86 2.43 2.68

Asia ex-Japan IG: 23/1 1.06 99.73 0.01 1.15 1.04 1.08

Japan: 23/1 0.52 102.41 0.01 0.60 0.48 0.53

Note: Data as ofMay26

SpreadsSpreads onve-year swapsfor corporatedebt; based onMarkit iTraxxindexes.

In percentage points

2.00

1.50

1.00

0.50

0

tAsia ex-Japan IG

t

Australia

2014 2015Dec. Jan. Feb. Mar. April May

Index roll

Source: Markit Group

NOTICE TO READERSAll statistics published inThe Wall Street JournalAsia from markets outsidethe Asian-Pacific regionreflect preliminary data.

Sources: SIX Financial Information;WSJMarket Data Group

Trackingcreditmarkets &dealmakers

Credit-default swaps: Asian companiesAt itsmostbasic, thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-andhowmuch a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives asensewhichway themarketwasmoving yesterday.

Showing the biggest improvement...CHANGE, in basis points

Yesterday Yesterday Five-day 28-day

TOSHIBA 100 19 11 56

Sony 58 4 3 4

Takashimaya 33 1 1 1

KintetsuGroupHldgs 73 1 2 1

Panasonic 37 1 1 4

Ricoh 38 1 ... 3

MitsuiOSKLines 96 1 2 5

CNOOC 91 1 2 5

SANYOElec 37 ... ... 4

HondaMtr 21 ... 1 1

And themost deteriorationCHANGE, in basis points

Yesterday Yesterday Five-day 28-day

SMBCConsumer Fin 25 2 2 ...

MTR 42 2 1 3

SHARP 766 14 159 337

PCCWHKTTel 129 2 ... 7

OBAYASHI 37 ... ... 3

Mitsubishi Estate 24 ... ... 1

Ptt 90 1 1 3

MISC 112 1 7 17

TAISEI 39 ... 1 3

AsahiGlass 23 ... ... 2

Source:Markit Group

BLUE CHIPS & BONDS

WSJ.com>>Follow the markets throughout the day, with updatedstock quotes, news and commentary at WSJ.com/Email.

Also, receive emails that summarize the days trading inEurope and Asia. To sign up, go to WSJ.com.

BehindAsia's deals: Bank revenue rankings, AsiaBehind every IPO, bond offering,merger deal or syndicated loan is one ormore investment banks. Here areinvestment banks ranked by year-to-date revenues from recent deals.

PERCENTAGEOFTOTALREVENUERevenue, Equity Debt Mergers&inmillions share capitalmarkets capitalmarkets acquisitions Loans

Nomura $212 4.8% 63% 21% 16% ...

Mizuho 189 4.3 30 34 9 27%

MorganStanley 183 4.2 51 35 14 ...

SumitomoMitsui Financial Group 162 3.7 45 21 20 13

JPMorgan 151 3.4 49 25 22 4

UBS 149 3.4 73 19 8 ...

GoldmanSachs 142 3.2 37 15 47 1

CITICSecurities 133 3.0 74 21 5 ...

Citi 123 2.8 24 40 34 3

Source: Dealogic


WORLD NEWS: U.S.

Strong stock prices point to strength even if GDP turns negative; here, the NYSE.

AGEN

CEFR

ANCE

-PRE

SSE/GET

TYIM

AGES

The IRS said it will provide credit-monitoring services for the roughly 100,000 taxpayers whose accounts were accessed.

Breach at IRS ExposesPersonal Taxpayer Data

The Internal Revenue Servicesaid Tuesday that identity thievesused one of its online services toobtain prior-year tax-return infor-mation for about 100,000 U.S.households, a major breach of theagency charged with safeguardingtaxpayers privacy.

The agency said cybercrooks usedstolen Social Security numbers andother data acquired from elsewhere togain unauthorized access to the tax-agency accounts, beginning in Febru-ary and continuing through mid-May.

About 104,000 attempts success-fully accessed earlier returns, IRSCommissioner John Koskinen said.An additional 100,000 attemptswere unsuccessful, the agency said.

The incident, which echoes simi-lar problems earlier this year insome states, highlights the growingrisks from cybersecurity breaches toboth individuals and the govern-ment. It particularly reflects crooksability to carefully aggregate vastamounts of personal data from mul-tiple sources and plan and executehighly sophisticated schemes.

The agency believes fewer than15,000 refunds were paid as a resultof the frauds, and the total paid outwas less than $50 million, Mr. Kosk-inen said. But in a statement, theIRS said it is possible that some ofthe stolen tax transcripts were be-ing stockpiled, with an eye towardusing them for identity theft fornext years tax season.

The IRS said that to access the in-formation, crooks had to clear a multi-step authentication process that re-quired prior personal knowledgeabout the taxpayer, including SocialSecurity information, date of birth,tax-filing status and street address be-fore accessing IRS systems. The pro-cess also involved answering personalidentity-verification questions, such asWhat was your high school mascot?

Mr. Koskinen, when asked howimpostors obtained answers tothese so-called out-of-wallet ques-tions, suggested social media mighthave played a role.

This is not a hack or databreach. These are impostors pre-tending to be someone who hasenough information to get more,

said Mr. Koskinen, who said thievesmight be using sophisticated pro-grams to aggregate and mine data.

Thieves hope access to full taxreturns could give them key infor-mation for future fraudulent effortsthat wouldnt be detected by IRS fil-ters, he added.

Five years of all kinds of databreaches are coming home to roost,said Neal OFarrell, founder of theIdentity Theft Council in WalnutCreek, Calif., who has been involved incybersecurity for more than 30 years.Thieves have so much data about somany consumers that they are nowable to join the dots and fill in theblanks. They have big, undetectablemalware that breaks in, finds the bestinformation, analyzes and bypassessecurity.

The information was obtainedfrom an IRS application known asGet Transcript that allows taxpay-ers to access prior-year returns. Thethieves then used the data to fash-ion a fake return for 2014 and re-quested the IRS send a tax refund toa hard-to-trace debit card.

Vicki Niesen, of Houston, said sheand her husband learned last weekthat they had been victims of fraud-sters using Get Transcript when anIRS check for $26,424 arrived attheir homeeven though the couplepaid tax due on April 15. When wetried to get a transcript, my husbandwas blocked, but I could see thefraudulent return, Ms. Niesen said.At least the IRS refused to do directdeposit and sent us the check in-stead. She said she returned thecheck, as instructed by the IRS.

Mr. Koskinen stressed that thepenetration was the result of an orga-nized crime, not one-off hacking.The agency said the matter is underreview by the IRS inspector general aswell as its Criminal Investigation unit.In addition, the Get Transcript applica-tion has been shut down temporarily.

The IRS said it would providefree credit-monitoring services forthe approximately 100,000 taxpayerswhose accounts were accessed, andit said it would notify the 100,000 orso other taxpayers about the unsuc-cessful attempts to access their data.

The agencys top leaders sought toemphasize that the breach didnt in-volve the IRSs core accounts, such asits filing system, which remain secure.

They said the incident wasnt techni-cally a data breach but instead repre-sented a successful exploitation of anIRS application.

But some lawmakers were irate,and the long-term impact of the inci-dent on the tax agencyalready un-der fire from Republicans for allegedtargeting of tea-party and other con-servative groupscould be signifi-cant. IRS officials have denied any po-litical motivations behind scrutiny ofgroups seeking tax-exempt status.

Sen. Orrin Hatch (R., Utah),chairman of the Senate FinanceCommittee, termed the breach dev-astating in a statement.

That the IRShome to highlysensitive information on every sin-gle American and every single com-pany doing business here at homewas vulnerable to this attack issimply unacceptable, Mr. Hatchsaid. Whats more, this agency hasbeen repeatedly warned by top gov-ernment watchdogs that its data se-curity systems are inadequateagainst the growing threat of inter-national hackers and data thieves.

Rep. Paul Ryan (R., Wis.), theHouse Ways and Means Committeechairman, added that the incidentwas deeply concerning.

The IRS has said in recent monthsthat funding cuts have hampered itsability to improve fraud detection.Congress has cut the agencys budgetto less than $11 billion for fiscal 2015from more than $12 billion five yearsearlier. The Obama administration isseeking almost $13 billion for 2016.

The troubles with the Get Tran-script application echo problemsthat surfaced this year with somestate tax systems. In February, Utahtax officials found that a few fraudu-lent 2014 state returns closely re-sembled 2013 returns. The similari-ties made the fraud harder to detectand suggested that scammers hadaccess to the taxpayers 2013 returns.

The newly disclosed IRS incidentshows that refund fraud is a chal-lenge shared by the federal govern-ment, state governments and tax-preparation professionals, saidVerenda Smith, a spokeswoman forthe Federation of Tax Administrators.The good news here is that we al-ready recognized that our individualefforts to combat refund fraud cantbe as good as our combined efforts.

BY JOHN D.MCKINNONAND LAURA SAUNDERS

population ages, the labor forcemay shrink, so a loss of outputthat leads to fewer jobs is lesslikely to translate into a higherunemployment

28_05_2015

Documents

Transcript of 28_05_2015