qnb group posts 4% jump in 9-month proﬁ t ... - gulf times

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QNB Group posts 4% jump in 9-month profi t to QR11.2bnQNB Group, one of the leading banks in the Middle East, Africa

and Southeast Asia (MEASEA) region, has reported a 4% year-on-year jump in net profi t to QR11.2bn in the fi rst nine months

ended September 30, 2019.Total assets grew 7% to QR912bn, the highest ever achieved by the

group. Loans and advances expanded 8% to QR653bn, which contrib-uted to the total asset expansion.

This was mainly funded by customer deposits, which showed a 7% growth to QR663bn in the fi rst nine months of this year.

QNB’s strong asset liability management capabilities helped it to improve its loans-to-deposits ratio to 98.6% at the end of September 30, 2019.

Non-performing loans, or NPLs, accounted for 1.9% during Jan-uary-September 2019, a level considered one of the lowest amongst fi nancial institutions in the Middle East and Africa region. It refl ects the high quality of the group’s loan book and the eff ective manage-ment of credit risk.

At the end of September 2019, the lender achieved a coverage ratio of 104% due to its conservative approach to loan loss provisioning.

The bank’s capital adequacy ratio (CAR) stood at 18.2%, which is higher than the regulatory minimum requirements of the Qatar Cen-tral Bank and the Basel Committee.

During September 2019, QNB Group obtained the regulatory ap-provals from the Hong Kong Monetary Authority to open a branch in Hong Kong, one of the global fi nancial hubs. The branch will provide a full range of banking products and services to individuals and cor-porate entities.

QNB Group’s expansion in Hong Kong is another fundamental step in its international expansion plans to support its growth strategy and market leadership in MEASEA, as well as to establish a foothold in highly competitive markets.

QNB Group serves a customer base of more than 24mn customers with more than 29,000 staff resources operating from more than 1,100 locations and 4,300 ATMs.

Global index compiler MSCI had recently said QNB had substan-tially improved its ESG (environment social and governance) ratings in a short span to occupy the top slot among the global peers.

MSCI started covering the bank in October 2015 with ‘BB’ rating and in 2016 and 2017, it became ‘BBB’ and in August 2019, it was upgraded to ‘A’ rating due to ‘strong position for meeting digital banking chal-lenges.’

QP and partners celebrate South Hook LNG Terminal 10th anniversaryQatar Petroleum (QP), the country’s hydrocarbon bellwether, and partners have celebrated the 10th anniversary of South Hook LNG Terminal, which has the capacity to provide up to 20% of the UK’s natural gas needs.Addressing a special event in London, HE Minister of State for Energy Aff airs as well as QP president and chief executive, Saad bin Sherida al-Kaabi hailed the historic relations between Qatar and the UK and stressed the importance of the UK market to Qatar’s liquefied natural gas.“The UK is a very important market for Qatari LNG, as it off ers a friendly and attractive business environment, and a stable regulatory framework. This is driven by the long and historic relations that tie our two countries and people, on many levels and across all walks of life,” he said in the presence of Yousef Ali al-Khater, Qatar’s envoy to the UK, and senior executives from QP, Qatargas, ExxonMobil and Total.Highlighting the importance of South Hook as an important tool for local development; al-Kaabi said as QP and its partners made significant investments to develop the import and regasification facilities in South Hook, the terminal itself became a provider of stable local jobs, and a supporter of local communities, businesses and services.“South Hook Terminal is a strategic investment that supports the security of energy supplies to one of the world’s most dynamic and vibrant economies,” he said, thanking QP’s partners ExxonMobil and Total as well as the Welsh authorities and senior off icials in the UK for their continuous support.The minister also thanked Qatargas for the safe and reliable supply of LNG and Nakilat for managing the shipping.Located on the Pembrokeshire coast near Milford Haven in Wales, the South Hook LNG terminal became commercially operational in March 2009 with the arrival of its commissioning cargo on board the QFlex class LNG carrier “Tembek.”

QNB Group’s total assets in the fi rst nine months of 2019 grew 7% to QR912bn, the highest ever achieved by the group

QIIB chairman and managing director Sheikh Dr Khalid Thani bin Abdullah al-Thani has been chosen as ‘Islamic Finance Personality of the year 2019’ by The Global Islamic Finance Awards committee. It recognised his pivotal role at one of the largest Islamic banks and also the eff orts he made to enhance Islamic finance at the regional and international levels. The honouring ceremony was held in Cape Town, South Africa.

Sheikh Dr Khalid chosen ‘Islamic Finance Personality of 2019’

HE al-Kaabi highlighting the importance of the UK LNG market at a special event in London to celebrate the 10th anniversary of South Hook terminal.

International Presence

Financial Highlights

(QR billion) September 2019 September 2018 Change

Net Profit 11.2 10.8 4%

Operating Income 19.1 18.3 4%

Total Assets 912 852 7%

Loans and Advances 653 607 8%

Customer Deposits 663 618 7%

Total Equity 93 76 23%

Key Performance Indicators September 2019 September 2018 December 2018

Earnings Per Share (QR) 1.13 1.14 1.44

Cost to Income Ratio 25.7% 26.2% 25.8%

Loans to Deposits Ratio 98.6% 98.2% 99.4%

NPL Ratio 1.9% 1.8% 1.9%

Coverage Ratio 104% 106% 104%

Capital Adequacy Ratio 18.2% 15.6% 19.0%

Liquidity Coverage Ratio 159% 133% 124%

Net Stable Funding Ratio 103% 101% 102%

Enhance long-term shareholder value through sustainable, profitable growth

Income statement results: For the nine months ended 30 September 2019, Net Profit topped QR11.2 billion, an increase of 4% compared to same period last year. Operating Income increased by 4% to QR19.1 billion. This reflects QNB Group’s success in maintaining growth across the range of revenue sources.

The Group’s drive for operational efficiency is yielding cost-savings in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency ratio (cost to income ratio) to 25.7%, from 26.2% last year, which is considered one of the best ratios among large financial institutions in the MEA region.

Balance sheet drivers: Total Assets reached QR912 billion, an increase of 7% from 30 September 2018. Loans and advances grew by 8% to reach QR653 billion, which contributed to the growth in Total Assets. This was mainly funded by customer deposits which increased by 7% to reach QR663 billion from September 2018.

QNB’s strong asset liability management capabilities helped QNB Group to improve its loans to deposits ratio to 98.6% as at 30 September 2019.

Credit quality: The ratio of non-performing loans to gross loans amounted to 1.9% as at 30 September 2019, a level considered one of the lowest amongst financial institutions in the MEA region, reflecting the high quality of the Group’s loan book and the effective management of credit risk. The Group’s conservative policy in regard to provisioning resulted in the coverage ratio at 104% as at 30 September 2019.

Capital strength: Group Capital Adequacy Ratio (CAR) as at 30 September 2019 amounted to 18.2%, higher than the regulatory minimum requirements of the Qatar Central Bank and Basel Committee. Currency headwinds in our core markets had limited impact on the CAR.

Top-tier credit ratings

QNB Group’s solid financial strength is supported by top tier credit ratings that continues to attract institutional, corporate and individual customers to bank with QNB, and for investors and markets to believe in the Group’s strong financial position and strategy.

QNB remains the highest-rated bank in Qatar and one of the highest-rated banks in the world with ratings of Aa3 from Moody’s, A from S&P and A+ from Fitch.

These ratings are a testament to our capital strength, governance, prudent risk management, business and operating model. This provides us with a competitive advantage to access global capital markets for wholesale funding and enables us to continue our growth and expansion plans in line with our strategy.

Diversified sources of liquidity

During 2019, QNB successfully closed the syndication of its EUR2.0 billion three-year senior unsecured term loan facility, successful completion of a USD1.0 billion bond issuance and a USD850 million Formosa bond issuances under its Euro Medium Term Note (EMTN) Programme in the international capital markets. These deals attracted strong interest around the world from key global investors, reflecting investors’ confidence in QNB Group’s financial strength and its position as the largest financial institution in the Middle East and Africa region. It also reflects their trust and confidence in QNB Group’s strategy over the coming years.

Growing international presence

During September 2019, QNB Group obtained the regulatory approvals from Hong Kong Monetary Authority (HKMA) to open a branch in Hong Kong, one of the world’s global financial hubs. The branch will provide a full range of banking products and services to individuals and corporate entities.

QNB Group expansion in Hong Kong is another fundamental step in QNB Group’s international expansion plans to support its growth strategy and market leadership in MEASEA, as well as establish a foothold in highly competitive markets.

Financial institution of choice

QNB Group’s strong financial strength, customer focused products, expanding international footprint and high quality service offerings enabled QNB to receive the following prestigious awards during the period:

Awards from Asian Banking and Finance for “Domestic Retail Bank of the Year – Qatar”, “Digital Banking Initiative of the Year – Qatar” and “Mortgage and Home Loan Product of the Year – Qatar”.

Creating and delivering value

Based on the Group’s continuous strong performance, driven by its strength and international footprint, QNB has been recognized as the most valuable banking brand in the MEA region by Brand Finance (2019), with its brand value increasing to USD5.04 billion to rise to the 60th place globally. QNB continued its outstanding achievements by topping the Middle East and Africa (MEA) region, on the Banker magazine’s Top 1000 World Banks list.

QNB Group’s vision is to become a leading bank in the Middle East, Africa, and Southeast Asia by 2020, in addition to establishing a foothold in highly competitive markets.

Employer of choice

QNB Group firmly believes that the personal development of individual employees contributes to the stable and sustainable growth of QNB as a whole. QNB recognises those employees who make an effort to put the QNB Values into practice. QNB is striving to continually enhance employee engagement, ensuring that all employees can achieve continual growth, reach their full potential, and enjoy long and fulfilling careers.

QNB Group provides key attention towards talent acquisition, development and retention of nationals in the geographies where it has operations in order to be a good corporate citizen. As part of a targeted career advancement initiative, QNB has 15 Qatari nationals currently deployed in overseas branches and subsidiaries based in the key markets where QNB operates. As a result of these and other initiatives, QNB’s Qatarisation ratio is 54% which is the highest among all Banking & Financial Institutions in Qatar and was recently recognised as one of the Leading Companies and Institutions in the field of Nationalisation at the 5th meeting of the GCC Ministers of Labour and Social Development Affairs.

Robust compliance and governance initiatives

QNB Group remains committed to becoming the leading bank in MEASEA by 2020 and strengthening and enhancing the Group’s governance model and compliance measures are an integral component of this growth process. To exude reliability in the markets wherein it operates, QNB Group adopts and then disseminates the leading standards and practices of corporate governance and compliance initiatives across the Group.

QNB Group has undertaken initiatives to protect stakeholder rights as well as, to deter bribery and corruption, and enhance the processes of disclosure all in an effort to promote a culture of ethical behavior and compliance across the bank.

During the third quarter of 2019, we revitalized Corporate Governance and Compliance practices set across the Group, and renewed efforts were taken to promote bolder sustainability measures, more efficient internal controls and anti-money laundering procedures, well-structured risk management policies and governance measures within the Group.

Sustainability

In 2017, QNB Group launched a group-wide sustainability strategy across the organization. The strategy has been developed in alignment with the objectives of the Qatar National Vision 2030 (QNV2030), United Nations Sustainable Development Goals and the sustainability criteria set forth by the Qatar Stock Exchange. As a result, QNB Group has improved the way in which it incorporates sustainability criteria into its financing activities, launched initiatives to reduce environmental impact from QNB Group’s activities and supporting local communities through volunteering and donations. Furthermore, the Group strengthened its risk management framework and improved the transparency of its corporate governance business practices. This helps ensure QNB Group operate in a responsible and ethical manner. QNB Group is early on in its sustainability journey and firmly believe a proactive approach to managing environmental, social and governance factors will strengthen its business resilience in the long-term and support QNB Group’s position as the number one bank in the Middle East and Africa (MEA) across all financial metrics.

Group statistics

QNB Group serves a customer base of more than 24 million customers with more than 29,000 staff resources operating from more than 1,100 locations and 4,300 ATMs.

521

713

912

0

238

475

713

950

792852

Total Assets (QR billion)

Sep-19Sep-18Sep-17Sep-16Sep-15

Total Assets increased by 7% to QR912 billionNet Profit increased by 4% to QR11.2 billion

8.7

9.710.3

11.210.8

0.0

3.0

6.0

9.0

12.0

Net Profit (QR billion)

Sep-19Sep-18Sep-17Sep-16Sep-15

Financial HighlightsCall +974 4425 2444 or visit qnb.com

QNB Group Delivers Strong Profit Momentum for the Nine Months ended September 2019

Commenting on the Group’s performance, Abdulla Mubarak Al-Khalifa – Acting Group Chief Executive Officer said:

“QNB’s disciplined strategy execution continues to provide the momentum to deliver sustainable growth”.

Total Assets up by 7% to reach QR912 billionSubsidiaries & Associates of QNB GroupQNB Group Country % OwnershipQNB Capital LLC Qatar 100%QNB Suisse S.A. Switzerland 100%QNB Financial Services Qatar 100%QNB Tunisia Tunisia 99.99%QNB Finansbank Turkey 99.88%QNB ALAHLI Egypt 95%QNB Indonesia Indonesia 92%Al-Mansour Investment Bank Iraq 54%QNB Syria Syria 51%Commercial Bank International UAE 40%Housing Bank for Trade and Finance Jordan 35%Al Jazeera Finance Company Qatar 20%Ecobank Transnational Incorporated Togo 20%

Interim Consolidated Statement of Financial Position

30 September2019

(Reviewed)QR000

30 September2018

(Reviewed)QR000

31 December 2018

(Audited)QR000

ASSETS

Cash and Balances with Central Banks 63,637,356 62,977,336 64,691,667

Due from Banks 74,143,958 58,788,047 61,748,844

Loans and Advances to Customers 653,028,970 607,287,797 617,125,304

Investment Securities 93,071,684 86,077,873 87,387,823

Investment in Associates 7,072,249 7,543,768 7,682,698

Property and Equipment 5,173,928 4,395,120 4,697,205

Intangible Assets 3,984,926 3,900,131 3,880,970

Other Assets 11,693,849 20,531,814 14,983,088

Total Assets 911,806,920 851,501,886 862,197,599

LIABILITIESDue to Banks 70,087,021 73,732,735 74,137,901

Customer Deposits 662,539,112 618,413,932 620,587,594

Debt Securities 33,024,803 28,936,700 26,209,791

Other Borrowings 25,195,164 25,621,916 25,109,644

Other Liabilities 28,105,256 29,181,863 27,877,948

Total Liabilities 818,951,356 775,887,146 773,922,878

EQUITYIssued Capital 9,236,429 9,236,429 9,236,429

Legal Reserve 25,326,037 25,326,037 25,326,037

Risk Reserve 8,000,000 7,500,000 8,000,000

Fair Value Reserve (1,727,390) (230,522) (973,557)

Foreign Currency Translation Reserve (16,027,527) (17,729,728) (16,209,852)

Other Reserves 308,943 1,051,556 683,722

Retained Earnings 46,653,674 39,491,449 41,206,855

Total Equity Attributable to Equity Holders of the Bank 71,770,166 64,645,221 67,269,634 Non - Controlling Interests 1,085,398 969,519 1,005,087

Instruments Eligible for Additional Tier 1 Capital 20,000,000 10,000,000 20,000,000

Total Equity 92,855,564 75,614,740 88,274,721 Total Liabilities and Equity 911,806,920 851,501,886 862,197,599

These interim condensed consolidated financial statements were approved by the Board of Directors on 9 October 2019 and were signed on its behalf by:

Ali Shareef Al-Emadi Chairman

Abdulla Mubarak Al-KhalifaActing Group Chief Executive Officer

Interim Consolidated Statement of Income

Three Months to30 September

2019(Reviewed)

QR000


2018 (Reviewed)

QR000

Nine Months to30 September

2019(Reviewed)

QR000


2018(Reviewed)

QR000

Interest Income 13,183,338 12,769,966 40,516,450 36,934,241

Interest Expense (8,084,573) (8,047,031) (25,573,602) (22,796,767)

Net Interest Income 5,098,765 4,722,935 14,942,848 14,137,474

Fees and Commission Income 1,263,733 1,080,544 3,605,480 3,425,550

Fees and Commission Expense (302,071) (241,330) (825,757) (702,639)

Net Fees and Commission Income 961,662 839,214 2,779,723 2,722,911

Net Foreign Exchange Gain 262,213 336,638 846,504 868,816

Income from Investment Securities 29,592 67,530 80,317 119,774

Other Operating Income 74,614 18,135 105,318 57,409

Operating Income 6,426,846 5,984,452 18,754,710 17,906,384

Staff Expenses (881,077) (776,436) (2,593,139) (2,514,983)

Depreciation (177,917) (100,018) (523,976) (335,725)

Other Expenses (624,936) (606,163) (1,786,453) (1,941,778)

Net ECL / Impairment Losses on Loans and Advances to Customers (618,355) (683,993) (1,924,740) (1,659,651)

Net ECL / Impairment Recoveries / (Losses) on Investment Securities 3,515 (4,711) 33,501 (7,111)

Net ECL / Impairment Recoveries / (Losses) on Other Financial Instruments (34,918) 107,716 (158,416) 47,356

Amortisation of Intangible Assets (18,830) (17,934) (54,871) (52,540)

Other Reversals / (Provisions) 20,308 (27,590) 15,382 (70,734)

(2,332,210) (2,109,129) (6,992,712) (6,535,166)

Share of Results of Associates 90,003 113,649 319,385 359,541

Profit before Income Tax 4,184,639 3,988,972 12,081,383 11,730,759

Income Tax Expense (319,854) (242,809) (790,177) (841,350)

Profit for the Period 3,864,785 3,746,163 11,291,206 10,889,409

Attributable to:

Equity Holders of the Bank 3,837,528 3,724,808 11,210,477 10,822,452

Non-Controlling Interests 27,257 21,355 80,729 66,957

Profit for the Period 3,864,785 3,746,163 11,291,206 10,889,409

Earnings Per Share (QR) (Basic and Diluted) 0.39 0.39 1.13 1.14

Financial HighlightsCall +974 4425 2444 or visit qnb.com

Interim Condensed Consolidated Financial Statements for the Nine Month Period ended 30 September 2019Independent auditor’s report on review of Interim Condensed Consolidated Financial Statements to the Board of Directors of Qatar National Bank (Q.P.S.C.)IntroductionWe have reviewed the accompanying 30 September 2019 interim condensed consolidated financial statements of Qatar National Bank (Q.P.S.C.) (the ‘Bank’) and its subsidiaries (together the ‘Group’), which comprise:• the interim consolidated statement of financial position as at 30 September 2019;• the interim consolidated statement of income for the three and nine month periods ended 30 September 2019; • the interim consolidated statement of comprehensive income for the three and nine month period ended 30

September 2019;• the interim consolidated statement of changes in equity for the nine month period ended 30 September 2019; • the interim condensed consolidated statement of cash flows for the nine month period ended 30 September

2019; and• notes to the interim condensed consolidated financial statements.

The Board of Directors of the Bank is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’ (‘IAS 34’) and applicable provisions of the Qatar Central Bank regulations. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanying 30 September 2019 interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 and applicable provisions of the Qatar Central Bank regulations.

9 October 2019DohaState of Qatar

Gopal BalasubramaniamKPMG

Qatar Auditor’s Registry Number 251Licensed by QFMA: ExternalAuditor’s License No. 120153

Key Highlights

• Net Profit for the nine months topped QR11.2 billion, an increase of 4% from

September 2018

• Total assets reached QR912 billion, an increase of 7% from September 2018

• Loans and advances increased to QR653 billion, up by 8% from September 2018

• Customer deposits reached QR663 billion, up by 7% from September 2018

• Diversified and stable funding sources helped improve Loans to Deposits ratio to 98.6%

• Cost to income ratio improved to 25.7%, compared to 26.2% in September 2018

• QNB Group’s presence spans more than 31 countries serving more than 24 million

customers through more than 1,100 locations, 4,300 ATMs and more than 29,000 staff

Interim Consolidated Statement of Comprehensive Income


2019 (Reviewed)

QR000


2018 (Reviewed)

QR000


2019(Reviewed)

QR000


2018(Reviewed)

QR000

Profit for the Period 3,864,785 3,746,163 11,291,206 10,889,409Other Comprehensive Income Items that are or may be Reclassified to Consolidated Income Statement in Subsequent Periods:Foreign Currency Translation Differences for Foreign Operations 463,132 (2,965,227) 222,341 (5,508,839)

Share of Other Comprehensive Income of Associates (137,522) 382,114 (374,996) 219,969 Effective Portion of Changes in Fair Value of Cash Flow Hedges (594,838) (87,472) (1,473,848) 712,166 Effective Portion of Changes in Fair Value of Net Investment in Foreign Operations 355,485 78,369 427,854 354,056

Investments in Debt Instruments Measured at FVOCI Net Change in Fair Value 121,073 (83,642) 149,241 (443,921) Net Amount Transferred to Income

Statement(1) 931 (3,261) (7,998)

Other Comprehensive Items that will not be Reclassified to Consolidated Income Statement: Net Change in Fair Value of Investments

in Equity Instruments Designated at FVOCI 49,746 79,807 149,357 205,891

Total Other Comprehensive Income for the Period, net of Income Tax 257,075 (2,595,120) (903,312) (4,468,676)

Total Comprehensive Income for the Period 4,121,860 1,151,043 10,387,894 6,420,733

Attributable to:

Equity Holders of the Bank 4,085,794 1,136,559 10,268,964 6,416,665

Non - Controlling Interests 36,066 14,484 118,930 4,068

Total Comprehensive Income for the Period 4,121,860 1,151,043 10,387,894 6,420,733

BUSINESS

Gulf Times Thursday, October 10, 20194

Warren fracking proposal has US shale investors weighing E&P riskBloombergToronto

The prospect of Elizabeth Warren becoming the 2020 Democratic presidential

nominee, or the 46th president of the US, has energy investors wor-rying about risks to hydraulic frac-turing.

“What happens if Elizabeth Warren becomes president and bans fracking?” was the most com-mon question Sanford C Bernstein received during recent marketing, analysts led by Bob Brackett said in note Tuesday. They don’t currently have a good answer.

Concern on Wall Street has been rising along with 2020 Democratic presidential contender Elizabeth Warren’s poll numbers, with sec-tors such as fi nancials, health care and industrials as well as energy identifi ed among those at risk from her policy proposals.

In early September, Warren tweeted: “On my fi rst day as presi-dent, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling off shore and on public lands. And I will ban fracking—everywhere.”

The former part of Warren’s plan would have a modest longer-term impact given the “mature state” of areas such as onshore Alaska or the Federal Gulf of Mexico, according to Bernstein. However, a fracking ban would off er “much more immediate

consequences,” and be “incredibly bullish for both global oil prices and US natural gas prices.”

Federal leasing changes could have the most impact on shale drillers such as EOG Resources Inc and Devon Energy Corp, Brackett said. Kosmos Energy, Hess Corp, Apache Corp and ConocoPhillips may have little to worry about from a fracking ban, however.

Still, any impact from a Warren win may be short-lived. “We have a government with checks and bal-ances,” Brackett noted, pointing to processes which have caused ex-ecutive orders to be moderated. He also highlighted the ability of E&Ps to re-allocate capital to mitigate ef-fects.

And, as RBC Capital Markets wrote earlier this week, most of the

sectors seen to be at high risk “are already deeply undervalued versus the broader market.”

There may also be some benefi -ciaries.

UBS analyst Lloyd Byrne recently identifi ed Canadian producers such as Canadian Natural Resources Ltd and Suncor Energy Inc as likely to gain from the curbing of drilling on federal acreage.

Small ships are the next big thing for $150bn LNG marketBloombergLondon

Giant ocean-going tankers built the liquefied natural

gas industry into a $150bn-a-year business. The

next expansion opportunity may come from ships a

seventh of the normal size.

Fifty-five years after the first commercial LNG tanker

sailed from Algeria, this segment of the gas industry

is pushing into ever more niche markets, upending

the economics of energy supply in the process.

Its next leap forward will be serving customers

whose ports or budgets are too small to handle

regular LNG tankers. Known as small-scale LNG,

the idea is to make the fuel chilled to minus

160-degrees Celsius (256 Fahrenheit) accessible to

factories, trucks, ships and even households. That’s

set to spur production capacity growth of 58% over

the next five years, more than double the pace of

the industry in total.

“We are just at the end of the beginning,” said An-

drew Pickering, the chief executive off icer of Avenir

LNG Ltd a London-based supplier set up less than a

year ago to focus on the small end of the business.

“Let the established players continue to develop

large scale and see how we can connect the two.”

LNG already is the quickest growing part of the

fossil fuel industry as customers switch away from

more polluting forms of energy like coal. The super-

chilled fuel is helping reduce smog in cities, it’s

bringing aff ordable energy to isolated markets and

even become a bargaining chip in US trade talks.

The International Gas Union classifies a small-scale

LNG vessel as one with capacity under 30,000 cu-

bic meters. That’s about 1/7th of the biggest tankers.

The traditional ships helped create a global trade

in the fuel, building an alternative for utilities and

industrial customers to gas that arrives by pipeline.

Smaller tankers can help LNG reach a growing

number of buyers that only need a fraction of the

cargo that a regular tanker can carry.

Small-scale LNG output capacity may rise 58% over

a five years through 2023, triple the pace of global

LNG capacity.

Gas burns more cleanly than coal, giving it less

prominence in the debate about how to rein in

climate change. Nations from China to the US are

investing in LNG as an alternative that allows the

flexibility that doesn’t come with billion-dollar pipe-

lines that link customers directly to often distant

production fields.

With an LNG terminal, customers can take ship-

ments from any of the countries that produce

the fuel – a group as far flung as Australia, the US,

Algeria, Angola, Qatar and Russia. As new LNG

production plants come online, market players are

searching for where to place the increasing supply

and finding small customers can absorb great

volumes.

Global small-scale production is about 25mn tonnes

per year. That’s a tiny part of the entire LNG indus-

try, which handled more than 300mn tons last year.

Still, the small-scale end of the business may grow

6% a year, according to the IGU. Pickering expects

the sector can also make better use of floating

import terminals, which may yield another 100mn

tonnes in the next 10 years.

That’s caught the eye of some of the leading LNG

producers. Royal Dutch Shell Plc and others are

considering investments on the small-scale side of

the industry.

OMV AG and the Italian pipeline operator Snam

SpA said last month they may build a small-scale

liquefaction plant in Austria to meet demand for

LNG-powered trucks. Facilities for serving ferries

are operating in Norway and gas-burning vessels

are entering cruise ship fleets.

New Fortress Energy LLC, a venture of billionaire

Wes Edens, plans to sell LNG across the Caribbean,

Central America and West Africa and is already

shipping the fuel to Jamaica. It’s seen benefiting

from the “secular natural gas demand story, which

is being driven by cheap and abundant” fuel in

North America, said Gregory Lewis, an analyst at

brokerage BTIG LLC.

Avenir, an off shoot of shipper Stolt-Nielsen Ltd,

intends to cover everything from ships and import

facilities to distribution. It even hired a veteran LNG

trader, Milorad Doljanin, as chief operating off icer to

wring as much value as possible out of supplies.

With six vessels and an LNG import terminal in

Sardinia under construction, the London-based

company is also looking to build in Scotland, the

South Pacific and Latin America. Avenir is backed

by Golar LNG Ltd and Hoegh LNG Holdings Ltd, the

biggest providers of floating terminals.

“Small scale is going to be a huge, huge part of

the LNG industry going forward,” Hoegh LNG CEO

Sveinung Stohle said at the Oil & Money conference

in London on Tuesday. “We are extremely bullish

on this.”

One big source of small-scale LNG will be from

shipping as stricter regulations by the International

Marine Organization on the sulphur content of

marine fuel kick in from next year. LNG is one of

the alternatives to replace dirtier oil product-based

fuels.

“Are we too early? We think because of IMO 2020

and because the general awareness that gas is both

environmentally better and clearly cheaper than

conventional fuels that this is going to take off very

quickly,” Avenir’s Pickering said. “So I’d rather be a

little bit early to a party than too late.”

Nigeria wants $62bn from oil majors on off shore rulingBloombergAbuja

Nigeria is seeking to recover as much as $62bn from international oil companies, using a 2018 Supreme Court ruling the

state says enables it to increase its share of in-come from production-sharing contracts.

The proposal comes as President Muham-madu Buhari tries to bolster revenue after a drop in the output and price of oil, Nigeria’s main ex-port. It’s previously targeted foreign companies, fi ning mobile operator MTN Group Ltd almost $1bn for failing to disconnect undocumented SIM-card users, and suing fi rms including JP-Morgan Chase & Co in a corruption scandal.

In the latest plan, the government says en-ergy companies failed to comply with a 1993 contract-law requirement that the state receive a greater share of revenue when the oil price ex-ceeds $20 per barrel, according to a document prepared by the attorney-general’s offi ce and the Justice Ministry. The document, seen by Bloomberg, was verifi ed by the ministry.

While the government hasn’t said how it will recover the money, it has said it wants to negoti-ate with the companies. In its battle with MTN, the fi ne imposed on the company was negotiated down from an initial penalty of $5.2bn.

Nigerian presidency spokesman Garba Shehu didn’t answer three phone calls or respond to a text message requesting comment.

Under the production-sharing contract law, companies including Royal Dutch Shell Plc, Exx-onMobil Corp, Chevron Corp, Total SA and Eni SpA agreed to fund the exploration and produc-tion of deep-off shore oil fi elds on the basis that they would share profi t with the government af-ter recovering their costs.

When the law came into eff ect 26 years ago, crude was selling for $9.50 per barrel. The oil companies currently take 80% of the profi t from these deep-off shore fi elds, while the govern-ment receives 20%, according to the document.

Most of Nigeria’s crude is pumped by the fi ve oil companies, which operate joint ventures and partnerships with the state-owned Nigerian Na-tional Petroleum Corp.

Representatives of the oil companies met Justice Minister Abubakar Malami on October 3 in the capital, Abuja, according to two people familiar with the discussions who asked not to be identifi ed because the meeting wasn’t pub-lic. Malami told them that while no hostility is intended toward investors, the government will ensure all the country’s laws are respected, the people said.

Oil companies including Shell have gone to the Federal High Court to challenge the govern-ment’s claim that they owe the state any money, arguing that the Supreme Court ruling doesn’t allow the government to collect arrears. They also contend that because the companies weren’t party to the 2018 case, they shouldn’t be subject to the ruling.

“We do not agree with the legal basis for the claim that we owe outstanding revenues,” Shell’s Nigerian unit said in an e-mailed response to questions. Chevron spokesman Ray Fohr said the company doesn’t comment on matters be-fore the court. Its units in Nigeria “comply with all applicable laws and regulations,” he said by email. Exxon and Total declined to comment, while Eni offi cials didn’t immediately respond to requests for comment.

An LNG tanker passes boats along the coast of Singapore (file). LNG already is the quickest growing part of the fossil fuel industry as customers switch away from more polluting forms of energy like coal. The super-chilled fuel is helping reduce smog in cities, it’s bringing aff ordable energy to isolated markets and even become a bargaining chip in US trade talks.

Democratic presidential hopeful Massachusetts Senator Elizabeth Warren attends the Unions for All summit in Los Angeles, California on October 4. The prospect of Warren becoming the 46th president of the US, has energy investors worrying about risks to hydraulic fracturing.

BUSINESS5Gulf Times

Thursday, October 10, 2019

EM investors see no olive branch in US-China trade spatBloombergSingapore

Trade war-hardened emerging-market investors aren’t counting on any breakthrough in trade negotiations as talks between the US and China are set to resume today in Washington.BNP Paribas Asset Management has been reducing its exposure in junk-rated debt, while Union Investments Privatfonds GmbH is favouring investment-grade rated bonds over high-yield debt. And in case any breakdown in discussions triggers a flight to safety, Aviva Investors has been buying the yen.“We expect another empty-handshake meeting,” said Bryan Carter, London-based head of emerging-market fixed-income at BNP Paribas Asset. Ultimately, no substantive agreement will be reached, he said.Emerging-market stocks rebounded 2.2% since an early September low, when China and the US announced they would hold face-to-face negotiations once again. The rally has since petered out after President Donald Trump said

he won’t seek an interim agreement and global growth showed further signs of deterioration as the year-long trade war dragged on. Impeachment proceedings have also spurred concern that it may hinder Trump’s hand in the negotiations.Below are comments from investors and analysts:Maddi Dessner, multi-asset strategist at JP Morgan Asset Management in New York, tells Bloomberg Television: Bar is much lower for US-China trade talks this week than it has been in previous negotiations. “Investors are much more conservatively positioned than they were even six months ago,” so there’s not as much of a negative risk.To have exposure to equities, investors can buy futures, stocks or upside calls, which allow them to gain upside in rallies and lose equity risk in their portfolio when market draws down.Brendan McKenna, a currency strategist at Wells Fargo in New York: “Trade relations between the US and China will probably get worse before they get better”. No trade truce or breakthrough this week, and Trump will probably move forward with plans to increase

and impose more tariff s. Escalations will hurt EM currencies broadly, especially emerging Asia’s IDR, INR and PHP; high-beta currencies TRY, ZAR, MXN and BRL likely to also come under pressure.Expect more downside in the renminbi and more risk-sensitive currencies such as the AUD, NZD, KRW.Jim Caron, global head of macro strategies at Morgan Stanley Investment Management in New York: Trade tensions put a damper on global growth, and expectations are for continued talks.“I don’t think that anybody really expected there to be a grand bargain this week with China”.Alejandro Cuadrado, a senior BBVA strategist in New York: Likes being “defensive (USD biased) with a preference for hedging through CLP” ahead of trade talks. “Our expectations are low as we don’t see the incentives fully lined up”.Prefers hedging through options in LatAm crosses given region’s sensitivity to global trade, lower levels and higher costs.Sergey Dergachev, senior portfolio manager at Union Investment

in Frankfurt: Expectations for a breakthrough are “very low,” though it will be important to see how the meeting will end and the mood during the meeting.Future steps are also crucial, such as when the next round of talks will be. Dergachev said he’s positioned “mildly defensive,” and is focusing on the credit quality of his holdings. Werner Gey van Pittius, co-head of emerging-market fixed income at Investec Asset Management in London: The trade war will last longer than what the market is hoping because it’s not just about trade. There’s an element in the US that is afraid of “the geopolitical rise of China” and that is much bigger than just trade right now.China is preparing for the next decade and trying to reduce the impact of the trade war by opening up their markets, attracting capital, and moving away from US influence by selling Treasuries and buying gold. Their time horizon is beyond the US elections.He is taking a long duration strategy in his bond portfolio as the trade war raises the risk of a recession Carter at BNP Paribas Asset: Politics are driving

the negotiations, and not economics.The upcoming 2020 presidential election, and impeachment investigations in the House, are the dominant context for the trade meeting. Carter said he plans to continue cutting exposure to junk-rated bonds even if there was a positive outcome from the meeting. That’s because the firm doesn’t expect any comprehensive agreement will be reached that would reverse the negative economic eff ects of the trade war.Mark Haefele, global chief investment off icer at UBS Global Wealth Management in Zurich, tells Bloomberg Television: Base case is for tensions to neither worsen nor improve much, with the US to go ahead with the announced additional tariff s.UBS Global is underweight equities globally at this time; the trade impact will be felt hardest in Europe and emerging markets, while the S&P will probably be range-bound.Stuart Ritson, emerging-market bond fund manager at Aviva Investors in Singapore: It is hard to be too optimistic on the outcome of trade talks given the

narrow scope of the discussions.The firm’s local-currency bond portfolio is “relatively defensive” at the moment, given the weak global growth backdrop. It is also positioned for further easing by EM policy makers and has increased exposure to the yen, given its anti-cyclical properties, and still attractive valuations. Robert Carnell, chief economist for Asia Pacific at ING Group NV in Singapore, writes in a note: China may see it as advantageous to keep the trade war alive, but under control, pending political developments in the US.For the US, the benefits of fighting China on trade may now be outweighed by the short-term hit to the economy, in terms of popular support and potential votes for Trump at next year’s presidential election.Stephen Innes, an Asia-Pacific market strategist at AxiTrader, writes in a report: In the absence of a significant catalyst, Asian currencies will continue to track the yuan, which remains the best global barometer for trade war risk. Headline risk will continue to influence trading flows in the Chinese currency.

Emerging equities end lower for third day on trade worriesReutersLondon

Most emerging market stocks headed lower for a third day yesterday, as the United

States and China showed little signs of backing off their trade dispute ahead of a crucial round of negotiations.

Any hope of a breakthrough was quashed after Washington widened its trade blacklist to include some of China’s top artifi cial intelligence start-ups, while China sought to tighten visa restrictions for US nationals with ties to anti-China groups.

In the wake of the decision to black-list Chinese companies, Goldman Sachs said it was reviewing its in-volvement in Megvii Technology Ltd’s

planned initial public off ering. Beijing shares closed marginally higher, but losses in Hong Kong- and Taiwan-list-ed stocks dragged the MSCI EM equi-ties index lower by 0.3%.

“With news fl ows moving in a back-wards direction, it is diffi cult to see how any progress is going to be made in trade talks which suggest equity mar-kets should struggle,” Stephen Innes from AxiTrader wrote in a client note.

Currencies largely held steady as the dollar was wobbly following remarks from Federal Reserve chairman Jerome Powell who fl agged further rate cuts and bond buying.

The Turkish lira steadied after its worst two-day decline in seven weeks, with an aide of President Tayyip Er-dogan saying Turkish forces will cross the Syrian border “shortly” as the

country wages a military incursion against a Syrian Kurdish militia.

Bloomberg reported, citing sources, that Turkish state banks bought about $1bn worth of lira this week to support the currency.

The Russian rouble and the South African rand gained 0.4% and 0.7%, respectively, while the Thai baht — the strongest performing Asian currency in 2019 — hit over a six-year high even as the central bank remained worried about the strength of the currency.

In eastern Europe, the Hungarian forint edged lower versus a fi rm euro even as the country posted a trade sur-plus of €37mn ($40.62mn) in August, beating analysts’ €50mn defi cit fore-cast in a Reuters poll.

However, soft infl ation data this week continued to support the central

bank’s view of interest rates remaining on hold.

Minutes from the latest monetary policy meeting are due later in the day.

Ecuador benchmark bonds hit their lowest in almost a year after fi erce protests at fuel price hikes saw Presi-dent Lenin Moreno move the govern-ment out of Quito to the coastal city of Guayaquil, having already declared a state of emergency.

“At this point the risks are rising, but it’s too early to call (which way it will go),” said Koon Chow, EM FX and macro analyst at UBP.

“Eurobonds total $19bn which is roughly 19% of GDP, so it’s a decent amount.

It’s not Argentina (where dollar debt is 30% of GDP), but there are some echoes there.”

Sensex snaps losing streak; rupee weakens furtherBloomberg, ReutersMumbai

Snapping six straight ses-sions of losses, benchmark Indian equity indices end-

ed higher yesterday led by gains in banking and fi nancial stocks. The S&P BSE Sensex gained 645.97 points or 1.72% to close at 38177.95, while the Nifty 50 index advanced 186.90 points or 1.68% to close at 11,313.30.

In the broader market, the S&P BSE Mid-Cap index was up 1.38%, while the S&P BSE Small-Cap index rose 0.66%.

The market breadth was posi-tive. On the BSE, 1,277 shares rose while 1,242 shares fell. A total of 179 shares were un-changed. On the Nifty 50, 38 stocks advanced and 12 stocks declined.

The BSE’s banking index, Bankex, gained 3.67% to close at 32,537.43. Private and public sector banks were in demand. IndusInd Bank rose 5.45%, State Bank of India was up 4.78%, ICI-CI Bank 4.88%, Kotak Mahindra Bank 3.58%, HDFC Bank ad-vanced 3.44%, Axis Bank gained 2.01%, Bank of Baroda 4.54%, Canara Bank 2.65%, Punjab Na-tional Bank 2.27%, Bank of India 3.70%, and Union Bank of India rose 2.92%.

The Nifty Pharma index gained 1.21% to close at 7,235.60, ending its six-day losing streak. The index shed 9.02% in the past six days from its closing high of 7857.30. Today, Aurobindo Pharma was up 3.16%, Cipla rose 3.70%), Sun Pharmaceu-ticals gained 1.11%, Dr Reddy’s Laboratories 1.52%, Glenmark Pharmaceuticals 1.89%, Lupin rose 2.32% and GlaxoSmithKline Pharmaceuticals was up 0.93%.

Cadila Healthcare surged 4.32% to Rs237.80 after the com-pany received a fi nal approval from the US Food and Drug Ad-ministration for Colesevelam Hydrochloride tablets, used in lowering cholesterol. The tab-lets will be manufactured at the group’s formulations manufac-turing facility at the special eco-nomic zone in Ahmedabad.

Titan Company lost 2.27%

after the company in its Q2 up-date said the jewellery division witnessed a sharp fall in sales af-ter a sudden surge in gold prices dented the consumer demand from mid-June.

While retail sales declined in July, between August and Sep-tember the retail growth was 15% YOY possibly due to promotions and schemes.

TCS fell 1.26%. The software major has been selected by Pan-dora, a world-leading jewellery design and manufacturer based in Copenhagen, as a strategic IT partner. Further, TCS has ex-panded its strategic partnership with Legal & General, UK. The strategic partnership with TCS will help L&G build an intelligent and automated digital work-space aligned to its business vi-sion. Infosys was down 0.73%.

Meanwhile the rupee weak-ened against the US dollar yes-terday, tracking subdued do-mestic equities and other Asian currencies.

Rupee closed at 71.07 a dol-lar, down 0.07%, from Monday’s close of 71.03. The Indian unit had opened at 71.19 a dollar.

Domestic equities have been weak recently, having declined for six sessions and losing 4% during the period, ahead of July-September quarterly earnings that start this week. The market widely expects quarterly corpo-rate earnings to be weak.

The benchmark Sensex gained 1.72% or 645.97 points to close at 38177.95. So far this year, the in-dex has gained 5.85%.

The yield on the 10-year In-dian government bond was at 6.453% compared with its previ-ous close of 6.675%. Bond yield and prices moves in opposite di-rections.

In the year so far, the rupee has weakened 1.83%, while foreign investors have bought nearly $7.66bn in Indian equi-ties and $3.99bn in debt during the period.

Most Asian currencies de-clined after tension between US and China escalated ahead of Chinese Vice Premier Liu He leading a delegation for two days of talks in Washington be-ginning today.

Growing China-US trade tensions hit most Asian marketsAFPHong Kong

Asian markets mostly fell after hefty losses in New York yesterday owing to growing China-US ten-

sions ahead of fresh trade talks, while the pound remained beaten down by fears Britain is on the verge of crashing out of the EU.

The downbeat mood comes as inves-tors fret over signs the global economy is slowing down, with the International Monetary Fund forecasting the weakest growth in a decade owing to long-run-ning tariff disputes.

Days before high-level negotiations were due to resume, the US announced restrictions on 28 Chinese entities over human rights violations in Xinjiang province and imposed visa restrictions on some offi cials.

Then Bloomberg News reported un-named Trump administration offi cials had said the White House was mulling new measures to curtail US investment in the country.

For its part, Beijing has hit out at the decisions and moved to take steps against the National Basketball Association in a brewing row over a team manager’s re-marks on Hong Kong’s protest movement.

A report this week had already said China had narrowed the issues it was willing to discuss at the talks, with ob-servers saying leaders felt in a stronger position as Donald Trump faces an im-peachment inquiry at home and a weak-ening economy.

“It will be interesting to see how it plays out this week between the US and China,” Andrew Balls, at Pacifi c Invest-ment Management, told Bloomberg News.

The fl are-up comes “at a time when we already see growth pretty weak in the fi rst half of next year and you have at least some evidence of weakness in manufac-turing spilling into services”.

While economic data has been in-

creasingly weak in recent months, hopes for this week’s talks have been providing some much-needed support.

But the latest developments were a reminder that progress would likely be rocky. All three main indexes on Wall Street sank and in afternoon trade Hong Kong fell 0.7% while Tokyo closed down 0.6%. Sydney was also off 0.7%, Singa-pore dropped 0.8% and Taipei lost more than 1%. Manila, Wellington, Taipei and Jakarta were also in the red but Mumbai and Shanghai posted gains.

In early trade London, Paris and Frank-furt were all fl at.

“The US tactics are undoubtedly a high risk, seeking to pressure the Chinese trade delegation before the main event really gets underway,” said Jeff rey Halley, OANDA senior market analyst for Asia-

Pacifi c. “Financial markets certainly thought so, with Wall Street a sea of red.

The very real danger is the whole proc-ess backfi res.” There was little support from comments by Federal Reserve boss Jerome Powell, who said the US economy would continue to expand but that trade wars and Brexit were causing headwinds.

The remarks suggested the bank was in no rush to cut interest rates further, with unemployment at a 50-year low, despite jobs creation slowing.

On currency markets, the pound struggled to recover from Tuesday’s losses as Brexit talks between Britain and the European Union teetered on the brink, with both sides blaming the other with just three weeks until the October 31 deadline. Prime Minister Boris Johnson and German Chancellor Angela Merkel

were unable to reach an agreement over the Northern Ireland issue during a tel-ephone conversation. A Downing Street offi cial quoted Merkel as saying the Brex-it talks were “close to breaking down”.

With many economists warning a no-deal Brexit could be calamitous for the British economy, the pound tumbled against the dollar and euro and there were warnings it could fall even further.

With negative sentiment prevalent across trading fl oors, the price of oil ex-tended losses as investors worry about the impact of the prolonged trade war on demand.

In Tokyo, the Nikkei 225 closed down 0.6% to 21,456.38 points; Hong Kong — Hang Seng ended down 0.7% to 25,702.95 points and Shanghai — Composite closed up 0.4% to 2,924.86 points yesterday.

An external view of the Hong Kong Stock Exchange building. The Hang Seng index closed down 0.7% to 25,702.95 points yesterday.

BUSINESS


Sunrise CEO is ‘very confident’ $6.4bn UPC deal will pass

BloombergGeneva

Sunrise Communications Group

AG chief executive off icer Olaf

Swantee said three quarters of

shareholders are positive about

his $6.4bn plan to buy Liberty

Global Plc’s Swiss cable unit.

Swantee said he’s “very con-

fident” he will get the necessary

backing to buy UPC Switzerland

LLC even though Sunrise’s larg-

est investor, Germany’s Freenet

AG, still opposes the deal.

“It’s a project where we cre-

ate a new converged player in

telecommunications that can

truly grab market share from

incumbents,” Swantee said in an

interview with Bloomberg TV

in Zurich on Tuesday. “With this

deal we double the size of our

customer base.”

The remarks are the latest

salvo in the battle between

Swantee and Freenet, the

mobile phone and media firm

that owns about a quarter of

Sunrise shares. The German

company has complained

that the deal price is too high

given pressures in the cable

industry and UPC Switzerland’s

operating performance, and has

vowed to oppose the purchase

at an October 23 shareholder

meeting.

Freenet initially supported the

acquisition and the price, and

then in February made a U-turn

that surprised the board and the

management, Swantee said.

“It had probably a lot to do

with their own issues and finan-

cial challenges,” Swantee said.

“Their arguments are not right,

and other shareholders are

clearly choosing the camp of

the management and the board,

because the synergies make

sense, the industrial logic is

there, and the dividend growth

that is promised by the new

company is very attractive.”

Freenet’s CEO Christoph Vi-

lanek strongly rejected that de-

scription, saying in an interview

on Tuesday that the company

has no financial issues. Vilanek

said he’d been critical of the deal

as early as last December, and in

mid-January informed Sunrise’s

management that Freenet would

oppose the acquisition under

the terms proposed.

“There was no U-turn,”

Vilanek said by phone. “The

fact that Swantee is so aggres-

sive is a sign that he knows a

large number of shareholders

strongly criticise the deal.”

Swantee has become more

vocal on the benefits of the deal

as the shareholder vote nears,

and Sunrise has taken out ads in

Swiss newspapers to promote

the tie-up. Swiss investor advi-

sory group Ethos on Tuesday

recommended that sharehold-

ers vote in favor of the deal.

Swantee said he has no plan

B if it fails and it’s too soon to

say whether he would leave if

that happens. A negative vote

would “of course shake up” the

management and the board, he

said in an interview.

The CEO has met more

than 200 investors in the past

weeks, most of which had a

positive view about the trans-

action, but some of them don’t

want to go public with their

support, he said.

LME nickel stocks are falling at an unprecedented rateBy Andy HomeLondon

Where is all the nickel going? London

Metal Exchange (LME) stocks of nickel are

falling at an unprecedented rate.

Another 8,898 tonnes left the ex-

change’s warehouse system on Tuesday,

meaning stocks have slumped by almost a

third in the last two weeks.

Headline inventory of 108,624 tonnes is

the lowest since 2012.

Strip out metal awaiting physical load-

out, and “live” stocks of 49,494 tonnes are

the lowest since 2008.

Disappearing stocks are adding fuel to

the bull fires that were lit when Indonesia

announced at the start of September it

would bring forward to next year a ban on

exports of nickel ore. LME three-month

nickel is trading around $17,600 per tonne,

up over 60% on the start of the year in

sharp contrast to the rest of the base met-

als, which are mostly in negative territory

due to global manufacturing weakness.

The stocks exodus is now creating a

rolling squeeze on the London market.

This does not reflect physical supply-

chain tightness. Buyers are backing off

from the high price with physical premi-

ums imploding.

But it is clear that someone is betting

big that the Indonesian ban will generate a

supply hit causing real-world tightness in

the not-too-distant future.

The super-fast decline in LME inventory

is perpetuating the most acute time-

spread tightness in over a decade in the

London market.

The benchmark cash-to-three-months

spread flexed out to backwardation of

$240 per tonne earlier this month and the

cash metal premium was still valued at an

elevated $104 at Tuesday’s close.

The exchange’s positioning reports

show a dominant long holding 40-50% of

the rapidly depleting “live” stocks.

The spread tightness is supporting the

elevated outright price with each daily

exchange stocks report reinforcing the

bull circle. But there is no current shortage

of nickel.

That much is evident from the fact that

the backwardation has already sucked in

almost 50,000 tonnes of metal since the

start of September.

More may be on its way given the

negative impact of high outright price and

backwardation on physical buying.

Premiums are collapsing, with that for

full-plate nickel delivered to China crash-

ing from $140-160 per tonne over LME

cash nickel in the middle of last month to a

current discount of $50-100, according to

Fastmarkets.

The import arbitrage window with the

Chinese market has also been slammed

shut. China’s imports of refined nickel

totalled 28,600 tonnes in August, the high-

est monthly tally in almost two years.

However, most of the flow, 20,800

tonnes, was classified as “entrepot by

bonded area”, implying the metal has

made it only as far as Shanghai’s bonded

warehouses rather than to a mainland

physical buyer.

This LME stocks grab isn’t a reflection

of current market dynamics but is rather

about potential future market tightness

resulting from the cut in the flow of Indo-

nesian ore to China’s mainland stainless

steel producers.

It is no secret in the nickel market that

a Chinese company has been snapping up

LME stocks. Tsingshan Holding Group was

the driver of falling stocks in July and is

the name in the frame again this time.

The stainless steel producer sits at the

heart of the supply conundrum thrown

up by Indonesia’s accelerated ban on ore

exports. It has led the charge to build out

processing capacity in Indonesia.

It is not only the largest producer of

nickel pig iron (NPI) in the country but

has also built a state-of-the-art stainless

steel plant. Indonesia would like more

operators to do the same, which is why

it has brought forward the export ban to

next year.

If nickel miners want to keep operating,

they will have to build processing capacity

in the country.

Choking off the supply of nickel ore

to China’s mainland stainless producers

will generate a supply shock to a market

already worrying about whether there will

be enough metal to meet the expected

needs of the electric vehicle battery

sector. Calculating the likely impact of

that shock is diff icult, though, given the

number of moving parts in the equation.

How much can Indonesia’s miners

ship before the ban comes into force in

January 2020? How much can Philip-

pine producers lift their production to

compensate? How much stock are China’s

stainless producers sitting on? Will higher

Indonesian production of processed

NPI help fill any supply gap and when?

Tsingshan, for one, seems to be betting

there will be disruption at some stage of

the production chain, generating more

demand for the sort of refined metal held

in LME warehouses.

It is by no means the first player in the

market to take a view on nickel’s bull nar-

rative by hoarding physical stocks.

Ever since LME inventory started falling

in 2018, there has been a broad market

consensus that some of what has been

leaving has simply moved to off -market

storage.

Andy Home is a columnist for Reuters.

The views expressed are those of the author.

Hostile state takeover tops Europe’s list of 5G worriesBloombergBrussels

The European Union has warned against a nightmare scenario whereby hackers or hostile

states assume control of everything from electricity grids to police com-munications and even home applianc-es, in a report assessing the security risks stemming from the roll out of 5G technology.

The review, fi rst reported by Bloomb-erg News on Tuesday and offi cially published yesterday, doesn’t name China or Huawei, it paves the way for regulatory measures such as restricting an over reliance on telecom equipment from a single supplier, especially if the latter is based in a country with poor democratic standards.

“Hostile third countries may exer-cise pressure on 5G suppliers in or-der to facilitate cyberattacks serving their national interests,” the EU said in its 24-pages report to be published yesterday.

Suppliers may be subjected to pres-sure because of their ownership, their home country’s legislation and states, experts at the EU wrote.

The document, originally coded “amber” for a restricted circulation, points to non-democratic countries that could exert pressure and poses a risk of spying.

It warned in its conclusions that the new technology will “increase the number of attacks paths that could be exploited by threat actors, in particular non-EU states or state-backed actors, because of their capabilities (intent and resources) to perform attacks against

EU Member States telecommunica-tions networks.” The EU is calling on its members states to revise their security systems ahead of the deployment of the 5G technology citing risks ranging from state-backed espionage, to sabotage

through malware by criminal groups and denial of services that would block end users appliances.

It also warned countries and opera-tors of the risks of relying on a sole sup-plier to build their infrastructure of the

risks, without citing countries like It-aly who have already signed deals with Huawei.

The European Commission, the bloc’s executive branch, will unveil its assessment of 5G security risks, as

Washington continues to pressure al-lies to reject Huawei from its future networks. US offi cials have threatened to cut off intelligence with countries that don’t, while not ruling out other potential penalties.

“EU-based operators who become overly dependent on a single equip-ment supplier are exposed to a number of risks caused by that supplier coming under sustained commercial pressure, whether due to commercial failure, be-ing subject to a merger or acquisition, or being placed under sanctions,” ac-cording to the report.

The assessment is set to serve the ba-sis for European-wide measures in the area, including possibly designating vendors like Huawei as “non-secure.” It was written following contributions sent send by all member states, includ-ing Germany and France.

The Commission sought to explore the full range of risks ranging from vi-tal industries capacity to function to “democratic processes, such as elec-tions” that will eventually rely on the 5G system to work.

While any decision to ban Huawei would ultimately rest with the capi-tals - and no European country has yet decided to fully ban the company from its networks - the EU-wide approach could make it more diffi cult for Beijing to retaliate against any individual Euro-pean country that takes too hard a line against Huawei.

US and European offi cials have raised concerns about partnering with Chi-nese equipment makers like Huawei following a 2017 Chinese law that man-dates any organisation and citizen to support and assist national intelligence in their investigations.

The European Union headquarters in Brussels. The EU has warned against a nightmare scenario whereby hackers or hostile states assume control of everything from electricity grids to police communications and even home appliances, in a report assessing the security risks stemming from the roll out of 5G technology.

Bank of England to spell out fate of open-ended funds in DecemberReutersLondon

How investors can pull cash from open-ended funds will be updated in December, following the high-profile suspension of money manager Neil Woodford’s equity fund, the Bank of England said.In the clearest sign yet that changes to how funds are designed are on the cards, the BoE’s Financial Policy Committee published principles yesterday to reduce “incentives” for investors to redeem before others, which can trigger fire sales.“The committee continued to judge that the mismatch between redemption terms and the liquidity of some funds’ assets had the potential to become a systemic risk,” the committee said in a statement.Woodford had to suspend his flagship fund in June, trapping thousands of retail investors.The fund offered daily redemptions to customers, but it ran out of cash because some of the assets were unlisted and could not be quickly sold.The BoE and the Financial Conduct Authority are looking at the illiquidity mismatch in open-ended funds that contain hard-to-trade assets and off er daily withdrawals.“The progress of this review will be reported in the December Financial Stability Report (FSR),” the FPC said.

The FSR is due to be published on December 10.The committee said that incentives for investors to redeem ahead of others in the fund should be reduced through “greater consistency in the design of the funds”. This would be between their liquidity — or how quickly assets can be sold — and redemption frequency or length of notice period, as well as the price off ered to redeeming investors.Investors often suff er a price discount if they withdraw when the fund is struggling to sell assets.“Consistency between these features of a fund could ensure that investors redeeming their share could do so without placing a cost on remaining investors,” the FPC said. Britain, however, may not be able to introduce all the fund rule changes itself.Some will need backing from international regulators, who have already signalled scepticism over the need for an overhaul.Open-ended funds like Woodford are regulated under European Union rules.The FCA last week published tougher rules for funds that invest in hard-to-sell assets like property, as property funds with more than £18bn in assets under management froze shortly after the June 2016 Brexit vote.But the new FCA rules did not cover funds like Woodford’s and did not tackle fund structure, leaving that to the separate BoE and FCA review.

Bankers brace for no-deal Brexit markets mayhem 10 days earlyReutersLondon

Financial markets could go into a Brexit tailspin about 10 days ear-lier than expected if a potentially

chaotic no-deal departure at the end of the month looks inevitable, bankers say.

Five banking sources said contin-gency plans were in place to deal with a possible rout in stocks, bonds and sterling on October 21, rather than im-mediately after Britain’s scheduled de-parture date of October 31.

Traders are preparing to eat, sleep and work round the clock in their offi c-es. Senior management of at least two large banks are expected to convene in Brexit “control rooms” to oversee op-erations and keep regulators abreast of market activity.

Under legislation known as the Benn Act passed by parliament last month, if Britain fails to secure a departure deal at an EU summit on October 17, Prime Minister Boris Johnson must ask for an extension by October 19.

There will be a special sitting of par-liament that day — a Saturday, when the House of Commons does not usu-ally meet — to debate ways forward.

Brussels has signalled that a compro-mise settlement proposed by Johnson last week won’t fl y, and the prime min-ister has said he will not extend Brexit

beyond October 31. If Johnson refuses to request an extension, a no-deal scenar-io becomes the most likely outcome, the sources said. Monday, October 21 would then be the fi rst day of trading for mar-kets and investors to react to Britain’s pending rupture from the bloc.

“Everyone realises that Monday morn-ing when markets open is an important point in the process,” a senior banker at an international lender told Reuters. The EU is Britain’s biggest fi nancial services ex-port market, worth £26bn in 2017, and a no-deal Brexit would disrupt some cross-border business.

Many banks, insurers, fund manag-ers and share trading platforms based in Britain have already opened hubs in the EU to ensure continuity of their business within the bloc.

Even if no deal is agreed or extension requested, markets would face either the government resigning, or clashing with parliament and the courts over the Benn Act, both of which would also unnerve investors, the banker said. While sterling took heat again on Tuesday, it remains largely within re-cent trading ranges. Markets still think there is far less than a 50% chance of a “no deal” Brexit this month and most expect an election to precede Brexit.

Options markets are also showing no sign of panic so far, with implied vola-tility, a gauge of expected price swings, relatively subdued. A source at a sec-

ond global bank said detailed plans were afoot to manage “bumpy” market conditions from October 21 through Brexit day.

October 21 is also the beginning of autumn holidays for many schools in Britain, and banks have asked staff to be “sensible” regarding travel and leave plans. “We continue to plan for a hard Brexit scenario — that may mean extra staff on the trading fl oors,” the source said. In July, the Association for Finan-cial Markets in Europe (AFME) warned that banks may not have enough to time to make the technology changes necessary to avoid market mayhem in the event of a no-deal Brexit.

Brexit is due on a Thursday, with markets in many European countries open on the following day.

Global banks may have to report trades to a diff erent regulator, depend-ing on where they are based. Such a switch would normally require a full weekend to ensure proper testing.

Additional challenges may arise from November 1 being a public holi-day in many EU countries, meaning not all regulators may be in place on that day, AFME has said.”

In Global Markets, we are mak-ing sure that we have the resources in place to provide a 24-hour service to our clients across all the key markets to which we usually provide access,” a spokesman for HSBC said.

BUSINESS7Gulf Times


Credit Suisse weighs US private banking return after exitBloombergZurich

Credit Suisse Group AG is considering a return to US wealth management after a

four-year absence as chief executive offi cer Tidjane Thiam seeks to boost growth in private banking.

Talks have focused on adding $15bn of assets under manage-ment at a new base in Miami, mostly catering to wealthy Latin Americans, people familiar with the matter said.

If the bank moves ahead, it could employ up to 30 people including control and support staff in Florida, the people said, asking not to be identifi ed as the talks are private. No fi nal decision has been taken and talks are at an early stage, they said.

The venture would be symboli-cally important for the Swiss bank, marking a return to private bank-ing on US soil after an agreement to transfer its US brokerage to Wells Fargo & Co in 2015 after a fi ne relat-ed to client tax evasion.

The US is one of the biggest off -shore wealth centres in the world, with Miami especially favoured by Latin America clients because of its close geographic and cultural links. Buoyed by a more favourable regu-latory environment, the US is likely to see strong growth from Latin

American and Asian investors, ac-cording to the BCG Global Wealth Report.

A spokesman for Credit Suisse declined to comment. Switzerland’s second-biggest lender reached an agreement in 2014 to plead guilty and pay about $2.6bn to the US Jus-tice Department and regulators for helping US citizens hide money.

The bank shifted strategy a year later under Thiam, who sought to bolster returns by focusing on the

home market of Switzerland and expanding in Asian wealth manage-ment. The bank agreed the broker-age transfer a year later.

The plans are an example of how Thiam is planning to kickstart growth in wealth management in the coming years as negative inter-est rates and cautious clients de-press margins in Europe.

The US ranks as the fourth largest country for off shore wealth behind Switzerland, Hong Kong and Singa-

pore, and is likely to hold about $1tn for non-US residents by 2023, ac-cording to BCG. Talks have focused on managing $15bn of assets at a new base in Miami.

Credit Suisse’s international wealth management business has focused on Latin America, Europe, the Middle East and Africa and was led until recently by Iqbal Khan, who moved to rival UBS Group AG. He was replaced by Philipp Wehle.

Thiam has been devoting more face time to top private bankers and holding talks on boosting pay as he seeks to prevent defections after Khan’s exit, according to people fa-miliar with the matter.

The CEO has been reaching out to the best revenue generators at the international wealth business to discuss compensation and ca-reer prospects since Khan left in the summer, paying particular atten-tion to emerging markets such as Brazil, the Middle East and emerg-ing Europe, the people said.

A scandal erupted over Khan’s departure after it was reported that Credit Suisse had its former em-ployee followed to make sure he didn’t try to encourage others to defect.

The bank’s own probe led to the ouster of chief operating offi cer Pierre-Olivier Bouee, a key ally of the CEO, though it didn’t fi nd wrongdoing on Thiam’s part.

BT tries to reboot image to stop rivals taking its customersBloombergLondon

BT Group Plc announced a new eff ort to

improve customer service, including bringing

back BT-branded shops for the first time in

almost two decades, as chief executive off icer

Philip Jansen tries to prevent defections to

rival phone companies.

Jansen is introducing the changes eight

months after taking the top job. In a recent

meeting with analysts, he indicated that “the

market is increasingly competitive and BT

will not sit back and lose market share,” ac-

cording to a note by analysts led by Polo Tang

at UBS. The nation’s dominant carrier, based

in London, has struggled with customer

complaints. At the start of 2017 it received 34

of them per 100,000 customers, the highest

in the industry, according to the regulator,

Ofcom. That dropped to 18 by the end of last

year, in line with the industry average.

With aggressive price competition under-

mining profitability, British phone companies

are under increasing pressure to improve

services by cutting call wait times, reducing

line failure rates and fixing service break-

downs quicker. BT also faces demands from

the government to speed the nation’s transi-

tion from slower copper networks to faster

full-fibre broadband.

The company said yesterday that 600

stores belonging to EE, the mobile carrier it

bought in 2016, will receive dual branding and

will off er consumers and small businesses ac-

cess to local experts for a range of issues.

A new team of 900 home tech experts will

provide assistance in people’s homes, and the

company pledged that all customer service

calls will be answered in the UK and Ireland

from January, a year earlier than planned.

Vodafone Group Plc undercut BT on 5G

pricing after both launched the faster mobile

services this summer. Mobile revenues

across the industry shrank 1.6% in the second

quarter, the worst performance in five years,

according to Enders Analysis. Vodafone plans

to increase UK shop numbers, even as it cuts

its European store network by 15%.

“It’s a very competitive market, this one,

and that’s why it’s so important for us to

diff erentiate beyond price,” BT Consumer

CEO Marc Allera said at a press conference

yesterday. “And we do believe because of this

explosion in devices in customer’s homes,

explosion in software platforms, content plat-

forms, life is getting more complicated.”

The changes continue a push Jansen

started in May, when he off ered each em-

ployee £500 ($611) in shares to bolster staff

morale against the strains of a transformation

that included thousands of job cuts.

Other changes announced yesterday

include consumer and business services

under a new Halo brand and an off er of online

and community training programs. The CEO

said previously flagged growth in operating

and capital expenditure will pay for the new

programs. Investment to roll out fibre to the

premises will continue, with an aim of reach-

ing 4mn premises by March 2021.

Prime minister Boris Johnson has pledged

to bring fibre broadband to every home by

2025. BT said yesterday it will automatically

shift 700,000 customers to fibre from cop-

per by June 2020. This step can speed the

closure of older networks as many premises

with access to higher speeds don’t manually

switch to them.

Jansen said in a speech to reporters late

Tuesday he was not looking to earn outsize

profits from the fibre rollout, and that he

wanted to encourage the government and

regulators to help the company speed

construction.

The headquarters of Credit Suisse in Zurich. The Swiss bank is considering a return to US wealth management after a four-year absence as chief executive off icer Tidjane Thiam seeks to boost growth in private banking.

Swiss bank CEO bets own cash on Berenberg unit’s wealth revamp

BloombergFrankfurt

Peter Raskin, Bergos Berenberg’s

chief executive off icer, may

increase his personal stake in the

Swiss private bank as he pushes

to turn it into a successful and

independent wealth manager.

“I had always dreamed of hav-

ing my own bank,” the 51-year-old

Swiss and German national said in

an interview. “I wouldn’t mind in-

creasing my share.” Raskin teamed

up to buy the business when Ger-

man lender Joh Berenberg Gossler

& Company KG put its Swiss

private banking subsidiary up for

sale. The deal closed late last year

and left him with a 5% stake.

He may get the opportunity

to increase his holding next year,

when he says the Hamburg-based

parent company, is set to sell its

remaining 20%. To demonstrate

its independence, the company is

likely to drop Berenberg from its

name, he said. A representative

of the German bank declined to

comment.

Raskin said he’s is confident

that he will succeed by focusing

on wealth services only. Unlike

Berenberg in Hamburg, “we will

not off er any investment banking

or institutional business,” he said.

Surviving in an industry where

scale matters might not be easy.

Especially in Switzerland, where

business with the wealthy has

shown some weakness. According

to a study by KMPG, only a few

private banks in the country have

been able to consistently generate

more than 5% of net new money

over the past few years.

With just 110 employees and

6bn Swiss francs ($6bn) under

management, Bergos Beren-

berg is relatively small. But the

business makes money and is

expected to end this year with a

profit, said Raskin.

Daimler CEO defendselectric strategy as key investor meeting loomsBloombergFrankfurt

Daimler AG chief execu-tive offi cer Ola Kallenius said the auto industry

faces a fundamental transfor-mation that brings about both enormous challenges as well as opportunities to generate new sources of income.

Daimler will focus on devel-oping fully-electric and hy-brid cars and sees potential for fuel-cell technology primarily in larger vehicles, Kallenius said yesterday at a conference in Nuertingen, Germany, hosted by research fi rm Institut fur Auto-mobilwirtschaft.

“The future is electric,” Ka-llenius said, adding that “the invention has to be reinvented,” referring to company’s founders who created the fi rst automo-biles in 1886.

Global sales at the manufac-turer’s main Mercedes-Benz brand surged to a third-quarter record after a dismal fi rst half of the year, when deliveries suf-fered from production bottle-necks embroiling popular SUV models and costs related to die-sel-emissions probes forced it to slash full-year profi t targets.

Critical meeting: The anticipat-ed sales recovery might help bol-ster confi dence just over a month ahead of a critical investor meeting on November 14 in London, where Kallenius plans to map out his fu-ture strategy after succeeding Di-eter Zetsche earlier this year.

“Our concern heading into this event is the lack of cash fl ow

at Daimler, which we believe will result in a dividend reduction in the coming months,” Citi Re-search analyst Angus Tweedie said in a report.

This is “likely a leading indica-tor of disappointing margin guid-ance for 2020 and 2021 as the new management team addresses the challenges facing the business.” The broader economic picture is hardly encouraging. While ap-petite for luxury cars in China has remained relatively robust com-pared to the contracting overall market, uncertainty has been swirling over a no-deal Brexit and simmering political tensions from the US to Asia.

Kallenius reiterated his re-marks from the Frankfurt auto show last month that meeting stricter emissions rules poses a substantial challenge amid un-predictable consumer behaviour.

Mercedes unveiled a silver battery-powered design concept for a full-size sedan in Frankfurt that’s slated to complement the fl agship S-Class. So far luxury cruisers have remained a mainstay for traditional combustion-era heroes, with only plug-in hybrids available for exclusive rides like the BMW 7-Series or the Audi A8.

After introducing the EQC electric sport utility vehicle last year, Mercedes plans at least 10 purely battery-powered cars through 2022 as emissions rules tighten across the globe.

But the regulatory changes haven’t been matched by con-sumer demand, with potential buyers concerned about driving ranges, charging times and high sticker prices.

Repo market is telling Washington that budget defi cit still do matterBloombergNew York

These days, you’d be hard-pressed to fi nd many people in Washing-ton who are all that worried about

the US budget defi cit. Republicans seem more interested in tax cuts, Democrats have ambitious spending plans for every-thing from health care to infrastructure, and Modern Monetary Theory, a mani-festo for free-spending governments, is all the rage in progressive circles.

But on Wall Street, bond dealers pro-vided a small, but pointed reminder that, just maybe, debt and defi cits do matter after all.

It came in the form of a sudden spike in interest rates for repurchase agreements, or repos, a normally obscure part of fi -nance that keeps the global capital mar-kets spinning. Plenty of factors helped cause liquidity to dry up, but one that’s getting more attention is concern that dealers are starting to choke on Treas-uries as the US government goes deeper into the red.

The argument goes like this: Primary dealers, which are obligated to bid at US debt auctions, have absorbed more and more Treasuries to fi nance the Trump administration’s tax cuts as investor de-mand has waned. Typically, they rely on repos to fund those purchases by putting up the debt as collateral.

The problem is that with the fi nancial system already inundated by over $16tn of Treasuries, banks constrained by crisis-era rules have fewer incentives to participate in repo.

Simply put, there was too much new debt fl ooding the fi nancial system and not enough money, causing lenders to jack up repo rates. The Federal Reserve has moved to inject much-needed cash on a temporary basis, but if left un-checked, the fl ood of supply in coming months and years could ultimately result in higher borrowing costs for the US.

“There’s no down time on the sup-ply front,” said Jim Vogel, a strategist at FTN Financial who’s been following debt markets for over three decades.

The Treasury’s next slate of debt sales comes this week. Yields on the bench-mark 10-year note are currently at 1.52%.

Of course, supply wasn’t the only is-sue. The situation was compounded by corporate tax payments that also si-phoned cash out of the banking system.

And to be fair, nobody is suggesting the US faces any imminent problems fi nanc-ing itself. Everywhere you look, govern-ment borrowing costs in bond markets around the world are at historic lows.

The dollar remains the world’s re-serve currency, and with the global economy showing signs of weakness, investors are still likely turn to Treas-uries for safe harbor.

Nevertheless, the mid-September repo upheaval is a clear sign there might actually be limits on just how much debt the US can take before triggering more frequent disruptions. Defi cits aren’t ex-actly new, but they do add up. Since the crisis, the market for Treasury debt has roughly tripled in size.

And the fi scal balance has only gotten worse under President Donald Trump. The defi cit surpassed $1tn in the fi rst 11 months of the fi scal year, which just ended last month. And the Congres-sional Budget Offi ce forecasts the short-fall this fi scal year will exceed $1tn. That all means the Treasury will need to keep increasing its debt auctions to fund the budget shortfalls.

In the coming decade, debt as a per-centage of the gross domestic product will reach 100%, CBO estimates show. That would be greater than any time since just after World War II.

Before the fi nancial crisis, debt-to-GDP was about 40%.

The growth was more than manage-able in the years after the crisis because the Fed bought signifi cant amounts of Treasuries (from dealers post-auction) with its quantitative easing, or QE. Some argue the Fed used QE to “monetise” the debt, which pumped trillions of dollars’ worth of cheap cash into the banking

system and kept US funding costs artifi -cially low. Whatever the case, there’s lit-tle doubt the buying helped dealers clear their inventories.

That started to change in late 2017, when the Fed began to gradually unwind those purchases, reduce the size of its balance sheet and drain the excess cash held in bank reserves. The Fed now holds roughly $3.9tn in assets, down from $4.5tn in January 2015. More than half of the total is in Treasuries.

Without the Fed, which was arguably the biggest buyer of US debt during the QE era, dealers have had to pick up the slack. In May, primary dealers’ outright positions in Treasuries reached an all-time high of almost $300bn – more than double what they were the previous year.

What’s more, post-crisis rules have led banks to prefer cash over Treasuries, which contributed to the liquidity issues in repo markets, according to Michael de Pass, head of Treasuries trading at Cita-del Securities.

“The Fed has shrunk its balance sheet in a meaningful way, resulting in reduced reserves in the system,” he said. The cash squeeze has “been further exacerbated by increased issuance, resulting in high levels of Treasury collateral settling into the market.”

Dealers aren’t getting as much help

from foreign investors to soak up all that additional supply. Big creditors like China and Japan have slowed their buy-ing of Treasuries in recent years. Overall, the share of foreign offi cial holdings has shrunk to just over 25% this year, from a high of about 40% in 2008.

That waning appetite been refl ected in the amount of bids investors submit ver-sus the actual amount sold, known as the bid-to-cover ratio.

According to an analysis by John Ca-navan, Oxford Economics’ lead analyst, the ratio for 3-, 10- and 30-year debt sold each month has fallen to 2.39. That’s down from 2.89 times in January 2018, just before the Treasury began boosting its sales, and far lower than a high of 3.48 times in December 2011.

So-called auction tails, which occur when yields on debt issued at auction exceed prevailing levels in the market at the time of sale, have become more com-mon as well. In layman’s terms, it’s a sign investors need to be paid more to take on new debt. That’s been true especially for longer-maturity debt, like the 10-year note and the 30-year bond.

“The debt has become more diffi cult to digest as the rise in Treasury issuance is outpacing the rise in demand, and overall there’s been a decline in recent years in foreign demand,” Canavan said.

The Federal Reserve building in Washington, DC. The Fed has moved to inject much-needed cash on a temporary basis, but if left unchecked, the flood of supply in coming months and years could ultimately result in higher borrowing costs for the US.

BUSINESS


Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Exchange Index Etf

Qatar Cinema & Film DistribAl Rayan Qatar Etf

Qatar Insurance CoQatar Aluminum Manufacturing

Ooredoo QpscNational Leasing

Mazaya Qatar Real Estate DevMesaieed Petrochemical Holdi

Al Meera Consumer Goods CoMedicare Group

Mannai Corporation QscMasraf Al Rayan

Al Khalij Commercial BankIndustries Qatar

Islamic Holding GroupInvestment Holding Group

Gulf Warehousing CompanyGulf International Services

Ezdan Holding GroupDoha Insurance Co

Doha Bank QpscDlala Holding

Commercial Bank PsqcBarwa Real Estate Co

Al Khaleej Takaful GroupAl Ahli Bank

13.33

6.30

1.23

1.37

0.40

0.53

6.25

6.00

19.06

6.75

3.63

9.01

1.85

15.02

2.35

3.60

0.83

22.70

0.31

15.41

10.10

2.20

2.32

3.13

0.90

7.34

0.70

0.73

2.88

15.37

7.70

3.28

3.55

1.19

10.82

2.05

0.54

5.00

1.64

0.67

1.03

2.53

0.69

4.42

3.35

1.93

0.73

0.00

-1.25

-0.81

0.00

-1.23

0.00

-0.79

-0.17

-0.68

-1.60

0.00

0.67

-1.60

-0.99

0.43

0.00

1.47

-1.30

-0.65

0.06

-0.20

0.00

-0.30

-2.19

-1.74

-0.41

0.00

0.00

-0.69

-0.90

-1.28

-0.61

-0.28

-0.83

-0.73

-0.49

0.37

0.81

-2.38

-0.75

0.98

-1.56

-0.29

-1.12

-0.30

-1.53

-0.28

-

112,145

790,196

3,223,474

2,125,826

30,000

47,934

55,289

757,336

10,533

65,954

5,035,896

403,718

1,365,633

1,652,053

-

9,558,746

185,917

5,648,466

230,203

2,500

-

5,000

404,424

2,850,451

394,260

588,556

283,709

1,715,447

34,692

571,704

259,436

8,056,745

304,000

492,355

214,798

1,086,099

42,861

1,316,004

5,979,772

29,000

2,386,090

151,350

364,831

1,096,449

435,259

10,383,828

QATAR

Company Name Lt Price % Chg Volume

KUWAIT


OMAN


KUWAIT


KUWAIT


Oman PackagingOman Oil Marketing Company

Oman National Engineering AnOman Investment & Finance

Oman Intl MarketingOman Flour Mills

Oman Fisheries CoOman Europe Foods Industries

Oman Education & Training InOman Chromite

Oman ChlorineOman Ceramic Company

Oman Cement CoOman Cables Industry

Oman & Emirates Inv(Om)50%Natl Aluminium Products

National Real Estate DevelopNational Mineral Water

National Life & General InsuNational Gas Co

National Finance CoNational Detergent Co Saog

National Biscuit IndustriesNational Bank Of Oman Saog

Muscat Thread Mills CoMuscat Insurance Co Saog

Muscat Gases Company SaogMuscat Finance

Muscat City Desalination CoMajan Glass Company

Majan CollegeHsbc Bank Oman

Hotels Management Co InternaGulf Stone

Gulf Mushroom CompanyGulf Investments Services

Gulf Invest. Serv. Pref-SharGulf International Chemicals

Gulf Hotels (Oman) Co LtdGlobal Fin Investment

Galfar Engineering&ContractGalfar Engineering -Prefer

Financial Services Co.Financial Corp/The

Dhofar TourismDhofar Poultry

Dhofar Intl DevelopmentDhofar Insurance

Dhofar Generating Co SaocDhofar Fisheries & Food Indu

Dhofar CattlefeedDhofar Beverages Co

Construction Materials IndComputer Stationery Inds

Bankmuscat SaogBank Nizwa

Bank Dhofar SaogArabia Falcon Insurance Co

Aloula CoAl-Omaniya Financial Service

Al-Hassan Engineering CoAl-Fajar Al-Alamia Co

Al-Anwar Ceramic Tiles CoAl Suwadi Power

Al Sharqiya Invest HoldingAl Maha Petroleum Products M

Al Maha Ceramics Co SaocAl Madina Takaful Co Saoc

Al Madina Investment CoAl Kamil Power Co

Al Jazerah Services -PfdAl Jazeera Steel Products Co

Al Jazeera ServicesAl Izz Islamic Bank

Al Buraimi HotelAl Batinah PowerAl Batinah Hotels

Al Batinah Dev & InvAl Anwar Holdings Saog

Al Ahlia Insurance Co SaocAhli Bank

Acwa Power Barka SaogAbrasives Manufacturing Co S

A’saff a Foods Saog0Man Oil Marketing Co-Pref

#N/A Invalid Security#N/A Invalid Security

0.27

1.07

0.14

0.13

0.52

0.68

0.08

1.00

0.24

3.64

0.38

0.42

0.23

0.81

0.07

0.18

5.00

0.09

0.32

0.22

0.14

0.70

3.92

0.19

0.08

0.78

0.17

0.07

0.12

0.18

0.17

0.13

1.25

0.12

0.31

0.08

0.11

0.14

8.55

0.07

0.08

0.39

0.06

0.10

0.49

0.18

0.30

0.17

0.19

1.28

0.20

0.26

0.04

0.26

0.44

0.09

0.13

0.10

0.53

0.10

0.02

0.75

0.11

0.07

0.09

0.79

0.17

0.08

0.02

0.38

0.55

0.19

0.13

0.07

0.88

0.07

1.13

0.07

0.09

0.36

0.13

0.66

0.05

0.60

0.25

0.00

0.00

0.00

0.00

0.00

2.42

0.00

0.00

3.85

0.00

0.00

0.00

0.00

0.00

-1.75

0.00

2.94

0.00

0.00

0.00

0.00

-3.91

0.00

0.00

0.00

1.62

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.23

0.00

0.00

0.00

0.00

-1.22

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

4.76

0.00

2.33

0.00

0.00

0.00

-2.26

0.00

0.00

0.00

0.00

0.00

0.96

2.90

0.00

0.00

0.00

-1.23

0.00

0.00

0.00

-9.57

0.00

0.00

0.00

2.90

0.00

0.00

0.00

5.88

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-

-

-

1,947,866

-

-

496,392

-

-

-

-

-

22,300

-

294,224

-

-

-

-

20,000

-

-

-

169,178

-

-

-

27,233

-

-

-

270

-

-

-

4,855,889

-

420

-

-

3,238,772

-

-

-

-

-

-

-

-

-

50,032

-

45,500

-

21,548

53,347

170,425

-

-

-

2,000

-

1,233,390

800,550

21,884

-

70,312

120,000

26,000

-

-

30,000

1,800

76,900

-

704,680

-

-

1,000

847,801

-

-

-

-

-

-

-

Al-Madar Finance & Invt CoGulf Petroleum Investment

Mabanee Co SakcInovest Co Bsc

Al-Deera Holding CoMena Real Estate Co

Amar Finance & Leasing CoUnited Projects For Aviation

National Consumer Holding CoAmwal International InvestmeEquipment Holding Co K.S.C.C

Arkan Al Kuwait Real EstateGfh Financial Group Bsc

Energy House Holding Co KscpKuwait Co For Process PlantAl Maidan Dental Clinic Co KNational Shooting CompanyAl-Ahleia Insurance Co Sakp

Wethaq Takaful Insurance CoSalbookh Trading Co Kscp

Aqar Real Estate InvestmentsHayat Communications

Soor Fuel Marketing Co KscTamkeen Holding Co

Alargan International RealBurgan Co For Well Drilling

Kuwait Resorts Co KsccOula Fuel Marketing Co

Palms Agro Production CoMubarrad Holding Co Ksc

Shuaiba Industrial CoAan Digital Services Co

First Takaful Insurance CoKuwaiti Syrian Holding Co

National Cleaning CompanyUnited Real Estate Company

AgilityKuwait & Middle East Fin Inv

Fujairah Cement IndustriesLivestock Transport & Tradng

International Resorts CoNational Industries Grp Hold

Warba Insurance CoFirst Dubai Real Estate Deve

Al Arabi Group Holding CoKuwait Hotels Sak

Mobile Telecommunications CoEff ect Real Estate Co

Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co

Kuwait Cement Co KscSharjah Cement & Indus Devel

Kuwait Portland Cement CoEducational Holding Group

Bahrain Kuwait InsuranceAsiya Capital Investments Co

Kuwait Investment CoBurgan Bank

Kuwait Projects Co HoldingsAl Madina For Finance And In

Kuwait Insurance CoAl Masaken Intl Real Estate

Intl Financial AdvisorsFirst Investment Co Kscc

Al Mal Investment CompanyBayan Investment Co Kscc

Egypt Kuwait Holding Co SaeCoast Investment Development

Privatization Holding CompanInjazzat Real State Company

Kuwait Cable Vision SakSanam Real Estate Co Kscc

Ithmaar Holding BscAviation Lease And Finance C

Arzan Financial Group For FiAjwan Gulf Real Estate Co

Kuwait Business Town Real EsFuture Kid Entertainment And

Specialities Group Holding CAbyaar Real Eastate Developm

Dar Al Thuraya Real Estate CKgl Logistics Company Kscc

Combined Group ContractingJiyad Holding Co Ksc

Warba Capital Holding CoGulf Investment House Ksc

Boubyan Bank K.S.CAhli United Bank B.S.C

Osos Holding Group Co

121.00

19.00

737.00

62.00

11.70

37.90

45.00

437.00

55.00

35.10

15.50

79.50

71.20

17.80

212.00

1,240.00

10.20

429.00

28.00

40.70

75.00

40.00

116.00

5.20

109.00

98.10

54.50

116.00

59.00

59.00

160.00

16.60

40.00

34.40

59.50

61.00

740.00

71.10

51.00

189.00

14.20

226.00

69.00

31.00

91.50

100.00

544.00

20.50

278.00

17.70

261.00

61.00

1,101.00

315.00

200.00

34.50

136.00

307.00

218.00

15.90

320.00

74.00

52.90

29.70

10.40

41.00

500.00

31.70

50.80

82.00

17.00

35.00

22.30

266.00

26.10

13.90

39.00

84.00

69.90

12.30

162.00

35.80

230.00

43.70

65.50

44.50

562.00

273.00

101.00

-3.20

-6.40

0.41

0.00

-0.85

-0.79

0.00

0.00

0.00

-2.50

1.31

0.00

0.56

-5.82

0.00

0.00

-0.97

0.00

3.70

0.00

7.14

-18.37

-0.85

0.00

0.00

0.00

0.00

-2.52

0.00

0.00

0.00

0.61

0.00

4.24

-0.17

0.00

-0.27

-7.66

0.00

2.72

0.00

-0.88

0.00

-4.02

0.55

0.00

-0.55

0.00

0.00

0.00

1.16

-0.65

0.09

0.00

0.00

-1.71

-1.45

-1.92

-1.36

-2.45

0.00

0.00

-1.86

-1.00

0.97

9.04

0.00

-0.31

-2.31

3.80

0.00

0.00

0.00

-0.37

-1.14

6.92

0.00

0.00

-0.14

-2.38

0.00

-0.28

-0.43

0.00

0.00

3.73

-0.18

-0.36

0.00

988,121

3,294,313

272,571

-

35,042

619,996

-

-

-

20

53,347

-

304,975

26,800

-

-

500

-

100

33,685

10,000

4,900

16,310

-

-

-

-

13,228

-

-

-

945,401

-

228,306

21

-

712,322

1,317,957

5,100

9,000

-

3,386,006

-

190,100

270,040

-

2,860,452

-

-

95

2,730

17,200

32,264

-

-

38,294

15,000

933,316

332,536

26,882

-

-

660,154

1,968,158

1,193,632

10,000

-

261,410

63,500

100

-

-

-

138,961

3,287,115

15,566,734

60,000

-

79,200

1,246,115

-

880,351

672,690

-

-

108,073

401,036

10,269,328

-

Al-Eid Food KscQurain Petrochemical Industr

Advanced Technology CoEkttitab Holding Co Sak

Real Estate Trade Centers CoAcico Industries Co Kscc

Kipco Asset Management CoNational Petroleum Services

Alimtiaz Investment GroupRas Al Khaimah White Cement

Kuwait Reinsurance Co KscKuwait & Gulf Link Transport

Humansoft Holding Co KscAutomated Systems Co Kscc

Metal & Recycling CoGulf Franchising Holding Co

Al-Enma’a Real Estate CoNational Mobile Telecommuni

Sanad Holding Co KsccUnicap Investment And Financ

Al Salam Group Holding CoAl Aman Investment Company

Mashaer Holding Co KscManazel Holding

Tijara And Real Estate InvesJazeera Airways Co Ksc

Commercial Real Estate CoNational International Co

Taameer Real Estate Invest CGulf Cement Co

Heavy Engineering And Ship BNational Real Estate Co

Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co

Independent Petroleum GroupKuwait Real Estate Co Ksc

Salhia Real Estate Co KscGulf Cable & Electrical Ind

Kuwait Finance HouseGulf North Africa Holding Co

Hilal Cement CoOsoul Investment Kscc

Gulf Insurance Group KscUmm Al Qaiwain General Inves

Aayan Leasing & InvestmentAlrai Media Group Co KscNational Investments CoCommercial Facilities CoYiaco Medical Co. K.S.C.C

Dulaqan Real Estate CoReal Estate Asset Management

55.40

309.00

900.00

16.00

22.70

132.00

99.00

1,099.00

123.00

61.50

158.00

70.90

3,145.00

71.90

52.00

160.00

47.70

712.00

0.00

42.00

30.50

56.00

69.50

26.40

35.00

986.00

93.00

60.00

26.70

55.30

405.00

79.40

19.50

751.00

20.10

430.00

81.20

330.00

463.00

680.00

58.50

90.00

70.00

680.00

53.80

55.00

40.10

122.00

200.00

66.50

350.00

95.40

9.92

0.00

0.00

0.00

8.10

0.00

4.21

6.70

-2.38

0.00

0.00

0.00

0.19

0.00

0.00

0.00

0.00

0.00

0.00

-3.23

0.33

-0.88

1.46

1.15

-2.78

0.10

3.22

-0.50

-1.48

0.00

0.25

-0.75

0.00

0.00

-31.40

0.00

-0.98

0.00

-0.22

-0.73

0.00

0.00

0.00

0.00

-8.66

-1.79

0.25

-1.61

0.00

0.00

0.00

0.00

185,000

173,031

-

-

25,000

-

2

1,750

1,001,016

-

-

-

77,175

-

-

-

1,960,011

7,590

-

73,000

860,528

2,091

70,000

368,497

500

109,577

107

8,174

3,540,089

1,000

371,936

645,546

-

-

7,848,320

-

4,802

200,000

282,135

4,232,954

-

-

-

-

410,500

8,175,716

84,383

259,899

-

-

-

-

OMAN

Company Name % Chg Volume

Voltamp Energy SaogVision Insurance Saoc

United Power/Energy Co- PrefUnited Power Co Saog

United Finance CoUbar Hotels & Resorts

Takaful OmanTaageer FinanceSweets Of OmanSohar Power Co

Sohar International BankSmn Power Holding Saog

Shell Oman Marketing - PrefShell Oman Marketing

Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat

Salalah Port ServicesSalalah Mills Co

Salalah Beach Resort SaogSahara Hospitality

Renaissance Services SaogRaysut Cement Co

Phoenix Power Co SaocPackaging Co Ltd

OoredooOminvest

Oman United Insurance CoOman Telecommunications Co

Oman Refreshment CoOman Qatar Insurance Co

0.18

0.11

1.00

2.40

0.08

0.13

0.12

0.10

0.55

0.09

0.12

0.08

1.05

1.05

0.29

0.13

0.60

0.50

1.38

3.15

0.26

0.35

0.08

2.21

0.54

0.34

0.26

0.59

1.33

0.10

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.88

8.45

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.38

0.00

-3.53

0.00

0.37

0.00

1.99

1.03

0.00

0.00

296

-

-

-

-

-

-

783

-

-

422,163

1,412,959

-

-

-

30,000

-

1,100

-

-

31,190

1,000

179,230

-

9,250

-

333,891

60,582

-

-

Sultan Center Food ProductsKuwait Foundry Co Sak

Kuwait Financial Centre SakAjial Real Estate Entmt

Kuwait Finance & InvestmentNational Industries Co Ksc

Kuwait Real Estate Holding CSecurities House/The

Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait

Ahli United Bank (Almutahed)National Bank Of Kuwait

Commercial Bank Of KuwaitKuwait International Bank

Gulf BankAl-Massaleh Real Estate Co

Al Arabiya Real Estate CoKuwait Remal Real Estate Co

Alkout Industrial Projects CA’ayan Real Estate Co Sak

Investors Holding Group Co.KAl-Mazaya Holding Co

0.00

-1.93

0.00

2.34

1.91

0.00

0.00

-0.47

-1.31

0.00

-1.22

-0.73

0.00

-1.48

-2.47

0.00

0.00

-0.79

0.00

-0.15

1.25

0.55

149,184

8,427

-

8,000

365,610

20,000

-

289,752

160,535

122,500

117,057

2,416,519

-

3,778,336

8,184,530

-

274,065

5,510

-

119,366

711,790

152,357

43.90

458.00

93.90

131.00

47.90

165.00

27.00

42.50

753.00

299.00

324.00

946.00

501.00

266.00

276.00

38.00

25.80

25.00

850.00

65.30

8.10

55.00

Lt Price

LATEST MARKET CLOSING FIGURES

Singapore dollar seen sliding as central bank faces downturnBloombergSingapore

Singapore’s dollar is set to weaken because the cen-tral bank is likely to scrap

its appreciation bias at a policy meeting next week, according to a growing group of forecasters.

Mizuho Bank Ltd and Societe Generale SA are defying consen-sus by predicting the Monetary Authority of Singapore will adjust the slope of its nominal-eff ec-tive-exchange-rate policy band to zero, from 1%, to counter slowing economic growth. Although Sin-gapore’s dollar has already fallen 1.4% this year against the US cur-rency, it is almost unchanged on a nominal-eff ective basis.

The local currency may “scream its way” to weaker than S$1.40 per US dollar if MAS ad-justs its bias to zero, said Vishnu Varathan, head of economics and strategy at Mizuho in Singapore. “US-China tariff s escalation, US-EU tensions, political uncer-tainties and wobbling asset con-fi dence all bearing down suggest that the MAS has cause to remove the slope.”

Singapore’s heavy reliance on trade makes the nation a bellwether for growth sentiment in Asia, along with nations such as South Korea and Taiwan. The MAS guides the local currency against an undis-closed basket and adjusts the pace of appreciation or depreciation by changing the slope, width and cen-tre of a band. It announces policy twice a year, with the next decision due Monday.

“A large policy easing is most likely,” Societe Generale analysts Jason Daw in Singapore and Ki-yong Seong in Hong Kong wrote in a research note last week. “Our base case is that the MAS lowers the slope of the NEER midpoint to 0%. There is a very low chance that the MAS stays on hold.”

While Mizuho and Societe Generale both predict an end to the MAS’s appreciation bias, the majority of other economists

anticipate it will just reduce the slope to 0.5%. Those hold-ing this view include DBS Bank Ltd, United Overseas Bank Ltd, Westpac Banking Corp, Bank of America Merrill Lynch, and Australia & New Zealand Bank-ing Group.

There have been growing signs in recent months that the US-China trade war is having an im-pact on Singapore’s economy. The government in August slashed

this year’s growth forecast to al-most zero after gross domestic product shrank an annualised 3.3% in the second quarter.

The MAS has surprised the market before, moving to a neu-tral policy of zero% appreciation in the exchange rate in April 2016 when economic growth ground to a halt. The Singapore dollar slid 0.9% that day.

Aviva Investors said it’s bet-ting against the local currency as

it joins Mizuho and Societe Gen-erale in predicting the MAS will end its appreciation bias.

“We have increased the size of our short Singapore dollar versus the eff ective exchange rate,” said Stuart Ritson, portfolio manager for emerging-market debt in Sin-gapore at Aviva, which oversees $440bn. “There’s an increasing chance that the MAS may move to a fl at slope at the upcoming Octo-ber meeting.”

Singapore dollar banknotes are arranged for a photograph in Singapore (file). The currency is set to weaken because the central bank is likely to scrap its appreciation bias at a policy meeting next week, according to a growing group of forecasters.

Investors taking cover as gold ETFs post longest run in a decadeBloombergSingapore

As global tensions es-calate and signs of a slowdown mount,

more investors are turning to gold. Worldwide hold-ings in bullion-backed ex-change-traded funds have expanded for 17 days in a row, the longest run of in-fl ows since 2009.

The total stash now stands less than 35 tons away from a record set in 2012, according to the lat-est tally by Bloomberg. The consistent infl ux has come even as prices struggled to extend gains above $1,500 an ounce in recent weeks.

Bullion has climbed in 2019 as the US-China trade war hurts global growth and central banks loosen policy. The rise in ETF holdings comes as investors fret that high-level talks between Washington and Beijing set for later this week are unlikely to yield a break-through.

In addition, Federal Re-serve chairman Jerome Powell hinted on Tuesday at the possibility of another interest rate cut.

“Gold infl ows are likely to persist,” Citigroup Inc said in a note, sticking with its forecast for a rally to

$1,700 an ounce over six to 12 months. “Markedly weak manufacturing and serv-ices ISM data show that the slowdown in global trade is starting to bite the US econ-omy.”

Spot gold, a traditional haven and benefi ciary when investors shun risk, edged lower yesterday as markets digested news that China is still open to agreeing a partial trade deal with the US, according to an offi cial with direct knowledge of the talks.

Still, there’s been a se-ries of warnings this week about risks, encompassing the trade standoff and oth-er long-running frictions. Societe Generale SA Chair-man Lorenzo Bini Smaghi said a hard Brexit could plunge the world into re-cession and would be a dis-aster for the financial sys-tem. Kristalina Georgieva – in her first major address as head of the International Monetary Fund – warned that global economy is now looking at a “synchronised slowdown.”

“Gold obviously stands to benefi t” if China and the US can’t reach a mini deal this week, Adarsh Sinha, co-head of Asia FX and rates strategy at Bank of America Merrill Lynch, told Bloomb-erg TV yesterday.

Stocks recover on US-China trade deal talks optimismAFP, ReutersLondon

European and US stock markets rebounded yesterday, helped by reports that China would accept

a partial trade deal with the US in key talks this week.

London’s FTSE 100 closed 0.3% up at 7,166.50 points, Paris’ CAC 40 ended 0.8% higher at 5,499.14 points and Frankfurt’s DAX 30 gained 1.0% at 12,094.26 points, while the EURO STOXX 50 added 0.8% at 3,459.50 points.

The dollar was mixed while the pound steadied after yet more Brexit-fuelled volatility.

Crude oil prices, which had ral-lied over 1%, trimmed gains after data showed US oil output at record levels and stocks rising.

China remains open to a limited trade deal as long as US President Donald Trump imposes no more tar-iff s, Bloomberg News and the Financial Times reported, citing people close to the upcoming talks.

In return, Beijing would off er non-core concessions such as purchases of US agricultural products, the reports added.

“This is likely contributing to the gains we’re seeing in Europe... but unless the US is also willing to accept a limited deal — and nothing cur-rently suggests they are — it may not lead to anything,” noted Craig Erlam, senior market analyst at Oanda trad-ing group.

“Traders are jumping at the pros-pect of good news at the moment but there’s been so many false dawns in these negotiations, this may just be the latest,” he told AFP.

With less than a week to go before

the next round of punitive tariff s is due to hit, Beijing’s top trade envoy Liu He will today meet US Trade Representa-tive Robert Lighthizer and Treasury Secretary Steven Mnuchin.

“Liu He is coming with real off ers, it’s not an empty visit,” the FT quoted a source as saying.

“The Chinese are ready to de-esca-late,” the source, briefed on the talks, added.

Asian stock markets had mostly closed lower yesterday ahead of the re-ports of possible progress in the talks, which could extend into Friday and with Trump present.

Asia tracked losses in Wall Street and across Europe from Tuesday as investors fretted over signs the global economy is slowing.

The International Monetary Fund has forecast the weakest growth in a decade owing to the long-running tar-iff disputes.

With economic data increasingly weak, the fresh hopes sparked by the reports for Thursday’s talks provided some much-needed support.

“But overall stock markets are still stuck in a violent see-saw... as inves-tors try to position themselves ahead of the (talks),” IG chief market analyst Chris Beauchamp said.

Meanwhile oil prices shot 1.6% higher in European afternoon trading as Turkey began an off ensive against Kurdish militants in northern Syria.

They later fell back on data from the Energy Information Administra-tion showed production hitting a new record high while stocks rose more than expected.

“It is a little worrying that invento-ries are rising despite lower prices, as it suggests that demand is weak,” said market analyst David Madden at CMC Markets UK.

Crude prices then later pushed higher once again.

In Europe, talks between the Euro-pean Union and Britain over an agree-ment to cover London’s departure from the EU on October 31 appeared to be going nowhere.

British lawmakers have voted to force Prime Minister Boris Johnson to seek an extension to the departure date if he cannot agree a deal, but the pros-pect of further prolonged political un-certainty is worrying investors.

Sterling jumped after a British newspaper report said that the EU would make a major concession in the negotiations, but the gains were quick-ly unwound as EU sources denied it.

The pound was last down marginally on the day at $1.2214.

Many economists say markets have already priced in the failure to reach a deal.

“In the interminably tedious EU-UK divorce process, things are getting uninteresting. Tweets are being fi red. Latin quotes are being sent out. Mar-kets did not expect a deal to be done, and so should remain indiff erent (un-less it looks as if a no-deal exit will be introduced in defi ance of legislation),” said UBS economist Paul Donovan.

Sweden’s crown weakened to anoth-er decade low against the euro.

Scandinavian currencies have been buff eted by concerns about a global trade slowdown, and the Norwegian crown this week hit a more than dec-ade low.

In bond markets, US Treasury and eurozone government bond yields ticked higher as investors happy to take on some more risk sold out of safer as-sets.

Spot gold prices succumbed to sell-ing pressure and were last down at $1,501.

Apple IncAmerican Express Co

Boeing Co/TheCaterpillar Inc

Cisco Systems IncChevron Corp

Walt Disney Co/TheDow Inc

Goldman Sachs Group IncHome Depot Inc

Intl Business Machines CorpIntel Corp

Johnson & JohnsonJpmorgan Chase & Co

Coca-Cola Co/TheMcdonald’s Corp

3M CoMerck & Co. Inc.

Microsoft CorpNike Inc -Cl B

Pfizer IncProcter & Gamble Co/The

Travelers Cos Inc/TheUnitedhealth Group Inc

United Technologies CorpVisa Inc-Class A Shares

Verizon Communications IncWalgreens Boots Alliance Inc

Walmart IncExxon Mobil Corp

226.78

114.41

374.35

118.45

46.97

113.05

128.76

44.19

198.24

228.26

139.50

50.45

129.13

112.54

53.69

213.07

150.92

84.09

137.86

92.37

35.68

121.73

141.39

222.14

131.69

175.44

59.15

52.55

119.01

67.33

1.06

1.66

0.07

0.41

1.25

1.20

0.23

0.78

0.44

0.70

0.81

1.46

-2.06

0.64

0.21

0.93

0.12

0.96

1.61

0.68

0.71

0.66

0.54

0.92

0.69

1.75

-0.95

0.88

1.21

0.94

1,824,876

134,633

154,972

142,259

1,650,707

355,778

423,204

134,255

97,412

148,063

180,606

1,297,303

657,556

547,793

567,799

89,742

96,152

402,337

2,190,272

309,387

1,058,427

342,948

43,606

293,886

131,894

374,891

753,893

490,863

365,737

687,901

DJIA


Anglo American PlcAssociated British Foods Plc

Admiral Group PlcAshtead Group Plc

Antofagasta PlcAuto Trader Group Plc

Aviva PlcAstrazeneca PlcBae Systems Plc

Barclays PlcBritish American Tobacco Plc

Barratt Developments PlcBhp Group Plc

Berkeley Group Holdings/TheBritish Land Co Plc

Bunzl PlcBp Plc

Burberry Group PlcBt Group Plc

Coca-Cola Hbc Ag-DiCarnival PlcCentrica Plc

Compass Group PlcCroda International Plc

Crh PlcDcc Plc

Diageo PlcDirect Line Insurance Group

Evraz PlcExperian Plc

Easyjet PlcFerguson Plc

Fresnillo PlcGlencore Plc

Glaxosmithkline PlcGvc Holdings Plc

Hikma Pharmaceuticals PlcHargreaves Lansdown Plc

Halma PlcHsbc Holdings Plc

Hiscox LtdIntl Consolidated Airline-Di

Intercontinental Hotels Grou3I Group Plc

Imperial Brands PlcInforma Plc

Intertek Group PlcItv Plc

Johnson Matthey PlcKingfisher Plc

Land Securities Group PlcLegal & General Group PlcLloyds Banking Group Plc

London Stock Exchange GroupMicro Focus International

Marks & Spencer Group PlcMondi Plc

Melrose Industries PlcWm Morrison Supermarkets

National Grid PlcNmc Health Plc

Next PlcOcado Group Plc

Paddy Power Betfair PlcPrudential Plc

Persimmon PlcPearson Plc

Reckitt Benckiser Group PlcRoyal Bank Of Scotland Group

Royal Dutch Shell Plc-A ShsRoyal Dutch Shell Plc-B Shs

Relx PlcRio Tinto Plc

Rightmove PlcRolls-Royce Holdings PlcRsa Insurance Group Plc

Rentokil Initial PlcSainsbury (J) Plc

Schroders PlcSage Group Plc/The

Segro PlcSmurfit Kappa Group Plc

Standard Life Aberdeen PlcDs Smith Plc

Smiths Group PlcScottish Mortgage Inv Tr Plc

Smith & Nephew PlcSpirax-Sarco Engineering Plc

Sse PlcStandard Chartered Plc

St James’s Place PlcSevern Trent Plc

Tesco PlcTui Ag-Di

Taylor Wimpey PlcUnilever Plc

United Utilities Group PlcVodafone Group Plc

John Wood Group PlcWpp Plc

Whitbread Plc

1,850.00

2,119.00

2,033.00

2,128.00

827.00

481.60

375.00

7,091.00

555.00

145.00

2,819.00

609.40

1,664.00

3,929.00

541.40

1,988.00

506.30

2,034.00

177.98

2,573.00

3,097.00

68.00

2,047.00

4,788.00

2,641.00

6,818.00

3,355.00

273.20

408.10

2,554.00

1,107.50

6,346.00

669.40

224.85

1,720.40

788.60

2,069.00

1,816.50

1,890.00

604.60

1,604.00

458.10

4,808.50

1,072.00

1,852.20

786.00

5,342.00

119.70

2,839.00

185.90

827.80

233.60

50.70

7,248.00

1,053.60

163.90

1,546.00

190.15

193.20

879.20

2,475.00

5,860.00

1,294.50

0.00

1,392.50

1,993.00

701.40

6,230.00

190.10

2,319.50

2,307.00

1,887.00

4,018.50

519.00

731.60

501.60

459.90

202.30

2,855.00

680.20

796.60

2,436.00

266.00

337.40

1,537.00

491.80

1,906.50

7,600.00

1,243.50

635.20

928.20

2,113.00

227.30

901.80

144.05

4,840.00

792.00

160.94

327.40

965.80

3,996.00

1.85

-1.72

-0.64

0.71

-1.83

-0.80

0.00

1.17

1.06

0.74

0.43

-0.85

-0.44

-0.86

0.11

-1.05

0.94

0.39

1.04

0.00

0.52

-1.99

0.24

0.38

1.38

0.32

1.05

-0.83

-1.66

-0.16

2.17

0.00

-2.82

0.42

0.43

5.15

0.44

2.54

-2.28

0.90

0.00

-0.67

0.38

-0.33

0.59

0.85

0.11

0.38

1.03

-1.48

0.88

0.39

-0.55

3.25

0.00

-2.03

-0.16

1.04

-0.49

-0.15

-0.80

-1.78

0.74

0.00

0.29

-1.63

-0.90

0.50

0.42

-0.11

-0.11

0.53

-0.20

-3.50

0.72

-0.16

0.50

-2.18

-0.21

1.01

1.04

-0.33

-0.86

-1.11

0.39

-0.12

-0.29

0.33

0.28

0.51

0.50

-0.42

-1.09

-0.24

-1.27

0.07

-1.05

0.04

-3.05

0.81

0.20

3,643,160

796,747

457,616

1,010,126

1,622,967

2,647,707

7,315,456

996,040

4,136,037

30,074,902

2,046,222

4,671,904

4,629,701

290,692

2,816,695

463,663

29,026,081

812,071

17,413,365

394,194

732,488

17,949,874

1,664,599

333,658

972,860

145,576

3,689,386

3,797,602

2,704,654

1,037,223

1,963,754

531,549

1,548,292

30,855,607

5,747,431

4,295,984

453,860

1,057,958

815,350

22,658,681

403,380

4,478,676

253,445

1,245,173

1,892,945

2,303,207

185,049

10,914,708

485,534

4,893,413

1,491,746

13,431,315

112,406,347

721,890

1,425,810

5,860,463

2,041,380

8,198,972

7,198,708

5,279,499

471,233

501,188

676,479

-

4,756,597

1,263,919

2,933,928

480,268

9,455,421

5,331,894

4,284,981

2,703,234

2,095,685

2,076,554

2,382,045

1,201,944

2,169,776

4,200,703

314,851

1,171,070

1,492,106

179,868

4,613,060

3,045,112

539,296

3,239,954

1,501,472

149,453

3,393,138

4,778,955

1,278,384

427,691

17,968,050

967,934

9,249,460

1,853,567

963,694

28,864,833

3,328,409

1,949,796

528,199

-

FTSE 100


Japan Airlines Co LtdRecruit Holdings Co Ltd

Softbank CorpKyocera Corp

Nissan Motor Co LtdT&D Holdings Inc

Toyota Motor CorpKddi Corp

Nitto Denko CorpHitachi Ltd

Takeda Pharmaceutical Co LtdJfe Holdings IncSumitomo Corp

Canon IncEisai Co Ltd

Nintendo Co LtdShin-Etsu Chemical Co Ltd

Mitsubishi CorpSmc Corp

3,247.00

3,449.00

1,514.50

6,708.00

653.50

1,142.50

7,125.00

2,921.00

5,209.00

3,969.00

3,699.00

1,271.50

1,651.00

2,827.00

5,329.00

40,890.00

11,140.00

2,625.00

46,300.00

-0.55

-0.49

0.73

0.19

-1.10

-1.68

0.54

-1.15

-1.06

-1.07

0.14

-1.93

-0.96

-0.81

-2.24

0.29

-0.13

-0.57

-0.88

1,250,100

3,992,200

10,608,800

993,200

8,668,100

1,735,700

4,903,400

4,651,700

542,500

2,863,400

4,024,300

2,425,100

2,863,300

3,128,900

955,000

994,700

1,398,700

4,178,000

253,100

TOKYO


Nidec CorpIsuzu Motors Ltd

Unicharm CorpNomura Holdings Inc

Daiichi Sankyo Co LtdSubaru Corp

Sumitomo Realty & DevelopmenNtt Docomo Inc

Sumitomo Metal Mining Co LtdOrix Corp

Asahi Group Holdings LtdKeyence Corp

Mizuho Financial Group IncSumitomo Mitsui Trust Holdin

Japan Tobacco IncSumitomo Electric Industries

Daiwa Securities Group IncSoftbank Group Corp

Panasonic CorpFujitsu Ltd

Central Japan Railway CoNitori Holdings Co Ltd

Ajinomoto Co IncDaikin Industries Ltd

Mitsui Fudosan Co LtdOno Pharmaceutical Co Ltd

Toray Industries IncBridgestone Corp

Sony CorpAstellas Pharma Inc

Hoya CorpNippon Steel Corp

Suzuki Motor CorpNippon Telegraph & Telephone

Jxtg Holdings IncMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Sompo Holdings IncDaiwa House Industry Co Ltd

Dai-Ichi Life Holdings IncMazda Motor Corp

Komatsu LtdWest Japan Railway Co

Kao CorpMitsui & Co Ltd

Daito Trust Construct Co LtdOtsuka Holdings Co Ltd

Oriental Land Co LtdSekisui House Ltd

Secom Co LtdTokio Marine Holdings Inc

Aeon Co LtdAsahi Kasei Corp

Kirin Holdings Co LtdMarubeni Corp

Mitsubishi Ufj Financial GroMitsubishi Chemical Holdings

Fanuc CorpFast Retailing Co Ltd

Ms&Ad Insurance Group HoldinKubota Corp

Seven & I Holdings Co LtdInpex Corp

Resona Holdings IncFujifilm Holdings Corp

Yamato Holdings Co LtdChubu Electric Power Co Inc

Mitsubishi Estate Co LtdMitsubishi Heavy Industries

Sysmex CorpShiseido Co Ltd

Shionogi & Co LtdTerumo Corp

Tokyo Gas Co LtdTokyo Electron Ltd

East Japan Railway CoItochu Corp

Ana Holdings IncMitsubishi Electric Corp

Sumitomo Mitsui Financial Gr

14,440.00

1,147.00

3,411.00

462.00

6,622.00

2,923.50

3,981.00

2,851.50

3,322.00

1,616.00

5,405.00

64,410.00

161.50

3,667.00

2,346.50

1,340.50

485.40

4,158.00

869.30

8,742.00

22,570.00

15,965.00

2,005.00

14,050.00

2,649.50

1,887.00

810.00

4,136.00

6,174.00

1,525.00

8,853.00

1,471.50

4,355.00

5,387.00

484.00

5,629.00

1,243.50

4,593.00

4,241.00

3,528.00

1,640.00

937.50

2,368.00

9,168.00

8,190.00

1,730.00

13,600.00

4,077.00

16,980.00

2,209.00

9,644.00

5,632.00

1,983.00

1,105.50

2,257.00

711.20

531.60

761.30

19,270.00

61,080.00

3,380.00

1,544.00

4,104.00

924.50

443.90

4,604.00

1,650.00

1,629.00

2,084.50

4,193.00

6,787.00

8,692.00

5,880.00

3,357.00

2,770.00

21,225.00

10,465.00

2,191.50

3,659.00

1,426.50

3,614.00

-1.13

-1.08

0.29

-1.64

0.06

-0.43

0.28

-0.51

-0.12

0.50

0.91

-1.21

-0.86

-1.48

0.02

-0.63

-0.35

-0.79

-0.58

0.53

0.02

0.50

0.05

-1.16

-0.28

-0.71

1.94

-0.72

-0.45

-0.68

-0.05

-0.84

-1.43

-0.57

-0.78

0.16

2.47

-0.71

-2.53

-0.34

-0.91

-1.51

-0.98

-0.29

1.61

-0.40

0.55

-1.47

2.01

1.77

-1.21

-0.72

-2.07

0.09

-0.04

-1.59

-0.71

-0.43

-1.63

-0.13

-1.05

-0.90

0.69

-2.36

-0.60

-0.58

-0.42

0.65

0.55

-1.06

-3.37

-0.11

-2.33

-1.50

0.45

0.45

0.43

-0.14

-0.19

-0.07

-0.39

TOKYO

Company Name Lt Price % Chg

Ck Hutchison Holdings LtdHang Lung Properties Ltd

Ck Infrastructure Holdings LHengan Intl Group Co Ltd

China Shenhua Energy Co-HCspc Pharmaceutical Group Lt

Hang Seng Bank LtdChina Resources Land Ltd

Ck Asset Holdings LtdSino Biopharmaceutical

Henderson Land DevelopmentAia Group Ltd

Ind & Comm Bk Of China-HWant Want China Holdings Ltd

Sun Hung Kai PropertiesNew World Development

Geely Automobile Holdings LtSwire Pacific Ltd - Cl A

Sands China LtdWharf Real Estate Investment

Clp Holdings LtdCountry Garden Holdings Co

Aac Technologies Holdings InShenzhou International GroupPing An Insurance Group Co-H

China Mengniu Dairy CoSunny Optical Tech

Boc Hong Kong Holdings LtdChina Life Insurance Co-H

Citic LtdGalaxy Entertainment Group L

Wh Group Ltd

68.35

17.70

52.60

49.20

15.60

16.76

159.80

34.15

51.25

10.50

36.55

72.50

5.23

6.17

108.50

10.10

13.50

70.25

34.45

41.00

79.60

10.36

41.95

103.30

90.55

30.35

112.60

25.30

17.90

9.89

47.50

7.05

0.81

-1.12

0.19

-0.81

-1.02

-1.99

-3.27

2.40

-1.91

0.19

0.55

-1.96

0.00

0.65

-1.09

-0.39

-0.15

-2.57

-0.72

-1.91

-1.55

0.19

-2.44

-0.67

-0.33

-0.82

-3.51

-2.13

-0.89

-0.10

-1.35

0.28

10,533,491

3,374,099

3,119,434

2,493,122

11,430,097

30,769,579

6,257,372

13,498,246

7,777,908

31,922,976

6,713,621

48,939,152

200,447,854

9,482,672

6,869,164

18,047,105

26,751,835

2,014,627

11,225,291

5,466,220

3,553,122

26,399,839

12,085,310

2,018,927

17,001,115

7,127,220

7,149,484

23,480,217

28,200,971

8,691,871

12,425,612

29,581,526

HONG KONG


Hong Kong & China GasBank Of Communications Co-HChina Petroleum & Chemical-HHong Kong Exchanges & Clear

Bank Of China Ltd-HHsbc Holdings Plc

Power Assets Holdings LtdMtr Corp

China Overseas Land & InvestTencent Holdings Ltd

China Unicom Hong Kong LtdLink Reit

Sino Land CoChina Resources Power Holdin

Petrochina Co Ltd-HCnooc Ltd

China Construction Bank-HChina Mobile Ltd

A

15.04

5.07

4.55

229.60

3.07

58.10

52.50

43.20

25.15

318.20

8.38

83.00

11.62

9.03

3.99

11.46

5.96

65.10

-0.53

0.40

-0.66

-0.69

0.33

-0.60

-0.38

-0.92

-0.20

-1.73

-0.36

-2.75

0.17

-2.80

-0.50

-0.69

0.17

0.00

17,651,787

18,833,986

75,235,318

5,532,961

161,128,142

37,955,195

3,610,383

4,326,477

12,889,387

17,689,295

20,642,348

12,490,269

3,727,799

10,884,602

37,959,056

37,086,570

471,515,224

12,572,212

HONG KONG


Adani Ports And Special EconAsian Paints Ltd

Axis Bank LtdBajaj Finance Ltd

Bharti Airtel LtdBharti Infratel Ltd

Bajaj Auto LtdBajaj Finserv Ltd

Bharat Petroleum Corp LtdCipla Ltd

Coal India LtdDr. Reddy’s Laboratories

Eicher Motors LtdGail India Ltd

Grasim Industries LtdHcl Technologies Ltd

Housing Development FinanceHdfc Bank Limited

Hero Motocorp LtdHindalco Industries Ltd

Hindustan Petroleum CorpHindustan Unilever Ltd

Icici Bank LtdIndiabulls Housing Finance L

Indusind Bank LtdInfosys Ltd

Indian Oil Corp LtdItc Ltd

Jsw Steel LtdKotak Mahindra Bank Ltd

Larsen & Toubro LtdMahindra & Mahindra Ltd

Maruti Suzuki India LtdNtpc Ltd

Oil & Natural Gas Corp LtdPower Grid Corp Of India Ltd

Reliance Industries LtdState Bank Of India

Sun Pharmaceutical IndusTata Steel Ltd

Tata Consultancy Svcs LtdTech Mahindra Ltd

Titan Co LtdTata Motors Ltd

Upl LtdUltratech Cement Ltd

Vedanta LtdWipro Ltd

Yes Bank LtdZee Entertainment Enterprise

400.45

1,773.45

686.30

4,023.90

359.40

255.85

2,891.85

8,318.25

492.85

423.35

185.35

2,663.40

18,239.35

132.10

670.40

1,051.10

2,002.00

1,228.15

2,604.35

186.05

314.50

1,948.00

436.70

239.80

1,308.65

783.65

148.20

247.10

212.80

1,612.35

1,426.25

576.55

6,719.55

117.25

125.85

197.70

1,324.75

260.95

383.95

336.45

2,020.10

711.05

1,230.30

120.90

581.70

4,043.55

145.70

237.75

43.25

245.95

1.32

2.80

1.91

3.15

5.23

3.98

-0.02

1.20

0.45

3.70

0.52

1.79

1.33

1.46

3.30

-2.17

1.66

3.48

-2.60

2.06

2.33

0.41

4.95

2.37

5.45

-0.75

-0.34

-1.91

2.31

3.64

2.03

4.27

1.35

1.12

-0.55

0.61

1.12

4.76

1.07

3.59

-1.35

0.89

-2.28

2.89

0.11

4.47

2.14

0.30

-5.26

-2.21

SENSEX

Company Name Lt Price % Chg

WORLD INDICESIndices Lt Price Change

GCC INDICESIndices Lt Price Change

Dow Jones Indus. AvgS&P 500 Index

Nasdaq Composite IndexS&P/Tsx Composite Index

Mexico Bolsa IndexBrazil Bovespa Stock Idx

Ftse 100 IndexCac 40 Index

Dax IndexIbex 35 Tr

Nikkei 225Japan Topix

Hang Seng IndexAll Ordinaries Indx

Nzx All IndexBse Sensex 30 Index

Nse S&P Cnx Nifty IndexStraits Times Index

Karachi All Share IndexJakarta Composite Index

26,337.69

2,917.96

7,902.16

16,357.67

42,754.50

100,576.00

7,166.50

5,499.14

12,094.26

8,991.90

21,456.38

1,581.70

25,682.81

6,667.02

1,833.64

38,177.95

11,313.30

3,089.90

24,187.77

6,029.16

+173.65

+24.90

+78.38

+63.72

+219.36

+594.60

+23.35

+42.52

+124.06

+51.80

-131.40

-4.80

-210.59

-46.68

-12.07

+645.97

+186.90

-20.95

+37.06

-10.44

Doha Securities Market

Kuwait Stocks Exchange

Oman Stock Market

10,197.57

4,707.31

4,039.86

-74.29

-3.82

+3.90

“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”

460,400

1,535,600

786,100

15,890,100

1,057,700

1,904,200

1,023,800

4,330,500

946,000

4,564,500

1,287,800

346,200

68,237,100

1,368,100

3,031,900

1,475,500

4,894,600

9,446,200

6,059,400

557,300

349,300

245,500

1,099,000

557,500

2,409,000

778,500

5,385,500

1,324,500

3,706,500

5,250,800

1,120,700

2,591,400

1,771,900

2,603,700

10,028,800

3,516,600

6,797,100

883,200

1,974,100

1,117,200

3,102,100

4,398,600

2,660,800

425,600

1,652,500

4,011,100

663,600

1,719,400

935,600

3,912,200

553,400

2,308,000

2,129,100

4,020,900

1,729,800

7,774,200

31,079,400

3,299,000

672,400

470,400

1,084,200

3,240,200

1,899,000

3,710,800

6,640,700

1,286,200

1,563,900

1,269,000

2,528,400

975,900

805,800

1,590,700

1,413,000

1,279,600

718,800

988,700

525,100

3,025,800

766,100

3,094,300

3,826,100

3,905,912

1,777,552

11,537,721

1,356,600

8,685,318

2,574,081

355,878

329,837

10,858,033

4,117,690

5,808,768

466,444

111,285

7,500,511

2,386,332

1,875,270

5,119,327

8,713,635

1,065,595

4,536,877

6,099,024

1,066,739

34,533,981

19,510,869

6,865,376

6,335,025

16,990,515

21,503,869

5,958,422

2,598,430

1,818,865

4,863,273

1,017,731

8,413,122

15,309,757

4,783,649

8,040,938

60,328,507

4,991,946

14,776,741

2,066,920

1,115,851

8,327,469

44,666,296

1,743,937

802,345

6,695,090

2,278,138

343,533,101

25,509,295

Volume

Volume

A statue of a bull is seen outside the Frankfurt Stock Exchange. The DAX 30 gained 1.0% to close at 12,094.26 points yesterday.

BUSINESS9Gulf Times


BUSINESS


BloombergBangkok

Thailand is considering forcing online giants such as Amazon.com Inc and Facebook Inc to col-

lect value-added tax on e-commerce sales, echoing an Indonesian clamp-down on transactions that skirt the levy.

Cross-border purchases by Thais routed through global online market-places, as well as booming domestic sales in the so-called social-commerce sector, should incur the tax.

But overseas vendors aren’t always aware of such obligations, and many Thais selling informally via social media avoid them.

“Our laws just can’t catch up with market trends,” Pinsai Suraswadi, prin-cipal adviser in Thailand’s Revenue De-partment, said in an interview Tuesday in Bangkok. “Current rules put the re-sponsibility on the customer to come to us to pay the value-added tax. But in reality, it’s diffi cult to collect.”

Governments from Indonesia to Mexico say huge amounts of online sales and profi ts aren’t taxed properly, and they’re intensifying eff orts to en-force their claims.

Legislation to plug the gap may reach the Thai parliament by the end of the year, Pinsai said, adding that offi cials are also looking at taxing the Thailand-derived earnings of internet platforms.

Thailand could put the onus on In-ternet platforms to ensure the 7% con-sumption tax is collected and sent to the government, Pinsai said.

A separate digital services levy could be imposed on the Thailand-derived earnings of such fi rms, he said.

The rate hasn’t been decided yet.Facebook declined to comment on

Thailand’s eff orts to tighten its rules.Amazon didn’t respond to a request

for comment.Levies on goods and services, such

as the value-added charge, account for more than half of Thai tax revenue, an Organisation for Economic Coopera-tion and Development report shows.

The country collected 806bn baht ($27bn) of value-added tax in 2018, ac-cording to offi cial data.

Pinsai said applying the charge to e-commerce will generate additional

revenues exceeding “many billions of baht,” but declined to give an exact fi g-ure. The Thai e-commerce sector may be worth $18bn by 2025 and its wider Internet economy could more than tri-ple to $50bn from the current $16bn, research by Google, Temasek Holdings Pte and Bain & Co shows.

However, these fi gures don’t cover social commerce because of a lack of reliable data.

Social commerce refers to burgeon-ing purchases of goods and services

through Line, Facebook and Instagram, where buyers may haggle over price and often skirt value-added tax, as the sec-tor is relatively new and part of the gray economy.

Offi cials should think carefully about whether taxes will stunt the e-com-merce sector, said Somprawin Man-prasert, chief economist at the research division at Bank of Ayudhya in Bangkok.

“If the government is only looking to add more revenue by imposing this tax without contemplating foregone

opportunities, it won’t be good in the long-term,” he said. “If they used that revenue to build a better digital eco-system, operators, tech companies and investors would be able to accept that.”

With an economic slowdown is squeezing tax collection, Pinsai said Thailand’s revenue department may have to cut its 2.1tn-baht target for this fi scal year.

Pinsai said the administration is also weighing whether to impose customs duties on low-value cross-border pur-

chases by Thais, which are growing fast.These sub-1,500 baht ($49) imports

– for example, orders placed with Chi-nese sellers on Alibaba Group Holding Ltd’s AliExpress platform – are below the current threshold for customs lev-ies. Adam Najberg, a spokesman for Alibaba, didn’t immediately respond to requests for comment.

“There’s exponential growth in the revenue of e-commerce in comparison to the fl at growth of tax revenue collec-tion,” Pinsai said. “It’s a very big gap.”

Amazon, Facebook facing Thaitax crackdown in new backlash

China to help ease fi scal strains on local govts amid tax cuts

ReutersBeijing

China’s cabinet unveiled steps on Tuesday to ease growing fi scal strains on

local governments, amid a push to cut taxes to support the slowing economy. China will shift some central government tax revenue to local governments’ coff ers when conditions are appropriate, the State Council said in a statement.

It did not specify how much money would be transferred or under what terms and conditions.

The current arrangement under which central and local govern-ments each get 50% of value-added taxes (VAT) will remain unchanged, while adjustments will be made to improve tax shar-ing among local governments, the cabinet said without elaborating.

The measures will help “sup-port local governments in imple-menting tax fee reduction policies and alleviate fi scal diffi culties”, the cabinet said. “Implementing larg-er-scale tax and fee cuts is a key measure to cope with the current downward pressure on the econ-omy,” it added. Beijing has been leaning heavily on fi scal stimulus over the last year to support the slowing economy, announcing annual tax and fee cuts of nearly 2tn yuan ($280.85bn) – mainly in value-added taxes.

But many local governments are facing increasing fi scal strains as the tax cuts and the broader economic slowdown reduce their revenues, hampering their abil-ity to carry through on big infra-structure projects which Beijing is counting on to revive growth.

China’s economic growth is ex-pected to slow further in the third quarter from 6.2% in the second quarter, its weakest pace in nearly 30 years, amid soft domestic de-mand and a bruising trade war with the United States.

DBS to weigh joining race for Bank Permata IndonesiaBloombergJakarta

DBS Group Holdings Ltd is considering join-ing the race to acquire PT Bank Permata, the Indonesian lender in which Standard Char-

tered Plc holds a stake, according to people familiar with the matter.

Singapore-based DBS is working with an adviser on the possibility of bidding for Permata, which has a market value of about $2.4bn, said the peo-ple, asking not be identifi ed as the discussions are private.

Such a move would pit DBS against both its Sin-gaporean competitor Oversea-Chinese Banking Corp and Tokyo-based Sumitomo Mitsui Finan-cial Group Inc, which are also interested in acquir-ing the Indonesian bank, Bloomberg has reported. Standard Chartered and PT Astra International each own 45% stakes in Permata.

The DBS deliberations are ongoing and may not result in a bid, the people said. Final off ers are due in about a month, they added. A representative for DBS declined to comment.

Shares of Permata jumped as much as 3.9% yes-terday afternoon in Jakarta to the highest level since February. DBS slipped 0.4% in Singapore.

If the bid moves ahead, it would be DBS’s sec-ond attempt to acquire a substantial Indonesian bank. In 2013, it was forced to abandon a $6.5bn bid to take over PT Bank Danamon Indonesia after a change in the rules on foreign ownership. Danamon was acquired earlier this year by Mitsubishi UFJ Fi-nancial Group Inc.

Since losing out on Danamon, DBS chief execu-tive offi cer Piyush Gupta has stressed expanding the bank’s reach via digital services, more than pur-chasing other lenders with large branch networks.

However, Gupta said in September he remains open to “bolt-on” acquisitions if they fi t with a strategy of augmenting digital services with a phys-ical presence.

“In addition to a fundamentally digital presence, we are beginning to fi gure you need some points of presence for the time being to create brand cred-ibility and to service the last mile,” Gupta said at the time.

As of June, Permata had 317 branches serving more than 2mn customers in 62 Indonesian cities.

When it comes to coal, breaking up is hard to do for AustraliaBloombergSydney

Australia should consider a “like for like”

replacement of its ageing coal plants, the

country’s energy minister said yesterday,

blaming a turn towards wind and solar

for compromising grid reliability.

The comments by the minister, Angus

Taylor, are the latest apparent pro-coal

push by the government of Scott Mor-

rison, which has embraced the fuel as

a key driver of Australia’s economy and

a source of reliable power at home and

abroad.

They also put the nation’s leadership

further at odds with climate-change

advocates calling for the closure of the

country’s fleet of 21 coal-fired plants and

with a business community increasingly

funding renewables.

“Record investments in renewables

are associated with falling reliability

and rising prices,” Taylor told an energy

conference in Sydney.

The states of Victoria and South Aus-

tralia were in the “danger zone,” where

dispatchable generation capacity had

fallen below levels required to meet peak

demand.

Australia gets around two-thirds of its

power from coal, and with several ageing

coal plants scheduled to retire over the

next decade, the nation either needs

replacements that off er the same level of

reliability and aff ordability, or life exten-

sions for existing plants, Taylor said.

“The objective is clear,” he said, adding

on the sidelines that he’s focused on

cost-eff ective outcomes, rather than sup-

porting specific technology or fuels.

Australia is likely to need around

A$400bn ($270bn) in new utility-scale

generation assets over the next 30 years,

according to a report Tuesday by the

Grattan Institute, a public policy think

tank.

The industry broadly agrees that more

dispatchable power is needed to back up

renewables, but has been frustrated by

the lack of clear policy directions from

government to promote investment.“A

decade of policy inertia” has made it

diff icult for boards to commit to investing

in long-dated assets, Origin Energy chief

executive off icer Frank Calabria said at

the same conference. “Right now, the

price of firming energy is not enough to

ensure that what we need to make the

system reliable will be built.”

Calabria added that the government’s

“big stick” energy legislation, which was

re-introduced to parliament last month

and carries the threat to break up compa-

nies that combine retail and generation,

was acting as a “hand-brake” on much-

needed investment.

Kerry Schott, chair of the Energy

Security Board, which was set up by na-

tional and state governments to oversee

energy market reform, said adding new

“flexible and firm” generation should be a

priority, but coal wasn’t the answer.

Inflexible coal-fired power stations,

which have to keep running during the

day even amid abundant solar power,

were “dinosaurs” that would become

increasingly redundant in the transition

to clean power.

The government is backing two major

energy infrastructure projects aimed

at boosting grid reliability: the A$5bn

Snowy pumped-hydro project and a new

transmission link between the island

state of Tasmania and the mainland.

It also plans to underwrite a raft of

new generation projects, most of them

either hydro of gas-peaking plants.

Audrey Zibelman, head of the Austral-

ian Energy Market Operator, had some

sympathy for Taylor’s position: “Govern-

ments cannot handle, because people

cannot handle, a power system that’s

uneconomic or not delivering reliability,”

Zibelman told the conference.

It was important to develop an energy

market that puts a value on providing

flexibility and system security, to help

give greater certainty to investment in

dispatchable generation, she said.

AEMO, with government backing, is

working on plans to develop a day-ahead

market to improve price transparency

and firm up on-demand capacity.

Under such a system, for instance, a

wind farm contracted to supply AEMO

with a certain amount of power would

have to pay to cover any shortfall if it fails

to deliver.

The wind farm could hedge against

that risk by entering a supply contract

with a gas-fired power plant.

Thailand is considering forcing online giants such as Amazon.com and Facebook to collect value-added tax on e-commerce sales, echoing an Indonesian clampdown on transactions that skirt the levy.

Shareholderin Unizo forexplanation after $1.3bnU-turn

ReutersTokyo

The top shareholder in Ja-pan’s Unizo Holdings yes-terday pressed the hotel

chain to explain its sudden with-drawal of support for a $1.3bn buyout, breaking its silence over concerns about disclosure and governance.

Unizo originally welcomed the “white knight” bid from SoftBank-backed Fortress In-vestment Group but later back-tracked. The Fortress bid fol-lowed an earlier, hostile one from travel agency HIS Co, giving in-vestors the impression that Un-izo had wooed, and then jilted, the white-knight suitor.

Elliott Management, the US activist fund, ended weeks of public silence to ask Unizo’s board to address its concerns about disclosure. Previously a relatively obscure hotelier, Un-izo is now being seen by foreign investors as a prominent bat-tleground amid Prime Minister Shinzo Abe’s push for greater transparency and reform. “We are highly concerned about the lack of disclosure and the risk of confl icts of interest that have appeared in Unizo’s handling to date of the tender off er bids,” El-liott, which owns 13.14% of Un-izo, said in a letter to the board which it released to the press.

“No answers, or answers that do not directly address share-holders’ concerns, will only deepen the misgivings that shareholders are starting to have,” Elliott said.

Fortress has said that Uni-zo proposed to raise ¥98.2bn ($913mn) by selling its US prop-erty assets.

The money would then be used by the Unizo-created entity to buy back the shares from For-tress after the tender off er.

BUSINESS13Gulf Times


ReutersBeijing

China’s new bank loans likely rose in September but other key gauges of credit growth

remained lacklustre, a Reuters poll showed, reinforcing expectations Bei-jing needs to deliver more support to stabilise the economy as trade pressures build.

Chinese regulators have been trying to boost bank lending and lower corpo-rate fi nancing costs for over a year, but the pick-up in loan growth has been modest compared to previous rounds of stimulus, and economic activity has continued to slow.

Analysts say the problem is not a lack of credit, but weakening business and consumer confi dence as the US-China trade war drags on, weighing on activity from manufacturing and investment to retail sales.

Chinese banks are expected to have issued 1.4tn yuan ($196.02bn) in net new yuan loans last month, up 16% from 1.21tn yuan in August but largely in line with the tally in September last year, according to a median estimate in a Reuters survey of 30 economists.

Broad M2 supply was seen unchanged from 8.2% growth in August.

But growth of outstanding loans was expected to decelerate for a sixth straight month.

Annual growth of outstanding loans in September was seen edging down to 12.3% in September, the lowest since July 2002, from August’s 12.4%.

Some analysts say the annual com-parison is a better way to assess trends in China’s credit growth, rather than more volatile monthly readings.

In a bid to boost bank lending, the central bank has pumped out trillions of yuan in liquidity by repeatedly cutting banks’ reserve requirement ratios (RRR) since early 2018.

But despite repeated calls by regula-tors to help struggling smaller, private fi rms, banks have been reluctant to lend as such fi rms are considered bigger credit risks.

Some factory managers have told Reuters they have lost fi nancing or had their credit lines sharply cut back.

More recently, Chinese regula-tors have stepped up eff orts to rein in mortgage lending amid concerns about property prices and rising household debt. Off setting the modest pick-up in yuan loans, Reuters survey respond-ents expect total social fi nancing (TSF), a broad measure of credit and liquidity in the economy, to drop to 1.8tn yuan in September from 1.98tn in August.

The expected decline is likely due to

lower issuance of both corporate and local government special bonds.

Net issuance of local government bonds are estimated to fall notably as the provincial authorities are already close to exhausting their annual bond quotas.

TSF includes off -balance sheet forms of fi nancing that exist outside the con-ventional bank lending system, such as initial public off erings, loans from trust companies and bond sales.

Analysts at Capital Economics noted problems with credit allocation will dampen the impact of stronger credit growth on the real economy.

“Private fi rms, which make up the

bulk of shadow banking borrowers and low-rated corporate bond issuers, have benefi ted least from current round of monetary easing. And the share of cred-it going to less-effi cient state fi rms has increased.”

Moody’s Investors Service said in a recent report that China’s shadow banking assets were near 3-year lows.

China’s central bank recently said it is in no rush to follow other countries in signifi cantly loosening monetary policy but has ample options to help prop up slowing growth, suggesting a cautious approach to additional stimulus.

With an eye on debt, Beijing has been leaning more heavily on fi scal stimulus

to weather the current downturn, an-nouncing trillions of yuan in tax cuts and special local government bonds to fi nance infrastructure projects.

But analysts say continued credit support is needed, especially as more US tariff measures against China are set to take eff ect on October 15 and Decem-ber 15, unless the two sides can agree on some form of de-escalation.

China and US top trade negotiators will meet in Washington for trade talks today and tomorrow.

But prospects for progress dimmed on Monday after Washington black-listed Chinese companies over Beijing’s treatment of Muslim ethnic minori-

ties, and President Donald Trump said a quick trade deal was unlikely. Analysts expect economic growth could cool further this quarter from a near 30-year low of 6.2% hit in April-June.

“Owing to rapidly falling industrial production growth, a slump in pork production and elevated US-China trade tensions, we expect the growth slowdown to gather pace,” economists at Nomura said in a recent note.

“We expect more policy easing/stim-ulus measures, including medium-term lending facility (MLF) rate and reserve requirement ratio (RRR) cuts through the rest of this year to stabilise market sentiment and bolster growth.”

China’s new loans seen rising; more policy easing expected

An employee counts 100-yuan notes at a bank in Nantong, Jiangsu province. Chinese regulators have been trying to boost bank lending and lower corporate financing costs for over a year, but the pick-up in loan growth has been modest compared to previous rounds of stimulus, and economic activity has continued to slow.

Chinese vow to make Gwadar more valuable than KarachiInternewsIslamabad

The Chinese operators of Gwadar Port

and its free zone have vowed to make the

coastal city the single largest contributor

to Pakistan’s national economic output

in seven years, saying 47,000 jobs will be

created for locals with new investments

worth billions of dollars.

China Overseas Ports Holding Com-

pany Gwadar (COPHC) chairman Zhang

Baozhong has shared his plans after the

government finally stamped 23-year

income tax holiday and exemptions of

sales tax and customs duties for the

Gwadar Port and businesses to be set up

at Gwadar Free Zone.

“It [issuing of ordinance] is a turning

point for Pakistan’s economy and now bil-

lions of dollars will be invested in Gwadar,”

said the chairman while talking to the

media persons here this week.

Baozhong was accompanied by Federal

Minister for Maritime Aff airs Ali Zaidi and

Federal Minister for Economic Aff airs

Hammad Azhar. The COPHC and its four

subsidiaries are responsible for operating

the seaport and its economic zones for a

period of 23 years.

The concessions had been guaranteed

in the Gwadar Port Concession Agree-

ment, but the successive governments

were not notifying them.

However, President Dr Arif Alvi on

Monday promulgated two ordinances to

set up China-Pakistan Economic Corridor

Authority and Tax Laws Amendment

Ordinance 2019.

“I believe Gwadar will be the largest

contributor to the gross domestic product

(GDP) growth in seven years,” said the

chairman, adding that 95% of the produc-

tion in the Gwadar Free Zone would be

exported.

Currently, Karachi remained the single

largest contributor to the national eco-

nomic output. “We have completed the

master plan of the Gwadar Free Zone that

will be built in four phases over a period

of seven years,” said Baozhong.“Once the

zone is fully developed in seven years,

47,000 jobs will be created for the locals,

and its annual sales will be $1bn.”

On the troubles faced in reaching this

point, the COPHC chairman said, “I had

to struggle for seven years to secure

these tax concessions, which had been

promised in the Gwadar Port Concession

Agreement.

I had been running up and down for

seven years and everybody made prom-

ises with me, but nobody helped.”

Baozhong’s company was lucky to get

the support of the National Development

Council – a joint civilian and military body

– upon whose directions the obstacles

were removed in obtaining these conces-

sions.

Bhaozhong praised the PTI govern-

ment for its seriousness in honouring its

promises and economic development of

Pakistan, especially Gwadar.

He also thanked the military and media

for their support to get these concessions

notified.

“So far, 41 investors have come forward

to invest about $500 mn in Gwadar Free

Zone in the first phase,” said the port

operator. “These industries are being set

up in sectors of logistics, edible oil, piping,

and halal food.”

He said the $500 mn investment would

create 5,000 jobs for the locals in phase

one alone, adding that the free zone devel-

oper had made it binding for the investors

to complete the physical infrastructure

in six months and start production within

one year.

The port operator said that in order

to promote advanced technology-based

industries in the Gwadar Free Zone, the

developer might off er free plots, cheap

financing, and free housing facilities to

such investors.

ADB to provide $2.7bn to Pakistan in 2019

InternewsIslamabad

The Asian Development Bank (ADB) yesterday announced that the re-

gional bank will provide $2.7bn in approved fi nancing to Paki-stan during the outgoing calen-dar year.

The ABD, through a tweet, also announced that under the recently approved Coun-try Operations Business Plan (COBP) 2020-2022, it will in-crease average lending to Paki-stan to $2.4bn a year – showing a whopping increase from the $1.4bn on average from 2015 to 2018.

According to the ADB, it will leverage the country’s lend-ing through the mobilisation of co-fi nancing and funding from other sources, including re-gional concessional resources.

“The new COBP will support Pakistan’s development goals and complement eff orts by other development partners,” it added.

On Monday, the Manila-based lending agency said it had approved a $200mn loan as ad-ditional fi nancing to support the Benazir Income Support Programme (BISP).

A press release issued by the ADB noted that an ADB-fi nanced social protection de-velopment project, approved in 2013, had enabled the enrol-ment of over 855,000 benefi ci-aries of the BISP.

Earlier in July, the ADB had announced to extend up to $10bn indicative lending to Pa-kistan for various development projects and programmes dur-ing the next fi ve years.

The bank said it had a series of country consultations to for-mulate a new Country Partner-ship Strategy (CPS), which will guide ADB’s engagement in the country from 2020 to 2024.

The purpose of ADB’s 5-year CPS is to defi ne priorities and to support Pakistan’s develop-ment goals.

The new strategy will also complement eff orts by other development partners.

Goldman evaluating role in China’s Megvii IPO after US blacklistReutersNew York/Hong Kong

Goldman Sachs Group Inc said on Tuesday it

was reviewing its involvement in Megvii Tech-

nology Ltd’s planned initial public off ering

after the US government placed the Chinese

artificial intelligence firm on a human rights

blacklist.

The Trump administration said on Mon-

day that Megvii and seven other Chinese

companies were targeted because they were

implicated in Beijing’s repression of Muslim

minority populations in the Xinjiang Uighur

Autonomous Region in the far west of the

country.

In an emailed statement in response to a

request for comment on the Alibaba-backed

Megvii IPO, Goldman said it was “evaluating

in light of the recent developments”.

Sources had previously told Reuters the

listing was scheduled for Hong Kong in the

fourth quarter and might raise as much as

$1bn.

Other US companies involved with the

blacklisted Chinese firms, whether as inves-

tors or as underwriters, are also likely to

re-evaluate their relationships, risk consult-

ants and Silicon Valley lawyers said. Goldman

is a joint sponsor of the Megvii IPO, alongside

Citigroup Inc and JPMorgan Chase & Co,

which both declined to comment.

Goldman had thoroughly evaluated the

Megvii deal before initially signing onto it us-

ing its usual due diligence process, a person

familiar with the matter said.

Known for its facial recognition platform

Face++, Megvii will become the first Chinese

AI firm to go public if the deal goes ahead.

The company provides facial recognition

and other AI technology to governments and

companies including Alibaba, Ant Financial,

Lenovo Group Ltd and Huawei.

The US Department of Commerce on Mon-

day barred eight companies, as well as 20

Chinese government entities, from buying US

technology without US government approval.

That will include high-powered computer

chips made by US companies such as Nvidia,

Intel and Qualcomm, which are considered

critical for building and operating many AI

systems.

The government said the entities were

“implicated in human rights violations and

abuses in the implementation of China’s cam-

paign of repression, mass arbitrary detention,

and high-technology surveillance against

Uighurs, Kazakhs, and other members of

Muslim minority groups”.

Megvii said it “strongly objects” to being

added to the blacklist and there were “no

grounds” for the designation.

In a statement, it said around 1% of rev-

enues were derived from Xinjiang in 2018 and

none in the six months ended June 30.

It added that a May 2019 report from

Human Rights Watch (HRW) on a surveil-

lance app in Xinjiang had implicated Megvii’s

Face++, but in a corrected and reissued

report, HRW did not highlight Megvii’s name.

On Tuesday, the US government imposed

visa restrictions on Chinese government and

Communist Party off icials it believes respon-

sible for the detention or abuse of Muslims

in Xinjiang.

UN experts and activists say at least 1mn

Uighurs, and members of other largely

Muslim minority groups, have been detained

in camps in the remote region.

Beijing denies any mistreatment at the

camps, which it says provide vocational train-

ing to help stamp out religious extremism

and teach new work skills.

US Senator Marco Rubio, who has been

seeking to spotlight both the easy access that

Chinese companies have been given to US

markets and human rights abuses in Xinjiang,

said the government’s move had been long

overdue.

“We should continue to do more to hold

Chinese government and Communist Party

off icials accountable for potential crimes

against humanity being committed in Xin-

jiang,” he said in a statement.

In recent years, Chinese and some foreign

investors have poured money into startups

that specialise in facial and voice recognition

software, as well as other surveillance equip-

ment and software.

They have been buoyed by China’s plans

to build a ubiquitous CCTV surveillance

network.

Another company on the US government’s

blacklist, SenseTime, is among the world’s

most highly valued artificial intelligence firms

and counts marquee US technology investors

Tiger Global and Silver Lake Partners among

its backers.

Fidelity, the US mutual fund firm, is also a

SenseTime investor, along with Qualcomm.

Bloomberg reported that the Massa-

chusetts Institute of Technology said it will

review its relationship with SenseTime, the

first company to join the US school’s research

eff ort into human and machine intelligence.

Goldman Sachs Group headquarters stands in New York. The company said on Tuesday it was reviewing its involvement in Megvii Technology Ltd’s planned initial public off ering after the US government placed the Chinese artificial intelligence firm on a human rights blacklist.

BUSINESS


BloombergSingapore

The US dropped from the top spot in the World Economic Forum’s annual competitive-

ness report, losing out to Singapore.Hong Kong, the Netherlands and

Switzerland made up the rest of the top fi ve, according to the WEF survey published yesterday.

On the US, it noted growing un-certainty among business leaders and said trade openness has declined.

World Economic Forum’s Saadia Zahidi discusses the results of the WEF’s annual competitiveness re-port. The forum focused its report on continued low productivity growth a decade after the fi nancial crisis, calling this the $10tn question – the amount injected by the world’s four major central banks through 2017.

In line with others, its view is that while monetary stimulus helped pull the global economy out of recession, it wasn’t the solution for all prob-lems.

With a new slowdown emerging, the WEF said fi scal policy has been underused. It joined the chorus call-ing for more government support,

particularly in investment to boost productivity.

The WEF also said central banks must take some blame for weak pro-ductivity, as their trillions of stimulus keep zombie fi rms alive, sometimes crowding out stronger businesses.

Given monetary policy resources are so depleted, it said investment-led stimulus would be an “appropri-ate action to restart growth in stag-nating advanced economies.”

“Although loose monetary policy mitigated the negative eff ects of the global fi nancial crisis, it may also have contributed to reducing pro-ductivity growth by encouraging capital mis-allocation....

As monetary policies begin to run out of steam, it is crucial for econo-mies to rely on fi scal policy and pub-lic incentives.”

While the US drops down to sec-ond in the survey of 141 countries, the WEF said it remains an “inno-vation powerhouse,” ranking fi rst in business dynamism and second on innovation capability.

Also in the top 10 were Japan, Ger-many, Sweden, the UK and Denmark.

Canada and France were ranked 14th and 15th respectively, while Chi-na was in 28th place.

US loses top spot to Singapore in competitiveness rankings

Thailand, Philippine fi rms lead revival in Southeast Asia IPOsReutersSingapore/Bangkok

Thailand and Philippine companies are leading a regional pick-up in initial

public off erings (IPOs), spurred by growing investor interest in fi rms focused on Southeast Asian consumers.

Asset World Corp, the hos-pitality and property fi rm listed by Thai billionaire Charoen Siri-vadhanabhakdi, and Philippine home furnishing retailer All-Home Corp, start trading today after raising $1.6bn and $285mn, respectively.

Asset World Corp was the largest IPO by a Thai fi rm, while AllHome was the Philippines’ biggest in three years.

Singapore still leads on overall fi rst time share sales in South-east Asia in 2019, but it has achieved this mainly through off erings of real estate and busi-ness trusts.

In Thailand, 11 companies raised a total of $1.9bn from January to October 4, compared with fi ve fi rms raising less than $100mn in the same period a year ago, Refi nitiv data showed.

The data excludes real estate and business trusts.

In the Philippines, Allhome is the third company to tap the lo-cal market in 2019, compared to just one IPO in 2018. “We expect Thailand to be one of the strong-er IPO markets in 2020.

Some more large IPOs have started preparations this year and are set to list next year,” said Ho Cheun Hon, head of South-east Asia equity capital markets at Credit Suisse.

He said international fund managers continued to be at-tracted by the growth in con-sumption across Southeast Asia.

Half of Asset World Corpora-tion’s shares were subscribed by 13 cornerstone investors, includ-ing Singapore sovereign wealth fund GIC, which put in about $300mn.

Bankers said the 2020 deal pipeline for Thailand included fund raising by a unit of the country’s biggest retailer Central Group, a retail arm of oil com-pany PTT Pcl and others. PTT’s retail IPO will give investors ex-posure to 2,000 coff ee shops, gas stations and auto repair shops.

Bangkok Commercial Asset Manager, which handles dis-tressed debt, has also fi led to list, off ering a niche business as there are only two publicly traded debt collectors in Thailand.

“Thai institutions and re-tail investors are more focused at home... and there is a lot of capital looking for good invest-ments,” SCB executive vice pres-ident Veena Lertnimitr said.

Samsung billionaire heir to cede board seat before legal probeBloombergSeoul

Samsung Electronics Co’s de facto leader, Jay Y Lee, plans to give up his board seat after

his directorship expires late Octo-ber as he prepares for another trial over alleged bribery, a person fa-miliar with the matter said.

The billionaire heir won’t seek to extend his three-year term on the board of the tech behemoth when it ends on October 26, but will remain at the helm of the world’s largest chip and smart-phone maker, the person said, ask-ing not to be named because of the sensitivity of the issue.

Lee will instead continue to run Samsung Electronics with the title of vice chairman though its board will stay central to overall manage-ment, the person added.

The 51-year-old is putting some distance between himself and Korea’s largest conglomerate ahead of a re-trial over bribery charges that could land him back in jail. He faces additional alle-gations in a landmark case that infl amed popular anger over the chaebols that control the coun-try’s economy and helped bring down former president Park Ge-un-hye.

Lee may be pre-empting a backlash over his re-seeking a board position – which requires shareholder approval – while contesting a months-long legal case.

When Lee joined the board in 2016, it was deemed a symbolic

move to step out from under the shadow of his ailing father and consolidate his power over Sam-sung.

His ascension was intended to shore up his position as a leader who drives strategic initiatives such as mergers and acquisitions.

Yet months later, Lee’s fortunes reversed.

Caught up in a nationwide scandal, Lee spent about a year in prison battling accusations that he off ered horses and funds to a confi dante of then-president Park in return for support of a 2015 merger that cemented his control over the Samsung group.

Since his release in 2018, Lee has been busily re-cultivating an image as the face of successful Korean business.

He joined President Moon Jae-in on visits to India and Pyongyang, and expanded his net-work via meetings with fi nancier Mohammed bin Salman and In-dian tycoon Mukesh Ambani. The only son of chairman Lee Kun-hee will remain Samsung’s overseer for the time being, grappling with a laundry list of tasks including steering Samsung through a severe industry downturn.

The company’s operating in-come fell more than 50% in the September quarter, though that was less of a decline than an-ticipated. As Lee has stressed in a series of press releases, the com-pany needs to continue to invest in future businesses such as logic chips and even sixth-generation mobile networks to overcome growing uncertainty.

Jay Y Lee, co-vice chairman of Samsung Electronics (centre), arrives at the Seoul Central District Court (file). The billionaire heir won’t seek to extend his three-year term on the board of the tech behemoth when it ends on October 26, but will remain at the helm of the world’s largest chip and smartphone maker, a source said yesterday.

Hidden gold, ‘murky’ payoffs threaten Japan nuclear revivalBloombergSingapore

A payoff scandal has struck Japan’s nuclear

world, threatening to delay the restart of

idled reactors in what’s becoming the indus-

try’s biggest crisis since the Fukushima melt-

downs of 2011. The issue, which emerged at

the end of last month, centres around how

an influential municipal off icial in a town that

hosts a nuclear plant spent years doling out

large gifts to executives of its operator, one

of the country’s biggest power producers.

It’s an example of how big business and

small towns work together, sometimes at

the expense of corporate governance.

The payments to senior management at

Kansai Electric Power Co included hundreds

of millions of yen, US currency, vouchers for

tailored suits and even gold coins hidden

in a box of candy. To make matters worse,

the off icial in question was close to – and

received money from – a company that won

construction work from the utility. The news

is a blow to an already deeply unpopular

industry as it seeks to resume operations at

plants that were shuttered after Fukushima.

It’s likely to have an impact beyond Kansai

Electric, with the government’s top spokes-

man, who called the payoff s “murky,” vow-

ing to investigate whether there are similar

cases at other companies.

Abe headache

It’s also a headache for Prime Minister

Shinzo Abe, who has set his stall as a

proponent of nuclear power, a cheaper

source of energy than imported fuels such

as oil, coal and natural gas. And questions

in parliament about the scandal may delay

Abe’s eff orts to pass a US trade deal and

proceed towards changing the country’s

pacifist constitution.

“This could slow the restart timetables

and undermine whatever goodwill had

been recovered by the nuclear industry

since Fukushima,” said Tom O’Sullivan,

founder of Tokyo-based energy consultant

Mathyos. Of Japan’s 33 operable reactors,

just nine are back online. The nation oper-

ated 54 before the Fukushima disaster.

The scandal is the latest exposure of

governance issues at Japanese companies,

which include the arrest last year of Nissan

Motor Co’s chairman for concealing more

than $140mn in compensation and Kobe

Steel Ltd’s indictment in 2018 for falsifying

quality data. Kansai Electric chairman

Makoto Yagi and president Shigeki Iwane

bowed in apology at a three-hour public

briefing last week as they detailed how they

and 18 other executives received almost

¥320mn ($3mn) in cash and presents from

Eiji Moriyama, who died at the age of 90 in

March, from 2006 to 2018.

Pay cuts

But they also tried to play down the

scandal. Accepting the gifts was inappropri-

ate but not illegal, Iwane said. And they had

no influence over how the firm awarded

construction contracts. The president

and chairman had taken pay cuts of 20%

of their salary for one or two months but

initially said they would not step down.

“It’s astounding how badly they’ve man-

aged this crisis,” said Jeff Kingston, director

of Asian studies at Temple University in

Tokyo. “Of course they should resign.”

Chairman Yagi resigned yesterday, while

president Iwane intends to do so after the

completion of an investigation into the pay-

ments, which could end by December.

The immediate risk for Kansai Electric is

that the issue may delay the restart of three

of its reactors, including two in the town in

question, Takahama. Every month a reactor

stays off line saddles the utility with extra fuel

costs of ¥3.6bn, according to Nomura Securi-

ties Co. It’s also taking a toll on the company’s

share price, which fell 13% from September

27 through Tuesday’s close, wiping out about

$1.5bn in market value. An index of power

and gas stocks listed on the Tokyo Stock

Exchange was down 4.3% in the period.

Hot temper

“The government will do a thorough

investigation into the industry to check if

there are similar cases in other companies,”

Yoshihide Suga, the government’s top

spokesman, told reporters in Tokyo on

September 27. It’s “outrageous” that Kansai

Electric executives accepted the gifts in a

“murky” fashion, he said last week.

The company has strived to deflect

blame for the matter, painting a picture

of Moriyama as a diff icult person to

handle. Executives wanted to return the

gifts but couldn’t because Moriyama was

hot-tempered when he didn’t get his way,

according to a report dated September

2018 that the company released last week.

He was an important person in Takahama, a

small coastal community in western Japan

where Kansai had four reactors. The com-

pany’s report, as well as articles in Japanese

media, contained details of why it wanted

to keep him onside.

Moriyama became entwined in Kansai

Electric’s nuclear business when he served

as Takahama’s deputy mayor from 1977 to

1987. He helped push through an expansion

to add two reactors at the Takahama plant,

and landed an advisory position at a Kansai

Electric unit the year he retired.

He remained an influential figure due

to his many contacts in the town of just

over 10,000, holding seats on numerous

municipal committees and advising local

companies that did business with the pow-

er sector. Moriyama would often appear at

Kansai Electric gatherings, meetings and

even birthday parties.

The No 3 (left), and No 4 reactor buildings stand at Kansai Electric Power Co’s Takahama nuclear power station at dusk in Takahama Town, Fukui Prefecture. A payoff scandal has struck Japan’s nuclear world, threatening to delay the restart of idled reactors in what’s becoming the industry’s biggest crisis since the Fukushima meltdowns of 2011.

BUSINESS15Gulf Times


Building permits issued rise double digit in Sept

By Santhosh V PerumalBusiness Reporter

Qatar’s construction sector and its allied segments as steel and cement are expected to see

strong growth with the building per-mits issued registering a robust double digit month-on-month growth in Sep-tember, according to offi cial estimates.

Al Rayyan, Doha and Wakrah to-gether constituted 70% of the total 758 building permits issued in September this year, the Planning and Statistics Authority (PSA) said.

On geographical basis, the PSA found that Al Rayyan remained atop the municipalities as it saw 229 build-ing permits issued or 30% of the total, Doha and Al Wakrah 154 (20% each), Al Daayen 103 (14%), Umm Slal 47 (6%), Al Khor 31 (4%), Al Shahaniya 22 (3%), and Al Shamal 18 (2%).

On a monthly basis, total number of permits issued witnessed a robust 83% surge in September 2019 with Al Shamal and Al Rayyan witnessing doubling of permits, followed by Al Khor (82% increase), Doha and Wak-rah (81% each), Al Daayen (78%), Al

Shahaniya (57%) and Umm Slal (47%). The building permits data is of par-ticular importance as it is considered an indicator for the performance of the construction sector which in turn occupies a signifi cant position in the national economy.

The PSA data indicates that the new building permits (residential and non-residential) constituted 50% (379 permits) of the total building permits issued in September 2019, while addi-tions constituted 45% (341 permits), and fencing 5% (38 permits).

Of the new residential building per-mits, PSA found that villas topped the list, accounting for 74% (228 permits) of all new residential building permits, dwellings of housing loans 18% (55 per-mits) and apartments 7% (21 permits).

Among non-residential buildings, commercial structures accounted for 54% or 38 permits, governmental buildings 27% (19 permits), and indus-trial buildings 11% (eight permits).

Qatar saw a total of 348 building completion certifi cates issued this Sep-tember, of which 224 was for residential buildings, 33 for non-residential and 91 for additions.

Total building completion certifi cate

issued witnessed 35% growth month-on-month with Al Khor reporting 90% expansion, followed by Umm Slal (81%), Al Shamal and Al Shahaniya (80% each), Doha (65%), Wakrah (33%) and Al Rayyan (25%), while there was a 3% decline in that in Al Daayen.

Of the 224 residential buildings completion certifi cates issued, as many as 124 or 54% were for villas, 82 (37%) for dwellings of housing loans and 12 (5%) for apartments.

Al Rayyan issued as many as 84 building completion certifi cates or 24% of the total, Doha 76 (22%), Wakrah 65 (19%), Al Daayen (57 (16%), Umm Slal 29 (8%), Al Khor 19 (5%) and Al Sha-haniya and Al Shamal nine (3% each).

Of the 122 villas completion certifi -cates issued, as many as 28 were in Al Daayen, 23 each in Umm Slal and Al Rayyan, 19 in Wakrah, 17 in Doha, seven in Al Khor and fi ve in Al Shamal.

Of the 82 dwellings of housing loans completion certifi cates issued, Al Rayyan saw 26, Wakrah (25), Al Daayen (16), Doha (fi ve), Umm Slal and Al Khor (four each) and Al Shahaniya (two).

Doha witnessed eight apartment com-pletion certifi cates issued, Al Khor (two) and Al Daayen and Wakrah (one each).

QFC to host second annual QatarBusiness Awards next monthThe Qatar Financial Centre (QFC) will host the second annual Qatar Business Awards in November this year.The awards are open to organisations that uphold a commitment to providing exceptional business services and innovation to their customers, partners, suppliers, as well as employees.This year’s categories will include ‘Best performing company of the year’, ‘Best employer of the year’, ‘Best non-profit organisation of the year’, ‘Most innovative company of the year’, ‘New business of the year’, ‘Best law firm of the year’, ‘Corporate social responsibility programme of the year’, ‘Best local partner of the year’, and ‘Best customer service platform of the year’.“By recognising the key role that QFC firms play in the local market, we are confident that the 2019 edition will off er a more inclusive platform for businesses to connect, inspire one another, and collectively celebrate their achievements as Qatar continues to build and diversify its growing economy,” said Raed al-Emadi, chief

commercial off icer, QFC.

HIA candidate for Skytrax ‘World’s Best Airport’ 2020Hamad International Airport (HIA) has announced that it will

participate in the annual Skytrax World Airport Awards ceremony

in Paris, France, on April 2, 2020, where HIA is a candidate for the

‘World’s Best Airport 2020’.

The Skytrax World Airport Awards is the most respected accolade

for the airport industry, voted by passengers in the largest annual

global airport customer satisfaction survey. The awards cer-

emony will take place at the Passenger Terminal Expo 2020, the

world’s leading international airport conference and exhibition.

HIA has risen from the fifth position in 2018 to its current position

as the fourth best airport in the world. This accomplishment has

been instrumental in recognising HIA as the gateway to Qatar and

the world, putting Qatar on the map as a destination of choice for

passengers, according to a press statement.

Hamad International Airport’s success at the Skytrax World Airport

Awards is also important in setting it apart from other airports and

in giving a lasting impression of Qatar’s modern, smart and quality

standard of living while celebrating the country’s heritage and

culture, the statement notes.

Badr Mohamed al-Meer, chief operating off icer at HIA, said: “It

is our goal to redefine the airport experience by empowering

passengers and taking the stress out of travel while keeping their

passion for exploration alive. We strive to enrich global travellers’

experience by off ering them a multi-dimensional lifestyle experi-

ence featuring a world-class art collection, endless shopping and

dining, entertainment and relaxation facilities — all housed in one

expansive terminal.

“Skytrax is a platform that allows our passengers to share their

view on their experiences with us as we move closer to the top

three rankings for the ‘World’s Best Airport’ at The Skytrax World

Airport Awards 2020.”

Hamad International Airport is increasingly being recognised for

its “five-star passenger experience and operational excellence”.

“With passengers at the heart of the airport strategy, HIA unlocks

the power of technology to deliver the airport of the future. By

employing cutting-edge smart technologies, automation and

self-service, HIA provides a hassle-free experience for passengers

fuelled with choice and flexibility,” the statement points out.

The successful completion of the first major phase of HIA’s Smart

Airport programme has seen up to 40% of the home carrier Qatar

Airways’ passengers preferring to self-check-in, and a further 20%

opting for self-bag drop. The trial for the second phase of the Smart

Airport Programme, which was completed in August, aims to com-

bine passengers’ flight, passport, and facial biometric information

in a single electronic record at

the self-check-in kiosk or mobile app.

This phase further sets to empower passengers and provide them

with a swift and seamless experience using facial verification at

various touchpoints including self-service bag-drop, automated

security gate, and the automated boarding gate.

HIA is also undertaking its expansion plans to meet the growing de-

mand for air travel and enhance its position as the preferred gateway

for travel. The expansion will increase HIA’s capacity to more than

53mn passengers and 3mn tonnes of cargo annually by 2022.

The Skytrax World Airport Awards are based on customer nomi-

nations across 100 nationalities of air travellers and include 550

airports worldwide. The survey evaluates customer satisfaction

across 39 key performance indicators for airport service and

product — from check-in, arrivals, transfers, shopping, security

and immigration, through to departure at the gate.

Passengers can vote for HIA by visiting the off icial Skytrax Awards

website at http://www.worldairportsurvey.com/Surveys/favorite_

airport.html

A view of Hamad International Airport. HIA has risen from the fifth position in 2018 to its current position as the fourth best airport in the world.

GBI launches ‘Experience 2022’ strategy to accelerate delivery of optimised digital experiencesGulf Bridge International (GBI), a

Qatar Science and Technology

Park domiciled global connectiv-

ity provider, has launched its

‘Experience 2022’ strategy to ac-

celerate the delivery of optimised

digital experiences for its part-

ners, customers and end users.

The high-performance low-

latency global connectivity pro-

vider has developed a roadmap

for ensuring that users across

Qatar and the Middle East have

the network infrastructure to

support the content, cloud and

communication services avail-

able in 2022.

“Connectivity providers across

the Middle East have to be

prepared to support Internet of

Things (IoT), Big Data, Artificial

Intelligence (AI) and Smart City

innovations. We are prepar-

ing for massive data transfer,

hyper-sensitive services, and the

delivery of real-time mission-

critical applications,” said Cengiz

Oztelcan, GBI chief executive.

GBI’s Experience 2022 strategy

builds on financial stability, a

robust business model, and a

long-term commitment to the

market. It refocuses infrastruc-

ture development by ensuring

multiple redundancies, lowering

the risk of network outage

and upgrading to the latest

technologies, whilst simplify-

ing internal processes to better

support customers and partners

end-to-end.

The aim is to use low-latency,

ultra-reliable and high-perform-

ance network infrastructure to

deliver exceptional experiences

for customers, partners and end

users, the company said.

‘Experience 2022’ includes

transforming processes from

basic connectivity and restruc-

turing customer service and

support, to enable a superior

user experience; upgrading to

the latest available technolo-

gies, to improve the network

uptime, minimising outages

and ensuring multiple diverse

options; focusing future invest-

ments on unique, low-latency

and diff erentiated routes and

adopting a policy of continual

transformation.

GBI connects and optimises

applications and services with

unique low-latency subsea

and terrestrial infrastructure

that spans India, the Gulf, and

Europe. It is committed to

customer service excellence and

enabling the long-term success

of its partners, customers and

the communities they serve.

Labourers install scaff olding at a construction site in Doha. Building permits data is of particular importance as it is considered an indicator for the performance of the construction sector which in turn occupies a significant position in the national economy.

Qatar Business Awards are open to organisations that uphold a commitment to providing exceptional business services and innovation to their customers, partners, suppliers, as well as employees.

QSE settles below 10,200 levels as foreign institutions turn bearishBy Santhosh V PerumalBusiness Reporter

An across-the-board selling, particularly in

insurance and consumer goods, yesterday

drove the Qatar Stock Exchange below

10,200 levels.

Foreign institutions turned bearish as the

20-stock Qatar Index settled 74 points, or

0.72% to 10,197.57 points.

Domestic funds’ weakened buying inter-

ests also had its role in dampening the

market, whose key benchmark was down

0.98% year-to-date.

“The market has lost its upward steam and

needs to regain strength above 10,600

points to change the tone and target

10,810 points; however, only above this

line will confirm a return to 11,100 points

and maybe higher to the strong layer at

11,400 points,” Kamco analysts said in

their technical note.

Market capitalisation saw more than QR3bn

or 0.62% decline to QR567.66bn mainly ow-

ing to mid and small cap segments.

Islamic equities were seen declining

slower than the other indices on the mar-

ket, where local retail investors and Gulf

institutions turn bullish.

Trade turnover marginally fell amidst high-

er volumes on the bourse, where banking

and industrials sectors together accounted

for about 62% of the total volume.

The Total Return Index lost 0.72% to

18,764.38 points, All Share Index by 0.7% to

3,022.46 points and Al Rayan Islamic Index

(Price) by 0.61% to 2,308.6 points.

The insurance index tanked 1.63%, consumer

goods (1.15%), banks and financial services

(0.67%), industrials (0.67%), telecom (0.5%),

realty (0.21%) and transport (0.03%).

About 70% of the traded constituents

were in the red with major losers being

Qatar Insurance, Al Khaleej Takaful, Doha

Bank, Commercial Bank, Qatar Islamic

Bank, QNB, Gulf International Services, Qa-

tari Investors Group, Woqod and Widam;

even as Qatari German Company for Medi-

cal Devices, Nakilat and Gulf Warehousing

were among the gainers.

Non-Qatari institutions turned net sellers

to the tune of QR18.91mn against net buy-

ers of QR0.4mn the previous day.

Domestic funds’ net buying declined

significantly to QR6.81mn compared to

QR20.01mn on October 8.

Non-Qatari individuals’ net buying weak-

ened noticeably to QR0.97mn against

QR1.43mn on Tuesday.

The Gulf individual investors’ net buying

also shrank marginally to QR0.42mn com-

pared to QR0.76mn the previous day.

However, local retail investors turned net

buyers to the extent of QR8.64mn against

net sellers of QR9.58mn on October 8.

The Gulf institutions were net buyers

to the tune of QR2.07mn compared

with net profit takers of QR13.01mn on

Tuesday.

Total trade volume rose 32% to 70.76mn

shares, while value fell less than 1% to

QR190.2mn and transactions by 16% to

4,670. The consumer goods sector’s trade

volume more than doubled to 12.85mn

equities, value gained 6% to QR19.69mn

and deals by 22% to 813.

The banks and financial services sec-

tor saw 94% surge in trade volume

to 24.93mn stocks, 19% in value to

QR119.69mn and 1% in transactions to

1,722. The industrials sector’s trade volume

was up 4% to 18.6mn shares, whereas

value declined 14% to QR28.05mn and

deals by 17% to 1,205.

However, there was 46% plunge in the

telecom sector’s trade volume to 1.18mn

equities, 70% in value to QR3.86mn and

70% in transactions to 249.

The transport sector’s trade volume plum-

meted 43% to 1.74mn stocks, value by 57%

to QR4.38mn and deals by 42% to 133.

The insurance sector reported 21% shrink-

age in trade volume to 0.88mn shares,

52% in value to QR2.23mn and 22% in

transactions to 148.

American Airlines cancels 737 MAX flights until Jan 16ReutersWashington

American Airlines Group Inc yesterday

extended cancellations of Boeing 737

MAX flights through January 15, run-

ning contrary to the US plane maker’s

promises that the grounded jets would

be flying again before the year-end.

The largest US airline, which had previ-

ously cancelled about 140 flights a day

through December 3, upped its estimate

for the impact of the groundings on

third-quarter pre-tax profit to $140mn,

$15mn more than a previous estimate.

Its shares, down about 16% in a rough

year for airlines, rose, however, on the

company’s statement that lower fuel

costs had boosted margins in the third

quarter.

Boeing shares, buff eted this week by

conflicting signals on European regula-

tors’ attitude to the MAX, were also

marginally higher.

In July, American said full-year profit

would be reduced by about $400mn if

the MAX remained grounded through

November 2, and that figure is likely

to increase now with a spillover eff ect

into 2020.

Boeing’s sales numbers on Tuesday also

showed that by the end of September it

had delivered only half the number of

aircraft it did in the same period of 2018.

Regulators are still reviewing proposed

software changes to the grounded

plane with no certain timetable for the

jet’s return.

American, which cancelled 9,475 flights

in the third quarter, said it expects to

gradually resume MAX flights starting

January 16, adding that software up-

dates could lead to the Federal Aviation

Administration’s (FAA) “recertifica-

tion of the aircraft later this year and

resumption of commercial service in

January 2020.”

The FAA said yesterday it was “fol-

lowing a thorough process, not a

prescribed timeline, for returning the

Boeing 737 Max to passenger service.

The FAA will lift the aircraft’s prohibition

order when it is deemed safe to do so.”

The fast-selling 737 MAX has been

grounded worldwide since mid-March

while Boeing updates flight control

software at the centre of two crashes

in Indonesia and Ethiopia that together

killed 346 people within a span of five

months.

Among other US airlines that operate

the MAX, Southwest Airlines Co has

cancelled flights through January 5

and United Airlines Holdings Inc until

December 19.

An ongoing regulatory safety review

means a key 737 MAX certification

test flight is unlikely before November,

Reuters reported on Tuesday.

Boeing has repeatedly said it hopes to

resume flights in the fourth quarter,

which began on October 1. FAA Ad-

ministrator Steve Dickson told Reuters

in September the agency would need

about a month following the yet-to-be

scheduled certification test flight before

the planes could return to service.

Boeing plans to revise the 737 MAX

software to take input from both of its

angle-of-attack sensors in the anti-stall

system linked to the two deadly crashes

and has added additional safeguards.

Boeing is also addressing a flaw dis-

covered in the software architecture of

the 737 MAX flight-control system that

involves using and receiving input from

the plane’s two flight control computers

rather than one.

Meanwhile, airlines that had purchased

the fuel-eff icient MAX have canceled

thousands of monthly flights as they

scramble to meet demand with slimmer

fleets, eating in to profit and hurting

some growth plans.

On Monday, the Southwest Airlines

Pilots Association sued Boeing alleging

that the plane maker “deliberately

misled” the airline and pilots about its

737 MAX aircraft.

The grounding of the 737 MAX has

wiped out more than 30,000 South-

west Airlines flights, causing over

$100mn in lost wages for pilots, the

union said.

Boeing said the suit is “meritless.”

Fort Worth, Texas-based American,

with 24 MAX jets at the time of the

grounding and dozens more on order,

said it expects to resume about 20 MAX

flights a day in mid-January and plans

to slowly return the MAX into commer-

cial service throughout January and

into February.

Will Boeingrebrand theinfamous jet?

By Alex Macheras

The Boeing 737 MAX has arguably become the most infamous commer-cial passenger jet in recent history. While the Boeing short-haul flagship jet remains grounded worldwide, the public’s fears about the aircraft are at an all-time high following a very public and ongoing crisis with devel-opments that continue to keep the 737 MAX under the spotlight. But will a rebranding be necessary to avoid the ramifications of returning a plane to commercial service that appears to have had its reputation damaged in an irreversible way?A potential rebrand or renaming of the 737 MAX has been a topic of conversation among industry stakeholders, public figures and even US President Donald Trump.“If I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name,” tweeted President Trump, following the second deadly 737 MAX accident.Kenya Airways — a 737 MAX operator — CEO Sebastian Mikosz told media in June that, “Renaming the Boeing 737 MAX will help restore the public’s trust in the aircraft when the global fleet is flying again”. Qatar Airways Group — also a 737 MAX customer, but not operator (Qatar’s ordered 737 MAX jets were transferred to Air Italy, which is 49% owned by Qatar) — CEO Akbar Al Baker echoed Mikosz’s thoughts, saying, “I think Boeing will have to come up with something to re-name this aeroplane”.While Boeing told media at the Paris Air Show that it would consider changing the name to help the model return to the skies, it seems as though that option is no longer on the table. A spokesperson told me: “Our immediate focus is the safe return of the MAX to service and re-earning the trust of airlines and the travelling public. We remain open-minded to all input from customers and other stakeholders, but have no plans to change the name of the 737 MAX”.However, speculation over a 737 MAX rebranding was rife when photos surfaced on Twitter showing a Ryanair 737 MAX at the Boeing factory with a new aircraft title painted on the fuselage. The aircraft, due to be

delivered to Ryanair once the 737 MAX is certified to return to the skies, displays the designation ‘737-8200’ instead of 737 MAX on the nose.The 737-8200 is not a new name for the jet and is merely the designation for the highest-capacity variant of the 737 MAX 8, which was designed for low-cost carriers looking to squeeze in as many seats as possible. However, the jet was previously referred to as the 737 MAX 200 by Ryanair, as well as by Boeing.Public opinion on a 737 MAX rebrand is wide-ranging. Recently, in a broadcast on the topic of rebranding the 737 MAX with Al Jazeera anchor Kamahl Santamaria, he admitted, “If I got on a plane called ‘737-greatest-plane-in-the-world’ but I knew it was still a 737 MAX, I’d still feel concerned”. Several viewers took to twitter to agree with Santa Maria, claiming a rebrand would do nothing to settle their concerns over the aircraft. Others disagreed, explaining that given the 737 MAX is under intense scrutiny from the FAA, the jet “will be the safest in the world” to fly on board once it returns to commercial service.While aircraft have suff ered turbulent entries into service in aviation history, has a commercial jet ever rebranded to escape the reputation of a tarnished name?Commercial air travel’s most similar example to the current 737 MAX crisis is the infamous McDonnell Douglas DC-10, which entered service in 1971 and was plagued by problems from the very beginning. In 1972, a brand-new American Airlines DC-10 had to make an emergency landing in Detroit after losing cabin pressure because the plane’s cargo door blew off mid-flight. Not long after, a Turkish Airlines DC-10 also suff ered decompression when its cargo door blew off during the flight. The sheer force of decompression caused the cabin floor to cave in, damaging the flight controls and killing all 346 on board. Some years later, an engine detached from the wing of an American Airlines DC-10 while taking off from Chicago, killing all 271 on board, and resulting in the immediate grounding of all DC-10s worldwide. The manufacturer, McDonnell Douglas replaced the DC-10 with a successor with a new name, the MD-11.But for Boeing, rebranding the 737 MAX due to bad publicity could still be somewhat unprecedented. The Boeing 727 — still in commercial service today, albeit only with a small number of airlines — suff ered four fatal crashes following its entry into service in the mid-1960s. However, passengers continued to fly on 727 jets for the decades that followed, and it remains in service with the same name.Do you think Boeing should rebrand the 737 MAX?

The author is an aviation analyst.

Twitter handle: @AlexInAir

AVIATIONBUSINESS


Airline seatback screens may soon become an endangered speciesBloombergDallas

In the quest to command higher fares and trav-eller loyalty, airlines are constantly scrambling to market their onboard services as better than Brand X. These days, one highly visible battle-ground is directly in front of you: the seatback screen.While such displays are firmly entrenched aboard long-haul fleets, helping pass the hours during ocean crossings, there’s a deep diff er-ence of opinion among US carriers when it comes to domestic single-aisle jets. The advent of onboard Wi-Fi has given airlines the option of using your phone or tablet as a portal for films, television shows and video games, avoiding the expense of costly hardware at every seat.Three of the largest US airlines — American Airlines Group Inc, United Airlines Holdings Inc and Alaska Air Group Inc — are removing screens from their domestic workhorses, the family of medium-range 737 and A320 aircraft sold by Boeing Co and Airbus SE, respectively. Southwest Airlines Co has never equipped its Boeing 737s with screens and said it has no plans to change course.Meanwhile, Delta Air Lines Inc and JetBlue Airways Corp are betting seatback screens with audio-video on demand will lure domestic trav-ellers. A three-year-old Delta subsidiary, Delta Flight Products, has merged the two worlds, developing a wireless streaming product and seat-mounted tablet screens for many of the airline’s new deliveries, dispensing with the weight associated with traditional, hardwired

displays. The split is evident internationally as well: Screens on single-aisle fleets are rare in Europe, but still relatively common in Asia among the full-service carriers. The reason for replacing the seatback screen is, of course, the ubiquitous smartphone. Onboard streaming services are seen by some airlines as an obvious way to trim expenditures. But for others, that sinking feeling passengers get when they realise there’s no screen in front of them presents a marketing opportunity.Airlines that are jettisoning their screens say it’s not just about high install costs. Those screens add weight, increasing fuel costs. What’s more, the technology in a seatback

screen typically becomes obsolete much faster than the gadget in your pocket. Kurt Stache, American’s senior vice president of marketing and loyalty, said that maintaining the screens isn’t cheap, either: “That’s clearly a pain point after a couple of years.” (Delta’s new pop-out screen tablets, meanwhile, can easily be replaced.)More than 50% of American’s passengers bring two devices with them, Stache said. As a result, power outlets and larger overhead bins—not screens—are the items that rank highest when American polls passengers on their priorities. (The airline is also outfit-ting most of its single-aisle fleet with faster satellite-based Internet access.)For those airlines sticking with seatback screens, it’s not just about satisfying pas-sengers who still expect one. JetBlue is also off ering broadband Wi-Fi for free while Delta is working to off er that amenity as early as next year. So why have both? The airlines argue that passengers want to replicate their “two-screen” home experience of simultaneously watching television or a movie while browsing the web.“Just because you are in a tube in the air, it doesn’t mean you need to stop your life as it is on the ground,” said Mariya Stoyanova, JetB-lue’s director of product development. “We give back control to you similar to what you have in your living room.”American and United have retained seatback screens on some of their domestic flights. Lucrative routes flown by some single-aisle air-craft between New York and Los Angeles or San Francisco will keep them. United has also kept

screens on more than 200 Boeing 737s from the former Continental which are equipped with live DirecTV service.Indeed, despite its commitment to streaming, United is considering new seatback screens in Boeing 737 Max 10 aircraft, which start to arrive next year. Tarek Abdel-Halim, United’s managing director of in-flight entertainment and connectivity, declined to confirm if the larg-est Max variant will come with screens at each seat, or which option he feels is superior. “We don’t say that one off ering is necessarily better than another,” he said.Delta chief executive off icer Ed Bastian said that “entertainment is important” because passengers spend an average of three hours on a flight. There are “absolutely” opportunities to monetise seat-back screens, Bastian said, but “I’m not interested in monetization for moneti-sation’s sake.”Notwithstanding the industry debate over seatback versus streaming, all airlines are keen for faster Wi-Fi service to help provide more personalised service — and to accumulate passenger data. This means not just knowing your preferred drinks, but also what kind of entertainment strikes your fancy and which ads should be funnelled your way.“You have a captive audience at 35,000 feet,” JetBlue’s Stoyanova notes. “There’s a lot you can do.”With more connectivity will come more passen-ger shopping, more potential advertisers, more subscription off ers and more partnerships like the kind Amazon inked with JetBlue and Apple has with American. Julie Lichty, head of digital services and solutions at Panasonic Avionics

Corp, said more carriers “are finding advertisers to pay for engagements.” Ads pay for onboard Wi-Fi sessions or other entertainment options used by passengers.Shopping for shoes or groceries at 40,000 feet “will become perfectly normal,” said Mike Pigott, senior vice president of aviation con-nectivity at Global Eagle Entertainment Inc. “It’ll be treated the same way as shopping on any mobile environment.”And there are more frequent flyer points to be had, too. As part of its partnership, JetBlue off ers extra loyalty program rewards for those who shop on Amazon.com during their flight. American’s deal with Apple allows Apple Music to be streamed onboard.But before you get too excited, passengers should know that all of this in-flight distraction isn’t designed to be a free lunch. The ability to market to thousands of captive passengers is seen as a lucrative source of new revenue.Stache of American Airlines said the carrier doesn’t want to start charging for everything right away, but instead sees a slower approach to boosting onboard revenue from its digital portal. “If you go too far too quickly, you may have people saying ‘I don’t want to engage with this,’” he said.Soon, however, there may be a way for you to spend money in-flight and not get anything at all: Online gaming. Gaming via video screens is an amenity that, one day, may be coming in for a landing, predicts Jason Rabinowitz, who tracks airline amenities at Routehappy by ATPCO, an aviation data company. “We haven’t seen it yet but you could definitely do it,” he said, assuming regulators sign off .

American Airlines Group Boeing 737 MAX planes sit parked outside of a maintenance hangar at Tulsa International Airport (TUL) in Tulsa, Oklahoma. The largest US airline upped its estimate for the impact of the groundings on third-quarter pre-tax profit to $140mn, $15mn more than a previous estimate.

In-flight entertainment (IFE) screens are displayed on seats at the Airbus booth during the APEX Expo in Los Angeles on September 11. The advent of onboard Wi-Fi has given airlines the option of using your phone or tablet as a portal for films, television shows and video games, avoiding the expense of costly hardware at every seat.

Lufthansa mulling plan to join takeover bid for AlitaliaBloombergMilan

Deutsche Lufthansa AG is preparing to join a takeover bid for bankrupt Italian airline Alitalia SpA in a deal that would see it help run the carrier without injecting equity.While Lufthansa previously said it would like full ownership of Alitalia, the German company is now prepared to partner with other investors, according to people familiar with the plan who asked not to be named as it’s not yet public.Lufthansa had considered a cash injection involving a 15% to 20% stake, but with resources focused on a turnaround at its Eurowings arm decided to

off er support without equity involvement, one of the people said. Lufthansa and Alitalia didn’t immediately respond to requests for comment.Should the deal go ahead, Europe’s biggest airline would replace Atlanta-based Delta Air Lines Inc in a group aiming to rescue Alitalia, alongside state railway Ferrovie dello Stato Italiane SpA and the Benetton family’s Atlantia SpA.Should the proposal come to fruition, Alitalia — under special administration for more than two years — would join at stable of carriers including Austrian Airlines, Swiss and Brussels Airlines, as well as the main Lufthansa brand.Italy’s Ansa news wire reported on the plan earlier, saying Lufthansa had written to Ferrovie off ering itself as an alternative industrial partner to Delta.

Should the deal go ahead, Lufthansa would replace Atlanta-based Delta Air Lines Inc in a group aiming to rescue Alitalia.

qnb group posts 4% jump in 9-month proﬁ t ... - gulf times

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