BUSINESS | 03BUSINESS | 02

Aamal reports

QR374m in revenue

for the first

quarter this year

WEDNESDAY 29 APRIL 2020

BUSINESS

GWC posts QR50.3m in net profitsTHE PENINSULA — DOHA

GWC, the leading logistics provider in the State of Qatar, posted net profits of QR50.3m and a gross revenues of QR296.3m for the first quarter of 2020. The company’s earnings per share stood at QR0.09, and total assets reached QR3.7bn for the same period.

“During this quarter, the company has furnished its expertise and capabilities in various logistics and supply chain fields such as ware-house management, distribu-tion, transportation, freight, customs clearance, and supply chain consulting to-wards the best interests of the nation and its inhabitants; supporting it customers, human capital and the gov-ernment of the State of Qatar in its efforts to mitigate the impact of the Coronavirus outbreak (COVID-19),” stated GWC Chairman Sheikh Abdullah bin Fahad bin Jassim bin Jabor Al Thani.

GWC’s direct contribution is by maintaining the supply chain during this time of crisis. The company has done so while ensuring the health and safety of the employees, cli-ents, and other stakeholders by maintain-ing the best inter-national health standards and the specific directives to combat this disease, the Chairman said.

“GWC is now and always ready to deliver the nation’s every logistics need. By offer-ing our every support to the business community, and keeping the flow of goods moving, we ensure the economy at large remains functional, and that the core needs of Qatar and its people are continu-ally met,” stated GWC Group CEO Ranjeev Menon.

GWC has also recently announced a COVID-19

business support bundle aimed at SMEs, offering free customs clearance and transportation services for SMEs im-porting critical medical supplies used for the fight against COVID-19.

This followed a previous announcement of a 3-month rent waiver for retail outlets and 6-month rental discounts for SME tenants at the GWC Bu Sulba Warehousing Park.

GWC Chairman Sheikh Abdullah bin Fahad bin Jassim bin Jabor Al Thani.

GWC GCEO Ranjeev Menon

CI affirms QIIB rating at ‘A’, outlook stable

THE PENINSULA — DOHA

Capital Intelligence Ratings (CI) has affirmed its ratings of QIIB at ‘A’ with a stable outlook, reflecting the strength of the bank’s financial position.

The ratings agency noted that it has affirmed the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of QIIB at ‘A’ and ‘A1’, respectively, based on a set of criteria that indicate that the various bank data and numbers are in a strong and stable position.

The agency also stressed that QIIB has a strong deposit base, its assets are charac-terised by quality, and enjoys strong profitability, good

capitalisations and continued operating efficiency gains, as the credit concentrations in its real estate sector are declining. �P2

QIIB Chief Executive Officer, Dr. Abdulbasit Ahmad Al Shaibei

GWC is now and always ready to deliver the nation’s every logistics need. By offering our every support to the busi-ness community, and keeping the flow of goods moving, we ensure the economy at large remains functional.

QIC’s gross

written premiums

increase by

5% to QR3.7bn

02 WEDNESDAY 29 APRIL 2020BUSINESS

CI affirms QIIB rating at ‘A’, outlook stableFROM BUSINESS PAGE 1

Capital Intelligence also noted the bank has good liquidity, and enjoys strength in the retail sector, and most of the bank’s deposits are from the local market, even as non-domestic deposits make up a minimal share.

The ratings agency men-tioned that “the above rating to reflect the high likelihood of official extraordinary support in case of need”, They added, “The Government’s financial capacity to support the Bank is also considered to be strong given Qatar’s sovereign rating

(‘AA-’/Stable)”.On the occasion, QIIB Chief

Executive Officer, Dr. Abdul-basit Ahmad Al Shaibei said, “This good rating is a natural reflection of the strength and high solvency of the Qatari economy, its ability to meet dif-ferent conditions, achieve stable growth, and provide opportu-nities for various economic sectors, foremost of which is the banking sector”.

He said, “QIIB owes its strong financial position to the rich opportunities provided by the Qatari economy, which wit-nesses dynamic activities in

various projects and all sectors with great competitiveness and the ability to find solutions for numerous factors and emerging conditions.

“At QIIB, we are committed to our strategy that focuses on the local market, and contribute to the development and financing of various projects.” Dr. Al Shaibei stressed, “The factors that Capital Intelligence relied on for QIIB rating include a recognition of the success of our strategic plans and interim plans, as we carefully studied the market factors and eval-uated existing and potential

risks. And we were able to maintain our high ratings, meanwhile safeguard the interest of our clients and shareholders alike.” The CEO noted that during the past periods, QIIB implemented an ambitious plan that focused on enhancing operational effi-ciency; restructure the locations of the bank’s branches, in addition to our stress on devel-opment of alternate channels a n d t e c h n o l o g i c a l infrastructure.

In addition, this has been greatly reflected on the bank’s services, generated demand for

such services, enhanced our c u s t o m e r b a s e a n d strengthened our position in the market as a reliable provider of banking services, whether for individuals or companies.

Dr. Al Shaibei expressed his optimism about QIIB’s ability to maintain its strong financial position, implement its approved plans and pro-grammes, mitigate various risks, and deal with various market factors and develop-ments, based on the capabilities provided by the Qatari economy and the continued implemen-tation of various projects.

QIB wins three Global Banking & Finance Review awardsTHE PENINSULA — DOHA

Qatar Islamic Bank (QIB) has won the ‘Best Digital Bank in Mena Region’, ‘Best Digital Bank in Qatar’, and ‘Most Innovative Retail Banking App in Mena Region’ for its ambitious digital transformation plan at the Global Banking & Finance Review 2020 Awards.

QIB’s Group CEO Bassel Gamal, said: “Winning these awards by Global Banking & Finance Review, substantiates the investments we’ve made towards our digital offering and recognises the successful results of our digital transfor-mation strategy. Our recent investments in upgrading our digital channels and call centre capabilities to ensure indi-viduals and companies can perform most of their banking transactions remotely are paying off and are being a p p r e c i a t e d b y o u r customers.”

He added: “Our team con-tinuously works on providing customers with technology-driven products and services that offer them a complete and convenient digital banking experience. Our online channels’ intuitive design enables our customers to find features easily and conduct any transaction in mere seconds in a secure manner. We remain

committed to diversifying and enhancing our digital offerings, to always meet and exceed the expectat ions of our customers.”

As the COVID-19 crisis unfolds, the importance of having a sound digital transfor-mation strategy, and success-fully implementing it, have become vital for any business but more importantly for banks. These awards are a testament to QIB’s ambitious digital trans-formation agenda, which the bank has been busy working towards in the last two years, with the objective of developing a truly customer centric business model, including a digital experience that differ-entiates the bank and addresses new financial behaviors.

Changes in customer demo-graphics and behaviors are increasing the importance of mobile and online, as

customers expect banking services to be available wherever they are, at any time, especially now more than ever with the global pandemic situ-ation. With this in mind, QIB has continuously invested in upgrading their mobile appli-cation and online platforms to ensure individual and corporate customers have an easy, secure, and convenient banking expe-rience, without the need to visit a branch.

Since its inception in 2011, the Global Banking & Finance Review 2020 Awards reflect the innovation, achievement, strategy, progressive and inspi-rational changes taking place within the global financial com-munity. The awards were created to recognise companies of all sizes, which are prom-inent in particular areas of expertise and excellence within the financial world.

Samsung Galaxy Z-Flip available in QatarTHE PENINSULA — DOHA

V o d a f o n e Q a t a r announced yesterday that the all-new Samsung Galaxy Z-Flip is now available for all customers at the retail price of QR5,599 on its online shop www.vf.qa/handsets.

Galaxy Z-Flip is the first device in the Z series and has been designed with first-of-its-kind foldable glass. The 6.7-inch Infinity Flex Display is an immersive, dynamic AMOLED screen that delivers impressive color quality and reduced blue light. Not only does this innovative display fold into a stylish and compact form factor that fits into the palm of your hand, but the device also provides elegant new ways to capture, share, and expe-rience content. With its stylish design and flexible camera experience, Galaxy Z Flip marks the beginning of a new era in foldable smartphone innovation.

Galaxy Z-Flip is available in three unique colors – Mirror Purple, Mirror Black, and Mirror Gold.

The Business Year launches tailor-made content services for companies of all sizesTHE PENINSULA — DOHA

Global media group The Business Year has launched a new range of specialised publishing and content marketing services.

With over a decade of experience as a premier communications platform for companies across the world, The Business Year is now launching a range of specialized publishing and content marketing services to help companies commu-nicate more effectively with their clients at the global level.

“The Business Year is familiar with the commu-nications needs of firms ranging from SMEs to large multinationals. With over 10 years of experience as a platform for them through our annual publications and niche Special Reports, we are now taking the next step, joining our partners right across their commu-nications journey,” said Peter Howson, Editor-in-Chief at The Business Year.

Among the new

services on offer are: spe-cia l ized publ ishing , including the creation of magazines, publications, brochures, and other cor-porate materials; content marketing, including the writing and editing of content in a range of areas, as well as related graphic design services; and events support, whereby The Business Year uses its extensive network and event organization expe-rience to match speakers with the events that matter.

The Business Year is a global media group that has been providing investors, businesses, and governments with first-hand insights into the world’s most dynamic markets for over a decade. It conducts hundreds of interviews a week with top decision makers in the Middle East , Lat in America, Central and Southeast Asia, Africa, and Europe. Its content is available in printed reports and across an array of digital platforms.

Samsung Galaxy Z-Flip

Black, and Mirro

ng y

QIC’s gross written premiumsincrease by 5% to QR3.7bnTHE PENINSULA — DOHA

Qatar Insurance Company (QIC Group), the leading insurer in the Mena region reported a 5 percent increase in its gross written premiums (GWP) to QR3.7bn for Q1 2020, up from QR3.5bn from a year ago. The Group continued to execute its strategic priorities during the first quarter; namely, expanding QIC’s domestic oper-ations in the Mena markets and refocusing its international business towards lower severity and higher frequency lines of business. announced its financial results for the first quarter of 2020.

Following a remote meeting presided over by Sheikh Khalid bin Mohammed bin Ali Al Thani, Chairman and Managing Director, QIC’s Board of Directors approved the Group’s Q1 2020 financial results. The company weathered sub-stantial headwinds related to the global COVID-19 pandemic, the lockdown in most of the leading economies worldwide and an unprecedented levels of capital market volatility.

The Group continued to execute its strategic priorities. The QIC expanded its domestic operations in the Mena markets and refocused its international business towards lower severity and higher

frequency lines of business during the period.

In Q1 2020, QIC Group’s international business continueed on its path of judi-cious growth in select low volatile busi-nesses while reducing its exposure to high severity risks. In the regional markets, the Group’s operations remained focused on driving forward the digitization of its per-sonal lines business.

In Q1 2020, gross premium volume for the domestic business grew by 18 percent and continued to produce stable and reliable underwriting profits.

QIC Group’s underwriting per-formance in Q1 2020 was impacted by the uncertainties from the COVID-19 pan-demic and the associated lockdowns across the world. Although little is yet known as to the full extent and duration of COVID-19 and its business / economic impact, QIC Group has adopted a conserv-ative approach. The Group reported a net underwriting result in the first quarter of QR11m as compared to QR166m for the corresponding period in 2019.

The Group cemented its position in the Mena region as the leading insurer. QIC has, once again, been recognized for its accomplishments as the “Best Personal Insurance Company MENA 2019” at the

Global Banking & Finance Review Awards, conducted by the Global Banking & Finance Review ® publication. The award reflects the innovation, achievements, strategy, progressive and inspirational changes that QIC has contributed to the marketplace.

In Q1 2020, QIC entered into a stra-tegic collaboration with Swiss Re, a leading global reinsurance company, to offer its internally developed, best-in-class insurance administration platform called Anoud+ to emerging market insurance car-riers. As part of the collaboration, QIC will integrate specialised offerings into its platform to help insurers oversee and manage their underwriting strategy and monitor their exposure to natural catas-trophes. Pursuant to this, QIC established an IT services subsidiary in the Qatar Financial Centre (QFC) called Anoud Tech-nologies LLC.

On the asset side, QIC’s investment portfolio was not immune to the shock waves that the COVID-19 crisis sent through global capital markets. While equities suffered steep declines, gov-ernment bond yields fell as investors sought for a safe haven. In light of the

existing volatility in the market, QIC Group’s net investment result, including realized and unrealized gains and losses, amounted to QR34m for Q1 2020, as com-pared to QR293m in Q1 2019.

During the reporting period, the Group also continued its endeavour to enhance its operational efficiency through the auto-mation and digitization of its internal proc-esses. The success of these measures is reflected in the Group’s results, as QIC improved the administrative expense ratio for its core operations to 5.5 percent in the quarter, compared to 5.9 percent for the previous year’s period.

Overall, the consolidated net loss for Q1 2020 stood at QR186m, as compared to a net profit of QR272m for the previous year’s period.

In the face of global uncertainties of historic proportions, the Group’s capital and liquidity position is robust. QIC is cur-rently in the process of shoring up our already strong balance sheet by issuing up to $300m in perpetual subordinated Tier 2 qualifying capital notes. This additional capital is expected to qualify as Tier 2 Capital under Qatar Central Bank regula-tions for the solvency ratio calculations.

QIC Group President, Khalifa Abdulla Turki Al Subaey, said: “Our Q1 2020 results were impacted by unprecedented chal-lenges facing the global economy and the insurance industry. Despite the prevailing turbulence, we continue to take proactive measures to strengthen our market position, maintain rigorous expense disci-pline and to execute our regional and global strategies. Meanwhile, we are taking decisive actions to protect our policy-holders and shareholders against the potential adverse consequences of the COVID-19 pandemic.” “While there remains too much uncertainty to provide precise outlook for the rest of 2020, based on our underlying strengths, diversified business model and exceptional financial position, we look forward to weathering these difficult times and emerging stronger from this challenge”, he said.

Khalifa Abdulla Turki Al Subaey, QIC Group President.

A view of QIC headquarters in West Bay

Bottleneck continues as businesses seek govt relief loans

AP — NEW YORK

Banks trying to submit appli-cations for thousands of small businesses seeking corona-virus relief loans have hit a bottleneck for a second day at the Small Business Adminis-tration.

Banking industry groups said yesterday the SBA’s loan processing system is still unable to handle the volume of loan applications from business owners trying to get aid under the Paychceck Pro-tection Program, part of the government’s $2 trillion coro-navirus aid package. The SBA has said the slowdown is due to its attempts to limit the amount of loans any bank can submit at one time. But some banks say they’re not able to get any applications into the system.

“Today is just another slow, frustrating slog for getting PPP loans through,” said Paul Merski, a vice pres-ident at the Independent Community Bankers of America.

Businesses are seeking loans from a $310bn second round of funding aimed at helping them retain workers or rehire those who they laid off in response to the virus outbreak. Restaurants, retailers, gyms and other busi-nesses were forced to shut down to try to contain the virus’s spread, and other com-panies have seen a steep drop in revenue as customers stayed home or cut back their spending.

The Company noted that the safeguarding and wellbeing of employees and all stakeholders remains its primary focus.

03WEDNESDAY 29 APRIL 2020 BUSINESS

Aamal reports QR374m in revenuefor the first quarter of this yearTHE PENINSULA - DOHA

Aamal Company (Aamal) has reported a total revenue of QR374m for the first quarters of this year end March 31, 2020 (Q1, 2020), up 16.3 percent to compared to QR321.7m posted for the corresponding period last year (Q1 2019).

Aamal Group, one of the region’s largest diversified companies, has reported its gross profit is down 7.4 percent to QR110.7m in first quarter of 2020 against QR118.8m in Q1, 2019. The Group is taking swift and effective action in response to the COVID-19 pandemic.

Total Company net profit was down 15.7 percent to QR82.1m compared to QR97.3m in Q1 2019, with net profit attributable to Aamal equity holders down 14.5 percent to QR82.5m against qR96.5m in the same period last year. The net profit before share of net profits of associates and joint ventures accounted for using the equity method (net under-lying profit) down 18.5 percent to QR65.2m against QR80.0m in Q1 2019.

Sheikh Faisal bin Qassim Al Thani, Chairman of Aamal, said:“I am pleased to report that despite the negative impact of the COVID-19 pandemic during

the first quarter, the resilience of our diversified business model and our continued focus on successfully executing our strategic priorities meant that Aamal was able to deliver robust revenue growth of 16.3 percent year-on-year. However, the challenges arising from the COVID-19 situation are unprecedented and, coupled with intense market compe-tition, impacted sales margins, resulting in a 15.6 percent decline in net profit compared to the first quarter of 2019.”

Sheikh Faisal added: “In line with guidance set out by the Qatari authorities, we have moved quickly to put in place social distancing measures across all of Aamal Company. Our absolute priority is pro-tecting the health and well-being of our employees and customers and, to this end, City Center Doha, Souq Al Haraj and the majority of our operations in our Managed Services

segment are currently closed. The Qatari government has closed parts of Qatar’s indus-trial area where some of our Industrial Manufacturing busi-nesses are located, impacting the performance of Aamal Cement Industries and Aamal Readymix in particular.

Profit in the segment was further impacted by dual impact of continuing price competition seen in tendering for contracts in the period and the additional costs incurred in reinstating formerly shuttered manufacturing capacity in line with the contracted volumes.

“Despite the challenges pre-sented by these unprecedented circumstances, we were pleased

to record a strong quarterly per-formance in our Trading and Distribution segment. This was primarily due to Ebn Sina Medical, again demonstrating the resilience and benefits of our diverse business model.

“I would like to take this opportunity to extend my thanks to all Aamal Company’s employees. They are working tirelessly throughout these challenging times and have shown admirable commitment and agility in responding to the new ways of working, while continuing to support our cus-tomers at all times. I would also like to thank the Qatari gov-ernment for their ongoing support and leadership during

this crisis. “Aamal has already proved its ability to adapt effec-tively and with agility to external change. I am confident in Aamal Company’s long-term strategy and in our capability to adapt quickly in these difficult times, supported by the strength of our balance sheet and the resilience of our operations which remain a robust platform for future growth.”

Sheikh Mohamed bin Faisal Al Thani, CEO and Managing Director of Aamal, said: “The global nature of the COVID-19 pandemic, and the uncertainty around its severity and duration, mean that we expect to feel its impact throughout the second quarter and beyond.

“The safeguarding and well-being of our employees and all our stakeholders remains our primary focus. Aamal’s advanced IT infrastructure has enabled our employees to tran-sition smoothly to remote working as we continue to support the Qatari government’s social distancing efforts. Mean-while, we have taken action across Aamal Company to respond swiftly to the crisis with many of our businesses launching innovative new services to benefit Qatar in these challenging times," Sheikh Mohamed said.

Sheikh Faisal bin Qassim Al Thani (left), Chairman of Aamal Company; and its CEO and Managing Director, Sheikh Mohamed bin Faisal Al Thani.

Qamco posts net profit of QR10.7m for Q1, 2020THE PENINSULA - DOHAQatar Aluminium Manufacturing Company (Qamco), a 50 percent joint venture partner in a suc-cessful smelter that produces premium high quality primary aluminum products in Qatar, reported a net profit of QR10.7m for the three months period ended 31 March 2020.

The financial performance of Qamco during first quarter of 2020 has continued to be impacted by external macroeco-nomic factors beyond the Com-pany’s control, which weighed on the Company’s financial per-formance since 2019.

During the period, Qamco’s earnings per share (EPS) stood at QR0.002. Qamco’s share of revenue for the financial period amounted to QR565m, down by 14 percent, compared to Q1-2019 , as the pressure continued on the global aluminium prices and

uncertainty building supply surplus on account of decreased global demand.

Qamco’s share of joint ven-ture’s EBITDA stood at QR166m for the three months period ended 31 March 2020, down by 11 percent, compared to Q1-20191, but the EBITDA margins remained resilient in the current turbulent market con-ditions and stood at 29.4 percent, as compared to 28.2 percent of Q1-2019.

Qamco’s average selling prices during Q1-2020 fell by 14 percent, compared to Q1-2019, which is largely driven by the decline in global market prices for aluminum.

Commenting on the financial and operational highlights, Abdulrahman Ahmad Al-Shaibi, Chairman of the Board of Directors, Qamco, said: “Although the macroeconomic

environment was challenging since the start of 2020, the Company managed to demon-strate its underlying strength as a key investor in one of the world’s lowest-cost, most-effi-cient aluminium smelters. During the period, in an adverse market, Qamco’s JV managed to continue with profits in the face of falling aluminium prices and unprecedented headwinds of COVID-19 pandemic.

In response to limit the spread of COVID-19 pandemic and ensure our operations remained resilient, our joint venture implemented several measures to ensure safety of employees and business conti-nuity. Our sales and marketing partner, is diligently monitoring the market position, as the pan-demic evolves, and acting effec-tively to minimize the risk of disruptions to the supply chain

activities. Going forward, adap-tation to ever evolving market forces will allow us more flexi-bility and better position the Company for long-term future growth and maintain its market standing as one of the world’s lowest cost aluminium smelters.”

The Company’s JV was able to successfully contain cost of goods sold, comprising of lowered raw materials and energy consumption. However, this was negatively offset pri-marily by the decline in realized average selling price.

Qamco’s share of debt in the JV declined by 7 percent to reach QR2,236m as at 31 March 2020, compared to the balance as at 31 December 2019, on account of principal repayment during the quarter amounting to QR222m. Qamco’s JV con-cluded refinancing of its

outstanding loan amounting to $1.3bn during the first quarter of 2020. The refinancing of Qamco’s JV’s debt will boost free cash flows to the extent of $1.3bn over the new tenor of 5 years, as there is no obligation to pay any recurring instalments unlike the previous loan, with the entire loan amount will be payable in form of a balloon payment at the end of the new tenor. The Company’s JV is also relieved from the compliance of stringent financial covenants previously required as per the old terms. This refinancing deal is not only expected to bring free cash flows to the JV, but also will provide new avenues of growth and flexibility to endure the market volatilities, which in turn is expected to maximize share-holder value. Qamco’s JV is well prepared to implement pro-active measures for optimizing

its production cost, corre-sponding to the declining sales price. Nonetheless, Qamco’s JV continued to remain profitable, compared to the other peers in the industry, which are cur-rently struggling to maintain their production capacity and profit margins in these chal-lenging macroeconomic cir-cumstances. This is a testament to the JV’s efficient cost base, mainly due to its lower input cost elements, including the power costs and long term raw materials agreements.

Qamco will host an IR earnings call to discuss its first quarter 2020 results, business outlook and other matters with investors on 05 May 2020 at 1.30pm Doha Time. The IR pres-entation that accompanies the conference call will be posted on the publications page of Qamco website.

Lakers return $4.6m from stimulus loan programmeAP - LOS ANGELES

The Los Angeles Lakers have repaid a loan of roughly $4.6m from coronavirus business relief funds after learning the pro-gramme had been depleted.

The Lakers applied for the loan under the Small Business Administration’s Paycheck Pro-tection Program, a part of the federal government’s $2.2 trillion stimulus package. The Lakers’ request was granted in the first round of distribution, but after the fund ran out of money in less than two weeks, the team returned its loan, as did several wealthier business including Shake Shack and AutoNation.

The Lakers issued a statement Monday confirming what happened.

“The Lakers qualified for and received a loan under the Payroll Protection Program,” the statement read. “However, once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need. The Lakers remain completely committed to supporting both our employees and our community.”

ESPN first reported the Lakers’ decision.

The Treasury Department issued further guidance for the loan program last week, asking companies not to apply for the funds if they don’t need the cash to survive.

The Lakers qualified for the program because they have only about 300 employees. But the team is thought to be the NBA’s second-most valuable franchise, with Forbes esti-mating a value of roughly $4bn.

The 16-time NBA cham-pions play in the nation’s second-largest media market, and their current roster led by superstars LeBron James and Antony Davis was on top of the Western Conference when the NBA suspended play last month.

The Lakers haven’t fur-loughed or fired any employees during the coronavirus pan-demic, and the franchise doesn’t plan to make any cutbacks. The team’s top executives agreed to defer 20 percent of their salaries until later this year or early next year.

China moves to harness tides for power with Wuhan-made turbineBLOOMBERG

A tidal-stream turbine with a diameter bigger than the length of a tractor trailer was installed in China for a project involving Simec Atlantis Energy Ltd, China Ship-building Industry Company Ltd and China Three Gorges Corp.

The 18-meter (59 feet) turbine was manufactured in Wuhan and put last week in the waters between two islands in the Zhoushan archi-pelago, south of Shanghai. While turbines that harness the tides to generate elec-tricity have struggled to compete on cost with solar

and wind farms, a move by China to industrialize pro-duction could significantly reduce the technology’s price tag.

The 500-kilowatt turbine is only a pilot project, but could be the first step toward larger-scale production.

“If they go into industrial-scale manufacturing of tur-bines and we can access that, you’re talking about rapid reductions instantly of the cost,” Tim Cornelius, chief executive officer of Simec Atlantis Energy, said in a phone interview. “It bodes very well for us to compete with floating offshore wind.”

Developers of tidal stream

projects have long promised that the technology could be a renewable power source that’s more reliable than wind and sunshine. However, by the end of last year Bloomb-ergNEF estimated only 12 megawatts of the projects were developed worldwide, a fraction of the wind and solar installations put in each year.

While it may not be pos-sible for tidal technology to catch up with wind and solar, it could be a good option in places such as islands that lack space for land-based renewables and where the seabed is too deep for off-shore wind turbines.

SIMEC Atlantis Energy’s SG500kW tidal stream turbine – rotor diameter of about 18 meters.

Turkey aims to reopen economy starting late May: OfficialREUTERS - ANKARA

Turkey’s government aims to begin reviving the economy in late May after a sharp slowdown due to measures to contain the coronavirus outbreak, while minimising any risk of a second wave of infections, a senior official said yesterday.

Separately, the head of a Turkish shopping malls associ-ation said there were plans for a gradual reopening from May 11 depending on demand from retailers and approval from a

health authority advisory board. Turkey has shuttered malls,

schools, restaurants and cafes to curb a surge in cases of the COVID-19 disease. Though some workplaces remain open, it has imposed partial stay-at-home orders, largely closed borders and slowed domestic movement.

Turkey is seventh globally in confirmed cases of the new coronavirus at more than 112,000. And while some 2,900 people have died, there has been a fall in newly reported

deaths over the last eight days. “When we look at the case

and death numbers we have come to a positive point. As of this moment, there is a possi-bility for the economy to reopen,” the senior official told Reuters. “Recent studies have indicated that a reopening of the economy will be possible at the end of May and current developments confirmed this. Steps will be taken to reopen without allowing a second wave of infections.”

The official, who requested

anonymity, said Turkey’s cabinet had on Monday dis-cussed further possible tax adjustments and incentives to protect jobs and cut business costs, adding the government aims to boost hard-hit tourism and airline sectors.

Reopening “will allow pos-itive GDP readings in the second half of the year and will min-imise the annual contraction this year,” the Turkish official said.

Trade, spending, manufac-turing and consumer

confidence - which hit a record low this month - have stumbled as virus containment measures have pushed Turkey’s economy toward its second recession in less than two years.

In an interview, Huseyin Alltas (pictured) of the Council of Shopping Centres said a planned phased reopening from May 11 would probably initially exclude cinemas, playgrounds and restaurants - where sticking to social-distancing rules would be most challenging - until the government gives approval.

Those in hard-hit cities such as Istanbul - the worst area of out-break in Turkey - may remain closed longer, he said, adding that all malls nationwide could reopen by June.

04 WEDNESDAY 29 APRIL 2020BUSINESS

EU sets out ‘quick fixes’ to boost bank lending during pandemicREUTERS - LONDON

Banks should rein in bonuses to boost their capacity to help businesses and households hit by the coronavirus crisis, the European Union’s executive said yesterday.

The European Com-mission set out a fresh package of temporary “quick fixes” offering capital relief that would support extra lending potentially worth up to €450bn ($490bn) to com-panies struggling as a deep recession looms.

“During the last crisis we had to prop up banks, this time we are helping banks to prop up households and companies,” the EU’s financial services chief Valdis Dombrovskis (pictured)told a news conference.

The easing of capital and accounting rules will be tem-porary, and the package needs to be approved by EU states and the European Parliament by June at the latest to have the full effect, he said.

The EU executive backed statements from regulators that banks should refrain from paying dividends or making share buybacks at a time they are getting capital relief.

“For the banks, moderating

the amount of bonuses paid out to senior management and high earners in these challenging times is also a way to express solidarity with those affected by the outbreak of COVID-19,” the Commission said.

Banks like UniCredit and Deutsche Bank have begun reporting rising provisions for bad loans as a deep recession beckons after national lock-downs to f ight the pandemic.

Yesterday’s package offers flexibility in how provisions are calculated and to delay their eventual hit to a bank’s capital buffer to avoid lending turning into a trickle in the face of mounting bad loans caused by the pandemic.

Delays to repayments should not automatically lead

to a harsher accounting treatment of the respective loans, the Commission said.

An EU official estimated that euro zone banks could face an extra €100bn in provi-sioning for loans in 2020, but the capital relief set out on Tuesday means they will still be able to support extra lending worth up to € 50bn.

The European Commission also proposed giving banks more leeway in how they cal-culate a capital measure known as the leverage ratio, brought forward easier capital treatment of lending to small companies, and accelerated a rule that allows banks not to deduct the value of software from capital.

“These adjustments to the prudential framework would facilitate collective efforts aimed at mitigating the impact of the pandemic and thus moving towards a fast recovery,” the Commission said.

In previous measures, EU regulators said banks could draw on some of their capital buffers to keep credit flowing to the economy, though some of the initiatives announced yesterday fall short of similar proposals made by US regulators.

Germany prepares to take stake in Lufthansa group in bailout dealBLOOMBERG

Deutsche Lufthansa AG, locked in tense negotiations over terms of a multibillion-euro state bailout, is considering court pro-tection as a last resort should it fail to reach a deal with the German government, according to people familiar with the matter.

The so-called Schutzschirm protection would shield Europe’s biggest airline from creditors for three months while it works out a management-led restructuring plan. The specter of a court-supervised proceeding comes as talks with Germany intensify over a rescue that could exceed €8bn ($8.7bn), said the people, who asked not to be named because the talks are private.

One option being discussed includes giving the government seats on the board and the power to block strategic decisions, one person said, terms Lufthansa is loath to accept because they may dent its competitiveness. The carrier is already cutting back its fleet to reflect depressed levels of travel that could last for years after the coronavirus pandemic passes. A spokesperson for Lufthansa said the company was examining all possibilities, while a government official said Germany is seeking a consensus.

Major US airlines such as American Airlines Group Inc., Delta Air Lines Inc and United Airlines Holdings Inc have been through bankruptcy proceedings over the last two decades, but it’s less common for flag carriers in Europe. German airline Condor last year applied for court pro-tection after the demise of UK parent Thomas Cook Group Plc.

While talks are continuing and German leaders have promised not to allow Lufthansa to fail, the possibility of creditor protection -- unthinkable before the virus hit -- harks back to the global financial crisis a decade ago when some banks and auto-makers were restructured under government oversight.

The International Air Transport Association has said the coronavirus will lead to $314bn in lost revenues for airlines, and force many out of business.

Lufthansa’s management team fears that the terms on offer would limit the airline’s ability to compete in Europe against low-cost carriers like Ryanair Holdings Plc, and internationally against US and Asian carriers that won’t be as indebted in the wake of the crisis, the people said.

Lufthansa, which connects Germany to the far-flung export markets on which its economic juggernaught depends, has been

wrangling with the government over a package that could amount to more than double the company’s market value of about €4bn, said one of the people.

Entering into Schutzschirm, or protective shield in German, must be approved by a court, and must be requested before the company is actually unable to pay its bills. The move would give the airline flexibility to part with more than 160 outstanding plane orders on the books of Boeing Co and Airbus SE, with the impact potentially rippling through the European planemaker’s factories in France, Germany and the UK.

The shares, which rose as much as 12 percent earlier, were up 2.6 percent at 2:54pm in Frankfurt.

A bailout would follow an even bigger package for European rival Air France-KLM, which was unveiled Friday by French and Dutch finance min-isters and came after weeks of talks between the airline, banks and the governments. France and the Netherlands pledged as much as €11bn in loans and guarantees that the carrier had said were crucial to its survival. Lufthansa and Air France-KLM are the region’s two biggest carriers by passenger traffic and considered by the states as too important to fail.

QATAR STOCK EXCHANGE

QE Index 8,600.51 +0.81 %

QE Total Return Index 16,534.19 +0.81 %

QE Al Rayan Islamic Index - Price 1,880.77 +0.98 %

QE Al Rayan Islamic Index 3,354.45 +0.98 %

QE All Share Index 2,674.68 +0.77 %

QE All Share Banks &

Financial Services 3,826.41 +0.58 %

QE All Share Industrials 2,188.51 +0.57 %

QE All Share Transportation 2,619.45 +3.68 %

QE All Share Real Estate 1,239.94 +2.93 %

QE All Share Insurance 2,014.02 -0.39 %

QE All Share Telecoms 838.87 -0.86 %

QE All Share Consumer

Goods & Services 7,019.69 +0.74 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

28-04-2020Index 8,600.51

Change +69.25

% +0.81%

YTD% -17.51

Volume 251,237,324

Value (QAR) 396,127,411.01

Trades 11,091

Up 35 | Down 09 | Unchanged 0227-04-2020Index 8,531.26

Change -27.02

% -0.32%

YTD% -18.17

Volume 148,051,552

Value (QAR) 288,063,655.04

Trades 9,362

EXCHANGE RATE

GOLD QR202.8618 grammeSILVER QR1.7958 per gramme

Index Day’s Close Pt Chg % Chg Year High Year Low All Ordinaries 4207.354 110.624 2.7 5069.5 3829.4

CAC 40 Index/D 3176.13 -0.06 0 4169.87 2979.87

DAX - Composit/D 531.14 8.71 1.67 667.98 485.74

DJ Indu Average 0 0 0 12876 9936.39

Egypt Cma Gn Idx 675.91 13.3 0.95 1567.23 143.08

Hang Seng Inde/D 19783.67 452.97 2.34 24468.64 18868.11

ISEG Overall/D 2510.71 44.36 1.8 3037.89 2333.35

Karachi 100 In/D 11311.29 276.37 2.5 12768.4 11032.2

Nikkei 225 Index 9038.74 94.26 1.05 10891.6 8227.63

S&P 500 Index/D 0 0 0 1370.58 1039.7

Straits Times/D 2821.09 -62.91 -2.18 3280.77 2847

Currency Buying (QAR) Selling (QAR)US$ 3.6305 3.6500

Pound Sterlig 4.4682 4.5313

Swiss Frnac 3.7067 3.7591

Japanese yen 0.03355 0.0342

Australian Dollar 2.2895 2.3346

Canadian Dollar 2.5502 2.6003

Indian Rupee 0.0474 0.0483

Pakistan Rupee 0.0225 0.0231

Philipine Peso 0.0712 0.0726

Bangala Takka 0.0425 0.0433

Sri lanka Rupee 0.0187 0.0191

Nepalese Rupee 0.0297 0.0302

South African Rand 0.1887 0.1925

Euro 3.8966 3.9508

05WEDNESDAY 29 APRIL 2020 BUSINESS

Riksbank may add high-grade bonds to $30bn QEBLOOMBERG

The governor of Sweden’s Riksbank, Stefan Ingves (pictured), said high-grade corporate bonds may be added to a record $30bn quantitative easing program to help prevent a credit crunch.

“It’s certainly on our agenda” Ingves said in an interview. Asked whether the Riksbank might even consider junk bonds, he said, “Everything is on the table.” The bank kept its main rate at zero yesterday, as expected. Though it said rate cuts remain an option, Ingves went on to clarify that such a

move would “not be a very meaningful” way to stimulate demand in the current crisis.

“We really want to ensure that the financial sector keeps working, that’s why we are massively using our balance sheet. Without doing so we run the risk of having all sorts of problems,” Ingves said. “Our choice now is to not use the policy rate, but to create more money by lending or buying assets.” Ingves has repeatedly downplayed the need to return to negative rates after bringing five years of the policy to an end in December. Instead, the Riksbank has spent the past six

weeks doubling an existing bond-purchase program and

provided about $50bn in cheap bank loans. Lenders also have access to dollar liquidity, via an agreement with the Federal Reserve.

The Riksbank’s reluctance to follow the deep rate cuts delivered by its peers has fed into a global debate on the best policy response to the current crisis.

“In our judgment, it has been much, much more important to use our balance sheet,” Ingves said.

With its current QE plans, the Riksbank is on track to increase its balance sheet to about 50 percent of Swedish

GDP, or roughly $250 billion, according to Andreas Steno Larsen, global FX strategist at Nordea.

In its statement yesterday, the Riksbank said its decision not to cut rates this week “does not rule out the possibility of the interest rate being cut at a later date if this is deemed an effective measure to stimulate demand and support the development of inflation in the recovery phase.” The krona gained as much as 0.8 percent against the euro after the Riksbank’s statement.

Three of the 22 economists surveyed by Bloomberg had pre-dicted a cut, while others had

expected an expanded quanti-tative easing program. The bank said it will “continue purchases of government and mortgage bonds up to the end of Sep-tember 2020.”

“Although future economic developments are extremely uncertain, everything never-theless indicates that monetary policy stimulus will be needed in the form of low interest rates and a large amount of liquidity for the foreseeable future. The combination of measures deemed appropriate is con-stantly evaluated and will be adjusted to economic develop-ments,” the Riksbank said.

BP hikes debt, keeps dividend as virus crisis hammers profitsREUTERS — LONDON

BP’s first-quarter profit tumbled by two thirds and its debt climbed to its highest in at least five years as the coro-navirus crisis hammered oil demand, but the energy major kept its dividend despite warning of exceptional uncer-tainty.

London-based BP said it expected significantly lower refining margins in the second quarter when global restrictions on movement to halt the spread of the virus reached their peak, throttling consumption of gasoline, diesel and jet fuel.

“I can see many reasons why this recovery will take longer and therefore I think we’re in this for quite some time,” Chief Executive Bernard Looney, who took over in Feb-ruary, told Reuters.

The company said oil and gas production faced “signif-icant uncertainties” linked to tumbling oil demand and plunging prices, as well as due to a deal between Opec, Russia and other producers to cut global supplies of crude by about 10 percent.

BP reported an underlying replacement cost profit, its def-inition of net income, of $800m, beating the $710m forecast by analysts in a com-pany-provided poll. The company reported $2.4bn profit a year earlier.

But BP, whose net debt climbed to its highest since at least 2015, kept its dividend of

10.5 cents per share and said it had repurchased shares worth $776m in the quarter.

Stuart Joyner, equities analyst at Redburn, said BP’s “large rise in net debt over-shadows (its) underlying earnings beat.” “Whilst the quarterly dividend was main-tained at 10.5 cents, serious questions remain over its affordability,” he added.

Including inventory charges of $3.7bn for oil it holds, the company reported a loss of $4.4bn.

BP has so far resisted cutting its dividend after raising it in February, even though some investors have said top oil and gas companies should consider reducing shareholder payouts in the event of a pro-tracted downturn.

Norway’s Equinor surprised investors by becoming the first big oil firm to cut its dividend, reducing its first-quarter

payout by two thirds and sus-pending a $5bn share buyback.

BP, like its peers, responded to the 65 percent drop in oil prices in the first quarter by sharply reducing spending. The company slashed its 2020 budget by 25 percent to around $12bn and reduced output at its US shale operations.

“The key question at this point is how far BP is willing to push the balance sheet in order to protect its dividend,” RBC wrote in a note, adding that it could end up spending the rest of 2020 and 2021 trying to pay down debt to reduce its gearing.

BP’s debt rose to $51.4bn in the first quarter and its debt-to-capital ratio, or gearing, rose to 36 percent, significantly higher than its target of keeping it below 30 percent.

BP held $32bn in liquidity at the end of the first quarter after it raised extra funds.

Cash flow slumped to $1bn in the quarter, the lowest in at least six years, compared with $5.3bn last year.

BP’s output in the quarter reached 2.58m barrel of oil equivalent, excluding its stake in Russia’s Rosneft, and 2.9 percent lower than a year earlier.

It secured an average price of $31.80 per barrel of oil equiv-alent in the first quarter, a fifth less than a year ago.

Benchmark Brent crude slumped to its lowest in two decades in April. It was trading around $19 yesterday.

BP, like its peers, responded to the 65% drop in oil prices in the first quarter by sharply reducing spending. The company slashed its 2020 budget by 25%.