UN GATHERING | Page 3
GT EXCLUSIVE | Page 6
Oil CEOs push
carbon-capture
efforts at meet
Uptrend for
Islamic finance
in Pakistan
Tuesday, September 24, 2019
Muharram 25, 1441 AH
WORLD’S OLDEST TRAVEL FIRM : Page 16
GULF TIMES
Hundreds of thousands
stranded as the UK’s
Thomas Cook collapses
BUSINESS
Qatar’s mandatory IR
regime from October to
boost investment appeal
By Santhosh V Perumal
Business Reporter
Q
atar, which will have a mandatory rule-based investor relations
(IR) regime from October, is keen
to promote the adoption of international
best practice in IR among its listed companies as part of efforts to enhance its attractiveness to global investors, a top official of the Qatar Stock Exchange (QSE)
said yesterday.
“As QSE is Qatar’s national stock exchange, we seek to support the sustainability of our listed companies in the years
and decades ahead, especially in light of
the current geopolitical instability in the
region,” QSE chief executive Rashid bin
Ali al-Mansoori told the 10th annual IR
conference.
Highlighting that the bourse is actively
working on promoting sound IR practices
among its listed firms in order to maintain
investor confidence and enhance their
investment attractiveness; he said since
transparency and effective IR communications are the hallmark of a successful
capital market, the development of IR
practices would definitely enhance the
sustainability of listed companies.
“Effective from October 1, 2019, Qatar
will be introducing a mandatory rulesbased framework for IR; the rules reflect
best-practice and should in any case be
standard for listed companies in today’s
regulatory capital markets’ environment,” he said.
The QSE has held over the last few
years many conferences and training programmes, the latest of which was held last
Al-Mansoori outlines the QSE’s efforts to enhance its attractiveness yesterday.
week and aimed to enable participants to
earn an internationally recognised IR certification.
Abdul Aziz al-Emadi, listings director
of the QSE, said that the IR annual conference, the excellence programme, and
frequent training programmes reflect the
Barwa Bank appoints
Abdulaziz al-Naema as acting
GM to head retail banking
Barwa Bank has announced the
appointment of Abdulaziz al-Naema as
acting general manager-head of Retail
Banking, which is under its strategic
vision to grow, support, and empower
Qatari talents towards executive and
managerial leadership.
Having joined Barwa Bank in 2009,
al-Naema steadily rose through the
ranks throughout his career with the
group. He started with Barwa Bank
as a business and branch operations
manager and served as the bank’s head
of branches prior to his appointment
in his current role. With over 20 years
of experience in the banking sector, alNaema obtained his bachelor’s degree
from Qatar University.
In a decade of his journey with the
group, al-Naema has made considerable
contributions to the development
and growth of Barwa Bank’s retail
banking portfolio. His promotion
recognises his longstanding expertise
and competence in the banking and
financial services field.
Commenting on al-Naema’s
appointment, Khalid al-Subeai, Group
CEO at Barwa Bank, said, “Mr Abdulaziz
al-Naema’s appointment comes in
line with Barwa Bank’s commitment
to its strategy in empowering and
stock exchange’s desire to achieve best
international practice among its listed
companies for a transparent investment
environment.
“The issuance of the IR Rules, which
will be effective as of October 1, 2019, is a
testament to the exchange’s commitment
encouraging Qatari talents, guided by
the State of Qatar’s vision to invest in
its national human capital and develop
local professionals.
“It is also a well-earned recognition of
his integral role and contributions to
Barwa Bank since he joined our group.
On behalf of all at Barwa Bank, I would
like to wish him the best of luck and
many more successes and strides
towards achieving the bank’s goals and
ambitions, today and in the future.”
By Santhosh V Perumal
Business Reporter
Qatar’s listed banks have seen a solid performance during the
first half (H1) of this year with healthy aggregated profitability
and total assets expanding 3% on a yearly basis to touch
QR1.53tn, according to PricewaterhouseCoopers (PwC).
Total profit of the listed commercial banks grew 4.6% year-onyear to QR12.6bn during January-June 2019, PwC said in a report.
The aggregated profits of the eight listed banks in H1 2019
witnessed continuous improvements, increasing by 17.5% from H1
2016 (a compound annual growth rate or CAGR of 5.5%).
“In particular, the growth in profits was driven by the increase
of the aggregate net income, which increased since H1 2016,” it
said.
Highlighting that Qatari banks, in general, have produced
“solid” results over the quarter, as demonstrated by the interim
(consolidated) reports published in H1 2019 by the eight listed
commercial banks; it said whether through an increase of assets,
total loans and advances and/or profits, most of the listed banks
played a key role in contributing to the favourable results over
the second quarter of 2019.
“Disruptive technologies are reshaping financial services the
world-over. Collaboration between traditional banks and fintechs
must be a priority for the industry and will require stakeholders
to develop solid infrastructure, regulations, procedures and
human capital. The Qatar financial industry is undergoing rapid
transformation, with all the stakeholders in the industry working
together in synergy to ensure long-term economic prosperity,”
said Burak Zatiturk, PwC Qatar financial services leader.
Total assets of the listed commercial banks reached QR1.53tn, of
which Islamic banks’ market share was QR0.31tn (20.3%) and that
of the conventional lenders’ at QR1.22tn (79.7%), according to the
report.
In the last three years (H1 2019 vs H1 2016), total loans and
advances grew a total of 19.8% (CAGR of 6.2%), proving that the
banking industry in Qatar has been expanding at a rapid pace,
and to have fully overcome the temporary volatility of 2017, it
said, adding building additional momentum, loans and advances
grew by 2.8% in the first half of 2019 (H1 2019 vs. FY 2018).
Total loans and advances of the listed banks totalled QR1.05tn, of
which Islamic banks’ market share stood at QR0.21tn (20%) and
QR0.84tn (80%) at the end of June 30, 2019.
The aggregate total loans and advances to total assets ratio
stood at 68.62% as on June 30, 2019, increasing by 0.37
percentage points over the second quarter of 2019, according to
the report.
The total customer deposits balance amounted to QR1.04tn (an
increase of QR44.2bn or 4.45% over H1 2019 and an increase of
QR7.4bn or 0.72% since March 31, 2019).
The listed commercial banks’ aggregate loans and advances to
customer deposits ratio stood at 101.4% at the end of this June,
increasing by 0.4 percentage points from its corresponding value
as at March 31, 2019, and partially recovering from 103.1% at the
end of December 2018, according to the report.
Meeza holds meetings on RECaaS
and business resilience solutions
M
Al-Naema: Well-earned recognition.
towards achieving quality investor relations to improve market accessibility and
support the development of successful
capital markets,” he said.
As the new IR regime takes effect, it will
be mandatory for all listed companies to
have IR officer and a dedicated section on
IR on their website.
As part of the QSE’s commitment to
create effective communication channels
and improve the ongoing communication
between the listed companies and the investors’ community, the Qatar Financial
Markets Authority (QFMA) has approved
a set of minimum requirements for the
IR Rules that will become part of QSE’s
Rulebook.
The QSE, QFMA and the listed companies have been working together over
many years to ensure that disclosure and
transparency are developed through an
increasing focus on IR, especially after the
inclusion of Qatar in the MSCI, Standard
& Poor’s and FTSE emerging markets
indices, which has served to increase attention on Qatar’s stock market and all its
listed companies.
“With the recent changes in MiFID II,
traditional corporate access is expected to
change significantly. The role of the sell side
is expected to shrink and the role for the
buy side is expected to rise and the numbers
of independent service providers will increase,” al-Mansoori had said earlier.
MiF iID IIs a legislative framework instituted by the European Union to regulate financial markets in the bloc and
improve protections for investors with
the aim of restoring confidence in the industry after the financial crisis exposed
weaknesses in the system.
Qatar banks post solid
performance in H1: PwC
eeza held a series of roundtable meetings for its existing clients over the last two
weeks to introduce the Recovery as
a Service (RECaaS) solution, and the
role it plays in supporting business
critical technology and infrastructure.
The meetings brought together
participants from the oil and gas, education, healthcare, media, banking
and finance, and government sectors,
who were presented with information
and case studies about the importance of adopting recovery solutions
and integrating it into their business
continuity plans.
In addition, clients learnt about
how RECaaS can ensure the integrity
of their digital assets and help avoid
business interruptions that affect
companies without such measures in
place.
“Clients learned how our RECaaS
solutions offer real-time data replication, continuous data protection,
and ensure the integrity of their digital assets. With multiple recovery
point and time objectives available,
we provide true flexibility for any
disaster recovery requirement either
on premise or within hybrid public
cloud workloads,” said Meeza chief
sales and marketing officer, Ahmad
al-Muslemani.
David Wilds, expansion operations executive, Meeza Expansion,
said, “Business continuity is the
most important priority for any organisation that cares about its future. Last May, we launched RECaaS
to provide a range of services that are
scalable, secure, and cost effective
delivering ever increasing value to
our clients.
“Our recent series of roundtables
helped familiarise clients with Opexbased cloud recovery services to help
prevent data loss and downtime in
the event of a man-made or natural
catastrophe. We will provide full support for our clients to successfully
implement and leverage backup and
disaster recovery solutions.”
Meeza’s unique, centralised, and
unified business cloud platform is
hosted across multiple Tier III data
centres based in Qatar. The main recovery service is Disaster Recovery as
a Service (DRaaS) offering continuous real time, byte-level replication,
automated full or partial failover,
Meeza’s meetings brought together participants from the oil and gas,
education, healthcare, media, banking and finance, and government sectors.
hardware agnostic, snapshot and
CDP Features with multiple recovery
point and time objectives. Backup as
a Service (BaaS) provides an extremely cost-effective backup and archiving solution hosted within the Meeza
local cloud.
Meeza is a fast-growing player in
cloud computing services, both in
regional and international markets. It
continues to innovate and offer cost
effective IT solutions and services
to help its clients focus on their core
business.
2
Gulf Times
Tuesday, September 24, 2019
BUSINESS
Tunisia sets up crisis cell to
handle Thomas Cook fallout
AFP, Reuters
Tunis
T
unisia set up a crisis cell to deal
with the fallout of British tour
operator Thomas Cook’s collapse yesterday, which has left around
4,500 mostly British tourists stranded in the North African country, officials said.
Tunisian authorities said officials
and tourism industry representatives
from both countries were to meet today with Tunisia’s central bank.
Thomas Cook, which had suspended trips to Tunisia after the
deadly militant attacks in 2015, returned in force last year and in 2019
with around 100,000 bookings a year,
mostly from Britons.
“We currently have about 4,500
British tourists in the hotels who
will finish their stay as scheduled,
and their repatriation will be paid
for by London,” Tourism Minister
Rene Trabelsi said on Mosaique FM
radio.
Managers of a hotel in the coastal
resort of Hammamet briefly delayed
the departure of a group of tourists
until they could verify that payments
owed by Thomas Cook had been
made, an interior ministry spokesman told AFP.
The resort managers requested additional payments even though the
group had already paid the costs of
their stay in full, one tourist said.
“After an hour they left the hotel
and are currently at the airport,” said
the government spokesman. “There
are other Thomas Cook groups in
Hammamet, Sousse, Mahdia and
Djerba — all payment procedures
have been settled.”
Thomas Cook owes Tunisian hotels
€60mn ($66mn) for stays in July and
August, Tourism Minister Trabelsi
told Reuters yesterday, adding that
British tourists, flying with Thomas Cook, queue at the Enfidha International airport, on the outskirts of Sousse south of Tunis yesterday. Thomas Cook owes
Tunisian hotels €60mn for stays in July and August, Tourism Minister Rene Trabelsi told Reuters yesterday.
4,500 British Thomas Cook customers are still in the country. Tourism is
a vital sector for Tunisia’s economy
and a key source of foreign currency,
and the government had expected another 50,000 Thomas Cook custom-
ers to visit this year, he added. “I will
have a meeting on Tuesday with the
British Embassy in Tunisia and the
hotel owners to see how debt could be
redeemed,” Trabelsi said.
The collapse of Thomas Cook, one
of Britain’s oldest companies, has
stranded more than half a million
tourists around the world.
It ran hotels, resorts and airlines for
19mn people a year in 16 countries.
Britain’s Civil Aviation Authority
(CAA) said the government had a fleet
of planes ready to bring home British
customers over the next two weeks
and they should not go to the airport
until they had been informed they
were due on a return flight.
Turkey to back
businesses
hit by Thomas
Cook collapse
AFP
Ankara
Turkey said yesterday it would
support local businesses impacted by
the collapse of British tour operator
Thomas Cook, adding that 21,033 of
its customers were currently in the
country.
“The tourism and finance ministries are
working on a ‘credit support package’
to be put in place as soon as possible
to help (affected) businesses,” the
tourism ministry said on Twitter.
Tourism Minister Mehmet Nuri Ersoy
later told reporters in Ankara that
the package could be worth €50mn
($55mn).
Antalya in southern Turkey was one of
Thomas Cook’s top destinations, along
with Bodrum and Dalaman.
The 178-year-old British operator failed
to get a last-ditch rescue deal over the
weekend and declared bankruptcy
Monday, leaving 600,000 tourists
stranded worldwide.
Some 150,000 of those passengers are
Britons seeking help from London to
return home.
Ersoy said around 21,000 British
passengers would be repatriated from
Turkey in the coming weeks.
He warned a further 60,000
holidaymakers in Turkey could be
impacted if the German, Russian and
Nordic subsidiaries of Thomas Cook
were dragged into the mess.
The German airline subsidiary,
Condor, has said it will continue flying,
though it has requested financial aid
from Berlin.
“Our priority is for the foreign guests
here to go back home without
experiencing too much discomfort,”
Ersoy said.
He warned hotels they would face
legal action if they sought money from
British tourists since the passengers
were protected by a scheme based on
a European Union directive.
Ersoy said he was confident other
firms would step in to fill the gap left by
Thomas Cook.
QSE extends bear run as
foreign funds book profit
By Santhosh V Perumal
Business Reporter
F
oreign funds’ increased profit
booking pressure yesterday further dragged the Qatar Stock Exchange below 10,400 levels and capitalisation eroded by about QR4bn.
The insurance and industrials
counters witnessed higher than average selling pressure as the 20-stock
Qatar Index fell 0.81% or 84 points for
the third straight session to 10,362.85
points.
However, domestic and Gulf institutions were increasingly net buyers
in the market, whose key benchmark
was up 0.62% year-to-date.
Market capitalisation saw 0.63%
decline to QR573.93bn mainly owing
to small and microcap segments.
Islamic equities were seen declining slower than the main index in the
market, where local retail investors’
net profit booking weakened.
Trade turnover and volumes were
on the increase in the bourse, where
the real estate, banking and industrials sectors together accounted for
about 79% of the total volume.
The Total Return Index declined
0.81% to 19,068.52 points, the Al Rayan Islamic Index (Price) by 0.77% to
2,334.22 points and the All Share Index by 0.61% to 3,045.2 points.
The insurance index plunged
3.83%, industrials (1.26%), realty
(0.4%), consumer goods (0.38%),
banks and financial services (0.34%)
and telecom (0.06%); while transport
gained 0.24%.
More than 58% of the traded constituents were in the red with major
losers being Qatar Insurance, Al Khaleej Takaful, Nakilat, Industries Qatar, Mesaieed Petrochemical Holding,
Qatar Islamic Bank, Medicare Group
and Vodafone Qatar; even as Qatari
German Company for Medical Devices, Qatar Industrial Manufacturing,
Milaha, Doha Insurance and Ooredoo
were among the gainers.
Non-Qatari institutions’ net profit
booking increased significantly to
QR30.29mn against QR1.05mn on
September 22.
Non-Qatari individuals’ net buying
weakened marginally to QR0.91mn
compared to QR1.15mn the previous
day.
However, domestic institutions’
net buying expanded substantially to
QR27.7mn against QR8.72mn on Sunday.
Gulf institutions’ net buying also
grew perceptibly to QR9.41mn compared to QR2.7mn on September 22.
Gulf individuals’ net buying
strengthened notably to QR1.51mn
against QR0.59mn the previous day.
Local retail investors’ net profit
booking declined considerably to
QR2.07mn compared to QR12.12mn
on Sunday.
Total trade volume rose 5% to
72.49mn shares, value by 23% to
QR206.74mn and transactions by
56% to 5,775.
The real estate sector’s trade volume more than doubled to 25.18mn
equities and value more than doubled
to QR20.8mn on more-than-tripled
deals to 1,183.
The banks and financial services
sector saw a 17% surge in trade volume to 19.36mn stocks, 91% in value
to QR102.26mn and 60% in transactions to 1,630.
The consumer goods sector’s
trade volume was up 3% to 9.48mn
shares, whereas value tumbled 17% to
QR13.88mn despite 46% higher deals
at 557.
However, the insurance sector reported a 63% plunge in trade volume
to 0.83mn equities and 67% in value
to QR2.12mn but on a 45% growth in
transactions to 106.
The telecom sector’s trade volume
plummeted 55% to 1.59mn stocks
and value by 39% to QR8.17mn, while
deals were up 6% to 523.
There was a 44% contraction in the
industrials sector’s trade volume to
12.48mn shares and 17% in value to
QR13.88mn but on 46% increase in
transactions to 1,513.
The transport sector’s trade volume
tanked 19% to 3.57mn equities, value
by 6% to QR19.67mn and deals by 11%
to 263.
In the debt market, there was no trading of treasury bills and sovereign bonds.
‘Saudi to restore full oil output by next week’
Saudi Arabia has restored more than 75% of crude
output lost after attacks on its facilities and will return
to full volumes by early next week, a source briefed on
the latest developments told Reuters yesterday.
Saudi’s oil production from its Khurais plant is now
at more than 1.3mn barrels per day, while current
production from its Abqaiq plant is at about 3mn bpd,
the source said.
The September 14 attacks on the Abqaiq and Khurais
plants, some of the kingdom’s biggest, caused raging
fires and significant damage that halved the crude
output of the world’s top oil exporter, by shutting down
5.7mn barrels per day of production.
Saudi Energy Minister Prince Abdulaziz bin Salman and
the chief executive of state oil company Aramco, Amin
Nasser, have said the output will be fully back online by
the end of September.
The kingdom has managed to recover supplies to
customers to the levels they were at prior to the
attacks by drawing from its huge oil inventories and
offering other crude grades from other fields, Saudi
officials said.
No casualties were reported at the sites even though
thousands of workers and contractors work and live in
the area.
Saudi said it would ensure full oil supply commitments
to its customers.
The kingdom ships more than 7mn bpd to global
destinations every day.
Saudi Arabia’s ability to quickly restore oil production
after the attacks, which hit at the heart of the Saudi
energy industry and intensified a decades-long
struggle with arch-rival Iran, would demonstrate an
important degree of resilience to potentially very
damaging shocks, Moody’s said last week.
Aramco is getting ready for an initial public offering
possibly later this year.
Aramco has a meeting with analysts scheduled for
Wednesday at the company’s headquarters in Dhahran,
two sources said.
Gulf Times
Tuesday, September 24, 2019
3
BUSINESS
Oil CEOs push carbon-capture
efforts ahead of climate talks
Reuters
New York
A
group of 13 major oil companies
charted out a plan yesterday to promote investments in carbon capture, use and storage (CCUS), ahead of a
gathering in New York.
Oil chiefs grappling with growing demand for action to fight climate change
have looked to invest in carbon-capture
and sequestration techniques that some
executives, including Occidental Petroleum Corp CEO Vicki Hollub, say could make
drilling carbon neutral.
With fossil fuel development growing
worldwide, the oil and gas industry faces
growing criticism from activists concerned
about accelerating climate impacts from
melting ice caps to sea-level rise and extreme weather.
Scientists say the world needs to halve
greenhouse gas emissions over the next
decade to avoid catastrophic warming.
Carbon sequestration technology traps
carbon in caverns or porous spaces underground.
A number of oil and gas CEOs say the
technology will be crucial to meeting goals
set in the 2016 Paris agreement on climate
change to reduce global emissions.
“A lot of people don’t even know what
CCUS is. I think the world is going to hear
more and more and more about it,” BP plc
CEO Bob Dudley said. “I don’t think we can
meet the Paris goals without CCUS.”
The group, known as the Oil and Gas Climate Initiative (OGCI), said it aims to double the amount of carbon dioxide stored
globally by 2030.
The group is also taking steps to reduce
methane emissions.
The group formed in 2014 to support efforts to reduce greenhouse gas emissions.
Its gathering will be held on the sidelines
of a climate summit, where United Nations
Secretary-General Antonio Guterres says
he is banking on new pledges from governments and businesses to abandon fossil
fuels.
Last Friday, millions of young people
A bird flies away over the East River from the UN Headquarters during the 2019 United Nations Climate Action Summit at the UN
headquarters in New York yesterday. A group of 13 major oil companies charted out a plan yesterday to promote investments in carbon
capture, use and storage (CCUS), ahead of the gathering.
flooded the streets of cities around the
world to demand urgent steps to stop climate change.
Many, including 16-year-old Swedish
activist Greta Thunberg, have criticised
governments and industries for not doing
enough.
The OGCI group said in a statement
that carbon-capture technologies could
be expanded to more efficiently trap large
amounts of carbon released by facilities
such as power plants, which could then be
used in oil recovery and, ultimately stored
— thus, removing it from the atmosphere.
The group plans to work with others to
put carbon-capture techniques into operation in the US, UK, Norway, the Netherlands, and China.
Later yesterday, , it was set to sign a declaration of collaboration with certain energy ministers and other stakeholders, to
commit to efforts to expand carbon storage.
Coal may outlive climate change
but can’t survive the drought
Bloomberg
Vienna
Asia’s prolonged binge on coal is making
the grids that transmit power to a third
of the world’s people brittle and prone
to failure.
That’s the conclusion of new research
in the peer-reviewed journal Energy &
Environmental Science.
More than 400 gigawatts of new
coal-fired capacity in Asia are at risk as
climate change dries out water sources
necessary to cool those plants, according
to the study.
“Coal power development can expect
reduced reliability in many locations
across Asia,” Edward Byers, one of the
report’s authors, said by e-mail. “This
is further evidence of coal power’s
increasingly recognised incompatibility
with current international and national
climate and sustainable development
policy.”
Summer heatwaves and reduced rainfall
have been closing water-cooled power
plants across the world as the impact of
climate change exacerbates the nexus
between water and energy supply. Asian
utilities building coal plans could find
themselves increasingly competing with
industry and consumers for scarce water
resources.
A smokestack of the shut coal-fired NTPC Ltd Badarpur Thermal Power Station
stands in Badarpur, New Delhi (file). Asia’s prolonged binge on coal is making
the grids that transmit power to a third of the world’s people brittle and prone
to failure.
“This planned capacity adds 30% more to
the existing coal-fired generation capacity, and will engender substantial water
requirements and amounts of pollutants that can exacerbate global climate
change and regional air pollution,” the
researchers wrote.
Thermal power generation could fall as
much as 16% globally in the next three
decades because of water shortages,
they concluded. Researchers used
hydrological and climate models as
well as data from the Global Coal Plant
Tracker to reach their conclusions. Different warming scenarios ranging to as
high as 3 degrees Celsius (5.4 Fahrenheit) were considered. The world is
currently on a warming trajectory that
may hit 5 degree Celsius by the end of
the century.
Pension funds in
Denmark pledge
$52bn in green
investments
Denmark’s $450bn pension industry plans to
invest over a tenth of its
wealth in sustainable energy over the next decade,
according to Bloomberg.
Danish pension firms,
ranked among the world’s
best performing, will make
more than 350bn kroner
($52bn) in new investments by 2030, according
to a joint statement. The
programme will target
both green financial assets and direct holdings
in energy generation
and energy-efficient
construction. According to
Torben Pedersen, deputy
chairman of the industry’s
umbrella group Insurance
& Pension Denmark, experience shows that such
investments are profitable.
The companies, which include Exxon
Mobil Corp, Chevron Corp and BP, account for 32% of global oil and gas production.
They have agreed to cooperate to accelerate reduction of greenhouse gas emissions.
Separately, almost 90 big companies in
sectors from food to cement to telecommunications are pledging to slash greenhouse
gas emissions, organisers said.
Pension funds and
insurers pledge climate
action at UN summit
Reuters
United Nations
Insurers and pension funds managing $2.3tn pledged
yesterday to shift their portfolios away from carbon-heavy
industries in the hope of triggering snowballing climate
commitments from other big investors.
German insurer Allianz, the California Public Employees’
Retirement System (CalPERS), and Swedish pension fund
Alecta were among the founders of the new “Net Zero Asset
Owner Alliance” launched at a United Nations climate summit.
“Mitigating climate change is the challenge of our lifetime.
Politics, business and societies across the globe need to act
as one to rapidly reduce climate emissions,” Oliver Baete,
chief executive of Allianz, said in a statement.
As accelerating climate impacts become increasingly
apparent via heatwaves, wildfires and receding coastlines,
the financial sector is under growing pressure from activists,
shareholders and regulators to respond.
UN Secretary-General Antonio Guterres, who organised
Monday’s summit to try to boost stalling international
efforts to control emissions, sees insurers and pensions
funds as a crucial lever to transition the global economy off
fossil fuels.
These types of companies — called “asset owners” because
they are the principal holders of retirement savings, or are
investing customers’ insurance premiums — represent some
of the world’s largest pools of capital.
Members of the new grouping pledged to align their
portfolios with a goal enshrined in the 2015 Paris Agreement
to combat global warming to limit the increase in average
temperatures to 1.5 degrees Celsius.
The importance of this target was underscored late last
year when a report by the UN-backed Intergovernmental
Panel on Climate Change spelled out the catastrophic
consequences for people and nature if the world is allowed
to get much hotter.
Under current emissions pledges by governments, the Earth
is on track for well over 3 degrees Celsius of warming by the
end of the century — an outcome that scientists say could
put the survival of modern industrial societies at risk.
“CalPERS recognises that climate change poses urgent
and systemic risk given our responsibility to protect our
members’ financial assets and provide the long-term returns
that can pay pensions for this and coming generations,” said
Marcie Frost, chief executive of CalPERS.
The pension funds and insurers said they would rebalance
their portfolios to ensure their investments were carbon
neutral by 2050, with intermediate targets set for 2025,
2030 and 2040.
They also pledged to make regular public progress reports.
The nucleus of founding members hope they will influence
an ever-growing proportion of the world’s other big pension
funds and insurers to push high-carbon companies towards
more sustainable economic activities.
4
Gulf Times
Tuesday, September 24, 2019
BUSINESS
Google bracing for the global
‘right-to-be-forgotten’ ruling
Bloomberg
Brussels
Google is bracing for another landmark
privacy decision at the European
Union’s top court, five years after a
“right-to-be-forgotten” ruling forced it
to delete links to personal information
on request.
The EU Court of Justice will rule today
on the US giant’s follow-up fight with a
French data-protection regulator over
whether the right should apply globally
and where to draw the line between
privacy and freedom of speech.
The Alphabet Inc unit is challenging
the French authority’s order to remove,
on demand, links on all of its platforms
across the world if they lead to websites
that contain out of date or false
information that could unfairly harm a
person’s reputation. Judges may also
clarify what links can stay online in the
public interest.
For Google, the fate of the Internet is
at stake. The 2014 ruling already forces
it to offer up different search results
in Europe than the rest of the world.
France’s CNIL says Google should
purge those results globally. Google’s
backers in the case, which include
press freedom groups, warn this could
allow authoritarian regimes to censor
the entire Internet by extending to the
world their decision on what can be
made public.
Creating a global right to be forgotten
“would create a serious clash with US
concepts of freedom of speech” and it
could also be used by other states to
“suppress search results on a global
basis,” according to Richard Cumbley, a
lawyer at Linklaters in London.
The EU court is hard to second-guess.
The initial ruling shocked Google
by rejecting its arguments that the
search-engine was merely a neutral
pathway for serving up information.
The decision effectively left it to Google
to decide if a link that someone asked
to be deleted contained something that
was “no longer relevant.”
Since 2014, Google has had to weigh
nearly 850,000 separate requests
to remove links to some 3.3mn
websites. Its staff have taken on a
semi-regulatory role to strike a balance
between what information should
stay public and what should now be
removed.
The court now will have to spell out
how widely Google should remove the
links. Should it pull links viewed in one
country or across Europe? Must it strip
them from local sites such as France’s
google.fr or also on the global google.
com domain – and what should it do if
they’re accessed from France, Europe
or elsewhere?
Since 2016 the company has used so-
An illuminated Google logo sits on a reception desk inside the tech giant’s office in Berlin. Google is bracing for another landmark privacy decision at the European Union’s top court, five years after a
“right-to-be-forgotten” ruling forced it to delete links to personal information on request.
called “geoblocking” to filter all Google
site results to Europeans so they won’t
see information a person in their
country wants to limit.
The EU court will also have to weigh
whether Google can refuse to remove
some information that might be in the
public interest. It will advise French
courts over a dispute on deleting
links over a personal relationship with
a public office holder and an article
mentioning the name of a Church of
Scientology public relations manager.
Judges in London and Paris have been
sympathetic to efforts to suppress
unflattering information. Last year a
London court told Google to remove
news reports about businessmen’s
criminal convictions, in line with an
English law that aims to aid people to
put past crimes behind them. Paris
judges also told Google to reduce the
visibility of stories about a former chief
financial officer fined for civil insidertrading violations.
Mountain View, California-based
Google and France’s privacy authority
CNIL declined to comment ahead of the
ruling.
Privacy has become a battleground
for Internet giants in Europe. Google
has faced numerous privacy probes
across the region, including scrutiny
of contractors listening to audio from
its digital home devices and data
processing or ads. The company was
fined €50mn ($55mn) by France’s
CNIL earlier this year over lack of
transparency for its privacy policy
and for failing to correctly processing
user data for ads. It was one of the first
penalties levied under powerful new
data-protection rules.
Google’s importance as the leading
search engine in Europe has led to an
EU declaration that it dominates the
European market. The company is
separately challenging billions of euros
in anti-trust fines at the same EU courts
in Luxembourg.
Bloomberg QuickTake Q&A
You’re home alone with Alexa;
are your secrets safe?
By Matt Day
Seattle
Privacy at home is something most
people take for granted. But the home
has become the latest frontier in data
harvesting for big tech companies.
Smart speakers and their voice
assistants, app-activated thermostats
and internet-connected everything
else are scooping up information
that could prove valuable to product
designers, advertisers, governments
and law enforcement. A range of
Interest groups, from civil liberties
organisations to consumer advocates
and children’s privacy watchdogs,
worry about an erosion of privacy.
1. Who’s collecting data
inside your home?
Amazon’s Echo, animated by the
voice assistant Alexa, and Google’s
Home, with its Assistant, keep track
of the questions people ask and store
recordings of them. Many appliances
and other gizmos are marketed as
“smart home” devices, a catchall term
that typically means they’re able to
communicate with a smartphone or
a central hub (like Echo or Home) and
take instructions by voice commands,
remote controls or a touchscreen.
Such smart devices include ceiling
fans made by Hunter Fan; thermostats
made by Ecobee, Emerson and Nest;
Kwikset and Schlage branded door
locks; and self-steering vacuums from
iRobot. Manufacturers of these and
other smart devices can develop a
catalogue of information about how
people use them.
2. What gets collected?
In addition to voice recordings by Echo
and Google Home, data that can be
collected include maps of homes (in
the case of automated vacuums) or a
record of every time a smart light bulb
or stove is turned on. Such information
can seem mundane. But especially
when paired with other information
about you, it helps fill out a record of
your behaviour in the home. A good
rule of thumb is if a device is able to
transmit data wirelessly, it is probably
gathering, and may well be sharing,
information about how it gets used.
3. How does that
information get used?
Amazon and Google say the knowledge
gained from use of smart devices could
lead to helpful personalised tips, like
a reminder to lock the door at night.
Or a smart stove might tell its owner
about a maintenance issue, or suggest
a recipe. The companies benefit as well.
They can sift through the accumulated
data for ideas about new features or
products that might be welcomed by
consumers. They also can – and do –
use their trove of recorded customer
voices to refine the algorithms trained
to interpret and respond to human
speech. Sometimes, that process
entails teams of humans charged with
reviewing voice recordings and other
data.
4. Can law enforcement use
this data?
Police in the US have sought records
captured by Amazon Echo speakers,
and security camera and thermostat
maker Nest, owned by Google
parent Alphabet, says it has received
hundreds of requests for information
about its users from governments
around the world. Typically, tech
companies pledge that they won’t
turn over data without a valid court
or government order. Amazon,
citing First Amendment speech
protections, initially resisted a
police request for user data in a
2017 Arkansas murder case that
ultimately was dropped. (Amazon
has been ordered to turn over Echo
recordings in another such case,
involving a double murder in New
Hampshire.) The Fourth Amendment
also gets cited, since it sets limits
on searches of homes. But police
access to smart home data remains
a gray area, as the legal code in most
cases didn’t contemplate corporateowned microphones on the kitchen
table or microwaves capable of
communicating with the internet.
5. Where is this headed?
The next frontier, observers say,
is likely monetising the cache of
personal data through advertising.
Google, for instance, could use its
awareness of a newly purchased smart
television to suggest a set of speakers
to go with it. Or the maker of a freshly
activated smart pressure cooker could
sell information on the buyer to local
grocers, who in turn could pepper the
buyer with ads. Google, the biggest
player in online ads, says it doesn’t use
some smart home data, like readings
on a Nest thermostat, to inform
targeted advertising. But it does use
what people tell the Google Assistant
An Amazon Echo Show smart speaker with screen sits on display at the Amazon.com Spheres headquarters during an
unveiling event in Seattle, Washington (file). Privacy at home is something most people take for granted. But the home
has become the latest frontier in data harvesting for big tech companies. Smart speakers and their voice assistants,
app-activated thermostats and Iinternet-connected everything else are scooping up information that could prove
valuable to product designers, advertisers, governments and law enforcement.
to personalise the ads that it shows
alongside smartphone apps and
websites. (Amazon says it doesn’t use
data gleaned from Alexa commands
for advertising purposes.)
6. What can people do?
Virtually all makers of smart devices
put the onus on customers to wade
through lengthy privacy policies to
learn how their information is being
used and what options they have
to control that. Users of Amazon
Echo and Google Home can delete
their accumulated voice recordings
or opt out of some data collection.
Other smart devices generally don’t
allow such clear-cut options. Often
the only way to stop an appliance
from gathering and transmitting
information on its use is to disconnect
it from the Internet. That, of course,
eliminates much or all of the
functionality promised by the “smart”
label in the first place.
7. Is anybody cracking down
on this?
In the European Union, governed by
the expansive General Data Protection
Regulation, people have the right to
compel companies to stop using their
personal information and to delete
the information. In the US, laws vary
by state but generally don’t give
people anywhere near that much
control. A California law set to take
effect in 2020 will give residents the
right to know how their data is being
collected and shared and allow them
to deny companies the right to sell it.
Several other states including Illinois,
Maryland, Massachusetts and New
York have considered legislation
giving customers more control over
their data or limiting what smart
speakers can scoop up. In the US
Congress, which is increasing scrutiny
of big technology companies, a
slate of competing bills – some with
stronger consumer protections than
California, others with weaker ones –
could override state actions if passed
and signed into law.
Gulf Times
Tuesday, September 24, 2019
5
BUSINESS
Bearish signal for crude as China closes in on filling oil storage
By Clyde Russell
Launceston, Australia
One of the fascinating tidbits to come
to light in the wake of the attacks on
Saudi Arabia’s crude facilities was
China’s disclosure that it has enough oil
inventories to last 80 days.
There isn’t too much short-term
significance in this, other than to
confirm that China probably won’t be
frantic to find replacements for any loss
of imports from Saudi Arabia.
But the information is vitally important
from a medium to longer term view of
the crude oil markets.
China’s strategic petroleum reserve
(SPR) is largely shrouded in mystery,
with no official disclosure of the actual
level of inventories in the world’s
largest crude importer.
It likely surprised the market, however,
that Beijing is quite close to the 90 days
of import cover recommended by the
International Energy Agency (IEA) as
the level of reserves that importing
nations should hold.
Earlier this year it was estimated by
some analysts that China had around
40 to 50 days of import cover.
The figure of 80 days of crude oil in
both commercial and strategic storage
was released on September 20 by
Li Fulong, the head of development
and planning at the National Energy
Administration. While Li didn’t disclose
the exact amount of stored crude, it
is likely to be around 788mn barrels,
based on taking the average daily
imports of 9.85mn barrels per day (bpd)
for the first eight months of 2019.
The last time inventories were officially
acknowledged was in December 2017,
when it was disclosed that reserves as
of end-June 2017 were 277mn barrels.
This implies that from July 2017 to
September 20 this year, China added
511mn barrels of crude, about 630,000
bpd.
It would also seem that the rate of
stock building has been accelerating
in 2019, if the difference between
the total crude processed at China’s
refineries and the amount of crude
available from both imports and
domestic output is calculated.
Domestic output in the first eight
months of 2019 was 3.83mn bpd and
imports were 9.85mn bpd, giving a
combined total of 13.68mn bpd.
Refinery throughput for the same
period was 12.74mn bpd, implying
that about 940,000 bpd went into
either commercial or strategic
stocks.
If China does conclude its stockpiling
at 90 days of import cover, the
implication is that it has about 98.5mn
barrels still to go.
At a 940,000 bpd rate, this further
implies that the filling of China’s
storage could be finished in about
105 days. There is no guarantee, of
course, that China will continue to
build inventories at the same clip it has
been, or indeed that it will stop at 90
days worth of import cover.
But the risk for the global crude
market is that sometime in the next
six months, and possibly earlier, China
may dial back the amount of crude it is
buying for storage.
This is important as most analysts
believed China still had some way
to go to complete filling its SPR
and building sufficient commercial
inventories.
If China does ease purchases of crude
for storage, it will put a sizeable dent
in global crude demand growth. For
the first eight months of 2019, China’s
crude imports have been about
859,000 bpd higher than they were for
the same period in 2018.
This means China is responsible for
about two-thirds of the global demand
growth for crude, going by an IEA
forecast for world oil demand to rise
by 1.2mn bpd in 2019.
If China does reduce the oil volumes
being purchased for strategic storage
in 2020, it would most likely be a
bearish surprise for crude markets.
 Clyde Russell is a columnist for
Reuters. The opinions expressed here
are those of the author.
India’s corporate tax cut to
boost smartphone industry
Hyundai
Motor,
Aptiv to
set up
$4bn JV
Reuters
Mumbai
Reuters
Seoul
I
ndia’s lower corporate tax rate will
help its smartphone industry expand, fuel research and development (R&D) investment and attract
higher-value component makers to the
world’s second-biggest smartphone
market, four top industry executives
said.
India slashed its headline corporate
tax rate to 22% from 30% on Friday in a
surprise gambit aimed at wooing manufacturers and boosting investment in
Asia’s third-biggest economy, where
unemployment has surged as growth
sinks to six-year lows.
The country is currently vying with
rivals like Vietnam to attract global
firms such as Apple and encourage contract manufacturers like Foxconn and
Wistron to step up their presence.
China’s trade tussle with the United
States, which is pushing smartphone
makers to seek alternative markets, is
giving that fight an additional edge.
“This is a clear signal from the government to boost investors’ confidence
in India’s economy,” said Vikas Agarwal,
India head of China’s OnePlus, which
makes its smartphones locally and rivals Apple for a share of India’s premium device segment.
“It will directly affect a company’s
profitability, help fuel consumption –
but more importantly it also reflects India’s ambitions.”
The trade war between Beijing and
Washington has led to higher tariffs
on goods worth tens of billions of dollars and disrupted global supply chains,
pushing companies to look at newer
markets to escape higher tariffs.
And India has already begun stepping up efforts to attract investment,
especially in labour-intensive electronics manufacturing. New Delhi last week
scrapped a tax on imports of open cell
TV panels, used to make television displays, in a move likely to boost television manufacturing in the country.
The arrival of global players has made
India the world’s No 2 mobile phone
maker and the smartphone industry is
central to Prime Minister Narendra Modi’s ambitious “Make in India” drive.
Friday’s announcement also cut taxes
for any manufacturing firm incorporated on or after October 1 and beginning
production by March 2023 to an even
H
An attendee holds a Xiaomi Mi A1 dual camera device during the smartphone’s launch in New Delhi (file). China’s Xiaomi said India’s lower corporate tax rate would help
it generate more employment and step up investments in local R&D.
lower rate of 17% – less than rival countries. That should help charm contract
manufacturers that do not already have
a presence in the South Asian country,
such as Taiwan’s Pegatron and other
firms which make higher-end electronics components.
The four senior smartphone industry executives said it was too early to
speculate about how much more money
their companies would commit to investing following the tax cut.
But Indian smartphone maker Lava
and China’s Xiaomi said the cut would
help them generate more employment
and step up investments in local R&D.
“We are hopeful that we will be able
to bring more of our component suppliers to India and help boost the local
manufacturing industry further,” said
a spokeswoman for Beijing-based Xiaomi, India’s top smartphone player.
It makes 99% % of its devices locally
through contract manufacturers and recently helped its supplier Holitech – a
maker of camera modules and other parts
– to set up a plant in northern India. The
tax cut will help draw makers of components like phone display panels, lithium
cells and camera modules, industry ex-
ecutives and analysts said, also citing a
jump for India in a global index that ranks
countries by ease of doing business.
“Earlier, India’s corporate tax rate
was among the highest in the world.
The new tax rate brings it at par with
other leading manufacturing economies such as the US and China,” said
one of the smartphone industry executives, who asked not to be named due to
company policy. “The central bank now
needs to cut lending rates by 75-100 basis points to fuel growth.” While it is hard
to calculate the benefits for individual
companies, the lower tax rate will mean
better profit margins for companies such
as Apple and OnePlus which sell highvalue phones, Rushabh Doshi of technology research firm Canalys said.
Executives warn, however, that investors remain wary of India’s policy
flip-flops, red tape, poor logistics infrastructure and cumbersome landacquisition procedures. “Right now is
the window of opportunity for India
to come up with as many incentives
as possible to draw attention,” ShihChung Liu, vice chairman of Taiwan’s
External Trade Development Council,
told Reuters.
China boosts govt presence at Alibaba, private giants
Bloomberg
Beijing
Alibaba Group Holdings signage is displayed outside the company’s offices in Beijing. Alibaba is
hosting its annual investors’ conference this week in Hangzhou against the backdrop of a worsening
outlook for the country.
The government of one of China’s top technology
hubs is dispatching officials to 100 local corporations including e-commerce giant Alibaba Group
Holding Ltd, the latest effort to exert greater influence over the country’s massive private sector.
Hangzhou, in the eastern province of Zhejiang,
is assigning government affairs representatives to
facilitate communication and expedite projects, the
city government said on its website.
Chinese beverage giant Hangzhou Wahaha Group
Co and automaker Zhejiang Geely Holding Group Co
are among the other companies based in the prosperous region that have been singled out, according
to reports in state media.
The Hangzhou government said the initiative was
aimed at smoothing work flow between officials and
China’s high-tech companies and manufacturers.
But the move could be perceived also as an effort
to keep tabs on a non state-owned sector that’s
gaining clout as a prime driver of the world’s No 2
economy. Representatives of the country’s public security system are already embedded within China’s
largest internet companies, responsible for crime
prevention and stamping out false rumours.
Government agencies may also be heightening their monitoring of the vast private sector at a
time China’s economy is decelerating – raising the
prospect of destabiliziing job cuts as enterprises try
to protect bottom lines.
Alibaba is hosting its annual investors’ conference
this week in Hangzhou against the backdrop of a
worsening outlook for the country.
“They might be checking whether the Communist party units are working effectively within the
companies,” said Paul Gillis, a professor at Peking
University’s Guanghua School of Management.
“While China legitimised capitalism, the level of government influence was never intended to disappear.
Occasionally private entrepreneurs forget about
this and are reminded of it.”
The Communist Party accepted so-called “red
capitalists” or private entrepreneurs into the Party in
2001, allowing them to become part of the country’s
legislature a year later.
Still, the relationship between Beijing and wellknown business people remains sensitive.
The government has been seen to try and step up
an official presence within non-state firms, by among
other things mandating that private companies of
scale set up and maintain a Party branch.
It wasn’t clear whether the 100 Zhejiang-based
companies included foreign enterprises.
“We understand this initiative from the Hangzhou
city government aims to foster a better business
environment in support of Hangzhou-based enterprises.
The government representative will function as
a bridge to the private sector, and will not interfere
with the company’s operations,” Alibaba said in a
text statement.
Representatives for Wahaha and Geely didn’t immediately respond to requests for comment.
yundai Motor Group will
invest $1.6bn in a joint
venture to develop selfdriving vehicle technologies
with Aptiv, the biggest overseas
investment by the South Korean
carmaker to catch up to rivals in
the autonomous car market.
Global carmakers and their
suppliers are forging alliances to
develop autonomous car technologies partly due to the need
to share the huge financial and
technical burdens.
Hyundai has lagged global rivals who have invested heavily
into developing new technologies for electrified an autonomous vehicles.
For example, BMW and Daimler announced earlier this year
that they would join forces on
automated driving technology.
Hyundai Motor, Kia Motors
and Hyundai Mobis will collectively contribute $1.6bn in cash
and $400mn in research and development resources and others,
valuing the joint venture $4bn,
Hyundai Group and Aptiv said in
a joint statement.
Dublin-headquarterd
Aptiv, which will own 50% of the
joint venture, will contribute its
autonomous driving technology, intellectual property, and
approximately 700 employees
focused on the development of
scalable autonomous driving solutions.
The new firm will begin testing fully driverless systems in
2020 and have a productionready
autonomous
driving
platform available for robotaxi
providers, fleet operators and
automakers in 2022.
Aptiv, which manufactures
vehicle components and provides technology for self-driving cars, was formerly known as
Delphi Automotive, which was
split into Aptiv and Delphi Technologies in 2017.
Market research firm Navigant
Research Aptiv put Aptiv at No 4
among automated driving system companies, following Waymo, General Motors and Ford.
Hyundai is not among the top
10 vendors, according to Navigant Research.
Aptiv said in its 2018 annual
report that Hyundai Mobis was
one of its competitors in advanced safety and user experience segment, along with Bosch
Group and Denso Corp.
Its major customers include
GM, Volkswagen and Fiat, according to the annual report.
Hyundai Motor is also one
of its customers, a Hyundai
spokesman said.
The latest investment is another sign that Hyundai has
abandoned its strategy of developing technology in-house, a
strategy which previously raised
investor concerns that it may be
left behind in the race for future
mobility.
Hyundai, along with affiliate
Kia Motors ranks fifth in global
sales, have joined rivals in making a series of investments in
technology firms, including selfdriving car tech startup Aurora,
especially after heir apparent
Euisun Chung was promoted a
year ago.
Hyundai Motor said in February that it will invest 14.7tn
won ($12.3bn) in future technologies such as self-driving,
connectivity and car sharing
areas by 2023.
Gulf Times
Tuesday, September 24, 2019
6
BUSINESS
Steady uptrend for Islamic
finance in Pakistan: SBP
By Arno Maierbrugger
Gulf Times Correspondent
London
Internews
Islamabad
The Islamic banking and finance sector
in Pakistan continues to be on an upward
trajectory, with assets, deposits and the
number of branches of Islamic banks all
showing solid growth. According to the latest
Islamic Banking Bulletin issued by the State
Bank of Pakistan on September 13, assets of
Pakistan’s Islamic banking industry stood
at Rs2,992bn ($19.8bn) by June-end, 2019, a
growth of 20.6% as compared to June-end,
2018. Similarly, overall deposits of Islamic
banking customers witnessed growth of
18.8% in the period and reached Rs2,415bn
($15.4bn). This translates into a market
share of Islamic banking assets and client
deposits in the overall banking industry of
14.4% and 15.9%, respectively, by the end of
June, 2019, as compared to 12.9% and 14.8%,
respectively, a year ago. On a half-year basis,
Islamic deposits have grown 21% through
June 2019, outpacing the 11% compound
annual growth rate of all other deposit types
in the banking sector.
Gulf Times
Exclusive
According to the bulletin, the network
of Islamic banks currently consists of 22
institutions, including five fully-fledged
Islamic banks and 17 conventional banks
with standalone Islamic banking branches.
Among the Islamic banks, the largest is
Meezan Bank with 678 branches, followed
by Bank Islami Pakistan with 218 branches,
Dubai Islamic Bank Pakistan with 200
branches, AlBaraka Bank (Pakistan) with 183
branches and MCB Islamic Bank with 177
branches. The largest banks with standalone
branches, so-called Islamic windows, are
Faysal Bank, National Bank of Pakistan, Bank
Alfalah, Allied Bank and United Bank. The
entire branch network of Pakistan’s Islamic
banking industry stood at 2,913 spread
across 113 districts by June-end, 2019, as
compared to 2,685 a year ago. More than
77% of the branches were concentrated in
Punjab and Sindh provinces. The number of
Islamic banking windows stood at 1,348.
Pedestrians pass in front of a branch of the Meezan Bank in Karachi. According to the latest Islamic Banking Bulletin issued by the
State Bank of Pakistan on September 13, the network of Islamic banks in Pakistan currently consists of 22 institutions, including five
fully-fledged Islamic banks and 17 conventional banks with standalone Islamic banking branches. Among the Islamic banks, the largest
is Meezan Bank with 678 branches.
But it is not only the sheer size of
the industry which is an important
measurement, but clearly also the
profitability of the banks. Profit before tax
of Islamic banks in Pakistan was recorded
at slightly more than Rs32bn ($204mn) in
the quarter ended June, 2019 compared to
Rs15bn ($95.6mn) in the same quarter last
year. Profitability ratios such as return-onassets and return-on-equity before tax stood
at 2.3% and 35.3%, respectively, by June-end,
2019, comparing favourably to industry
figures of 1.6% and 21.3%, respectively. During
the period under review, operating expense
to gross income ratio witnessed further
improvement and was recorded at 52.6%,
compared to 54.7% in the previous quarter
and lower than the industry total of 57.1%.
In terms of financing, the corporate sector
accounted for a 73.5%-share in overall
financing of Pakistan’s Islamic banking
industry, followed by commodity financing
with a share of 10.6% and consumer
financing with 10.4%. The shares of small
and medium enterprises financing and
agriculture financing in overall financing
stood at 3.7% and 0.5%, respectively. Sectorwise, production and transmission of energy
retained the leading position at a share in
overall Islamic financing of 17.9%, followed by
the textile and individual financing sectors,
both having had a respective share of
11.6% by June-end, 2019. The most popular
financing types were diminishing musharaka,
followed by musharaka and murabaha.
The report also noted that much of the
growth in Pakistan’s Islamic banking industry
came from new retail customers on a market
were 79% of a 197mn-population are still
unbanked.
“The potential for Islamic banking
penetration (in Pakistan) is substantial,”
Moody’s Investors Service said in a
separate report, adding that “Islamic
banking products are attracting previously
unbanked customers, creating new business
opportunities for banks to grow their deposit
base and benefit from stronger profitability.”
The State Bank of Pakistan has now set
a goal to increase Islamic assets to 20%
from the current 14.4%, helped by lifting
structural and regulatory barriers, increasing
awareness for Shariah-compliant banking
and regular sukuk issuances.
Chinese homebuying
in US to hit 8-year low
Reuters
Shanghai
U
S home sales to Chinese buyers are
likely to drop to an eight-year low
in the year ending next March as
a prolonged Sino-US trade war hits demand, according to estimates from Chinese real estate website Juwai.com.
Analogous to US portals like Realtor.
com and Trulia, Juwai is China’s largest
international property website, hosting some 2.8mn listings on both sides of
China’s Internet censorship mechanism
known as the Great Firewall.
Based on its enquiry and buyer data, as
well as feedback from industry partners,
the site estimated US home sales to Chinese buyers would fall to between $10bn
and $12bn in the year to March 2020.
While that represents just a fraction of
1% of the $1.6tn worth of US homes sold
annually, it is down from the $13.4bn reported for the year ended in March by the
National Association of Realtors (NAR)
and from more than $30bn in both 2017
and 2018.
The site’s executive chairman, Malaysian-based German tech entrepreneur
Georg Chmiel, said worries over US visas, the weakening yuan and the desire to
diversify investments had spurred a collapse in sales to Chinese buyers after a
five-year surge.
“The Trump administration’s tariffs,
aggressive rhetoric, targeting of Chinese
graduate students at US universities, and
new visa red tape have all hurt Chinese
demand,” he told Reuters.
After a decade of gains against the dollar, China’s yuan currency has fallen 11%
in the past 18 months, capped by a devaluation in August which was widely seen
as a political move in the trade war and
which added to buyers’ concerns.
Chmiel said for Chinese customers US
properties served as both financial investments and potential homes for them
or for offspring, who they hoped one
day would study and work in the United
States.
“With the trade war going on, it’s easy
to imagine a scenario in which you might
be forced to sell or your investment might
Islamabad
residents face
200% hike in
property tax
Property owners in Pakistan’s capital Islamabad
have seen an unprecedented 200% hike in
property tax with little time to pay the charges.
The Metropolitan Corp Islamabad (MCI) approved
the increase in property tax last December, making
it applicable from July 1, but tensions between the
MCI and Capital Development Authority (CDA)
over who would control the revenue directorate
responsible for collecting property tax meant that
the distribution of property tax bills was delayed.
Bills that should have reached people in the first
week of August were distributed last week, with
September 30 listed as the due date.
The revenue directorate used to be a part of the
CDA and was devolved to the MCI after the local
government was forced in 2016.
The MCI revised property and water taxes, both
of which were being deposited into CDA accounts
because the bills were to be paid to the “directorate
of revenue CDA”.
Sources said that both civic organisations have
claimed their right to the directorate, because of
which the concerned officials are uncertain about
whether tax bills should be issued with the MCI’s
logo or the CDA’s.
After a considerable delay, they decided to go
ahead with a CDA logo.
When it approved the revised property tax rate, the
MCI said property taxes had not been revised for
more than 18 years and an increase was therefore
imperative.
However, residents said it was the authority’s fault
if tax rates were not revised on time and not the
fault of property owners now facing the 200%
increase.
A resident of F-6 said: “This is ridiculous and
nonsense. There is no justification for a hike of
more than 200pc whatever the reason. There
should be a 10% to 20% increase.”
The situation has been exacerbated by the fact that
tax notices were not delivered on time in August.
Citizens said they were delivered a few days ago,
directing citizens to pay their taxes no later than
September 30.
“It seems the inner tussle between the CDA and the
MCI to grab the civic powers of the capital territory
resulted in the delay in the distribution of property
tax bills.
Bills that would otherwise have reached their
destinations in August were distributed on
September 21-22, leaving residents shocked at the
raise on one hand and fearful of the deadline on
the other,” a CDA official said.
Property owners demanded that the MCI or CDA
revise the rate and extend the deadline.
“This is totally unjust. We do not know who has the
powers to decide the tax increase, but it is nothing
less than a bombshell for residents who have to
pay 200 times what they paid in property tax last
year.
“I am surprised at the criteria being followed by the
MCI. Such a significant increase in one go has left
our budgets reeling.
We are the salaried class, and have to maintain our
monthly budgets accordingly. Now we have to look
to our savings to pay the bills,” a G-10 resident said.
Rejecting the argument that the taxes were raised
after 2001, he said: “This is not my fault. The MCI
should have a system to follow when it comes to
imposing or increasing such property taxes. Sadly
they don’t have any. A sudden increase, and that
too by a huge proportion, means the city is being
run by amateur officials.”
He added that property owners who were
previously paying Rs8,000 per year will now have
to pay around Rs30,000.
An MCI official said the rates were revised after 18
years, which is “justified”. The official added that
the tax is being collected by the CDA and not by
the MCI.
CDA spokesperson Syed Safdar Ali said the federal
government would decide how the taxes would be
shared between the MCI and CDA.
Asked why the rate was increased by 200% and
why notices were not distributed on time, he said:
“The revision in rate was made by the MCI house so
the CDA has nothing to do with it.
As far as the late distribution is concerned with
little time for payment, we will look into it.”
Asia refining margins
highest in two years
Reuters
Singapore
otherwise lose value,” he said. The trend
has shown up at US housebuilders this
year, with luxury homebuilder Toll Brothers Inc flagging sluggish sales in California, which makes up as much as 30% of its
business and is the main target market for
Chinese buyers.
The country’s number two builder,
Lennar Corp also recently put the blame
for soft sales in the state and a western region which accounts for 42% of sales, on
fading Chinese demand.
Gay Cororaton, a senior economist at
the NAR, did not provide detailed forecasts, but said a slowing Chinese economy and the dollar’s strength were likely to
keep pushing down Chinese buying, particularly in prime markets such as Cali-
fornia. “Chinese buyers form a significant
portion of international home sales in
California, where home prices have been
increasing steadily, and that has been one
of the factors acting as a deterrent for
home purchases, when the yuan has declined,” she said.
“They might look for properties in areas that are less expensive than California,
such as Texas and Seattle. And this could
put downward pressure on prices in California,” Cororaton said.
Dean Jones, principal and owner at
Seattle-based brokerage Realogics Sotheby’s International Realty, said the focus
was shifting to “secondary gateway markets” such as Seattle, because of their
strong economies and relative affordabil-
ity. Jones said Seattle was wooing international buyers with properties selling
for a third or half the price of real estate
in San Francisco or Los Angeles.
One 41-year old businessman from
Tianjin in China, who is looking for properties with a US broker and asked not to
be named, told Reuters he hoped the trade
war would be resolved soon and that he
was considering waiting it out before
buying.
“The United States is a liveable country
where the natural environment, climate,
education, medical care, commodity
prices are all satisfying,” he said.
“(But) if the trade war keeps intense, it
may affect my income and I will probably
reduce (my investment).”
Asia’s oil refining margins for September reached
their monthly highest in two years, Refinitiv data
showed, as attacks on Saudi oil facilities came at
a time when demand for fuel oil and gasoil was
strong ahead of new shipping regulations.
Singapore’s refining margins between September
1 and 23 averaged at more than $7.50 a barrel,
making this the highest monthly average since
September 2017. The margins are derived from
profits for gasoline, naphtha, diesel, jet fuel and
high-sulphur fuel oil, also known as cracks.
The attacks on Saudi Aramco’s oil facilities at
Abqaiq and Khurais on September 14 prompted
the country to buy up supplies, helping to soak
up excess cargoes of naptha. “The recent diesel
crack movement is a double impact from IMO
(International Maritime Organisation) and Saudi,”
said an industry source based in North Asia who
tracks petroleum products.
Cracks for gasoil in September were at their
highest in six years as mandatory reductions
in sulphur levels by the IMO for ships in 2020 is
expected to lift gasoil demand by 1.4mn to 2mn
barrels per day (bpd).
Gulf Times
Tuesday, September 24, 2019
7
BUSINESS
Fund prefers mid-cap picking over timing India’s volatile market
Bloomberg
Mumbai
Kotak Mahindra Asset Management
Co has loaded up on shares of Indian
mid- and small-sized businesses based
on its primary investment rule to pick
stocks rather than try to time the
market.
It’s been a volatile year for Indian
stocks, however, with the Sensex’s 12%
climb through early June nearly wiped
out as of Thursday’s close.
The benchmark gauge surged 5.3%
Friday after the country cut its
corporate tax rate, putting it back in
the green for the year.
“For investors it’s very difficult to time
market phases,” Harsha Upadhyaya,
chief investment officer-equity at
India’s sixth-largest fund manager, said
in an interview at his office in Mumbai
last week. “If you can take a little bit
of more risk, you should tilt towards
mid- and small-cap as this basket can
give higher returns when the market
stabilises.” India’s smaller stocks have
been hit by a slowing economy and a
severe dent in consumption.
The Nifty Midcap 100 Index has
slumped 25% from its peak in January
2018 and now trades 14.3 times its
estimated 12-month earnings, lower
than the Nifty 50 Index’s 17.5 times.
Kotak sees this as a good opportunity
to enter this segment of the market,
as it expects Indian lenders to pass
interest-rate reductions by the
central bank to their customers. “If it
happens, it will improve consumer and
corporate demand, and that will be
one of the bigger triggers,” Upadhyaya
said. The money manager prefers
non-consumer companies and will
continue to add shares of businesses
such as industrial-equipment
suppliers, chemicals, cement and gas
utilities.
Consumer stocks constitute nearly
12% of its holdings, according to data
compiled by Bloomberg as of August
31. About 40% of the firm’s holdings
are financial stocks.
Around 55% of its stock holdings are
larger companies, while mid- and
small-sized names constitute a total
39%. Kotak Standard Multicap Fund,
the company’s biggest fund with
about $3.6bn of assets, has returned
an average of about 11% over the
past five years, topping 82% of its
rivals, according to Bloomberg data.
That compares with a 7.4% annual
return generated by the Nifty 200
Cut in corporate tax
boosts India shares
B
I
Traders monitor share prices at the Bombay Stock Exchange. The Sensex jumped 2.8% to 39,909.03 points yesterday.
lysts including Sarthak Mukherjee wrote
in a note on Friday. Foreign investors will
probably shift their negative stance on Indian equities, he said.
Thirteen of 19 sector sub-indexes com-
piled by BSE Ltd rose, led by gains of more
than 5% in gauges of capital goods, financial and industrial stocks.
Sixteen of the 31 Sensex members and
32 of the 50 Nifty companies advanced.
Bajaj Finance Ltd was the top gainer
after surging as much as 9.8% to a record
high.
Technology stocks including Infosys
Ltd were among the top decliners.
Trade anxiety, growth worries keep EM stocks in check
Reuters
London
E
merging market shares fell yesterday
as uncertainty over the United States
and China reaching a trade deal anytime soon and dismal growth data from major
economies kept investors on the sidelines.
Although Washington and Beijing labelled
their two-day talks last week as “productive”
and “constructive”, a deal appeared elusive
Eurozone bond
yields slide as
weak PMI
rattles markets
Reuters
London
Bloomberg
Mumbai
ndian stocks rose for a second day on
expectations that the government’s
surprise $20bn company tax cut will
revive economic growth and boost company earnings.
The S&P BSE Sensex jumped 2.8% to
39,909.03 at the 3:30pm close in Mumbai,
while the NSE Nifty 50 Index advanced
2.9%. Both gauges surged 5.3% on Friday, marking their biggest gain since May
2009, after the corporate tax rate was lowered to 22% from 30%. Analysts increased
earnings estimates for both measures by
as much as 10% to factor in the lower tax
burden.
The government’s move follows a series
of other measures unveiled over the past
month aimed at boosting consumer demand and attracting investment.
The tax cuts have “significant positive
implications for corporates’ profitability, broader economy and market valuations,” Nomura Holdings Inc strategists
including Saion Mukherjee wrote in a
note. “We expect the strong monetary
stimulus in the near-term to result in
a cyclical recovery followed by investment/exports-led growth in the medium
term.”
The reduction has led to “earnings upgrades, hence we believe that Nifty, Sensex
are set for a higher trajectory, and a rally
up to 12,500 and 42,000 respectively is
likely in the next 3-6 months,” Stewart &
Mackertich Wealth Management Ltd ana-
over the same period. Here are some
more comments from Upadhyaya:
Although interest rates have fallen
and are expected to drop further,
the initial leg of revival will likely be
among companies with strong balance
sheets India has been a beneficiary
of abundant global liquidity and low
interest rates, and if anything changes
with that it will impact local investors
If oil prices rise, that would add to
the problems that local investors are
already facing.
after Chinese officials unexpectedly cancelled
a visit to farms in the US on Friday.
Focus now turns to high-level talks planned
for October.
“We are indeed in a wait-and-see mode
ahead of those talks, maybe an interim deal
will be discussed, maybe not, it’s still too close
to call,” said Jakob Christensen, head of EM
research at Danske Bank.
MSCI’s index for emerging market stocks
fell 0.3% led by mainland Chinese shares.
Hong Kong’s Hang Seng index was 0.8%
weaker after a weekend of sometimes violent
protests, while South Korea’s Kospi ended flat
after data showed a slump in exports.
Indian shares, up nearly 3%, outperformed, extending their rally from Friday after the government announced a surprise cut
in corporate taxes to revive flagging growth in
Asia’s third-largest economy.
Developing world currencies were more
mixed, with Russia’s rouble and Turkey’s lira
making nominal gains against the dollar, but
much of the reaction came from emerging
European ones after dire growth data from
the eurozone.
The Hungarian forint and the Polish zloty
fell 0.4% each against the euro, after data
showed German private sector activity had
shrunk for the first time in 6-1/2 years in September as a manufacturing recession deepened.
Manufacturing activity in the eurozone
contracted at its steepest rate since late 2012
as demand sank, puncturing sentiment
among factory managers.
ond yields across the euro area tumbled yesterday
after weaker-than-expected business activity data
from the bloc’s biggest economies deepened investors’ recession fears.
German private sector activity shrank for the first time
in 6-1/2 years in September as a manufacturing recession
worsened and growth in the service sector lost momentum.
Markit’s flash composite Purchasing Managers’ Index
(PMI), which tracks the manufacturing and services sectors
that together account for more than two-thirds of Germany’s economy, fell to 49.1 from 51.7 in the previous month.
French business activity also slowed unexpectedly and
Markit’s eurozone composite flash PMI sank to 50.4 in September from 51.9 in August.
The data sparked a rally in government bond markets,
where yields slid.
The euro and regional stocks tumbled.
“The bit that will worry markets is that services that have
been largely immune now show signs of substantial contagion effect from the slowdown in manufacturing,” said
Marc Ostwald, global strategist at ADM Investor Services.
Across the eurozone, 10-year bond yields were down 6-8
basis points on the day.
Germany’s benchmark 10-year bond yield fell to -0.59%
– its lowest level since the September 12 European Central
Bank meeting that concluded with rate cuts and fresh asset
purchases to boost weak growth.
It was on track for its biggest one-day fall since June
18, when a speech by ECB chief Mario Draghi in Portugal
flagged the need for stimulus and set bond yields tumbling.
Rishi Mishra, interest rates strategist at Futures First
Info Services, said he would not be surprised if the German
Bund yield now returned to all-time lows around -0.70%.
A long-term measure of the market’s eurozone inflation
expectations meanwhile fell to around 1.21% – its lowest
since early September.
Spanish bond yields received an additional boost from a
credit ratings upgrade after Friday’s market close.
Spain’s 10-year bond yield fell 8 bps to just 0.154%, outperforming eurozone peers.
S&P Global Ratings lifted Spain to A from A-, citing economic resilience and an improving budgetary position and
changed the rating outlook to stable from positive.
Rival ratings agency DBRS also changed the outlook on
Spain’s rating to positive from stable, which suggests the
next move could be an upgrade.
It rates Spain at A Jim McCormick, global head of desk
strategy at NatWest Markets, said Spain’s average ratings
score is now the highest in seven years.
“Spain’s fundamentals already look more semi-core than
peripheral,” he said. “Importantly, this is slowly bringing
Japanese investors into the market in bigger size.”
Outgoing ECB chief Draghi speaks to the European Parliament later in the day.
His comments are likely to be scrutinised closely after
the weak PMI data.
Asian stock markets drop; oil rallies on Middle East tensions
AFP
Hong Kong
Pedestrians walk past an electronic ticker board displaying stock figures outside the Exchange Square complex, which houses the
Hong Kong Stock Exchange (file). The Hang Seng index fell 0.8% to 26,228.74 points yesterday.
Oil prices rallied yesterday after Iran warned the
presence of US forces in the Gulf was causing
instability in the region, while equities were
mixed as Donald Trump said he did not want a
partial trade deal with China.
While a loosening of monetary policy by central
banks is providing support to investors, they
remain on edge following last week’s attack on
Saudi oil facilities that was claimed by Houthi
rebels in Yemen but blamed by the US on Iran.
President Hassan Rouhani on Sunday hit out
at a US move to increase troop numbers in
Saudi Arabia, saying: “Foreign forces can cause
problems and insecurity for our people and for
our region.”
He called on outside powers to “stay away” from
the region and added that Tehran would present
a peace plan to the United Nations within days.
Investors are concerned about a possible conflict
in the oil-rich Middle East after last week’s
attacks – which hammered Saudi Arabia’s biggest
crude plant – though both sides have said
they do not want a war. The US has ramped up
sanctions on Tehran, targeting its central bank.
Both main oil contracts saw prices rise more
than 1% yesterday and traders are keeping tabs
on Riyadh’s progress in repairing the facilities.
“You can never say never, but with an Iranian
delegation apparently due to attend the UN
session opening week in New York, it is hard
to imagine too many fireworks in the Gulf this
week,” said OANDA senior markets analyst
Jeffrey Halley.
Equity markets were struggling for traction with
investors tracking comments from Trump saying
he wanted to strike a full trade deal with Beijing,
knocking hopes for a piecemeal agreement
between the economic superpowers.
“I’m not looking for a partial deal. I’m looking for
a complete deal,” he told reporters at the White
House. He added that he did not see the need
for an agreement before the 2020 presidential
election.
The remarks tempered recent optimism on the
talks, though came as China hailed progress
in preparatory discussions ahead of a planned
high-level meeting next month.
“The hot and then cold and then hot and cold
again US-China trade vibes continue to rattle
markets,” said Rodrigo Catril at National
Australia Bank.
“Hopes of a potential interim trade deal had
boosted sentiment ahead of last week’s China’s
trade delegation visit to the US, but in the end it
seems that the inability to find common ground
in key contentious issues such as intellectual
property rights resulted yet again in an increase
in tensions.”
Hong Kong fell 0.8% to 26,228.74 with China’s
Fosun International losing more than 1% after
British travel giant Thomas Cook – in which it is
the top shareholder – collapsed.
The 178-year-old firm went under after failing to
secure £200mn ($250mn) from private investors
to keep it afloat.
Shanghai shed 1% to 2,977.08, while Singapore
dropped 0.3%, with Taipei, Manila and Bangkok
also lower, though there were gains in Seoul,
Sydney, Wellington and Jakarta
Tokyo was closed for a holiday.
Mumbai rallied 3.3%, extending last week’s
more than 5% surge that was fuelled by the
government’s decision to slash corporation tax
by almost a third.
8
Gulf Times
Tuesday, September 24, 2019
BUSINESS
KUWAIT
Company Name
QATAR
Company Name
Zad Holding Co
Widam Food Co
Vodafone Qatar
United Development Co
Salam International Investme
Qatar & Oman Investment Co
Qatar Navigation
Qatar National Cement Co
Qatar National Bank
Qatar Islamic Insurance
Qatar Industrial Manufactur
Qatar International Islamic
Qatari Investors Group
Qatar Islamic Bank
Qatar Gas Transport(Nakilat)
Qatar General Insurance & Re
Qatar German Co For Medical
Qatar Fuel Qsc
Qatar First Bank
Qatar Electricity & Water Co
Qatar Exchange Index Etf
Qatar Cinema & Film Distrib
Al Rayan Qatar Etf
Qatar Insurance Co
Qatar Aluminum Manufacturing
Ooredoo Qpsc
National Leasing
Mazaya Qatar Real Estate Dev
Mesaieed Petrochemical Holdi
Al Meera Consumer Goods Co
Medicare Group
Mannai Corporation Qsc
Masraf Al Rayan
Al Khalij Commercial Bank
Industries Qatar
Islamic Holding Group
Investment Holding Group
Gulf Warehousing Company
Gulf International Services
Ezdan Holding Group
Doha Insurance Co
Doha Bank Qpsc
Dlala Holding
Commercial Bank Psqc
Barwa Real Estate Co
Al Khaleej Takaful Group
Al Ahli Bank
Lt Price
% Chg
Volume
13.65
6.08
1.22
1.33
0.40
0.52
6.25
6.04
19.35
6.05
3.69
8.64
1.91
15.82
2.34
3.87
0.65
23.27
0.31
15.25
10.26
2.20
2.36
3.39
0.85
7.22
0.69
0.71
2.98
15.17
7.31
3.37
3.54
1.18
11.03
1.91
0.51
4.71
1.73
0.66
1.09
2.53
0.69
4.50
3.36
1.81
0.71
0.37
0.83
-0.81
-0.75
0.50
-0.19
4.34
-0.98
0.00
0.00
6.34
-0.69
0.00
-1.13
-1.68
-0.26
2.05
-0.56
-0.63
-1.68
0.11
0.00
0.00
-4.51
0.00
0.28
0.29
-0.14
-3.25
0.80
-1.75
-0.30
-0.28
0.00
-1.08
1.06
-0.39
0.00
0.00
-0.62
1.87
-0.39
-0.14
-0.66
0.00
-1.09
-0.14
1,000
51,977
557,806
868,998
636,652
1,010,118
2,913,592
715,100
2,258,684
312,237
791,434
340,126
954,973
659,516
3,500
8,259,436
221,109
4,626,531
144,167
7,300
20,000
402,435
2,154,934
1,030,829
406,448
275,074
4,474,303
76,828
210,138
4,911
5,834,665
220,702
1,230,007
149,242
240,923
523,839
22,534,314
49,312
325,071
63,100
2,722,811
1,498,210
372,154
2,341,732
Lt Price
% Chg
Volume
43.80
460.00
92.00
130.00
50.00
172.00
27.00
43.80
742.00
306.00
322.00
964.00
500.00
273.00
283.00
36.90
25.30
24.40
840.00
63.50
9.10
53.00
4.29
8.75
-0.54
0.00
7.53
0.00
0.00
-0.23
-1.07
0.66
1.90
1.90
0.00
-0.36
0.71
0.00
-0.78
1.67
0.00
-0.78
1.11
-1.30
225,312
21,295
148,531
2,920,258
207,224
514,564
124,442
758,555
7,720,869
5,345,045
18,500,682
285,100
27,130
38,000
1,176,032
469,754
KUWAIT
Company Name
Sultan Center Food Products
Kuwait Foundry Co Sak
Kuwait Financial Centre Sak
Ajial Real Estate Entmt
Kuwait Finance & Investment
National Industries Co Ksc
Kuwait Real Estate Holding C
Securities House/The
Boubyan Petrochemicals Co
Al Ahli Bank Of Kuwait
Ahli United Bank (Almutahed)
National Bank Of Kuwait
Commercial Bank Of Kuwait
Kuwait International Bank
Gulf Bank
Al-Massaleh Real Estate Co
Al Arabiya Real Estate Co
Kuwait Remal Real Estate Co
Alkout Industrial Projects C
A’ayan Real Estate Co Sak
Investors Holding Group Co.K
Al-Mazaya Holding Co
Al-Madar Finance & Invt Co
Gulf Petroleum Investment
Mabanee Co Sakc
Inovest Co Bsc
Al-Deera Holding Co
Mena Real Estate Co
Amar Finance & Leasing Co
United Projects For Aviation
National Consumer Holding Co
Amwal International Investme
Equipment Holding Co K.S.C.C
Arkan Al Kuwait Real Estate
Gfh Financial Group Bsc
Energy House Holding Co Kscp
Kuwait Co For Process Plant
Al Maidan Dental Clinic Co K
National Shooting Company
Al-Ahleia Insurance Co Sakp
Wethaq Takaful Insurance Co
Salbookh Trading Co Kscp
Aqar Real Estate Investments
Hayat Communications
Soor Fuel Marketing Co Ksc
Tamkeen Holding Co
Alargan International Real
Burgan Co For Well Drilling
Kuwait Resorts Co Kscc
Oula Fuel Marketing Co
Palms Agro Production Co
Mubarrad Holding Co Ksc
Shuaiba Industrial Co
Aan Digital Services Co
First Takaful Insurance Co
Kuwaiti Syrian Holding Co
National Cleaning Company
United Real Estate Company
Agility
Kuwait & Middle East Fin Inv
Fujairah Cement Industries
Livestock Transport & Tradng
International Resorts Co
National Industries Grp Hold
Warba Insurance Co
First Dubai Real Estate Deve
Al Arabi Group Holding Co
Kuwait Hotels Sak
Mobile Telecommunications Co
Effect Real Estate Co
Tamdeen Real Estate Co Ksc
Al Mudon Intl Real Estate Co
Kuwait Cement Co Ksc
Sharjah Cement & Indus Devel
Kuwait Portland Cement Co
Educational Holding Group
Bahrain Kuwait Insurance
Asiya Capital Investments Co
Kuwait Investment Co
Burgan Bank
Kuwait Projects Co Holdings
Al Madina For Finance And In
Kuwait Insurance Co
Al Masaken Intl Real Estate
Intl Financial Advisors
First Investment Co Kscc
Al Mal Investment Company
Bayan Investment Co Kscc
Egypt Kuwait Holding Co Sae
Coast Investment Development
Privatization Holding Compan
Injazzat Real State Company
Kuwait Cable Vision Sak
Sanam Real Estate Co Kscc
Ithmaar Holding Bsc
Aviation Lease And Finance C
Arzan Financial Group For Fi
Ajwan Gulf Real Estate Co
Kuwait Business Town Real Es
Future Kid Entertainment And
Specialities Group Holding C
Abyaar Real Eastate Developm
Dar Al Thuraya Real Estate C
Kgl Logistics Company Kscc
Combined Group Contracting
Jiyad Holding Co Ksc
Warba Capital Holding Co
Gulf Investment House Ksc
Boubyan Bank K.S.C
Ahli United Bank B.S.C
Osos Holding Group Co
KUWAIT
Lt Price
110.00
22.00
760.00
64.00
12.30
37.80
40.10
440.00
55.00
55.00
17.60
77.70
72.60
19.00
210.00
1,240.00
10.30
421.00
27.00
40.00
65.50
50.00
117.00
5.20
141.00
98.10
57.00
117.00
59.00
58.50
160.00
16.90
42.50
34.00
58.60
62.00
736.00
96.50
49.50
189.00
12.90
227.00
69.00
34.00
79.00
100.00
550.00
20.50
280.00
16.80
260.00
64.00
1,200.00
315.00
200.00
36.50
137.00
316.00
220.00
16.10
330.00
74.00
52.20
32.00
12.40
39.10
438.00
31.10
53.50
80.00
23.00
37.50
22.30
268.00
25.70
12.80
40.00
86.10
72.50
12.60
162.00
38.60
223.00
43.70
75.00
47.80
570.00
274.00
100.00
% Chg
1.85
0.00
0.80
0.00
2.50
-0.53
-0.99
0.00
0.00
0.00
-5.88
0.00
1.26
0.00
-0.94
0.00
0.00
0.00
0.00
-2.91
0.77
56.25
0.86
0.00
0.00
4.92
1.79
0.86
0.00
1.74
0.00
-0.59
0.00
6.25
2.81
0.00
0.14
2.01
0.00
3.85
0.00
1.34
5.83
0.29
0.00
0.00
0.73
0.00
-6.67
-0.59
-0.38
0.00
0.00
0.00
0.00
-4.95
0.74
-0.32
0.00
1.90
0.00
0.00
-0.38
-0.31
-0.80
-2.25
6.83
-0.32
0.00
0.00
0.00
0.00
0.00
1.52
-1.15
-3.03
0.00
0.00
0.69
-3.08
0.00
-1.03
0.00
0.00
0.00
-0.42
3.83
0.74
-3.85
Company Name
Volume
546,643
2,076,757
522,553
274,396
2,310,842
100,010
158,004
2,222
40
10,232
80,201
686,550
17,415
100
21,464
2,500
44,052
34,978
495,864
248,510
763,349
34,719
1,984,170
1,172,574
84,240
11,392,106
500
41,050
38,750
4,770,936
11,350
3,250
60,053
10,001
618,090
158,350
5,429,717
1,621,362
222,100
547,608
1,484,109
2,849,194
55,042
100
685,000
45,105
902,186
9,053,080
597,215
50,005
8,302
3,085,010
330,784
1,268,648
25,577
1,829,669
40,209,600
29,170
OMAN
Al-Eid Food Ksc
Qurain Petrochemical Industr
Advanced Technology Co
Ekttitab Holding Co Sak
Real Estate Trade Centers Co
Acico Industries Co Kscc
Kipco Asset Management Co
National Petroleum Services
Alimtiaz Investment Group
Ras Al Khaimah White Cement
Kuwait Reinsurance Co Ksc
Kuwait & Gulf Link Transport
Humansoft Holding Co Ksc
Automated Systems Co Kscc
Metal & Recycling Co
Gulf Franchising Holding Co
Al-Enma’a Real Estate Co
National Mobile Telecommuni
Sanad Holding Co Kscc
Unicap Investment And Financ
Al Salam Group Holding Co
Al Aman Investment Company
Mashaer Holding Co Ksc
Manazel Holding
Tijara And Real Estate Inves
Jazeera Airways Co Ksc
Commercial Real Estate Co
National International Co
Taameer Real Estate Invest C
Gulf Cement Co
Heavy Engineering And Ship B
National Real Estate Co
Al Safat Energy Holding Comp
Kuwait National Cinema Co
Danah Alsafat Foodstuff Co
Independent Petroleum Group
Kuwait Real Estate Co Ksc
Salhia Real Estate Co Ksc
Gulf Cable & Electrical Ind
Kuwait Finance House
Gulf North Africa Holding Co
Hilal Cement Co
Osoul Investment Kscc
Gulf Insurance Group Ksc
Umm Al Qaiwain General Inves
Aayan Leasing & Investment
Alrai Media Group Co Ksc
National Investments Co
Commercial Facilities Co
Yiaco Medical Co. K.S.C.C
Dulaqan Real Estate Co
Real Estate Asset Management
Lt Price
52.90
310.00
900.00
16.70
24.70
138.00
81.00
1,100.00
126.00
61.00
158.00
75.00
3,091.00
71.00
25.00
160.00
43.80
718.00
0.00
43.50
30.60
56.40
69.70
28.50
40.00
972.00
92.50
62.00
18.40
54.50
392.00
79.60
19.50
770.00
24.70
435.00
79.50
332.00
445.00
678.00
58.80
90.00
70.00
680.00
71.90
55.10
37.60
131.00
195.00
66.50
350.00
95.40
% Chg
0.00
-0.96
0.00
0.00
0.00
0.73
-10.00
0.00
-0.79
-1.45
0.00
0.67
0.52
0.00
4.17
0.00
-4.78
0.42
0.00
-1.14
-2.86
2.55
1.75
-1.72
0.00
0.41
-0.54
1.64
5.14
-11.95
-1.26
-2.57
0.00
0.00
1.65
0.00
-0.63
-0.90
5.20
0.74
0.00
0.00
0.00
0.00
0.00
0.36
-4.81
0.77
-2.01
0.00
0.00
0.00
Volume
845,322
48,500
7,581
2,899,963
14,305
26,610
189,405
2,053
508,024
10,166
744,555
7,733,677
50,235
2,053,045
31,000
429,174
50,000
200
14,011
19,010
825,979
662,334
501,841
719,430
65,300
2,905,644
28,147,793
6,397,890
5,001
2,071,850
52,000
-
OMAN
Company Name
Voltamp Energy Saog
Vision Insurance Saoc
United Power/Energy Co- Pref
United Power Co Saog
United Finance Co
Ubar Hotels & Resorts
Takaful Oman
Taageer Finance
Sweets Of Oman
Sohar Power Co
Sohar International Bank
Smn Power Holding Saog
Shell Oman Marketing - Pref
Shell Oman Marketing
Sharqiyah Desalination Co Sa
Sembcorp Salalah Power & Wat
Salalah Port Services
Salalah Mills Co
Salalah Beach Resort Saog
Sahara Hospitality
Renaissance Services Saog
Raysut Cement Co
Phoenix Power Co Saoc
Packaging Co Ltd
Ooredoo
Ominvest
Oman United Insurance Co
Oman Telecommunications Co
Oman Refreshment Co
Oman Qatar Insurance Co
Lt Price
0.17
0.12
1.00
2.40
0.08
0.13
0.12
0.10
0.55
0.10
0.11
0.08
1.05
1.11
0.29
0.13
0.60
0.50
1.38
3.15
0.29
0.35
0.09
2.21
0.52
0.35
0.22
0.58
1.30
0.09
% Chg
-0.57
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.91
-1.23
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.35
2.94
0.00
0.00
1.95
0.00
3.24
3.93
0.00
0.00
Volume
25,565
116,449
12,000
118,829
44,649
100,000
11,700
211,410
853,146
166,255
5,000
Emerging markets defy risks as
central bank rate cuts beckon
Bloomberg
Singapore
F
or all the obvious negatives – think
surging oil prices, trade tensions and
the US Federal Reserve having possibly reached the limits of its dovishness –
emerging markets are keeping their heads
above water.
While developing-nation currencies just
weakened for the first time in three weeks,
their implied volatility, at around 8.25%,
remains below the past year’s average. The
yield on emerging-market local-currency
debt is within 10 basis points of the alltime low of 4.12% reached in August. And
the MSCI Index of stocks isn’t far off its
highest level in seven weeks.
“We maintain an optimistic outlook for
emerging markets going into the next few
months as global central bank accommodation overshadows concerns of slower
global economic growth,” said Anders
Faergemann, a senior portfolio manager at
Pinebridge Investments in London.
“The overall market has taken the oil
shock, the Fed meeting and the repo market
confusion in its stride, suggesting it would
have to take an even bigger flare up in risk to
unsettle financial markets.”
Some $933mn flowed into emergingmarket debt-dedicated funds in the week
through September 18, compared with
$443mn the previous week, according to
Morgan Stanley. Central banks in Egypt,
the Philippines and Mexico will probably
cut interest rates this week as policy makers
around the world look to boost their economies.
US-China trade tensions appear to be on
the mend for now after China’s Ministry of
Commerce signalled that both sides held
“constructive” talks in Washington last
week, though not everyone is buying into
that narrative.
Sentiment was also buoyed after Chinese
officials emphasised that the cancellation
of a planned visit to farms in the US had
nothing to do with trade talks.
Oil prices may continue to be volatile too,
after the US sent more troops and weapons
to Saudi Arabia and Iranian Foreign Minister Mohammad Javad Zarif refused to rule
out a military conflict. Oil importers with
current-account and fiscal deficits – including India and South Africa – remain
vulnerable to a further jump in energy
prices.
More easing
Just days before Egypt’s central bank is
expected to slash its benchmark rate, concern that rare protests against President
Abdel-Fattah El-Sisi’s government may
escalate sent the nation’s dollar bonds sliding.
 Egypt has attracted bond investors
with some of the highest real interest rates
in the world; inflation slowed to 7.5% in August, the lowest level since early 2013.
The central bank has already cut rates
twice this year, reducing its benchmark by
a total of 250 basis points.
 “Should political uncertainties rise,
the negative impact on Egyptian risk assets
could be more sustained,” Farouk Soussa,
an economist at Goldman Sachs in London,
says in a note. “In such an environment, we
believe the CBE may see cause to hold rates
on Thursday.”
 Economists surveyed by Bloomberg
expect the central bank of Philippines to
cut rates by 25 basis points Thursday. This
is based partly on comments last week from
Governor Benjamin Diokno. The rise in oil
prices following the attack on Saudi Arabia’s
oil facilities is “not yet a worry” he said, despite the Philippines being a net oil importer.
 Mexican TIIE swap rates are pricing
in 60 basis points of rate cuts for the rest
of 2019 as the central bank prepares for its
next meeting on Thursday. Economists expect authorities to lower borrowing costs
by 25 basis points as inflation slows and the
economy stalls.
 The Bank of Thailand is expected to
maintain its policy rate on Wednesday, according to a majority of economists surveyed by Bloomberg, following a surprise
25-basis-point cut at its August meeting.
 Hungary’s central bank will set its
monetary-policy stance for the next three
months today, with most analysts expecting no change to the unconventional
toolkit. The ECB’s easing measures will
weigh against still-high core price pressures in Hungary and the forint trading at
a record low.
 Czech policymakers will probably
leave policy unchanged for a third consecutive meeting, even as a debate about
the need for further tightening continues
among officials Colombia and Kenya will
probably keep their benchmark rates unchanged; Morocco will also decide on policy today.
 Brazil’s central bank may provide
more hints about the extent of its easing
cycle when minutes of its latest meeting are
released today. Traders have priced in more
aggressive rates cuts, dragging down the
real, after policy makers announced their
latest reduction last week. Investors are
debating how much more the currency can
weaken before the central bank turns more
hawkish.
Index decisions
FTSE Russell will announce the results of
an annual review of its World Government
Bond Index, with investors likely to focus
on the possible inclusion of China and Israel, as well as on the potential exclusion of
Malaysia.
 An exclusion announcement could
possibly trigger outflows of $5bn to $6bn
from the ringgit bond market, according to
analysts at Goldman Sachs Group.
Economic pulse
Malaysia inflation data is due tomorrow,
with price levels having picked-up considerably since January.
Company Name
Oman Packaging
Oman Oil Marketing Company
Oman National Engineering An
Oman Investment & Finance
Oman Intl Marketing
Oman Flour Mills
Oman Fisheries Co
Oman Europe Foods Industries
Oman Education & Training In
Oman Chromite
Oman Chlorine
Oman Ceramic Company
Oman Cement Co
Oman Cables Industry
Oman & Emirates Inv(Om)50%
Natl Aluminium Products
National Real Estate Develop
National Mineral Water
National Life & General Insu
National Gas Co
National Finance Co
National Detergent Co Saog
National Biscuit Industries
National Bank Of Oman Saog
Muscat Thread Mills Co
Muscat Insurance Co Saog
Muscat Gases Company Saog
Muscat Finance
Muscat City Desalination Co
Majan Glass Company
Majan College
Hsbc Bank Oman
Hotels Management Co Interna
Gulf Stone
Gulf Mushroom Company
Gulf Investments Services
Gulf Invest. Serv. Pref-Shar
Gulf International Chemicals
Gulf Hotels (Oman) Co Ltd
Global Fin Investment
Galfar Engineering&Contract
Galfar Engineering -Prefer
Financial Services Co.
Financial Corp/The
Dhofar Tourism
Dhofar Poultry
Dhofar Intl Development
Dhofar Insurance
Dhofar Generating Co Saoc
Dhofar Fisheries & Food Indu
Dhofar Cattlefeed
Dhofar Beverages Co
Construction Materials Ind
Computer Stationery Inds
Bankmuscat Saog
Bank Nizwa
Bank Dhofar Saog
Arabia Falcon Insurance Co
Aloula Co
Al-Omaniya Financial Service
Al-Hassan Engineering Co
Al-Fajar Al-Alamia Co
Al-Anwar Ceramic Tiles Co
Al Suwadi Power
Al Sharqiya Invest Holding
Al Maha Petroleum Products M
Al Maha Ceramics Co Saoc
Al Madina Takaful Co Saoc
Al Madina Investment Co
Al Kamil Power Co
Al Jazerah Services -Pfd
Al Jazeera Steel Products Co
Al Jazeera Services
Al Izz Islamic Bank
Al Buraimi Hotel
Al Batinah Power
Al Batinah Hotels
Al Batinah Dev & Inv
Al Anwar Holdings Saog
Al Ahlia Insurance Co Saoc
Ahli Bank
Acwa Power Barka Saog
Abrasives Manufacturing Co S
A’saffa Foods Saog
0Man Oil Marketing Co-Pref
#N/A Invalid Security
#N/A Invalid Security
Lt Price
% Chg
Volume
0.27
1.07
0.14
0.12
0.52
0.68
0.08
1.00
0.23
3.64
0.36
0.42
0.22
0.81
0.07
0.18
5.00
0.09
0.32
0.21
0.14
0.70
3.92
0.18
0.08
0.78
0.19
0.07
0.11
0.18
0.17
0.13
1.25
0.12
0.31
0.07
0.11
0.14
9.50
0.07
0.08
0.39
0.06
0.10
0.49
0.18
0.30
0.18
0.19
1.28
0.14
0.26
0.04
0.26
0.44
0.09
0.14
0.10
0.53
0.09
0.02
0.75
0.10
0.07
0.09
0.80
0.17
0.08
0.02
0.38
0.55
0.21
0.12
0.07
0.88
0.07
1.13
0.08
0.09
0.32
0.12
0.66
0.05
0.60
0.25
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.30
0.00
0.00
0.00
0.00
0.00
-0.45
0.00
0.00
-4.81
0.00
0.00
0.00
-3.67
0.00
0.00
0.00
-0.55
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.25
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.53
0.00
0.00
0.00
7.50
0.00
0.45
1.09
1.50
0.00
0.00
0.00
0.00
0.00
1.04
-1.35
-3.33
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-4.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,933,500
13,000
76,189
398,623
23,300
1,028,245
325,000
48,000
2,535,006
717,751
50,000
281,312
415,509
30,000
26,810
491,569
10,500
20,224
609,829
25,000
1,000
949,000
11,962
20,000
2,000,000
-
LATEST MARKET CLOSING FIGURES
Yield mania is back
as new bond sales
revive in EMs
Bloomberg
London
E
merging-market sovereign borrowers are returning
to international debt markets as stimulus from central banks cuts borrowing costs and as investors chase
yields again.
South Africa’s decision to sell Eurobonds for the first time
since May last year follows Kazakhstan, Pakistan and Abu
Dhabi announcing new issues. That has revived action in a
market that saw a seven-week lull amid a resurgence in US
Treasury yields and uncertainty over the Federal Reserve’s
monetary path.
The clouds seem to have lifted. The premium dollar-bond
issuers are asked to pay over Treasuries has dropped as much
as 28 basis points from an eight-month high three weeks
ago as the Fed cut rates and the European Central Bank announced bond purchases to support the continent’s slowing
economies.
“We are in this kind of sweet spot in which spreads are still
relatively high to make it attractive to investors but yields
are relatively low for issuers,” said Jean-Charles Sambor,
the deputy of head of emerging-market fixed income at BNP
Paribas Asset Management in London.
“We would not be surprised to see even more sovereigns
and corporates attempting to issue in the foreseeable future.”
South Africa plans a two-part deal comprising 10-year and
30-year notes in the 5.25% area and 6.125% area, respectively.
Abu Dhabi is offering a three-part deal with the longest note
maturing in 2049. Kazakhstan holds investor meetings for
benchmark-sized notes maturing in 7 years and/or 15 years.
Pakistan seeks bidders to advise on sale of Eurobonds
and sukuk in the international capital markets. Investors
put $900mn in emerging-market bond funds in the week
through September 19 amid an ”yield mania,” according to a
Bank of America Merrill Lynch note.
Buyers of dollar bonds are having a good year, pocketing an
11% return, a Bloomberg Barclays index tracking developingnation debt showed.
The first half of September saw no borrowing by developing-nation governments apart from a $815mn long-bond tap
by Jamaica.
“It is just cheap to borrow now,” said Paul McNamara,
a London-based fund manager who helps oversee $9.4bn
in assets at GAM UK. “This is the result of an epic rally we
have seen in emerging-market bonds after the decline in core
rates.”
Gulf Times
Tuesday, September 24, 2019
9
BUSINESS
DJIA
WORLD INDICES
Company Name
Apple Inc
American Express Co
Boeing Co/The
Caterpillar Inc
Cisco Systems Inc
Chevron Corp
Walt Disney Co/The
Dow Inc
Goldman Sachs Group Inc
Home Depot Inc
Intl Business Machines Corp
Intel Corp
Johnson & Johnson
Jpmorgan Chase & Co
Coca-Cola Co/The
Mcdonald’s Corp
3M Co
Merck & Co. Inc.
Microsoft Corp
Nike Inc -Cl B
Pfizer Inc
Procter & Gamble Co/The
Travelers Cos Inc/The
Unitedhealth Group Inc
United Technologies Corp
Visa Inc-Class A Shares
Verizon Communications Inc
Walgreens Boots Alliance Inc
Walmart Inc
Exxon Mobil Corp
Lt Price
218.88
117.14
377.66
127.82
49.69
124.33
132.36
47.93
212.83
226.37
141.79
50.81
131.00
118.52
54.10
212.15
165.76
84.73
139.48
87.76
36.45
123.62
147.07
230.43
135.71
174.77
60.45
54.16
118.09
72.08
% Chg
0.53
0.29
-0.46
-0.27
0.18
0.01
0.07
-0.58
-0.43
0.76
-0.06
0.18
-0.49
-0.32
0.35
1.32
-0.60
-0.50
0.03
1.25
-0.65
1.13
0.54
-1.06
0.10
0.41
0.27
-1.53
0.95
0.00
2,319,825
156,643
173,540
231,934
1,402,893
253,991
426,456
288,464
109,856
264,872
128,547
1,927,905
354,064
576,566
526,336
215,786
103,890
538,320
1,813,563
430,283
1,014,858
376,420
46,782
220,852
133,255
353,592
454,717
341,600
372,829
705,576
FTSE 100
Company Name
Anglo American Plc
Associated British Foods Plc
Admiral Group Plc
Ashtead Group Plc
Antofagasta Plc
Auto Trader Group Plc
Aviva Plc
Astrazeneca Plc
Bae Systems Plc
Barclays Plc
British American Tobacco Plc
Barratt Developments Plc
Bhp Group Plc
Berkeley Group Holdings/The
British Land Co Plc
Bunzl Plc
Bp Plc
Burberry Group Plc
Bt Group Plc
Coca-Cola Hbc Ag-Di
Carnival Plc
Centrica Plc
Compass Group Plc
Croda International Plc
Crh Plc
Dcc Plc
Diageo Plc
Direct Line Insurance Group
Evraz Plc
Experian Plc
Easyjet Plc
Ferguson Plc
Fresnillo Plc
Glencore Plc
Glaxosmithkline Plc
Gvc Holdings Plc
Hikma Pharmaceuticals Plc
Hargreaves Lansdown Plc
Halma Plc
Hsbc Holdings Plc
Hiscox Ltd
Intl Consolidated Airline-Di
Intercontinental Hotels Grou
3I Group Plc
Imperial Brands Plc
Informa Plc
Intertek Group Plc
Itv Plc
Johnson Matthey Plc
Kingfisher Plc
Land Securities Group Plc
Legal & General Group Plc
Lloyds Banking Group Plc
London Stock Exchange Group
Micro Focus International
Marks & Spencer Group Plc
Mondi Plc
Melrose Industries Plc
Wm Morrison Supermarkets
National Grid Plc
Nmc Health Plc
Next Plc
Ocado Group Plc
Paddy Power Betfair Plc
Prudential Plc
Persimmon Plc
Pearson Plc
Reckitt Benckiser Group Plc
Royal Bank Of Scotland Group
Royal Dutch Shell Plc-A Shs
Royal Dutch Shell Plc-B Shs
Relx Plc
Rio Tinto Plc
Rightmove Plc
Rolls-Royce Holdings Plc
Rsa Insurance Group Plc
Rentokil Initial Plc
Sainsbury (J) Plc
Schroders Plc
Sage Group Plc/The
Segro Plc
Smurfit Kappa Group Plc
Standard Life Aberdeen Plc
Ds Smith Plc
Smiths Group Plc
Scottish Mortgage Inv Tr Plc
Smith & Nephew Plc
Spirax-Sarco Engineering Plc
Sse Plc
Standard Chartered Plc
St James’s Place Plc
Severn Trent Plc
Tesco Plc
Tui Ag-Di
Taylor Wimpey Plc
Unilever Plc
United Utilities Group Plc
Vodafone Group Plc
John Wood Group Plc
Wpp Plc
Whitbread Plc
Lt Price
1,870.80
2,314.00
2,135.00
2,240.00
884.20
517.80
388.10
7,170.00
576.00
149.26
2,884.00
646.60
1,761.20
4,154.00
564.60
2,072.00
518.90
2,184.00
176.28
2,600.00
3,618.00
71.76
2,030.00
4,844.00
2,710.00
7,004.00
3,247.50
302.90
487.00
2,548.00
1,106.50
5,936.00
742.40
249.05
1,685.80
727.80
2,090.00
2,028.00
1,951.00
612.90
1,625.00
471.30
4,990.00
1,117.00
2,094.00
828.20
5,400.00
126.30
3,029.00
201.10
840.00
250.60
54.30
7,306.00
1,119.80
189.50
1,558.00
203.10
202.10
860.30
2,702.00
5,902.00
1,312.00
0.00
1,442.50
2,115.00
853.20
6,293.00
208.90
2,353.50
2,357.50
1,879.50
4,245.00
535.80
775.00
524.40
452.90
216.50
3,042.00
673.40
790.60
2,400.00
274.50
341.90
1,559.00
511.50
1,922.50
8,005.00
1,221.50
685.00
962.40
2,079.00
240.40
901.40
163.10
4,867.50
789.20
159.96
419.00
995.20
4,424.00
% Chg
-1.35
-0.17
-0.56
-1.54
-2.56
-0.50
-0.33
0.04
0.77
-1.50
-1.15
0.09
-1.54
-0.55
-0.07
-0.43
-0.40
-0.86
-1.39
-1.22
-1.92
-2.18
1.30
-0.53
-0.66
0.43
0.79
0.66
-0.81
0.39
4.63
-0.07
3.48
-2.92
0.85
0.05
0.97
-0.10
-1.09
-0.44
-1.10
-1.36
-0.02
0.63
-2.08
-1.52
-0.74
-1.56
-2.29
-0.45
-0.80
-0.87
-2.18
0.77
-4.36
-3.24
-1.52
-1.17
-0.88
1.03
-7.15
-1.44
0.46
0.00
-1.60
-0.24
0.16
0.51
-2.15
0.43
0.99
1.18
0.28
-0.69
-2.25
-2.71
0.13
0.28
-2.72
-1.72
0.74
-2.36
-0.33
-0.93
-4.82
-0.39
0.23
0.00
-1.17
-0.46
-0.82
0.53
-0.46
7.23
-1.48
1.51
-0.35
0.28
-2.87
-1.27
-1.47
Volume
3,935,692
483,776
469,163
728,915
1,771,102
1,896,527
5,982,388
1,183,491
3,748,082
20,682,647
2,190,995
2,442,532
4,317,065
288,853
3,867,681
334,687
18,832,467
979,340
17,926,128
403,804
596,715
17,868,972
1,933,723
263,202
1,438,797
149,917
3,284,997
3,694,704
2,017,276
1,301,898
3,029,436
437,841
2,254,319
26,059,049
5,701,874
1,754,806
544,697
463,778
616,010
15,557,238
470,002
7,503,923
232,092
1,062,086
1,418,376
1,381,537
188,033
8,276,557
435,390
6,458,008
1,902,115
11,121,492
101,690,760
336,567
2,471,229
10,901,323
2,013,619
10,002,055
7,491,213
3,731,175
512,281
312,583
1,010,288
2,697,286
1,155,992
1,682,185
453,339
12,047,339
4,173,913
4,074,971
2,909,346
2,135,856
1,185,438
2,120,640
2,378,906
2,348,158
4,865,267
465,678
1,444,494
1,539,629
182,788
6,430,334
3,527,428
1,151,576
1,861,846
1,231,994
123,441
3,528,190
5,124,305
1,472,522
683,783
12,040,284
4,223,559
9,088,001
1,639,891
1,714,556
30,767,995
2,478,000
1,946,840
241,483
TOKYO
Company Name
Japan Airlines Co Ltd
Recruit Holdings Co Ltd
Softbank Corp
Kyocera Corp
Nissan Motor Co Ltd
T&D Holdings Inc
Toyota Motor Corp
Kddi Corp
Nitto Denko Corp
Hitachi Ltd
Takeda Pharmaceutical Co Ltd
Jfe Holdings Inc
Sumitomo Corp
Canon Inc
Eisai Co Ltd
Nintendo Co Ltd
Shin-Etsu Chemical Co Ltd
Mitsubishi Corp
Smc Corp
Lt Price
3,379.00
3,372.00
1,549.00
6,804.00
709.30
1,147.00
7,403.00
2,863.50
5,345.00
3,985.00
3,798.00
1,299.50
1,781.50
2,934.50
5,426.00
42,830.00
11,825.00
2,760.00
44,630.00
% Chg
-0.82
-1.46
1.24
0.28
-0.62
-0.48
0.53
-0.12
-0.35
-1.97
1.09
-1.44
1.48
0.20
0.26
0.87
0.04
-0.83
-1.87
Indices
Volume
Volume
3,255,700
11,742,500
21,892,200
1,624,600
13,879,500
3,375,500
7,687,000
7,420,300
1,358,000
5,068,000
7,566,900
4,923,300
4,935,000
4,449,900
1,397,500
1,504,500
1,472,400
10,435,200
449,600
Dow Jones Indus. Avg
S&P 500 Index
Nasdaq Composite Index
S&P/Tsx Composite Index
Mexico Bolsa Index
Brazil Bovespa Stock Idx
Ftse 100 Index
Cac 40 Index
Dax Index
Ibex 35 Tr
Nikkei 225
Japan Topix
Hang Seng Index
All Ordinaries Indx
Nzx All Index
Bse Sensex 30 Index
Nse S&P Cnx Nifty Index
Straits Times Index
Karachi All Share Index
Jakarta Composite Index
Lt Price
26,947.47
2,993.80
8,118.65
16,880.14
43,376.73
104,568.90
7,326.08
5,630.76
12,342.33
9,093.60
22,079.09
1,616.23
26,222.40
6,861.06
1,827.31
39,090.03
11,600.20
3,143.24
23,145.92
6,206.20
Change
+12.40
+1.73
+0.98
-19.55
-182.72
-248.50
-18.84
-60.02
-125.68
-85.40
+34.64
+0.57
-213.27
+22.10
+5.96
+1,075.41
+326.00
-16.44
-237.99
-25.27
TOKYO
Company Name
Nidec Corp
Isuzu Motors Ltd
Unicharm Corp
Nomura Holdings Inc
Daiichi Sankyo Co Ltd
Subaru Corp
Sumitomo Realty & Developmen
Ntt Docomo Inc
Sumitomo Metal Mining Co Ltd
Orix Corp
Asahi Group Holdings Ltd
Keyence Corp
Mizuho Financial Group Inc
Sumitomo Mitsui Trust Holdin
Japan Tobacco Inc
Sumitomo Electric Industries
Daiwa Securities Group Inc
Softbank Group Corp
Panasonic Corp
Fujitsu Ltd
Central Japan Railway Co
Nitori Holdings Co Ltd
Ajinomoto Co Inc
Daikin Industries Ltd
Mitsui Fudosan Co Ltd
Ono Pharmaceutical Co Ltd
Toray Industries Inc
Bridgestone Corp
Sony Corp
Astellas Pharma Inc
Hoya Corp
Nippon Steel Corp
Suzuki Motor Corp
Nippon Telegraph & Telephone
Jxtg Holdings Inc
Murata Manufacturing Co Ltd
Kansai Electric Power Co Inc
Denso Corp
Sompo Holdings Inc
Daiwa House Industry Co Ltd
Dai-Ichi Life Holdings Inc
Mazda Motor Corp
Komatsu Ltd
West Japan Railway Co
Kao Corp
Mitsui & Co Ltd
Daito Trust Construct Co Ltd
Otsuka Holdings Co Ltd
Oriental Land Co Ltd
Sekisui House Ltd
Secom Co Ltd
Tokio Marine Holdings Inc
Aeon Co Ltd
Asahi Kasei Corp
Kirin Holdings Co Ltd
Marubeni Corp
Mitsubishi Ufj Financial Gro
Mitsubishi Chemical Holdings
Fanuc Corp
Fast Retailing Co Ltd
Ms&Ad Insurance Group Holdin
Kubota Corp
Seven & I Holdings Co Ltd
Inpex Corp
Resona Holdings Inc
Fujifilm Holdings Corp
Yamato Holdings Co Ltd
Chubu Electric Power Co Inc
Mitsubishi Estate Co Ltd
Mitsubishi Heavy Industries
Sysmex Corp
Shiseido Co Ltd
Shionogi & Co Ltd
Terumo Corp
Tokyo Gas Co Ltd
Tokyo Electron Ltd
East Japan Railway Co
Itochu Corp
Ana Holdings Inc
Mitsubishi Electric Corp
Sumitomo Mitsui Financial Gr
Lt Price
15,180.00
1,229.50
3,329.00
478.10
7,152.00
3,035.00
4,148.00
2,794.00
3,444.00
1,735.50
5,306.00
66,310.00
170.10
3,986.00
2,320.50
1,401.50
508.20
4,624.00
894.70
8,762.00
22,285.00
16,075.00
2,052.00
14,380.00
2,715.50
1,991.50
820.60
4,308.00
6,411.00
1,530.00
8,800.00
1,505.00
4,465.00
5,209.00
501.10
5,082.00
1,373.50
4,828.00
4,573.00
3,578.00
1,617.00
976.50
2,515.50
9,415.00
7,995.00
1,855.50
14,430.00
4,732.00
15,930.00
2,102.50
9,813.00
5,900.00
1,993.00
1,110.00
2,250.50
754.00
566.80
811.20
20,005.00
65,740.00
3,535.00
1,691.50
4,142.00
1,060.00
480.80
4,836.00
1,740.00
1,660.50
2,113.50
4,395.00
7,295.00
8,737.00
5,821.00
3,393.00
2,800.00
20,770.00
10,470.00
2,359.50
3,745.00
1,448.00
3,801.00
% Chg
-0.98
-1.36
-0.54
0.72
0.36
-0.91
0.19
0.18
0.58
0.14
-0.45
-0.87
0.95
-0.75
0.98
0.29
-0.06
0.17
0.24
-0.67
-0.96
0.88
0.59
-0.66
-0.91
-3.07
-2.04
0.07
0.56
0.53
-0.56
-1.28
3.72
-1.18
0.40
0.71
-1.12
-0.54
-1.42
-0.11
-0.68
-0.49
1.35
-0.25
0.73
0.92
-0.17
-0.32
0.66
0.69
0.53
0.02
-0.03
0.68
-1.34
0.11
0.30
0.26
-2.15
0.80
-1.81
-0.50
-0.86
-0.52
0.80
0.77
-8.37
0.21
1.32
0.18
-0.50
0.17
-0.50
2.35
-0.97
-0.05
-0.76
2.50
0.38
-0.99
0.40
Volume
1,144,800
2,677,200
1,282,100
19,995,900
1,909,000
3,288,300
1,463,600
6,251,000
1,723,100
5,618,100
1,508,300
429,100
111,436,900
2,872,400
6,120,600
3,095,900
8,297,300
16,525,300
7,661,200
1,276,400
660,800
297,800
2,519,300
995,900
5,832,200
3,160,500
6,720,900
2,505,100
5,285,500
8,797,700
2,121,800
4,414,700
4,143,000
4,990,700
21,396,400
3,234,300
3,524,800
1,502,400
2,918,600
1,994,200
5,012,200
5,789,700
5,155,000
801,100
1,618,900
6,744,600
444,500
1,448,900
950,200
4,952,700
854,500
2,820,700
2,165,100
3,753,200
3,819,700
9,219,000
41,470,800
6,996,900
1,464,900
430,600
2,715,600
3,819,200
3,319,200
5,168,300
11,394,400
2,002,800
12,928,600
2,377,400
6,724,600
1,578,000
610,800
1,409,600
1,005,700
2,194,700
2,075,800
1,246,100
1,326,700
10,354,500
1,139,600
5,747,900
5,790,800
SENSEX
Company Name
Adani Ports And Special Econ
Asian Paints Ltd
Axis Bank Ltd
Bajaj Finance Ltd
Bharti Airtel Ltd
Bharti Infratel Ltd
Bajaj Auto Ltd
Bajaj Finserv Ltd
Bharat Petroleum Corp Ltd
Cipla Ltd
Coal India Ltd
Dr. Reddy’s Laboratories
Eicher Motors Ltd
Gail India Ltd
Grasim Industries Ltd
Hcl Technologies Ltd
Housing Development Finance
Hdfc Bank Limited
Hero Motocorp Ltd
Hindalco Industries Ltd
Hindustan Petroleum Corp
Hindustan Unilever Ltd
Icici Bank Ltd
Indiabulls Housing Finance L
Indusind Bank Ltd
Infosys Ltd
Indian Oil Corp Ltd
Itc Ltd
Jsw Steel Ltd
Kotak Mahindra Bank Ltd
Larsen & Toubro Ltd
Mahindra & Mahindra Ltd
Maruti Suzuki India Ltd
Ntpc Ltd
Oil & Natural Gas Corp Ltd
Power Grid Corp Of India Ltd
Reliance Industries Ltd
State Bank Of India
Sun Pharmaceutical Indus
Tata Steel Ltd
Tata Consultancy Svcs Ltd
Tech Mahindra Ltd
Titan Co Ltd
Tata Motors Ltd
Upl Ltd
Ultratech Cement Ltd
Vedanta Ltd
Wipro Ltd
Yes Bank Ltd
Zee Entertainment Enterprise
Lt Price
410.95
1,802.75
725.50
4,023.75
348.00
263.80
2,995.15
8,297.75
450.85
448.90
202.70
2,767.25
19,239.35
141.30
759.30
1,032.90
2,162.00
1,257.25
2,820.35
200.00
288.45
2,039.75
446.30
437.70
1,511.55
764.35
142.65
254.85
243.70
1,640.60
1,528.50
565.00
6,897.85
116.05
136.30
188.30
1,239.20
313.75
409.45
377.35
2,015.80
682.80
1,311.80
127.90
580.85
4,391.10
157.90
239.35
55.45
271.60
% Chg
7.95
7.88
6.64
8.69
-2.36
1.79
2.25
7.85
11.64
-3.11
1.32
-2.49
7.72
4.90
1.11
-1.54
5.50
4.81
-1.49
-1.06
4.04
3.55
6.90
2.17
6.48
-5.05
7.62
7.06
2.35
6.61
8.29
-0.69
4.64
-3.17
2.02
-4.03
-1.21
3.99
-1.03
2.39
-2.40
-2.58
3.82
-4.02
3.34
2.84
-0.66
-2.68
-0.09
-9.89
Volume
6,695,717
4,253,004
31,417,887
4,011,002
5,746,894
4,244,471
807,027
806,321
31,006,317
2,819,792
9,396,444
929,038
330,720
19,474,860
3,077,990
2,366,746
9,653,408
20,960,205
1,380,382
7,366,155
8,908,295
3,783,357
57,490,445
12,681,025
8,634,884
17,279,260
22,725,150
52,040,316
13,040,988
6,854,029
12,082,820
9,599,883
3,140,286
33,355,557
17,685,955
13,829,833
9,879,751
54,178,171
7,342,291
16,393,164
6,323,401
2,256,769
5,902,008
51,032,391
3,697,264
975,156
14,441,035
6,776,981
221,169,297
29,747,305
The German share price index DAX graph is seen at the Frankfurt Stock Exchange. The DAX 30 lost 1% to 12,300 points
yesterday.
Europe markets slide on
dismal economic data
AFP
London
E
uropean stock markets fell yesterday after a key survey pointed
to weakness in the eurozone
economy while some travel and tourism stocks benefited from the collapse
of British giant Thomas Cook.
London’s FTSE 100 was down 0.3%
to 7,326.08 points, Frankfurt’s DAX 30
lost 1% to 12,300 and Paris’s CAC 40
dived 1.1% at 5,630.76 close yesterday
after data from a closely watched survey showed that Brexit and trade war
fears drove eurozone business growth
to its lowest level in six years in September.
IHS Markit’s composite eurozone
PMI, seen as a key indicator of business
confidence, fell to 50.4 in September,
down from 51.9 in August – the lowest
reading since June 2013.
It warned that the single currency
area’s economy was “close to stalling”.
Market analyst David Madden at
CMC Markets UK said “disappointing
manufacturing and services reports
from France, in addition to Germany,
has weighed on European stock markets.”
Investors now need to weigh “German recession odds against central
bank support”, added Fawad Razaqzada, market analyst at Forex.com.
The euro also slid lower.
Some rivals of British travel giant
Thomas Cook, which declared bankruptcy after last-ditch re-financing
attempts failed, saw their shares rise
sharply.
TUI shares, listed in London, shot
six percent higher.
Ryanair gained 1.4% and easyJet
4.5%, but British Airways parent IAG
shed 1.3%.
In Hong Kong, China’s Fosun International lost 1.5% after the collapse of
Thomas Cook, in which it is the top
shareholder.
The price of oil rose after Iran
warned the presence of US forces in
the Gulf was causing instability in the
region.
Meanwhile the pound sank against
the dollar at the start of a crucial week
for Britain with the Supreme Court to
decide whether Prime Minister Boris
Johnson acted legally in suspending
parliament for an extended period as
he pushes for Brexit on October 31.
Stock markets were also buffeted after President Donald Trump ruled out
a partial trade deal with China, casting
fresh doubt on any early agreement.
“Investors remain unconvinced that
a trade deal is about to see the light of
day soon, and that’s likely to put a cap
on any further gains in risk assets,” said
Hussein Sayed, chief market strategist
at FXTM.
“I’m not looking for a partial deal.
I’m looking for a complete deal,” Trump
told reporters at the White House.
He added that he did not see the
need for an agreement before the 2020
presidential election.
The remarks tempered recent optimism on the talks and the possibility of a quick piecemeal deal, though
they came as China hailed progress
in preparatory discussions ahead of
a planned high-level meeting next
month.
HONG KONG
Company Name
Ck Hutchison Holdings Ltd
Hang Lung Properties Ltd
Ck Infrastructure Holdings L
Hengan Intl Group Co Ltd
China Shenhua Energy Co-H
Cspc Pharmaceutical Group Lt
Hang Seng Bank Ltd
China Resources Land Ltd
Ck Asset Holdings Ltd
Sino Biopharmaceutical
Henderson Land Development
Aia Group Ltd
Ind & Comm Bk Of China-H
Want Want China Holdings Ltd
Sun Hung Kai Properties
New World Development
Geely Automobile Holdings Lt
Swire Pacific Ltd - Cl A
Sands China Ltd
Wharf Real Estate Investment
Clp Holdings Ltd
Country Garden Holdings Co
Aac Technologies Holdings In
Shenzhou International Group
Ping An Insurance Group Co-H
China Mengniu Dairy Co
Sunny Optical Tech
Boc Hong Kong Holdings Ltd
China Life Insurance Co-H
Citic Ltd
Galaxy Entertainment Group L
Wh Group Ltd
“The hot and then cold and then hot
and cold again US-China trade vibes
continue to rattle markets,” said Rodrigo Catril at National Australia Bank.
US stocks were largely flat in late
morning trading.
Sterling was steady yesterday as investors looked for signs of progress in
Britain’s Brexit talks and awaited a Supreme Court ruling on whether Prime
Minister Boris Johnson misled Queen
Elizabeth over his reasons for suspending parliament this month.
Johnson meets European Union
leaders at the UN General Assembly in
New York. Expectations for progress
were low, and the substantial volume
of short positions built up on Sterling may shield the currency from any
sharp declines, analysts said.
“We are sceptical of much in the way
of progress being made, and on top of
that there is also the risk of PM Johnson having to cut his trip short to return to London if the Supreme Court
decision goes against the government,”
MUFG analysts said in a note to clients.
Johnson suspended parliament for
five weeks, until October 14, a move
critics saw as an attempt to stop MPs
from preventing Britain leaving the EU
on October 31. Scotland’s highest court
of appeal ruled the suspension unlawful, but Johnson appealed.
By 1445 GMT, the pound was down
0.3% at $1.2430, having dropped earlier to a six-day low of $1.2413, mostly
because of dollar strength after a solid
composite purchasing managers’ survey.
The dollar index was up 0.2% at
98.68 after rising earlier to a weekand-a-half high of 98.832.
HONG KONG
Lt Price
69.35
17.70
52.80
52.15
16.22
14.98
170.80
32.70
54.10
10.36
37.50
74.90
5.26
6.17
113.60
10.02
12.90
72.90
36.70
42.25
81.45
9.98
43.10
103.00
91.15
29.50
114.00
26.80
18.62
9.99
50.05
7.04
% Chg
-0.64
0.00
-0.47
0.19
-0.12
-2.60
-0.64
-1.80
-0.64
-3.00
-1.70
-0.73
-0.38
0.82
-0.79
-0.60
-0.92
-1.69
-1.21
-1.86
-0.55
-1.58
-5.90
-0.96
-1.03
-1.50
-4.76
-0.37
-1.17
-0.30
-1.86
-0.98
Volume
2,911,529
1,753,653
598,257
1,444,638
13,187,690
26,068,800
759,273
5,991,617
4,820,059
60,467,675
4,538,101
20,117,221
120,783,517
6,894,875
2,704,397
17,153,919
38,763,584
1,592,705
3,573,895
2,286,642
2,893,299
17,390,119
14,623,225
3,589,615
21,452,405
13,355,162
12,065,809
16,230,293
20,789,281
6,287,182
6,456,445
23,674,395
Company Name
Hong Kong & China Gas
Bank Of Communications Co-H
China Petroleum & Chemical-H
Hong Kong Exchanges & Clear
Bank Of China Ltd-H
Hsbc Holdings Plc
Power Assets Holdings Ltd
Mtr Corp
China Overseas Land & Invest
Tencent Holdings Ltd
China Unicom Hong Kong Ltd
Link Reit
Sino Land Co
China Resources Power Holdin
Petrochina Co Ltd-H
Cnooc Ltd
China Construction Bank-H
China Mobile Ltd
Lt Price
15.46
5.18
4.74
225.80
3.11
59.50
52.60
45.50
24.90
335.80
8.27
87.15
11.66
10.64
4.13
12.42
5.96
64.60
% Chg
-1.02
-0.77
-0.84
-1.91
0.00
-0.83
-0.66
-0.98
-1.19
-0.53
0.12
-0.68
0.87
-0.93
-0.72
-1.27
-0.17
0.00
Volume
11,875,760
23,877,871
70,329,517
9,032,814
161,489,534
14,643,542
1,145,881
3,331,507
7,931,082
8,307,566
24,856,683
3,072,085
3,752,807
6,121,226
57,260,465
37,971,145
337,917,798
11,909,678
GCC INDICES
Indices
Lt Price
Change
Doha Securities Market
10,362.85
-84.42
Kuwait Stocks Exchange
4,703.88
+18.53
Oman Stock Market
4,006.70
+41.15
“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 offer 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.”
14
Gulf Times
Tuesday, September 24, 2019
BUSINESS
Negative rates just
got real for a record
group of bank clients
Bloomberg
Copenhagen
Apple’s new offices on Half Moon Street in southern Ireland. Apple may only need to wait until today to get early clues about its chances of success in the biggest European
Union tax case in recent history.
Apple’s odds in biggest
European Union tax case
may sway in court test
Bloomberg
Luxembourg
A
pple Inc may only need to wait until today to get early clues about its
chances of success in the biggest
tax case in recent history.
The iPhone maker has been arguing
its case at the European Union’s General
Court to topple a record €13bn ($14.3bn)
EU tax order. This week the same panel of
judges will deliver a ruling on two smaller
but related challenges by Starbucks Corp
and a Fiat Chrysler Automobiles NV unit.
They’re the first in a series of cases
to come to a decision as companies rail
against EU Competition chief Margrethe
Vestager’s five-year crackdown on allegedly unfair tax deals.
While the facts of the various appeals
differ, today’s decisions “should have a
far-reaching impact, both on the other
pending cases and going forward,” said
Howard Liebman, a tax partner at law
firm Jones Day in Brussels, who isn’t involved in the disputes.
The judges’ stance will “presumably
establish some precedent as to how far
the court is willing to allow the commission to extend its approach of judging tax
regimes – and individual tax rulings – in
the context of a state-aids analysis,” he
said. Appeals have been piling up at the
EU courts since state-aid investigators
started work in 2013 to unearth what
they deem to be the most problematic
examples of otherwise legal individual
tax agreements doled out to companies by countries. The judges’ verdicts
could empower or halt Vestager’s probes,
which are now centring on fiscal deals
done by Amazon.com Inc and Alphabet.
Starbucks and Fiat were targeted on
the same day in 2015 by a similar EU order
to pay back about €30mn each over their
tax arrangements in the Netherlands and
Luxembourg respectively.
The commission accused Luxembourg
and the Netherlands of granting socalled tax rulings to the companies that
backed “artificial and complex methods”
to calculate their taxable profits that
didn’t reflect “economic reality.”
The EU said at the time the companies
did this by setting prices for products
and services sold between units – called
transfer prices – that didn’t reflect market conditions.
“As a result, most of the profits of
Starbucks’ coffee roasting company are
shifted abroad, where they are also not
taxed, and Fiat’s financing company only
paid taxes on underestimated profits,”
said in a 2015 statement.
Luxembourg has since also been or-
Green steel needs a huge new
source of electricity in Europe
Bloomberg
Vienna
Austria may need to boost its renewable
power generation by 50% to meet
demand from steelmakers seeking to
replace fossil fuels with hydrogen.
The finding emerged at a discussion last
week convened by the country’s biggest
utility, which is probing the enormous
consequences for electricity and carbon
markets of efforts to rein in global
warming.
Verbund AG estimates that producing
hydrogen in the volumes needed to
help cut industrial emissions could take
an additional 30 terrawatt-hours of
renewable electricity annually – equivalent
to some 20 times the output of the world’s
biggest offshore wind farm.
“We have the resources and technology,”
Verbund AG chief executive officer
Wolfgang Anzengruber said at a briefing
in Fuschl, Austria. “Now, we have to come
to a point where it’s cheaper to cut carbon
dioxide than it is to pay a penalty for its
emission.
The cost of not doing so will become
significantly higher.” Verbund is
spearheading Austria’s drive to turn the
universe’s lightest element into fuel for its
heaviest industry.
Clean-burning hydrogen could replace
coal and coke in mills that currently
release about 1.7 tonnes of carbon dioxide
for every ton of steel manufactured. The
sector accounts for as much as 9% of
global carbon emissions, according to the
World Steel Association.
“What we need are power-to-fuel plants
that are above all electrolysis plants,”
said Katharina Beumelburg, a senior vice
president at Siemens AG’s gas and power
division, who was at the meeting. “The
most important input is cheap, green
electricity.”
Siemens and Verbund are jointly
developing Europe’s biggest electrolyser
at Voestalpine AG’s steel plant in Linz,
Austria. By the end of this year, that
6-megawatt unit is scheduled to begin
feeding hydrogen into blast furnaces as a
reduction agent to remove oxygen from
iron ore.
The steel industry could adopt hydrogen
for between 10% and 50% of output
by mid-century given the right carbon
pricing, Bloomberg analysts wrote in a
report last month. The London-based
researcher sees hydrogen technology
becoming competitive with high-cost,
coal-based plants by 2030.
“Hydrogen will continue to be a
growth market,” said Timur Gul, who
heads energy technology policy for
the International Energy Agency and
also attended the Austrian meeting.
The element is already widely used by
chemical and fertiliser makers and is
poised to “break out” in other sectors, he
said.
Austrian politicians agreed on €540mn
($597mn) renewable energy package on
Friday that will build out wind and solar
generation, according to a statement.
The country is also looking at converting
excess renewable capacity into hydrogen.
The underground reservoir Austria has
identified could hold gas equivalent to 92
terrawatt-hours of power.
Verbund’s Anzengruber said his utility
probably wouldn’t need to cover all of
the new electricity demands required for
producing hydrogen on industrial scales.
“It could be that we import hydrogen like
we do with oil right now,” the CEO said. “It
could be cheaper to produce elsewhere.”
dered to recoup €250mn from Amazon.
com and €120mn in back taxes from
energy utility Engie SA, France’s former
natural-gas monopoly, previously known
as GDF Suez.
In the Apple case, the EU said Ireland
illegally slashed the iPhone maker’s tax
bill between 2003-2014, a finding the
company and Irish officials don’t accept.
The EU alleged that “Apple paid essentially no tax on earnings in Europe”
and “sought headlines by quoting tiny
numbers, but this public campaign ignores the taxes Apple pays all across the
world,” Apple attorney Daniel Beard said
at last week’s hearing.
The Dutch finance ministry said it
had nothing to add to previous statements criticising the EU’s approach. Fiat
Chrysler, Starbucks, Apple and the commission declined to comment, as did the
Luxembourg and Irish finance ministries.
EU nations ordered to claw back the
allegedly illegal tax aid have accused the
commission of overreaching itself by using state aid law to attack individual fiscal arrangements that dated back many
years. A key question for the commission
in the cases is whether its argument that
these tax rulings were selective and unfair stands up in court.
“The commission did not identify a
single instance where a taxpayer was
treated less favourably than Apple,” Paul
Gallagher, a lawyer for Ireland, told the
judges in the court hearings last week.
Luxembourg, which has so far faced
the brunt of the EU’s decisions, has attacked the “arbitrary nature” of the commission’s approach which creates “complete legal uncertainty,” their lawyer
Denis Waelbroeck said in a court hearing
about Fiat’s case last year. Ireland and
Luxembourg have supported each other
in their respective appeals.
The nation was among the first EU
countries to be singled out in 2014 over
its tax practices, when a group of investigative reporters published thousands of
pages from secret arrangements between
the tiny nation and companies including
Walt Disney Co, Microsoft Corp’s Skype
and PepsiCo.
The so-called LuxLeaks publications
have been used by EU regulators in their
deliberations and EU officials further expanded their probes by seeking new information to find more “outliers” among
these tax deals.
Still, in a first in the EU’s continued
crackdown on “outliers” among these
otherwise legal tax rulings, the commission last year closed its probe into the fiscal deal between McDonald’s Corp and
Luxembourg, finding there was no violation of state aid laws.
In the country with the longest
history of negative interest rates,
a commercial bank just decided
to share the cost of the monetary
policy with the largest group of
retail clients yet.
Jyske Bank, which recently
made headlines by offering the
first 10-year mortgage at negative
coupons, said it had no choice
but to drag more retail depositors
into its negative-rate plight after
Denmark’s central bank cut its
policy rate to minus 0.75%. Analysts were quick to point out that
the development will help central
bank policy feed through to the
broader economy.
“Due to the rate reduction last
week, we are losing even more
money,” Jyske chief executive
officer Anders Dam said in a statement. “And we need to share that
bill with some of our clients.”
Denmark’s second-largest
listed lender said on Friday it will
impose a rate of minus 0.75% on
all private clients with 750,000
kroner ($111,000) or more. Jyske
had already planned to pass on
the cost of negative rates to some
of its richest retail depositors, but
had so far limited the client group
it exposed to the policy to people
with at least 7.5mn kroner.
Shares in Jyske closed more
than 5% higher marking their best
performance since December
2017, as investors calculated the
impact that the new policy will
have on the bank’s net interest
income.
Jyske has “set the ball rolling,”
said Per Hansen, an investment
economist at broker Nordnet. The
bank is “taking one for the team
and the industry, but also for
itself.” “Everyone’s been talking”
about taking such a step, Hansen
said. “But no one has dared to
take the cost of being a pioneer.”
Spar Nord Bank plans to update the market on its policy “by
the end of next week,” according
to spokesman Leif Lind Simonsen.
The bank’s “considerations
regarding negative interest rates
are of course affected by the fact
that several of our competitors
have taken the initiative” with
private deposits, he said.
A Danske Bank spokesman
said, “We cannot comment on
competitors’ prices and have
nothing new to add on the matter.” The bank has previously
promised to protect retail depositors from negative rates.
Nordea Bank spokeswoman
Tenna Schoer said the Danish
unit is “monitoring the situation
closely.” The bank’s CEO Frank
Vang-Jensen has previously said
Nordea can’t rule out imposing
negative rates on retail depositors.
Sydbank, which has already
said it will impose negative rates
on retail depositors with over
7.5mn kroner, is monitoring the
situation. “We have taken note
of developments in the market
and have seen that interest rates
have fallen further,” said Jan
Svarre, deputy CEO at the bank.
“We’ll investigate our options and
where the limit should be, and
then we will return and notify our
customers directly.”
Rasmus Gudum, a senior
economist at Handelsbanken in
Copenhagen, said the decision to
pass negative rates on to more
retail clients “will enhance the
transmission mechanism” of monetary policy.
“But it’s going to be very
interesting to see what the de fact
effect on the economy will be. I
think we’ll see some kind of effect
on consumption and investment.”
David Powell, a Bloomberg
economist, also weighed in:
“When we look at the euro as a
whole, we know that in the aggregate, interest rates have not
gone negative for either corporate clients or individual clients.
And that is the point of negative
rates policy – that it gets passed
on to the real economy in order
to encourage businesses and
consumers to go out and spend
money and save less.”
Denmark’s biggest lender,
Danske, is unlikely to have the
freedom to follow Jyske, according to Hansen at Nordnet.
He says that imposing such a
policy is politically difficult for
Danske, given its recent history
of financial scandals. The bank is
being investigated for a $220bn
money-laundering affair, and has
been reported to the police for
a separate case in which it overcharged retail investors.
Dam at Jyske has said he expects Denmark to have negative
rates for another eight years, after
already enduring the policy for
roughly seven. Denmark, which
uses monetary policy to defend
the krone’s peg to the euro,
was the first country to push its
benchmark rate below zero back
in mid-2012.
A number of European banks
have already opted to drag some
retail clients into the fray, but
have limited negative rates to
only the very wealthiest of customers. Credit Suisse Group AG
plans to impose charges for Swiss
franc deposits after imposing
a 0.4% fee on euro accounts of
more than €1mn ($1.1mn), according to a person with knowledge
of the matter. Swiss rival UBS
Group AG has already said it
will introduce negative rates for
clients holding more than 2mn
francs ($2mn).
Dam, the Jyske CEO, said
there’s no guarantee that negative retail rates won’t become
more entrenched.
UK firms stampede into bond market
Bloomberg
London
U
K companies are rushing into
Europe’s bond market, taking advantage of what may
be a last chance to lock in low-cost
financing before renewed Brexit upheavals.
Last week was the busiest for
sales in five years, according to data
compiled by Bloomberg, and Metro
Bank Plc joined the rush yesterday.
Royal Mail Plc, WM Morrison Supermarkets Plc and Lloyds Bank
Corporate Markets are also readying
potential deals, following sales last
week by borrowers including Barclays Plc, GlaxoSmithKline Plc and
broadcaster ITV Plc.
UK issuers may have a potentially short window to get deals
done, as earnings blackouts and the
countdown to the country’s October 31 departure from the European Union may hinder deals next
month, particularly if a no-deal
Brexit seems likely.
In the meantime, optimism that
the country will reach an agreement
or delay its departure is boosting the
pound and helping to hold borrowing costs near record lows in both
euros and sterling.
“The whole Brexit situation remains in a state of flux,” said Andrey
Kuznetsov, senior credit portfolio
manager at Hermes Fund Managers Ltd “In this type of situation, it
is normal for issuers to tap the market in periods of calm and improved
sentiment.”
Gains for the pound this month
will also likely boost investor de-
mand for sterling assets especially
amid Europe’s low yields, he said.
UK companies sold €7.6bn ($8.3bn)
of bonds in euros and sterling last
week, according to data compiled by
Bloomberg.
Barclays demonstrated the recent pricing advantage for issuers,
as the bank sold a £1bn ($1.2bn) AT1
at 6.375% last week after more than
£7.5bn of orders. That compares
with 7.125% for a comparable note
in June.
Sterling borrowing costs are
about 2.1%, compared with above
3% at the start of the year, according
to Bloomberg Barclays index data.
Euro investment-grade yields are
below 0.5%, the data show.
Metro Bank is offering sterling
senior non-preferred bonds. Royal
Mail, the nation’s postal service,
will start a roadshow on Wednesday ahead of a bond sale in either
pounds or euros.
“We are taking the opportunity
to access finance at the current
low rates,” a spokesperson for the
London-based company said in an
emailed reply to Bloomberg News
questions. Yields in both euros and
sterling have crept up this month,
after fairly consistent declines this
year, adding extra urgency for any
borrower considering a sale. Europe’s traditionally busy September
sales surpassed €100bn at a record
pace this year.
Brexit risks also remain for borrowers and issuers. Uncertainty
about the country’s future ties to
the EU contributed to the collapse
of tour operator Thomas Cook
Group Plc.
UK non-financial companies have
also only sold about $60bn pounds
of bonds worldwide this year, the
lowest tally since 2016, according to
Bloomberg data. Domestic sterling
sales are the lowest since 2015, the
data show.
Domestic-focused
companies
have taken advantage of pauses in
Brexit upheavals to get deals done
this year. Retailers Next Plc, Tesco
Plc and Co-Operative Group Ltd all
sold pound bonds in a three-week
spell ending in May.
Marks & Spencer Group Plc followed in early July.
Morrison, the country’s fourthlargest supermarket chain, plans
to offer a sterling-denominated
benchmark twelve-year bond following meetings in London yesterday. The company didn’t reply to an
e-mailed request for comment on
the bond sale.
Across Europe, “it makes sense
for companies to take advantage of
the current window to issue bonds,
said Ryan Staszewski, senior portfolio manager, investment grade
credit at Columbia Threadneedle
Investments.
Gulf Times
Tuesday, September 24, 2019
15
BUSINESS
Deutsche Bank shifts its prime
brokerage to BNP Paribas
Bloomberg
Frankfurt
D
eutsche Bank AG finalised a deal
transferring its business with
hedge fund clients to BNP Paribas as part of the German lender’s historic retreat from investment banking.
About 1,000 Deutsche Bank employees will move to the French rival
through 2021, according to people with
knowledge of the matter. Ashley Wilson, one of two executives at the German bank overseeing the disposal of
unwanted assets, will head the business
during this period and may eventually
leave to run the combined unit at BNP,
the people said, asking not to be identified as the matter is private.
The volume of assets BNP will ultimately add remains uncertain because Deutsche Bank’s client balances
slumped by about half to $80bn since it
announced its intention to transfer the
business.
The lenders expect clients to come
back now that there’s more certainty,
the people said. But analysts at Citigroup Inc led by Andrew Coombs questioned whether there will be anything
left to transfer by the time the deal is
closed.
The two firms had agreed on the
move in principle in early July, as Deutsche Bank chief executive officer Christian Sewing retreats from equities trading – which houses the prime business
– in the bank’s biggest restructuring in
decades.
But finalising the accord has been
complicated by the client defections.
For Sewing’s counterpart at BNP, JeanLaurent Bonnafe, the deal could bring
the scale needed to compete with the
bigger players.
Shares of both lenders fell yesterday along with the broader market. Deutsche Bank declined 3.5% in
Frankfurt, curbing gains this year to
1.3%. BNP lost 2.8% in Paris and is up
11% in 2019.
The agreement, which is subject to
regulatory approval, could vault BNP
into the global top 4 of prime brokerages over the next 12 months, reaching
$250bn to $300bn in client balances
eventually, according to the people.
The Deutsche Bank headquarters in Frankfurt. The German bank finalised a deal transferring its business with hedge fund clients to BNP Paribas as part of the lender’s
historic retreat from investment banking.
Deutsche Bank will continue to manage
the platform until clients can be passed
over, the two banks said yesterday.
“Now that the deal has signed, we
believe we have the basis to regain
and expand on the business,” Deutsche Bank chief operating officer Frank
Kuhnke said in a telephone interview.
The deal “provides tangible real benefits for our customers and gives our
staff a way forward.”
The agreement comes just a few days
after Deutsche Bank sold its first portfolio of equity derivatives, another key
step to exit equities trading and get the
associated assets off its balance sheet.
The bank has said it will provide more
details when it publishes third-quarter
results on October 30.
When the two firms first discussed
the deal, Deutsche Bank’s prime brokerage business was set to move about
€150bn ($165bn) of balances, people
familiar with the matter have said. Yet
clients put off by the uncertainty of the
deal headed for the exit, pulling about
$1bn of funds per day, the people said
at the time.
Prime-brokerage divisions cater
specifically to hedge funds, lending
them cash and securities and executing
their trades, and the relationships can
be vital for investment banks.
The prime business generated about
$18.3bn in fees across the industry in
2018, about the same as revenue from
trading corporate debt and currencies
combined, data from Coalition Development Ltd show.
The deal will give BNP the technol-
ogy it needs to improve trading with
asset managers and hedge funds specialising in quantitative strategies, Olivier Osty, global head of markets at the
Paris-based bank, said in an interview.
Executives at the French lender had
been planning to develop a platform
themselves but had estimated it would
take three to four years, he said.
“The electronic platform is dedicated to managing all the big quant funds
that we’re missing in our franchise,”
Osty said. “So this is the opportunity
to bring to BNP Paribas a product that
was missing and that could allow us to
grow.”
Quantitative hedge funds, such as
Winton Capital Management and AQR
Capital Management, use computer
algorithms to evaluate risk, pricing
and timing in financial markets. Investors, fed up with years of lacklustre returns by other kinds of managers, have
flocked to the industry.
Assets under management at socalled quants have surged 88% since
2010 to $951bn, compared with a 53%
gain for other funds, according to data
from Hedge Fund Research.
Deutsche Bank, which became a
force on Wall Street in the wake of the
financial crisis, has struggled to keep
hedge-fund clients in recent years as it
lurched from one problem to another.
US rivals JPMorgan Chase & Co,
Morgan Stanley and Goldman Sachs
Group Inc are the top three firms in the
business, while Deutsche Bank wasn’t
among the top seven prime brokers in
2018, Coalition data show.
Citi’s top banker in Miami has become a coveted CEO prospect
Bloomberg
New York
J
ane Fraser is not exactly a big name
on Wall Street. Based in Miami, she
runs Citigroup’s operations across
Latin America, a region that generates
less than 15% of the bank’s revenue.
And yet, after chief executive officers stepped down at two of the world’s
biggest banks in recent months – first,
at Wells Fargo & Co in March and then
HSBC Holdings Plc last month – her
name has consistently popped up
among potential candidates to run both
companies. That talk adds to long-held
speculation in some corners of Citigroup that Fraser, an executive with a
rare combination of experience in
strategy as well as consumer and international banking, is a potential successor to CEO Mike Corbat.
It all feeds into a debate over what’s
next for a rising star at the third-largest
US lender. After all, HSBC’s recruiters
were in contact with her in a previous
CEO hunt just two years ago, according
to people close to that firm.
External advisers to banks on succession, speaking on the condition they
not be identified discussing the company, argue competitors’ interest in
Fraser, 52, raises the risk that Citigroup
will lose her if she doesn’t continue to
advance.
Yet insiders at Citigroup and analysts covering the firm see little reason
to worry. They expect Corbat to stay on
for several more years, and there’s no
sign Fraser is interested in leaving, giving the board little reason to intervene.
The buzz is also especially notable
for what it says about the potential for a
woman to finally reach the top of a major bank. The industry is under mounting pressure to improve diversity of its
leadership. In April, white men running
seven of the largest US lenders were
grilled at a congressional hearing about
why their companies have never put a
woman in charge. Several, including
Corbat, said they can imagine one succeeding them.
Just last week, Royal Bank of Scotland Group Plc promoted Alison Rose to
CEO, making her the first woman to run
one of Britain’s big four lenders. Yet at
KeyCorp, the largest US regional bank
run by a woman, CEO Beth Mooney announced plans to retire.
Fraser doesn’t actually want so much
attention on her career, according to
colleagues at Citigroup. She didn’t respond to messages seeking comment.
A company spokeswoman, Jennifer
Lowney, declined to comment or make
executives available for interviews.
Indeed, Fraser has downplayed her
prospects for rising to the top. In an
interview with CNN last year, she said
she never had the ambition to be CEO
of Citigroup or any other Wall Street
firm, acknowledging that her current
role comes with a lot of the perks of
running a large bank without the harsh
limelight.
“I look forward to seeing a woman
being the first CEO of a Wall Street
firm,” Fraser said. “Whoever that may
be.” Harvard and McKinsey Born in
Scotland, Fraser earned degrees at
Cambridge University and Harvard
Business School, and then spent a decade at McKinsey & Co advising financial firms.
She joined Citigroup’s investment
bank in 2004, and in three years was promoted to be global head of strategy for
the company, ultimately working alongside then-CEO Vikram Pandit. As the
bank teetered in the financial crisis, the
two cleaved entire businesses - elimi-
nating nearly 100,000 jobs.Citigroup
soon threw her into other problems: She
took over its private bank in 2009 and
salvaged parts of the unit that had been
tagged for disposal. Next came the mortgage unit, where she had to address the
bank’s mishandling of home loans. That
gave her regular face time with regulators and board members. At one point,
she accompanied directors on a field trip
to the company’s mortgage operations in
O’Fallon, Missouri, where they met rankand-file employees, according to a person who attended the gathering.
Head hunters hired to find talent for
Citigroup’s consumer units told potential candidates as early as 2014 that Fraser was being groomed to be the bank’s
next CEO. That year she became head of
its US consumer and commercial bank,
positioning her to potentially succeed
her boss, Manuel Medina-Mora, the
global head of consumer banking.
Then came a pivot: Medina-Mora’s
job went to Stephen Bird, who’s also
long been seen as a potential CEO. He
was reported to be on a short list of candidates to take the post at Royal Bank of
Scotland in 2013, as well as contacted
by representatives for Standard Chartered Plc in 2015. Some in the industry
suggest he, too, is qualified to run Wells
Fargo or HSBC. Spokesmen for both of
those banks declined to comment.
While Fraser was passed over for
Medina-Mora’s job, Corbat simultaneously opened another door. He moved
her to lead the bank’s sprawling operations in Latin America, parts of which
were struggling, offering Fraser another
chance to prove herself.
Latam Backlash The transition to
that role was tough. Fraser has recounted how the local press initially attacked
her for being a foreigner and a woman.
“This was seen as a bit of an insult,”
she explained to CNN. “It’s not intuitively obvious to have a woman from
Scotland running Latin America for
an American bank.” For her first town
hall with the region’s employees, she
spoke in fluent Spanish, which she had
learned on a trading floor in Madrid.
The effort impressed her new staff.
In 2016, she unveiled a new name for
the firm’s retail banking operations in
Mexico – Citibanamex – finally giving
it a logo that incorporated Citigroup’s
brand. It had been 15 years since Citigroup had acquired Banamex, but it was
Fraser who finally coaxed its workforce
to see it as an extension of the US bank.
Coffee traders
‘dare not sell’
as Vietnam
farmers hoard
supplies
Bloomberg
Ho Chi Minh City
Coffee exports from Vietnam,
the world’s top robusta grower,
are set to keep falling as inventories dwindle and slumping
prices lead farmers to hoard
supplies.
Local growers and middlemen probably held onto 5% of
the crop, or 85,000 tonnes, as
of mid-September, according
to the median estimate of eight
traders surveyed by Bloomberg.
Shipments are likely to continue
falling through next month, said
Le Tien Hung, chief executive officer at Vietnam’s No 2
exporter Simexco Daklak.
Farmers have been holding
onto stocks to avoid selling at
a time when prices are trading
near a nine-year low. Futures for
robusta have slumped about
15% this year due to abundant
supplies. Investors are expecting it to get worse, with hedge
funds boosting bearish bets on
prices to the most on record
in data going back to October
2011.
“We dare not to sell more
at this point as we may not
gather enough supplies,” said
Simexco’s Hung. “Several traders have wrestled to fulfil their
October contracts.”
Hung expects Vietnam to
ship no more than 120,000
tonnes in September and October. That would be the lowest
for the two months since 2011,
when exports totalled about
60,000 tonnes, according
to customs data. Meanwhile,
Simexco itself will see shipments fall to a low of about
85,000 tonnes in the season
ending this month, down from
an average 100,000 tonnes,
Hung said.
Exporters have already seen
shipments fall this year, with
sales last month dwindling to
about 114,000 tonnes, the lowest for August since 2017, customs data showed. Year-to-date
exports through August were
down 12% from a year earlier.
The amount of coffee produced in Vietnam had also been
on the decline, with the ongoing
lower prices encouraging farmers to switch to more profitable
crops. Farmers probably reaped
1.71mn tonnes of green beans in
the season that ends September 30, according to the median
estimate of 10 traders in the
survey, or 90,000 tonnes less
than in the previous crop.
The slump in futures in
London has rippled through
to Vietnam too, with robusta
prices in the country’s coffee
belt of Dak Lak province trading at 33,100 dong ($1.43) a
kilogram on Friday, down about
12% from last year’s high of
37,800 dong.
“Local traders currently have
to offer a $200 premium over
London prices,” said Do Ha
Nam, chairman of top shipper
Intimex Group and head of
Vietnam’s top 20 coffee exporters club.
“Farmers will most likely keep
their remaining stocks if local
prices remain unprofitable.”
Stocks at warehouses nationwide were 260,000 tonnes as
of end-August versus 305,000
tonnes a year earlier, according
to the survey.
Carry-over stocks are
probably at 150,000 tonnes
compared with 262,000 tonnes
a year ago.
Pressure mounts on WeWork CEO as board mulls coup
Bloomberg
San Francisco
Adam Neumann has said his mission as
WeWork’s chief executive is to elevate
the world’s consciousness. Members
of his board are now discussing a plan
to elevate someone else to run the
company and salvage its troubled initial
public offering.
The board plans to meet, people
familiar with the situation said. There,
some directors are expected to raise
the prospect of Neumann stepping
down as CEO and becoming nonexecutive chairman, said the people,
who asked not to be identified because
the discussions are private.
With the drama of a palace coup,
Neumann has found himself at odds
with WeWork’s largest investor,
SoftBank Group Corp. Masayoshi Son,
founder of the Japanese conglomerate,
is among those pushing for Neumann
to resign, a person familiar with
the situation said, after widespread
criticisms of the company’s governance
and spending. The choice is ultimately
Neumann’s, though, as the 40-yearold CEO maintains effective control of
management decisions.
The boardroom infighting not only
imperils the IPO but also a $6bn
loan contingent on the deal. The
unprofitable company must complete a
successful stock offering before the end
of the year to keep access to the credit
facility.
WeWork conceded last week that its
plans for going public would have to
wait after talks with potential investors
lowered expectations for the company’s
planned IPO valuation to $15bn or less,
after a previous valuation of $47bn.
Among the concerns they voiced:
Neumann’s controversial style and
control of the company.
“It’s Uber-scale mess,” said Kellie
McElhaney, a professor at the University
Neumann: In deep trouble.
of California Berkeley’s Haas School of
Business, who blames both the board
and Neumann for not learning from
that company’s earlier mistakes.
“He’s really taken a first-mover
advantage that WeWork had in the
space and blown it in a big way.”
The WeWork story is beginning to
fit squarely into the era of unicorn
capitalism: A young and charismatic
entrepreneur disrupts an industry,
runs afoul of elders and investors,
sometimes winning but sometimes
failing to live up to their own hype.
Institutions including Benchmark
Capital, one of WeWork’s investors,
pushed out Uber Technologies’ Travis
Kalanick before the ride-hailing
company went public.
Still, even if some directors want to oust
Neumann, it won’t be easy given the
company’s governance structure. Based
on the number of shares he controls
and their unique super-voting rights,
Neumann has the power to get rid of
the entire board on his own, according
to the prospectus.
Softbank’s intervention in the WeWork
saga comes as the biggest backers of
the company’s gargantuan Vision Fund
are reconsidering how much to commit
to its next investment vehicle.
Saudi Arabia’s Public Investment
Fund, which contributed $45bn to
the $100bn Vision Fund, is now only
planning to reinvest profits from that
vehicle into its successor, people
familiar said last week. Abu Dhabi’s
Mubadala Investment Co, which
invested $15bn, is considering paring its
future commitment to below $10bn, the
people said.
The news of Neumann’s potential
ouster comes after a whirlwind week of
uncertainty for WeWork.
Banks that provided a $500mn credit
line to Neumann are looking to revise
the terms as the company’s struggle
to go public casts doubt on the value
of his collateral, people briefed on
the discussions said last week. It’s not
clear what changes they may seek,
or what right they may have to make
demands.
On Friday, Wendy Silverstein, a big
name in New York commercial real
estate who joined WeWork last year as
head of its property investment arm,
left the company. She’s spending time
caring for her elderly parents.
Even the president of the Federal
Reserve Bank of Boston was adding to
the angst. In a speech Friday in New
York, Eric Rosengren warned that the
proliferation of co-working spaces
might pose new risks to financial
stability.
“I’ve never seen a company of this size
and scale generate such a consensus
of negative opinion in my long, long life
of following IPOs,” said Len Sherman,
a Columbia Business School adjunct
professor whose 30-year business
career included time as a senior partner
at consulting firm Accenture Plc.
“There is no box that they haven’t
ticked when you think of all the reasons
that you might be very concerned - like
blaring red lights. Like, oh my gosh,
caution, danger, danger.”
Tuesday, September 24, 2019
BUSINESS
GULF TIMES
Draghi’s highway to inflation goal risks ending in taper tantrum
Bloomberg
Frankfurt
T
he European Central Bank’s new
message on how long it’ll keep
interest rates low is supportive
for the economy, but could prove risky
for markets.
President Mario Draghi raised the
bar for any future policy tightening with a pledge that a new round
of quantitative easing will end only
“shortly before” key interest rates rise.
That commitment was meant to reassure investors that the stimulus will
continue until inflation is solidly back
in line with the goal of just under 2%.
Yet the flip side is that when price
growth is looking robust, markets face
the prospect of an end to bond-buying
and a rate increase coming almost instantly. While such a scenario might be
years away from happening, the ECB’s
current guidance could mean the
tightening happens too quickly.
“Is this something that’s going to
come back to bite them further down
the line? Potentially,” said Jefferies International economist Marchel Alexandrovich. “They’re trying to deal with
the problem that’s immediate.”
In a contentious decision at Draghi’s
penultimate policy meeting, the ECB
decided to restart asset purchases, cut
interest rates to minus 0.5% and ease
the terms of its program of long-term
loans. The Governing Council also
dropped its previous guidance that
rates will stay unchanged or lower at
least until mid-2020.
Instead it said both rates and QE will
be tied exclusively to the progress of
inflation.
The ECB has been undershooting
its goal for price growth for most of
the last decade and its recent forecasts
don’t see it returning to the objective
until at least 2021.
The promise of almost unlimited
stimulus makes sense until you have to
remove it.
In 2013, the US Federal Reserve’s
signal that it was ready to reduce the
pace of its purchases caused the socalled taper tantrum, battering markets across the globe as investors panicked over the impending squeeze on
liquidity.
As the eurozone eventually moves
closer toward its own inflation target,
the ECB will also face the dilemma that
the very fact that it’s reaching the goal
could trigger a negative reaction from
the markets.
“The risk of a QE taper tantrum has
gone up due to the link to the onset
of the rate hiking cycle,” said Martin
van Vliet, a rates strategist at Robeco.
“Nothing has been set in stone.
The ECB has said they expected to
continue net QE until shortly before
they start raising rates. Expectations
can change.” The central bank’s own
inflation projections currently see
prices rising at an average pace of 1.5%
in 2021, still clearly below the target.
Chief economist Philip Lane has said
he is “not going to disagree” with the
estimate that the latest stimulus package should push up inflation by 20 or
30 basis points.
“This was meant as a dovish reassurance: they won’t stop asset purchases until they are so sure about
inflation being back at target that they
could hike,” said Antoine Bouvet, a
senior rates strategist at ING Group
NV. “In reality, it is questionable they
will manage to do both in short order
Hundreds of thousands
stranded as travel firm
Thomas Cook collapses
Reuters
London
T
he world’s oldest travel firm Thomas Cook collapsed yesterday,
stranding hundreds of thousands
of holidaymakers around the globe and
sparking the largest peacetime repatriation effort in British history.
British Prime Minister Boris Johnson
pledged to get stranded British travellers
home and revealed that the government
had rejected a request from Thomas Cook
for a bailout of about £150mn ($187.1mn)
because doing so would have set up a
“moral hazard”.
“It is a very difficult situation and obviously our thoughts are very much with the
customers of Thomas Cook, the holiday
makers who may now face difficulties getting home we will do our level best to get
them home,” he told reporters on a plane
as he headed to the UN General Assembly
in New York.
The liquidation marks the end of one of
Britain’s oldest companies that started life
in 1841 running local rail excursions before it survived two world wars to pioneer
package holidays and mass tourism.
The firm ran hotels, resorts and airlines
for 19mn people a year in 16 countries.
It currently has 600,000 people
abroad, forcing governments and insurance companies to coordinate a huge rescue operation.
Chief executive Peter Fankhauser said
it was a matter of profound regret that the
company had gone out of business after it
failed to secure a rescue package from its
lenders in frantic talks that went through
the weekend.
The UK’s Civil Aviation Authority
(CAA) said Thomas Cook had ceased trading and the regulator and government had
a fleet of planes ready to start bringing
home the more than 150,000 British customers over the next two weeks.
“I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have
supported us for many years,” Fankhauser
said in a statement.
“It is a matter of profound regret to me
and the rest of the board that we were not
successful.”
Pictures posted on social media showed
Thomas Cook planes being diverted away
from the normal airport stands.
Some were left deserted once passengers and staff had departed. Employees
Passengers are seen at Thomas Cook check-in points at Mallorca Airport. The world’s oldest travel firm collapsed yesterday, stranding
hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.
posted pictures of themselves walking
from their last flights.
“Love my job so much, don’t want it to
end,” Kia Dawn Hayward, a member of the
company’s cabin crew, said on Twitter.
The government and aviation regulator
said that due to the scale of the situation
some disruption was inevitable.
All the company’s flights are cancelled.
Customers were told not to travel to airports until they have been told via a special website — thomascook.caa.co.uk —
that they were due on a return flight that
was being organised by the government.
The British regulator is also contacting
hotels hosting Thomas Cook customers to
tell them that they will be paid by the government, through an insurance scheme.
That was after some were briefly held in
a hotel in Tunisia when staff asked for additional payments to be made.
Gary Seale, a guest at the Orangers
Hotel in Hammamet, Tunisia, posted
on Facebook on Saturday that “security
have refused to let us out of the hotel and
barricaded us in”. He later posted that he
had reached the airport and flew home on
Sunday.
British Transport Minister Grant
Shapps said the government had managed
to “acquire planes from across the world”
to get people home, and call centres had
been established to answer travellers’
queries.
In Germany, a major customer market
for Thomas Cook, insurance companies
will coordinate the response.
The corporate collapse has the potential to spark chaotic scenes around the
world, with holidaymakers stuck in hotels
that have not been paid in locations as far
afield as Goa, Gambia and Greece.
In the longer term, it could also hit the
tourism sectors in the company’s biggest
destinations, such as Spain and Turkey,
leave fuel suppliers out of pocket and
force the closure of its hundreds of travel
agents across British high streets.
Thomas Cook has been brought low by
a £1.7bn ($2.1bn) debt pile, online competition, a changing travel market and geopolitical events that can upend its summer season.
Last year’s European heatwave also hit
the company hard as customers put off
last-minute bookings.
The group had seemed set for a rescue
when it agreed the key terms of a £900mn
recapitalisation plan in a deal with its biggest shareholder, China’s Fosun, and the
travel firm’s banks in August.
But in finalising the terms of the deal,
the company was hit with a demand for
another facility of £200mn in underwritten funds by its banks.
Johnson said Thomas Cook’s collapse
raised questions over whether directors of
travel companies were “properly incentivised” to avoid bankruptcy.
“We need to look at ways in which tour
operators one way or another can protect themselves from such bankruptcies
in future and clearly the systems that we
have in place to make sure (they) don’t in
the end come to the taxpayer for help,” he
said.
Fosun said it was disappointed by the
company’s failure to strike a deal with its
banks and bondholders, and noted it had
remained supportive throughout.
The recapitalisation plan was “no longer applicable given the compulsory liquidation” of Thomas Cook, Fosun said in a
statement.
because of the potential for an adverse
market reaction.” For Gilles Moec,
chief economist at Axa SA in London,
it would be better for the ECB to have
the freedom to use both instruments
– rates and quantitative easing – separately.
It’s possible, for example, that policymakers may want to stop buying
bonds because of the improvements in
the economy but still keep rates low to
prevent the currency strengthening.
“The market isn’t fixated on this
right now, but it will end up being a
problem so my guess is they will have
to change their forward guidance at
one point,” Moec said. “I don’t think
it’s their last word.”
The stocks winning
and losing from
Thomas Cook’s demise
Bloomberg
London
The collapse of UK tour
operator Thomas Cook Group
Plc will be to the detriment of
some stocks, but the benefit
of many others.
Shares of rival TUI AG surged
as much as 11% in London,
while online peer On The
Beach Group Plc gained as
much as 6.3%, boosted by the
prospect of reduced industry
capacity.
Budget airlines also rose,
though one decliner was
Webjet, the Australian travel
group which has a hotel
sourcing deal with Thomas
Cook.
“The effects will be felt across
the sector, not all bad,”
Neil Wilson, chief market
analyst at Markets.com, said
in e-mailed commentary.
“Airlines are firmer today as
they should feel the benefit
from the abrupt loss of shorthaul capacity.”
Bernstein analyst Richard
Clarke sees the potential for
several other tour operators
collapsing, though predicts
TUI will be among those
that benefit from the shakeout.
Here’s a round-up of stocks
affected by Thomas Cook’s
collapse:
Tour operators: TUI is the
most significant beneficiary
among tour operators,
according to Citi analyst
James Ainley.
TUI will be the only tour firm
left with “a significant captive
retail store base in the UK and
the only major fully integrated
European tour operator,”
Ainley writes in a note.
TUI has an estimated market
share of about 19% in the UK
compared with about 8% for
Thomas Cook.
On The Beach is in a strong
position to gain “significant
market share,” according
to Liberum analyst Anna
Barnfather. Liberum sees
potential for On The Beach to
increase profit by GBP10mGBP15m over the medium
term.
On The Beach said it’s
assisting Thomas Cook
customers who are currently
in resort and expects a one-off
cost that will be booked in the
current financial year.
Australian travel group
Webjet said Thomas Cook’s
liquidation will impact its
FY20 results, with Ebitda
being reduced by up to about
A$7m. Webjet previously
indicated it expected to earn
A$150m to A$200m in total
transactional value from
Thomas Cook in FY20.
Airlines: The removal of
Thomas Cook’s capacity
should be positive for airlines’
pricing over the upcoming
winter season, according to
Liberum analyst Gerald Khoo.
EasyJet shares gain as much
as 6.6% in London, while
Ryanair rises as much as 3.8%
in Dublin.
The budget airlines were the
biggest beneficiaries when
UK leisure carrier Monarch
collapsed two years ago,
Khoo says.
Thomas Cook’s exit suggests
a “more rational” winter
ahead, while key is how
Thomas Cook’s slots and
capacity will be recycled back
into market, RBC analysts led
by Damian Brewer write in a
note.
Thomas Cook collapse
could trigger a reaction
similar to that after Air
Berlin’s bankruptcy in
2017, when ticket prices
rose significantly in some
cases and Lufthansa shares
surged, analyst Guido
Hoymann writes in a note.
Lufthansa shares advance
as much as 1.8% in
Frankfurt. Leeds, Englandbased Dart Group generated
94% of its FY19 revenue
from its leisure airline,
according to data compiled
by Bloomberg.
Chinese conglomerate Fosun
International is Thomas
Cook’s biggest shareholder
and had led a bailout plan.
Shares of the company’s
Fosun Tourism unit fell 4.7% in
Hong Kong.
Fosun Tourism said it’s
disappointed that the UK
company hadn’t been able
to find a viable solution.
“For certain, Fosun wasn’t
prepared to pay a penny
more,” said Wilson of Markets.
com.
The Turkish government is
preparing a loan-support
package for Turkish
businesses which might
be harmed from Thomas
Cook’s collapse, according
to a Twitter post by
Turkey’s Culture & Tourism
Ministry.
Thomas Cook UK currently
has 21,033 guests
accommodated in Turkey.
Goldman Sachs is taking another stab at serving Europe’s rich
Bloomberg
London
G
oldman Sachs Group is making
another go at a business that
not so long ago fell out of favour
with US banks: Catering to the super
wealthy, from Switzerland.
The US investment bank plans over
the next three years to hire more than
30 wealth advisers to cater to clients
in the country, as well as in Germany
and the UK. In total, the bank wants
to add 100 client-facing staff from
250 currently.
They would serve individuals with
disposable assets of at least $30mn,
according to Stefan Bollinger, who
co-heads Goldman Sachs’s wealth
management operation in Europe with
Chris French.
The plans follow Switzerland’s
move years ago to abandon its notorious banking-secrecy laws on pressure
from US and European authorities.
Banks had to pay billions in fines for
helping foreigners dodge taxes in their
home countries.
Since then, Switzerland’s wealth industry revamped its image by stepping
up compliance procedures, signing on
to global tax-information agreements
and abandoning undeclared assets.
The country is still the biggest centre for offshore wealth in the world,
even after many US banks left the
country and smaller firms disappeared
due to eroding profitability. Goldman’s
growth plans in Europe are focused
on Switzerland, Germany and the UK.
Goldman never left Switzerland and
has been serving wealth clients there
since the 70’s.
Private-equity firms’ hunger to deploy cash for deals creates liquidity
events for company owners - money
they need to invest. At the same time,
negative interest rates force investors
to think harder about where to put
their assets, and they need advice.
The proposal echoes what Credit
Suisse Group AG and UBS Group AG
have been doing in recent years: Using
The new European headquarters of Goldman Sachs Group in London. The US
investment bank plans over the next three years to hire more than 30 wealth
advisers to cater to clients in the country, as well as in Germany and the UK.
their investment-banking know-how
to provide a broader offering to wealthy
clients, who often need advice on both
their business and private assets. On
the downside, such customers tend to
squeeze margins because they’re very
price-sensitive to the choices offered
by different banks.
“If you look at ultra-high-net-worth
individuals, they often want services in
addition to traditional wealth management,” Bollinger said.
“With QE, the Japanification of Europe – or low to negative rates for longer – you will see clients needing more
advice how to go into private markets,
manage risks and sell their companies
given demand from private equity.”
The plans to expand the operations
in Switzerland, the UK and Germany
are part of a broader push by Goldman into more stable business areas.
The bank plans to hire roughly 200
wealth advisers over the next three
years globally.
Goldman recently reopened its office in Geneva and is in the process of
hiring and staffing the office there.
Apart from the hiring, Goldman plans
to boost its lending offering to wealth
clients – which can be often asset rich
but cash poor – and wants to expand
its family office coverage.
Bollinger said that the bank’s EMEA
business recorded inflows each month
this year.
Wealth advisers or relationship
managers establish relationships with
the wealth holders. It’s common practice for banks to poach teams for whole
regions or specific segments such as
entrepreneurs.
Once hired, relationship managers
need six to 12 months to increase their
assets under management. However,
clients don’t always follow their relationship managers as banks offer discounts to retain them.
Goldman currently has just 1% of
the market for ultra-high-net-worth
individuals in Europe – a $7tn business, Bollinger said.
To grow from here he plans to hire
teams from other banks.
Bollinger said he would also screen
acquisition opportunities in Europe,
but any target would have to be exclusively holding wealth of ultra-highnet-worth clients.
Goldman earlier this year agreed to
buy wealth manager United Capital for
$750mn, one of the investment bank’s
biggest purchases in recent years. The
company manages $250bn.