View
3
Download
0
Category
Preview:
Citation preview
Friday, April 28, 2017Sha’baan 2, 1438 AH
BUSINESSGULF TIMES
ECB keeps its money taps open
United to pay oversold fl iers up to $10,000
BEST RUN | Page 12DRAGGING ROW | Page 10
Opec wants further drop in oil stocks, working for consensusOil stocks need to move closer to 5-year average: Barkindo; Saudi, Azeri ministers agree to support extending oil cut; Iraq says will go with consensus at May Opec meeting; deal likely to be extended beyond June: Angola oil minister
ReutersParis
Opec wants oil inventories to decline further and is work-ing to ensure a policy-setting
meeting in May reaches consensus, the group’s secretary-general said yesterday in comments pointing to an extension of a global supply cut.
The Organisation of the Petrole-um Exporting Countries, Russia and other producers originally agreed to curb production by 1.8mn bpd for six months from January 1 to support the market.
Oil prices have gained support from the pact but a supply glut has been slow to shift, limiting their in-crease.
As a result, Opec members includ-ing top exporter Saudi Arabia have signalled support for extending the deal at a May 25 meeting.
Opec secretary-general Moham-mad Barkindo, speaking at a confer-ence in Paris, and other offi cials from Opec countries said the oil market was moving towards a balance be-tween supply and demand with the help of the agreement.
“While it is evident that the mar-ket rebalancing is now moving for-ward and investment specifi cally in short-cycle projects is returning, it is essential we do not take our eyes off our desired goals,” Barkindo said. “We need to see the global stock overhang move closer to its fi ve-year average.”
Barkindo did not comment directly on whether the cut would be extend-ed, but he said eff orts were under way led by Saudi Energy Minister Khalid al-Falih, who is Opec president in 2017, to get a consensus before min-isters meet next month in Vienna.
“We are confi dent that the col-laborative eff ort of Minister Khalid al-Falih and other ministers...will eventually facilitate a successful conclusion of the meeting in Vienna on the 25th,” Barkindo said.
Al-Falih met his Azeri counterpart Natig Aliyev and both agreed to sup-port continuing the production cut agreement that was signed in De-cember, the Saudi Energy Ministry said on its Twitter account yesterday.
His views were echoed by the oil ministers of Opec members Iraq and Angola, and the head of Saudi Ara-bia’s state oil company, who were also attending the Paris conference.
Iraqi Oil Minister Jabar al-Luaibi said production cuts were gradually leading to a long-awaited rebalanc-ing of the market.
The output curbs, two-thirds of which are from Opec producers, are aimed at clearing a supply glut that has depressed oil prices.
Iraq last year asked to be exempt from cutting output, raising doubts over whether it would comply with the Opec deal or wish to extend it.
But al-Luaibi said yesterday Bagh-dad would go with the consensus reached by Opec.
Angola’s oil minister, José Maria Botelho de Vasconcelos, said he be-
lieved the deal would be extended beyond June.
Opec and the outside producers are trying to erode a glut that is keep-ing prices at less than half the level of mid-2014, cutting producer oil income and reducing investment in new fi elds.
The International Energy Agency
said in its latest monthly market re-port that oil stocks in industrialised countries stood at around 3.06bn barrels at the end of February, a fi g-ure that mostly includes crude and oil products.
Stocks were some 336mn barrels above the fi ve-year average, the Par-is-based IEA said.
Economic slowdown weighing on GCC bank outlook, says BMIGCC banks are “facing rising
headwinds” as weak prices and the concomitant cutbacks in
government spending weigh on lend-ing opportunities, BMI Research has said in a report.
“There are a couple of bright spots, with higher interest income from in-creased sovereign debt issuances and the removal of sanctions on Iran,” the Fitch Group company said.
The Gulf Cooperation Council’s banking sector is facing signifi cant headwinds that will weigh on lending and deposit growth over the coming quarters, the report said.
“Our expectation for sustained weakness in oil prices will ensure a continuation of weak fi scal revenues for the six countries in the Gulf. We forecast Brent to average $57 a barrel this year and $60 in 2018,” BMI said.
In response, government spending will see “signifi cant cutbacks”, depos-its in local banks will continue to be drawn down, and liquidity will decline and lead to higher funding costs.
In broad terms, the GCC will be able to cope with higher borrowing rates which began in Q4, 2015, but this dy-
namic will dampen the growth out-look. “Overall, we forecast aggregate credit to expand by only 4.9% in 2017, which while still signifi cant, is well below the annualised 9.2% recorded between 2012 and 2016.
The primary factor in the slowdown in lending activity comes from the de-cline in oil prices and the concomitant shift in the Gulf sovereigns’ position from a net creditor to net debtor.
To fi nance the fi scal defi cits, govern-ment deposits at banks in the UAE and Saudi Arabia have already fallen by 17% and 4.5% respectively since 2015, BMI said. Government deposits account for 10% to 35% of Gulf banks ‘ non-equity fi nancing, according to international rating agencies. These deposits, which tend to be cheaper for banks than tap-ping wholesale funding markets, have kept the banks highly liquid while boos ting profi tability, BMI said.
Their reduction is of particular con-cern in Oman and Bahrain, the two economies with the lowest fi scal and external buff ers, where government deposits are already being tapped, re-sulting in tightening liquidity in the banking system.
In addition, 2017 budgets across the region show a contraction in public spending, a trend BMI expects to con-tinue as oil prices stay low for several years.
This will delay major capital ex-penditure projects, thus reducing opportunities for regional banks to fi nance large state-led development projects, which have been a key source of profi tability over the past fi ve years.
More generally, BMI said the pro-longed fall in oil prices will lead to slower deposit growth across most of the GCC and weigh on consumer and business confi dence over the longer term.
“Lending growth will also be hit by rising interest rates. Following the 25 basis point (bps) hike in interest rates across the GCC at the end of 2016 , we expect another 50 bps by the end of this year,” BMI said.
UNANSWERED QUESTIONS: Page 3
Trump’s corporate tax rewrite faces major obstacle: Cost
Demographic, social factors seen key in Mideast tourism growthThe Middle East will require further
transformation within its travel and
tourism industry owing to multi-faceted
demand shift driven by generational
and demographic changes, according to
PricewaterhouseCoopers (PwC).
With the region leading the emerging
market population boom over the past
decade, demographic and social change
is a key issue the industry would need to
tackle fast, PwC said in a report.
Finding that 40% of the region’s people
are under the age of 25 and its popula-
tion slated to rise by 50% in the next
25 years, it said “the travel and tourism
industry today finds itself at the helm of
a multi-faceted demand shift driven by
these generational and demographic
changes.”
Generation Z and the millennial to the
silver tourist brings with it numerous
opportunities and challenges, mainly
because of the polarising demands it
requires, bringing forth a new age of
innovation, it said, suggesting targeted
rebranding and proactive actions to
attract new types of travellers whilst
retaining existing customers; overhaul-
ing traditional marketing concepts and
embracing the power of social media; to
embracing a digital era.
“Over the past decade, the Middle East
has developed into a global hub for tour-
ism and leisure, attracting visitors from
all over the world. However, new winds
of change will require further transfor-
mation within the region’s travel and
tourism industry,” said Dr Martin Berlin,
Middle East partner and global deals real
estate leader at PwC.
Finding that the shift in global economic
power has placed the Middle East at the
center of many of the world’s fastest
growing markets, especially India and
China, it said as this handing over of
the torch from advanced to emerging
economies continues, the region, which
finds itself at the epicentre of these
shifts, will have to take proactive steps.
The region would need to take advan-
tage of the enviable position and central
location on the West-East corridor, PwC
said, arguing that emerging markets are
set to overtake developed ones as tour-
ism and hospitality destinations.
On the accelerating urbanisation in the
Middle East, the report said a majority of
the countries within the Gulf Coopera-
tion Council (GCC) attract urban tourists;
wherein the main city is the targeted
destination for the traveller. “Dynamic
development of urban tourism is
strongly dependent on economic and
technological growth and increased air
connectivity; all of which are positive for
the GCC region,” it said.
The Middle East travel and tourism indus-
try has many of the right ingredients to
benefit from the technological break-
throughs, with young, tech savvy popula-
tions across the spectrum and smart-
phone penetration in the GCC amongst
the highest in the world, reaching 78% in
the UAE and 77% in Saudi Arabia.
Digitisation would aff ect the entire value
chain of the travel and tourism industry;
from influencing travelling decisions, to
collecting feedback and improving the
products and services delivery, it said,
adding a business strategy, befit for the
digital age, will prove to be the key for
the industry.
2017 budgets across the region have seen contraction in public spending, a trend BMI expects to continue as oil prices stay low for several years
The Middle East travel and tourism industry has many of the right ingredients to benefi t from the technological breakthroughs, with young, tech savvy populations across the spectrum and smartphone penetration in the GCC amongst the highest in the world
Oil market rebalancing aft er Opec-led cuts: Aramco CEOThe oil market is moving towards a balance
between supply and demand with the help
of an agreement reached between Opec and
other producers to cut production, the chief
executive of Saudi Aramco said yesterday.
The Organization of the Petroleum Exporting
Countries, Russia and other producers agreed
to cut output by 1.8mn bpd for the first half of
2017, although persistent high global invento-
ries have depressed oil prices.
Opec meets again on May 25 and is expected to
extend the pact until the end of 2017 in a bid to
end the supply glut.
“The market is moving toward rebalancing,”
Aramco’s CEO Amin Nasser told a conference in
Paris. “I see the oil market pointing upward and
expect it to continue improving.”
“This returning confidence is being driven by
improving fundamentals, and accelerated by
the production agreement reached last year,”
he said referring to the OPEC-led cuts.
Despite short-term volatility in oil prices, he said
there had been “a rapid drawdown of floating
storage during the first quarter of this year.”
Oil prices dipped yesterday, weighed down by
concerns about globally bloated markets, but
traders said prices seemed to have found sup-
port around current levels.
Brent futures, the international benchmark for
oil prices, were down 50 cents at $51.32 per
barrel at 1025 GMT yesterday, but remain above
the $46 price level where they traded in late
November just before Opec announced plans
to cut supply.
Nasser said the oil industry needed to continue
investing in long-term project despite short-
term price volatility.
The Opec logo is seen at its headquarters in Vienna, Austria. Opec members including top exporter Saudi Arabia have signalled support for extending the output cut deal at a May 25 meeting.
BUSINESS
Gulf Times Friday, April 28, 20172
Saudi bank stocks strong amid brewing changes in industry; Gulf subduedReutersDubai
Shares in two Saudi banks that are in early merger talks moved in opposite di-
rections yesterday while other regional markets ended the week down as investors had little fresh company earnings and news to reallocate their funds or build po-sitions.
Alawwal Bank extended the pre-vious session’s 8.6% gains, adding 2.2%.
Shares in Saudi British Bank (SABB), however, slipped 0.9% after jumping 6.8% on Wednesday.
Six other commercial lenders rose, with the largest by assets, Na-tional Commercial bank up 1.0%.
If Alawwal and SABB were to merge they would form the third largest bank by assets.
Analysts have said that although the merger is generally positive for both banks, Alawwal would be able
to reap the benefi ts of lower cost of deposits.
Other analysts pointed out that though this may not be a harbinger of other potential bank mergers in Saudi Arabia, the industry’s land-scape will start to change and com-petition will start to stiff en.
“Smaller players that used to compete for market share with Alawwal will now face less strenu-ous competition because they will be targeting diff erent clients,” said a Riyadh-based analyst. “But on the other hand you have more in-terest from other regional and in-ternational banks wanting to set up shop in the kingdom, so the indus-try’s landscape is in the midst of a change.”
Earlier this week, Citigroup ob-tained a licence to conduct capital markets business in Saudi Arabia, after an absence of almost 13 years.
Also, a senior executive of Dubai’s Emirates NBD, which already has a licence to operate in Saudi Arabia, told Reuters they have plans to ex-
pand their presence in the kingdom in the next 12 months.
Petrochemicals, most of which have still to report earnings, re-versed from declines earlier in the session and closed modestly high-er.
Saudi Kayan Petrochemical add-ed 0.6% after falling as much as 1.1% earlier in the day.
Dubai’s index lost 0.6% near a 4-1/2 month low as decliners out-numbered gainers 20 to 12.
Emaar Malls dropped 4.8% as its shares went ex-dividend yesterday.
In neighbouring Abu Dhabi, the index also fell 0.6%, dragged down by losses in blue chips.
Developer Aldar Properties, which has yet to report fi rst quarter results, fell 1.8%.
In Egypt, the index retreated 1.2% on profi t taking.
Kuwait’s bourse was shut for a public holiday.
Elsewhere, Bahrain’s index lost 0.1% at 1,332 points, while Oman’s index rose 0.3% to 5,525 points.
Saudi sees 7,000 jobs coming from solar projects by 2020BloombergLondon/New York
Saudi Arabia is hoping its solar-power programme will gener-ate 7,000 jobs and build a local
manufacturing industry that can ex-port products to the world, reducing domestic demand for its crude oil in the process.
The Ministry of Energy and Natural Resources requires bidders seeking to build about 3.45 gigawatts of solar and wind plants by 2020 to spend 30% of the capital they invest through home-grown workers and companies, said Turki al-Shehri, head of the renew-able project development offi ce for the kingdom.
“We want to create value,” al-Shehri said in an interview at the Bloomberg New Energy Finance conference in New York on Tuesday. “We don’t just want to bring in companies that open up manufacturing facilities at a very high premium, which the consumer will end up paying. We want to ensure that whatever they are opening is competi-tive, that it can compete globally for exports.”
The remarks indicate the importance of the renewable energy programme to a kingdom that’s among the world’s biggest exporters of crude oil. With a growing population and surging de-mand for electricity, Saudi Arabia is seeking new energy supplies to en-sure that more of its oil reaches export markets instead of being consumed at home.
Ministers are working on a sec-ond auction of power-purchase deals for renewable energy developers that would grant government-guaranteed contracts for up to 25 years. Results from the current 1.02-gigawatt pro-gramme are due by the end of the year, following a 700-megawatt programme already tendered. Another 1.73 giga-watts of contracts will be awarded in a third round in time to reach the 2020 target, the offi cial said. The contracts are for both solar and wind farms.
The ministry off ers land and grid connection for the projects, requir-ing developers only to build the power
plants. It’s focusing on sites where it can displace the most expensive fuels – diesel, heavy fuel oil and forms of crude oil that Saudi Arabia now consumes to generate electricity.
But the ambition for renewables goes beyond energy needs. It’s also about spurring local industry to build prod-ucts that the nation can export, help-ing the government reach its target to diversify the economy away from fossil fuels by 2030. The programme also includes building banks, a tourist
industry and manufacturing from the proceeds of energy, some of which will come from selling a stake to investors in state oil company Saudi Arabian Oil Co, or Aramco.
“We see it as complementing oil be-cause renewables bring more than just a low-value fuel,” al-Shehri said. “It fi ts perfectly into our demand profi le, which is high demand, almost 50% higher than you see in the evening from air conditioning.”
Local content rules embedded in the
auction currently underway will be in-creased in the coming years as Saudi companies develop their capabilities.
After delaying the programme earlier this year, al-Shehri said the solar pro-gramme is back on track under the di-rect management of the energy minis-try. His renewable energy offi ce reports to the ministry. It has absorbed au-thority over renewables from the King Abdullah City for Atomic and Renew-able Energy, or KaCare, an organisation chartered by the government working
outside the energy ministry.The renewables offi ce is managed
by a board led by the energy minister and including offi cials from Aramco, KaCare and the state electricity com-pany, Saudi Electric Co.
“What’s diff erent now is the fact that they have established this offi ce,” he said. “It’s testimony to the fact that we’re serious. These tenders have years of pre-development work. Putting out a tender is easy. Putting out a good ten-der requires work.”
Bonds of Etihad, partners nosedive on Alitalia concerns
Etihad Airways’ bonds raised
through a special purpose vehi-
cle have nosedived in the sec-
ondary market, losing almost 10
cents on the dollar over the past
two days, traders and portfolio
managers said on Wednesday,
according to Reuters.
The special purpose vehicle
(SPV) includes the Abu Dhabi
airline and several other carri-
ers in which it has equity stakes.
The bonds dropped after
workers at Alitalia, which is
49%-owned by Etihad, rejected
the company’s latest turna-
round plan on Monday, blocking
the loss-making Italian airline
from accessing rescue financ-
ing.
Etihad raised some $1.2bn in
bonds over the past two years
through a special purpose vehi-
cle (SPV) called EA Partners.
The SPV’s notes – a $700mn
bond maturing in 2020 and a
$500mn bond maturing in 2021
– were trading in the low 90s on
Wednesday.
A trader spotted the 2020s with
a cash price of 92-93 while the
2021s were quoted at 90.75-
91.95. Both bonds were quoted
at par or slightly above par be-
fore Alitalia’s workers rejected
the latest turnaround plan.
Etihad did not immediately
respond to a request for com-
ment.
“The Alitalia news has put a lot
of pressure on the bonds and
it’s very diff icult to work out
where you’re going to be sitting
with such complex structures,”
said a Dubai-based fixed income
portfolio manager.
It is not clear to what extent
Etihad can guarantee the bonds
should one of the companies
in the SPV portfolio default, he
added.
A second portfolio manager
said, “Etihad may try to find a
way to bail the instrument by
maybe replacing the Alitalia
note in the structure through
a private transaction, but I
wouldn’t assume it. The note
does have Alitalia risk.”
The proceeds of the $700mn
five-year bond issued by EA
Partners in 2015 were used to
enter into separate debt obliga-
tions with the entities involved,
which were Etihad Airways, Eti-
had Airport Services, Alitalia, Air
Berlin, Jet Airways, Air Serbia
and Air Seychelles.
QSE drops as foreign institutions book profitBy Santhosh V PerumalBusiness Reporter
The Qatar Stock Exchange yesterday
plummeted below 10,100 levels mainly on
foreign institutions’ profit booking.
Selling pressure was seen especially at the
consumer goods, industrials and telecom
counters, which dragged the 20-stock
Qatar Index 1.13% to touch a 20-week low
of 10,089.86 points.
A persistent decline, albeit with a constant
tangent, was visible right from the begin-
ning for about 150 minutes, after which the
fall was sharper with the index touching a
low of near 10,050 points but only to see
some last minute buying support. Overall,
the index settled 116 points lower against
the previous close.
Small and large cap segments witnessed
higher off loading in the bourse, whose
year-to-date losses swelled to 3.32%.
Islamic stocks were seen declining
relatively slower than the main index as
well as other indices in the market, where
non-Qatari individual investors were also
net sellers.
However, domestic institutions were
increasingly net buyers and both Gulf
institutions and individuals turned bullish.
There was lower net selling by local retail
investors.
Trade turnover and volumes grew in the
bourse, where banking, real estate and
telecom sectors together accounted for
more than 85% of the total volumes.
Market capitalisation eroded more than
QR7bn, or 1.31%, to QR542.73bn as small,
large and midcap stocks shrank 1.74%,
1.16% and 0.94% respectively; while micro-
caps were up 0.06%.
The Total Return Index shrank 1.13% to
16,920.1 points, the All Share Index by 1.14%
to 2,871.97 points and the Al Rayan Islamic
Index by 1.12% to 4,045.89 points.
The consumer goods sector’s index plum-
meted 2.01%, followed by industrials (2%),
telecom (1.38%), banks and financial serv-
ices (0.98%), realty (0.91%) and transport
(0.32%); whereas insurance rose 0.18%.
More than 63% of the stocks were in the
red with major losers being QNB, Industries
Qatar, Aamal Company, Mazaya Qatar,
Woqod, Ooredoo, Vodafone Qatar, Qatar
First Bank, Zad Holding, Qatar National
Cement, Qatari Investors Group, United
Development Company, Qatar Electric-
ity and Water, Ezdan, Barwa, Nakilat and
Medicare Group.
Nevertheless, Commercial Bank, Gulf Ware-
housing, Dlala, Qatari German Company
for Medical Devices, Mesaieed Petrochemi-
cal Holding, Doha Insurance, Al Khaleej
Takaful and Qatar Islamic Insurance were
among the losers.
Non-Qatari institutions turned net sellers
to the tune of QR25.51mn compared with
net buyers of QR38.45mn on April 26.
Non-Qatari retail investors were also net
sellers to the extent of QR1.83mn against
net buyers of QR1.98mn on Wednesday.
However, domestic institutions’ net buying
rose considerably to QR21.47mn from
QR2.54mn the previous day.
The GCC (Gulf Cooperation Council) funds
were net buyers to the tune of QR7.97mn
against net sellers of QR10.92mn on April 26.
The GCC individual investors turned
net buyers to the extent of QR3.21mn
compared with net sellers of QR3.05mn on
Wednesday.
Local retail investors’ net profit booking
declined substantially to QR5.31mn from
QR28.98mn the previous day.
Total trade volumes rose 11% to 9.9mn
shares, value by 19% to QR276.68mn and
deals by 3% to 3,679.
There was a 95% surge in the real estate
sector’s trade volume to 2.99mn equities,
54% in value to QR47.16mn and 21% in
transactions to 523.
The industrials sector’s trade volume
soared 36% to 0.79mn stocks and value
by 22% to QR38.99mn, while deals fell 10%
to 852.
The market witnessed a 31% increase
in the consumer goods sector’s trade
volume to 0.34mm shares, 32% in value
to QR25.07mn and 12% in transactions to
368.
Although the banks and financial services
sector’s trade volume was rather flat at
3.34mn equities, value expanded 45% to
QR127.37mn and deals by 34% to 1,471.
However, the insurance sector’s trade
volume plummeted 67% to 0.04mn stocks,
value by 66% to QR2.72mn and transac-
tions by 75% to 43.
The transport sector saw a 64% plunge in
trade volume to 0.3mn shares, 57% in value
to QR8.41mn and 61% in deals to 99.
The telecom sector’s trade volume was
down 5% to 2.1mn equities, value by 25% to
QR26.95mn and transactions by 4% to 323.
In the debt market, there was no trading of
treasury bills and government bonds.
Record issuance marks Gulf shift towards bondsReutersDubai
The volume of interna-tional bond issues from the Gulf may hit a record
high for a second straight year in 2017 as lower oil prices crimp the capacity of banks to fi nance billions of dollars of investments and state budget defi cits.
Issuance data shows the six-nation Gulf Cooperation Coun-cil’s bond market is on track to become more important than its syndicated loan market in a re-
gion traditionally dominated by relationship-driven bank lend-ing.
This historic shift is positive for economies because it eases risks and liquidity pressures for the region’s banking system, which has been hurt by smaller fl ows of petrodollars, bankers and economists say.
It is also changing the be-haviour of investors in the bond market, which has long been led by local banks that buy the bonds to hold them until matu-rity rather than trading them.
Jumbo bond issues by govern-
ments – such as Saudi Arabia’s $17.5bn debut sale last Octo-ber, the largest ever in emerging markets – have deepened the market and created new pricing benchmarks.
This has stimulated trad-ing activity, attracting more institutional and foreign in-vestors.
Monthly Reuters polls of Mid-dle East fund managers in the last few months have shown their interest in bonds at or near record levels, to a large extent because of the bond market’s in-creasing liquidity.
The trend looks set to contin-ue. Last year Standard & Poor’s estimated the funding needs of GCC countries – Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain – at $560bn be-tween 2015 and 2019.
This will push regional gov-ernments to rely heavily on bonds.
“The fi nancing requirements are signifi cantly larger than they have been historically,” said Jonathan Segal, head of capital markets for the Middle East and Africa at Mitsubishi UFJ Finan-cial Group.
“Given that the region’s fi -nancing requirements have risen very sharply, absolutely there is a need for the region to be look-ing at other sources of fi nancing and doing more to attract those sources.”
The GCC’s international bond issuance was around $30bn each year from the mid-2000s until it suddenly spiked to a record of $69bn in 2016, Thomson Reu-ters data shows.
Meanwhile, syndicated loan volumes totalled about $60bn annually in 2013 and 2014, $70bn in 2015 and $78bn last year.
If the current trends continue, bonds could overtake loans this year.
“Syndicated loans will con-tinue to be important, for in-stance in the project fi nance space, but debt capital markets will remain in focus going for-ward,” said Monica Malik, chief economist at Abu Dhabi Com-mercial Bank.
Segal said, “In this region, in the past if you had $1 of DCM (debt capital markets) for fi -nancing, roughly $3 came from loans.
Now I would not be surprised
if there is parity.” Some bor-rowers are expected to continue to fuel demand for bank loans, however.
“The absence of local curren-cy bond markets leaves regional corporates with little choice but to resort in the fi rst instance to traditional bank loans,” said Dima Jardaneh, head of regional economic research at Standard Chartered. “Also, transparency requirements for tapping inter-national capital markets could still be a deterrent for a large segment of corporates in the re-gion.”
With a growing population and surging demand for electricity, Saudi Arabia is seeking new energy supplies to ensure that more of its oil reaches export markets instead of being consumed at home
BUSINESS3Gulf Times
Friday, April 28, 2017
Trump’s corporate tax rewrite faces major obstacle: Its costDeficit issue seen limiting plan’s duration and eff ectiveness; temporary cuts might discourage investment of off shore profit
BloombergNew York
President Donald Trump off ered corporate America a sweeping tax vision whose ultimate promise of lower rates and more global competitiveness depends on one thing: longevity. Given the plan’s uncertain costs, longevity may be one thing the proposal can’t deliver.The tax plan released on Wednesday by top economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin provided much for multinational corporations to rejoice over – it calls for slashing the corporate income tax rate to 15% from 35% and applying a one-time, low rate to an estimated $2.6tn in off shore profits that have so far avoided US taxes.The plan also calls for shifting to a territorial system for corporate taxes in which, going forward, most foreign profits would be exempt from US levies. Currently, the US taxes corporate income no matter where it’s earned.But it’s unclear whether or how the corporate-tax proposals would be paid for; Mnuchin has said economic growth resulting from tax cuts would cover much of the cost, but economists question that assertion. The issue is more than just academic: In order to clear the Senate without any Democratic votes, any tax plan can’t add to the deficit outside a 10-year budget window. So if the legislation isn’t revenue neutral in the long run, its tax cuts would have to be temporary – set to expire at least within a decade, and perhaps sooner.“For business rate cuts and territoriality to have their full positive eff ect on growth, businesses will eventually need more certainty that they will remain in place,” said Michael Mundaca, co-leader of the Ernst & Young Americas Tax Center and a former top Treasury
tax off icial. If the measures were only temporary, US corporations might eventually have incentives to return to the current practice of hoarding untaxed profits overseas, he said.Economist Kyle Pomerleau of the conservative Tax Foundation said in a Twitter message on Wednesday that there wasn’t enough detail to provide a cost estimate for Trump’s tax plan, while the nonpartisan Center for a Responsible Federal Budget released a rough estimate that it could cost $3tn to $7tn over the next decade – potentially “harming economic growth instead of boosting it.”Moving to a territorial system would put the US on even footing with other developed nations, which don’t tax
corporate income off shore. It would also end the so-called “lockout” eff ect, under which companies hold billions of dollars in earnings abroad to avoid US taxes. Currently, companies can defer taxes on their off shore earnings until they bring them to the US. And when they do “repatriate” their foreign income, they can claim credits against their US tax bills for any foreign taxes they’ve already paid.Under the deferral system, US companies have stockpiled an estimated $2.6tn off shore to avoid paying US taxes on it – though Trump has said repeatedly that he thinks the amount is higher. The outline that the administration released on Wednesday didn’t specify a tax rate that would be
applied to those off shore earnings, but called it a one-time rate that Mnuchin said would be “very competitive.”During the campaign, Trump had proposed a 10% tax. At that rate, a repatriation tax would raise about $147.8bn over a decade – assuming that companies were allowed to pay over time – according to an estimate made by the Urban-Brookings Tax Policy Center, a Washington policy group.Under a voluntary repatriation in 2004, 843 companies chose to bring back $312bn, which they spent mostly on dividends and share buybacks, not on new investments or hiring, as Trump has said he wants to promote.“If this is only a temporary cut and we’re going to revert back to the
old system in 10 years, do you as a company really want to invest in the US?” asked David Sites, an international tax services partner at accounting firm Grant Thornton. Longer term, Sites said, for companies to make the “structural shifts” that Trump calls for, “they have to know that 10 years from now, we’re not going to be back in the same situation.”Likewise, Trump’s call for a 15% tax rate and the territorial approach may help deter US companies from shifting their profit overseas – and from moving their tax addresses to low-tax countries like Ireland – but only if the rate lasts more than a decade, Mundaca said.Republican congressional leaders greeted the White House tax
announcement coolly, with an e-mailed statement that said the bullet-points would serve as “critical guideposts” in what’s expected to be a months-long eff ort to overhaul the US tax code.Henrietta Treyz, a managing partner and director of economic policy at Veda Partners, called Trump’s corporate tax plan “a shot for the moon” that would face fierce opposition.In the near-term, repatriation would likely spark a fresh wave of mergers and acquisitions, according to Rose Williams, a principal at Ernst & Young focused on the tax implications of deal-making. “There will be more cash on hand for transactions – you’ll see an uptick in M&A,” she said.
US budget deficitBy Rich Miller
US politicians once loudly and frequently bemoaned the size of the federal government’s budget deficit. The complaints faded as the country’s creditors showed no signs that they were worried about the government’s ability to pay its bills and the shortfall melted like ice cream on a summer’s day. The deficit shrank as a share of the economy for six straight years, narrowing to 2.5% of gross domestic product in the fiscal year that ended in September 2015. But in fiscal 2016, the gap widened again, to 3.2% of GDP. Now President Donald Trump has plans for big projects and tax cuts that could add $16tn to the debt over 20 years. Get ready to hear more about Washington spending beyond its means.
The Situation
Trump has proposed building a wall between the US and Mexico, spending as much as $1tn on infrastructure, increasing the nation’s military forces and slashing the corporate tax rate to 15%. During the past six years, his fellow Republicans in Congress have
worked to enforce strict spending caps designed to hold down the federal debt; it’s unclear whether they’ll back down in the name of party unity. The most recent numbers don’t make it easier for them. In October, the US Treasury Department reported that the budget deficit for the 2016 fiscal year was $587.4bn, up from $439.1bn the year before. This was due in part to tax breaks Congress revived in December 2015. The 2011 Budget Control Act had mandated $2tn in automatic spending reductions from 2012 to 2021, but in subsequent years Congress voted to roll back these cuts, known in Washington as the sequester. The provision will now trim spending by about $1.5tn. While the government’s annual interest bill amounted to 1.3% of GDP in 2016 — less than half what taxpayers paid when Ronald Reagan left the White House in 1989 — it’s expected to surpass 2% by 2021.Deficit decriers — including Reagan — often noted that no business would survive by running its finances in the same way as the government. Yet the historical reality is that the government doesn’t often balance its books. The US has run surpluses
in only 12 of the last 75 years. Deficits surged through World War II before peacetime brought three years of surpluses from 1947 to 1949. The prosperity during the years when Bill Clinton was in the White House led to a $128bn surplus in fiscal 2001. A year later this turned into a $157bn deficit following a brief recession and the upheavals of the September 11 terror attacks. The far bigger recession triggered by the global financial meltdown of 2008 meant
that President Barack Obama entered off ice in the midst of a four-year run of trillion-dollar deficits that ended in 2012. Though the process wasn’t pretty, Obama and his Republican-controlled Congress brought the deficit down from a high of $1.4tn in fiscal 2009.
The Argument
The long-term deficit outlook is troubling. Around 2024, when the last of the 76mn baby boomers approach
retirement age, there will be heavy demands on Social Security, the Congressional Budget Off ice says. Some economists say the pain could arrive much sooner. If Trump carries through with all his spending plans and tax cut plans, there’s a chance the inflation rate will rise sharply and swell the government’s annual interest payments. That threat is cited by politicians pushing for a smaller government and their ideological allies at think tanks like the Peter G
Peterson Foundation and Fix the Debt. If anti-deficit forces in Congress aren’t powerful enough to rein in Trump’s tax and spending ideas, another group could take aim: bond vigilantes. Investors unhappy at the thought of accelerating inflation could sharply cut their purchases of Treasury debt. That’s what happened in 1993, when bond buyers eff ectively pressured President Bill Clinton to abandon his campaign promise of a tax cut for the middle class.
Bloomberg QuickTake
Yellen may see inflation risk in cuts One page, many unanswered questionsBloombergWashington
What President Donald Trump giveth
to the economy with massive tax cuts,
Federal Reserve Chair Janet Yellen may
be tempted to taketh away with higher
interest rates.
With the economy already near maxi-
mum employment, the central bank is
inclined to use tighter credit to keep the
economy from overheating as taxes are
reduced and budget deficits increase.
Fed off icials, who have pencilled in two
more interest rate increases this year
and three next, have said they see pos-
sible fiscal stimulus as an upside risk to
the economy. That risk is only magnified
if Trump relies on more government
debt, rather than off setting tax code
changes, to finance his cuts, as adminis-
tration off icials have indicated he might.
Trump’s proposal, an outline of which
was announced on Wednesday by
Treasury Secretary Steven Mnuchin and
top White House economic adviser Gary
Cohn, potentially puts the administration
on a collision course with Fed off icials
who have almost reached their economic
goals and are in the early stages of pull-
ing up ultra-low borrowing costs.
“The biggest tax cut in history has
monetary policy implications,” said Lou
Crandall, chief economist at Wrightson
ICAP in Jersey City, New Jersey, alluding
to Mnuchin’s description of the plan. “If
the package looks like it will increase
the deficit, that will be an argument for
more tightening, not less.”
Fed policy makers would have wel-
comed fiscal stimulus earlier in the
expansion that began in mid-2009,
when unemployment was still elevated
and inflation was well below their 2%
target. But now, with the jobless rate at
almost a 10-year low and price pressures
starting to build, they don’t see a need
for a short-term prod from the federal
government.
Administration off icials have said the
president wants to chop the corporate
tax rate to 15% from 35% and to levy a
10% tax rate on cash that companies
have stockpiled overseas. He also intends
to slash individual income taxes, reduc-
ing the number of tax brackets to three
from seven. How the package is financed
is important for the Fed. If a middle-in-
come tax cut, say, is paired with limits on
how much Americans can deduct from
their obligations, then the immediate
impact on demand and the economy is
limited. If it’s not, it’s more likely to give
a short-term boost to growth that could
lead to a Fed response.
BloombergWashington
The “phenomenal” tax plan that Presi-
dent Donald Trump promised 11 weeks
ago appeared at a White House briefing
on Wednesday: It was a one-page list of
bullet-points that amounted to fewer
than 250 words.
The document was largely devoid of de-
tail, including on whether the proposed
cuts for businesses and individuals
would increase the federal deficit. The
answer to that question may determine
whether Trump’s recommended 15%
corporate tax rate – a huge cut from the
current 35% – would be permanent or
temporary.
The points that the tax outline did in-
clude – calls for slashing business taxes,
eliminating the alternative minimum
tax and the estate tax, cutting indi-
vidual income-tax rates and repealing an
investment-income tax for high earners
– amount to a conservative wish-list from
the past several years. Separately, any
one of them could provoke a titanic fight.
But the most immediate controversy is
likely to focus on cost. The Committee for
a Responsible Federal Budget released
a rough analysis saying the plan could
cost $3tn to $7tn over the next decade –
potentially “harming economic growth
instead of boosting it.”
The non-partisan research group deter-
mined that Trump’s corporate tax cut
would cost $2.2tn, while his other cuts
for other businesses would amount to
$1.5tn. Doubling the standard deduction,
which would help lower- and middle-
class taxpayers, would cost roughly
$1.5tn, the CRFB said, while repealing the
estate tax, which would benefit wealthy
families, would cost $200bn. Treasury
Secretary Steven Mnuchin said during a
White House briefing to roll out the plan
Wednesday that it would lead to rapid
economic growth, helping to cover the
cost of the cuts – but many tax experts
disagree. “No tax cut has ever been
self-financing,” wrote Howard Gleckman,
a senior fellow at the Urban-Brookings
Tax Policy Center, in an online post
Wednesday.
Other tax experts who would normally
jump to analyse the plan were foiled by
the scant specifics. “Sorry, friends. We
cannot model this. Definitely not enough
detail,” Kyle Pomerleau, director of
federal projects for the Tax Foundation,
said in a Twitter message. Len Burman,
a fellow at the Urban Institute, was more
pointed: “First draft of Reagan tax reform:
three-volume 500+ page treatise. First
draft of Trump: bullet points.”
US National Economic Director Gary Cohn (left) and Treasury Secretary Steven Mnuchin unveil the Trump administration’s tax reform proposal in Washington on Wednesday. The plan provided much for multinational corporations to rejoice over – it calls for slashing the corporate income tax rate to 15% from 35% and applying a one-time, low rate to an estimated $2.6tn in off shore profits that have so far avoided US taxes.
BUSINESS
Gulf Times Friday, April 28, 20174
BoJ chief warns on ‘likely’ delay on infl ation targetAFPTokyo
Japan’s central bank chief warned yesterday it is “likely” that an in-fl ation target already running four
years late would be delayed once again.Bank of Japan (BoJ) governor
Haruhiko Kuroda added that policy-makers would not slow down their monetary easing programme until their 2% goal had been achieved.
“It’s likely that the timing of exceed-ing 2% infl ation in a stable manner will be later than” March 2019, Bank of Ja-pan governor Haruhiko Kuroda told re-porters yesterday.
The fi gure is seen as crucial to ending years of defl ation and putting Japan’s torpid economy on a stable path.
Kuroda’s comments come as the US central bank raises interest rates while speculation swirls that the European Central Bank is considering backing off its own stimulus by turning off the taps on massive bond-buying or raising borrowing costs from historic lows.
The BoJ – which trimmed its an-nual infl ation forecast yesterday after a two-day meeting – had already been forced to push back its price target sev-eral times, having set an original date of March 2015.
“Governor Kuroda poured cold water on expectations of tighter policy in the post-meeting press conference,” re-search house Capital Economics said in a commentary.
“Today’s downward forecast adjust-ment highlights that the Bank is still struggling to lift infl ation
“What’s more, we believe that the Bank remains too optimistic about in-fl ation,” it added.
Policymakers yesterday lowered their infl ation forecast to 1.4% for the fi scal year to March 2018 from an earlier esti-mate of 1.5%.
After wrapping up its meeting yes-terday, the bank kept monetary policy
unchanged and issued a relatively up-beat view on the world’s number three economy, slightly upgrading its annual growth outlook.
The BoJ raised its economic growth forecast for the current fi scal year to 1.6% from 1.5% earlier.
It also left its massive ¥80tn ($719bn) annual asset-purchase scheme un-
changed and said it would press on with a plan to keep the yield on government 10-year bonds around zero.
Both measures are central to the bank’s eff orts to hike consumer prices and stimulate the economy.
This month, the International Mon-etary Fund (IMF) raised its growth fore-cast for Japan’s economy this year and
next, citing a pickup in exports, but it warned that a shrinking labour force and below-forecast infl ation would curb longer-term expansion.
Prime Minister Shinzo Abe swept to power in late 2012 on a pledge to con-quer defl ation and create a lasting re-covery through a growth plan dubbed Abenomics.
The scheme – a mix of aggressive monetary easing and huge government spending along with reforms to the economy – stoked a stock market rally as it weakened the yen and fattened cor-porate profi ts.
But its eff ect on the wider economy has been less dramatic, with promised reforms slow in coming.
Qantas to axe Dubai fl ights, boost Asian presenceReutersSydney
Australian national carrier Qantas Air-ways Ltd yesterday said it would axe its Melbourne-Dubai-London fl ights
operated in partnership with Emirates and switch the capacity to Asia when it launches non-stop Perth-London fl ights next year.
The move is part of a strategy of cutting the journey time to London to gain an edge and pricing premium over the two dozen rivals off ering one-stop fl ights on the so-called Kangaroo route.
Qantas will charge a premium of as much
as 48% in economy class and 62% in busi-ness class relative to one-stop rivals like Qatar Airways and Singapore Airlines on the Perth-London route in return for saving three hours of travel time, according to online price com-parisons.
Qantas chief executive Alan Joyce has said his airline could be operating non-stop fl ights from Sydney and Melbourne to Lon-don within fi ve years as Airbus SE and Boe-ing Co introduce longer-range aircraft. The 17-hour Perth-London fl ight on a Boeing 787-9 will originate and end in Melbourne and will not be subject to heightened secu-rity checks for Middle Eastern fl ights as a result.
It will cut more than an hour off the fl y-ing time from Melbourne to London relative to the current route through Dubai, Qantas said in a statement.
Sydney-Dubai-London will be the Australian airline’s only fl ight operating through the Emirates hub once the change takes place in March.
Qantas’s capacity to London will fall as a result of the switch to a 787 from a larger A380. Two A380s that had been serving the Melbourne-Dubai-London route would be redeployed to meet periods of high demand from Melbourne and Sydney to destinations in Asia, such as Singapore and Hong Kong, a Qantas spokeswoman said.
A man walks in a store selling electric household goods in Tokyo. Japan’s central bank chief said that policymakers would not slow down their monetary easing programme until their 2% goal had been achieved.
Australia plans LNG export limits to help ease local price painReutersMelbourne
Australia’s conservative government un-
veiled a radical plan yesterday to restrict
exports of liquefied natural gas (LNG) at
times when domestic shortages push
up local prices, aiming to ease soaring
energy costs for local manufacturers.
The plan would allow Australia’s
resources minister to impose controls on
LNG exports on advice from the market
operator and regulator, as the govern-
ment seeks to cap domestic gas prices,
which have become a political hot potato.
“It’s not a threat. This will be export
controls. They will not be able to export
gas if that has the consequence of reduc-
ing the availability of gas for the Austral-
ian market,” Prime Minister Malcolm
Turnbull told Australian Broadcasting
Corp radio. Australia is the world’s second-
largest LNG exporter after Qatar, but local
gas prices have rocketed over the past
two years with the start of LNG exports
from three newly built plants in eastern
Australia to customers in China, Japan,
Korea and Malaysia.
The government’s move drew a swift
rebuke from gas producers, who called
instead for curbs on onshore gas explora-
tion to be lifted to help boost supply.
“Restricting exports is almost unprec-
edented for Australia,” said Malcolm
Roberts, chief executive of the Australian
Petroleum Production and Exploration
Association.
The Australian Energy Market Operator
warned in March of a shortage set to hit
eastern Australia and has already taken
steps to ensure there is enough gas for
power plants at peak times.
At least one of the east coast LNG
plants, Gladstone LNG (GLNG) – operated
by Australia’s Santos Ltd – is drawing gas
out of the domestic market to help meet
its export contracts.
Santos said yesterday it was seeking
more details on how the new policy would
work.
“Moving forward, Santos will supply
more gas into the Australian domestic
market than it purchases for its share of
LNG exports,” it said in a statement to the
stock exchange.
The two other eastern LNG exporters,
Queensland Curtis LNG, operated by
Royal Dutch Shell, and Australia Pacific
LNG, operated by ConocoPhillips, have
committed to being net gas suppliers to
the domestic market.
Manufacturers welcomed Turnbull’s
move.
“The government has given themselves
a bigger stick to ensure the gas industry
balances the needs of their international
customers and their obligation to sup-
ply the domestic market with gas at a
fair price,” Energy Users Association of
Australia chief executive Andrew Richards
said in a statement.
Companies including France’s Engie SA
and Origin Energy have sealed deals to
ensure gas supply to power plants at peak
times, easing some short-term concerns
about shortages that have already helped
to trigger blackouts.
Didi seeks $6bn fundingReutersHong Kong/Beijing
Didi Chuxing, China’s top ride-hailing fi rm, is set to become the country’s
second-most valuable privately owned company, with a valua-tion of more than $50bn, through a fund raising round of up to $6bn, sources said yesterday.
The valuation represents a jump from Didi’s $34bn price tag in August, when it agreed to acquire Uber Technology Inc’s China business, and also puts it closer to the US fi rm’s $68bn.
It also propels Didi well above Xiaomi Inc, which held the title of China’s most valuable star-tup after a 2014 funding round valued the smartphone maker at $46bn.
Ant Financial, China’s most valuable private internet fi nance fi rm and an affi liate of Alibaba Group Holding Ltd, is valued up-wards of $60bn.
The funding round has drawn investors including Japan’s Soft-bank Group Corp, private equity fi rm Silver Lake Partners, China Merchants Bank and Bank of Communications, two people familiar with the matter said.
They declined to be identifi ed because they are not authorised to speak publicly.
Didi Chuxing and Softbank declined to comment, while Sil-ver Lake, China Merchants Bank and Bank of Communications did not immediately respond to a request for comment.
The people said that part of the latest capital investment in Didi would be used for interna-tional expansion.
Didi has sealed several over-seas partnerships, focusing on intelligent driving, such as mak-ing use of artifi cial intelligence, as well as similar ride-hailing services.
The fi rm is ramping up over-seas activity as regulatory changes are set to take a toll on their local service.
Draft rules released in October would slash the number of eligi-ble drivers and double fares for users in major cities, the com-pany has said.
Since Uber exited the Chi-nese market last year following a drawn-out rivalry with Didi, the Chinese fi rm has sought to ex-pand in Latin America, leading a $100mn investment in Brazilian ride-hailing service 99 in Janu-ary.
Last month it offi cially opened a lab researching artifi cial in-telligence-related driving tech-nologies in Silicon Valley in the United States.
The company has previous-ly entered a range of strategic agreements with US tech fi rms including Lyft, TripAdvisor Inc and Udacity.
Qantas Airways aircraft at Sydney Airport. The airline yesterday said it would axe its Melbourne-Dubai-London flights operated in partnership with Emirates and switch the capacity to Asia.
Customers in short supply at HSBC’s Pearl River Delta branches, core of China planReutersLondon/Hong Kong
In the digital age, footfall in bricks-and-
mortar outlets is an incomplete measure
of business activity, but HSBC’s sparsely
attended branches in the Pearl River Delta
suggest it’s not all plain sailing for the
bank’s expansion in mainland China.
HSBC, the world’s sixth-largest bank by
assets, announced in 2015 that it would
hire 4,000 new staff and invest billions
to make the Pearl River Delta (PRD) its
gateway to China, a retail and corporate
banking push that bet on a tech boom,
infrastructure spending and a growing
middle class.
It is, as chief executive Stuart Gulliver
reminded shareholders in Hong Kong on
Monday, a key plank of the bank’s global
strategy to improve profits by focusing on
markets with stronger economic growth.
PRD already generates more than 10%
of China’s GDP and over a quarter of its
exports. On the ground, HSBC still has a
mountain to climb.
In a rundown mall in Houjie, a factory
town in the urban sprawl of Dongguan,
the HSBC branch stands out with its bright
posters, colourful pamphlets for credit
cards and smiling receptionist, but only a
handful of customers an hour crossed the
threshold during a Reuters visit last week.
At the Industrial and Commercial
Bank of China (ICBC) branch in nearby
Changan, dozens rolled up in a similar
period. At a branch in a leafy district of
Shenzhen, again HSBC was far quieter
than rivals China Merchants Bank and
China Construction Bank.
Some customers, like Way Zhi, a
28-year-old who helps run a family trading
business, welcome the peace – you don’t
have to “waste a few hours each time”
like in local banks, he said – but it is a
reminder that HSBC has some way to go
to scale up.
Large local rivals in the PRD, most
state-backed, each have more than 1,000
branches to HSBC’s 114 including Guang-
dong, and they don’t have the headache
of the tough compliance rules that HSBC
has to follow to safeguard its international
business.
It’s a headache the bank has to pass on
to prospective customers.
A factory owner who gave his surname
as Luo said he opened an HSBC account
last year to facilitate his business making
wooden floorboards and panels for clients
in Hong Kong, where HSBC was founded
in 1865.
Luo, who spoke to Reuters as he was
leaving the Houjie branch, represents the
kind of aff luent Chinese customer with
business in Hong Kong that the bank is
keen to snag.
But opening a bank account was “quite
a lot of trouble”, he said, and took nearly
two weeks. HSBC’s customer-checking
procedures have got tighter in recent
years after it was hit with billions of
dollars in fines in the US for lapses in anti-
money laundering controls.
A HSBC staff member at the branch,
who declined to be named, confirmed that
customer background checks can take
longer than at local banks that have no or
negligible US business at risk and are not
subject to global regulatory scrutiny.
HSBC says it is pleased with its progress
in China. At the start of April it had
150,000 credit cards in circulation, having
begun to issue them in December, mostly
after digital applications.
It has also launched online trading
and banking over social media platform
WeChat. “We do not intend to compete on
a traditional basis in PRD. Absolute branch
numbers and footfall will not be our
measure,” said Kevin Martin, HSBC’s Asia
Pacific head of retail banking and wealth
management.
But that’s a game its big rivals are also
playing; ICBC, for example, has off ered
WeChat banking since 2013.
Since HSBC announced its strategy in
June 2015, China’s slowing growth and
a stock market crash have prompted a
rethink on the pace of expansion.
CEO Gulliver said last year it would take
on the 4,000 new regional hires over five
years, not three, as initially planned.
“Quite rightly, management felt at
that time they didn’t want to achieve the
strategy by taking on more risk,” Sam
Laidlaw, an independent board member
at HSBC, told Reuters. Investors remain
broadly positive.
“It’s not an overnight thing, and of
course everyone wants it to be faster.
The (China) strategy should be pursued
– but it is only one of many strategies for
HSBC,” said Hugh Young, Singapore-based
fund manager at Aberdeen Asset Manage-
ment, HSBC’s 6th-largest shareholder.
And what figures the bank has
disclosed for 2016 are encouraging,
albeit from a low base; it said in its annual
report that its number of retail banking
and wealth management clients and its
mortgage loan book in the area had both
increased by 51% during the year.
But it also has some battles with red
tape to win. The lender is still waiting
for approval for its securities business
venture with a state-owned fund in the
PRD, more than a year after it announced
the partnership.
And some say the bank remains
something of an outsider. At the Ling Jia
Property Agency, a few metres from HSBC’s
Houjie branch, realtor Yi Linfeng said most
of his customers use ICBC for mortgages.
None, he says, have ever used HSBC. “I think
they mostly have foreign customers from
Taiwan and Hong Kong.”
BUSINESS5Gulf Times
Friday, April 28, 2017
ReutersHong Kong
China’s wealth management in-dustry is preparing for a boom in automated investment advice
and trading programmes, or “robo-ad-visers”, as brokerages, banks and insur-ers look for a cheaper way to increase revenue from retail clients.
Robo advice services barely existed in China before 2015, but they are expected to manage $27.1bn of assets at the end of 2017, though that remains small rela-tive to the $182bn fi gure for the United States, where services launched several years earlier, according to market re-search fi rm Statista.
But the market in China is forecast to more than double every year from 2017 to 2021, compared with US growth of 29% a year, which will rapidly narrow the gap, Statista fi gures show.
The number of Chinese investors using robo services is forecast to soar to 79.4mn over that period from fewer than 2mn last year.
“Everyone talks about the billion-aires, but actually we’re talking about hundreds of millions of customers in that income band who are basically starting to have investable assets that they want to reposition and redeploy,” said Matthew Phillips, fi nancial serv-ices leader for PwC China and Hong Kong.
“The only way to service those cus-tomers is to automate those processes.”
Competition from large fi nancial technology (Fintech) companies, in-cluding Alibaba Group affi liate Ant Fi-nancial, Ping An-backed Lufax, and startups such as WaCai is pushing tra-ditional fi nancial companies to embrace the trend.
Some traditional players without the technical expertise to develop their own robo advisers are turning to technology fi rms such as Pintec Group’s Xuanji and MiCai.
Others, like China Merchants Bank (CMB), the country’s largest non-state-backed lender, have managed to create their own.
After a months-long nationwide ad-vertising campaign, CMB launched in December its “Machine Gene Invest-ment”, or Mojie robo advisory service, which pre-selects a range of assets and trades them automatically, cutting the costs of investment advice for users of its Internet banking app.
The bank said users had invested an average 36,900 yuan ($5,360) each so far in the new service, and a person fa-miliar with the bank’s business said the service had racked up 3bn yuan in assets under management in just a couple of months.
After months in development, Ant Financial, the world’s largest fi ntech fi rm, will be launching automated ad-vice to its millions of clients this year, people familiar with the plans told Reu-ters. The company itself said it wouldn’t be off ering them “in the short-term”.
The sources also said Industrial and Commercial Bank of China (ICBC) is
about to introduce a similar tool.ICBC, the world’s largest bank by as-
sets, declined to comment.Moves by the two behemoths could
tempt others off the fence about robo services.
“When you have a main-street bank that did a huge marketing campaign in that particular fi eld... that solution becomes a must-have for the industry, and the bigger state-owned banks fol-low them,” said Gregory Van den Bergh, chief executive of MiCai, China’s oldest robo adviser. “It’s had a very good eff ect on the industry.”
Xuanji signed early in 2017 to have its
technology run Minsheng Securities’ robo adviser and expects to soon close other deals with an insurer and a bank in China, CEO Zheng Yudong said.
MiCai is getting many inquiries from banks in mainland China, though the company can’t disclose the names of clients, Van den Bergh added.
An EY survey of wealth management clients and industry executives showed Chinese respondents, who are already used to handling most of their fi nances on mobile phones, were the most likely in Asia Pacifi c to open robo advisory ac-counts.
As many as 76% said they would
consider it, compared with just 25% in Australia.
Given low-interest rates in China and expensive real estate, Chinese investors are seeking alternative ways to gener-ate returns, while avoiding the volatility that followed a major slump in Shang-hai and Shenzhen stock markets in 2015.
Many hope that a robo-tailored port-folio can deliver.
“Robo advisory is not for gamblers. It’s not a sexy product.
It’s supposed to prevent volatility; it focuses on stability, so lower returns, but no spikes up and down,” Xuanji’s Zheng said.
China banks, brokers eye robo advice for edge on competition
Kia Motors announces $1bn India investmentAFPNew Delhi
South Korean car maker Kia Motors said yesterday it will build a new $1.1bn
plant in India, marking its en-try into one of the world’s fast-est growing markets as sales in neighbouring China have sagged.
Kia Motors said in a state-ment it would manufacture up to 300,000 cars a year at the new factory in the southern state of Andhra Pradesh, starting in late 2019.
Kia and its sister company Hyundai Motor have seen sales in China, the world’s biggest car market, hammered by the fallout from a diplomatic spat between Seoul and Beijing over a US mis-sile defence system.
The company plans to pro-duce a compact sedan and com-pact SUV especially for the In-dian market at the new plant.
India is the world’s fi fth big-gest auto market and is growing rapidly.
Nearly 4mn cars were sold there last year and PriceWater-houseCoopers predicts that will rise to almost 7mn by 2022.
“India is a key market and you lose a big opportunity for future growth if you’re not here,” said Abdul Majeed, partner at PWC.
“Apart from selling to cus-tomers in India, global auto makers are also looking at how to use India as base to design and source parts and now Kia is on that journey.”
Hyundai Motor is the second largest auto maker in India be-hind Maruti Suzuki India and analysts expect Kia to use some of Hyundai’s existing supply chain network.
Volkswagen was one of the last global auto giants to launch in India in 2010, but has struggled to capture market share.
The company plans to produce a compact sedan and compact SUV especially for the Indian market at the new plant
S Korea raises 2017 export outlook as economy speeds upReutersSeoul
South Korea raised its export outlook for the year after fi rst quarter economic growth accelerated at a sharper pace, with policymakers saying there was no need for extra stimulus
even as the economy faces a host of political and economic chal-lenges.
The fi rm start to the year on strong exports and capital invest-ment is a relief for policymakers after months of political crisis and as the country prepares to elect a new president in May amid rising tensions with neighbours North Korea and China.
With overall growth rebounding, drawing up a supplementary budget to boost the economy won’t be necessary for now, Finance Minister Yoo Il-ho told reporters, although the fi nal decision may be up to the nation’s next leader.
Growth in the second quarter won’t slow sharply, Yoo added, but uncertainties will continue to persist.
Gross domestic product grew a seasonally adjusted 0.9% in the fi rst quarter, the Bank of Korea said earlier yesterday, accelerating from a 0.5% quarterly expansion in the fi nal three months of last year.
It was the fastest pace since the second quarter of 2016 when the economy grew 0.9%. The median forecast in a Reuters survey was for a 0.7% expansion. From a year earlier, GDP rose 2.7% in the fi rst quarter.
Facility investment led overall growth with a 4.3% gain on quarter, while exports gained 1.9% after declining 0.1% a quarter earlier. Private consumption grew 0.4%, accelerating from 0.2% previously. Construction investment growth leapt 5.3% from three months earlier, as “apartment projects that boomed from a year earlier are still supporting economic growth,” a fi nance min-istry offi cial said.
Still, South Korea’s service sector barely averted decline and rose at the slowest pace in 32 quarters, 0.1%, from three months earlier. “Chinese tourist numbers fell due to China’s restrictions on travel to South Korea, while consumer sentiment was sluggish.
Some also delayed buying their mobile phones waiting for new smartphone releases,” Chung Kyu-il, a director general at the BOK said. China has ordered a halt to tours to South Korea in retaliation against Seoul’s decision to deploy the US
Terminal High Altitude Area Defence radar system.Asia’s fourth-largest economy will hold a presidential election
on May 9 following the impeachment of ex-leader Park Geun-hye.Leading democratic candidate Moon Jae-in has already prom-
ised an extra budget of at least 10tn won ($8.90bn), although many analysts including Stephen Lee, chief economist at Meritz Securi-ties, said current economic conditions don’t warrant one for now.
“Drawing up an extra budget wouldn’t make sense anymore,” Lee said. “We have to see who’ll become president, but I think it would be better to focus on spending on next year’s budget in or-der to improve the fundamentals of the economy.”
China still hungry for copper, but not in refined formBy Andy HomeLondon
China’s imports of refined copper slumped by
28% year-on-year in the first quarter of 2017.
Factoring in exports, now a regular feature
of the country’s trade picture, the slide in net
metal imports was an even more dramatic
35%.
The net draw on units from the rest of the
world was 699,000 tonnes in the first three
months of the year, a decline of 368,000
tonnes on the same period of 2016.
Look no further to understand why cop-
per’s early-year bull run to over $6,200-per
tonne, basis three-month metal on the Lon-
don Metal Exchange, has stalled.
The price is today trading around $5,720.
Even while production disruptions have
accumulated, any impact on refined metal
availability has been muted, witness the
near 185,000-tonne build in global exchange
stocks in the first quarter.
However, it’s not as if China has lost its ap-
petite for imported copper.
It’s just that it has shifted to other forms of
the metal.
Imports of scrap seemed to be in long-term
decline having fallen in each of the last four
years.
Volumes last year were 3.35mn tonnes
(bulk weight, not metal contained), compared
with 4.86mn tonnes in 2012.
That steady downtrend, however, has gone
into sharp reverse over the last few months.
Imports accelerated by 22% to 907,000
tonnes in January-March, the highest first-
quarter level since 2013.
This is part and parcel of what seems to be
a global surge in scrap supply occasioned by
the sharp jump in the copper price from un-
der $5,000 in the fourth quarter of last year.
This is how large parts of the scrap sector
“hedge” their price exposure.
When the price falls, sales of material
bought at higher prices simply dry up.
Accumulated stocks are only released
when the price rises to a suff icient level to
make them profitable again.
Discounts for copper scrap in both the
United States and Europe have flexed wider
since the fourth quarter of last year, attesting
to much improved availability.
It’s no surprise, therefore, to see the world’s
largest buyer of copper soak up this cheaper
source of metal.
The scrap import surge is a recent phe-
nomenon.
The rise in mined concentrate imports
is part of a longer-running trend rooted in
China’s build-out of refining capacity.
Imports of concentrates have risen every
year since 2011 with the pace accelerating in
2016 thanks to much-improved mine supply.
And the trend was extended in the first
quarter with inbound flows of concentrate
rising another 8.5% to 4.31mn tonnes (bulk
weight).
True, there is clear evidence of the supply
hits at Freeport McMoRan’s Grasberg mine
in Indonesia and at BHP Billiton’s Escondida
mine in Chile.
Imports of concentrate from Indonesia al-
most dried up completely in March itself with
the first quarter tally of 66,100 tonnes down
by a third on last year’s equivalent.
Those from Chile, meanwhile, grew by just
3% in the period after growth of 27% last year
and the country was overtaken by Peru as
China’s top supplier of mined concentrates.
But compensation came in particular
from sharp jumps in imports from Spain and
Kazakhstan, China’s sixth and seventh largest
volume suppliers in the first quarter.
Concentrate imports in March itself were
1.63mn tonnes, still the third highest monthly
total on record after November and Decem-
ber 2016.
The steady rise in China’s appetite for
imported copper concentrates is part of a
long-running trend and one which will serve
eventually to dampen the country’s require-
ment for imports of refined metal.
However, it’s clear that the short-term
weakness in refined metal imports owes more
to the turnaround in availability of copper
scrap.
Scrap impacts the supply chain in two
ways, both negative for refined metal
demand.
Firstly, greater scrap supply means higher
production of refined copper by those refiner-
ies capable of handling it as a raw material
feed.
The International Copper Study Group
(ICSG) estimates that global production of
refined copper rose by around 2% in January.
Production using concentrates as a feed
was flat, while production from scrap rose by
13% year-on-year.
“Increased availability of scrap allowed
world secondary refined production to
increase, notably in China where the upward
trend started in 4th quarter 2016,” the Group
said in its most recent monthly update.
Secondly, and perhaps even more
importantly, the combination of improved
supply and cheaper pricing incentivises many
product manufacturers to increase scrap in
their input mix, reducing the need for refined
copper.
The resulting softness in refined metal
import demand is being compounded by
continued robust “exports” of copper.
These come from a clutch of producers
permissioned to toll-treat raw materials and
export refined copper without paying the
15-percent export tax.
The first-quarter export tally was 105,000
tonnes, compared with just 43,000 tonnes in
the same period of 2016.
Not all of these “exports” necessarily leave
the country.
China’s customs department counts a ship-
ment as an export even if the metal only goes
as far as a bonded warehouse zone in one of
the country’s ports.
At times last year there seemed to be a
fairly clear linkage between China’s outbound
flows and arrivals at LME warehouses in Asia.
The picture has become much murkier
with the most recent high-volume deliveries
into the LME’s Asian network taking place at
Singapore, to which China has exported only
a modest 5,000 tonnes so far this year.
A long-running theme of China’s trade in
copper is that it often says as much about
supply as it does about the country’s underly-
ing demand.
The emergence of scrap as a significant
supply source is accentuating that theme at
the moment.
However, it will not last.
By its very nature this sort of price-related
destock of scrap is a one-off phenomenon
and most copper analysts are looking for a
steady diminution over the coming months.
To what extent that translates into a
recovery in refined copper imports by China
remains to be seen.
Much will depend on the state of play in the
concentrates part of the supply chain.
Mine supply has taken some big hits in the
early months of this year but it has evidently
not yet impacted China’s ability to make more
refined copper itself.
Production was up by 8.5% in March and
not all of that increase is attributable to scrap.
Smelters have probably been drawing on
stocks accumulated last year in what turned
out to be a boom year for mine production.
They, like everyone else in the copper
market, will be paying close attention to what
happens with mine supply over the rest of
this year.
Andy Home is a columnist for Reuters. The
opinions expressed are those of the author.
BUSINESS
Gulf Times Friday, April 28, 20176
Takata shares plunge 20% on bankruptcy reportAFPTokyo
Takata shares dropped nearly 20% yesterday after a media report said the embattled Japanese air-
bag maker was considering fi ling for bankruptcy protection and then rolling its key businesses into a new company.
The stock price fell 19.53% to ¥412 ($3.70) — the daily limit loss of ¥100— after the Tokyo Stock Exchange lifted a trading suspension in the afternoon.
Trading in Takata’s shares was tem-porarily halted yesterday after Japan’s Nikkei business daily reported on a scheme to split the company.
Takata, at the centre of the biggest-ever auto safety recall, acknowledged that discussions were under way, but said no fi nal decisions have been made.
It declined to comment on details of the report in the Nikkei.
Takata has already agreed to pay a billion-dollar fi ne to settle lawsuits in the United States over its defective air-bags, which have been linked to at least 16 deaths and scores of injuries globally.
Yesterday, the Nikkei said Takata was considering fi ling for bankruptcy pro-tection and then selling its core opera-tions, including airbags, seat belts and child safety seats, to a new company created for the purpose of acquiring those divisions.
An external committee charged with formulating a plan for Takata’s rescue in February recommended Key Safety Systems (KSS), a US subsidiary of Chi-na’s Ningbo Joyson Electronic, as its turnaround sponsor, the Nikkei said.
“It’s true there are talks under way about how to rehabilitate the company, primarily among automakers and KSS, but we haven’t received a report from the external committee yet,” the com-
pany said in a statement yesterday.“We do not have any decision or rel-
evant facts to disclose.”Key Safety would put up nearly
¥200bn ($1.79bn) to create the new company that would purchase Takata
operations, the Nikkei said. That would let the stripped-down auto parts maker use the proceeds of the sale to repay creditors, including major automakers, for expenses linked to the massive recall of its airbags, the paper said without
citing sources. Takata would eventually be liquidated, it added.
Top creditors of Takata, including Honda and Toyota, broadly agree on the plan, the Nikkei said.
Japanese automakers would agree not
to pursue Key Safety or its future sub-sidiary for future recall costs, the article said.
The recall of more than 100mn air-bags has aff ected almost every major automaker.
Globalised yuan is long-term, market-driven goal: PBoCBloombergBeijing
People’s Bank of China’s depu-ty governor Fan Yifei said the country’s commitment to yuan
internationalisation is long-term, and policy makers will keep pushing to-wards that objective.
Boosting the currency’s global role is a market-driven process and a nat-ural result of China’s fi nancial open-ing, Fan said in a speech yesterday in Sydney, according to a statement re-leased on the central bank’s website. He said policy makers are confi dent in maintaining fi nancial stability and achieving their full-year economic growth goal of around 6.5%.
The quest for a globalised yuan has been undermined as authorities tightened controls to help curb capi-tal fl owing out of the country after the yuan last year posted its steepest de-cline in more than two decades. Swift data show global transactions using yuan fell to 1.78% in March, down from a record 2.79% share in August 2015. While outfl ows are easing for now, loosening the control too quickly
could fuel future risks. Fan said a dig-ital currency backed by the central bank has the potential to exert a nega-tive impact on fi nancial stability and security, which makes it important for policy makers to conduct further research on the topic. Meanwhile, the central bank should also step up oversight of private cryptocurrencies, he told a gathering of the RMB Global Cities Dialogue.
The central bank is among the fi rst working to create its own digital mon-ey, conducting trial runs of a proto-type earlier this year. Fan is one of the key PBoC offi cials leading the eff ort.
Reserve Bank of Australia gover-nor Philip Lowe, speaking at the same forum on yuan internationalisation, said China should be wary of the mes-sage investors take from capital curbs as they may be interpreted as concern about the economy.
“One consideration is the signal that a tightening of controls, after several years of liberalisation, could send to investors about how the gov-ernment perceives the balance of risks facing the economy,” Lowe said in a speech text prepared for delivery to the forum.
Asia stock markets rise on NAFTA deal hopes
AFPTokyo
Asian markets mostly rebound-
ed yesterday as the US said
it would renegotiate its free-
trade deal with Canada and
Mexico, dampening fears of
a trade war after reports said
President Donald Trump was
considering leaving the pact.
Europe’s major bourses
meanwhile drifted lower in
late morning trade before the
latest interest rate call from
the European Central Bank at
1145 GMT.
Equities across Asia started
the day in the red, following
four days of gains, as traders
assessed the chances of US
Congress passing massive tax
cuts unveiled Wednesday.
The White House said all
three countries would revise
the 22-year-old North Ameri-
can Free Trade Agreement
(NAFTA) swiftly.
The news has fuelled relief
on trading floors as President
Trump has previously hit out
at the agreement — calling
it a “disaster” that has killed
American jobs — as well as
other deals the US has signed
globally.
Jitters about a possible
trade war were heightened
this week when Washington
slapped 20% tariff s on Cana-
dian softwood lumber imports.
“It is my privilege to bring
NAFTA up to date through
renegotiation,” Trump said
in a White House statement.
“I believe that the end result
will make all three countries
stronger and better.”
Tokyo stocks fell 0.2% after
a four-day rally, with dealers
unmoved by the Bank of Ja-
pan’s decision to lower its infla-
tion target and stand pat on its
monetary easing programme.
But Hong Kong climbed
0.5% for a sixth-straight gain,
while Sydney added 0.2% and
Shanghai ended 0.4% higher.
The White House unveiled
plans to slash corporate and
individual rates on Wednesday
but there were few details and
several questions over how the
measures will be paid for.
The proposals are part of a
wide-ranging plan to fire the
world’s top economy, which
also includes ramping up infra-
structure spending and wiping
away business regulations.
“Under the Trump plan, we
will have a massive tax cut for
businesses and massive tax
reform and simplification,”
US Treasury Secretary Steven
Mnuchin said.
Stephen Innes, analyst at
trading firm Oanda, said that
no comprehensive details were
provided.
“Traders are viewing (the
plan) as little more than a road
map, rather than.... a big an-
nouncement,” he noted.
Investors in New York were
unsure about the measures
and decided to cash out after
two days of gains.
Turkish assets outperform EMsReutersLondon
The Turkish lira rallied to four-month highs yes-terday after a surprise policy tightening deci-sion reassured investors about the central bank’s
resolve on infl ation, while Mexico’s peso rose after US comments on the NAFTA trade deal.
The lira strengthened 0.5% towards its fi rmest level since January after the central bank hiked the highest of its multiple interest rates on Wednesday in an attempt to rein in double-digit infl ation.
Annual infl ation soared to 11.29% last month, its highest in 8-1/2 years, as currency weakness stoked a surge in food and transport prices.
The latest hike and liquidity measures are expected to raise the weighted average cost of funding by 25 basis points to 11.75%.
But it may also reassure investors that the central bank may be able to tackle infl ation without govern-ment interference.
“The move was surprising in the sense as it came at a time of relative stability in the lira given that the cen-tral bank seems to generally respond to lira weakness,” said Inan Demir, senior emerging market economist at Nomura. “But it might still have a defensive ele-ment given that we will see next week the April infl a-tion release... and Wednesday’s hike may be aiming to preempt that infl ation increase and preempt an erosion of real rates into negative territory.” He predicted infl a-tion would rise to 12%. JPMorgan told clients the move
had injected “a signifi cant dose of confi dence” which could spark a more durable rally in local currency as-sets, adding it was moving to an overweight position in lira and Turkish local bonds in its model portfolio.
Local 10-year sovereign bond yields fell to the low-est since November 2016 while fi ve-year credit default swaps eased to 212 basis points, their tightest in 21 months.
The average yield spread paid by Turkish sovereign bonds over US Treasuries on the JPMorgan EMBI Glo-bal Diversifi ed index also narrowed 1 basis point to 291 basis points, the lowest level since July 2016.
Mexico’s peso, which had slumped 1.75% on Wednesday on reports that the United States was considering withdrawing from the North American Free Trade Agreement (NAFTA), rose 1% as President Donald Trump said he would not immediately scrap the pact. A disruption in trade could wreak havoc in the auto sector and other industries, hitting profi ts at companies that have benefi ted from zero-level tariff s and Mexico’s relatively low labour costs.
Emerging currencies were also supported more broadly by the lack of specifi cs in Trump’s long-await-ed US tax cut plan, which many fear will be diffi cult to achieve and which weighed on the dollar.
Russia’s rouble gained 0.3%.Investors will be looking to an ECB interest rate deci-
sion later in the day and will scrutinise policymakers’ comments for any clues on whether it will start to pare monetary stimulus in the coming months. The rally in emerging market equities ran out of steam, with MS-CI’s benchmark emerging stocks index down 0.2%.
The logo of Takata Corp is seen at a showroom for vehicles in Tokyo. Shares in the company fell 19.53% to ¥412 ($3.70) after the Tokyo Stock Exchange lifted a trading suspension in the afternoon.
People’s Bank of China’s deputy governor Fan Yifei said the country’s commitment to yuan internationalisation is long-term, and policy makers will keep pushing towards that objective.
Indian equities fall fromrecord high; rupee steadyBloombergMumbai
India’s benchmark equity index fell from a record as shares of metal makers declined on the day monthly derivatives contracts expire.The S&P BSE Sensex index fell 0.3%, still closing above 30,000 mark at the 3:30pm close in Mumbai. The index fluctuated repeatedly between gains and losses as the April series of derivatives contracts expire on the last Thursday of every month and investors roll over positions to the next month. The NSE Nifty 50 Index dropped 0.1%.“Expiry-led volatility will dominate the market today before investors refocus on the earnings,” said Jagannadham Thunuguntla, head of fundamental equity research at Karvy Stock Broking Ltd. “It is a recovery quarter and the first one after demonetisation, so company numbers will remain crucial.”
Drugmaker Lupin Ltd declined 2.5%, the most on Sensex. Private lender HDFC Bank Ltd was the best performer, rising 1.3% to close at a record for the fifth straight day, after fourth-quarter net income released on April 21 matched estimates.The S&P BSE Metal Index dropped 1%, the biggest decliner among the 13 sector gauges compiled by BSE. The India VIX Index, a gauge of expected stock-price swings, dropped 5.7% to the lowest level on record, a day after rising 5.2%.Meanwhile, the rupee washed out initial gains to quote steady at 64.11 against the dollar in late morning trade on fresh demand for the greenback from banks and importers despite its weakness in overseas market. The rupee resumed higher at 64.05 per dollar as against Wednesday’s closing level of 64.11 at the Interbank Foreign Exchange (Forex) Market and firmed up further to 63.97 on initial selling of dollars.
LATEST MARKET CLOSING FIGURES
Zad Holding CoWidam Food CoVodafone Qatar
United Development CoSalam International Investme
Qatar & Oman Investment CoQatar Navigation
Qatar National Cement CoQatar National Bank
Qatar Islamic InsuranceQatar Industrial Manufactur
Qatar International IslamicQatari Investors Group
Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical
Qatar Fuel QscQatar First Bank
Qatar Electricity & Water CoQatar Cinema & Film Distrib
Qatar Insurance CoOoredoo Qsc
National LeasingMazaya Qatar Real Estate Dev
Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co
Medicare GroupMannai Corporation Qsc
Masraf Al RayanAl Khalij Commercial Bank
Industries QatarIslamic Holding Group
Gulf Warehousing CompanyGulf International Services
Ezdan Holding GroupDoha Insurance Co
Doha Bank QscDlala Holding
Commercial Bank QscBarwa Real Estate Co
Al Khaleej Takaful GroupAamal Co
74.60
64.00
9.43
19.19
10.50
9.53
70.50
75.60
143.80
60.90
43.45
62.80
57.00
101.00
19.90
39.10
9.39
128.00
8.55
208.00
35.90
71.00
103.80
17.22
12.65
14.95
156.90
97.00
78.50
41.85
14.63
104.30
61.00
52.50
25.60
15.30
16.84
31.30
25.00
29.95
34.00
20.00
13.26
-6.75
-0.62
-1.15
-2.04
-0.47
0.21
-0.42
-1.56
-2.18
1.50
0.81
-0.63
-1.72
0.00
-0.50
0.00
1.40
-3.03
-1.27
-0.95
0.00
0.00
-1.42
-0.63
-5.39
1.15
-0.70
-1.72
0.00
0.00
0.21
-2.98
-2.87
0.57
-0.58
-0.65
1.45
-0.79
2.75
0.50
-0.58
4.71
-3.56
1,616
8,739
2,030,714
146,612
67,175
9,085
18,228
1,633
312,074
301
1,276
84,612
126,853
42,027
228,283
-
78,867
147,877
288,912
27,026
-
37,591
74,035
802,110
1,237,315
334,875
7,611
26,892
205
356,530
8,760
172,968
36,877
48,706
89,394
1,394,435
1,000
211,753
658,009
527,994
208,670
652
37,640
QATAR
Company Name Lt Price % Chg Volume
United Wire Factories CompanEtihad Etisalat Co
Dar Al Arkan Real Estate DevSaudi Hollandi Bank
Rabigh Refining And PetrocheBanque Saudi Fransi
Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran
Saudi British BankMohammad Al Mojil Group Co
Red Sea International CoTakween Advanced Industries
Sabb TakafulSaudi Arabian Fertilizer Co
National GypsumSaudi Ceramic Co
National Gas & IndustrializaSaudi Pharmaceutical Industr
ThimarNational Industrialization C
Saudi Transport And InvestmeSaudi Electricity Co
Saudi Arabia Refineries CoArriyadh Development Company
Al-Baha Development & InvestSaudi Research And MarketingAldrees Petroleum And Transp
Saudi Vitrified Clay Pipe CoJarir Marketing Co
Arab National BankYanbu National Petrochemical
Arabian CementMiddle East Specialized Cabl
Al Khaleej Training And EducAl Sagr Co-Operative Insuran
Trade Union Cooperative InsuArabia Insurance Cooperative
Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C
Bupa Arabia For CooperativeWafa Insurance
Jabal Omar Development CoSaudi Basic Industries Corp
Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat
Co For Cooperative InsuranceNational Petrochemical Co
Gulf Union Cooperative InsurGulf General Cooperative Ins
Basic Chemical IndustriesSaudi Steel Pipe Co
Buruj Cooperative InsuranceMouwasat Medical Services Co
Southern Province Cement CoMaadaniyah
Yamama Cement CoJazan Development Co
Zamil Industrial InvestmentAlujain Corporation (Alco)
Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc
Qassim Cement/TheSaudi Advanced Industries
Kingdom Holding CoSaudi Arabian Amiantit Co
Al Jouf Agriculture DevelopmSaudi Industrial Development
Bishah AgricultureRiyad Bank
The National Agriculture DevHalwani Bros Co
Arabian Pipes CoEastern Province Cement Co
Al Gassim Investment HoldingFiling & Packing Materials M
Saudi Cable CoTihama Advertising & Public
Saudi Investment Bank/TheAstra Industrial Group
Saudi Public Transport CoTaiba Holding Co
Saudi Industrial Export CoSaudi Real Estate Co
Saudia Dairy & Foodstuff CoNational Shipping Co Of/The
Methanol Chemicals CoAce Arabia Cooperative Insur
Mobile Telecommunications CoSaudi Arabian Coop Ins Co
Axa Cooperative InsuranceAlsorayai Group
Weqaya For Takaful InsuranceBank Albilad
Al-Hassan G.I. Shaker CoWataniya Insurance Co
Abdullah Al Othaim MarketsHail Cement
20.83
20.57
6.71
0.00
13.83
26.20
16.52
20.19
22.59
12.55
25.61
12.12
27.62
68.80
13.56
28.59
34.20
34.45
34.13
16.39
0.00
22.96
33.60
20.57
13.50
27.60
26.42
58.63
136.23
19.65
55.59
35.80
7.00
18.60
37.40
19.36
12.80
33.15
34.04
116.55
13.79
67.24
95.98
8.88
8.80
96.00
19.45
12.28
16.90
25.00
16.18
31.63
143.12
56.48
23.00
17.74
14.20
30.00
23.71
12.00
13.03
49.80
13.65
10.50
6.70
30.73
11.88
69.75
10.33
31.07
49.39
15.98
27.27
0.00
34.55
5.75
40.76
12.69
16.39
14.99
44.40
31.22
20.88
126.03
35.63
7.04
47.86
10.35
22.98
23.05
9.40
19.39
18.69
15.52
28.38
105.75
10.80
1.12
0.05
1.51
0.00
2.14
0.11
-0.84
0.40
-1.27
0.00
-0.31
0.17
0.47
-0.01
0.00
0.70
0.80
-0.38
-1.16
2.31
0.00
-0.22
0.60
0.34
0.00
0.25
1.38
1.97
0.54
0.05
-0.18
0.00
4.17
0.59
0.54
0.16
0.39
0.45
-2.49
0.82
-4.77
0.36
1.34
1.02
-1.12
0.26
0.26
-0.16
1.20
-0.16
0.19
0.25
-0.28
2.69
0.44
0.80
-0.35
1.35
1.15
0.00
2.12
0.00
0.89
0.86
1.36
0.82
0.00
0.00
0.29
-1.71
1.21
1.20
0.26
0.00
0.29
0.00
-0.61
-0.08
0.61
0.33
0.54
0.26
0.68
0.37
0.08
0.28
-1.20
0.68
0.66
0.88
0.43
0.00
0.59
-1.15
0.96
0.00
-0.37
850,050
1,278,229
89,400,522
-
4,416,862
105,842
111,878
108,137
628,498
-
66,880
300,997
237,132
148,447
28,704
69,307
9,859
62,862
128,992
673,751
-
1,164,058
107,465
75,909
-
116,734
341,254
17,132
42,213
86,690
384,673
74,239
2,067,152
105,831
105,318
89,526
420,630
38,425
1,195,197
69,155
2,079,359
38,294
4,534,377
12,479,075
322,451
106,601
118,081
96,065
191,415
278,236
59,926
369,341
2,197
61,623
158,344
439,366
396,515
69,537
1,143,651
765,441
474,586
38,545
264,110
109,921
853,036
112,177
379,338
-
260,208
697,081
25,743
252,918
19,586
-
80,764
-
526,570
196,406
98,531
1,100,938
27,354
136,320
384,313
111,722
185,683
1,842,703
370,922
4,379,518
360,291
745,026
501,619
-
297,421
169,561
250,699
11,213
150,259
SAUDI ARABIA
Company Name Lt Price % Chg Volume
Saudi Re For Cooperative ReiSolidarity Saudi Takaful Co
Amana Cooperative InsuranceAlabdullatif Industrial Inv
Saudi Printing & Packaging CSanad Cooperative Insurance
Saudi Paper Manufacturing CoAlinma Bank
Almarai CoFalcom Saudi Equity Etf
United International TranspoHsbc Amanah Saudi 20 Etf
Saudi International PetrocheFalcom Petrochemical Etf
Saudi United Cooperative InsBank Al-Jazira
Al Rajhi BankSamba Financial Group
United Electronics CoAllied Cooperative Insurance
Malath InsuranceAlinma Tokio Marine
Arabian Shield CooperativeSavola
Wafrah For Industry And DeveFitaihi Holding Group
Tourism Enterprise Co/ ShamsSahara Petrochemical Co
Herfy Food Services Co
7.50
17.97
18.73
13.90
16.50
15.23
8.21
14.36
73.08
27.50
22.80
27.70
17.33
26.70
28.68
11.71
63.11
21.40
36.86
13.04
21.29
17.34
53.14
42.51
22.72
12.36
30.08
14.46
80.00
0.00
0.73
-1.00
-0.71
0.30
0.00
1.99
0.98
0.69
-0.72
0.00
0.00
2.85
0.00
0.35
0.60
0.33
0.94
-3.08
-1.58
-0.19
1.58
-1.32
0.33
0.04
-0.08
-0.10
-0.55
0.63
501,683
143,766
475,166
137,481
411,611
-
1,954,465
27,898,604
135,963
1,180
202,196
-
1,830,539
-
545,772
1,832,322
1,233,476
598,032
627,700
231,839
76,063
163,873
46,406
100,525
208,167
94,415
70,434
415,538
63,362
SAUDI ARABIA
Company Name Lt Price % Chg Volume
Securities Group CoSultan Center Food Products
Kuwait Foundry Co SakKuwait Financial Centre Sak
Ajial Real Estate EntmtGulf Glass Manuf Co -Kscc
Kuwait Finance & InvestmentNational Industries Co Ksc
Kuwait Real Estate Holding CSecurities House/The
Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait
Ahli United Bank (Almutahed)National Bank Of Kuwait
Commercial Bank Of KuwaitKuwait International Bank
Gulf BankAl-Massaleh Real Estate Co
Al Arabiya Real Estate CoKuwait Remal Real Estate Co
Alkout Industrial Projects CA’ayan Real Estate Co Sak
Investors Holding Group Co.KAl-Mazaya Holding Co
Al-Madar Finance & Invt CoGulf Petroleum Investment
Mabanee Co SakcCity Group
Inovest Co BscKuwait Gypsum Manufacturing
Al-Deera Holding CoAlshamel International Hold
Mena Real Estate CoNational Slaughter House
Amar Finance & Leasing CoUnited Projects For Aviation
National Consumer Holding CoAmwal International Investme
Jeeran HoldingsEquipment Holding Co K.S.C.C
Nafais HoldingSafwan Trading & Contracting
Arkan Al Kuwait Real EstateGfh Financial Group Bsc
Energy House Holding Co KscpKuwait Slaughter House Co
Kuwait Co For Process PlantAl Maidan Dental Clinic Co K
National Ranges CompanyAl-Themar Real International
Al-Ahleia Insurance Co SakpWethaq Takaful Insurance Co
Salbookh Trading Co KscpAqar Real Estate Investments
Hayat CommunicationsKuwait Packing Materials Mfg
Soor Fuel Marketing Co KscAlargan International RealBurgan Co For Well Drilling
Kuwait Resorts Co KsccOula Fuel Marketing Co
Palms Agro Production CoIkarus Petroleum Industries
Mubarrad Transport CoAl Mowasat Health Care Co
Shuaiba Industrial CoHits Telecom Holding
First Takaful Insurance CoKuwaiti Syrian Holding Co
National Cleaning CompanyEyas For High & Technical EdUnited Real Estate Company
AgilityKuwait & Middle East Fin Inv
Fujairah Cement IndustriesLivestock Transport & Tradng
International Resorts CoNational Industries Grp Hold
Marine Services Co KscWarba Insurance Co
Kuwait United Poultry CoFirst Dubai Real Estate Deve
Al Arabi Group Holding CoKuwait Hotels Sak
Mobile Telecommunications CoAl Safat Real Estate Co
Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co
Kuwait Cement Co KscSharjah Cement & Indus Devel
Kuwait Portland Cement CoEducational Holding Group
Bahrain Kuwait InsuranceAsiya Capital Investments Co
Kuwait Investment CoBurgan Bank
Kuwait Projects Co HoldingsAl Madina For Finance And In
Kuwait Insurance CoAl Masaken Intl Real Estate
Intl Financial AdvisorsFirst Investment Co Kscc
Al Mal Investment CompanyBayan Investment Co Kscc
Egypt Kuwait Holding Co SaeCoast Investment Development
Privatization Holding CompanKuwait Medical Services Co
Injazzat Real State CompanyKuwait Cable Vision Sak
Sanam Real Estate Co KsccIthmaar Holding Bsc
Aviation Lease And Finance CArzan Financial Group For Fi
Ajwan Gulf Real Estate CoKuwait Business Town Real Es
Future Kid Entertainment AndSpecialities Group Holding C
Abyaar Real Eastate DevelopmDar Al Thuraya Real Estate C
Al-Dar National Real EstateKgl Logistics Company Kscc
Combined Group ContractingZima Holding Co Ksc
Qurain Holding Co
99.00
67.00
290.00
106.00
170.00
0.00
51.00
214.00
43.00
48.50
580.00
310.00
430.00
680.00
390.00
248.00
248.00
53.00
37.00
73.00
700.00
88.00
26.00
124.00
0.00
45.50
800.00
0.00
106.00
95.00
36.50
335.00
0.00
40.00
57.00
740.00
90.00
71.00
44.50
60.00
150.00
0.00
84.00
188.00
45.50
188.00
174.00
0.00
28.50
90.00
480.00
54.00
66.00
82.00
85.00
0.00
124.00
188.00
85.00
81.00
124.00
110.00
0.00
79.00
310.00
315.00
46.00
56.00
40.50
49.00
400.00
90.00
620.00
31.50
90.00
204.00
36.50
122.00
60.00
92.00
0.00
60.00
94.00
0.00
440.00
0.00
425.00
46.50
490.00
90.00
960.00
305.00
0.00
38.00
100.00
305.00
415.00
49.50
248.00
75.00
44.00
49.00
20.00
51.00
192.00
45.50
52.00
0.00
93.00
0.00
55.00
51.00
250.00
38.00
82.00
53.00
124.00
90.00
27.00
204.00
0.00
68.00
540.00
58.00
0.00
0.00
0.00
0.00
0.00
4.94
0.00
5.15
0.00
1.18
-3.00
1.75
0.00
1.18
1.49
5.41
0.00
0.00
6.00
2.78
2.82
0.00
2.33
0.00
3.33
0.00
1.11
-2.44
0.00
0.00
0.00
2.82
0.00
0.00
0.00
0.00
7.25
0.00
0.00
-1.11
3.45
0.00
0.00
0.00
2.17
3.41
0.00
0.00
0.00
-1.72
0.00
0.00
5.88
-1.49
0.00
1.19
0.00
0.00
0.00
-5.56
1.25
0.00
5.77
0.00
0.00
0.00
-10.00
3.37
-3.45
1.25
-1.01
0.00
-5.26
0.00
5.00
0.00
0.00
1.39
1.67
0.00
5.75
0.00
3.45
-2.08
0.00
-1.12
0.00
0.00
1.09
0.00
0.00
0.00
3.39
0.00
-1.30
-1.96
-1.61
0.00
5.32
0.00
-3.85
3.53
0.00
-4.76
6.25
0.00
1.11
0.00
0.00
0.00
0.00
0.00
4.08
0.00
1.33
-1.20
3.92
0.00
1.12
1.89
0.00
0.00
1.49
-1.82
1.75
0.00
419
379,176
11,000
65,005
10,050
-
4,850
102
2,129,699
7,297,153
67,054
5
25,010
3,278,284
10,381
97,000
601,500
1,266,910
2,707,661
2,687,720
1,000
479,252
1,177,015
15,996,346
-
3,358,555
271,511
-
2,515,580
100
38,501
250
-
6,404
500
100
78,300
500
1,000
4,563,342
5,008
-
10,050
84,314
38,650
5,000
941
-
1,004,010
400,000
8,860
100
32,055
10,000
87,330
-
35,804
50
43,451
920,000
21,711
50
-
15,105
20
30,753
6,834,417
24,010
1,719,000
89,296
40,000
5,050
431,771
52,750
77,200
3,000
898,500
325,909
7,000
812
-
3,022,561
745,015
-
1,480,899
-
39,799
2,676,413
73
290,000
1,500
11,710
-
196,937
505,000
481,053
397,877
1,522,800
6,394
60,000
5,158,242
48,200
3,789,524
16,365,645
95,000
778,600
760
-
6,000
-
15
22,178,460
286,000
3,440,804
255,000
2,216,232
505
301,011
10,021,232
10
-
153,816
235,957
121,230
-
KUWAIT
Company Name Lt Price % Chg Volume
Voltamp Energy SaogUnited Power/Energy Co- Pref
United Power Co SaogUnited Finance Co
Ubar Hotels & ResortsTakaful Oman
Taageer FinanceSweets Of OmanSohar Power Co
Sohar PoultrySmn Power Holding Saog
Shell Oman Marketing - PrefShell Oman Marketing
Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat
Salalah Port ServicesSalalah Mills Co
Salalah Beach Resort SaogSahara Hospitality
Renaissance Services SaogRaysut Cement Co
Port Service CorporationPhoenix Power Co Saoc
Packaging Co LtdOoredoo
OminvestOman United Insurance Co
Oman Textile Holding Co SaogOman Telecommunications Co
Oman Refreshment CoOman Packaging
Oman Orix Leasing Co.Oman Oil Marketing Company
Oman National Engineering AnOman Investment & Finance
Oman Intl MarketingOman Hotels & Tourism CoOman Foods International
Oman Flour MillsOman Fisheries CoOman Fiber Optics
Oman Europe Foods IndustriesOman Education & Training In
Oman ChromiteOman Chlorine
Oman Ceramic CompanyOman Cement Co
Oman Cables IndustryOman Agricultural Dev
Oman & Emirates Inv(Om)50%Natl Aluminium Products
National SecuritiesNational Real Estate Develop
National PharmaceuticalNational Mineral Water
National Hospitality InstituNational Gas Co
National Finance CoNational Detergent Co Saog
National Biscuit IndustriesNational Bank Of Oman Saog
Muscat Thread Mills CoMuscat National Holding
Muscat Gases Company SaogMuscat Finance
Majan Glass CompanyMajan College
Hsbc Bank OmanHotels Management Co Interna
Gulf StoneGulf Plastic Industries Co
Gulf Mushroom CompanyGulf Investments Services
Gulf Invest. Serv. Pref-SharGulf International Chemicals
Gulf Hotels (Oman) Co LtdGlobal Fin Investment
Galfar Engineering&ContractGalfar Engineering -Prefer
Financial Services Co.Financial Corp/The
Dhofar UniversityDhofar Tourism
Dhofar PoultryDhofar Intl Development
Dhofar InsuranceDhofar Fisheries & Food Indu
Dhofar CattlefeedDhofar Beverages Co
Construction Materials IndComputer Stationery Inds
Bankmuscat SaogBank SoharBank Nizwa
Bank Dhofar Saog
0.46
1.00
3.25
0.14
0.13
0.18
0.11
1.34
0.17
0.21
0.70
1.05
1.88
4.35
0.25
0.63
1.39
1.38
2.50
0.22
1.15
0.23
0.14
2.21
0.52
0.51
0.38
0.75
1.32
2.16
0.28
0.12
1.66
0.15
0.22
0.52
0.40
0.00
0.93
0.14
0.00
1.00
0.15
3.64
0.49
0.42
0.46
1.65
0.00
0.12
0.16
0.05
5.00
0.11
0.05
0.00
0.42
0.15
0.66
3.75
0.23
0.08
0.86
0.56
0.12
0.19
0.51
0.13
1.25
0.12
0.00
0.31
0.11
0.11
0.24
10.50
0.17
0.08
0.39
0.11
0.10
1.49
0.49
0.18
0.29
0.21
1.28
0.19
0.26
0.03
0.26
0.40
0.15
0.09
0.23
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
1.23
0.00
0.00
0.00
0.00
0.00
0.44
0.00
1.44
0.00
0.00
0.00
0.00
0.00
0.77
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2.88
0.00
0.00
0.00
0.00
0.00
0.00
0.88
0.00
0.00
-0.86
-0.61
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
0.00
0.00
0.00
0.00
0.00
0.95
0.00
0.00
0.00
0.00
-1.27
0.00
0.00
0.00
0.00
0.00
0.00
-2.00
0.00
0.00
0.00
0.00
0.00
0.00
0.50
1.33
-1.06
0.00
2,723
-
-
-
-
-
-
-
-
-
-
-
-
-
122,402
-
-
-
-
-
80,000
396,835
594,966
-
-
75,652
250,000
-
325,723
-
1,278
-
-
-
-
-
-
-
75,000
1,671,378
-
-
-
-
-
-
50,000
-
-
11,609
7,100
-
-
-
-
-
-
-
-
-
65,000
-
-
-
3,026,200
-
-
-
-
-
-
120
10,000
-
-
-
-
419,790
-
-
-
-
-
-
104,948
-
-
-
-
-
-
593,876
1,866,366
202,002
460,270
OMAN
Company Name Lt Price % Chg Volume
Areej Vegetable Oils SaocAloula Co
Al-Omaniya Financial ServiceAl-Hassan Engineering Co
Al-Fajar Al-Alamia CoAl-Anwar Ceramic Tiles Co
Al Suwadi PowerAl Shurooq Inv Ser
Al Sharqiya Invest HoldingAl Maha Petroleum Products M
Al Maha Ceramics Co SaocAl Madina Takaful Co Saoc
Al Madina Investment CoAl Kamil Power Co
Al Jazerah Services -PfdAl Jazeera Steel Products Co
Al Jazeera ServicesAl Izz Islamic Bank
Al Buraimi HotelAl Batinah PowerAl Batinah Hotels
Al Batinah Dev & InvAl Anwar Holdings Saog
Ahli BankAcwa Power Barka Saog
Abrasives Manufacturing Co SA’saff a Foods Saog
0Man Oil Marketing Co-Pref
0.00
0.53
0.28
0.05
0.75
0.15
0.18
1.04
0.11
1.44
0.40
0.10
0.07
0.31
0.55
0.26
0.17
0.07
0.88
0.17
1.13
0.09
0.21
0.19
0.79
0.05
0.59
0.25
0.00
0.00
0.00
0.00
0.00
0.69
0.00
0.00
0.00
0.00
-0.50
0.00
-1.47
0.00
0.00
2.76
3.13
-1.43
0.00
0.00
0.00
0.00
0.98
0.00
0.00
0.00
0.00
0.00
-
-
-
-
-
614,845
1,686,363
-
10,279
-
115,910
1,747,529
60,063
-
-
2,596,101
104,169
247,358
-
-
-
-
1,131,352
-
43,000
-
-
-
OMAN
Company Name Lt Price % Chg Volume
Waha Capital PjscUnited Insurance Company
United Arab Bank PjscUnion National Bank/Abu Dhab
Union Insurance CoUnion Cement Co
Umm Al Qaiwain Cement IndustSharjah Islamic Bank
Sharjah Insurance CompanySharjah Group
Sharjah Cement & Indus DevelRas Al-Khaimah National Insu
Ras Al Khaimah White CementRas Al Khaimah Ceramics
Ras Al Khaimah Cement Co PscRas Al Khaima Poultry
Rak PropertiesOoredoo Qsc
Oman & Emirates Inv(Emir)50%Nbad Oneshare Msci Uae Ucits
National Takaful CompanyNational Marine Dredging Co
National Investor Co/TheNational Corp Tourism & Hote
National Bank Of Umm Al QaiwNational Bank Of Ras Al-Khai
National Bank Of FujairahNational Bank Of Abu Dhabi
Methaq Takaful InsuranceManazel Real Estate Pjsc
Invest BankIntl Fish Farming Co Pjsc
Insurance HouseGulf Pharmaceutical Ind Psc
Gulf Medical ProjectsGulf Cement Co
Fujairah Cement IndustriesFujairah Building Industries
Foodco Holding PjscFirst Gulf BankFinance House
Eshraq Properties Co PjscEmirates Telecom Group Co
Emirates Insurance Co. (Psc)Emirates Driving Company
Dana GasCommercial Bank Internationa
Bank Of SharjahAxa Green Crescent Insurance
Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc
Al Wathba National InsuranceAl Khazna Insurance Co
Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.
Al Buhaira National InsurancAl Ain Ahlia Ins. Co.
Agthia Group PjscAbu Dhabi Ship Building Co
Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C
Abu Dhabi National InsuranceAbu Dhabi National Hotels
Abu Dhabi National Energy CoAbu Dhabi Islamic Bank
1.87
2.00
1.56
5.00
1.86
1.20
1.78
1.33
3.85
1.49
1.10
4.10
1.08
2.38
0.89
3.70
0.61
101.00
0.86
6.20
0.58
4.50
0.52
2.90
3.10
4.57
2.91
11.00
0.83
0.53
2.40
1.65
0.78
2.16
3.00
0.98
0.91
1.56
6.50
12.90
1.65
1.17
17.45
5.98
8.10
0.44
1.75
1.43
0.73
0.70
1.20
2.14
12.75
0.40
300.00
3.85
2.20
50.00
6.25
2.72
0.54
5.15
3.00
3.00
0.60
3.58
0.54
0.00
0.00
-1.96
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.48
1.14
0.00
0.00
0.00
0.00
0.00
0.00
11.11
0.00
0.00
0.00
0.44
-9.35
0.46
0.00
0.00
0.00
-0.60
4.00
1.89
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2.63
-2.24
0.00
0.00
0.00
0.00
0.00
0.00
6.06
0.00
-1.83
0.00
-2.44
0.00
0.00
0.00
0.00
-1.42
0.00
0.00
0.00
0.00
0.00
0.00
-0.56
79,171
-
-
1,912,299
-
-
-
-
-
-
-
-
-
172,868
11,500
-
1,800,716
-
-
-
-
699
-
-
-
75,588
14,512
4,851,634
983,750
1,842,343
-
762,296
200,000
47,781
-
-
-
-
-
10,031,354
-
40,916,659
784,582
-
-
8,720,996
-
-
-
2,826,062
-
7,907,956
-
83,084
-
-
-
-
792,957
-
-
-
-
215,772
542,341
244,577
UAE
Company Name Lt Price % Chg Volume
Zain Bahrain BsccUnited Paper Industries Bsc
United Gulf Investment CorpUnited Gulf BankTrafco Group Bsc
Takaful International CoTaib Bank -$Us
Seef PropertiesSecurities & Investment Co
National Hotels CoNational Bank Of Bahrain Bsc
Nass Corp BscKhaleeji Commercial Bank
Ithmaar Holding BscInvestcorp Bank -$Us
Inovest Co BscGulf Monetary Group
Gulf Hotel Group B.S.CGfh Financial Group Bsc
Esterad Investment Co B.S.C.Delmon Poultry Co
Bmmi BscBmb Investment Bank
Bbk BscBankmuscat Saog
Banader Hotels CoBahrain Tourism CoBahrain Telecom Co
Bahrain Ship Repair & EnginBahrain National Holding
Bahrain Kuwait InsuranceBahrain Islamic Bank
Bahrain Flour Mills CoBahrain Family Leisure Co
Bahrain Duty Free ComplexBahrain Commercial Facilitie
Bahrain Cinema CoBahrain Car Park Co
Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us
Aluminium Bahrain BscAlbaraka Banking Group
Al-Salam BankAl-Ahlia Insurance Co
Ahli United Bank B.S.C
0.10
0.00
0.00
0.39
0.25
0.00
0.00
0.24
0.00
0.00
0.67
0.15
0.12
0.17
8.50
0.33
0.00
0.53
0.62
0.13
0.00
0.82
0.05
0.39
0.00
0.07
`
0.26
0.00
0.36
0.00
0.15
0.00
0.08
0.77
0.69
1.30
0.14
0.47
0.32
0.42
0.44
0.10
0.00
0.71
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.76
0.00
-2.44
0.00
0.00
0.00
0.00
2.94
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.75
0.00
-5.26
0.00
3.57
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.48
-1.12
1.02
0.00
-0.70
40,000
-
-
26,959
10,000
-
-
202,500
-
-
127,000
207,715
1,580,025
50,000
9,500
25,000
-
3,500
131,131
37,024
-
50,000
61,091,823
455,000
-
57,832
-
95,486
-
10,000
-
48,112
-
150,000
6,000
9,000
5,000
16,500
50,000
240,000
120,586
48,760
249,901
-
1,432,350
BAHRAIN
Company Name Lt Price % Chg Volume
Boubyan Intl Industries HoldGulf Investment House Ksc
Boubyan Bank K.S.CAhli United Bank B.S.C
Osos Holding Group CoAl-Eid Food Ksc
Qurain Petrochemical IndustrAdvanced Technology Co
Ekttitab Holding Co SakKout Food Group Ksc
Real Estate Trade Centers CoAcico Industries Co Kscc
Kipco Asset Management CoNational Petroleum ServicesAlimtiaz Investment Co Kscc
Ras Al Khaimah White CementKuwait Reinsurance Co Ksc
Kuwait & Gulf Link TransportHuman Soft Holding Co Ksc
Automated Systems Co KsccMetal & Recycling Co
Gulf Franchising Holding CoAl-Enma’a Real Estate Co
National Mobile TelecommuniAl Bareeq Holding Co Kscc
Housing Finance Co SakAl Salam Group Holding Co
United Foodstuff IndustriesAl Aman Investment Company
Mashaer Holdings Co KscManazel Holding
Mushrif Trading & ContractinTijara And Real Estate Inves
Kuwait Building MaterialsJazeera Airways Co Ksc
Commercial Real Estate CoFuture Communications Co
National International CoTaameer Real Estate Invest C
Gulf Cement CoHeavy Engineering And Ship B
Refrigeration Industries & SNational Real Estate Co
Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co
Independent Petroleum GroupKuwait Real Estate Co Ksc
Salhia Real Estate Co KscGulf Cable & Electrical IndAl Nawadi Holding Co Ksc
Kuwait Finance HouseGulf North Africa Holding Co
Hilal Cement CoOsoul Investment Kscc
Gulf Insurance Group KscKuwait Food Co (Americana)
Umm Al Qaiwain Cement IndustAayan Leasing & Investment
21.50
43.50
405.00
214.00
138.00
0.00
340.00
1,100.00
40.00
0.00
47.00
290.00
93.00
1,560.00
168.00
98.00
194.00
60.00
3,780.00
265.00
76.00
63.00
41.50
1,260.00
0.00
0.00
50.00
0.00
49.00
0.00
57.00
0.00
58.00
156.00
560.00
76.00
0.00
65.00
43.00
77.00
232.00
0.00
106.00
42.00
1,400.00
88.00
400.00
58.00
380.00
440.00
0.00
495.00
38.50
208.00
63.00
550.00
2,460.00
0.00
50.00
0.00
3.57
0.00
-0.93
2.99
0.00
3.03
0.00
1.27
0.00
0.00
3.57
-1.06
-2.50
-2.33
0.00
0.00
-1.64
-2.58
-8.62
0.00
0.00
0.00
3.28
0.00
0.00
5.26
0.00
0.00
0.00
5.56
0.00
0.00
0.00
0.00
0.00
0.00
-1.52
6.17
-4.94
1.75
0.00
3.92
0.00
0.00
0.00
0.00
0.00
1.33
1.15
0.00
-1.00
0.00
0.00
1.61
0.00
0.00
0.00
1.01
1,000,850
2,841,677
360,783
2,096,965
22,687
-
299,566
5,025
3,346,640
-
128,350
27,646
76,452
25,920
8,316,260
210
500
74,000
764,578
26,550
23,705
51,020
905,350
5
-
-
4,326,019
-
2,900
-
32,693,225
-
24,096
45
154,823
508,211
-
70,507
13,879,010
182,110
20
-
1,870,881
2,444,934
6,004
938,500
4,959
22,600,169
31,000
78,048
-
944,552
387,709
14,842
30,010
500
15,002
-
3,848,382
KUWAIT
Company Name Lt Price % Chg Volume
BUSINESS7Gulf Times
Friday, April 28, 2017
Apple IncMicrosoft Corp
Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co
Jpmorgan Chase & CoProcter & Gamble Co/The
Wal-Mart Stores IncVerizon Communications Inc
Pfizer IncVisa Inc-Class A Shares
Chevron CorpCoca-Cola Co/The
Intel CorpMerck & Co. Inc.
Cisco Systems IncHome Depot Inc
Intl Business Machines CorpWalt Disney Co/The
Unitedhealth Group Inc3M Co
Mcdonald’s CorpNike Inc -Cl B
United Technologies CorpBoeing Co/The
Goldman Sachs Group IncAmerican Express Co
Du Pont (E.I.) De NemoursCaterpillar Inc
Travelers Cos Inc/The
143.60
67.83
81.00
123.61
29.05
87.42
87.58
75.20
46.81
33.94
91.37
105.14
42.95
37.16
62.72
33.85
154.85
159.92
115.97
175.40
195.94
141.35
55.36
119.00
183.69
224.08
80.29
80.32
102.87
122.16
-0.06
0.00
-0.49
0.08
-0.72
-1.14
-0.18
-0.30
-1.17
0.27
-0.49
-0.89
-0.67
0.61
0.02
1.35
0.41
-0.09
0.34
0.58
0.48
0.36
0.35
0.68
1.09
-0.94
-0.29
-1.58
-1.72
0.12
6,191,780
11,589,059
5,406,103
1,661,017
12,880,796
6,323,970
4,361,390
2,465,182
6,928,371
6,364,614
2,333,186
2,241,061
4,862,367
11,553,685
2,170,891
11,069,626
1,735,359
1,504,951
1,611,935
1,139,503
599,515
2,359,240
4,216,007
1,332,349
1,277,428
1,304,572
1,192,551
2,212,311
3,236,023
549,371
DJIA
Company Name Lt Price % Chg Volume
Wpp PlcWorldpay Group Plc
Wolseley PlcWm Morrison Supermarkets
Whitbread PlcVodafone Group Plc
United Utilities Group PlcUnilever Plc
Tui Ag-DiTravis Perkins Plc
Tesco PlcTaylor Wimpey Plc
Standard Life PlcStandard Chartered Plc
St James’s Place PlcSse Plc
Smith & Nephew PlcSky Plc
Shire PlcSevern Trent Plc
Schroders PlcSainsbury (J) Plc
Sage Group Plc/TheSabmiller Plc
Rsa Insurance Group PlcRoyal Mail Plc
Royal Dutch Shell Plc-B ShsRoyal Dutch Shell Plc-A Shs
Royal Bank Of Scotland GroupRolls-Royce Holdings Plc
Rio Tinto PlcRexam Ltd
Relx PlcReckitt Benckiser Group Plc
Randgold Resources LtdPrudential Plc
Provident Financial PlcPersimmon Plc
Pearson PlcPaddy Power Betfair Plc
Old Mutual PlcNext Plc
National Grid PlcMondi Plc
Merlin EntertainmentMediclinic International Plc
Marks & Spencer Group PlcLondon Stock Exchange Group
Lloyds Banking Group PlcLegal & General Group PlcLand Securities Group Plc
Kingfisher PlcJohnson Matthey Plc
Itv PlcIntu Properties Plc
Intl Consolidated Airline-DiIntertek Group Plc
Intercontinental Hotels GrouInmarsat Plc
Informa PlcImperial Brands Plc
Hsbc Holdings PlcHargreaves Lansdown Plc
Hammerson PlcGlencore Plc
Glaxosmithkline PlcGkn Plc
Fresnillo PlcExperian Plc
Easyjet PlcDixons Carphone Plc
Direct Line Insurance GroupDiageo Plc
Dcc PlcCrh Plc
Compass Group PlcCoca-Cola Hbc Ag-Di
Centrica PlcCarnival Plc
Capita PlcBurberry Group Plc
Bunzl PlcBt Group Plc
British Land Co PlcBritish American Tobacco Plc
Bp PlcBhp Billiton Plc
Berkeley Group Holdings/TheBarratt Developments Plc
Barclays PlcBae Systems Plc
Babcock Intl Group PlcAviva Plc
Astrazeneca PlcAssociated British Foods Plc
Ashtead Group PlcArm Holdings Plc
Antofagasta PlcAnglo American Plc
Admiral Group Plc3I Group Plc
1,680.00
303.70
4,927.00
234.40
4,050.00
202.15
984.00
3,968.50
1,131.00
1,615.00
182.50
201.60
361.60
741.30
1,139.00
1,394.00
1,273.00
989.00
4,602.50
2,320.00
3,205.00
273.90
670.00
0.00
592.50
418.90
2,059.50
2,010.50
253.40
809.00
3,030.00
0.00
1,576.00
7,194.00
6,700.00
1,738.00
3,245.00
2,340.00
638.50
8,615.00
195.50
4,303.00
1,007.00
2,014.00
505.50
859.00
366.30
3,391.00
68.97
246.90
1,118.00
335.80
3,000.00
210.50
278.30
548.50
4,086.00
4,077.00
823.00
642.00
3,820.00
640.70
1,406.00
596.00
299.65
1,558.50
353.90
1,436.00
1,668.00
1,155.00
333.30
346.00
2,255.50
7,245.00
2,826.00
1,550.00
2,163.00
198.80
4,688.00
565.50
1,610.00
2,409.00
308.10
662.00
5,236.00
442.65
1,153.50
3,298.00
588.00
223.95
631.00
910.50
528.00
4,698.00
2,832.00
1,627.00
0.00
818.50
1,088.00
2,026.00
805.00
-2.44
0.86
-0.50
-0.17
1.43
-0.47
0.72
-0.97
-0.53
0.37
1.11
1.56
-1.18
-2.11
0.71
-0.07
0.00
0.25
0.03
0.65
0.22
0.11
0.83
0.00
0.85
-0.10
-2.02
-1.69
0.28
-2.06
-2.63
0.00
-1.25
-1.28
-0.74
0.87
1.00
2.36
-0.39
-1.77
-1.61
1.41
0.15
-0.20
1.16
17.51
0.08
1.28
2.31
-5.44
-0.62
2.75
1.69
-4.06
0.51
-2.58
-0.17
0.39
-0.30
-1.83
-0.73
-0.22
1.52
-0.08
-3.15
-0.48
-1.59
-3.82
0.97
-0.77
1.99
-0.77
-0.24
-1.02
-0.81
0.71
0.00
-0.60
0.69
-0.18
0.69
-0.08
-0.63
0.53
-1.34
-2.42
-4.75
1.63
1.12
-0.31
-1.02
-1.03
-0.56
0.25
0.25
-2.34
0.00
-2.79
-2.42
0.05
0.69
9,758,043
3,155,574
507,042
7,870,395
968,470
47,438,462
1,376,778
1,799,848
1,033,786
1,526,690
33,866,798
27,569,360
4,717,331
13,080,824
1,327,583
2,181,373
6,617,301
4,072,816
1,734,969
802,952
306,359
4,976,983
2,487,407
-
1,977,586
2,109,571
4,698,764
5,236,733
15,392,414
5,061,447
4,322,710
-
3,608,015
1,402,763
495,871
8,369,083
245,979
1,773,089
2,524,742
176,780
5,670,405
784,337
4,086,784
1,431,099
3,527,250
4,920,973
4,853,532
566,282
469,576,207
28,297,432
2,506,038
12,565,572
695,936
13,573,958
2,379,860
11,982,619
226,785
525,023
2,051,356
2,319,781
1,421,910
20,130,214
938,386
2,729,282
48,099,263
10,000,701
7,645,257
1,126,682
1,951,480
3,574,304
4,378,860
8,077,863
3,550,158
215,723
1,346,049
3,140,500
423,566
15,668,555
607,273
1,250,222
1,905,648
618,017
15,580,138
3,515,897
1,866,859
27,832,126
9,214,749
633,065
4,168,656
56,353,190
7,090,925
830,415
7,464,601
2,086,117
572,505
1,757,254
-
3,084,534
6,549,723
311,566
1,797,299
FTSE 100
Company Name Lt Price % Chg Volume
East Japan Railway CoItochu Corp
Fujifilm Holdings CorpYamato Holdings Co Ltd
Chubu Electric Power Co IncMitsubishi Estate Co Ltd
Mitsubishi Heavy IndustriesToshiba Corp
Shiseido Co LtdShionogi & Co Ltd
Tokyo Gas Co LtdTokyo Electron Ltd
Panasonic CorpFujitsu Ltd
Central Japan Railway CoT&D Holdings Inc
Toyota Motor CorpKddi Corp
Nitto Denko Corp
9,992.00
1,569.00
4,151.00
2,409.00
1,478.00
2,157.50
442.20
221.50
3,008.00
5,686.00
520.70
13,015.00
1,351.00
694.80
19,050.00
1,675.50
6,117.00
2,878.00
8,397.00
-0.08
0.22
0.90
-0.45
-1.14
0.19
-2.88
0.27
-0.33
-0.73
-2.44
-0.04
-0.66
1.37
-0.24
0.39
-0.60
-0.33
-0.08
803,800
2,960,700
1,649,600
1,171,300
1,434,300
3,846,500
37,261,000
128,660,000
1,339,600
930,900
7,738,000
870,500
10,932,500
11,722,000
372,700
3,248,500
6,931,300
4,778,000
1,132,700
TOKYO
Company Name Lt Price % Chg Volume
Rakuten IncKyocera Corp
Nissan Motor Co LtdHitachi Ltd
Takeda Pharmaceutical Co LtdJfe Holdings Inc
Ana Holdings IncMitsubishi Electric Corp
Sumitomo Mitsui Financial GrHonda Motor Co Ltd
Fast Retailing Co LtdMs&Ad Insurance Group Holdin
Kubota CorpSeven & I Holdings Co Ltd
Inpex CorpResona Holdings Inc
Asahi Kasei CorpKirin Holdings Co Ltd
Marubeni CorpMitsubishi Ufj Financial Gro
Mitsubishi Chemical HoldingsFanuc Corp
Daito Trust Construct Co LtdOtsuka Holdings Co Ltd
Oriental Land Co LtdSekisui House Ltd
Secom Co LtdTokio Marine Holdings Inc
Aeon Co LtdMitsui & Co Ltd
Kao CorpDai-Ichi Life Holdings Inc
Mazda Motor CorpKomatsu Ltd
West Japan Railway CoMurata Manufacturing Co Ltd
Kansai Electric Power Co IncDenso Corp
Sompo Holdings IncDaiwa House Industry Co Ltd
Jxtg Holdings IncNippon Steel & Sumitomo Meta
Suzuki Motor CorpNippon Telegraph & Telephone
Ajinomoto Co IncMitsui Fudosan Co Ltd
Ono Pharmaceutical Co LtdDaikin Industries Ltd
Bank Of Yokohama Ltd/TheToray Industries IncAstellas Pharma Inc
Bridgestone CorpSony CorpHoya Corp
Sumitomo Mitsui Trust HoldinJapan Tobacco Inc
Osaka Gas Co LtdSumitomo Electric Industries
Daiwa Securities Group IncSoftbank Group Corp
Mizuho Financial Group IncNomura Holdings Inc
Daiichi Sankyo Co LtdSubaru Corp
Ntt Docomo IncSumitomo Realty & Developmen
Sumitomo Metal Mining Co LtdOrix Corp
Asahi Group Holdings LtdKeyence Corp
Nidec CorpIsuzu Motors Ltd
Unicharm CorpShin-Etsu Chemical Co Ltd
Smc CorpMitsubishi CorpNintendo Co Ltd
Eisai Co LtdSumitomo Corp
Canon IncJapan Airlines Co Ltd
1,139.00
6,342.00
1,059.50
615.40
5,327.00
1,882.50
334.50
1,538.50
4,199.00
3,245.00
36,250.00
3,643.00
1,769.00
4,692.00
1,071.00
632.30
1,079.00
2,167.50
663.00
721.70
886.10
22,780.00
16,370.00
5,152.00
6,450.00
1,839.50
8,044.00
4,728.00
1,654.00
1,570.00
6,169.00
1,925.00
1,646.50
2,947.00
7,450.00
15,005.00
1,466.50
4,968.00
4,230.00
3,320.00
499.90
2,539.00
4,638.00
4,687.00
2,188.00
2,470.00
2,258.50
10,900.00
0.00
989.20
1,516.00
4,655.00
3,762.00
5,358.00
3,895.00
3,758.00
416.00
1,813.00
692.30
8,393.00
206.80
690.30
2,454.00
4,279.00
2,587.50
3,038.00
1,504.00
1,722.00
4,286.00
44,460.00
10,205.00
1,495.00
2,717.00
9,807.00
31,260.00
2,396.50
27,465.00
5,847.00
1,478.50
3,731.00
3,487.00
-4.41
0.38
-1.44
-0.50
0.08
-1.00
-1.04
0.00
-0.02
-0.34
-1.49
0.22
1.14
0.97
-0.05
0.29
0.47
0.79
-1.49
0.24
0.56
-2.08
0.21
-0.54
-0.91
-1.50
0.00
0.00
-0.48
-0.03
0.47
-0.62
0.64
0.07
-0.63
-0.50
0.76
-1.25
0.57
0.42
-0.04
-0.98
0.19
-0.51
-0.52
-0.44
0.09
0.93
0.00
1.07
-3.13
-0.43
0.53
0.28
-0.18
-0.97
-4.13
-0.38
-1.24
0.32
0.29
-1.00
0.10
0.35
0.25
-0.16
0.13
-0.89
1.35
0.47
-0.63
0.20
0.13
0.53
-0.06
-0.35
-0.56
-0.05
0.17
3.07
0.17
14,831,700
1,229,000
13,977,800
16,923,000
1,641,200
3,484,700
13,952,000
5,718,300
7,075,100
4,425,600
496,500
1,855,000
5,071,400
2,989,000
4,468,000
13,703,800
2,606,000
3,677,100
5,064,500
63,596,400
5,476,700
1,223,100
578,700
858,400
853,000
4,447,700
619,400
3,422,500
1,838,100
4,043,900
3,760,200
5,790,000
8,647,600
4,191,500
635,300
765,700
5,774,600
1,267,600
1,358,400
2,282,000
16,292,600
2,326,000
1,476,600
4,714,500
1,397,000
2,561,100
1,570,700
987,200
-
7,046,200
8,685,100
2,101,300
7,040,700
1,467,700
1,364,300
3,139,200
12,572,000
2,264,800
11,750,000
5,529,500
98,207,800
18,586,500
1,607,600
4,078,700
5,699,600
1,306,000
2,774,000
4,295,800
2,070,700
297,900
1,260,800
3,615,900
1,181,200
1,240,700
267,200
2,928,100
1,927,200
648,900
3,141,100
16,383,200
2,405,700
TOKYO
Company Name Lt Price % Chg Volume
Aluminum Corp Of China Ltd-HBank Of East Asia Ltd
Bank Of China Ltd-HBank Of Communications Co-H
Belle International HoldingsBoc Hong Kong Holdings Ltd
Cathay Pacific AirwaysCk Hutchison Holdings Ltd
China Coal Energy Co-HChina Construction Bank-H
China Life Insurance Co-HChina Merchants Port Holding
China Mobile LtdChina Overseas Land & Invest
China Petroleum & Chemical-HChina Resources Beer Holdin
China Resources Land LtdChina Resources Power Holdin
China Shenhua Energy Co-HChina Unicom Hong Kong Ltd
Citic LtdClp Holdings Ltd
Cnooc LtdCosco Shipping Ports Ltd
Esprit Holdings LtdFih Mobile Ltd
Hang Lung Properties LtdHang Seng Bank Ltd
Henderson Land Development
3.89
32.35
3.78
6.04
5.27
31.75
11.38
97.00
3.78
6.34
23.75
22.45
83.60
22.80
6.34
18.56
22.10
14.06
18.14
10.16
11.20
82.10
9.04
8.49
6.01
2.68
20.35
157.10
49.20
-1.77
0.00
-0.26
-1.15
0.00
0.32
1.25
0.10
-2.07
-0.47
-0.21
0.00
-0.06
-0.87
-1.40
-2.21
-0.67
-0.28
0.33
0.40
-0.71
0.67
-0.33
-0.35
0.00
-0.37
-0.25
-0.88
-0.61
13,052,414
1,263,054
328,680,625
25,520,315
-
5,975,040
4,724,675
3,795,750
10,657,730
190,440,499
33,088,101
5,290,055
17,346,677
16,080,232
67,826,257
7,529,464
14,545,776
3,923,032
28,573,190
37,179,291
6,257,671
3,730,273
62,449,124
3,488,000
665,132
4,012,348
2,276,348
872,550
1,685,557
HONG KONG
Company Name Lt Price % Chg Volume
Hong Kong & China GasHong Kong Exchanges & Clear
Hsbc Holdings PlcHutchison Whampoa Ltd
Ind & Comm Bk Of China-HLi & Fung Ltd
Mtr CorpNew World Development
Petrochina Co Ltd-HPing An Insurance Group Co-H
Power Assets Holdings LtdSino Land Co
Sun Hung Kai PropertiesSwire Pacific Ltd - Cl ATencent Holdings Ltd
Wharf Holdings Ltd
15.46
194.10
64.40
0.00
5.11
3.29
44.90
9.76
5.49
44.00
69.60
13.12
117.20
75.35
244.60
66.85
0.00
0.21
0.47
0.00
-0.58
1.23
0.00
0.31
-0.54
1.03
0.22
-0.46
0.34
-0.53
1.24
0.00
4,381,330
2,600,186
23,929,132
-
238,179,270
209,627,178
2,145,594
6,083,701
91,019,782
37,744,281
3,652,854
4,007,892
2,739,064
718,151
17,296,815
1,440,622
HONG KONG
Company Name Lt Price % Chg Volume
Zee Entertainment EnterpriseYes Bank Ltd
Wipro LtdVedanta Ltd
Ultratech Cement LtdTech Mahindra Ltd
Tata Steel LtdTata Power Co Ltd
Tata Motors LtdTata Consultancy Svcs Ltd
Sun Pharmaceutical IndusState Bank Of India
Reliance Industries LtdPunjab National Bank
Power Grid Corp Of India LtdOil & Natural Gas Corp Ltd
Ntpc LtdMaruti Suzuki India Ltd
Mahindra & Mahindra LtdLupin Ltd
Larsen & Toubro LtdKotak Mahindra Bank Ltd
Itc LtdInfosys Ltd
Indusind Bank LtdIdea Cellular Ltd
Icici Bank LtdHousing Development Finance
Hindustan Unilever LtdHindalco Industries Ltd
Hero Motocorp LtdHdfc Bank Limited
Hcl Technologies LtdGrasim Industries Ltd
Gail India LtdDr. Reddy’s Laboratories
Coal India LtdCipla Ltd
Cairn India LtdBosch Ltd
Bharti Airtel LtdBharat Petroleum Corp Ltd
Bharat Heavy ElectricalsBank Of Baroda
Bajaj Auto LtdAxis Bank Ltd
Asian Paints LtdAmbuja Cements Ltd
Adani Ports And Special EconAcc Ltd
530.75
1,642.40
496.05
233.85
4,237.10
424.95
445.85
84.65
455.35
2,302.65
637.00
282.05
1,409.50
164.70
207.75
179.10
164.10
6,374.05
1,337.20
1,336.20
1,766.75
916.65
285.80
925.25
1,470.65
85.15
274.15
1,566.50
947.30
194.85
3,300.80
1,568.60
809.70
1,152.20
418.40
2,596.55
274.15
561.70
285.35
22,523.60
357.90
736.00
176.20
181.40
2,866.05
506.60
1,105.35
249.50
322.50
1,636.00
0.57
3.81
1.06
-0.28
0.15
-0.49
-1.75
-0.41
1.01
-0.33
-0.90
-1.54
-0.49
-1.47
1.00
-0.56
-0.91
-0.50
-1.15
-2.54
0.88
1.81
-1.75
1.20
0.41
-0.64
-0.99
-1.23
0.63
-1.09
-0.37
1.16
1.18
-1.15
1.25
-0.54
-0.90
0.89
0.00
-0.46
0.10
0.58
0.09
-0.14
-0.67
-2.04
0.06
1.42
-0.31
2.15
1,418,923
4,518,628
3,892,240
10,485,891
297,346
1,521,163
6,719,479
4,733,479
11,111,712
3,045,398
2,640,073
23,572,347
3,143,172
12,918,190
7,898,628
7,817,348
4,165,980
1,172,178
1,198,312
1,963,083
1,567,156
7,381,549
16,558,619
4,025,220
1,195,707
10,669,731
14,068,623
4,605,001
1,160,331
9,843,196
837,870
4,242,083
2,907,706
1,568,006
3,437,363
436,633
2,907,813
2,419,099
26,579,537
19,155
4,633,511
1,170,107
5,236,795
6,859,964
345,753
24,243,937
708,164
4,427,585
3,147,243
506,963
SENSEX
Company Name Lt Price % Chg Volume
WORLD INDICESIndices Lt Price Change
GCC INDICESIndices Lt Price Change
Dow Jones Indus. AvgS&P 500 Index
Nasdaq Composite IndexS&P/Tsx Composite Index
Mexico Bolsa IndexBrazil Bovespa Stock Idx
Ftse 100 IndexCac 40 Index
Dax IndexIbex 35 Tr
Nikkei 225Japan Topix
Hang Seng IndexAll Ordinaries Indx
Nzx All IndexBse Sensex 30 Index
Nse S&P Cnx Nifty IndexStraits Times Index
Karachi All Share IndexJakarta Composite Index
20,958.03
2,384.79
6,039.16
15,451.77
49,465.92
64,353.15
7,237.17
5,271.70
12,443.79
10,683.90
19,251.87
1,536.67
24,698.48
5,944.43
1,348.67
30,029.74
9,342.15
3,171.36
34,094.97
5,707.03
-17.06
-2.66
+13.93
-197.77
-99.24
-508.77
-51.55
-16.18
-29.01
-79.50
-37.56
-0.74
+120.05
+7.65
+3.39
-103.61
-9.70
-2.40
-137.17
-19.50
Doha Securities MarketSaudi Tadawul
Kuwait Stocks ExchangeBahrain Stock Exchage
Oman Stock MarketAbudhabi Stock MarketDubai Financial Market
10,089.86
6,945.74
6,854.27
1,332.16
5,525.43
4,512.91
3,416.71
-115.75
+28.71
+23.42
-1.87
+15.25
-28.13
-22.12
“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”
CURRENCIESDOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI
DINARKUWAITI
DINAR
European stocks weaker as Wall Street gives up gainsAFPLondon
European markets ended the ses-sion in the red yesterday, weighed down by a weaker showing on
Wall Street, traders said.After already starting the session in
negative territory, the main European stock markets ended in the day deeper in negative territory, as Wall Street gave up its initial gains while investors awaited a volley of corporate earnings reports and economic indicators.
London’s FTSE 100 was 0.7% down at 7,237.17 points, Frankfurt’s DAX 30 was 0.2% down at 12,443.79 points, Paris’ CAC 40 slipped 0.3% at 5,271.70, while the EURO STOXX 50 shed 0.4% at 3,563.29 points at close yesterday.
In Frankfurt, the European Central Bank held its key interest rates un-changed at historic lows and its mas-sive bond-buying programme intact, as
expected, at its regular policy meeting.After notching up gains earlier in the
week, investors were currently taking profi t, traders said.
“The euro and equity markets have had a strong week so far, thanks mainly to a market-friendly outcome of the French fi rst round presidential election at the weekend,” said Forex.com analyst Fawad Razaqzada.
“The stock markets in Europe also sighed relief as fears about the future of the European Union receded.”
Financial markets also appeared to take in their stride the outlines of Pres-ident Donald Trump’s tax cut propos-als and plans to renegotiate the North American Free Trade Agreement, said Briefi ng.com analyst Patrick O’Hare.
On Wednesday, the White House had unveiled plans to slash corporate and individual rates, but there were few de-tails and several questions over how the measures will be paid for.
The proposals are part of a wide-ranging plan to fi re the world’s top
economy, which also includes ramping up infrastructure spending and wiping away business regulations.
London Capital Group analyst Jasper Lawler said that while Trump was set to mark his 100th day in offi ce on Satur-day, the fact that the president “hasn’t checked off every box on his 100-day to-do list is not a reason to panic.
“From a markets standpoint, very few of Trump’s pledges for the fi rst 100 days really matter.
Markets specifi cally want Trump to get the job done on tax cuts, infrastruc-ture spending and deregulation.
Signifi cant policy overhauls can’t happen in 100 days,” Lawler said.
Earlier in Asia, Tokyo stocks fell 0.2% after a four-day rally, with dealers un-moved by the Bank of Japan’s decision to lower its infl ation target and stand pat on its monetary easing programme.
But Hong Kong climbed 0.5% for a sixth-straight gain, while Sydney added 0.2% and Shanghai ended 0.4% higher.
BUSINESS
Gulf Times Friday, April 28, 20178
Pedestrians pass the London Stock Exchange Group off ices in Paternoster Square. The FTSE 100 was 0.7% down at 7,237.17 points at close yesterday.
BUSINESS
Gulf Times Friday, April 28, 201710
Fannie and Freddie are back in black and many want their moneyBloombergWashington
Fannie Mae and Freddie Mac were among the biggest disasters of the fi nancial crisis. In September
2008, nine days before Lehman Broth-ers failed, the federal government took over the mortgage companies; it even-tually spent more than $187bn bailing them out. For decades, the companies had provided an implicit government backstop to the US mortgage market, buying loans from private lenders and guaranteeing payments to investors. That helped spur a steady rise in home-ownership — until the subprime crisis hit and Fannie and Freddie were on the hook for billions in losses.
Lawmakers vowed to overhaul the companies and some planned to wind them down completely. But more than eight years later, Fannie and Freddie still operate under government control — and they’re now a bigger part of the system, guaranteeing payment on just under half of all US mortgages, up from 38% before the crisis.
There is one key diff erence: Any
profi ts the companies generate go to the government instead of inves-tors. The latest payment, a combined $9.9bn to the US Treasury at the end of March, pushed the total amount of cash Fannie and Freddie have paid to taxpayers to $266bn, making their bailout one of the most profi table in history.
There’s now a pitched battle over who should get those profi ts. The companies’ pre-crisis common and preferred stocks still trade over-the-counter, and investors who snapped up the shares, such as hedge fund manag-ers Bill Ackman and John Paulson, say Treasury is breaking the law by taking the money. The fi ght goes back to a change the Barack Obama administra-tion made to the bailout terms in 2012.
When the government took them over, Fannie and Freddie issued Treas-ury a new class of preferred stock that paid a 10% dividend, along with war-rants to acquire almost 80% of the companies’ common stock. In 2012 the government changed the terms to say that every quarter Fannie and Freddie would send Treasury all their profi ts except for a certain amount of money
kept in reserve. That reserve started at $3bn in 2013 and was scheduled to fall by $600mn every subsequent year, un-til hitting zero in 2018.
The department said this would hasten the wind down of the compa-nies. In 2013, Fannie and Freddie be-came profi table again. All those earn-ings went to taxpayers, infuriating investors who hoped to share in the rebound. Ackman, along with mutual fund manager Bruce Berkowitz, and Richard Perry, a prominent hedge fund manager, said the changes were illegal and sued.
In more than 20 lawsuits, investors have made claims including that the dividend payment is an illegal confi s-cation of private property, that the gov-ernment lied about its reasoning, and that the structure of the regulator in charge of Fannie and Freddie, the Fed-eral Housing Finance Agency (FHFA), is unconstitutional.
Judges who’ve ruled so far have come down on the government’s side. Mat-thew McGill, an attorney with Gibson, Dunn & Crutcher who represents Perry in one of the cases, says Perry plans to keep pressing his case. “This is a
case where the government’s conduct and the damage it’s done to investors is simply immense,” McGill says. An FHFA spokeswoman declined to com-ment. Treasury didn’t respond to a re-quest for comment.
Investors want the government to begin the process of selling its stake in Fannie and Freddie by stopping the div-idend, but they don’t want the compa-nies to go away. Ackman favours a plan that would strengthen the companies and keep their activities largely intact. “There is simply no credible alterna-tive to Fannie and Freddie,” he wrote in a letter to investors in March.
The Obama administration left it to Congress to pass legislation deal-ing with the problem, but nothing has emerged. Texas Republican Jeb Hen-sarling, chairman of the House Finan-cial Services Committee, wants to wind down Fannie and Freddie completely, while some Democrats think they should be strengthened rather than killed.
Some small lenders and advocates for aff ordable housing would also like to see the dividend suspended to let the mortgage companies build their
reserves. They’re nervous that any al-ternative Congress might put in place would make it harder for lower-income borrowers to get mortgages. Investors had hoped Donald Trump’s adminis-tration would move to sell the govern-ment’s stake, but so far the view from the White House is unclear. Treasury Secretary Steven Mnuchin has said that ending government control is a prior-ity, but that he’s focused on regulatory relief and tax reform.
In the middle of the debate is Mel Watt, the Obama appointee who heads the FHFA and essentially controls Fan-nie and Freddie. Watt has the author-ity to order the companies’ boards of directors to suspend the dividend pay-ments. He came close to doing so at the end of March, just before Fannie and Freddie’s last payment was due, according to people familiar with the matter. A group of senators wrote Watt a letter that week, warning him against stopping payment, and Watt decided to make it.
Stopping the payment would have let Fannie and Freddie build their re-serves, making it less likely they would need more money from taxpayers in
the event of a loss. Under terms of the bailout, the companies could still bor-row up to $259bn in an emergency, so insolvency is a long way off . Watt, a former North Carolina congressman, has told people around him that he’d consider it a dereliction of duty if the companies needed more money on his watch.
Investors would’ve been thrilled if Watt had withheld the dividend in March. Building capital is a necessary precursor to selling Fannie and Freddie back to the private market, where their shares could be worth billions. Mnuch-in put one of his counsellors, Craig Phillips, in charge of the situation. In meetings, Phillips has fl oated ideas as wide-ranging as putting the companies into receivership, which could wipe out investors, as well as legislation to re-place or supplement them with a new system, according to people familiar with the matter. Clarity on what the administration wants to do could be a long way off .
The bottom line: Fannie Mae and Freddie Mac have paid $266bn to the US Treasury. Investors say it’s time for them to get paid.
Talks to avert shutdown near end as Trump bows on ObamacareBloombergWashington
US lawmakers are putting the final touch-
es on a $1.1tn spending bill needed to avert
a government shutdown, after the White
House appeared to satisfy Democrats’
demands that President Donald Trump
and Republicans protect a key piece of
Obamacare.
House Republicans introduced a
seven-day stopgap measure late on
Wednesday aimed at giving both cham-
bers enough time to finish negotiating
and pass a broader spending bill that
would fund the government through
September 30.
The move should remove the threat of
a shutdown, even as lawmakers continue
to haggle over several outstanding issues.
The White House on Wednesday
afternoon assured lawmakers that the
administration would continue to make
the Obamacare payments at issue, which
are used to subsidise coverage of lower-
income Americans, according to a person
familiar with the negotiations.
“This decision brings us closer to a
bipartisan agreement to fund the govern-
ment and is good news for the American
people,” Senate Minority Leader Chuck
Schumer said on Wednesday afternoon
in a statement. “There are outstanding
issues to be resolved, particularly with
riders, but this is a positive development
for the negotiations.”
With government funding set to run
out Friday, Republicans and Democrats
in Congress have reached agreement on
most elements of the sweeping spending
bill, which remains under wraps.
But Trump criticised Democrats for
their stances in the negotiations.
“The Democrats want to shut govern-
ment if we don’t bail out Puerto Rico and
give billions to their insurance companies
for OCare failure,” Trump wrote on Twitter
yesterday morning, using an abbrevia-
tion for Obamacare. Democrats had also
pushed for funds to help Puerto Rico
cover a shortfall in Medicaid payments.
The omnibus is being delayed by
fights over other policy areas, including
Republican demands for changes to the
Dodd-Frank financial law in the bill, a
“conscience clause” provision to allow
insurers to refuse certain procedures, and
language to restrict abortion coverage
on Obamacare exchanges, a Democratic
aide said.
The biggest issue was the billions in
cost-sharing payments used to off -
set health premiums for low-income
people. Insurers are threatening to raise
premiums if they don’t get the subsidies
and could further drop coverage in
Obamacare markets.
House Democratic leader Nancy Pelosi
said in a statement that negotiators had
made progress on the health-care issue,
though other disputes remained. She
spoke twice on Wednesday with White
House chief of staff Reince Priebus, ac-
cording to a Democratic aide.
A White House decision to continue
the payments may be enough to clear the
current deadlock and allow the spending
bill to move forward, although it’s unclear
how quickly Congress would act.
On Thursday, Trump’s budget director,
Mick Mulvaney, told CNBC that he’s hope-
ful there will be no shutdown but is unsure
of where Democrats stand.
“We thought we had a deal Monday”
when they took funding the border wall
off the table, but since then, Democrats
have gone silent, he said. He believes
Senate Democrats now are “looking
for something they can ask for” but he
doesn’t think there is such a sticking point,
he said.
“This administration has made CSR
payments in the past, and the only reason
some are raising this now is to hold the
government hostage and find an excuse
to oppose a bipartisan agreement,” he
said, referring to the cost-sharing funds.
Democrats have expressed concern
that the cost-sharing payments could
be used as leverage against them in the
future or get nixed in the courts and blow
up the insurance market. The payments
are currently being challenged by House
Republicans in a lawsuit questioning their
legality.
Anthem threatened to raise rates for
its Obamacare plans next year if the US
government stops funding subsidies for
lower-income customers, raising the ante
on the outcome of this debate.
Chief executive off icer Joseph Swedish
said on a conference call Wednesday that
the insurer could raise its rates by 20% if
the subsidies aren’t paid to insurers.
Pelosi clashed with Mulvaney on
Tuesday night over the issue during a
telephone call.
She reiterated to Mulvaney what has
been the House Democratic negotiating
position in the talks that CSR payments
must be included in the omnibus, said a
Democratic aide familiar with the conver-
sation.
The aide said Mulvaney indicated
that, while the Trump administration had
continued the payments, off icials hadn’t
yet decided whether they would make the
May payment.
The Democratic aide said Mulvaney
made clear that, absent congressional ac-
tion, the judge’s order ruling the payments
illegal would stand and the administration
would cease making payments.
But a White House off icial said that
Mulvaney didn’t say the administration
would end payments.
“Instead of working with Democrats to
avert another disastrous Republican gov-
ernment shutdown, the Trump admin-
istration is cruelly threatening to raise
health premiums on millions of families,”
Pelosi said in a statement Wednesday,
noting that Mulvaney helped push the
GOP towards a government shutdown
in 2013.
The outlines of the broader spending
package have been largely to Democrats’
liking, including the GOP decision to
omit $18bn in domestic spending cuts
proposed by Trump and Mulvaney.
Democrats had off ered to increase
defence spending if the deal included the
CSR funding along with money for Puerto
Rico’s Medicaid program and coal miners’
health benefits.
United to pay oversold fl iers up to $10,000 after dragging furoreBloombergAtlanta
United Continental Hold-ings will off er as much as $10,000 to passengers
who voluntarily give up their seats on oversold fl ights, one of 10 changes the airline is adopt-ing after a customer was dragged off a plane by security offi cers.
The carrier will also reduce the overbooking of fl ights and refrain from calling in law en-forcement offi cials unless safety and security are at risk, accord-ing to a company statement yes-terday. United issued the chang-es more than two weeks after the forcible removal of David Dao, a 69-year-old passenger who re-fused to surrender his seat, by Chicago Department of Aviation offi cials.
Rigid policies for handling cases where passengers must be denied boarding “got in the way of our values,” United chief ex-ecutive offi cer Oscar Munoz said in the statement. The airline is still dealing with brand damage and other fallout from the April 9 incident, and faced another round of negative headlines on Wednesday when a giant rabbit died as it awaited a connecting fl ight after arriving in Chicago from London on United.
The company said it’s striv-ing to become a “better, more customer-focused airline” to win back the public’s trust after a worldwide furore over Dao’s treatment and calls from some politicians to crack down on the industry with tougher rules and legislation.
“Every customer deserves to be treated with the highest levels of service and the deepest sense of dignity and respect,” Munoz said. “Two weeks ago, we failed to meet that standard and we profoundly apologize.”
The United board cancelled Munoz’s expected 2018 eleva-tion to chairman and tied com-pensation more closely to cus-tomer service last week.
Along with the statement on
policy changes after Dao’s mis-treatment, the Chicago-based airline also released a timeline of what happened before and during the dragging — thereby meeting a deadline for providing an account of its actions to a US Senate committee probing the matter. Dao suff ered a concus-sion, broken nose and two lost teeth in the incident, according to his attorney.
The airline said it needed to
remove four seated passengers from the fl ight to make room for crew members fl ying to Louis-ville, Kentucky. Dao and his wife were among those randomly se-lected.
After Dao refused to surren-der his seat, another passenger came forward and off ered to leave the plane in exchange for $1,000, United said. The airline turned down the off er because it needed two volunteers to avoid
removing the Daos. No one else was willing to leave the plane without a guaranteed arrival in Louisville that same night — something United couldn’t promise because of maintenance problems on another Louisville-bound fl ight.
The company’s 10 policy changes are being rolled out this year, with some already in place. The $10,000 maximum payout went into eff ect yesterday. Un-til now, gate agents were only allowed to off er passengers as much as $500, while managers could go as high as $1,350.
In raising potential payouts, United followed the lead of Del-ta Air Lines, which earlier this month said it pay as much as $9,950 compared with a previ-ous cap of $1,350.
Additionally, United will re-frain from demanding that seat-ed customers surrender their spots involuntarily, unless safety or security is at risk. The com-pany is planning a new automat-ed system to solicit volunteers willing to give up their places on overbooked fl ights. Other meas-ures are designed to give em-ployees more training and power to deal with diffi cult situations.
By June, United expects to have a team in place to help gate agents fi nd ways to use near-by airports, other airlines and ground transportation to get passengers and crews to their destinations.
“The changes we have an-nounced are designed to better serve our customers and em-power our employees,” the air-line said. “This is how we begin to earn back your trust.”
An employee assists a passenger inside the United Continental Holdings terminal at Newark Liberty International Airport (EWR) in Newark, New Jersey. Rigid policies for handling cases where passengers must be denied boarding “got in the way of our values,” United chief executive off icer Oscar Munoz said in the statement.
Trump administration opens investigation into aluminium tradeWill address whether aluminium imports hinder national security; probe parallels investigation on steel begun last week
BloombergNew York
The Trump administra-tion opened an inves-tigation on Wednesday
into whether an infl ux of for-eign aluminium is damaging US manufacturers severely enough to threaten national security, beginning a process that could lead to curbs on imports, Com-merce Secretary Wilbur Ross said.
“Here’s why we did it,” Ross told reporters, “Imports have been fl ooding into the alumin-ium industry and the defence angle is that high-purity alu-minium is used in the F-35” as well as other military aircraft and vehicles. In the event of a war, domestic manufacturers might be unable to meet the Pentagon’s needs, he said.
The investigation mirrors a probe the Commerce Depart-ment launched a week earlier focusing on the steel industry, also invoking a seldom-used legal provision: section 232 of the Trade Expansion Act. A CNBC report on plans for the investigation sent aluminium stocks surging, with Century Aluminum Coclosing up 8.74% and Constellium up 2.46%.
The benchmark global alu-minium price has gained 16% this year after rising by 12% last year, helped by stable demand but also reports that China is stepping up eff orts to curb ex-cess aluminium capacity. China is the world’s biggest producer of the metal and has been a target of criticism for creating a glut of aluminium that pre-viously was depressing global prices.
The probe Ross announced comes as the US has a stand-ing trade complaint with the
World Trade Organisation al-leging Chinese subsidies to its domestic aluminium producers are hurting prices of the metal. The case, fi led by the Obama administration in its fi nal days, also was supported by Canada and Japan, among others.
When asked about the WTO complaint, Ross said that it was still in the “exploration” phase and that it may be “subsumed” by the new investigation.
Last summer, Century Alu-minum chief executive offi cer Mike Bless said China was sub-sidising its smelters to an ex-tent that violates World Trade Organisation rules, and that something had to give or else they may have to shut down a smelter in Hawesville, Ken-tucky, that mass produces high purity aluminium used in US fi ghter jets.
Ross said the US currently only has one company that can mass produce aluminium in that quality, although he didn’t identify the Hawesville smelter.
If the Commerce Department fi nds evidence of a national se-curity threat from aluminium imports, the president is au-thorised to unilaterally “adjust imports.” Only two presidents — Richard Nixon and Gerald Ford — have ever granted relief under Section 232, citing na-tional security concerns stem-ming from the global oil crisis of the 1970s.
Until the Trump adminis-tration opened the steel inves-tigation last week, the US had launched only two such inves-tigations since the 1970s, and in each the Commerce Depart-ment’s Bureau of Industry and Security declined to recom-mend action.
The presidential memoran-dum initiating the steel probe also cited aluminium manufac-turing as a core industry that is critical to the manufacturing and defence base, along with vehicles, aircraft, shipbuilding and semiconductors.
BUSINESS11Gulf Times
Friday, April 28, 2017
Total approves first project since 2014 as profits surgeCORPORATE RESULTS
French energy company Total gave the go-ahead
yesterday to develop its first major project since
2014 after reporting a sharp rise in quarterly profit
that underscored its drive to cut costs throughout
the oil price downturn.
Total, France’s largest company, kickstarted the sec-
tor’s first-quarter earnings reporting with an upbeat
tone, as its adjusted net profit surged 56% to $2.6bn
compared with the same period of 2016.
Analysts had forecast Total’s net adjusted profit at
$2.4bn in the quarter.
Total said it had approved the development of its
Aguada Pichana Este project in the Argentine Vaca
Muerta shale gas site, and had increased its stake
in the license to 41% from 27%. Greater confidence
in an oil price recovery following years of lower
investment and after Opec and other major produc-
ers agreed to cut output is expected to lead to a
cautious revival in project approvals.
Shell in February approved the development of its
Kaikias deepwater field in the Gulf of Mexico, the
first project clearance since 2015.
The first phase of the project will cost around
$500mn, Total chief executive Patrick Pouyanne
told journalists on the sidelines of an oil summit in
Paris.
Total maintained its investment, production and
savings guidance stated in February, when it said it
aimed to make a further $3.5bn of savings in 2017.
It had set its capital expenditure, excluding re-
source acquisition, at $14 billion-$15bn in 2017.
It said its cash flow in the months ahead would
benefit from production growth and cost reduction,
after it generated free cash flow of $1.7bn in the
first quarter, while Total’s oil production rose 4%.
The company said its planned ramp-up of recently
started projects would continue to boost output,
although this would be aff ected by seasonal main-
tenance as well as the full implementation of the
Opec quotas.
Ford Motor
Ford Motor Co reported a lower quarterly net profit
yesterday but beat analyst expectations amid
higher commodity, engineering and recall costs,
and a drop in vehicle sales Ford shares were down
slightly at $11.54 in early trade.
The No 2 US automaker, which reiterated its pretax
profit forecast for 2017, warned investors in late
March that higher costs and lower sales volumes
would hurt quarterly earnings.
Chief financial off icer Bob Shanks told reporters at
the company’s headquarters in Dearborn, Michi-
gan, that additional costs made this the “toughest
quarter” for 2017.
Shanks said Ford’s results for the rest of the year
would be “about flat to a little bit better” compared
with 2016.
Shanks said Ford’s own used-car values at its
finance arm were down 7% compared to the same
quarter in 2016, but said customers’ credit scores
remained high and we “feel really good about
where credit is.”
Ford’s costs during the first quarter were hurt by
two recalls in North America, one to replace po-
tentially faulty side door latches and the other for
under-hood fire risks.
The company said it expects to spend $295mn to
fix those problems.
Ford expects commodity costs to be around $1bn
higher this year.
Shanks said around half of that will be due to higher
steel prices.
Ford maintained its expectation for a full-year 2017
pretax profit of around $9bn, down from a record of
$10.4bn in 2016.
The company reported a first-quarter net profit of
$1.6bn, or 40 cents a share, down 36% from $2.5bn,
or 61 cents per share, a year earlier.
Analysts had, on average, expected earnings per
share for the quarter of 35 cents.
Automotive revenue rose to $36.5bn from $35.3bn
a year earlier.
Analysts had expected $34.7bn.
Volkswagen
German car maker Volkswagen will manufacture its
new e-Crafter electric utility vehicles at a factory in
neighbouring Poland, a spokesman for the group
said yesterday.
“At this stage of the project, the design of the
vehicle will be finalised in Hanover (Germany). In
the next stage, production will be transferred to
a new factory in Wrzesnia,” western Poland, VW
spokeswoman Dagmara Prystacka said, quoted by
the Polish PAP news agency.
She declined to provide further details.
Volkswagen has said it would deliver the first new
electric vehicles to clients later this year.
Like its existing fossil fuel models, VW says its new
electric-powered utility vehicle will be able to travel
more than 200km (124 miles) and can carry a load
of 1.7 tonnes.
Volkswagen began construction on its new plant
in Wrzesnia in 2014, an investment estimated to be
worth around €800mn ($869mn). VW now says it
aims to become the world leader in electric cars
by 2025.
Net profit at VW reached €5.1bn in 2016, as the Ger-
man automaker became the biggest brand in car
sales in volume terms, overtaking Japan’s Toyota.
The recovery came after a stinging €1.6bn loss in
2015 triggered by the Dieselgate scandal which
forced VW to admit it had installed so-called “cheat”
software in 11mn diesel-engine cars worldwide.
Renault
Renault’s revenue surged by a quarter in the first
three months of 2017, the French car maker said
yesterday, as new models boosted deliveries and
pricing, while production increased for industrial
partners including Nissan.
Quarterly revenue rose to €13.13bn ($14.27bn) from
10.49bn a year earlier, also lifted by the consolida-
tion of Russian Lada sales.
Excluding Lada parent Avtovaz, group sales rose
19.7% to €12.56bn.
Renault’s revenue performance beat the €12.49bn
expected by analysts, based on the median of 10
estimates in an Inquiry Financial survey for Reuters.
A near-16% jump in vehicle deliveries was the big-
gest contributor, boosting revenue by 9.2%, helped
by the renewal of the Megane family of compact
cars in 2016.
Sales to partners — including Micras built in France
for alliance partner Nissan and semi-assembled ve-
hicles for Iran — lifted revenue by 3.5%. Favourable
currency eff ects added 1.3% on a stronger Russian
rouble and Brazilian real.
Renault increased its 2017 global auto-market
growth forecast to 1.5-2.5% from 1.5-2% and reiter-
ated its own full-year goals, including increased
operating profit and revenue at constant exchange
rates.
Vale
Shares in Vale slumped the most in two weeks
yesterday, as executives signalled lacklustre trends
for iron ore prices this year and investors reacted to
a first-quarter profit miss with disappointment.
On a results conference call, company executives
said supply and demand of the main ingredient for
steel look balanced, helping prices stay at $70 reais
per tonne or less.
Net income totalled $2.490bn, well below consen-
sus estimate of $3.325bn, reflecting the impact of
heavy rains that slowed output in some Brazilian
mines and rising financial expenses.
It compared with $525mn in the prior three months
and $1.776bn a year earlier.
Last week, Vale said first-quarter iron ore output fell
6.7% as seasonal rainfalls in the so-called northern
system, which groups the Carajás, Serra Leste and
S11D mines in northern Brazil, hampered extraction.
Revenue slipped on a sequential basis, even as
realised prices rose 9% from the fourth quarter.
Adjusted earnings before interest, taxes, deprecia-
tion and amortisation, or EBITDA, hit $4.308bn,
below a consensus estimate of $4.996bn compiled
by Thomson Reuters.
Despite the profit miss, Vale is taking advantage of
higher realised prices on an annual basis to slow
the pace of asset sales to cut debt.
Higher ore recovery last quarter also helped Vale
generate $2.454bn in free cash flow — the money
left for bond and shareholders after all expenses
are paid.
Net debt fell to $22.777bn in March, from $25.042bn
in December.
Vale wants the indicator between $15bn and $17bn
this year.
Air China
Air China’s net profit fell 40% in the first three
months of 2017, hit by rising oil prices and weak-
ness in the yuan.
China’s flag carrier yesterday posted profit attribut-
able to shareholders of 1.47bn yuan ($213mn) for
January to March, down from 2.4bn yuan during
the same period last year.
Its rival China Eastern Airlines said net profit at-
tributable to shareholders was 2.82bn yuan for the
quarter, up from 2.6bn yuan a year earlier.
Southwest Airlines
Southwest Airlines Co reported a smaller-than-
expected quarterly profit, hit by higher operating
expenses and a decline in average fares.
The airline’s shares fell as much as 4.3% to $54.52 in
morning trading yesterday.
The No 4 US airline by passenger traff ic said its unit
revenue, a key metric that compares ticket sales
with flight capacity, fell 2.8% in the quarter ended
March 31, hurt by competitive fare pricing and a
shift in Easter travel demand to April.
However, the Dallas, Texas-based carrier expects
unit revenue in the current quarter to rise 1-2%. The
metric turned positive in April even after excluding
an about $10mn benefit from the shift in Easter
date, the company said.
Southwest’s unit costs, excluding fuel, oil expense
and some items, increased 6.9% in the quarter and
the company expects the metric to increase by
about six% in the current quarter.
While more people booked travel on Southwest in
the first quarter, fares on average declined 2.6%.
The company said its net income fell to $351mn, or
57 cents per share, in the quarter, from $513mn, or
79 cents per share, a year earlier. Excluding items,
the company earned 61 cents per share, compared
with estimates of 63 cents, according to Thomson
Reuters I/B/E/S.
Operating revenue rose 1.2% to $4.88bn.
Airbus
Core profit at Airbus more than halved in the first
quarter as it cut prices of old models and delays at
an engine maker hampered deliveries of its profit-
able new A320neo jet.
The European firm said it was confident of plans
to increase jet output despite wobbling demand,
but voiced caution about the speed at which it can
lower costs on its new A350 and warned of “signifi-
cant” exposure on its troubled A400M army plane.
Airbus finance director Harald Wilhelm took aim at
US supplier Pratt & Whitney over engine delays that
forced it to deliver fewer A320neos than planned
last quarter, despite fresh assurances from the
engine maker that it will meet targets.
He also said Airbus was trying to secure a return
this year to European government export funding,
which was suspended last year amid a probe into
suspected corruption in jetliner sales.
Wrangling over past business dealings deepened
on Wednesday when Austria disclosed a separate
fraud probe into Airbus chief executive Tom Enders
over a 2003 fighter deal.
Airbus called the accusations “completely unsub-
stantiated”. Airbus quarterly adjusted operating
profit fell 52% to €240mn ($261.7mn) as revenues
rose 7% to 12.988bn.
Analysts were on average expecting core profit of
€344mn, down 31%.
The Airbus plane making business saw 31% lower
profit despite a 13% rise in revenues.
It blamed a less favourable mix of deliveries in the
quarter, which included more of the new but still
sharply discounted A350s and higher production
ramp-up costs.
Kotak Mahindra Bank
India’s Kotak Mahindra Bank forecast a decline in
bad loans and provisioning costs and a pick up in
credit growth this financial year after reporting a
better-than-expected 40% rise in fourth-quarter
profit yesterday.
Kotak Mahindra — the fourth-biggest private sec-
tor lender in the country by assets but the third
most-valuable with a market capitalisation of more
than $25bn — posted net profit of 9.76bn rupees
($152mn) for the three months to March 31, ahead
of analysts’ estimates of 9.38bn rupees.
Its bad loans, however, ticked up to represent 2.59%
of total loans as of the end of March from 2.42%
three months ago.
Billionaire Uday Kotak, the biggest shareholder and
the chief executive of the bank, predicted better
days ahead for the lender which has seen its bad
loans rising since its $2.4bn acquisition of smaller
rival ING Vysya in 2015 in India’s biggest banking
sector takeover.
He said the impact of the deal had been almost fully
absorbed by this point.
For the year to March, the bank’s credit cost fell to
61 basis points from 82 basis points in the previous
year.
The bank’s loans grew at about 20% in the March
quarter, at a faster pace than 15% for the full finan-
cial year.
Kotak said he expected loan growth in the current
financial year to be broadly in line with the pace last
quarter.
Nokia
Finland’s telecoms giant Nokia reported yesterday
that it remained deep in the red at the start of the
year, with sales in its main business, networks, on
the decline.
But the stock market rejoiced as analysts’ fears of a
much worse performance were allayed.
The company posted a loss of €488mn ($532mn) in
the first quarter, an improvement from the €609mn
a year earlier, prompting chief executive Rajeev
Suri to say he believed in an “improving business
momentum, even if some challenges remain”.
Investors agreed with that assessment, sending
Nokia’s share price more than 6% higher on the
Helsinki stock exchange to €5.29 by late morning.
While the company’s overall sales declined by 2% to
€5.38bn, sales in its core networks business fell by
6%, to €4.9bn.
Once the world’s number one handset maker,
Nokia transformed itself into a network equip-
ment company and bought its hugely unprofitable
French-American rival Alcatel-Lucent a year ago,
sending the whole group’s results plunging into the
red in 2016.
The firm recorded a net loss of €766mn last year.
But in fact the company has been going through a
process of radical transformation for several years
now.
In 2013, it bought 50% of its network activities from
Germany’s Siemens, and the following year it pulled
out of mobile phones.
It sold its mapping unit Here in 2015 and completed
the deal late last year to buy Alcatel-Lucent, which
had only recorded one year of annual profit since
its inception in 2006.
Nokia was the world’s top mobile phone maker
between 1998 and 2011 but was overtaken by South
Korean rival Samsung after failing to respond to the
rapid rise of smartphones.
Roche
Swiss drugmaker Roche, encouraged by better
than expected first-quarter sales, said it was con-
fident new drugs will help to deliver revenue and
profit growth even as its older medicines take a hit
from cheaper copies.
Sales rose to 12.94bn Swiss francs ($13.03bn), ahead
of the 12.704bn franc average estimate of analysts
in a Reuters poll.
The company, which confirmed its 2017 full-year
targets, releases earnings details in July.
Drug unit head Dan O’Day said new immunothera-
py Tecentriq, breast cancer drug Perjeta and newly
approved multiple sclerosis drug Ocrevus will
counteract looming patent expirations for cancer
medicines Avastin, Herceptin and Rituxan.
Rituxan faces competition from near-copy biolog-
ics, called biosimilars, this quarter, with Herceptin
exposed in the second half as patents expire.
Roche’s drug division sales rose 4% to 10.2bn
francs, topping the analysts’ average estimate of
9.89bn.
Diagnostic products rose 6% to 2.77bn francs, also
ahead of the poll.
Sales of Tecentriq, approved last year to treat blad-
der and lung cancer, hit 113mn francs, more than
the 103mn estimate in the Reuters poll.
Perjeta sales rose 19% to 524mn francs, with Roche
optimistic that a key trial result announced during
the quarter will expand the medicine’s use in 2018.
While Ocrevus was approved only in late March,
Roche chief executive Severin Schwan said the
launch was going “very well” in the $20bn overall
MS market.
For the first three months of 2017, the three older
drugs that account for more than a third of Roche’s
revenue also beat analyst expectations.
Herceptin sales rose 2% to 1.76bn francs and
Rituxan rose 4% to 1.9bn francs.
While Avastin sales slipped 2% to 1.68bn francs, the
drop was less than expected.
Roche stuck to a 2017 target of a low- to mid-single-
digit sales growth rate, with similar core earnings
per share growth, but some analysts suggested the
company was being tentative.
Deutsche Bank
Deutsche Bank more than doubled its profit in
the first quarter, but its shares fell yesterday after
the German lender’s earnings showed declining
revenues and its securities trading business lagging
US rivals.
Chief executive John Cryan, however, pointed to
the eff ect of the revaluation of Deutsche Bank’s
own debt, which it has to value at market prices.
That has meant the bank was able to book profits
when its own debt value fell during last year’s
turbulence, but now booked losses as investor
confidence returned.
The bank’s first-quarter net profit rose to €575mn
($627mn) compared to 236mn a year ago.
Cryan added that a 5% fall in adjusted costs showed
the progress the bank was making in restructuring,
while it lowered its cost-income ratio to 86%. But
this still lags rival banks, many of whom manage 60
to 70% ratios.
Deutsche’s headcount, which it has unsuccessfully
tried to cut for years, was 3,300 lower at the end
of March despite 370 hires in compliance and anti-
financial crime.
The bank’s core tier 1 equity ratio rose to 14.1% from
11.8% at the end of 2016, if this month’s $8.5bn cash
call is taken into account.
Gazprom
Russian energy giant Gazprom said yesterday net
profit increased 21% last year, with a rise in sales
driven mostly by crude oil and gas condensate.
The company said total sales had increased by
37.7bn roubles ($662mn, 607mn euros), up 1% from
the 2015 figure to 6.1tn roubles.
Net profit came in at 951.6bn roubles.
“The increase in sales was mainly driven by an
increase in sales of crude oil and gas condensate,”
Gazprom said.
Net sales of gas were down 4% on 2015, the com-
pany said, as a weak rouble hit the value of exports
to key markets of Europe and Turkey despite the
overall volume of gas sold to the continent rising
by 24%. Gazprom is the dominant gas supplier in a
number of central and eastern European countries.
Last year it supplied nearly a third of Europe’s gas
needs, a record amount despite tensions with the
European Union and a desire by the bloc to reduce
its dependence on Russian supplies.
PayPal
PayPal Holdings raised its earnings outlook on
Wednesday after reporting higher-than-expected
quarterly profit resulting from an increase in pay-
ment processing volumes and user growth.
The company raised its full-year profit forecast to
$1.28-$1.33 per share from $1.26-$1.31, and said its
board authorised a $5bn share buyback pro-
gramme.
Revenue rose 17% to $2.98bn, beating analysts’
average estimate of $2.94bn.
Chief financial off icer John Rainey said the
company was planning some staff cuts and other
restructuring initiatives which will slash $75mn in
annual costs.
“Less than 3% of our global workforce will be
aff ected and based on current plans, we do not
expect a net decrease in headcount for the year,”
Rainey said.
Chief executive Dan Schulman said the company
had added 6mn new active accounts in the first
quarter, the largest quarterly user increase in the
past 3 years.
Rainey said growth in revenue had been driven by
an increase in payments processing volumes in
both its core business and other services such pay-
ments platform provider BrainTree.
PayPal’s total payments volume jumped 22.5% to
$99.33bn, beating research firm FactSet StreetAc-
count’s estimate of $99.20bn.
Mobile payments volume rose 51% to about $32bn
in the quarter. Payment volumes at Venmo, its mo-
bile peer-to-peer payment platform popular with
younger customers, more than doubled to $6.8bn
in the first quarter.
The company’s net income rose to $384mn, or 32
cents per share, in the first quarter, from $365mn,
or 30 cents per share, a year earlier.
On an adjusted basis, PayPal earned 44 cents per
share, above the average analyst estimate of 41
cents, according to Thomson Reuters I/B/E/S.
Lloyds Banking
Lloyds Banking Group yesterday reported its first
quarter profit remained steady, defying analysts’
expectations of a dip in performance at Britain’s
biggest mortgage lender following the vote last
June to leave the European Union.
Lloyds said underlying profit before tax was a
better-than-expected £2.1bn ($2.70bn), in what will
likely be the lender’s last earnings update before a
return to full private ownership following its state
bailout during the 2008 financial crisis.
Lloyds reported its net interest margin rose to 2.8%
from 2.74% a year ago and said it expected the
measure to hold at the new level this year, again de-
fying expectations the key measure of profitability
would dip on economic uncertainty.
The bank said it had not seen signs of rising
defaults among consumers using credit cards and
other unsecured borrowing methods, an area the
Bank of England said in January it was watching
closely.
The bank’s common equity tier 1 ratio, a closely
watched measure of balance sheet strength, now
stands at 14.3%, making it one of the best capital-
ised lenders among its major European peers.
Taxpayers have recouped all of the £20.3bn ($26bn)
invested in the bailout of Lloyds during the 2008
financial crisis, British finance minister Philip Ham-
mond said last week.
While Lloyds’s booming profits in recent years sig-
nal its diverging fortunes from RBS since the 2008
crisis, it is still plagued by some of the costs from its
behaviour in that era.
Lloyds booked a £100mn charge yesterday to pay
for a compensation scheme for victims of a fraud
by its HBOS unit for which six people were jailed
this year.
Bayer
German chemicals and pharmaceuticals giant
Bayer yesterday upped its forecast for 2017, after
netting a big boost to profits on the back of higher
sales in the first quarter.
Sales at the group grew 11.7% to €13.2bn ($14.4bn),
while profits added 38% to reach almost €2.1bn —
both outstripping analyst forecasts. Operating, or
underlying, profit grew 34.3% to €3.1bn.
The group increased its forecast for the full year,
upping revenue projections to €51bn and predict-
ing growth of around 10% in operating profits
excluding special items.
A strong performance at materials subsidiary
Covestro, majority-owned by Bayer but with a sepa-
rate stock market listing, contributed to the group’s
positive outlook.
Bayer reported healthy growth across its prescrip-
tion drugs, over-the-counter medications, animal
health and agrochemicals divisions.
Swiss National Bank
Switzerland’s central bank posted a profit of 7.9bn
Swiss francs ($7.95bn) in the first quarter, it said
yesterday, boosted by gains from the huge foreign
currency reserves built up during its long campaign
to weaken the Swiss franc.
The Swiss National Bank made a profit of 5.3bn
francs on its foreign currency holdings that rose to
683.18bn francs at the end of March, a figure larger
than Swiss GDP.
The bank also made a profit of 2.2bn francs from
a valuation gain on the gold it holds, and 466.4mn
francs from negative interest rates it has charged
on the sight deposit accounts it holds for commer-
cial banks.
The SNB is not required to make a profit, with its
main mandate to ensure price stability in Switzer-
land defined as annual inflation of under 2%. But
a portion of any profit it does make is distributed
to the Swiss government and the country’s 26
cantons.
Samsung Electronics
Samsung Electronics Co yesterday flagged stronger
earnings and announced a cancellation of treasury
shares after posting a solid first-quarter profit
boosted by the memory chip business, sending its
shares to a new high.
Samsung rejected a call from US activist hedge
fund Elliott to split itself in two but accepted part
of the fund’s proposals yesterday, revealing plans
to cancel its existing treasury shares worth over
$35bn by 2018.
While the first quarter was a torrid time for
Samsung as chief Jay Y Lee was swept up in a
political corruption scandal, the world’s top maker
of memory chips, smartphones and televisions still
managed to book a profit that supports expecta-
tions for record earnings in 2017.
First-quarter operating profit for Asia’s most valu-
able company by market capitalisation was 9.9tn
won ($8.75bn), matching Samsung’s earlier guid-
ance. Revenue rose 2% to 50.5tn won.
Elliott welcomed the share cancellation and said it
saw “room for even more progress”. The fund had
called for Samsung to adopt a holding company
structure by splitting itself in two, and to pay out a
30tn won a special dividend.
BUSINESSFriday, April 28, 2017
GULF TIMES
ECB keeps money taps open; nods to eurozone recoveryDraghi acknowledges eurozone recovery; council tweaks introductory statement after debate; but Draghi insists underlying inflation still subdued
ReutersFrankfurt
The European Central Bank left its ultra-easy policy stance in place yesterday as infl ation continues
to undershoot its target but explicitly acknowledged the vigour of the eu-rozone economy, now on its best run since the global fi nancial crisis.
The ECB maintained its bias for fur-ther policy easing, leaving the door open to further rates cuts or an increase in asset buys.
This is in line with market expecta-tions but at odds with calls from Ger-many, the eurozone’s economic pow-erhouse, for a gradual reduction of stimulus.
“Incoming data since our meeting in March confi rm that the cyclical recov-ery of the euro area economy is becom-ing increasingly solid and that down-side risks have further diminished,” ECB president Mario Draghi told a news conference.
“At the same time, underlying infl a-tion pressures continue to remain sub-dued and have yet to show a convincing upwards trend,” he added, justifying the continued stimulus measures.
However, in response to a reporter’s question, Draghi noted there had been a debate among ECB council members over the eurozone growth outlook, with some “more sanguine” than oth-ers.
That, he added, had resulted in a line being added to his introductory state-ment which noted that downside risks to the growth outlook “relate predomi-nantly to global factors”.
The euro weakened slightly against the dollar following the rates decision after trading near six-month highs, aided by expectations that Macron would win the French presidential vote on May 7.
The subtle tweak in language will be seen by some observers as foreshad-owing a more bold change at the next meeting in June, possibly including a removal of a phrase signalling a bias for more policy easing.
Eurozone economic sentiment hit a 10-year high this month and political risk is receding after pro-euro centrist Emmanuel Macron won the fi rst round of France’s presidential vote.
Elsewhere, the Bank of Japan, also operating deep in unconventional ter-ritory, off ered its most optimistic as-sessment of the economy in nine years yesterday but signalled that it would maintain its massive stimulus eff ort.
Sweden’s Riksbank also extended
its own asset buys by 15bn crowns ($1.70bn) yesterday, predicting the fi rst rate hike in the middle of 2018, later than earlier projected.
Having missed its 2% infl ation tar-get for years and even fl irting with defl ation, the ECB is buying €60bn worth of bonds per month at least until the end of the year and plans to keep interest rates in negative territory until later.
But economic growth is steadily
picking up pace, inflation is comfort-ably above 1% and the ECB’s policy arsenal is nearly depleted, all fuelling calls by conservative policymakers to start mapping out the way to the exit.
Draghi said, however, that infl ation was still not fi rmly in place.
“We have not seen suffi cient evi-dence to alter our assessment of the infl ation outlook, and we are not suf-fi ciently confi dent that infl ation will converge to levels consistent with our infl ation aim in a durable and self-sus-taining manner,” said.
Draghi did say, however, that the risk of defl ation had virtually disappeared.
In a departure from the bank’s long-held, more pessimistic stance, ECB board member Benoit Coeure, a key ally of Draghi, last week argued that the balance of risk for the economy is now largely balanced.
Coeure’s view may not signal an imminent policy shift but suggests growing confidence in the outlook and a willingness to entertain the once-taboo subject of scaling back stimulus.
Last month, the ECB removed one phrase from the statement — a pledge to act “using all the instruments avail-able within its mandate” if needed, sig-nalling a diminishing urgency for more policy action.
Some or all the references to prevail-ing downside risks to the outlook, to the possibility of further rate cuts or to larger asset purchases may be taken out, sources with direct knowledge of the bank’s deliberations have told Reuters.
Policymakers are likely to remain cautious, however, particularly those from the periphery of the bloc, where unemployment is high and wages are not rising.
“Before getting too enthusiastic, not all is well in the eurozone,” ING econo-mist Carsten Brzeski said before the decision.
A euro currency symbol sits on a eurosystem sign outside the the European Central Bank (ECB) headquarters in Frankfurt. The ECB maintained its bias for further policy easing yesterday, leaving the door open to further rates cuts or an increase in asset buys.
Riksbank’s surprise decision to boost stimulus splits boardBloombergStockholm
Sweden’s central bank in a split decision
unexpectedly extended its bond buying
programme into the second half of the
year and delayed any potential tightening
as policy makers take no chances on infla-
tion backsliding.
The Riksbank yesterday prolonged its
quantitative easing beyond June and will
buy a total of 15bn kronor ($1.7bn) in nomi-
nal government debt and inflation-linked
debt. The move was opposed by three
members on its six-person board and was
only anticipated by one of Sweden’s top
five banks. Policy makers also delayed any
rate increases until the middle of 2018,
while keeping their key rate at a record
low of minus 0.50%. The bank’s forecasts
suggest rates will stay negative at least
into 2019.
“To support the upturn in inflation,
monetary policy needs to be somewhat
more expansionary,” the bank said. “The
considerable uncertainty over economic
and political developments abroad is also
important for the stance of monetary
policy.”
The krona slid 0.8% to 9.626 per euro
as of 10:54am in Stockholm. Swedish
two-year yields fell 2 basis points to minus
0.63% while five-year yields dropped
below zero again.
After being derided as “sadomonetar-
ists” three years ago for keeping rates too
high, the bank, led by Governor Stefan
Ingves, is now showing considerable
resolve in its all-out off ensive to deliver on
its main mission of price stability. Having
come in below the central bank’s 2% target
for more than six years, inflation again
disappointed in March, with the headline
rate falling to an annual 1.3%.
“There’s yet no evidence of rising core
inflation and the low wage agreements will
probably hold back domestic inflation,”
Andreas Wallstrom, an analyst at Nordea
Bank, said in a note.
“Without a substantial pick-up in prices
globally, inflation will therefore most
likely continue to be a challenge for the
Riksbank.”
The decision was also unexpected as
the krona has been weaker than the bank
anticipated amid a nascent global tighten-
ing drive. The European Central Bank is
laying the groundwork for an end to its
own bond buying programme on signs of
an economic recovery in the euro area,
while the Federal Reserve is expected to
continue raising rates this year.
The expansion of stimulus in Sweden
is likely to be controversial as house
prices have been rising at a fast clip and
the economy is running on all cylinders.
Reports just this week showed unemploy-
ment dipping to an eight-year low and
manufacturing confidence reaching the
highest in more than two decades.
Ingves had to use his tie-breaking
power since three of the six board mem-
bers, Martin Floden, Henry Ohlsson and
Cecilia Skingsley entered reservations
against extending the bond purchases.
“They consider that monetary policy does
not need to be made more expansionary
in the current economic situation,” the
bank said.
Concerns have also been growing over
the impact of liquidity on the bond market.
The Riksbank has snapped up more than
40% of the market and will by the end of
2017 have purchased about 290bn kronor
in bonds.
While the additional stimulus was
unexpected, the message from the bank
wasn’t completely tilted toward easing.
The pace of bond purchases was scaled
back from 30bn kronor in the current six-
month period and some of the easing bias
was removed in the rate outlook. It now
sees a rate trough of minus 0.53% through
the first quarter of next year versus minus
0.56% in February.
RBS settles with more investors over 2008 cash call lawsuitReutersLondon
Royal Bank of Scotland has reached an out-of-court settlement with another
batch of shareholders who al-leged they were misled during a £12bn ($15.5bn) cash call in 2008, the state-owned bank said yesterday.
The latest settlement, which follows a similar deal struck with four other investor groups last year, leaves a rump party of investors claiming damages of around £520mn, excluding in-terest and costs, weeks before a trial is scheduled, one source fa-miliar with talks said.
The deal has splintered the vast RBoS Shareholder Action Group, with 40% of the value of the original claimants now set-tled.
“We are pleased that some members of our group have been able to come to an agree-ment with the bank,” said the shareholder group, which still represents around 27,000 retail investors and around 20 insti-tutions.
“However, we remain resolute in our fi ght for justice for retail shareholders and the numer-ous institutions that remain in this litigation,” said the group, which represents thousands of current and former RBS share-holders.
Shareholders lost around 80% of their investment after buy-ing into RBS’s rights issue as the credit crisis raged in 2008, shortly before the bank almost collapsed and received a £45bn government bailout.
Edinburgh-based RBS said it had now reached a full and fi nal settlement with shareholders representing 87% of the original claims by value in the litigation — without any admission of li-ability.
“We are pleased to have reached this agreement,” Ross McEwan, chief executive of RBS said in a statement.
RBS last year set aside £800mn to settle investor claims totalling around £4bn from fi ve investor groups in an unprec-edented lawsuit over alleged omissions and misrepresenta-tions about its fi nancial strength when it launched the rights issue during the credit crisis.
US business spending likely gained momentum in fi rst quarterReutersWashington
New orders for US-made capital goods rose less than expected in March, but a second straight
monthly increase in shipments sug-gested business investment accelerated in the fi rst quarter amid a recovering energy sector.
While other data yesterday showed a bigger-than-expected increase in fi rst-time applications for unemployment benefi ts last week, the trend in claims remained consistent with tightening labour market conditions.
The Commerce Department said non-defence capital goods orders ex-cluding aircraft, a closely watched proxy for business spending plans, increased 0.2% last month after gain-
ing 0.1% in February. Orders for these so-called core capital goods have now increased for six consecutive months.
Shipments of core capital goods rose 0.4% after jumping 1.1% in February.
Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
“Business investment appears to have some better momentum early in 2017 and, while growth is far from hot, we appear to be transitioning away from the declines that plagued much of 2016,” said Robert Kavcic, a senior economist at BMO Capital Markets in Toronto.
Economists had forecast core capital goods orders rising 0.5% last month.
The dollar rose marginally against a basket of currencies, while US stocks were little changed. Prices for US
Treasuries were trading mostly high-er.
March’s small increase in core capital goods orders suggests moderate busi-ness investment growth in the second quarter.
It also implies a moderation in the manufacturing sector activity after re-cent strong growth.
Manufacturing, which accounts for about 12% of the US economy, could get a lift from President Donald Trump’s proposed tax plan, announced on Wednesday, that includes cutting the corporate income tax rate to 15% from 35%. For now, manufacturing is being underpinned by the energy sector re-vival.
Energy services fi rm Baker Hughes said last Friday that US oil rigs totalled 688 in the week ending April 21, the most in two years.
US drillers have added oil rigs for 14 straight weeks and shale production in May was set for its biggest monthly in-crease in more than two years.
Overall orders for durable goods, items ranging from toasters to air-craft that are meant to last three years or more, increased 0.7% after surging 2.3% in February.
Business spending on equipment is expected to have accelerated from the fourth-quarter’s annualised 1.9% growth pace and will likely be one of the few bright spots when the government publishes its advance fi rst-quarter GDP estimate today.
Other data from the Commerce De-partment yesterday showed the goods trade defi cit widening 1.4% in March.
Though retail inventories increased 0.4% last month, stocks of goods at wholesalers dipped 0.1%. In the wake
of the data, the Atlanta Federal Re-serve cut its fi rst-quarter GDP growth estimate by three-tenths of a percent-age point to a 0.2% rate, which would be the weakest performance in three years.
The economy grew at a 2.1% pace in the fourth quarter.
With the labour market near full em-ployment, the anticipated slowdown in growth likely understates the health of the economy.
In a separate report yesterday, the Labor Department said initial claims for state unemployment benefi ts rose 14,000 to a seasonally adjusted 257,000 for the week ended April 22.
Claims have now been below 300,000, a threshold associated with a healthy labour market, for 112 straight weeks.
That is the longest such stretch since
1970, when the labour market was smaller. Economists had forecast fi rst-time applications for jobless benefi ts rising to 245,000 last week.
“Despite this week’s rise, we believe that the labour market remains solid and see no pattern in the underlying state data to give us pause on that as-sessment,” said Rob Martin, an econo-mist at Barclays in New York.
The four-week moving average of claims, considered a better meas-ure of labour market trends as it irons out week-to-week volatility, fell 500 to 242,250 last week, the lowest level since February.
Other data from the National As-sociation of Realtors showed contracts to buy previously owned homes fell 0.8% in March, suggesting a persistent shortage of properties could hurt sales for the rest of the spring season.
UiPath raises $30mn as battle for enterprise AI heats upBloombergLondon
UiPath, a New York-based company that uses computer-vision to automate repetitive business processes involving software, has raised $30mn to help expand globally.The move comes as companies increasingly look to artificial intelligence to solve the sorts of routine tasks, such as checking invoices and inputting data from human resource forms into databases, that they once outsourced to low-cost human contractors.The London off ice of venture capital firm Accel lead the investment round. Accel, which did well backing consumer-facing startups and companies building market-place business models in Europe
over the past decade, has increasingly shifted to investments in enterprise software startups, many of them employing some form of machine learning or artificial intelligence.Earlybird Venture Capital, Credo Ventures and Seedcamp also participated in the funding round.UiPath’s software uses computer-vision — a branch of artificial intelligence that involves the extraction, analysis and understanding of visual information in images — to observe a set of tasks being performed on a user’s machine. It can then replicate these tasks automatically, a bit like the way macros work in Microsoft Excel. The diff erence is that UiPath’s software, unlike most macros, can carry out tasks across any software the business is using. In addition, users can train the tool with a set of rules or steps for analysing the data it is handling. For instance, it
could look up data from an SAP system, check if it meets certain conditions, and then input it into a Salesforce database.One big advantage of such software over humans, is that they follow the same steps and rules exactly every time, without getting tired, making errors or skipping procedures.“From a compliance perspective it makes a lot of sense because the software will log every step and if you need to go back and audit what happened you can,” Luciana Lixandru, the Accel partner who led the investment in UiPath, said in an interview. “That means this can work well in highly-regulated industries like finance, healthcare and insurance.”UiPath says that it has 200 customers, including Lufthansa, Generali, Telenor and Dong Energy. It also has partnerships with consulting firms
Deloitte and Capgemini, which often recommend its products to their clients.The market for what is known as robotic process automation software is expected to reach $8.75bn annually by 2024, up from about $125mn in 2015, tech research firm Grand View Research wrote in an October 2016 report. Grand View estimated that these software solutions are, on average, 60% cheaper than using humans to perform the same tasks and cost 30% less than using contractors in low-paid countries, such as India.Software like UiPath is increasingly threatening large business process outsourcing firms like Cognizant, Infosys and Tata Consultancy Services, which have announced layoff s as customers have increasingly turn to automation and software over human contractors.
Recommended