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Macro :

- Germany's Equity Indices Celebrate Best Quarter in Four Years

- China to Continue With Tariff Suspension on U.S. Autos, Parts

- Huge Stock-Bond Volatility Disconnect May Not Mean VIX Explosion

Keep an eye on :

- ACS SM : Spanish Police Says ACS Bribed Catalan Party Convergencia: Mundo

- AIR FP : Airbus May Have Paid Bribes in 2003-2008 Egyptair Deals: Spiegel

- POST AV : Austrian Post May Buy Grawe’s Bruell Kallmus Bank: Standard

- AZN LN : AstraZeneca Says 44.4 Million Shares Placed at GBP60.50/Share

- BA US : EU Agency Said to Have Skipped 737 Max Meeting in Snub to Boeing

- CSGN SW :Credit Suisse Hires Whitlock for Algorithmic-Trading Sales Role

- EDF FP : *EDF-ODDO BHF HAVE ENTERED NEW LIQUIDITY CONTRACT ON MARCH 28

- FCA IM : PSA Group, Fiat Chrysler Are Said to Explore Europe Venture

- FME GY : Fresenius Medical Sees No Effect on 2019, 2020 View From FCPA

- HLAG GY : Hapag-Lloyd Found Hole in Ship Hull, Too Early To Assess Damage

- IAG LN : British Airways Unions Reject Pay Proposal, Prepare Next Move

- MRK GY : FDA Approves Mavenclad to Treat Relapsing Multiple Sclerosis

- MCRO LN : Micro Focus Shareholders Reject Pay Report at AGM

- NOVN SW : Teva Drops Copaxone Patent Cases Against Novartis, Momenta

- OSR Gy : Osram CEO Reports ‘Good Progress’ in Talks With Bain, Carlyle

- PETR4 BZ : Brazil’s Petrobras to Bid for Israeli Gas Licenses: Calcalist

- UG FP : PSA Group, Fiat Chrysler Are Said to Explore Europe Venture

- PUB FP : Alliance Data Unit Said to Draw Publicis, Goldman and Advent Duo (ADS US +3% in After Mkt)

- SPM IM :Saipem Said in Talks to Exit Drilling Business With Two Sales

- SNR LN : Albany International Names Stephen M. Nolan as CFO & Treasurer

- TUI LN : Hapag-Lloyd Found Hole in Ship Hull, Too Early To Assess Damage

- VWS DC : Vestas Receives 749 MW Order for Turbines From Brazil, U.S.

- VIV FP : Vivendi to Remain Vigilant That TI Board Acts for All Investors

* NYT (Saturday): Another deadline for the Brexit is looming, with no clear way forward, raising fears that the UK is moving closer to an economically damaging, potentially disastrous departure from the European Union without a deal; - BA: Black box data from a doomed Ethiopian Airlines flight suggests the crash was caused by a faulty sensor that erroneously activated an automated system on the Boeing 737 Max, similar to what led to the crash of a Lion Air plane last year; The Red Cross received permission from Venezuela’s government and opposition to launch one of the organization’s biggest global relief campaigns, signaling a possible easing in the dire humanitarian emergency gripping the country; Attorney general William Barr said special counsel Robert Mueller’s report on the investigation into Russia’s election interference will be made public by mid-April, and that the White House would not see the document before he sent it to Congress; +/- WFC: As the bank hunts for a new chief executive, it faces a daunting list of problems: litigation, with hundreds of millions of dollars on the line, more than a dozen federal regulatory restrictions, and a largely demoralized work force chafing under the bank’s leadership; (Sunday): The race for cash in the 2020 Democratic presidential primary is reaching a frenetic peak as candidates hold fund-raisers on both coasts, but amid talk about attracting low-dollar donors to boost grass-roots appeal, some are also appealing to large donors—and trying to keep it under the radar; +/- AMZN: Gavin de Becker, security consultant to chief executive Jeff Bezos, accused the Saudi government of gaining unauthorized access to Bezos’ phone in an attempt to harm him, possibly because the Washington Post—which Bezos owns—has been critical of crown prince Mohammed bin Salman; In a major legal blow to Donald Trump’s push to expand offshore oil and gas development, a federal judge ruled that an executive order by Trump that lifted an Obama-era ban on oil and gas drilling in the Arctic Ocean and parts of the North Atlantic coast was unlawful; California’s clean-energy goals are colliding with Texas billionaire Andrew Beal, who is arguing before federal regulators that the state’s policies discriminate against generators powered by fossil fuels like natural gas and coal while it promotes sources like solar and wind power.

* WSJ (Weekend): U.S. stocks saw their biggest quarterly gains in nearly a decade, lifted by bets that central banks would hold interest rates at low levels as global growth slows; In what amounts to its biggest transformation since the 2001 terror attacks, the FBI will retrain and refocus special agents to combat cyber criminals, whose threats to lives, property and critical infrastructure has outstripped U.S. efforts to thwart them; Donald Trump wants the Federal Reserve to cut interest rates to guard against a slowdown in global economic growth, a top White House official said, revealing concern about the durability of the U.S. expansion; American consumers only slightly increased their spending in January after a sharp pullback in December, adding to recent evidence the economy may have slowed after strong growth in 2018; U.S. and Chinese trade negotiators haggled over how to get Beijing to ease China’s tough cybersecurity law as both sides push to resolve deep-seated disputes that are holding up a final trade deal; Story says LYFT’s $24B debut marks the arrival of Japanese billionaire Hiroshi Mikitani—who leads Rakuten—to the list of Silicon Valley’s venture-capital heavyweights, with a 13 percent stake in the ride-hailing company; The middle-class wage squeeze is affecting an unlikely group: Hollywood movie and television writers, who are threatening to fire their agents en masse over what their union calls unfair business practices; The Federal Communications Commission has imposed hefty financial penalties against illegal robo-callers and demanded that bad actors repay millions to their victims, but years later, little money has been collected; Delivery drones face a number of problems in cities, leaving developers to focus on the suburbs, where other forms of delivery are unprofitable—but success depends on how many deliveries they can make in a small radius without crashing; H.O.T.S.: SCI and CSV, the two leading U.S. providers of funeral and cemetery services, made a total return of nearly 1,300% during the past decade—but competition, price transparency and even market performance threaten those gains; The Renault–Nissan alliance has survived 20 years without a clear-cut idea of what goals it hopes to achieve; The fact WFC chief Tim Sloan is stepping down doesn’t change the fact the bank has a long way to go to solve its problems.

* FT (Weekend): Front page story reports that British prime minister Theresa May warned of “grave implications” for the UK as her Brexit plan suffered its third defeat in the House of Commons, paving the way for “cliff edge” exit on April 12; In Venezuela, president Nicolas Maduro is tightening his grip on the media, with government forces arresting and intimidating journalists, some of whom have been physically and verbally attacked, as well as threatened with legal action; Turkey is moving ahead with discussions about the delivery of Russia’s S-400 defense system, despite tensions with the U.S. over the purchase; “Donald Trump is celebrating the end of the Mueller investigation, which did not recommend charges against him, but the bigger factor in his re-election bid could be the signal from falling bond yields”; Lex Column: The ability of LYFT, a lossmaking taxi company, to list at $72 a share and a $24B valuation only makes sense if ride-sharing is seen as completely new sort of business; With its stake in a promising new cancer drug from Daiichi Sankyo, adding to several other likely cancer blockbusters, expect AZN to outpace most peers; In the fashion industry, taking control of pre-owned platforms can help brands protect their sustainability reputation; Comment: Despite the hopes among Remainers that a long Brexit extension will morph into a second referendum, all the signs are still that that UK will be leaving the EU, says Merryn Sommerset Webb

* NY POST (Saturday): +/- WFC: Story says federal regulators had lost faith in chief Tim Sloan, whose replacement must please the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency, all of which had expressed “no confidence” in Sloan; (Sunday): Restaurants in New York City are eliminating jobs, reducing employee hours and raising prices in response to the higher costs of the $15/hour minimum wage; Experts say New York City will lose a growing number of multimillionaires this year as Wall Street bankers and other high earners head to Florida and other state to escape New York’s high taxes. Related ( RAGSX )

Testing the water: asbestos in old pipes raises a call for action

Residents of one English village are pushing for an overhaul of the mains network and more research into the health implications

Adrian Clarke first became aware there was asbestos in the drinking water when he saw workers wearing white masks repairing a burst pipe in Cranleigh, a large village 40 miles south of London. He soon found out that almost a third of Cranleigh’s water pipes were made of asbestos cement.

As a former factory inspector for the UK government’s Building Research Establishment in the 1970s and 1980s, Mr Clarke had seen asbestos being used to make water pipes at three manufacturing plants. He was also familiar with the dangers of inhaling asbestos when used to build schools and homes. “I used to hold the fibres, and walk through the clouds of white dust, until we became aware of the dangers,” he says. 

Two people in Mr Clarke’s village had recently died of asbestos-related diseases, though they did not work in the industry and believed they had no direct contact with the silicate mineral, which is found in everything from car brake pads to paper and roofing materials. Mr Clarke, a retired specialist in glass for commercial buildings, was curious about whether a connection could be drawn between the asbestos cement pipes and their cancers. “If it’s dangerous when it’s inhaled, isn’t it dangerous when we drink it?” he asks.

Cranleigh, with its 19th-century drinking fountain and traditional English village green, turned out to be far from the only place to be riddled with asbestos cement pipes. About one-fifth of people in England and Wales drink water that has flowed through asbestos cement pipes, many of which were installed in the 1950s and 1960s. 

But although the official government advice is that there is no risk to the supply of water, Mr Clarke’s research into the issue alarmed him further.

The 37,000km of asbestos cement piping laid in Britain is now coming to the end of its 50-70 year lifespan. It is an accepted fact that the release of asbestos fibres into the water supply increases as pipes age and deteriorate — and spikes when they burst. But not only are there no UK guidelines as to when asbestos fibre levels in the water may be considered a health threat, their levels in drinking water are not routinely tested.

The government has not investigated the issue for decades. A 1988 report by the the environment department concluded there was no need for immediate action to remove asbestos cement pipes, even though it found clear evidence asbestos fibres were entering the water supply though degraded pipes. The World Health Organization has adopted a similar stance.

But Mr Clarke is not alone in his concerns. Campaigners in the US, Italy, Australia and New Zealand have also been asking questions about the link between asbestos water pipes and disease — misgivings that have been given weight by several scientific analyses.

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In Britain, the questions about asbestos pipes come amid a broader crisis of confidence in the privatised water industry following a series of environmental and financial scandals.

Faced with at least 18 bursts in the six months to June last year, Cranleigh’s residents have joined Mr Clarke in pressing Thames Water, their regional supplier, to replace the asbestos cement pipes. Their fight has been taken up by county and parish councillors, who are also concerned that increasing housebuilding in the village will pile pressure on the network, bursting more pipes and releasing more asbestos into the water. 

“Is there another asbestos storm brewing here, this time around the ingestion of fibres in water?” asks Mr Clarke. “I hope not, but if you have a risk to public health, you should err on the side of caution.”

One reason that asbestos in water pipes has never been considered a public health concern is the WHO’s drinking water guidelines. It stated in 1996 and again in 2003 that there was “little convincing evidence” that ingesting loose asbestos fibres from water passing through asbestos pipes was harmful. 

Ivan Ivanov, team leader of global occupational health at the WHO, tells the FT that the organisation had re-examined its position in 2014 and “considered the reassessment of asbestos in drinking water (through ingestion) to be a low priority. The conclusions have not changed.”

While the WHO is adamant that there is no cause for concern, some scientists are not so sure, pointing to the power of the asbestos industry’s lobbying campaign and questioning research carried out on hamsters and rats. 

County and parish councillors are concerned that increasing house building in the village of Cranleigh will pile pressure on the water network, bursting more pipes and releasing more asbestos into the water © Charlie Bibby/FT

“The WHO study was based on limited research and was incorrect,” says Arthur Frank, professor of public health and professor of medicine at Drexel University in Philadelphia, who has helped asbestos victims in court cases. “There is plenty of evidence that water rushing through asbestos cement water pipes leaches out asbestos fibres and there is no question in my mind that the ingestion of asbestos causes gastrointestinal tract and kidney cancers.”

Critics of the WHO-inspired status quo point out that almost all past research into the issue has focused on chrysotile, or “white asbestos”, whereas the cement pipes in Britain were often made of crocidolite, or “blue asbestos,” much of it mined in South Africa. The blue variety has pointed needlelike fibres that enter into the tissue of the oesophagus, stomach and colon, and is thought by some to be more dangerous than other fibre types. 

The effect of inhaling blue asbestos is well documented in Britain. Crocidolite was banned in 1985 and chrysotile in 1999 as part of a complete ban on asbestos’ use in the construction industry. By then Britain had released 6m tonnes of asbestos into the environment, meaning that many of us work or live in buildings that still contain traces of the fibre. It has since become an accepted fact that the inhalation of asbestos fibres can cause terminal diseases such as lung cancer and mesothelioma, though it can take more than 20 years to develop. 

Questions have also been raised over the independence of academics credited in the WHO research, with one, Eric Chatfield, subsequently carving out a career as an expert witness for asbestos companies fighting claims from people with asbestos-related diseases. Another, Peter Toft, became a Canadian government representative opposing US plans to ban asbestos.

© Charlie Bibby/FT

The WHO acknowledges that the research by Mr Toft and Mr Chatfield was used in the 2003 study but says the “overall weight of evidence on the occurrence and health effects of asbestos were independently assessed by our expert group”. It adds, however, that asbestos in drinking water is “on our watchlist” and that it does not “recommend the installation of asbestos-containing pipes.”

Several studies elsewhere have disputed the WHO’s conclusions. A 2005 study of Norwegian lighthouse keepers who drank water from asbestos cisterns found that the “risk of stomach cancer was elevated in the whole cohort”. 

In 2012, the International Agency for Research on Cancer, a specialist arm of the WHO which has its own governance and budget, published a review of all the existing evidence up to 2009, listing a wide range of cancers that could be caused by the ingestion of asbestos fibres through drinking water, though its findings were also inconclusive.

“Asbestos can enter potable water supplies . . . from the deterioration of asbestos-containing cement pipes containing drinking water,” it said. Although levels are generally low, “in some areas the concentration in water may be extremely high”. It added: “Small children may be particularly vulnerable because per kg of body weight they drink more water than adults.”

Agostino Di Ciaula, president of the scientific committee for the International Society of Doctors for the Environment, a pressure group, says that despite the inconclusive IARC paper in 2012, “the available evidences certainly demonstrate that the risk of gastrointestinal cancer deriving from chronic ingestion of asbestos is not negligible, and that ingested asbestos might also act as a co-carcinogen agent”.

In July last year a group of women with ovarian cancer in the US won a case that argued they had absorbed asbestos fibres into their ovarian tissue by using Johnson & Johnson talcum powder, proving that it could migrate from the genital areas to their ovaries. The pharmaceutical company has been told to pay out $4.7bn, though it is planning to appeal against the decision. 

The cement pipes in Britain were often made of crocidolite, or 'blue asbestos', which has pointed needlelike fibres that enter into the tissues of the oesophagus, stomach and colon

But, whatever the outcome, the landmark ruling provides a serious challenge to the orthodoxy that asbestos is only dangerous when it is inhaled. 

It is not just Cranleigh in the UK that is struggling to trust the advice that asbestos in drinking water is not toxic. Last December the inhabitants of Temuka, a small farming town on the South Island of New Zealand, started to complain that they had low water pressure and their water filters had become clogged with a grey pollen-like substance. 

“It was very odd because we were getting a very high concentration of asbestos fibres, so high it was clogging the filters on the taps and hoses of washing machines,” says Grant Hall, water manager for Temuka district authority.

The grey muck was asbestos, released into the drinking water by a 9km cement asbestos mains pipe that stretched to the local reservoir and dated back to 1964. Cement asbestos pipes were used in the region until 1990. 

Health officials reassured Temuka that “the presence of asbestos in water doesn’t make it unsafe to drink or to use for washing and showering”. But the town’s residents were not convinced. The asbestos cement mains have now been replaced with polyethylene pipes. Mr Hall says the action was needed to reassure people despite government advice that there was no significant risk. 

In the pipeline

© Alamy

20%

People in England and Wales who drink water that has flowed through asbestos cement pipes

A$8bn

Cost of an asbestos cement pipe replacement programme under way in Australia

37,000km

Asbestos cement piping laid in Britain, much of it now coming to the end of its 50-70 year lifespan

“It was a concern because there was such a high concentration of asbestos fibres in the water,” says Mr Hall. There were also concerns that if you watered the garden it would “dry on the leaves on the lettuce and then you’d inhale it”. 

In New Zealand the cost of replacing asbestos cement water pipes has been estimated at NZ$2.3bn ($1.6bn), while in Australia an A$8bn replacement programme is already under way.

There are no such plans in England and Wales, where responsibility for the infrastructure, including drinking water safety, has been left in the hands of the 10 privately owned regional water monopolies. The actual testing of water is carried out by the companies and monitored by the Drinking Water Inspectorate, part of the Department for Environment, Food and Rural Affairs. 

A report in 2002 for the inspectorate by Professor John Fawell, an independent consultant who sits on a WHO panel to establish drinking water guidelines, acknowledged that “most waters, whether or not distributed through asbestos cement pipes, contain asbestos fibres . . . because asbestos is widely found in the environment as a consequence of natural dissolution of asbestos-containing minerals”.

Despite this the DWI says it does not monitor asbestos in water and referred to the WHO’s assessment stating that there was no significant risk.

Ofwat, the UK water regulator, also says it has no information on the extent of asbestos cement drinking water pipes and that the issue is outside of its remit. 

Yet if responsibility for replacing asbestos cement pipes lies with the water companies in England and Wales, their record has been heavily criticised.

The inhabitants of Temuka in New Zealand noticed a grey muck in their water supply, which turned out to be was asbestos, released into the drinking water by a 9km cement asbestos mains pipe © John Bisset/Stuff

EU directives to improve water quality drove a surge in infrastructure investment. Overall, capital expenditure — which includes fixing leaks and improving reservoirs — averaged £5.5bn a year in the first two decades after privatisation but declined 10 per cent in the 10 years to £4.56bn in March 2018, according to research by Greenwich university based on Ofwat’s annual reports.

The lack of investment has led to hundreds of burst pipes across the country, flooding businesses and homes, and closing schools and roads. In February last year burst water mains caused by a thaw after freezing temperatures left tens of thousands of people without water supplies and some Londoners queueing for bottled water. 

Faced with rising public and political criticism, water companies have pledged to raise their investment. But having taken on £51bn in borrowings since being privatised with no debt in 1989, they are not in a position to start comprehensively replacing asbestos cement drinking pipes even if they were to accept the concerns. 

There is also a question of legal liability. The pipes were installed during public ownership, raising difficult questions over liability for the work. 

Thames Water insists there is “absolutely no reason for concern, for any of our customers, in Cranleigh or in any part of our region”. Citing support from the DWI and the WHO, it says: “We are tested vigorously on the quality of our water, which ranks among the best in the country and the world.”

But even Prof Fowell says “the industry needs to have a strategy for replacing the pipes.” At the very least, he says, “they need to know where they are and how many are left and what condition they are in.”

Mr Clarke, the unlikely Cranleigh campaigner, agrees. “People are still dying of asbestos-related diseases,” he says. “Everyone assumes they inhaled asbestos at some point in their lives. But what if people are dying from drinking asbestos fibres in water?” 

Barrons weekend summary:

Cover story on VZ and AT&T; positive feature on DWDP