Friday, October 29, 2021Rabia I 23, 1443 AH

BUSINESSGULF TIMES

Gulf energy states pledge net zero in boost to COP26

CLIMATE SUMMIT | Page 3

FM participates in Eurasian Economic Forum discussionQNAVerona

HE the Deputy Prime Minister and Minister of Foreign Af-fairs Sheikh Mohamed bin Ab-

dulrahman al-Thani, who is also the Chairman of Qatar Investment Au-

thority (QIA), participated in a panel discussion in the Eurasian Economic Forum in Verona entitled “Structural Changes in the Economy and the Fu-ture of Energy.”

HE Sheikh Mohamed discussed the State of Qatar’s view on supporting eco-nomic growth, in addition to the role of Qatar’s trade partners in supporting

the local economy over the long term. He discussed the challenges facing eco-nomic growth in light of the challenges and current international conditions, in addition to the importance of addressing climate change and the energy crisis.

HE Sheikh Mohamed also discussed a number of Qatari eff orts that could contribute eff ectively in supporting

economic growth in an environmen-tally-sustainable and economically-effi cient manner.

He also pointed out the QIA’s role in investing in innovative sectors, espe-cially ones that have a positive impact on society like energy, e-commerce, healthcare, technology, and education.

HE Sheikh Mohamed stressed the

importance of managing the transition from the world’s reliance on fuel to re-newable energy, noting that the State of Qatar is working hard in this regard.

Participating in the session were president and CEO of Rosneft Igor Sechin; Minister of Petroleum and Natural Gas of India Hardeep Singh Puri; CEO of BP Bernard Looney; ex-

ecutive chairman and CEO of Trafi gura Jeremy Weir; chairman of the Oil and Gas Climate Initiative (OGCI) Robert Dudley; former CEO of Glencore Ivan Glasenberg; president of Banca Intesa Russia Antonio Fallico; chairman and CEO of Baker Hughes Lorenzo Simo-nelli, and senior vice president of Exx-on Mobil Neil Chapman.

SUPPLY SNAGS : Page 4

Delta wave slows US economic growth in Q3

HE the Deputy Prime Minister and Minister of Foreign Aff airs Sheikh Mohamed bin Abdulrahman al-Thani, who is also Chairman of Qatar Investment Authority (QIA), participated in a panel discussion in the Eurasian Economic Forum in Verona entitled “Structural Changes in the Economy and the Future of Energy.” HE Sheikh Mohamed discussed the State of Qatar’s view on supporting economic growth, in addition to the role of Qatar’s trade partners in supporting the local economy over the long term.

HE the Minister of Finance, Ali bin Ahmed al-Kuwari, received Dr Mohamed Maliki bin Osman, Minister in Singapore Prime Minister’s Off ice and Second Minister for Education & Foreign Aff airs during his visit to Doha yesterday. During the meeting, bilateral relations were reviewed and aspects of joint co-operation and the most important economic, investment and trade developments were discussed. Dr Mohamed is accompanied by a senior-level delegation. HE the Minister of Commerce and Industry, Sheikh Mohamed bin Hamad bin Qassim al-Abdullah al-Thani also yesterday met Dr Mohamed, and the accompanying delegation currently visiting the country. During the meeting, off icials touched on the bilateral relations between the two nations and discussed aspects of joint co-operation in the trade, investment, and industrial fields, as well as ways to enhance and develop them. The meeting also discussed trade policies between the two countries and the eff orts exerted by both to confront the Covid-19 pandemic. During the meeting, HE Sheikh Mohamed highlighted the economic policies Qatar had put in place to support the private sector, including the incentives, legislation, and investment opportunities made available in Qatar to companies wishing to invest and establish a presence there. Trade and investment ties between Qatar and Singapore have witnessed significant growth. Bilateral trade between the two countries amounted to about $3.69bn from January to August this year. The Republic of Singapore ranked as Qatar’s sixth largest trading partner in 2020.

Al-Kuwari, Sheikh Mohamed receive Singapore minister

QSE crosses 11,800 on Gulf funds’ strong buying interests

By Santhosh V PerumalBusiness Reporter

The Qatar Stock Exchange yesterday gained 141 points to cross the 11,800

levels, mainly on the back of strong buying interests of the Gulf institutions.The banking and consumer goods counters witnessed higher than average demand as the 20-stock Qatar Index shot up 1.21% to 11,806.53 points.

The foreign institutions were also seen increasingly into net buying in the bourse, whose year-to-date gains improved to 13.13%.The foreign and Gulf individuals were seen net buyers in the market, whose capitalisation saw about QR9bn or 1.28% increase to QR682.02bn, mainly owing to

large cap segments. However, the domestic institutions were increasingly into net profit booking in the bourse, where the industrials and banking sectors together constituted about 62% of the total trading volume.The overall trade turnover and volumes were on the increase in the main market,

where local retail investors turned net sellers.The Arab individuals were also seen net profit takers in the market, which saw a total of 4,312 exchange traded funds (Masraf Al Rayan-sponsored QATR and Doha Bank-sponsored QETF) valued at QR13,685 change hands across four deals. To Page 3

BUSINESSGulf Times Friday, October 29, 20212

Airbus lifts full-year profit, cash targets

Airbus overcame new snags in its global supply chain to maintain a widely watched forecast for 600 jet deliveries this year, pushing its shares higher despite signs of labour shortages as the economy exits Covid-19 “hibernation”.The world’s largest planemaker lifted full-year profit and cash targets after profits held up better than expected in the third quarter, and refused to bow to industry crit-ics who have questioned its bullish forecasts for jet production.Chief executive Guillaume Faury said the recovery towards pre-crisis output levels was under way after 15 months in which the European group kept its foot on the brake to avoid adding to a glut of aircraft during the airline industry’s worst crisis.“We observe labour shortages around the world impacting all sectors,” Faury told reporters.Airbus posted a 19% drop in third-quarter operating profit to €666mn ($772.7mn) as revenues slipped 6% to €10.518bn.It said it was looking for full-year operating profit of €4.5bn and free cashflow of €2.5bn, up from previous targets of €4bn and €2bn respectively.Analysts were on average expecting quarterly operating profit of €623mn on revenues of €10.651bn, according to a company-compiled consensus.

Mastercard

Mastercard Inc reported better-than-expected profit for the fourth consecutive quarter on Thursday, as easing of pandemic-era restrictions drove a healthy recovery in cross-border spending and lifted domestic spending.After more than a year of staying home-bound, customers have started ventur-ing out for travel, dining and other social activities made possible by vaccinations against the coronavirus, driving up spend-

ing volumes at payment companies like Mastercard.On an adjusted basis, Mastercard earned $2.37 per share, shattering analyst estimates of $2.19 per share on average, according to IBES data from Refinitiv.The company said gross dollar volumes, the dollar value of the transactions processed, jumped 20% to nearly $2tn.Cross-border volumes, a metric that tracks spending on its cards beyond the country of issue, were up 52% from last year when the pandemic hit travel demand.Net revenue rose 30% to $5bn in the quarter.

Caterpillar

Caterpillar Inc said on Thursday that infla-tion may force further price hikes across the board as the manufacturer tries to navigate through production delays after reporting a quarterly profit on Thursday that beat analysts’ estimates.“This has been the first quarter where it (supply chain challenges) started to impact us significantly,” Chief Financial Off icer Andrew Bonfield told Reuters, adding that the company had not experienced any shutdowns yet.The company’s adjusted profit rose to $2.66 per share in the third quarter ended Septem-ber 30, beating analysts’ estimates of $2.20, according to Refinitiv IBES data.Total sales and revenue rose 25.4% to about $12.40bn, compared with estimates of $12.48bn.

Volkswagen

Volkswagen’s underlying profits tumbled in the third quarter as a global chip shortage left the German auto giant unable to meet demand for its vehicles, it said on Thursday.In the third quarter the company “lost some 600,000 vehicles that could not be deliv-ered to customers compared to the second

quarter”, chief executive Herbert Diess said in a conference call.“The global semiconductor bottlenecks par-ticularly impacted on the business perform-ance of the Volkswagen Group in the third quarter,” the carmaker said in a statement, forcing it to pause production at some of its plants due to missing components.Operating profit before special items, VW’s preferred yardstick for underlying earnings, fell 12% to €2.8bn ($3.2bn) in the period from July to September.By contrast, bottom-line net profit rose by 5.6% to €2.9bn.

Sony

Sony upgraded its full-year sales and profit forecast on Thursday, saying it expected strong performances in the music, movie and electronics sectors.The optimistic outlook came despite a lacklustre second quarter overall, with net profit down more than half compared with its extraordinary results in the same period last year.The Japanese conglomerate, which this year bought top online anime library Crunchyroll for $1.2bn, said it expected the purchase to boost sales and profit in its movie division.The group’s net profit more than halved for the second quarter to ¥213.1bn as the pan-demic boom enjoyed by the gaming sector, when people turned to indoor entertain-ment during virus lockdowns, slowed.

Sabic

Petrochemicals giant Saudi Basic Industries Corp (Sabic) on Thursday reported a fivefold increase in third-quarter profit helped by higher average selling prices.Sabic reported a post-tax profit of 5.6bn riyals ($1.5bn), up from 1.1bn riyals a year earlier but missing a 6.1bn riyal consensus from estimates by four analysts compiled by Refinitiv.Revenue increased 49% to 43.7bn riyals.Net income was helped not only by higher average selling prices but also by an increase in its share of results from joint ventures and associates, Sabic said.

Samsung Electronics

South Korean tech giant Samsung Electron-ics posted a 28% jump in operating profit on Thursday despite global supply chain challenges caused by the pandemic.The world’s top chipmaker saw its operating profit reach 15.8tn won ($13.5bn) for the July-September period, it said in a regula-tory filing.Its sales rose 10% on-year to a record 74tn won on the back of strong performance

from its memory chip division thanks to sustained global demand.“Favourable market conditions continued in the memory market” resulting in “robust sales”, the company said in a statement.Operating profits generated from its semi-conductor business accounted for over 60% of the total, illustrating the major role the division plays to the sprawling group.

Shell

Royal Dutch Shell on Thursday reported a net loss for the third quarter as a huge sum written off by the energy giant off set a surge in oil prices.Shell also announced plans to cut carbon emissions but its target was far from meet-ing a recent Dutch court order for a 45% reduction in its greenhouse gases by 2030.Shell said its loss after tax came in at $447mn in the three months to the end of September after writing off $5.2bn linked to commodity derivatives.Stripping out the charge, adjusted earnings soared to $4.13bn from $955mn in the third quarter of 2020.

TotalEnergies

TotalEnergies said Thursday the surge in global oil and energy prices boosted its bottom line in third quarter, when it booked a net profit of $4.6bn.“The global economic recovery, notably in Asia, drove all energy prices sharply higher” in the period from July to September, said chief executive Patrick Pouyanne.In the same period a year earlier, when oil prices had been very low, TotalEnergies booked net profit of $202mn.But compared with the third quarter of 2019, prior to the outbreak of the coronavirus pandemic, the 2021 figure represented an increase of 66%.Gas prices in Asia and Europe were up by 85% over the previous quarter, at “unprec-edented levels,” TotalEnergies said.And oil prices had climbed by seven %, “con-tinuing their steady year-long rise.”The French group said it had benefited from its multi-energy model and its position as world leader in LNG (liquefied natural gas).

CORPORATE RESULTS

Zad Holding Co

Widam Food Co

Vodafone Qatar

United Development Co

Salam International Investme

Qatar & Oman Investment Co

Qatar Navigation

Qatar National Cement Co

Qatar National Bank

Qlm Life & Medical Insurance

Qatar Islamic Insurance Grou

Qatar Industrial Manufactur

Qatar International Islamic

Qatari Investors Group

Qatar Islamic Bank

Qatar Gas Transport(Nakilat)

Qatar General Insurance & Re

Qatar German Co For Medical

Qatar Fuel Qsc

Qatar First Bank

Qatar Electricity & Water Co

Qatar Exchange Index Etf

Qatar Cinema & Film Distrib

Al Rayan Qatar Etf

Qatar Insurance Co

Qatar Aluminum Manufacturing

Ooredoo Qpsc

Alijarah Holding Company Qps

Mazaya Real Estate Developme

Mesaieed Petrochemical Holdi

Al Meera Consumer Goods Co

Medicare Group

Mannai Corporation Qsc

Masraf Al Rayan

Al Khalij Commercial Bank

Industries Qatar

Inma Holding Company

Investment Holding Group

Gulf Warehousing Company

Gulf International Services

Al Faleh Education Holding

Ezdan Holding Group

Doha Insurance Co

Doha Bank Qpsc

Dlala Holding

Commercial Bank Psqc

Barwa Real Estate Co

Baladna

Al Khaleej Takaful Group

Aamal Co

Al Ahli Bank

15.95

4.08

1.62

1.55

0.95

0.96

7.59

5.07

20.50

5.08

7.90

3.19

9.79

2.49

18.42

3.25

2.06

3.35

18.39

1.83

16.80

11.57

3.60

2.62

2.45

1.90

6.92

1.04

1.04

2.40

19.59

8.47

4.83

4.78

2.24

15.86

4.85

1.38

4.90

1.84

1.79

1.55

1.94

2.88

1.52

6.11

3.15

1.61

4.48

1.09

3.90

0.00

-0.05

-0.12

-1.15

-1.24

-1.95

0.25

0.30

3.33

0.00

0.00

-0.59

1.82

-1.39

1.71

-1.22

-1.90

0.51

2.39

1.67

0.90

1.50

0.00

0.69

-2.31

-3.27

-1.42

-0.29

0.19

2.13

0.72

-0.58

-1.71

1.17

0.00

1.54

-0.61

-0.65

-1.82

-3.87

0.00

-0.51

1.31

-0.52

-1.49

0.33

-0.16

0.00

1.27

-1.98

2.44

-

153,060

878,129

852,639

19,992,247

5,243,955

4,400,364

256,927

9,366,528

197,716

-

107,222

1,399,126

575,614

2,165,933

4,842,803

230

2,268,619

1,259,387

1,295,899

320,400

265

-

4,047

3,513,290

23,549,743

3,604,289

3,292,824

10,332,136

18,430,839

160,254

46,509

1,326,098

5,790,984

-

1,975,269

235,206

5,888,019

592,464

14,896,929

-

4,182,020

14,443

2,763,072

2,836,746

2,873,934

609,086

4,957,147

65,248

1,238,285

100

QSE MARKET WATCH

Company Name Lt Price % Chg Volume

BUSINESS3Gulf Times

Friday, October 29, 2021

Gulf energy states pledge net zero in boost to COP26

Thomson Reuters FoundationBeirut

A surge of new net zero pledges from the Middle East’s oil producing nations has raised

expectations ahead of the United Nations COP26 climate change summit in Glasgow starting Sunday.

The world’s top oil exporter Saudi Arabia announced on Saturday that it would aim to reach net zero emis-sions by 2060 by investing more than $186bn into a green economy over that time — or roughly one to two years’ worth of its current oil revenue.

Saudi Arabia estimated that rev-enue at 412bn riyals ($110bn) in 2020, and expects to rake in 770bn riyals ($205bn) this year as oil price recover.

Bahrain made the same net zero commitment on Sunday, just days after the United Arab Emirates said it would hit that target by 2050 and invest $163bn in renewable energy.

The energy sector as a whole ac-counts for around three-quarters of greenhouse gas emissions and “holds the key to averting the worst eff ects of climate change,” the Inter-national Energy Agency (IEA) said in a report in May.

The new pledges could also pro-vide a boost to COP26, said UN cli-mate chief Patricia Espinosa, after hopes of a signifi cant breakthrough dimmed as leaders of major emitters including Russia and China indicat-ed they would not attend.

“We need countries to come to COP with a high level of ambition,” Espinosa said on Saturday at a Sau-di-led climate conference in Riyadh, describing the Gulf countries’ net zero commitments as “a powerful signal at the right moment”.

The net zero commitments are the latest in a series of green initia-tives by the Gulf’s oil producers in response to global eff orts to avoid the worst impacts of climate change founder.

Oman updated its climate action plan in July to include a 7% reduc-tion in emissions by 2030 — a cut far

short of the 50% reduction scien-tists say is needed to stem runaway climate change.

Opec’s second-largest oil pro-ducer Iraq ratifi ed the Paris agree-ment in January, committing to a 1%-2% reduction in emissions.

Saudi Arabia, which aims to gen-erate half its domestic energy sus-tainably by 2030, opened its fi rst renewable energy plant in April and its fi rst wind farm in August.

The UAE, meanwhile, has invest-ed in nuclear energy and sustainable transport.

But both countries said at a re-cent summit that they could not transition to net zero unless they continued to produce oil — a major

contributor to dangerous planetary heating.

“We must include oil and gas, be-cause it will be mainstream — it will be the spinal cord of our ability to meet energy requirements in the fu-ture,” said the UAE’s Minister of In-dustry Sultan al-Jaber at the Saudi Green Initiative summit in Riyadh.

Speaking alongside him, Saudi Oil Minister Prince Abdulaziz bin Salman said his nation was adopting a “holistic” approach to transition that would include oil, gas, and hy-drogen production, and that it could act as an “incubator” for collective eff orts.

“If we are congregating at COP26 with a view that we need to be inclu-

sive, then inclusivity requires you to be open to accept what everybody is going to do, as long as you contribute to emissions reduction,” he added.

Chatham House associate fel-low Karim Elgendy said the net zero pledges were positive in that they would enable Gulf producers to be held to account to their commit-ments, and could bring “alternative visions” to the table at COP26.

But continued production of fos-sil fuels is not compatible with the required eff ort to combat global warming, environmental activists warned.

Prior to the new net zero an-nouncements, the Climate Action Tracker consortium — which ranks

countries’ policies, actions, and domestic targets — labelled Saudi Arabia’s commitments as “critically insuffi cient” and the UAE’s as “in-suffi cient.”

In May, the IEA set out a road-map to move away from fossil fuels, which would require that no new oil and gas fi elds be developed beyond projects already approved as of 2021.

At the time, Saudi Arabia’s energy minister dismissed the plan as a “la la land” scenario.

Following last week’s announce-ments, the IEA said that new “cli-mate pledges close less than 20% of the emissions gap between today’s policy settings and a #NetZero by 2050 path.”

Saudi Arabia said to licence 44 fi rms to open regional headquarters in RiyadhReutersRiyadh

Saudi Arabia said on Wednesday it had licensed 44 in-ternational companies to set up regional headquar-ters in the capital Riyadh under the kingdom’s push

to become a regional commercial hub and vie for foreign capital and talent.

Among the 44 companies are multinationals in sectors including technology, food and beverages, consulting and construction including Unilever, Baker Hughes and Sie-mens, a press release said.

The world’s top oil exporter and largest Arab economy in February said it would give foreign fi rms until the end of 2023 to set up headquarters in the country or risk losing out on government contracts.

The move, part of eff orts by Crown Prince Mohamed bin Salman to wean the economy off oil by creating new indus-tries that also generate jobs for Saudis, has put the kingdom in competition with regional business hub the United Arab Emirates.

The new headquarter establishments would add 67bn ri-yals ($18bn) to the economy and provide around 30,000 job opportunities by 2030, the president of the Royal Commis-sion for Riyadh City, Fahd al-Rasheed, said in a statement.

He told Reuters he expects the 44 fi rms to move to Riy-adh within a year, adding that some had already done so.

He said the target was for 480 companies by 2030.

The kingdom earlier this year said 24 companies had signed agreements to establish main regional offi ces — in-cluding PepsiCo, Schlumberger, Deloitte, PwC and Bechtel — rather than oversee operations remotely from Dubai.

European law fi rm DWF Group said on Wednesday that Riyadh would become its regional headquarters for busi-ness services.

Al-Rasheed has said the move is not aimed at disman-tling corporate operations elsewhere.

Some people in the business community say companies are unlikely to shut operations in the UAE and may simply shift some operations to Saudi.

Danish wind turbine maker Vestas, not among the list of 44 fi rms, told Reuters in a statement that it was moving its Middle East sales headquarters from Dubai to Riyadh.

Saudi Arabia has launched economic and social reforms aimed at making the kingdom an easier place to live and work in and has cut the red tape that long deterred com-panies.

However some attendees at the FII investment summit where Wednesday’s announcement was made, and who were speaking on condition of anonymity due to sensitivi-ties, cited continued uncertainty around regulations and taxes, as well as high operational costs and lack of a skilled local workforce. One example was the kingdom’s sudden move in May 2020 to triple its value-added tax rate.

Issues around negotiating electricity tariff s would make it much harder for manufacturers to relocate than fi nancial companies, some said.

Turkish central bank chief says current account key to price stability, lira Bank hikes end year inflation forecast to 18.4% from 14.1% Kavcioglu says will evaluate room for further cuts Central bank repeats view that inflation pressures are temporary

ReutersAnkara

Turkey’s central bank governor said on Thursday that ad-dressing the current account

defi cit was key to tackling price sta-bility and a weak lira, as the bank sharply revised its end-year infl a-tion forecast to more than 18%.

Sahap Kavcioglu said the bank cut its policy interest rate recently because infl ation pressures were temporary and he teed up more cuts

in the next two months, saying the bank would evaluate how much room it has for easing.

“When we achieve current ac-count surplus we will achieve fi -nancial and price stability,” Kavci-oglu said as he presented the bank’s quarterly infl ation review, adding that he expected the current ac-count to improve during the rest of the year.

“A 5% current account defi cit contradicts with infl ation, growth performance and price stability and it was not sustainable,” he said.

A slide shown at the presentation reiterated there was limited room for further monetary policy easing by year-end, after the bank cut its policy rate by 200 basis points to 16% last week, following a 100 bps cut in September.

Kavcioglu reiterated the bank’s

view that some of the recent pres-sure on infl ation came from tran-sitory factors including a lifting of coronavirus-related restrictions over the summer.

“The recent rise in infl ation was caused by a rise in food and im-port prices, supply-side elements like disruption in the procurement processes, increase in regulated prices and developments due to reopening after the (Covid-19) out-break,” Kavcioglu said, adding that some factors would start to ease.

He also said the bank would keep building up reserves.

The bank raised its mid-point forecast for infl ation at the end of this year to 18.4% and raised its end-2022 infl ation forecast to 11.8% and end-2023 to 7%.

The lira, which fell to a record low against the US dollar earlier this

week before regaining some ground, weakened on Thursday by almost 1.4% to 9.6240 to the dollar at 1031 GMT.

The central bank’s year-end fore-casts, which have nearly doubled from 9.4% earlier this year, have well undershot the actual infl ation rate over the last two years.

Infl ation has been in double dig-its and well above emerging mar-kets peers for most of the last four years. Turkey’s October infl ation will be announced on Wednesday, and six economists have told Reu-ters they calculate the annual rate will climb above 20%, from 19.58% last month.

John Hardy, head of FX strategy at Saxo Bank said a major factor would be the latest falls in the lira, which has lost 22% of its value against the dollar this year.

QSE crosses 11,800From Page 1

The Total Return Index rose 1.21% to 23,371.73 points, the All Share Index by 1.24% to 3,736.27 points and the Al Rayan Islamic Index (Price) by 0.59% to 2,642.96 points in the market, which saw no trading of sover-eign bonds and treasury bills.The banks and financial services sector index soared 2.09%, consumer goods and services (1.22%) and industrials (0.77%); while insurance declined 1.4%, tel-ecom (1.03%), transport (0.7%) and real estate (0.55%).About 55% of the traded constituents in the main market extended gains with major movers being Industries Qatar, QNB, Qatar Islamic Bank, Woqod, Ahlibank Qatar, Mesaieed Petrochemical Holding, QIIB, Masraf Al Rayan and Qatar First Bank.Nevertheless, Gulf International Services, Qamco, Qatar Insurance, Aamal Company, Qatar Oman Investment, Dlala, Salam International Investment, Mannai Corporation, Qatar General Insurance and Reinsurance, Ooredoo, Gulf Warehousing and Nakilat were among the losers in the main market. In the venture market, Mekdam Holding saw its shares lose glean.However, the Gulf institutions’ net buying increased substantially to QR177.41mn against QR30.97mn on October 27.The foreign institutions’ net buying grew significantly to QR42.65mn compared to QR8.79mn the previous day.The foreign individuals turned net buyers to the tune of QR2.04mn against net sellers of QR1.95mn on Wednesday.The Gulf individuals were net buyers to the extent of QR1.5mn compared with net sellers of QR0.56mn on October 27.However, the domestic funds’ net selling increased drastically to QR194.57mn against QR63.36mn the previous day.The Arab individuals turned were net sellers to the tune of QR16.24mn compared with net buyers of QR1.83mn on Wednesday.Local retail investors were net profit takers to the ex-tent of QR12.79mn against net buyers of QR24.27mn on October 27.The Arab institutions had no major net exposure compared with net buyers to the tune of QR0.03mn the previous day.Total trade volume in the main market rose 5% to 168.75mn shares and value by 24% to QR655.72mn, while transactions fell 1% to 11,202.The insurance’s sector’s trade volume more than doubled to 3.79mn equities, value soared 70% to QR9.99mn and deals by 41% to 226.The banks and financial services sector saw a 25% surge in trade volume to 37.26mn stocks and 50% in value to QR312.39mn but on a 17% decline in transac-tions to 4,152.The real estate sector’s trade volume shot up 14% to 15.98mn shares and value by 3% to QR20.52mn, while deals shrank 18% to 582.There was a 6% expansion in the industrials sector’s trade volume to 67.24mn equities, 11% in value to QR166.03mn and 12% in transactions to 3,264.The consumer goods and services sector’s trade vol-ume was up 6% to 30.16mn stocks and value by 27% to QR68.42mn, whereas deals declined 5% to 1,224.However, the transport sector reported a 48% plunge in trade volume to 9.84mn shares, 31% in value to QR52.14mn and 27% in transactions to 592.

A merchant counts Turkish lira banknotes at the Grand Bazaar in Istanbul (file). Turkey’s central bank governor said on Thursday that addressing the current account deficit was key to tackling price stability and a weak lira, as the bank sharply revised its end-year inflation forecast to more than 18%.

Saudi Energy Minister Abdulaziz bin Salman participates in a panel during the annual Future Investment Initiative (FII) conference in Riyadh on October 27. Saudi Arabia could go carbon neutral before its target of 2060 if technology evolves quickly enough, he said, days before the COP26 climate summit.

Friday, October 29, 2021

BUSINESSGULF TIMES

Delta wave slows US economic growth in Q3AFPWashington

The US economic expansion slowed dramatically in the third quarter to an annual rate

of just 2% as consumer spending was choked by resurgent Covid-19 infec-tions, the government said Thurs-day.

The spread of the Delta variant of the virus over the summer combined with renewed restrictions and global supply snags including shortages of workers and computer chips took a toll on the economy, cutting growth from the 6.7% pace in the prior quarter.

The impact on the world’s largest economy was most notable in the more than 26% collapse in purchases of big-ticket manufactured goods in the latest three months, the Com-merce Department reported.

That drop was partly off set by the 7.9% increase in spending on servic-es like travel and hotels, though that was slower than the gain in the prior quarter, according to the data.

The “resurgence of Covid-19 cas-es resulted in new restrictions and delays in the reopening of establish-ments in some parts of the country,” the report said.

The US government has supported the economy with massive stimulus measures including the $2tn Ameri-can Rescue Plan enacted in March, but much of that relief including ex-panded unemployment benefi ts have lapsed.

“Government assistance pay-ments in the form of forgivable loans to businesses, grants to state and lo-cal governments and social benefi ts to households all decreased,” the Commerce Department said.

Despite the worse-than-expected result in the latest quarter, econo-mists are confi dent growth will ac-celerate at the end of 2021.

“Growth was crushed by con-sumption slowing” as stimulus pay-ments ended, said Ian Shepherdson of Pantheon Macroeconomics.

“The Delta wave and the chip shortage — the latter subtracted nearly three percentage points from consumption growth — made

things much worse,” he said in an analysis.

However Shepherdson predicted the fourth quarter “will be very dif-ferent; spending on services is al-ready rebounding as Delta subsides.”

The hot real estate market that has seen home sales and prices surging during the pandemic showed signs of cooling as residential investment dropped nearly 8%, according to the data.

Mike Fratantoni, chief econo-mist of the Mortgage Bankers Asso-ciation, attributed that sag to “the supply chain issues that continue to bedevil the economy” including “builders’ ongoing struggles to ob-tain key construction inputs.”

Like other economists, Fratantoni said the downdrift in spending is not due to lack of demand.

“Consumers are willing and able to spend, but the goods are just not available,” he said.

There was some good news as in-fl ation measured by the personal consumption expenditures (PCE) price index retreated in the July-September period, but remained at

a still-high 5.3% compared to 6.5% in the second quarter. If the volatile food and energy prices that have been spiking amid surging demand and supply bottlenecks are excluded, the closely watched infl ation gauge increased only 4.5%.

Rising prices — including oil pushing above $80 a barrel for the

fi rst time in years — have raised fears infl ation could spiral out of control, which would compel the Federal Re-serve and other central banks to hike interest rates and slow growth.

Infl ation is expected to continue to rise until the pandemic-infl icted bottlenecks are resolved worldwide, sometime in 2022.

China warns unlicensed online brokerages are breaking the lawReutersShanghai

A Chinese central banker warned that online broker-ages not licensed in China

are acting illegally if they serve Chinese clients via the Internet, sending New York-listed shares of Futu Holdings Ltd and UP Fintech Holding sharply lower.

“Cross-border online broker-ages are driving in China without a driver’s license. They’re con-ducting illegal fi nancial activities,” Sun Tianqi, head of the Financial Stability Department of the Peo-ple’s Bank of China (PBoC), said in a speech, according to a transcript released on Wednesday.

Futu and UP Fintech shares slumped more than 20% in pre-market trade on Thursday on Sun’s remarks, the fi rst offi cial com-ments following recent media re-ports fl agging regulatory risks fac-ing online brokers.

Shares of the two fi rms had al-

ready tumbled since October 14, when the offi cial People’s Daily said in an analysis on its website that Futu and UP Fintech face reg-ulatory risks as China’s new per-sonal data privacy law takes eff ect on November 1.

Investors are concerned that the sector will be next in Beijing’s regulatory crosshairs, after China launched a fl urry of crackdowns targeting sectors ranging from technology to cryptocurrency and real estate.

Investors need to see whether the Chinese government will re-strict domestic individuals from opening an account at an off shore bank, and whether they can use this account to open a trading ac-count with off shore brokers like Futu, Jeff eries said in a note.

Jeff eries added that many Chi-nese securities fi rms have set up their off shore subsidiaries to pro-vide Hong Kong or US trading services to domestic individuals, and foreign brokers including In-teractive Brokers Group Inc also

accept mainland Chinese cli-ents, so “we need to wait for more guidelines from the regulators”.

Futu chairman and CEO Hua Li said in a posting on Thursday that the company has business licences in Hong Kong, enjoys a good track record, has suffi cient capital and “there are no bankruptcy issues.”

The speech by the PBoC offi cial threatens to further dent foreign investors’ confi dence in Chinese tech fi rms, said an institutional in-vestor in UP Fintech, who declined to be named.

Speaking at the Bund Summit in Shanghai over the weekend, PBoC’s Sun said that some online brokerages, with only overseas licenses, serve mainly mainland Chinese investors, allowing them to trade US and Hong Kong stocks.

Without identifying the fi rms, Sun said that 80% of accounts of a brokerage registered in the Cay-man Islands were opened by main-land clients, while the ratio is 55% for another Hong Kong-registered brokerage.

ECB stands pat on stimulus amid rising infl ation

AFPFrankfurt

European Central Bank policymakers shrugged off rising infl ation across the eurozone when they met on Thursday,

with the bank leaving its massive stimulus programme unchanged.

While supply disruptions have pushed up prices and squeezed industrial production, the ECB kept its accommodative monetary policy stance as it seeks to nurse the economy back to health from the impact of the coronavirus pandemic.

The bank’s 25-member governing coun-cil held interest rates at their historic lows, including a negative bank deposit rate that means lenders pay to park excess cash at the central bank.

And it decided its massive monthly bond purchases would continue at a “moderately lower” rate than in the second and third quar-ters in a turbulent period for the eurozone economy.

The €1.85tn ($2.15tn ) pandemic emergency bond-buying programme (PEPP) is the ECB’s main crisis fi ghting tool, aimed at keeping bor-rowing costs low to stoke economic growth.

Attention will now shift to the press confer-ence of ECB President Christine Lagarde, who faces the diffi cult task of deciding when to re-move stimulus without threatening the recov-ery or letting infl ation run out of control.

Analysts expect Lagarde to nod to chang-ing economic circumstances in her statement without prejudging the outcome of the bank’s crucial coming policy meeting in December.

Behind the status quo stance, policymakers are split between hawks, who favour tighter monetary policy to stifl e infl ation, and doves, who want to maintain the bank’s expansive policy.

In September, prices in the euro area rose 3.4% year-on-year, a 13-year high driven by soaring energy costs, and well above the bank’s 2% infl ation target.

Lagarde will have needed “all her energy” to bring the two sides of the argument together, said Carsten Brzeski of ING, and could favour a “neutral” tone in her remarks.

The ECB’s meeting comes a week before policymakers at the US Federal Reserve and the Bank of England gather to discuss possible changes to their own monetary policies.

The Fed has already signalled that it is “get-ting closer” to winding down its stimulus pro-gramme, as infl ation in the US climbs higher.

The Governor of the Bank of England An-drew Bailey, meanwhile, has stated that the British central bank “will have to act” on in-fl ation, setting off speculation that a rate hike could come as soon as next week.

Elsewhere in the European Union, rate-setters have reacted sharply to infl ation, with both Polish and Czech central banks making their biggest rate rises in years.

The prospect of the ECB following suit seems distant, not least because “infl ationary pressures are less pronounced in the eurozone than in the US”, according to Holger Schmied-ing, chief economist at Berenberg Bank.

The ECB has insisted that the infl ation spike is “temporary” in nature, driven by one-off pandemic-related eff ects that will gradually dissipate over the course of 2022.

Labour markets in the 19-country euro area were more “sluggish” than the UK and US, meaning it would take longer for wage infl a-tion — an indicator the ECB is watching close-ly — to become apparent, Schmieding said.

While markets have been pricing in a rise somewhere near the end of 2022, there would be “no ECB rate hike before 2024”, forecast Frederik Ducrozet, a strategist at Pictet Wealth management.

October’s ECB meeting was more about “paving the way” for December’s promised decision on the ECB’s stimulus programme, Ducrozet said.

How Facebook algorithms can fight over your feedBy Anna Edgerton, David McLaughlin and Madeline Campbell

Over the past decade, most of us have gotten used to hearing that “the algorithm” is responsi-ble for this or that on the Internet. Sometimes it’s something useful, like movie recommendations. Sometimes it’s not. Facebook Inc is under fire for algorithms that shape what nearly 3bn users see on the world’s largest social media network, including troubling amounts of hate speech and misinforma-tion. But internal company documents provided by a whistle-blower make clear that it’s wrong to think of “the algorithm” as a single bad actor. Rather, they show how an algorithm designed for one purpose can struggle to integrate signals aimed at another, as when Facebook’s eff orts to reduce harmful content in its News Feed ran into a system meant to keep users scrolling, sharing and posting.

1. What is an algorithm?

A set of instructions for making decisions or performing a task. Arranging names in alphabeti-cal order is a kind of algorithm; so is a recipe for making chocolate chip cookies. But those simple formulas bear only a distant relationship to the computerised code that companies like Facebook, Alphabet Inc’s Google and Twitter Inc spend billions of dollars on to keep their platforms running.

2. What are those like?

Typically, algorithms are written to perform discrete tasks, but many can work in concert to pro-duce enormously complex systems. At Facebook and Google, the algorithms powering the platforms are constantly updated to learn from new data and better optimise for company priorities. While algorithms operate strictly according to their program, the decisions about what signals to train the software on and what outcomes to aim for are entirely human. As one internal Facebook memo recently revealed by the whistle-blower put it, “The mechanics of our platform are not neutral.”

3. How does Facebook use algorithms?

Facebook’s business model is centred on selling ads to be viewed by users. It had $86bn in revenue last year, a reflection of its huge reach and success at keeping users clicking. One of Facebook’s most important algorithms is the one that produces the News Feed on a user’s page. Before 2009, the al-gorithm reflected the chronological order in which items were posted. But starting that year, the Feed began to be ordered in a more complex way by an algorithm designed to show people the things they would find most interesting or engaging, not just the most recent. Facebook also uses algorithms to target ads and recommend friends or groups to follow.

4. How do they work?

The billions of pieces of content posted on Facebook are all ranked in terms of an individual user’s likely reaction. That is, the algorithm makes a prediction based on each user’s characteristics and past behaviour, as well as the nature of the content and how such posts have previously been received. Like many companies, Facebook uses algorithms powered by artificial intelligence that are designed to improve with use. Feeding and improving such algorithms is a big reason why social media compa-nies collect, store and curate vast amounts of data about users.

5. What other roles do algorithms play?

Facebook says it also designs its system to reduce content that might be off ensive or distasteful. Facebook changes the settings of a variety of algo-rithmic elements from time to time. But the internal documents provided by Frances Haugen, a former product manager for Facebook turned whistle-blower, show that the complexity of the algorithm meant that tweaking it is not a simple matter. For instance, a 2018 shift to focus on “meaningful social interactions” ended up increasing polarisation on the platform.

6. Are there any checks on the ranking system?

After posts get assigned an algorithmic rank, they go through what Facebook calls its “integrity proc-esses,” designed by its Integrity team, to automati-cally detect and deal with problematic content. Information that is illegal or violates Facebook’s community standards is deleted, and otherwise off ensive or questionable content is demoted. How-ever, the internal documents show that people on the Integrity team realised that demoting content by 50% – or even 90% in some cases – wouldn’t dent very highly ranked posts that in some cases were amplified 100 times over by competing algorithms designed for the News Feed. “I worry that Feed is becoming an arms race,” one Facebook employee wrote to colleagues in October 2019, de-scribing a situation in which diff erent aspects of the algorithm were in eff ect competing for influence.

7. What else did the documents show about algorithms?

A common complaint from Facebook employees was that there was no centralised vision for what kind of experience a user should have, as directed by the platform’s algorithms. A member of the Integrity team who was leaving the company wrote in a parting note that “harms fester in unwatched interactions” between diff erent parts of the platform. What Haugen called the company’s “flat” corporate structure made it hard to implement pro-posed interventions to address harmful content. For example, one internal study found that demot-ing “deep reshares” from people who weren’t a friend or a follower of the original poster could cut the number of times so-called civic misinformation was viewed by 25% and civic photo misinforma-tion views by 50%. Haugen said this intervention was discussed with senior management but never implemented, in part because Facebook didn’t want to lose the reader engagement driven by deep reshares. Joe Osborne, a Facebook spokes-person, said the company sometimes reduces deep reshares, but only rarely, because it is a blunt

instrument that aff ects benign speech along with misinformation.

8. What else does Facebook say?

That it’s been trying to give people more control over the content in their News Feed. The platform now has an easier way for users to say they want more recent posts, rather than machine-ranked content, and people can mark some friends or sources of information as favourites. Facebook also suggests that users hide posts they don’t like, an action that would signal to the algorithm to show fewer posts like those.

9. Do other social media companies have similar issues?

Facebook is definitely not alone. Other social media platforms including Twitter, YouTube, TikTok, LinkedIn and Pinterest all give prominence to user content based on similar algorithms. While the specific challenges can vary, many of the issues are universal, including their handling of misinforma-tion, hate speech and abusive posts.

10. What ideas are being proposed for dealing with algorithms?

There are two main approaches: One would be to chip away at liability protections for online platforms off ered by a 1996 US law often referred to by its relevant provision, Section 230. Facebook founder Mark Zuckerberg told Congress this year that companies should only enjoy Section 230 protections if they implement best practices for removing illegal content. The other would involve regulating algorithmic interventions. Hypothetically, a law could place a cap on how many times a piece of content could be reposted automatically or shared by users. Some lawmakers have called for algorithms to be subject to audits to see if they are fostering discrimination or other social harms. Haugen in her testimony before Congress said lawmakers should push social media platforms to return to a more chronological user experience in which information would move at a slower, more human-scale pace.

Bloomberg QuickTake Q&A

A healthcare worker administers a dose of a Covid-19 vaccine to a student at a mobile vaccination clinic at a high school in Los Angeles on August 30. The spread of the Delta variant of the virus over the summer combined with renewed restrictions and global supply snags including shortages of workers and computer chips took a toll on the economy, cutting growth from the 6.7% pace in the prior quarter.