6
BUSINESS Sunday 23 December 2018 PAGE | 02 PAGE | 04 India cuts tax rates on some goods under national sales tax Brazil to ‘actively’ boost exports from its huge farm sector QNB examines ECB’s early decision to end QE programme THE PENINSULA DOHA Despite a weaker Euro area recovery and mounting head- winds associated with softer global growth and higher policy uncertainty, the European Central Bank (ECB) has decided to end the net purchases of assets under its quantitative easing (QE) programme earlier than previ- ously planned. The early decision of the ECB to start unwinding the QE pro- gramme was a result of several factors, which included partial success in lifting the economy, idiosyncratic institutional con- straints associated with the mon- etary union, a challenging global environment, and threats to financial stability and the soundness of pension systems, noted a QNB report released yesterday. The QNB analysis delves into the nature of the ECB’s QE pro- gramme and describes the rea- soning behind the recent decision to move ahead with QE taper plans. QE programmes are uncon- ventional monetary policy tools that are waged after financial crisis and deep recessions. In such cases, a prolonged period of deleveraging is often unleashed and policy rates tend to quickly reach nominal levels at or close to zero. Operationally, QE is the extraordinary process through which central banks intentionally expand their balance sheets beyond normal levels. This requires central banks to systematically acquire selected securities from the sec- ondary market against bank reserves. The aim is to remove “duration” from the market and thus put downward pressure on long-term interest rates, further easing financial conditions. Ini- tially experienced by the Bank of Japan in the early 2000s, QE programmes became a tool for central banks in the aftermath of the great financial crisis of 2007-08. The ECB officially started its QE or large-scale expanded asset purchase programme (APP) in March 2015. Back then, disinfla- tionary pressures were creating material deflationary risks on the back of new bouts of economic weakness following the European debt crisis. The APP was implemented just after a series of other non-standard monetary measures such as the negative deposit facility rate and a facility extended by the ECB to provide longer-term funding to banks for new loans. The APP expanded the unconventional toolkit by extending four pro- grammes targeting the acqui- sition of different types of assets, including public sector bonds, corporate sector bonds, asset- backed securities and covered bonds. Over the last three years, the APP turned into the primary instrument for calibrating the monetary policy stance in the Euro area. In fact, net purchases of assets by the ECB varied, peaking at €80bn per month in 2016-17. Overall, the APP has added €2.3 trillion in assets for the ECB, which contributed to create €1.9 trillion in e x c e s s reserves. In 2017, the ECB announced its intention to start tapering or gradually scaling back its net asset purchases. Recently, the ECB confirmed that it will stop net purchases after December 2018. While more details of the tapering plan are still to be com- municated, the ECB will continue to reinvest proceeds from maturing bonds for an extended period of time. Four reasons explain the ECB’s decision to press on with policy normalisation. First, the unconventional monetary policy has partially achieved its main goals. Lower term and risk premia had pro- vided accommodative financial conditions, boosting economic activity. Unemployment and industrial spare capacity are at or close to 10 year lows at respectively 8.1 percent and 16.1 percent. The risks of deflation were fully eliminated for the time being. Second, further purchases of public sector bonds are limited by implicit rules associated with Maastricht treaty provisions on ECB financing for member states. As the composition of asset pur- chases has to be proportional to GDP (the capital key), the ECB is approaching its debt ownership limits (one-third of each mem- ber’s debt) in a number of countries. If it were not for the QE tapering plan, the ECB would soon run out of eligible bonds to buy from Germany, the Nether- lands, Slovakia and Finland. Third, the tapering is expected to anticipate further monetary policy normalisation with rate hikes, which should create policy room for eventual economic downturns in the future. This is particularly important as key advanced econ- omies are already in the later stages of their economic cycles and recessions loom over the horizon of the next years. Fourth, the QE was unable to deliver inflation within the ECB target and the side effects of the APP are creating financial sta- bility concerns and undermining pension schemes. Inflation and specially core inflation are still subdued at 1.9 percent and 1.1 percent, respectively. Ultra-easy monetary policy has been inflating asset prices and prompting exhuberant market behaviour with bubble-like char- acteristics. Moreover, as pension funds rely on longer yields to match future liabilities, the com- pression of term premia is causing a lasting detrimental impact on European pension plans. Net purchases of assets by the ECB varied, peaking at €80bn per month in 2016-17. Overall, the APP has added €2.3 trillion in assets for the ECB, which contributed to create €1.9 trillion in excess reserves. Intelligent transportation industry expo in China A man looks at a passenger aircraſt engine at the 2018 International Intelligent Transportation Industry Expo in Hangzhou in China’s eastern Zhejiang province. VW’s diesel scandal cleanup to cost €5.5bn REUTERS FRANKFURT Volkswagen’s cleanup of a diesel cheating scandal will cost it €5.5bn ($6.25bn) in 2018 and around €2bn in 2019, Chief Financial Officer Frank Witter told German weekly Boersen-Zeitung. Since 2015, the German car making group has paid more than €27bn to settle investor and consumer law- suits as well as regulatory fines and remedies tied to resolving excessive emissions levels in its diesel cars. In 2020 Volkswagen Group will see costs of about €1bn related to emissions cheating, Witter told the paper. Turkey aracts over $8bn FDI in first nine months this year QNA ANKARA The Ministry of Industry and Technology of Turkey announced that the value of foreign direct investments in the country during the first nine months of 2018 amounted to $8.1bn. The Ministry said in a report that total foreign direct investment from January to September was $8.1bn. The report pointed out that the value of foreign direct investment, during the same period of 2017, estimated at $7.76bn. In terms of investment in stocks, which is the cornerstone of the calculation of the value of foreign investment, the direct flow to Turkey during the same period amounted to about $4.26bn, 64.8 percent of this amount from the European Union, according to the same source. Last year, Turkey attracted $10.94bn in direct international investment, of which $7.45bn was total investment in equities. In the first nine months of 2018, Turkey saw the estab- lishment of 4918 new com- panies supported by the outside, while 87 local com- panies benefited from interna- tional partners. The Ministry said that total foreign direct investment from January to September was $8.1bn. US Fed could rethink rate hikes as trade wars drag on economy AFP WASHINGTON The US central bank sent a strong signal on Friday that it would be willing to reconsider expected interest rate hikes amid new data showing President Donald Trump’s multi-front trade wars are dragging on the economy and shaking up investors. The message, from the senior Federal Reserve official with the closest links to US financial markets, sent the Dow Jones Industrial Average surging 300 points. But the index later turned negative once again, and closed with yet another steep decline, its worst week in 10 years. “I think we are hearing something important for markets and that is a concern around risks to the economy and potential slowdown,” New York Federal Reserve Bank President John Williams said on Friday on CNBC. He stressed that the Fed is listening to the fears about the risks and will “be ready to reassess and re-evaluate our views and our policy stance.” It was a remarkable comment coming just two days after the Fed raised the key borrowing rate on Wednesday and signaled it will continue to hike next year, albeit at a slower pace, with only two increases projected. Economist Chris Low (pic- tured) lambasted the Fed’s “epic post-meeting communications bungle,” and cited the “glaring omission” of the Fed failing to recognize a global manufac- turing slowdown, and continuing to believe the labour market is the main factor behind inflation. The Fed has continued to forecast strong growth, which would support their case for tightening monetary policy, but the expected inflation spurt and rise in wages have not materi- alised. New data Friday showed the Fed’s preferred inflation index slowed to 1.8 percent in November, below the central bank’s target. “It’s hard to imagine anyone would think it’s acceptable to signal three rate hikes when inflation is below target,” Low said, noting the Fed forecast see two hikes in 2019 and one in 2020. Williams tried to correct the market impression that two interest rate increases are set in stone for next year, highlighting a slight change of language in the policy statement issued Wednesday.

BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

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Page 1: BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

BUSINESSSunday 23 December 2018

PAGE | 02 PAGE | 04India cuts tax rates

on some goods under national

sales tax

Brazil to ‘actively’ boost exports from its huge farm sector

QNB examines ECB’s early decision to end QE programmeTHE PENINSULA DOHA

Despite a weaker Euro area recovery and mounting head-winds associated with softer global growth and higher policy uncertainty, the European Central Bank (ECB) has decided to end the net purchases of assets under its quantitative easing (QE) programme earlier than previ-ously planned.

The early decision of the ECB to start unwinding the QE pro-gramme was a result of several factors, which included partial success in lifting the economy, idiosyncratic institutional con-straints associated with the mon-etary union, a challenging global environment, and threats to financial stability and the soundness of pension systems, noted a QNB report released yesterday.

The QNB analysis delves into the nature of the ECB’s QE pro-gramme and describes the rea-soning behind the recent decision to move ahead with QE taper plans.

QE programmes are uncon-ventional monetary policy tools that are waged after financial crisis and deep recessions. In

such cases, a prolonged period of deleveraging is often unleashed and policy rates tend to quickly reach nominal levels at or close to zero. Operationally, QE is the extraordinary process through which central banks intentionally expand their balance sheets beyond normal levels. This requires central banks to systematically acquire selected securities from the sec-ondary market against bank reserves. The aim is to remove “duration” from the market and thus put downward pressure on long-term interest rates, further

easing financial conditions. Ini-tially experienced by the Bank of Japan in the early 2000s, QE programmes became a tool for central banks in the aftermath of the great financial crisis of 2007-08.

The ECB officially started its QE or large-scale expanded asset purchase programme (APP) in March 2015. Back then, disinfla-tionary pressures were creating material deflationary risks on the back of new bouts of economic weakness following the European debt crisis. The APP was implemented just after a series of other non-standard monetary measures such as the negative deposit facility rate and a facility extended by the ECB to provide longer-term funding to banks for new loans. The APP expanded the unconventional toolkit by extending four pro-grammes targeting the acqui-sition of different types of assets, including public sector bonds, corporate sector bonds, asset-backed securities and covered bonds. Over the last three years, the APP turned into the primary instrument for calibrating the monetary policy stance in the Euro area. In fact, net purchases of assets by the ECB varied,

peaking at €80bn per month in 2 0 1 6 - 1 7 . Overall, the APP has added €2.3 trillion in assets for the ECB, which contributed to create €1.9 tri l l ion in e x c e s s reserves.

In 2017, t h e E C B announced its intention to start tapering or gradually scaling back its net asset purchases. Recently, the ECB confirmed that it will stop net purchases after December 2018. While more details of the tapering plan are still to be com-municated, the ECB will continue to reinvest proceeds from maturing bonds for an extended period of time.

Four reasons explain the ECB’s decision to press on with policy normalisation.

First, the unconventional monetary policy has partially achieved its main goals. Lower term and risk premia had pro-vided accommodative financial

conditions, boosting economic activity. Unemployment and industrial spare capacity are at or close to 10 year lows at respectively 8.1 percent and 16.1 percent. The risks of deflation were fully eliminated for the time being.

Second, further purchases of public sector bonds are limited by implicit rules associated with Maastricht treaty provisions on ECB financing for member states. As the composition of asset pur-chases has to be proportional to GDP (the capital key), the ECB is approaching its debt ownership limits (one-third of each mem-ber’s debt) in a number of

countries. If it were not for the QE tapering plan, the ECB would soon run out of eligible bonds to buy from Germany, the Nether-lands, Slovakia and Finland.

Third, the tapering is expected to anticipate further monetary policy normalisation with rate hikes, which should create policy room for eventual economic downturns in the future. This is particularly important as key advanced econ-omies are already in the later stages of their economic cycles and recessions loom over the horizon of the next years.

Fourth, the QE was unable to deliver inflation within the ECB target and the side effects of the APP are creating financial sta-bility concerns and undermining pension schemes. Inflation and specially core inflation are still subdued at 1.9 percent and 1.1 percent, respectively. Ultra-easy monetary policy has been inflating asset prices and prompting exhuberant market behaviour with bubble-like char-acteristics. Moreover, as pension funds rely on longer yields to match future liabilities, the com-pression of term premia is causing a lasting detrimental impact on European pension plans.

Net purchases of

assets by the ECB

varied, peaking at

€80bn per month

in 2016-17. Overall,

the APP has added

€2.3 trillion in assets

for the ECB, which

contributed to create

€1.9 trillion in excess

reserves.

Intelligent transportation industry expo in ChinaA man looks at a passenger aircraft engine at the 2018 International Intelligent Transportation Industry Expo in Hangzhou in China’s eastern Zhejiang province.

VW’s diesel scandal cleanup to cost €5.5bnREUTERS FRANKFURT

Volkswagen’s cleanup of a diesel cheating scandal will cost it €5.5bn ($6.25bn) in 2018 and around €2bn in 2019, Chief Financial Officer Frank Witter told German weekly Boersen-Zeitung.

Since 2015, the German car making group has paid more than €27bn to settle investor and consumer law-suits as well as regulatory fines and remedies tied to resolving excessive emissions levels in its diesel cars.

In 2020 Volkswagen Group will see costs of about €1bn related to emissions cheating, Witter told the paper.

Turkey attracts over $8bn FDIin first nine months this yearQNA ANKARA

The Ministry of Industry and Technology of Turkey announced that the value of foreign direct investments in the country during the first nine months of 2018 amounted to $8.1bn.

The Ministry said in a report that total foreign direct investment from January to September was $8.1bn.

The report pointed out that the value of foreign direct investment, during the same period of 2017, estimated at $7.76bn.

In terms of investment in stocks, which is the cornerstone of the calculation of the value of foreign investment, the direct flow to Turkey during the same

period amounted to about $4.26bn, 64.8 percent of this amount from the European Union, according to the same source.

Last year, Turkey attracted $10.94bn in direct international investment, of which $7.45bn was total investment in equities.

In the first nine months of 2018, Turkey saw the estab-lishment of 4918 new com-panies supported by the outside, while 87 local com-panies benefited from interna-tional partners.

The Ministry said

that total foreign

direct investment

from January to

September was

$8.1bn.

US Fed could rethink rate hikes as trade wars drag on economyAFP WASHINGTON

The US central bank sent a strong signal on Friday that it would be willing to reconsider expected interest rate hikes amid new data showing President Donald Trump’s multi-front trade wars are dragging on the economy and shaking up investors.

The message, from the senior Federal Reserve official with the closest links to US financial

markets, sent the Dow Jones Industrial Average surging 300 points. But the index later turned negative once again, and closed with yet another steep decline, its worst week in 10 years.

“I think we are hearing something important for markets and that is a concern around risks to the economy and potential slowdown,” New York Federal Reserve Bank President John Williams said on Friday on CNBC.

He stressed that the Fed is

listening to the fears about the risks and will “be ready to reassess and re-evaluate our views and our policy stance.” It was a remarkable comment coming just two days after the Fed raised the key borrowing rate on Wednesday and signaled it will continue to hike next year, albeit at a slower pace, with only two increases projected.

Economist Chris Low (pic-tured) lambasted the Fed’s “epic post-meeting communications bungle,” and cited the “glaring

omission” of the Fed failing to recognize a global manufac-turing slowdown, and continuing to believe the labour market is the main factor behind inflation.

The Fed has continued to forecast strong growth, which would support their case for tightening monetary policy, but the expected inflation spurt and rise in wages have not materi-alised. New data Friday showed the Fed’s preferred inflation index slowed to 1.8 percent in November, below the central

bank’s target.“It’s hard to imagine anyone

would think it’s acceptable to signal three rate hikes when inflation is below target,” Low said, noting the Fed forecast see two hikes in 2019 and one in 2020.

Williams tried to correct the market impression that two interest rate increases are set in stone for next year, highlighting a slight change of language in the policy statement issued Wednesday.

Page 2: BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

02 SUNDAY 23 DECEMBER 2018BUSINESS

10,412.51

-83.89 PTS

0.80%

QSE FTSE100 DOW BRENT6,721.17

+9.24 PTS

0.14%

22,688.67

−170.93PTS

0.75% Dow & Brent before going to press

$45.90

+0.02

MarketWatchIndia cuts tax rates on some goods under national sales taxREUTERS NEW DELHI/MUMBAI

India slashed the sales tax rate on over 20 items yesterday in a move aimed at appealing to traders and the middle class after Prime Minister Narendra Modi’s ruling party lost elections in five states.

Modi is seeking a second term in next five months amid voter frustration over the abrupt imple-mentation of a nationwide goods and services tax (GST) in July 2017 that has resulted in job losses for thousands of workers in small businesses.

The GST council, headed by India’s finance minister Arun Jaitley (pictured), agreed to lower the tax on some goods including

televisions, batteries and movie tickets.

The council cut tax rates on six items from the highest tax rate of 28 percent to 18 percent and on

one item - wheelchairs and parts - to five percent. Most other items saw tax rates cut from 18 percent to 12 percent and five percent.

The council has so far taken more than 190 items, including washing machines and leather goods, out of the highest tax rate. Only 34 items - particularly luxury goods - remain in the top slab of 28 percent.

“It is decided to retain sin (such as alcohol and tobacco) and luxury goods in 28 percent bracket. Cement and some auto parts are also still in 28 percent slab,” Jaitley told reporters.

On Tuesday, Modi said the government was planning to cut the number of items taxed at the highest rate so that over 99 percent

of items, with the exception of luxury goods, come under the 18 percent or lower rates.

A report by the country’s largest bank State Bank of India estimated that federal and state governments could face a shortfall of about 900 billion rupees ($12.83bn) in GST tax collections in the current fiscal year against the budget target of 12.9 trillion rupees.

The council cut tax

rates on six items

from the highest tax

rate of 28 percent

to 18 percent and

on one item -

wheelchairs and parts

- to five percent.

Trump discussed firing Federal Reserve Chairman: Report REUTERS TOKYO

US President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell, Bloomberg reported yesterday, citing sources.

Trump’s frustration with the US central bank chief intensified after this week’s interest rate increase and months of stock-market losses, the news agency said, citing four unidentified people

familiar with the matter.The president has talked

privately about firing Powell many times in the past few days, it said, citing two of the people.

White House spokesmen declined to comment, as did Federal Reserve spokes-woman Michelle Smith, Bloomberg reported.

The Fed raised interest rates on Wednesday for the fourth time in 2018, and sig-nalled “some further gradual”

rate increases ahead.Global financial markets,

including Wall Street stocks, had been hoping for a more dovish policy outlook and sold off broadly.

The Dow had the worst week since the 2008 financial crisis, while the Nasdaq sank into bear market territory.

Any attempt to fire Powell could be seen as undermining the central bank’s inde-p e n d e n c e f r o m t h e administration.

China’s ethanol love may be antidote for slumping US farmsBLOOMBERG CHICAGO

A little love from China in the US ethanol market during the trade-war detente between Washington and Beijing could go a long way in soothing the ailing American farm economy.

That’s according to Mark Marquis, chief executive officer and co-founder of closely held Marquis Energy LLC, a Hennepin, Illinois-based producer that operates the world’s largest dry mill ethanol plant. His company shipped one of the last cargoes of US-made ethanol to China in April, just as the spat between President Donald Trump and his counterpart President Xi Jinping deepened.

Since then, China’s retaliatory tariffs choked off demand and contributed to a slump in the ethanol industry that’s squeezed

margins and forced output cuts.While duties on US-grown

soybeans and pork have received the lion’s share of attention, the Asian country has 70 percent tariffs on American-made ethanol, mostly made from corn in the Midwest. There are also fees on a byproduct known as dried dis-tillers grains, which is fed to live-stock. The biofuel is a key com-ponent of the farm-belt economy, with about 38 percent of US corn production destined for ethanol mills.

‘Quick Fix’ If China were to resume purchases of American ethanol, like the nation’s done for soybeans amid the trade truce, it would not only mean improve-ments for the biofuel industry, but could also aid US agriculture overall, Marquis said.

If the US can “ship 200m or 300m gallons into China, it would improve the margin environment

in ethanol,” he said in a telephone interview. “You wouldn’t be having these layoffs and low corn prices and whatnot. It’s a quick fix for the ag economy to just get ethanol and DDGs going back into China, and I think we’d have an immediate snapback of profita-bility in biofuels and in corn pro-duction.” In recent years, ethanol companies expanded capacity

with an eye toward meeting robust demand from China. The Asian country outlined a plan to widen consumption by 2020. With the trade war, the American ethanol industry is reeling. Pacific Ethanol Inc., one of the largest US producers, said December 19 that it idled a mill in Aurora, Nebraska, and laid off a third of its work-force there.

“Our industry was encouraged by the recent announcement that China will resume buying US soy-beans, and we remain hopeful that US ethanol and distillers grains will be next,” Geoff Cooper (pictured), president and CEO of the Renewable Fuels Association, a Washington-based trade group, said Thursday in an emailed statement.

China’s absence “has been painful for our industry and sig-nificantly contributed to our current economic challenges,”

with low prices and thin or “below break-even” returns, Cooper said, noting that the Asian country was once the third-biggest importer of American ethanol.

Plant Closures Without the return of Chinese demand, things for the US ethanol industry go from bad to dire, according to Marquis, who runs a 300m gallon-a-year plant near the Illinois River. He’s heard of as many as eight plants that have shut down amid the poor margins, with “maybe two or three more coming.” “It’s going to end up being that there’s some of the maybe more marginal producers -- whether it’s based on poor logistics, poor efficiency, poor scale size, poor cash-management situations -- where some of them are going to shut down and probably never restart,” Marquis said.

He added that the US also

faces trade barriers in Europe, Brazil and Peru. In the meantime, the industry has been pushing the Trump administration to prod China to resume ethanol pur-chases. Trump has repeatedly professed his affection for ethanol and farmers, a key constituency that helped him reach the White House.

Growth Energy, a Wash-ington-based ethanol trade group, has been in touch with the US Trade Representative and its chief agricultural negotiator, Gregg Doud, “often and directly,” Craig Willis, senior vice president of global markets at the group, said in an emailed statement.

“If we continue down this path, China’s tariffs have the potential to have a very material effect on ethanol demand and is a critical item we need resolved to move the bottom line for our producers,” Willis said.

Danske crisis ‘more painful’ than 2008 meltdown: NielsenBLOOMBERG COPENHAGEN

What’s worse for a bank, the biggest financial crisis since the Great Depression or the biggest money laundering scandal in European history? According to Danske Bank, which has lived through both, it’s the latter.

The bank’s acting chief executive, Jesper Nielsen (pic-tured), says that during the global meltdown of 2008, con-cerns centred on things like “greed,” which was obviously bad. But this time, it’s about “the extent to which we were involved in crimes,” Nielsen said in an interview with FinansWatch.

And “that’s much more painful,” he said.

For shareholders, the obser-vations are noteworthy. The crisis of 2008 sliced 74 percent off Danske’s market value that year. In 2018, the bank’s stock has lost about 48 percent.

The bad news follows a period during which Danske had appeared to turn a corner. Investors seemed pleased with the results of a management purge that included the former CEO, Thomas Borgen, and chairman, Ole Andersen. And the financial regulator in Denmark hinted that prose-cutors might show leniency, given the bank’s willingness to cooperate with investigators.

But ultimately, there are too many unknowns for investors to assume the worst is behind them. At Alfred Berg, head of equities Leif Eriksrod says Danske has turned into “a big black box. It’s clear that it has fallen a lot, but whether it’s

cheap now is a speculative guess.” The Laundering Case The allegations against Danske suggest that potential criminals from the former Soviet Union used the bank as a central causeway for funneling their money into the West. The original crimes, according to allegations made by prosecutors in Estonia and a whistle-blower, include tax fraud and embez-zlement. The laundering is alleged to have continued into 2015.

Bill Browder, the Hermitage Capital founder who has made it his life’s work to follow the money tied to the 2009 death of his colleague, Sergei Mag-nitsky, says Danske was part of a scheme in which funds were ultimately used for everything from chemical weapons, to con-tracts for assassins, to luxury items such as yachts and fur coats.

The big question sur-rounding Danske now is how severely the US will come down on the bank. The market has known since October that the Justice Department is con-ducting a criminal investigation into Danske. That probe may include the extent to which the bank was used by entities placed under US sanctions. Investors fear significant fines, with esti-mates ranging from less than

$1bn to well over $8bn.Danske hasn’t set aside pro-

visions, according to its latest quarterly results. Instead, it’s been building a Pillar 2 buffer to deal with the fallout of the laundering case, which is already about $2.7bn. The bank says it can also draw on other reserves and remain well capi-talized, if need be.

But the real value erosion may come from the fact that the whole case is likely to continue to hang over Danske for a long time. Otto Friedrichsen, head of equities at Formuepleje, a Danish asset manager that oversees about $11bn on behalf of its clients, said that, given the scope of the investigations into Danske, “this case will drag on, probably also beyond 2019.” --With assistance from Ott Ummelas and Jonas Cho Walsgard.

Quadrilateral Balkan Summit on economic stabilityFROM LEFT: Romania’s Prime Minister Viorica Dancila, Bulgaria’s Prime Minister Boyko Borisov, Serbian President Aleksandar Vucic and Greece’s Prime Minister Alexis Tsipras pose for a photo during the Quadrilateral Balkan Summit in Belgrade, Serbia yesterday. The four-party co-operation that began in October 2017 in Varna, establishes the Balkan countries’ co-operation on major regional issues such as stability, security, transport, infrastructure, energy and economy.

The bank’s acting

chief executive,

Jesper Nielsen, says

that during the global

meltdown of 2008,

concerns centered on

things like “greed,”

which was obviously

bad. But this time,

it’s about “the extent

to which we were

involved in crimes,”

Nielsen said in an

interview with

FinansWatch.

Commercial Bank does not support merger of Bank DhofarTHE PENINSULA DOHA

The Commercial Bank holds 34.9 percent of the shares in National Bank of Oman. As previously disclosed the Board of Directors of National Bank of Oman commenced discussions with

Bank Dhofar in July 2018 to explore the possibility of a merger between the two entities. Following careful consideration, as a major shareholder in NBO, CB confirms that they have advised NBO that CB does not support the merger.

Page 3: BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

03SUNDAY 23 DECEMBER 2018 BUSINESS

MSCI’s index of global

equities fell 1.5 percent,

dragged down by broad

declines in Europe and

Asia. On Wall Street, US

stocks initially moved

higher after Commerce

Department data showed

the US economy is on pace

to grow by 3 percent this

year.

Global stock indexes skid on US government shutdownREUTERS NEW YORK

World stock markets continued a week-long sell-off on Friday as the threat of a US government shutdown and comments from a top White House trade adviser casting doubt that a breakthrough on trade tensions with China can be achieved compounded investor anxiety that global economic growth is slowing.

MSCI’s index of global equities fell 1.5 percent, dragged down by broad declines in Europe and Asia. On Wall Street, US stocks initially moved higher after Commerce Department data showed the US economy is on pace to grow by 3 percent this year. But they pared their gains and then turned lower.

The Dow Jones Industrial Average fell 414.23 points, or 1.81 percent, to 22,445.37, the S&P 500 lost 50.8 points, or 2.06 percent, to 2,416.62 and the Nasdaq Composite dropped 195.41

points, or 2.99 percent, to 6,333.00.Stocks fell after Trump adminis-

tration trade adviser Peter Navarro told Nikkei it would be “difficult” for the United States and China to reach a long-lasting trade agreement that would end the simmering trade war between the world’s two largest economies.

The tech-heavy Nasdaq Composite dropped into a bear market, defined as a 20 percent decline from its recent highs, for the first time since the global financial crisis in 2008. Broad stock markets in the United States and Europe are on pace for the worst quarter since 2008, while the Dow finished its worst week since late 2008.

“China is cooling and the euro zone is slowing down, and some of the eco-nomic indicators from the US have been a bit soft recently, but yet the Fed hiked rates and suggested that two more interest rate hikes were lined up for 2019,” said Michael Hewson, chief

markets analyst at CMC Markets in London.

He said speculation that the US economy could be headed for a recession has picked up, dampening

global sentiment. “Fear about a US gov-ernment shutdown is playing into the mix too.” US President Donald Trump has refused to sign legislation to fund the US government unless Congress authorizes money for a Mexico border wall, thus risking a partial federal shutdown yesterday.

“Political brinkmanship in Wash-ington is further heightening market uncertainty,” said Westpac economist Elliot Clarke.

Adding to the air of crisis was news that US Defense Secretary Jim Mattis had resigned after Trump announced a with-drawal of all US forces from Syria and sources said a military pullback from Afghanistan was also planned.

Oil prices, which slid just over 4 percent on Thursday, tumbled to their lowest since the third quarter of 2017. US crude fell 1 percent to $45.41 a barrel, while Brent fell 1.5 percent to $53.52.

Japan’s Nikkei lost 1.1 percent to

close at its lowest since mid-September last year, after giving up 5.6 percent this week. Australian stocks slipped 0.7 percent, hovering just above a two-year trough hit earlier in the session.

The mood change has triggered a rush out of crowded trades, including massive long positions in US equities and the dollar and short positions in Treasuries.

Lipper data on Thursday showed investors pulled nearly $34.6bn out of stock funds in the latest week and were heading for the biggest month of net withdrawals on record.

Benchmark 10-year Treasury notes last rose 2/32 in price to yield 2.783 percent, from 2.789 percent late on Thursday.

As recently as October, yields had been at a seven-year high of 3.261 percent. The dollar index rose 0.76 percent, with the euro down 0.74 percent to $1.1359.

US budget stalemate leads to partial shutdownSenate Majority Leader Mitch McConnell speaks to reporters as he walks from the Senate Chamber on the first day of a partial federal government shutdown in DC in the US, yesterday. Democrats refused to agree with President Donald Trump’s demands for $5bn to go towards building a wall on the US southern border.

OTAS shares in Turk Telekom transferred to SPV REUTERS ISTANBUL

Turk Telekom shares previously held by Ojer Telekom (OTAS) have been moved to a special purpose vehicle (SPV), three Turkish banks said yesterday, setting the company up for new owners after the majority shareholder missed several payments.

OTAS, a unit of the Dubai-based Oger Telecom, had taken out a $4.75bn loan in 2013 to acquire a 55 percent stake in

Turk Telekom. However, it failed to keep up payments on what at the time was Turkey’s largest corporate loan.

The creditor banks said in July that they had decided to set up the SPV as part of the debt restructuring talks after an e x t e n d e d p e r i o d o f negotiations.

The main goal in the process is to transfer the Turk Telekom shares to a “competent” investor, Is Bank, Garanti Bank and Akbank said in a joint statement.

“The uncertainties in the shareholding structure of the company will be eliminated which will ensure that the nec-essary steps are taken in a timely manner,” the banks said.

In a separate statement, Turk Telekom said four board members representing OTAS had resigned and three people nominated by the SPV and rep-resenting the three banks joined the board. Reuters reported in July that creditor banks would extend a loan of up to $4 billion to the SPV and that the majority

stake would be used as col-lateral for the loan.

Many Turkish companies are currently facing the formi-dable task of repaying foreign currency loans while raising revenues in lira, which lost 30 percent of its value against the dollar this year.

The currency was hit by a sharp sell-off sparked by worries about President Tayyip Erdogan’s grip on monetary policy and deteriorating ties between Ankara and Washington.

Banks stuck with $1.6bn of unsold loansBLOOMBERG NEW YORK

A rout in the once-hot market for risky corporate loans has some of Wall Street’s largest banks stuck with at least $1.6bn of unwanted leveraged buyout debt.

Banks including Barclays Plc, Goldman Sachs Group Inc. and Bank of America Corp. -- among the top providers of loans for LBOs -- have struggled in recent weeks to sell loans they’ve agreed to make for private equity deals, as concerns about the global economic outlook spurred investors to flee risky assets.

At least four loan sales for buyouts and acquisitions have failed to clear the market so far this month, forcing the banks to keep the debt on their books, according to data compiled by Bloomberg and people familiar with the matter.

The hope is that by waiting until next year to sell the debt to investors the banks might be able to avoid a fire sale. But holding onto the loans could weigh on banks’ earnings in the fourth quarter.

The hung deals are equal to 14 percent of the $11.7bn of loans sold in December, according to Bloomberg data. But they also represent a small fraction of the more than $2.3 trillion of loans to corpora-tions that were on US banks’ books as of Dec. 12, according to Federal Reserve data.

All companies or banks mentioned have either declined to comment or did not respond to requests for comment.

Ulterra Drilling Technol-ogies: Blackstone’s acquisition of a majority stake in the drilling equipment supplier closed this month. Wells Fargo & Co and Barclays had to keep a $415 million loan on their books and plan to offload it in January.Blue Racer: First Reserve’s acquisition of 50 percent of the pipeline operator is expected to close by the year end. The Goldman Sachs-led group arranging the financing ended up holding onto a $516m loan.

Goldman is now likely to sell the loan to a small group of buyers separate from the syndicated market, such as direct lenders or infra-structure funds, according to a person familiar with the matter.

Barclays and Royal Bank of Canada are also involved.C&D Technologies: The firm’s acquisition of Trojan Battery closed on Thursday, without the Bank of America-led group of underwriters being able to offload the $400m loan to finance the deal. Credit Suisse Group AG, ING Groep NV and KeyCorp are also involved.Apollo Infrastructure: Apollo Global Management LLC’s acquisition of a $1bn investment portfolio from GE Capital’s Energy Financial Services is expected to close this quarter. Apollo Infra-structure has shelved the $275m loan backing the deal, led by RBC. The loan is expected to return to the market in the new year once markets stabilize. BMO Financial Group and Goldman Sachs are also involved.

Bulgaria picks US for talks on planned $1bn defence dealBLOOMBERG SOFIA

Bulgaria is preparing to start exclusive talks with the US to purchase F-16 fighter jets in a $1bn defence tender that could be the Balkan country’s biggest military deal since the Cold War.

The Defense Ministry picked the aircraft to replace its outdated Soviet fleet as the US urges NATO members to meet the alliance’s defense spending goals. The ministry also considered offers from Italy for Eurofighter Typhoons and from Sweden for Saab AB Gripen fighters, Defense Min-ister Krasimir Karakachanov told reporters in Sofia. Before starting talks on price and con-ditions, parliamentary approval is required.

Japan’s declining annual inflationJapan’s Vice-Finance Minister Shigeaki Okamoto (right) talks with Reuters Japan Bureau Chief William Mallard during a Reuters Newsmaker event in Tokyo, Japan. Japan’s annual core consumer inflation slowed in November, reinforcing market expectations the central bank will hold off on whittling down stimulus for a prolonged period as prices remain distant from its target.

Turkish company to build Sarajevo-Belgrade HighwayANATOLIA SERBIA

The governments of Turkey and Serbia on Wednesday signed a $285m contract to build the Sarajevo-Belgrade Highway.

Turkey’s Transport and Infrastructure Minister Mehmet Cahit Turhan held a bilateral meeting as well as a meeting between delegations with his Serbian counterpart Zorana Mihajlovic in the capital Belgrade.

The two ministers discussed the highway project which will connect the capital cities of Serbia and Bosnia and Herzegovina.

The meetings and signing ceremony were also attended by Serbia’s Deputy Premier Rasim Ljajic and Tanju Bilgic, Turkey’s ambassador to Belgrade, Tasyapi company head Emrullah Turanli

and President of the Public Enterprise Roads of Serbia Zoran Drobnjak.

Speaking at the ceremony, Ljajic said the new contract is a result of the successful trilateral mechanism of Serbia, Bosnia-Herzegovina and Turkey.

“A few people believed that this highway project could be implemented, because it is a very expensive project. But today, the impossible became possible and the project was signed,” said Ljajic.

Turhan said the contract plays an important role in devel-oping the relations of the two countries and added: “This agreement signed here today is a very important beginning between two countries. Turkey gives great importance to Serbia for the region’s stability.”

He described the highway’s role as a guarantee for peace in

the region.“Road infrastructure projects

do not only contribute to a single country but to the entire region’s industry, economy, tourism,” he said. “In particular, the roads passing through Serbia play a cross-border role between Europe and Asia.” “The com-mercial developments on these roads will contribute to the development of social, economic life in the region and increase the welfare level. Moreover, the improvements would guarantee the peace in the region,” Turhan added.

Mihajlovic, for her part, stressed that the two countries support the development of existing good relations and coop-eration, and ensuring peace and stability in the region.

She said roads are not only roads, but also political and eco-nomic relations.

Page 4: BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

04 SUNDAY 23 DECEMBER 2018BUSINESS

World’s richest people lost $511bn in 2018BLOOMBERG NEW YORK

The richest people on Earth lost $511bn this year after record first-half gains were obliterated by a succession of bruising market sell-offs.

Global trade tensions and worries about a US recession dragged markets lower at year-end, leaving the 500 people on the Bloomberg Billionaires Index with a combined net worth of $4.7 trillion as of Friday’s close. It’s only the second annual decline for the daily wealth index since its 2012 debut, and represents a sharp about-turn from the start of the year, when bullish investors helped propel the fortunes of the richest to a record $5.6 trillion.

“As of late, investor anxiety has run high,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “We do not expect a recession, but we are mindful of the downside risks to global growth.” Even Jeff Bezos, who recorded the biggest gain for 2018, wasn’t spared the vola-tility. His fortune peaked at $168bn in September, a $69 billion gain. It later tumbled $53bn -- more than the market value of Delta Air Lines Inc, or Ford Motor Co. -- to leave him with $115bn at year-end.

The Amazon.com Inc founder had

a better year than Mark Zuckerberg, who recorded the biggest loss since January, dropping $23bn as Facebook Inc careened from crisis to crisis. Overall, the 173 US billionaires on the list -- the largest cohort -- lost 5.9 percent from their fortunes to leave them with $1.9 trillion.

Asia Angst Even Asia’s fabled wealth-creation machine stumbled as the region’s 128 billionaires lost a com-bined $144bn in 2018. The three biggest losers in Asia all hailed from China, led by Wanda Group’s Wang Jianlin, whose fortune declined $11.1bn.

Despite the turmoil, Asia continued to mint new members of the three-comma club. The Bloomberg index uncovered 39 new members from the region in 2018, although that status proved short-lived for some. About 40 percent had lost their 10-figure status as of Dec. 7.

The Middle East had an even more turbulent year. While many of the bil-lionaires ensnared in Saudi Crown Prince Mohammed bin Salman’s cor-ruption crackdown were released, doubt and fear about the powerful royal’s methods sent a chill through the Saudi economy.

The Kingdom’s richest person, Prince Alwaleed, who was released in March after 83 days in detention, lost

$3.4 billion. His net worth has fallen by 60 percent since its peak in 2014. One of the remaining Saudi captives, Mohammed Al Amoudi, managed to become richer during his year in detention, as the value of his Swedish energy and property assets rose. The Saudi government confirmed this month that he was facing charges on graft and corruption and is awaiting trial. Meanwhile, Africa’s richest saw their fortunes shrink by 14 percent as the emerging-market rout hammered assets.

European Rout From Zara founder Amancio Ortega to former Italian Prime Minister Silvio Berlusconi, most of Europe’s billionaires saw their fortunes

fall. Germany’s Schaeffler family, the majority shareholders of car-parts maker Continental AG, lost the most as extra costs and tough business condi-tions in Europe and Asia hampered the company’s performance.

Georg Schaeffler and his mother Maria-Elisabeth Schaeffler-Thumann are $17bn worse off than at the start of the year. That sum alone would place them among the world’s 100 richest people.

Mexico’s Carlos Slim, the majority shareholder of Latin America’s largest mobile-phone operator, also suffered big losses. Once the world’s richest person, Slim now ranks sixth with a $54bn pile. 3G Capital co-founder Jorge Paulo Lemann saw his fortune drop the most among Latin American billionaires, losing $9.8bn. But even with that fall, he remains Brazil’s richest person.

Russian fortunes on average fared better. The volatility caused by col-lapsing oil prices, a flare-up in tensions with Ukraine and tightening sanctions was partially offset by periodic gains. The combined net worth of the coun-try’s 25 wealthiest people was down only slightly, ending at $255bn, according to the ranking.

Still, 16 of the 25 Russian billion-aires on the Bloomberg index saw their

net worth fall in 2018. Aluminum magnate Oleg Deripaska, who remains under US sanctions, lost the most -- $5.7bn -- and dropped out the Bloomberg ranking of the world’s top 500 richest people.

By contrast, energy moguls Leonid Mikhelson, Gennady Timchenko and Vagit Alekperov added a total of $9 billion. Timchenko, sanctioned in 2014, added 27 percent to his net worth as shares of gas producer Novatek rose 40 percent.

Sector Slump Those gains were the main reason why energy billionaires as a group had the best year, adding a collective $6 billion. Technology for-tunes -- the best performing in 2017 after climbing $262bn -- were down a total of $55 billion, even including Bezos’s gain. All other industries were down, including a $75bn decline for retail tycoons and a $79bn drop for industrialists.

The number of women on the list inched up by one to 66 as Denise Coates, the British founder and chief executive officer of online bookmaker Bet365 Group Ltd, joined the ranking for the first time. She pocketed 220m pounds ($282m) in remuneration last year, one of the highest disclosed pay packages anywhere, after the company reported record results.

Global trade tensions

and worries about a US

recession dragged markets

lower at year-end, leaving

the 500 people on the

Bloomberg Billionaires

Index with a combined net

worth of $4.7 trillion as of

Friday’s close.

India races forward in e-vehicles sectorBLOOMBERG MUMBAI

This hasn’t been the best of years for those of us who worry about climate change. The US admin-istration has firmly turned against emissions controls. State backing for construction pushed China’s emissions higher. And, far from peaking or even stagnating, worldwide emissions actually increased at the fastest rate in the past seven years, according to the Global Carbon Project. The longer term prospects don’t look great, either, with the devel-oping world -- led by China and India -- still firmly addicted to coal. However, I’m holding on to one piece of good news that’s emerged in the past week: It looks like India is serious about electric vehicles.

Now, promises from India’s government usually don’t mean a whole lot. The government has a tendency to set targets it calls “aspirational” and which are so ambitious that officials get points just for trying.

It looked for awhile like plans to electrify India’s fast-growing fleet of cars would meet the same fate. The minister in charge of transport famously declared that India’s roads would be all-electric by 2030, only to have his promise humiliatingly walked back by colleagues within months.

The new target -- for 30 percent of all vehicles to be electric by 2030 -- seemed more than ambitious enough, espe-cially given that India’s powerful automakers have over and over again demonstrated their ability to block or delay any regulations

meant to address climate change.It’s in this context that the

government’s draft policy for the infrastructure needed to support an electric fleet is a surprising and refreshing change. India’s legacy carmakers have long moaned about the lack of charging infra-structure being a major reason why they wouldn’t invest in pro-ducing electric vehicles. For once, India’s bureaucrats might not crush an emerging sector by over-regulation.

In fact, most of the rules they’ve proposed are meant to insulate charging stations, say, from bad regulations in other fields.

For example, the draft sug-gests that the price of electricity at charging stations shouldn’t be more than 15 percent higher than the average cost of supply for their location. Interestingly, public charging stations have been promised “open access” -- a term with fraught echoes in Indian economic history.

Back in the early 2000s, the government tried to reform the power sector by saying that all consumers, anywhere, could shop around for the lowest tariffs available and then buy from that electricity provider, even if their local utility charged a lot more.

The policy got tied up in liti-gation and was never really properly implemented. If power for electric vehicles manages to change that, it wouldn’t just help build an electric fleet - it might force reform in India’s power sector.

The fun part, in my opinion, is a nifty little loophole that the designers have -- perhaps

deliberately -- left in the draft. People setting up charging sta-tions won’t need a license; anyone can do so. And domestic users will be allowed to charge electric vehicles at the electricity tariffs appropriate for households.

In India, that means everyone will be charging everyone else’s vehicle as long as they can take a little bit off the top. This is exactly how new technology spreads here. Long before we all had mobile phones, the telecom-munications revolution had already begun because of tiny little kiosks, mostly unlicensed, that sold long-distance phone calls. In India, the crucial con-straint for charging stations would normally be getting hold of enough land to park cars for the time it takes to charge them. If anyone with a bit of spare space and an electricity connection can run a low-cost charging station, you might be able to solve that problem.

The plans aren’t perfect; the technical requirements for a public charging station appear excessive, for example. But, as long as those restrictions are changed in keeping with the laissez-faire instinct that appears to inform the rest of the rules, things should work out.

There are lessons worth taking home from this. First, while the future of climate change will be determined by India -- nothing any other economy will do matters if India decides to climb up to prosperity the same emissions-heavy way everyone else has -- failure isn’t preordained.

A file picture of Indian auto maker Mahindra’s Atom car, a new urban mobility concept electric vehicle, at the ‘Auto Expo 2018’ at the India Expo Mart in Greater Noida, on the outskirts of Delhi.

Brazil to ‘actively’ boost exports from its huge farm sectorAFP BRASÍLIA

Brazil is to throw its diplomatic muscle behind a push to “actively and systematically” increase exports from its huge farm sector, the country’s next foreign minister said yesterday.

“Agriculture’s strength will be part of the project to increase Brazil’s power. At the same time, projecting the image of a country that is con-fident, big and strong will further serve agriculture’s interests,” Ernesto Araujo said in a series of tweets.

Araujo promised to inject a good dose of ideology into trade and Brazil’s dealings with other countries, while railing against the foreign policies of leftist leaders who ruled the country between 2003 and 2010.

He also said a new agribus-iness department would be created in his ministry.

“New foreign policy: Brazil won’t stop exporting chicken and soya, beef and sugar, but will also move to export hope and freedom,” he said.

“The fact we are an agricul-tural power doesn’t stop us having ideas and fighting for them.”

Araujo was a mid-ranking public worker in Brazil’s foreign ministry when far-right pres-ident-elect Jair Bolsonaro tapped him to become the country’s top diplomat. The new government takes office on January 1.

The 51-year-old, who never held the post of ambassador, embodies Bolsonaro’s stance of encouraging business and foreign investment while

downplaying the need to fight climate change or protect the environment.

The foreign policy inexpe-rience of Bolsonaro and his team has been evident in rash rhetoric against China -- Brazil’s biggest trading partner -- and the pres-ident-elect’s promise -- hastily backpedalled -- to move Bra-zil’s embassy in Israel to Jerusalem.

Bolsonaro has repeatedly said that China “is buying Brazil.”

But his country is doing very well in terms of increased soya exports to China after Beijing imposed a 25 percent tariff on US soybeans in retaliation for tariffs on Chinese goods ordered by US President Donald Trump.

And while Bolsonaro said last month he intended to follow Trump’s lead by moving his embassy to Jerusalem, the sudden realization that such a

controversial step could put vital agriculture exports to Europe and Middle East markets at risk forced him to say “it hasn’t been decided yet.”

Brazil is a significant trading power, notably exporting soy-beans, iron ore, sugar, oil and chicken, with its main markets being China, the United States and the European Union.

Exports last year topped $200bn and imports $138bn, according to government figures.

Some Brazilian media reported that Araujo was trying to stake out a bigger area of responsibility for his foreign ministry by including agricul-tural trade.

He faces an economy min-istry that has been expanded to swallow portfolios for industry, investment and labor and which looks poised to have a say over Brazil’s trade policies.

A file photo of workers loading soybeans imported from Brazil at a port in Nantong in east China’s Jiangsu province. After China imposed a duty on soy imports from the US, Brazilian farmers were the most beneficiaries and Brazilian soybean premiums continued rising.

Cuba will be unable to pay off its debt commitments in 2019AFP HAVANA

Cuba’s government admitted on Friday that it won’t be able to pay all its debt commitments in 2019, blaming Hurricane Irma and United States sanc-tions for its woes.

“In 2019, we’ll have less credit than the amount of debt we’re planning to pay,” said finance minister Alejandro Gil during a parliamentary session.

“There will be a level of debt that we won’t be able to

pay next year and this will affect the performance of the economy.

“There is a high level of debt in the economy that creates daily tensions.

“We’ve been looking for specific solutions but it’s affecting the harmonious per-formance of the economy.” Gil insisted that Cuba’s new loans would be marginally lower than the existing debts it will pay off, meaning that “we won’t be increasing our level of debt.” Cuba recently

defaulted on a part of its debt with Brazil and is behind in reimbursing another portion related to the construction of a port and purchase of food.

Havana blames these delays on the effects of Hur-ricane Irma, which made landfall in early September 2017, and a hardening US embargo that hinders its inter-n a t i o n a l f i n a n c i a l transactions.

Cuba’s government has said the economy grew by 1.2 percent in 2018.

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05SUNDAY 23 DECEMBER 2018 BUSINESS

The FBI found

on Tan’s laptop

an employment

agreement from a

Chinese company

that has developed

production lines for

lithium ion battery

materials.

Chinese national charged with stealing trade secrets in USREUTERS WASHINGTON

The US Justice Department has said that a Chinese national had been arrested for stealing trade secrets from a US-based petroleum company, his employer, related to a product worth more than $1bn.

The department alleged Hongjin Tan downloaded hun-dreds of files related to the manufacture of a “research and development downstream energy market product,” which he planned to use to benefit a company in China that had offered him a job. He was arrested on Thursday in Oklahoma and will next appear in court on Wednesday, the department said.

Tan’s LinkedIn page said he has worked as a staff scientist for Phillips 66 in Bartlesville, Oklahoma, since May 2017.

Phillips 66 said in a statement it was cooperating with the Federal Bureau of Investigation in a probe involving a “former employee at our Bartlesville location,” but declined to comment further.

An FBI affidavit said Phillips 66 called the agency last week to report the theft of

trade secrets and Tan told a former co-worker he was leaving to return to China.

The FBI found on Tan’s laptop an employment agreement from a Chinese company that has developed production lines for lithium ion battery materials.

Tan accessed files for mar-keting the trade secret “in cell phone and lithium-based battery systems,” the FBI said. Phillips 66 said it has one of two refineries in the world that manufacture the unspecified product.

Tan was responsible for research and development of the US company’s battery program and developing battery technologies using its proprietary processes. Phillips 66 told the FBI it had earned an estimated $1.4bn to $1.8bn from the unspecif ied technology.

Turkish Airlines is country’slargest service exporterANATOLIA ISTANBUL

The national flag carrier Turkish Airlines has been named as the country’s largest service exporter yesterday.

Turkey’s 500 Largest Service Exporters Award Ceremony was held in Istanbul by Turkish Exporters’ Assembly (TIM) in coordination with Trade Ministry.

Speaking at the ceremony, Turkish President Recep Tayyip Erdogan said the total turnover of awarded 500 firms was $93bn in 2017 as their services exports amounted to $23bn.

“These 500 firms made more than half of our total services exports,” Erdogan said.

Turkey continues to move towards its aims with democracy, economy, and security, the pres-ident added. Carrier firms Sun Express and Pegasus, logistic company Ekol, construction

contracting company Gap Insaat were also among the top 5 service exporters.

Trade Minister Ruhsar Pekcan said Turkey had $22bn services export surplus during the January-October period, up 22 percent compared to the same period last year. The country’s services export surplus was around $1bn in 1984, $7.9bn in 2002 and $20bn in 2017, she noted.

“Our target is to double or triple this figures with contribu-tions of new services sectors, “ she added. Services export becomes one of the most pow-erful instruments for fighting against the current deficit, Pekcan said.

The country ranked as 29th last year with its $43.7bn services exports in the world, Pekcan reminded.

California to consider broad shakeup of PG&E after disastersBLOOMBERG SAN FRANCISCO

California regulators said they will consider breaking up PG&E Crop, or turning it into a publicly owned utility as part of a broad review into the company after a string of deadly disasters tied to its operations.

The California Public Utilities Commission said on Friday that it also will consider whether PG&E’s board and executive management should be replaced. The agency said it hadn’t drawn

any conclusions on how it will act, and it will seek input from the public.

“This is not a punitive exercise,” commission Pres-ident Michael Picker, who will oversee the proceeding, said in a statement. “The keystone question is would, compared to PG&E and PG&E Corp. as pres-ently constituted, any of the proposals provide Northern Californians with safer natural gas and electric service at just and reasonable rates?” The step came one day after a state

senator demanded changes to the board and executive suite in light of accusations by the commission that PG&E had fal-sified natural-gas safety records for years after a 2010 natural gas pipeline explosion that killed eight people. PG&E, the largest utility in California, was already under scrutiny for the role its equipment might have played in sparking last month’s Camp Fire, the dead-liest and most destructive in state history.

PG&E shares have lost more

than half their value since the outbreak of that fire on Nov. 8 on concern the company’s equipment may be found to be responsible. The utility is also confronting billions of dollars of claims stemming from last year’s deadly Northern California fires, where state investigators have said its equipment sparked at least 17 blazes, with rule viola-tions found in 11 of them.

Picker said last month that he would open a sweeping review of the San Francisco-based company’s safety culture,

structure and governance, including a possible boardroom shakeup in light of a string of safety issues. The agency will gather input on the underlying issue of PG&E’s safety culture from a range of perspectives before it will consider imple-menting changes, the com-mission said Friday.

PG&E said in a statement late Friday that it recognized state regulators have serious concerns about the utility and it needed to ‘re-earn’ the trust of its cus-tomers. The company said that

while it has made progress, it has more work to do and would be open to a range of solutions.

“The company’s board of directors and senior man-agement team have been actively exploring additional changes beyond the corrective actions and new programs we’ve implemented at the oper-ational level,” PG&E said. “Our shared goal is to improve our culture and practices that will more fully reinforce our com-mitment to safety, integrity and risk reduction.”

A file picture of Turkish Airlines.

BREAK TIMEVILLAGGIO & CITY CENTER

Note: Programme is subject to change without prior notice.

Zero (2D/Hindi) 2:00, 5:00, 8:00 & 11:00pm; Spider-Man: Into The Spider-Verse (2D/Action) 2:15pm; Padi Padi Leche Manasu (2D/Telugu) 2:15pmAquaman (2D/Action) 6:30, 9:00 & 11:30pmMaari 2 (2D/Tamil) 4:30 & 11:30pmAnchor’s Up (2D/Comedy) 5:00pmBumblebee (2D/Animation) 7:00 & 9:15pm;

Spider-Man: Into The Spider-Verse (2D/Action) 2:15pm; Maari 2 (2D/Tamil) 2:30, 8:30 & 11:00pmZero (2D/Hindi) 3:00, 5:00, 8:00 & 11:00pm; Bumblebee (2D/Animation) 4:15 & 6:30 & 11:15pm; Aquaman (2D/Action) 6:00 & 8:45pm

Bumblebee (2D/Animation) 2:30 & 8:00pmZero (2D/Hindi) 5:00, 8:00 & 11:00pm; Maari 2 (2D/Tamil) 3:00 & 11:00pmAquaman (2D/Action) 5:30pm

Johny Johny Yes Appa (2D/Malayalam) 5:45pm;

Autorsha (2D/Malayalam) 2:00 & 8:30pm;

Joseph (2D/Malayalam) 11:15pm;

Kanaa (2D/ Tamil) 8:15pm;

Silukkuvaarpatti Singam (2D/Tamil) 11:00pm;

Zero (2D/Hindi) 9:00am, 12:00, 6:00 & 9:00pm

Maari 2 (2D/Tamil) 3:45, 6:30 & 9:15

Aquaman (2D/Action) 10:30am, 1:30, 4:30, 7:30, 10;30,8, 10 & 11;00pm; Ralph Breaks The Internet: Wreck It Ralph 2 (2D/Animation)

1:30, 4:30 & 6:30pm; Maari 2 (2D/Tamil) 3:45, 6:30, 9:15, 12:00am & 2:45am; Seethakaathi (2D/Tamil) 8:30, 4:45pmSpider-Man: Into The Spider-Verse (2D/Action) 10:30am & 3:30pm; Zero (2D/Hindi) 9:00am, 12:00, 3;00, 6:00, 9:00pm, 12:00am, 1:30am & 3:00am

Zero (2D/Hindi) 10:30am, 1:30, 4:45, 8:00 & 11:15pmSeethakaathi (2D/Tamil) 11:30am, 5:30 & 11:30pmBumblebee (2D/Animation) 10:30am, 1:00, 6:30 & 12:00 mid-night; Aquaman (2D/Action) 3:00 & 9:00pmMaari 2 (2D/Tamil) 2:30 & 8:30pm

On the run in the year of 1987, Bumblebee finds refuge in a junkyard in a small Californian beach town. Charlie, on the cusp of turning 18 and trying to find her place in the world, discovers Bumblebee, battle-scarred and broken.

ROYAL PLAZA MALLCROSSWORD

LANDMARK

FLIK Mirqab Mall ROXY

AL KHOR

ASIAN TOWN

Anna and the Apocalypse 12:00, 12:50, 9:40pm & 0:30amAquaman (2D/Action) 4:15, 1:25, 7:00 & 9:30pmAsher (2D/Drama) 2:30, 7:05, 4:40 & 9:50pmBumblebee (2D/Animation) 11:30am, 2:10, 4:50, 7:30, 10:10, 2:00, 0:05am, 6:55, 9:25, 11:40, 12:05 & 2:50pmMaari 2

Ralph Breaks The Internet: Wreck It Ralph 2 (2D/Ani-

mation) 11:00am, 11:55am & 5:15pmSecond Act 0;20am, 11:30am & 7:50pm Spider-Man: Into The Spider-Verse (2D/Arabic) 10;25, 4:35, 2:15, 7:15, 10:05pm & 12:00 midnight;Widows 4:40pmZero (Hindi) 9:45pm

BUMBLEBEE

Page 6: BUSINESS - The Peninsula · 23-12-2018  · 02 BUSINESS SUNDAY 23 DECEMBER 2018 10,412.51 -83.89 PTS 0.80% QSE FTSE100 DOW BRENT 6,721.17 +9.24 PTS 0.14% 22,688.67 −170.93PTS 0.75%

06 SUNDAY 23 DECEMBER 2018CLASSIFIEDS

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REGENCY RESIDENCE AL SADD 12 (AL SADD): 3���+�.���������=����������)�������������������������������� �������� � (*���� � ��� ��!�"�#$� �%"&'#'"()� 3���+� �H��**����+��� ��!�"�#$� ("�/'�"()� 02� ������ �������+� �� �����������3!��%!�"� '&3!�%�#'!&��4"�("���44)� 567829� >>=;�0?2?� �??;;�=>07� �::<:�;2=>� �??;;2?>?����"%�'4)������������@����������������� REGENCY RESIDENCE AL SADD 13 (AL SADD): 3���+�.���������=����������)�������������������������������� �������� � � ����������� � ��� ��!�"�#$� ("�/'�"()� 02� �������������+� �� ����������� 3!�� %!�"� '&3!�%�#'!&� �4"�("���44)�567829�>>=;�0?2?� �??;;�0>72� �::<7;0;8� �:::0�?=2; �??;;2?>?����"%�'4)������������@����������������� REGENCY RESIDENCE MUSHEIREB 1 (MUSHEIREB): 3���+�.���������=������������������������������������������ �������� � � ����������� � ��� ��!�"�#$� �%"&'#'"()� '������(��������������I+���(�����������������A�������C����������!�"�#$� ("�/'�"()� 02� ������ �������+� �� ����������� 3!��%!�"�'&3!�%�#'!&��4"�("���44)� 567829�::8;�=802� �::7>�?8:<� �>>77�20??� �::<7�:7:?����"%�'4)�����������������@����������������� REGENCY RESIDENCE AIRPORT 1 (DOHA AREA): 3���+�.���������=������������������������������������������������� ��*������-�����!�"�#$��%"&'#'"()�(��������*������I+��� ��!�"�#$� ("�/'�"()� 02� ����� �������+� �� �����������3!��%!�"� '&3!�%�#'!&��4"�("���44)� 567829� >>:?�8=:?� �>;>7�:0<8� �??;;�2?>?� �:::=�08>2����"%�'4)�����������@������������������REGENCY RESIDENCE AIRPORT 1 (DOHA AREA): (����.���������0������������������������������������������������� ��*������-�����!�"�#$��%"&'#'"()�(��������*������I+��� ��!�"�#$� ("�/'�"()� 02� ����� �������+� �� �����������3!��%!�"� '&3!�%�#'!&��4"�("���44)� 567829� >>:?�8=:?� �>;>7�:0<8� �::<7�<070� �??;;�=>07����"%�'4)�����������@����������������� REGENCY RESIDENCE AIRPORT 2 (DOHA AREA): (���� .��������� 0� �������� ��� ��������� ������� �� ��������������������� ��*����� �����!�"�#$��%"&'#'"()�(��������*����� ��!�"�#$� ("�/'�"()� 02� ����� �������+� �� �����������3!��%!�"� '&3!�%�#'!&��4"�("���44)� 567829� >>:?�8=:?� �>;>7�:0<8� �::<:�;2=>� �>>2>�>=?<����"%�'4)�����������@����������������� 63 OLD SALATA (OLD SALATA):�3���+�.�����������������+*�� ��� �������� �� �������� � � ����������� � ��� ��!�"�#$��%"&'#'"()� I+��� ��!�"�#$� ("�/'�"()� 02� ����� �������+� ��������������3!��%!�"�'&3!�%�#'!&��4"�("���44)�567829�>>:?�8=:?� �>;>7�:0<8� �:::0�?=2;� �>>2>�>=?<����"%�'4)�����������@����������������� BIN DIRHAM 1 (MANSOURA):� N�.��������� 0����������)������������������������������������������������!�"�#$� ("�/'�"()� 02� ������ �������+� �� ����������� 3!��%!�"� '&3!�%�#'!&� �4"�("� ��44)� 567829� � >;>7� :0<8� �>>:?�8=:?� �??;;�0>72� �??;;�0>:?����"%�'4)�������������@����������������� BIN DIRHAM 5 (MANSOURA):� N�.��������� 0����������)������������������������������������������������!�"�#$� ("�/'�"()� 02� ������ �������+� �� ����������� 3!��%!�"�'&3!�%�#'!&��4"�("���44)� 567829�>;>7�:0<8� �>>:?�8=:?� � :::0� ?=2;� � ::<7� :7:?� ��� "%�'4)� ������������@����������������� 18 FLATS (AL WAKRA):� =<� N�.��������� ���� �*������������ ��.��� ������� ��� �������� *������� 0� .���� ������������ 02� ������ ���������� 5�L��� ���������� ��� ��9� 3!��%!�"� '&3!�%�#'!&���44)� 567829�>;>7�:0<8� �>>:?�8=:?� �>>2>�>=?<����"%�'4)�������������@����������������� DOHA GARDENS (AL WAAB):�3���+�.���������>����������)�%�����C�������������������������������������������������������!�"�#$�("�/'�"()�02��������������+��������������3!��%!�"� '&3!�%�#'!&��4"�("���44)� 567829� >>=;�0?2?� �??;;�=>07� �::<:�;2=>� �:::2�=?;<����"%�'4)������������@������������������

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