BUSINESSBUSINESSMonday 18 September 2017

Dow & Brent before going to press

Qatari products gain momentum in local marketSatish Kanady The Peninsula

The products up for dis-play at the third edition of “buy local products” showed the prowess of Qatar’s ‘made in Qatar’

products in the country’s con-struction sector. A range of locally made products on display con-firms that a powerful local product movement is fast growing in Qatari market, thanks to QDB’s unflinching support to local star-tups and SMEs- local companies have become capable of meeting the demands from at least in the electricity, water and recycling sectors.

For companies like Arabian Specialised Materials (ASMA), the ongoing blockade on Qatar has been proved a ‘blessing’. The com-pany, a leading construction solution provider, has been depending on UAE , and Saudi Arabia for raw materials for years. “We couldn’t bring in our last con-signment because of the blockade. There were huge orders in our books and we finally realized that we can source the raw materials locally. Now, for the past 100 days, we have been solely depending our local sources for the raw materials”, Emad El Kurdi, Divi-sion Manager, ASMA Industries told The Peninsula.

Public Works Authority (Ash-ghal) and Qatar General Electricity and Water Corporation

(Kahramaa) are among some of the major clients of ASMA.

The lamp manufacturer, Al Shams Advanced Lighting Tech-nologies, promoted by QDB, is not only meeting the local demand, but has strong command in the Middle East market. It supplies lamps to all over Middle East, until the quartet countries declared a blockade on Qatar. The company, after completing new projects in lighting design, landscaping and trading, is set to further expand its portfolio in Qatar.

Al Shams HID lamp factory is the largest, most modern and well-equipped plant in the region. Launched in 2009, the company was the pioneer in producing all types of High Intensity Discharge Lamp in Qatar. Later on added manufacturing of CFL & LED lamp in their portfolio. Al Shams prod-ucts are tested and certified by Dekra, Breau Veritas, ERDA and also awarded with SASO Quality Mark.

The company produces High Pressure Sodium Vapour Lamp, Metal halide Lamp High Pressure Mercury Vapour Lamp, Compact Fluorescent Lamp, LED Lamps, Fluoresscent Tube Lamp, Incan-descent Lamp, and High Intensity Discharge Lamp, Dipesh Shah, General Manager, Al Shams Advanced Lighting Technologies said.

Seashore Steel is the first pri-vate steel melting and hot rolling company in Qatar, located at the

Doha new industrial area. The plant produces internationally approved Quality Mid Steel Billets and Structural Steel products. The annual production capacity of the plant is presently 100,000 tonnes of billets and structural steel products.

“We use highly sophisticated and internationally approved quality testing methods for ana-lyzing the mechanical parameters like tensile strength, pull out tests and chemical parameters like car-bon, manganese, sulphur and

phosphorus... we are striving toward international certifications and globally recognized bench-mark for excellence in environmental management”, said Anoop Mammen Mathew, Senior Technical Engineer-Switch Gear, Seashore Eletromechanical.

Advanced Electronics Com-pany (AEC), a 100 percent Qatari owned enterprises, is Qatar’s first ever electronic manufacturing plant that is certified and licensed by the regulatory bodies. It strives to be the market leader in the

Mena region in the production and supply of Smart Electronic Equip-ment that is energy-efficient and reliable for the benefit of consumers.

AEC is one of the six facilities provided with governmental sup-port for a enw market trend in the most distinctive industrial zones, with a total manufacturing space of 2400 square meters; with approved funding from QDB, AEC manufacturing facility will be fit-ted-out to satisfy the clean room manufacturing environment for

Smart Meters and other by-products.

The local companies who showcased their products included those providing plastic solutions, building and construction solu-tions, new technology systems, electronic gadgets, pipes and light-ing equipments, wooden products, specialised composites products, technical bolts, new energy solu-tions and switch gears , environment protection products, Greenfield recycling projects and pipes and fittings.

QINVEST and its investment partner take ownership of OneOcean Port Vell The Peninsula

QINVEST, Qatar’s leading private investment group and one of the region’s

most prominent Islamic finan-cial institutions, yesterday announced that it has invested in and is a shareholder in One-Ocean Port Vell in Barcelona – Spain. The investment was made through its wholly-owned subsidiary BOH LLC, and was made in conjunction with an investment partner.

QINVEST will work with the city and port authorities in Bar-celona to increase the profile of the marina by investing addi-tional resources in the port infrastructure.

Tamim Hamad Al Kawari, Chief Executive Officer of QIN-VEST, said: “Having supported the marina for a number of years, we, alongside our invest-ment partner, are very pleased to be leading the new owner-ship of One Ocean Port Vell. As one of the most prestigious

marinas in the region and situ-ated in one of Europe’s leading cities, we are confident about its prospects for the future.”

Craig Cowie, QINVEST’s Head of Real Estate Investment and Advisory, said:

“OneOcean Port Vell is a valuable asset which has signif-icant potential for growth and we are committed to working hand-in-hand with the relevant authorities, including the

Barcelona Port Authority, the wider local community and all other stakeholders to support its continued development and success.

OneOcean Port Vell is QIN-VEST’s second investment in Spain this year, having earlier during 2017 invested into a Spanish real estate strategy focused on land developments in Madrid, Barcelona, Valencia and Marbella.

Craig Cowie (left), Head of Real Estate Investment and Advisory, and Tamim Hamad Al Kawari, Chief Executive Officer

Apple & Dell join bid to buy Toshiba’s chip businessTokyo

AFP

US tech titans Apple and Dell have joined a bid to buy Toshiba’s memory

chip business, a deal seen as key to the survival of the cash-stripped Japanese industrial conglomerate, the US investor leading the consortium has said.

“Last week Bain Capital made a revised offer” for Toshiba, which “brings in a broad list of strategic partners including Apple, Dell” and oth-ers who will invest in the business, Bain Capital said in a statement obtained by AFP on Sunday.

The announcement came after Toshiba said last week it had picked the Bain Capital-led consortium as the leading can-didate to buy its prized chip business in a deal reportedly worth some $18bn. The devel-opment was the latest twist in a long-running saga as Toshiba agonises between three groups

of suitors for its chip business.The Bain Capital-led group

also includes the state-backed Development Bank of Japan and the public-private Innovation Network Corp. of Japan as well as South Korean chipmaker SK Hynix.

However, Toshiba has stressed that it was a “non-exclusive” agreement with Bain Capital that “does not exclude the possibility of negotiations with other consortia”.

Other suitors in the frame are a group led by Western Dig-ital, Toshiba’s US-based chip factory partner, and Taiwan’s Hon Hai Precision, better known as Foxconn.

Western Digital demanded control of the memory chip business, frustrating Toshiba’s management which prompted them to turn to the Bain Capi-tal-led group, according to reports in the local media.

Toshiba has sued Western Digital for trying to block the sales process.

BUSINESSBUSINESS

A range of locally made products on display confirms that a powerful local product movement is fast growing in Qatari market.

Thanks to QDB’s unflinching support to local startups and SMEs- local companies have become capable of meeting the demands from at least in the electricity, water and recycling sectors.

The lamp manufacturer Al Shams Advanced Lighting Technologies, promoted by QDB, is not only meeting the local demand, but has strong command in the Middle East market.

Seashore Steel plant produces internationally approved Quality Mid Steel Billets and Structural Steel products. The annual production capacity of the plant is presently 100,000 tonnes of billets and structural steel products.

Advanced Electronics Company (AEC), a 100 percent Qatari owned enterprises, is Qatar’s first ever electronic manufacturing plant that is certified and licensed by the regulatory bodies.

Nordea Bank loses clients as it moves headquartersCopenhagen

Bloomberg

Nordea Bank AB is losing clients in Sweden in what independent

mortgage brokers say appears to be a protest against the bank’s plan to redomicile to Finland in pursuit of a more accommodating regulatory environment.

The customer shift has been registered by two online home-loan brokers and confirmed by other banks operating in Swe-den. The largest Nordic bank said this month it will move its base to Helsinki from Stock-holm, putting the region’s only global systemically important lender inside the European banking union. The decision means Sweden’s regulator will no longer have full control over Nordea’s Swedish operations.

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European car market revs up

in summer

QC to participate in World Chambers meet

22 MONDAY 18 SEPTEMBER 2017BUSINESS

BMW unveils new products at Frankfurt motor show

The Peninsula

The new products unveiled by BMW at the ongoing 67th International Motor Show (IAA) in Frank-

furt highlight the German auto giant’s status in the global auto-mobile industry. It has showcased vehicles that trans-mit unrivalled levels of emotional appeal with their inspirational design, trailblazing innovations and the driving pleasure for which the brand is renowned.

BMW is also showcasing the latest technological develop-ments for the future of personal

mobility, in which powertrain electrification, comprehensive digitalisation and other advances in the field of automated driving will play a particularly impor-tant role.

Hall 11 at the main entrance to the Frankfurt trade fair site has been prepared for the shared BMW, MINI and BMW Motorrad stand, and serves as a forum for current and future highlights of the product range. This is where the new products and features from all the brands are presented under the slogan: “This is tomor-row. Now. Die Zukunft ist jetzt”.

The exhibition space covers an area of over 10,500 square metres and has a circuit running around it that is about 150 metres long. This gives visitors to the ongoing Frankfurt Motor Show (running from September 14 – 24 2017) the opportunity to experience the new models in action too. Both the BMW Con-cept 8 Series and the BMW 7 Series Edition 40 Jahre are tes-timony to BMW’s expanded presence in the luxury segment. Other facets of driving pleasure are demonstrated at the exhibi-tion by the BMW Concept Z4, the new BMW 6 Series Gran Turismo and the new BMW

X3 respectively – including exhilarating open-air fun, ele-gance and long-distance comfort, not to mention multi-faceted sportiness.

The know-how gleaned from competing in motor sport is a traditional component of the BMW brand’s DNA, and it endows the new BMW M8 GTE with ideal credentials for endur-ance racing.

The new BMW M5, mean-while, transfers these high-performance genes from track to road to stunning effect. The new edition of the BMW i3,

which is making its debut appearance at the 2017 Frank-furt Motor Show together with the new and even sportier BMW i3s, illustrates just how closely the company associates driving pleasure with sustainability.

With the unveiling of the BMW Concept X7 iPerformance at the IAA Cars 2017 show in Frankfurt, the BMW Group is not only pulling back the covers on a new model concept for the lux-ury segment, it is also introducing a whole new take on luxury for the BMW brand. The Concept X7 iPerformance embodies this

understanding of luxury in the form of a striking exterior com-posed of intently focused lines, and combines it with a gener-ously-sized, six-person interior pared down to the essentials: ele-mentary forms, high-class materials and a state-of-the-art infotainment system brimming with connectivity.

The Concept’s iPerformance badge denotes the presence of groundbreaking BMW eDrive technology allied with a BMW TwinPower Turbo petrol engine to create an exceptionally effi-cient and dynamic plug-in hybrid

powertrain that excels in all driv-ing situations – including running with zero local emissions.

BMW Motorrad is also plac-ing the spotlight on the intensely emotional and sustainable sides of mobility in Frankfurt.

The exclusive BMW HP4 RACE for track use and the BMW Motorrad Concept Link, boast-ing an all-electric drive system and state-of-the-art connectiv-ity technology, are joined by numerous other pioneering ideas for urban mobility in tomorrow’s world.

Innovation

BMW is showcasing the latest technological developments like powertrain electrification, comprehensive digitalisation and other advances in the field of automated driving.

First edition of LaLiga Festival to kick off at Hotel Park next weekThe Peninsula

Katara Hospitality and Spanish football league LaLiga Lounge have

announced the launch of the first edition of LaLiga Festival in Qatar, to be held at Hotel Park from September 28 to October 7, 2017.

Katara Hospitality estab-lished a partnership agreement with LaLiga for the world’s first LaLiga Lounge and the first themed restaurant for sports fans in Doha earlier this year.

LaLiga Festival is a unique football and entertainment fes-tival which is planned to take place twice a year in Doha.

The festival will be a cele-bration of sports, food, entertainment and games, entic-ing people to engage with one of the most popular global foot-ball leagues, LaLiga.

The event, which is organ-ised by Four and One, Hotel Park’s event management com-pany, aims to bring football and sport fans together to

experience the LaLiga lifestyle. Passionate fans will be able to experience games showcasing the best football techniques and strategy, while football free-stylers will be able to compete for the title of Qatar Freestyle Championship.

Sports clothing and equip-ment booths offer visitors the best deals on their favourite football merchandise. Offering an event for those beyond fans of the game, photographers will compete to capture the spirit of the festival which revolves around the newly launched LaLiga Lounge.

Hotel Park is an illustration of Katara Hospitality’s commit-ment to social responsibility and LaLiga Festival demonstrates the organisation’s role in giving back to the community by cre-ating an event that bring players, enthusiasts and those passion-ate about the world’s most popular sport together in a cen-tral venue to celebrate the international game of football.

Hotel Park is located

adjacent to Sheraton Grand Hotel Doha and features fitness zones, children’s play areas, water features, and sprawling well-manicured lawns in addi-tion to over 2,500 underground parking spaces.

Katara Hospitality is the leading hotel owner, developer and operator, based in Qatar. With more than 45 years’ expe-rience in the industry,

Katara Hospitality actively pursues its strategic expansion plans by investing in peerless hotels in Qatar while growing its collection of iconic proper-ties in key international markets.

The company’s portfolio has grown to include 42 owned and / or managed hotels and the company is now focused on achieving its target of 60 hotels in its portfolio by 2026.

Its current properties are spread across three continents in Qatar, Egypt, Morocco, UK, France, Germany, Italy, Spain, Switzerland, The Netherlands, Singapore and Thailand.

A general view of the Hotel Park near Sheraton, at Corniche, Doha.

Venezuela’s President Nicolas Maduro (centre) meets with members of the Parlasur, the parliament of the Mercosur trade bloc, at Miraflores Palace in Caracas, Venezuela.

Maduro meets members of the Mercusor trade bloc

NelsonPark Property wins Arabian Property Award for 2017–2018The Peninsula

NelsonPark Property, Qatar’s leading real estate brokerage com-

pany, announced today its recent awarding of the Arabian Property Award (2017-2018) in the Real Estate Agency category for the State of Qatar. Jeffrey Asselstine (pictured), founder and Managing Director for Nel-sonPark Property received the award at a prestigious ceremony held in Dubai on September 7, 2017.

Established in 2009 by an expat Canadian husband and Australian wife team, Nelson-Park Property is one of the largest independent, well estab-lished and successful property businesses operating in Qatar.

Covering all of Doha and with access to a multitude of properties, the company deals with residential and commer-cial leasing and sales as well as property management.

With many years of experi-ence in the Qatar market, the company’s highly professional and knowledgeable team is drawn from diverse back-grounds including Europe, Arabia, Australia, North Amer-ica and many more. The team represents some of the most

experienced professionals in Qatar which makes it the com-pany of choice for expats and Qatari nationals equally.

Jeffrey Asselstine, Managing Director, NelsonPark Property, commented saying: “We are delighted with the recently won Arabian Property Award. This is an achievement that we are highly proud of given its high level and prestigious repute in the industry.

This could have not been achieved without our staff, com-ing from diverse backgrounds, and who are today an integral pillar of our success in deliver-ing premium tailor made services to our elite clientele in Doha.”

“At NelsonPark Property, we

pride ourselves for our long standing heritage in the State of Qatar. Whether customers are looking to buy, sell or rent their properties, our goal is to always provide them with a service that is based on reliability and integ-rity.” Jeffrey concluded.

The International Property Awards are open to residential and commercial property pro-fessionals from around the globe. They celebrate the high-est levels of achievement by companies operating in all sec-tors of the property and real estate industry.

An International Property Award is a world-renowned mark of excellence. The awards are split into regions covering Africa, Asia Pacific, Arabia, Can-ada, Caribbean, Central & South America, Europe, UK and USA. Participants enter at their rele-vant national level and are judged by a highly experienced team of professionals who cover the whole range of property disciplines.

NelsonPark Property has won in the category of Africa & Arabia Property Awards, as one the best real estate agencies in Qatar, for their outstanding achievements and premium services provided to the Qatar market.

Ooredoo announces closure of GDR delisting from LSEThe Peninsula

Ooredoo has announced that the delisting process of Ooredoo GDR (Global Deposi-tary Receipt) from the London Stock

Exchange has now closed, effective from 31 August, 2017.

The primary reason for the delisting was that international investors are now easily able to pur-chase Ooredoo securities on the Qatar Exchange, the company said in a Qatar Stock exchange (QSE) regulatory filing.

Ooredoo GDR was admitted to trading on the London Stock Exchange on July 1999.

Models of BMW showcased at the Frankfurt Motor Show in Frankfurt, Germany.

23MONDAY 18 SEPTEMBER 2017 BUSINESS

Qatar oil production picks up, fiscal deficit narrowsSatish Kanady The Peninsula

Qatar’s oil production picked up to 611,000 b/d in June from 594,000 b/d in May. Average Brent crude

oil prices declined by -0.5 per-cent month on month in August, reaching $52.4/b, as news of increasing US production out-weighed news of falling US crude stockpiles, QNB noted in its monthly monitor yesterday.

Qatar’s broad money supply (M2) grew by 8.3 percent year-on-year in July compared to 7.8 percent in June.

Broad money grew by 0.2 percent month on month in July compared to 2.2 percent in June.

Overnight interbank rates rose to 1.77 percent in June from 1.29 percent in May; the 3-month interbank rate fell to 2.10 per-cent from 2.25 percent while the 1-year interbank rate stayed flat at 2.50 percent.

The QCB raised its deposit rate by 25 basis points to 1.5

percent after the US Fed hiked rates in March, but kept the lend-ing and repo rates unchanged.

QNB’s Qatar Central Bank (QCB) data reading shows the country’s fiscal deficit has nar-rowed to -5.1 percent of GDP in Q1 2017 from -17.9 percent in Q4 2016. Revenue rose by 31.0 per-cent year on year in Q1, helped by higher oil prices, while expenditure rose by 15.8 percent

year on year. The 2017 budget announced by the government projects a reduction in the fiscal deficit to QR28.4bn in 2017 from a deficit of QR46.5bn in 2016.

Qatar’s real estate price index contracted by 5.5 percent year on year in June: The real estate price index picked up slightly during Q2, but the index still fell by 5.5 percent year on year in June from a decline of 9.6 percent in March.

The current account balance registered a surplus in Q1 2017 (0.3 percent of GDP) compared to a -1.7 percent deficit in the previous quarter.

The surplus was owing to oil prices which rose higher on a quarter on quarter basis, lead-ing to increased export revenue.

The trade surplus narrowed to $3.3bn in July from $3.4bn in June. Exports grew 11.4 percent year on year to $5.0bn, helped by the recovery in oil and gas prices, while imports fell 35.0 percent year on year in July.

South Korea was the largest

QC to participate in World Chambers meetThe Peninsula

Qatar Chamber(QC) will par-ticipate in the 10th World Chambers Congress, which

will be held in Sydney from Sep-tember 19 to 21.

The conference is being held by the World Chambers Feder-ation and the International Chamber of Commerce (ICC), in conjunction with the Sydney Chamber of Commerce.

The Qatar Chamber is spon-soring the conference, which will address many important trade issues globally and regionally.

The delegation includes Saleh bin Hamad Al Sharqi, Director General of Qatar Cham-ber, Sheikha Tamader Al Thani, Director of the International Chamber of Qatar, and Remi Rouhani, Advisor to the Presi-dent of the Qatar Chamber for International Chamber Affairs.

Sheikh Khalifa bin Jassim bin Mohammed Al Thani, Pres-ident of the Qatar Chamber and President of the International Chamber of Commerce- Qatar, said the World Chambers Con-gress is considered an important

event in the world trade. It dis-cusses all issues related to the flow of trade around the world.

The World Chambers Con-gress is a valuable opportunity for business owners from around the world to exchange ideas.

It also allows them to develop networks between chambers and make use of their expertise, discuss the pressing issues facing the international business community, featuring a unique global international business and a valuable

opportunity to exchange ideas and best practices and innova-tions and to enhance communication between the chambers of commerce and ben-efit from their experience for the benefit of future business and trade efforts.

Sheikh Khalifa bin Jassim recalled the great success achieved by the 8th World Chambers Congress, which was hosted by Qatar Chamber in 2013 and held for the first time in the Middle East region, where about

2300 people representing more than 143 countries participated and transported about 250 inter-national media outlets.

Qatar Chamber’s presence in this World Conference aims to enhance bridges of communica-tion between the business sectors in Qatar and the world, thus facilitating the flow of trade between the State of Qatar and various countries of the world, stressing that Qatar Chamber continues its efforts to support the conduct of trade around the world.

The International Chamber of Commerce (ICC) has awarded Sheikh Khalifa bin Jassim bin Mohammed Al Thani, President of the Qatar Chamber and Pres-ident of the International Chamber of Commerce Qatar, the title of “Peace Merchant”, the highest honour awarded by the International Organisation for his hard work and efforts with the ICC over the years, especially on the World Trade Agenda ini-tiative, which is a joint initiative by ICC and Qatar Chamber to advocate for trade facilitation worldwide.

DP World Limited not to renew operating contract in IndonesiaThe Peninsula

DP World Limited announced that the company has reached a

decision not to renew its oper-ating contract for PT Terminal Petikemas Surabaya (TPS) in Indonesia at the end of the agreement in 2019.

DP World is a 49 percent shareholder in TPS, which rep-resents a gross capacity of 2.1 million TEUs (twenty-foot con-tainers) out of 85 million TEUs for the Group. There will be no material financial impact on the Group as a consequence of this action.

“DP World, alongside other global terminal operators, has built world class port infra-structure in Indonesia that serves the needs of shipping lines, manufacturers, traders and consumers in the region,” said Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO.

“Over the last 20 years, Surabaya has benefitted from DP World’s state-of-the-art, productivity-enhancing sys-tems, t ra in ing and development programmes, as well as the company’s security, safety and environmental best practices, and we are proud of our success there. We have invested significantly in the terminal infrastructure, which has created jobs and

contributed to the growth of both the port and the region,” he added.

“It is unfortunate that the significant positive contribu-tions made by global terminal operators in Indonesia have not been fully recognised, despite our successful track record. We are therefore dis-appointed that the operating contract renewal terms offered by the Indonesian authorities did not meet our threshold for continued investment. Adher-ing to strict financial discipline has been crucial to the growth of DP World and on that basis we are not able to renew the agreement beyond 2019. The transfer of operations will be in accordance to the terms and conditions of the contract.”

“When investing in trade infrastructure and services, our goal is to serve our global cus-tomers while making a positive economic impact in the coun-tries in which we work and delivering returns to our share-holders. We remain committed to investing in Asia and all geographies that have an appe-tite for foreign direct investment.” he added.

Container handling is the company’s core business and generates more than three quarters of its revenue. In 2016, DP World handled 64 million TEU (twenty-foot equivalent units) across its portfolio.

export market, with a share of 17.3 percent of total exports, fol-lowed by China and Japan; the US and China were the top coun-tries of origin for imports.

Bank deposits growth rose by 12.8 percent year-on-year in July compared to 12.7 percent in June.

Public sector deposit growth accelerated to 37.1 percent com-pared to 21.4 percent in June. Non-resident deposits slowed to 13.8 percent year-on-year from 26.6 percent growth the previ-

ous month. Private sector deposits

declined by -1.1 percent year-on-year compared to 2.4 percent in June.

Bank assets grew 10.9 per-cent year on year in July to QR1.3tn, compared to growth of 11.6 percent in June. Domestic assets grew 10.3 percent year-on-year in July from 12.4 percent in the previous month. Foreign asset grew 9.5 percent year-on-year in July, from 11.0 percent in

the previous month.Bank credit grew 11.5 percent

year-on-year in July, down from 11.9 percent in June.

Loans to the public sector (around 40 percent of total domestic credit) grew 19.0 per-cent year-on-year versus 19.6 percent growth in the previous month. Private sector loans grew by 5.9 percent year-on-year from 6.4 percent, while foreign credit grew by 10.5 percent from 11.1 percent.

Sheikh Khalifa bin Jassim bin Mohammed Al Thani (left), President of the Qatar Chamber and Saleh bin Hamad Al Sharqi, Director General of Qatar Chamber.

Broad money Overnight interbank rates rose to 1.77% in June from 1.29% in May.

Qatar’s broad money supply (M2) grew by 8.3 % year-on-year in July compared to 7.8 percent in June. Broad money grew by 0.2% month on month in July compared to 2.2% in June

Oman committed to FX peg: Al AmriAbu Dhabi

Reuters

The new executive pres-ident of Oman’s central bank said yesterday

that his country remained committed to the rial’s cur-rency peg against the US dollar. Tahir Salim Al Amri, a former director-general of treasury and accounts at the Ministry of Finance, was speaking to Reuters on the sidelines of a meeting of Arab central bank governors, in his first comments to foreign media since he was appointed earlier this month.

Amri said the rial was not under pressure in the foreign exchange market, despite low oil prices that have strained Oman’s state finances and current account balance.

He also said that Oman was not committed to the sin-gle currency project.

Muted inflation a trillion-dollar puzzle, says BIS

Ryanair cancels 82 flights after holiday mess upLondon

Bloomberg

Ryanair Holdings Plc scrapped 82 flights yes-terday, the start of a

six-week programme of cancel-lations it’s making as it seeks to reduce a backlog of

crew vacation required by Irish regulators before the end of the year.

“We have messed up in the planning of pilot holidays and we’re working hard to fix that,” Kenny Jacobs, Ryanair’s chief marketing officer, said in a statement on Saturday.

In the statement, the Dub-lin-based carrier said it expected to cancel 40 to 50 flights daily, “with a slightly higher number this weekend.”

Ryanair will offer refunds or alternative flights to affected customers over the period, it said in a statement on Friday.

London

Reuters

The conundrum of stub-bornly low inflation despite a pick-up in glo-

bal growth and continued monetary stimulus is a “trillion dollar” question, the umbrella body for the world’s leading central banks said yesterday.

The Bank for International Settlements (BIS) said in its lat-est quarterly report that cheap borrowing rates and the rare simultaneous expansion of advanced and developing econ-omies are driving financial markets higher, with signs of “exuberance” starting to

re-emerge. US corporate debt is much higher than before the financial crisis and a drop in the premiums investors demand for riskier lending has boosted sales of so-called covenant-lite bonds offering high yields.

The BIS said this raises a question over the potential for another crisis if there is a sig-nificant rise in interest rates. The body has called for a grad-ual return to higher rates, though central banks are being tentative because of persisting low inflation.

“It feels like ‘Waiting for Godot’,” said Claudio Borio (pic-tured), the head of the monetary and economic department of the

BIS, referring to a play in which the main characters wait for someone who never arrives.

But the BIS says no one has yet worked out why inflation has remained so subdued while economies have approached or surpassed estimates of full

employment and central banks have provided unprecedented stimulus.

“This is the trillion-dollar question that will define the glo-bal economy’s path in the years ahead and determine, in all probability, the future of cur-rent policy frameworks,” Borio said.

“Worryingly, no one really knows the answer.”

The report also contained a study that showed global debt could be under-reported by about $13 trillion because tra-ditional accounting practices exclude foreign exchange deriv-atives used to hedge international trade and foreign

currency bonds.Another said central banks need to do more work on digital or cryptocurren-cies but that they could make it easier to implement sub-zero interest rates, while a third said the shift to more domestically issued and longer-dated bonds in emerging markets could make them more resilient to external shocks despite the increase in overall debt levels.

There has been a doubling in outstanding government debt of emerging market economies since 2007 to $11.7 trillion at the end of 2016. Government debt rose from 41 percent to 51 per-cent of GDP over the same period.

Frankfurt

AFP

At this year’s Frankfurt International Motor Show (IAA), carmakers are pull-

ing out all the stops to dazzle visitors with cars that are greener, smarter and faster than ever. Here are some of the high-lights of the industry showcase, which runs until September 24 and is expected to draw hun-dreds of thousands of car enthusiasts.

SupercarsIf you’ve always wanted to

feel like Lewis Hamilton, the Mercedes-AMG Project One might be for you. A hybrid “hypercar” built with Formula 1 technology, it promises 1,000 horsepower and top speeds of over 350km per hour (218 mph). Mercedes plans to make just 275 units, each costing more than two million euros ($2.4 million). “It looks like a shark,” was one fairgoer’s verdict as a crush of people strained to catch a glimpse of the showstopper.

Ten-year-old Moritz was more generous. “You can tell that Mer-cedes put in a lot of effort,” he said, “but I would have preferred bigger spoilers”. Not to be out-done, Bugatti revealed that its own limited edition supercar — the 2.4m-euro Chiron — had just set a heart-stopping new speed record, going from 0 to 400 kmh in 42 seconds.

Taking the high roadThey’re not quite the flying

cars we have long been prom-ised but if a string of start-ups are to be believed, our daily commute could soon come with a bird’s eye view. Fairgoers were abuzz over a pilotless “air taxi” on display at Daimler’s stand, an electric, 18-rotor craft being developed with Volocopter. Dutch start-up PAL-V mean-while showed off a cross between a gyrocopter and a car, which could whizz you to work from next year—all you need is €500,000 and a pilot licence.

Battle for the soccer momsSUVs reign supreme at this

year’s IAA. Accounting for more

than two thirds of the model launches, they cater to all tastes and wallets, from Volkswagen’s sporty T-Roc to the updated budget Dacia Duster. Chinese car-makers are increasingly muscling in on the action, with Chery and high-end Wey both unveiling compact 4x4s. They may be the wheels of choice for soccer moms everywhere but SUVs are “over-represented” at the IAA, according to the Inovev consultancy.

Promises, promisesEager to turn the corner on

the ‘dieselgate’ emissions cheat-ing scandal, carmakers are falling over themselves to present a futuristic vision of sleek, self-driving electric cars that do all the work as you lean back and enjoy the ride.

But observers expressed frustration that most of the cars being dangled were years away from hitting the roads, while Nis-san and Tesla — the only two carmakers actually mass pro-ducing electric cars — shunned the IAA. “I don’t want some sexy electro-concept that will never

happen,” said Bild car reporter Dennis Petermann, urging Ger-man carmakers to step on the gas in the race against Tesla.

Trip down memory laneThose who prefer the roar of

a souped-up classic motor to the gentle purr of an electric engine should head over to the IAA’s “Wild 70s” display to check out the red-and-white Gran Torino made famous by the “Starsky and Hutch” TV series, or a cult 911 Porsche Turbo Targa with rainbow trimming.

“That car has never felt a drop of rain,” said Josef Lonsky of the Automobilclub of Germany. If you’re nostalgic for the era’s more mellow vibe you may want to check out Volkswagen’s new ID Buzz, a re-imagined—and of course, electric—version of the world’s best-loved hippiemobile. With surfboards strapped to its roof and, somewhat bafflingly, a floating, meditating gnome for a dashboard ornament, the neon yellow-and-grey van could be coming to a beach near you in 2020.

Belgrade

AFP

Qualified, cheap and little protected by law—Serbian workers have everything

t o p l e a s e f o r e i g n multinationals.

But discontent is growing among employees of such com-panies in the Balkan country, a candidate for European Union membership.

A three-week strike at a Fiat car-making plant from late June was particularly telling: the fac-tory’s 2,400 employees in Kragujevac, a city in central Ser-bia, sought a wage increase of over 18 percent.

While such a raise might seem steep, it would only have put their salary at 45,000 dinars (379 euros) a month—below the average wage in the former Yugoslav republic, which in July this year was around 400 euros.

The strike was the first cri-sis for Prime Minister Ana Brnabic, a 41-year-old techno-crat, who took over in June. She warned the unions that Fiat would not negotiate as long as the strike continued.

The Serbian venture is a joint enterprise, 67 percent owned by Fiat and 33 percent by the state.

The Italian manufacturer remained silent over the indus-trial action, letting rumours spread of its departure from Ser-bia, where it has had a presence since the 1950s. Such a move would be a worrying prospect for the country of around seven million people and a double-digit unemployment rate.

Fiat’s exports, worth 382.2 million euros ($454 million) in the first quarter of the year, account for three percent of Ser-bia’s gross domestic product, according to the national statis-tics office. Talks between the unions and the management eventually resulted in a deal on a wage increase indexed to the projected inflation rate -- 4.5 percent for 2018.

But Ranka Savic, leader of the Association of Free and Inde-pendent Trade Unions, was not satisfied, saying the state “allows the multinationals to do what they want so it can brag about a historic hiring rate”.

Serbia offers employment

subsidies and tax exemptions to attract foreign investors to the country. The Foreign Investors Council declined to comment to AFP.

Beyond Fiat’s strike, local media regularly report tales of late wages, “forgotten” social security payments, unpaid over-time and disastrous working conditions.

South Korea’s Yura Corpo-ration, which specialises in car electronics components, was at the centre of media attacks last year, with reports of abuse, har-assment and refusing to let workers go to the toilet at its fac-tory in Leskovac in southern Serbia. The story of an

unmarried mother suffering from a tumour, whose contract had not been extended, aroused strong emotions in the country.

Yura, contacted by AFP by email, did not comment. Serbia’s labour inspectorate said it did not find any trace of “behaviour contrary to the rules”.

But workers are “too afraid to publicly confirm these accu-sations”, said Biljana Stepanovic, editor-in-chief of the Nova Ekonomija (“New Economy”) magazine. Savic said workers were afraid of “losing the little wages they earn” in a country where unemployment insurance benefits are extremely low.

Paris

AFP

The European car mar-ket booked its best-ever August in 10 years this year, with new registrations

jumping by 5.6 percent last month, the European Automo-bile Manufacturers’ Association ACEA said.

A total of 865,000 new cars were registered on Europe’s roads in August, ACEA calculated in figures released as the indus-try’s biggest showcase in Europe, the IAA car show, opens its doors to the general public in Frankfurt.

The region’s major markets of Italy and Spain booked the strongest increases — of 15.8 per-cent and 13 percent respectively. France and Germany came next, clocking up growth in new reg-istrations of 8.4 percent and 3.5 percent.

But demand for cars in Brit-ain, which is negotiating to leave the bloc, skidded 6.4 percent lower, ACEA said.

Taking the first eight months as a whole, “demand for passen-ger cars maintained momentum throughout Europe,” the organ-isation continued.

“With more than 10 million new vehicles registered across the EU, registrations went up by 4.5 percent compared to the same period last year.” Again, while Italy, Spain, France and Germany all saw demand increase across the January-August period, Brit-ain “registered a slight decline” of 2.4 percent.

As German Chancellor Angela Merkel was scheduled to open the IAA, ACEA calculated that German auto giant VW remains Europe’s biggest carmaker, com-manding 23.6 percent of the market over the January-August

period. But it nevertheless saw its market share eroded slightly as it continues to battle the so-called “Dieselgate” scandal in which it admitted to installing emissions-cheating software into 11 million diesel engines worldwide.

French carmaker PSA Peu-geot Citroen, the region’s number two, saw its market share increase by 0.4 percentage point to 10.6 percent as it integrated Opel and Vauxhall, the German and British makers it recently acquired from General Motors, ACEA said.

German Chancellor Angela Merkel urged car giants to win back the trust of “deceived” driv-ers, walking a fine line between berating the scandal-hit indus-try and praising its role as the backbone of the German econ-omy. Once nicknamed the “car chancellor” for her cosy relations to the industry, Merkel’s tone has shifted in recent weeks to include more robust attacks on auto com-pany bosses.

“Auto industry firms exces-sively exploited regulatory loopholes, they haven’t only damaged themselves, but above all deceived and disappointed consumers and the authorities,” she said in stern remarks at the IAA opening ceremony.

But Merkel was also careful not to alienate the car sector, highlighting its role as a “key industry” that employs some 870,000 people nationwide and is an important engine of growth for Germany and Europe.

European car market revs up in summer

Five trends at the Frankfurt auto show

Mexico CityReuters

Amazon.com Inc is prepar-ing to open a 1 million square-foot warehouse

near Mexico City, sources famil-iar with the project said, part of an effort to boost its presence in Mexico’s nascent e-com-merce industry.

The new warehouse is slated to be built in the Tepot-zotlan municipality about 25 miles (40 km) north of the Mex-ican capital, according to four Mexico City real estate profes-sionals familiar with the plans. Expected to be completed next year, the facility would triple Amazon’s distribution space in Mexico, home to around 120 million potential customers.

Amazon’s Mexico push comes amid talks to revamp the North American Free Trade Agreement, which could ben-efit the Seattle-based retailer if the United States persuades Mexico to raise a $50 limit on the value of online purchases that can be imported duty-free.

Amazon is a relative new-comer to Mexico; it opened its Kindle e-books site to Mexican customers in 2013 and expanded into sales of physical goods just two years ago. But it

is growing much faster than rivals such as Wal-Mart Stores Inc, and is already the nation’s third-largest online retailer. Amazon posted $253 million in sales in Mexico last year, more than double the year before, according to market research f i r m E u r o m o n i t o r International.

Sharing a nearly 2,000-mile long border with the United States, Mexico would seem a logical place for Ama-zon to expand. But duplicating the company’s U.S.-style suc-cess could prove tougher.

Online shopping comprises nearly 3 percent of all retail sales in Mexico compared with over 10 percent in the United States. Some Mexican shoppers are wary of online fraud and many do not have credit cards.

Some analysts believe Ama-zon is willing to take the risk as it races to bulk up in foreign markets to compete with fast-moving global competitors such as China’s Alibaba Group Hold-ing Ltd.

“Amazon is not afraid to plow into a new market in a very big way, take a big hit, but say, 10 years down the line, this is going to be big and profita-ble,” said Neil Saunders, managing director at the Glo-balData Retail research firm.

24 MONDAY 18 SEPTEMBER 2017BUSINESS

IAA car show

A total of 865,000 new cars were registered on Europe’s roads in August.

Spectators visiting the hall in which Jaguar, Land Rover and Ferrari are exhibited at the Frankfurt Auto Show IAA in Frankfurt am Main, Germany.

Workers at a Fiat car making plant in Kragujevac, in central Serbia.

Serbian workers rebel against foreign bosses Amazon plans mega-warehouse for Mexico growth spurt

25MONDAY 18 SEPTEMBER 2017 BUSINESS

Ecotitanium factory President Marc Dauzat during the inauguration of the French mining and metallurgy group Eramet “EcoTitanium” titanium alloys production plant using recycling technics, in Saint-Georges-de-Mons, central France.

Ecotitanium factory

Paris/Frankfurt

Reuters

The battle over how and where Europeans charge their electric cars is expanding from the continent’s cities to

its motorways. Power utilities, tech start-ups and oil majors are fighting to establish themselves as the dominant players in the fast-growing business of charg-ing stations – but advances in electric vehicles means where they build them is changing.

Refuelling conventional pet-rol and diesel cars on motorways has long been the domain of the oil companies, which typically have their own networks of fill-ing stations. Several are now talking about setting up high-power charging networks, creating major competition for limited space at motorway serv-ice areas.

“It is a bit of a landgrab now to win this sector,” said Tim Payne, Chief Executive of Brit-ish charging start-up InstaVolt, which has raised 12 million pounds to install 3,000 charge points across Britain by 2020.

While the range of electric vehicles (EVs) was less than 100km, Europe’s utilities were happy to help cities and compa-nies install slow and inexpensive charging points at homes, offices and shops, often supported by state subsidies. But Tesla, Porsche and BMW are now making

battery-powered cars with enough range to drive across countries. Daimler and Volkswagen also announced plans to accelerate their shift to electric cars.

Charging infrastructure remains nowhere near it needs to be. “Where is the network of charging points that will be required? Indeed where is the power and the grid?” Ralf Speth, boss of Britain’s Jaguar Land Rover, asked.

Experts including Charge-Point and Engie are, however, making plans to build pan-Euro-pean networks of high-voltage fast-charging stations which can refill a battery in less than half an hour instead of overnight.

In Britain, InstaVolt is renting land from filling station opera-tors, bringing them additional revenue from the lease as well as the increased traffic to their shops at the sites. It earns a margin by selling power through the charg-ers. InstaVolt struck a deal in May with ChargePoint, which itself is on a $125m expansion spree in

Europe, to install about 200 of the US group’s ultra-fast chargers close to popular roads across Britain.

Morgan Stanley estimates that 1-3 million public charging points could be needed in western Europe by 2030, adding that while utilities have natural skills in the new industry, it was too early to determine who will come put on top. “The winning business model is up for grabs,” it said.

Today, there are fewer than 100,000 public charging points available in Europe, with only about six percent of them fast, according to the International Energy Agency. Almost none of these is super-fast, a term usually used for charging stations with an output of at least 150 kilowatts. More than three times faster than current-generation chargers, they are now being targeted by those trying to become market leaders. Contenders include Dutch EV-Box, one of Europe’s biggest makers of charging stations, which was snapped up by French utility Engie in March.

EV-Box Chief Executive Kristof Vereenooghe said that unlike most of its competitors EV-Box has been profitable from the start, a claim that makes it stand out in an industry where gaining scale is considered more important for now. That’s why German utility E.ON, too, announced a strategic partner-ship with Danish startup CLEVER and said it had the ambition to

roll out several hundred ultra-fast charging stations along European motorways.

CLEVER, which is owned by a group of Danish utilities and runs charging networks in Den-mark, Sweden and Germany, wants to extend its network to France, Britain and Italy with E.ON. The firm, which unlike EV-Box and ChargePoint does not make its own hardware, is also still looking for other partners. “We want to connect cities so

that you can easily drive across Europe in an electric vehicle,” CLEVER Chief Executive Casper Kirketerp-Moeller said.

Among the oil majors, BP, Shell and Total have all either announced plans or launched pilot projects for EV charging. Few people, however, expect them to become serious con-tenders for a business that would effectively curb demand for their chief product: Oil.

“People like Shell and Total

talk a lot, but nothing happens. We are putting the grid connec-tion in place,” said Michiel Langezaal, founder and Chief Executive of Fastned, which has 63 EV charging stations in the Netherlands. Unlike utilities and charging station startups, elec-tric vehicle makers see fast charging networks not as a profit center, but as a loss-leader needed to persuade customers that electric vehicles can drive across continents.

Chicago

Reuters

Boeing Co will raise produc-tion of 787 Dreamliner jets to 14 a month in 2019,

Chief Executive Dennis Muilen-berg (pictured) said, reviving plans previously on hold due to a wobble in demand for wide-body jets.

The increase in output from 12 a month comes as Boeing also voiced confidence that produc-tion rates for its older 777 have stopped falling and signals its faith in rebounding wide-body demand.

“Based on existing backlog, we’re confirming now that we are going to build 14-a-month production rate in 2019,” Muilenberg told a Morgan Stanley conference. “We expect to add 100 aeroplanes to the 787 (accounting) block. That will fac-tor in to the financials and is accretive to our margins.”

Boeing earlier struck a pre-liminary deal to sell eight 787s to Malaysia Airlines. Muilenberg said Boeing had also just grabbed an order for six 777 air-craft, whose output has been

slowing as Boeing prepares to introduce an upgraded model from 2020.

The order increases Boeing’s confidence about filling remain-ing production slots during the transition to the new 777X, he said.

“So I think the production plan we laid in place for the 777 represents the floor and we still have some work to do to fill in the remaining skyline, but we’re closing in on it rapidly.”

Asked about future devel-opments, Muilenberg suggested a decision on whether to launch a new “middle of the market”

jet could come within the next year. “It’s going to driven on closing the business case, so it’s not an imminent decision,” he said.

“But if you think about an aer-oplane that would have to enter service in the 2024-2025 time-frame, we’ll be getting into the front end of that decision process over the next year or so.”

As Boeing expands its reach into services, the proposed mid-market aeroplane, which industry sources say would carry some 220 to 260 people, will be designed from the out-set to support higher-margin aftermarket services.

Muilenberg said Boeing could bring more activities in-house after setting up an Avionics business. That too is meant to support future serv-ices revenues, rather than just parts manufacturing.

“There’s a handful of these vertical areas that we want to invest in. We don’t need to be vertical everywhere...but where we need some targeted vertical capability, we’re going to invest to build that out,” Muilenberg said.

Energy firms vie to wire Europe’s highways for electric cars

An electric car is being charged in a Paris street, France.

Boeing to raise 787 jet output; upbeat on 777

New York Reuters

US consumers who want Apple Inc’s newest iPhones, including its

most expensive model yet, the iPhone X, may find fewer deals as wireless carriers are less will-ing to offer subsidies on devices in a saturated market.

New phone launches have long offered carriers a chance to gain market share by offering incentives such as free service and discounts.

But customer defection rates fell to record lows in the last quarter as most people already have cell phones, a sit-uation that creates less urgency to launch costly promotions to

lure customers, analysts said. Deals for the iPhone 8, 8 Plus

and X have been pared back from the deals offered for the iPhone 7. “In retrospect, there’s some regret on how promotional they were,” said Craig Moffett, a telecom analyst at MoffettNath-anson. The iPhone 7 trade-in offers were too easily copied by rivals, resulting in a costly move that offered no competitive advantage, he said. The iPhone 8 model starts at $699, while the iPhone X will start at $999, Apple announced recently.

T-Mobile US Inc said that it will give customers $300 off a new iPhone if they trade in an iPhone 6 or newer. Meanwhile, Sprint Corp customers can save 50 percent off the monthly lease

price of the iPhone 8 if they trade in an iPhone 6 or newer, as well as eligible Android devices.

AT&T Inc said it will include a 32GB iPad for $100 if custom-ers buy the iPhone 8 or 8 Plus on a plan that allows subscrib-ers to upgrade their phones as frequently as every year.

Verizon Communications Inc, the No. 1 wireless carrier, said customers can get $300 off the iPhone 8 or 8 Plus when they sign up for unlimited and trade in select phones. But the offers are less rich than last year, when all four major car-riers offered up to a $650 credit if they traded in an iPhone 6, 6S or high-end Android device, BTIG Research said.

J e f f e r i e s a n a l y s t s

characterised the latest round of offers as a “more rational” approach in a note, as last year’s free iPhone deals weighed heav-ily on the carriers’ margins. Representatives for T-Mobile, Verizon, AT&T and Sprint did not provide additional details on their marketing plans, such as whether they will offer incen-tives for the iPhone X.

Even with less generous promotions, the new iPhones should attract enough high-income consumers, including wealthy customers in China, said Brian White, analyst at Drexel Hamilton. “It’s great for Apple because they’re starting to segment the market more, and now the consumers have more options,” he said.

Athens

Reuters

Greece should not put off agreed bailout reforms or it could “compli-

cate” an upcoming bailout review by its foreign credi-tors, a European Central Bank official said.

Greece’s third bailout review is expected to begin in October with bad loans, the 2018 budget, the energy mar-ket and privatizations among the main issues, the ECB’s mission chief in Greece, Francesco Drudi, told Greek newspaper Proto Thema.

“If any major backtracking or delays occur in the imple-mentation of the key deliverables due so far, this could complicate the comple-tion of the review,” Drudi said.

“Unfortunate ly , a number of parliamentary bills adopted after the con-clusion of the second review may not be in line with pro-gram commitments and will have to be assessed by our teams,” he said.

Athens is keen to con-clude the review quickly to help smooth its return to mar-ket financing, as its third bailout program ends next August. The second review dragged on for half a year, and delays had hurt economic activity.

Greece has two remain-ing bailout reviews and Drudi said it should aim to complete at least one between now and the end of the program to cre-ate momentum.

“With regard to the post-program period, we fully understand the government’s desire for a clean exit,” he said. A “clean exit” would mean Greece emerging from its latest bailout without fur-ther conditionality.

“This will require a lot of effort to convince markets, investors and depositors that the momentum for reform will not abate and that no reversal of actions taken dur-ing the program will occur.”

US wireless carriers dial back discounts on new iPhones

Backtracking by Greece on reforms may prolong next review: Official

Charging points

Today, there are fewer than 100,000 public charging points available in Europe, with only about six percent of them fast, according to the International Energy Agency.

26 MONDAY 18 SEPTEMBER 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,375.18 0.41 %

QE Total Return Index 14,044.68 0.41 %

QE Al Rayan Islamic Index 3,357.16 0.89 %

QE All Share Index 2,387.52 0.53 %

QE All Share Banks &

Financial Services 2,617.19 0.53 %

QE All Share Industrials 2,522.49 0.72 %

QE All Share Transportation 1,756.66 0.50 %

QE All Share Real Estate 1,782.76 1.09 %

QE All Share Insurance 3,815.92 1.28 %

QE All Share Telecoms 1,007.15 0.18 %

QE All Share Consumer

Goods & Services 5,013.00 0.94 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

17-09-2017Index 8,375.18

Change 34.30

% 0.41

YTD% 19.75

Volume 7,872,358

Value (QAR) 130,535,890.03

Trades 1,832

Up 12 | Down 28 | Unchanged 0214-09-2017Index 8,409.48

Change 18.29

% 0.22

YTD% 19.42

Volume 17,138,071

Value (QAR) 491,299,364.77

Trades 4,355

EXCHANGE RATE

GOLD QR156.4735 per grammeSILVER QR2.1055 per gramme

Index Day’s Close Pt Chg % Chg Year High Year Low

All Ordinaries 5803.995 -2.396 -0.04 5983.2 5635.1

Cac 40 Index/D 5209.75 0.74 0.01 5219.08 4995.07

Dj Indu Average 22118.86 61.49 0.28 22179.11 17883.56

Hang Seng Inde/D 27894.08 -78.16 -0.28 28127.9 21883.82

Iseq Overall/D 6732.84 8 0.12 7157.43 6369.05

Kse 100 Inx/D 42310.12 1030.82 2.5 53127.24 40686.09

S&P 500 Index/D 0 0 0 2496.77 2245.13

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.9071 QR 5.0361

Euro QR 4.3098 QR 4.4362

CA$ QR 2.9590 QR 3.0414

Swiss Fr QR 3.7708 QR 3.8233

Yen QR 0.03279 QR 0.03343

Aus$ QR 2..8802 QR 2.9680

Ind Re QR 0.0561 QR 0.0573

Pak Re QR 0.0348 QR 0.0374

Peso QR 0.0723 QR 0.0723

SL Re QR 0.0236 QR 0.0241

Taka QR 0.0455 QR 0.0454

Nep Re QR 0.0353 QR 0.0359

SA Rand QR 0.2724 QR 0.2886

Mumbai

IANS

The Indian equity markets are expected to take cues from geo-political devel-

opments in the Korean peninsula, as well as the policy meet of the US Federal Reserve, during the upcoming week starting September 18, accord-ing to market analysts.

In addition to global cues, experts maintain that the direc-tion of foreign fund flows will have a major bearing on the stock markets. “On geo-politi-cal concern over Japan, North Korea will set the tone for mar-kets in the coming new week,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, said.

According to Devendra Nevgi, Chief Executive of Zyfin Advisors, the upcoming week is likely to be dominated by action from global central bank meet-ings — the US Federal Reserve and Bank of Japan.

“While a 25 basis points hike in Fed funds rate is almost cer-tain, given the stronger macro data and higher CPI (Consumer Price Index) levels, the language for the future path remains cru-cial. Hence, global risk sentiment remains important,

especially the North Korean developments,” said Nevgi.

The US Fed’s Federal Open Market Committee will meet on September 20-21. The risk of a US Fed rate hike and delay in earnings revival has accelerated foreign institutional investors’ (FIIs) outflows, said Vinod Nair, Head of Research, Geojit Finan-cial Services.

“However, DIIs (domestic institutional investors) inflows continue to be strong -- sup-ported by higher mutual fund inflows -- while continuation of this remains to be seen,” said Nair.

Provisional figures from the stock exchanges showed that FIIs continued with their selling spree and offloaded stocks worth Rs 3,365.4 crore during the week. This outflow was offset by con-tinuous injection of funds by the DIIs, which bought scrips worth Rs 3,835.21 crore. Figures from the National Securities Depository (NSDL) revealed that foreign port-folio investors (FPIs) divested equities worth Rs119.46 crore, or $18.79m, during September 11-15.

“Currently, domestic mar-ket is under-performing versus other EMs (emerging markets) due to peak valuation... Going forward, actions from global central banks will curtail the near-term liquidity and

domestic market may under-perform,” added Nair.

During the week, the Indian rupee weakened by 28-29 paise to close at 64.07-08 to a US dol-lar from its previous week’s close at 63.79.

On technical levels, Deepak Jasani, Head - Retail Research, HDFC Securities, explained: “Technically, with the Nifty breaking out of a range this week, the intermediate trend remains up. Further, upsides are likely once the Nifty crosses the immediate resistances of 10,132. Downside support to watch for emergence of weakness is at 9,913,” Jasani said.

Last week, the equity mar-kets rode the bulls with a fillip given by healthy domestic industrial production data and persistent pumping in of funds by domestic investors. The two key equity indices reclaimed their psychologically important 32,000 and 10,000 levels. Despite that, the equity markets ended the week on a muted note as investors booked profits.

On a weekly basis, the Sensex of the BSE surged by 585.09 points or 1.85 percent to close at 32,272.61 points, while the Nifty50 closed at 10,085.40 points, up 150.6 points or 1.52 percent.

Karachi

Internews

Pakistan stocks rallied dur-ing the outgoing week with the KSE-100 index

going up by 1,386 points (3.35 per cent) to 42,787.

Strong support at the 41,000-point level provided the market with a major trigger. The index closed in the positive in four out of five sessions during the week. “The rally was likely spurred by Friday’s FTSE rebal-ancing,” said dealers at Topline Securities.

The brokerage stated that the addition of five stocks by the FTSE in one of its indexes didn’t move the market by much because passive funds opted to avail Friday’s post-close session to execute big orders to elimi-nate tracking error.

Arif Habib Ltd attributed the overall market upsurge to improved sentiments on the gov-ernment’s plan to boost exports, control the widening current account deficit and keep away from the currency depreciation.

AKD Securities stated that the bourse rode on to the path carved out by international oil prices, up 4.8pc week-on-week, while incorporating the buoy-ant pull from Habib Bank.

Domestic equities garnered

significant foreign interest dur-ing the past week. Foreigners remained net buyers of $27.7m worth of stocks, which stood out as 11-week high.

Foreign buying was concen-trated in banks that attracted $11.8m, fertilisers $6m, cements $4.2m and exploration and pro-duction $1.5m.

Among local participants, individuals resorted to profit-taking by selling equities worth $15.9m. Companies and banks sold stocks worth $7.82m and $6.74m, respectively, while bro-kers accumulated shares amounting to $9.7m.

The average daily volume in the week surged 16pc to 157m shares while the average traded value was up 9pc to $83m. Vol-ume leaders included WorldCall Telecom with 60.91m shares,

Azgard Nine 60.74m shares, TRG Pakistan 44.16m shares, Aisha Steel 40.11m shares and Bank of Punjab 31.92m shares.

Major index drivers during the week were Habib Bank, which added 510 points or 22pc, and Engro Corp that contributed 180 points or 8pc. In addition, per-formance leaders during the week included Engro Foods, which went up 9.7pc, National Bank 9.6pc and Nishat Mills 7.4pc.

Laggards included Cherat Cement, which went down 4.9pc, Attock Petroleum 4.5pc, Fauji Cement 1.7pc, Gharibwal Cement 1.6pc and Pioneer Cement 1.2pc.

OUTLOOK: According to Arif Habib Ltd, the KSE-100 index is currently trading at a price-to-earnings multiple of eight times the 2018 income against the Asia Pacific regional average of 13.4 times. The divi-dend yield on Pakistani stocks works out at 6.2pc against 2.5pc offered by the region. The bro-kerage views the upcoming week with optimism.

AKD Securities observed that the by-poll result in NA-120 can affect the investor senti-ments during the upcoming week. “With the FTSE rebalanc-ing set to take effect from Monday, stock-specific move-ment can’t be ruled out,” it said.

Geo-political developments and US Fed meet to guide equities in India

Pakistan’s KSE Index-100 adds 1,386 points on FTSE rebalancing

Strong support at the 41,000-point level provided the market with a major trigger. The index closed in the positive in four out of five sessions during the week.

US equity investors could rotate out of high-yielding sectors and into stocks of banks, which would ben-efit from the next leg up in interest rates, after the

Federal Reserve’s policy-setting meeting wraps up on Wednesday. If the Fed next week gives a nod to rising infla-tion or focuses its trimmed-down bond buying on longer-dated bonds as it winds down its balance sheet, there could be a shift around of preferred sectors, investors said.

“In the short run financials will benefit,” said Chad Morganlander, portfolio manager at Washington Cross-ing Advisors, if the Fed action pushes long-term rates higher relative to short-term rates.

Next week’s meeting is not expected to result in an interest rate increase, but investors will focus on how Fed Chair Janet Yellen characterizes recent inflation readings, for clues to the likelihood of a hike in December, as well as on how the US central bank will begin to wind down its $4.5 trillion balance sheet.

Inflation has been persistently low but Yellen could dismiss this as transitory and point to recent stronger-than-expected data on consumer prices. Any heightened expectations of a rate increase could fuel a rotation and “will certainly change leadership” among market sectors, favoring financials, industrials and materials, according to Jim Paulsen, chief investment strategist at The Leu-thold Group in Minneapolis.

Investors typically sell shares of utilities and telecoms as well as high dividend payers when interest rates rise, partly because they lose their appeal as bond proxies since investors can expect similar returns investing in bonds, which are seen as safer assets. So far this year, the S&P 500 banking index is up less than 4 percent, underper-forming the 9.2 percent gain in the S&P 500 dividend aristocrats index. S&P 500 utilities are up 12 percent.

While the Fed’s expected announcement of the trim-ming of its balance sheet has been well telegraphed, investors will look for any Fed reveal on its preference for shorter- or longer-dated bonds when it reinvests a portion of its maturing assets.

If the focus is on the repurchase of short-term assets, that would likely push the long end of the yield curve higher, driving investors’ attention also to shares of banks, which would theoretically make more money with the help of higher net interest margins, said Morganlander.

Banks borrow money short term and lend it out longer term, so a steeper yield curve is seen as positive for their balance sheets. However, long-term yields in the US are not immune to the effect of low-yielding bonds in other developed countries like Germany and Japan.

“The general tendency based on global rates will con-tinue to pressure the yield curve,” Morganlander said.

While the Fed’s quantitative easing program was a pillar of the US stock market’s march from then-12-year lows on the S&P 500 in 2009 to current record-high lev-els, winding it down is not expected to produce a major market reaction on the downside.

The US central bank is expected to initially trim no more than $10bn per month from its $4.5 trillion port-folio, with the cap rising each quarter for a year until it hits $50bn monthly. The slow and steady move would not turn the US central bank into a seller. The Fed would allow assets to mature without reinvesting the totality of those maturing assets, which would trim some $300bn from the Fed’s portfolio after the first year according to analysts.

Estimates of where the Fed plans to take its balance sheet range from about $2 trillion to $3 trillion. The Fed’s portfolio was close to $900bn before the 2007-2009 financial crisis and ballooned to near $4.5 trillion by late 2014, where it has roughly stayed since.

Business owners who are trying to get back on track after hurricanes Harvey and Irma now face a dif-ferent sort of challenge: Trying to recoup lost income from their

insurers. Exclusions in the fine print of pol-icies, along with waiting periods and disagreements over how to measure a com-pany’s lost income, make business interruption claims among the trickiest in an industry renowned for complexity.

“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.

Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said his insurer rejected it because his busi-ness was not physically damaged.

Business interruption policies typically require “direct physical damage” as a con-dition of coverage, said Loretta Worters, a spokeswoman for the Insurance Informa-tion Institute, a insurance industry-funded communications group.

It was Arnold’s second disappointing experience with business interruption cov-erage. He said another insurer denied his claim in 2008 after a nine-day power out-age from Hurricane Ike.

Devastating storms are hitting the United States with increasing frequency. Risk mod-eling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65bn to $75bn, regardless of whether they are insured.

The income lost by shuttered firms makes up a significant chunk of overall losses from a natural disaster and can hobble the pace of a

community’s economic and social recovery. Hurricane Katrina in 2005, for example, caused about $25bn in insured commercial losses, of which $6bn to $9bn has been attributed to business interruption, according to informa-tion posted on AIR’s website.

The National Flood Insurance Program (NFIP)does not offer a business interruption component. The program is largely used by homeowners, but it also covers commercial structures for up to $500,000 in damage, with another $500,000 for the contents.

That is why companies able to afford the additional protection of business interrup-tion insurance, usually large and medium-sized firms, often purchase it despite the potential for unsuccessful and drawn-out claims. Big Star Honda, a car deal-ership in Houston, lost 600 vehicles — 95 percent of its inventory — and was shut for five days after Harvey.

Its managers are now girding themselves for a potentially long slog with the firm’s insurance company as the dealership pre-pares to make a claim on its business interruption policy. “We’re collecting every single invoice that pertains to the hurricane,” said Allen Paul, Houston regional vice pres-ident of Ken Garff Automotive Group, which owns the dealership. “I’m really curious to see how that goes,” he said.

The dealership also has a flood policy through the NFIP, but relatively few firms do. As of June 30, 2017, the NFIP had just 264,681 non-residential policies, said a spokeswoman for the Federal Emergency Management Agency, the agency that runs the government-backed flood insurance program.

That figure covers businesses but could also include churches, private schools and community centers, and is a sliver of the esti-mated 2.4 million small businesses located in flood-prone Florida alone. Insurers such as Travelers Companies Inc and Hartford Financial Services Group Inc are bracing for a wave of claims from businesses in Texas

and Florida. They face a daunting task. The size and scope of the two storms, which pounded the states within two weeks of each other, affected everything from energy refin-eries to hoteliers.

“Insurers are craving information now,” said Allen Melton, Americas Leader of Insurance Claims Services for Ernst & Young LLP. “They want to know how big a claim we are looking at and what the issues are.” The answers to those ques-tions are often difficult for businesses and insurance companies to pinpoint.

Both sides often hire their own forensic accountants to comb through profit-and-loss accounts from the current and prior years. It can take months, and sometimes years, for a policyholder to receive monies owed. Insurance brokerage Aon PLC is still working on claims from Hurricane Matthew, which struck South Carolina last October, said Jill Dalton, who leads claims for Aon.

Many business owners in the storm-rav-aged Florida Keys are not even close to estimating their losses because they cannot get to their properties yet. “When you have property damage, you can pretty much fig-ure out how much it costs to buy nails and a hammer and wood,” said Gary Marchitello, North American Head of Property Broking for Willis Towers Watson PLC. Payouts can

hinge on factors such as whether a storm hits during a slow season or if a business can make up for lost time in another quarter.

Richard Leong Reuters

While US corporate pen-sions regained some swagger after Wall

Street’s record run this summer, they are still far from their hey-day before the 2007-2009 credit crunch when they appeared to be in great shape to meet retirement obligations.

Rockbottom bond yields around the world remain the big-gest obstacle for many pensions as they try to backfill a $400bn funding gap and shore up funds

to cover payments to current and future retirees.

This low-rate climate is not expected to change much even as the Federal Reserve prepares to reduce its $4.2 trillion of bond holdings possibly from next month and investors speculate whether the European Central Bank may slow its bond purchases.

“We are still not back to where we were before the financial cri-sis, despite the great run in equities and fixed income mar-kets over the last eight to nine years,” said Mike Moran, chief pensions strategist at Goldman Sachs Asset Management.

Pensions’ stock holdings have appreciated considerably this year, but their value has not caught up with their liabilities, or what they owe their retired work-ers. The current value on pension liabilities is based on or “dis-counted” by bond yields, particularly those on corporate bonds. Liability value climbs with

low yields because future bond income to meet payouts is low.

“Pension fund status hasn’t improved as much as you might think because the discount rate has stayed persistently low and has even fallen in some cases,” said Matt McDaniel, US head of defined ben-efits at Mercer Consulting.

For instance, yields on US investment-grade corporate bonds are about half what they were before the financial crisis and, at around 3.13 percent, they remain 2 percentage points below their long-term average of about 5.13 percent, according to an index compiled by Bank of America Mer-rill Lynch . Those yields have declined about a quarter percent-age point this year.

Heavy investor demand and muted inflation have pressured domestic bond yields lower.

On the other hand, investors have snapped up stocks as an improving global economy and strong corporate earnings have

offset less easy money from the Federal Reserve and delays in Washington on promised tax reform and other fiscal stimulus.

The benchmark S&P 500 equity index is at all-time highs, produc-ing a year-to-date total return, including reinvested dividends, of 13.2 percent. The Nasdaq, also at a record, has delivered a year-to-date total return of 20.9 percent.

All in all, the aggregate fund-ing level of S&P 1,500 companies fell 1 percentage point in August to 82 percent. This was unchanged from the end of 2016 but some 15 points higher than the low seen in 2011, data from Mercer released last week showed. The aggregate funding status before the finan-cial crisis was at 100 percent.

This meant these retirement programs still needed $404bn to fill their funding deficit, $12bn less than in June but down only $4bn from the end of 2016, Mercer data showed. The viability of defined benefit pensions, which promise

fixed monthly payments, is criti-cal to people who already rely on them or will depend on them in retirement. By 2030, more than 20 percent of US residents will be age 65 and over, against 13 per-cent in 2010, government data showed.

Pensions need to ensure their solvency as funding pressure per-sists in the current low interest rate climate. Some companies have transferred their pension plans to be managed by insurers, while others have sold bonds to raise cash to fund their pensions.

The Pension Benefit Guaran-tee Corp, which insures defined benefit plans from insolvency, has been ratcheting up their guaran-tee fees.

By 2019, the fixed-rate part of the guarantee fee will go up to 8 percent of underfunded assets from just under 7 percent cur-rently, while the variable-rate portion will climb to 4.2 percent from the current 3.4 percent.

Fed meeting could trigger stock sector rotationRodrigo CamposReuters

Hurricane-damaged firms dig in for insurance fight

A file picture of a car dealership covered by Hurricane Harvey floodwaters near Houston, Texas.

Suzanne Barlyn Reuters

Risk modeling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65bn to $75bn, regardless of whether they are insured.

Pensions’ stock holdings have appreciated considerably this year, but their value has not caught up with their liabilities. The current value on pension liabilities is based on or “discounted” by bond yields, particularly those on corporate bonds.

US pensions stuck in the red despite stock market boom

BUSINESS VIEWS 27MONDAY 18 SEPTEMBER 2017

28 MONDAY 18 SEPTEMBER 2017BUSINESS

BACK TO BUSINESS

Escalation in credit card delinquencies worries US banks

sight

Reuters

US banks, already under pressure from slower loan growth

and low interest rates, could be facing yet another chal-lenge as a rising number of Americans fall behind on their credit card payments.

Several large US banks and credit card companies, including Capital One Finan-cial Corp (COF.N) and JPMorgan Chase & Co (JPM.N), reported a rise in credit card delinquency rates for August, the second con-secutive rise after falling for four months. While the rates remain significantly below the levels hit during the 2008-2009 financial crisis, rising delinquencies could result in higher loan losses for lenders.

“A noticeable rise in delinquency rates - even from very low levels - is worth paying attention to,” said Andrew Haughwout, senior vice president at the New York Federal Reserve.

JPMorgan’s credit card delinquencies rose 1.16 per-cent in August from 1.15 percent in July, while Capi-tal One reported a delinquency rate of 3.97 per-cent, up from 3.81 percent in July. Discover Financial Services’ (DFS.N) monthly credit card delinquency rate rose to 2.1 percent in August versus 2 percent in July. Overall, seasonally-adjusted credit card delinquency rates for US banks rose to 2.47 per-cent in the second quarter from 2.20 percent a year ear-lier, according to New York Fed data. Delinquency rates surged during the financial

crisis as the economy crum-pled and thousands of people lost their jobs. In the after-math of the crisis, lenders tightened their standards to curb losses from non-per-forming loans. With the US now approaching full employment, lenders are more willing to take risks and extend loans and cards to people with low credit scores. “We have seen some loosening of standards on card originations: low-credit-score individuals getting credit cards or extended limits, which allow them to borrow more,” Haughwout said.

US household debt lev-els are hovering near record highs, after having surpassed their pre-crisis peak earlier this year, as Americans con-tinue to extend their credit card as well as mortgage and auto debt repayments. There has been a notable increase in the transition to serious delinquency levels primarily among borrowers with credit scores of below 660, the NY Fed said in a blogpost.

“It is not clear yet what effect it will have on the future. But historically it has been the case that once these delinquency rates start to rise, they can continue to rise,” Haughwout said.

Along with lenders will-ing to take on more risks, stagnant wage growth is also to blame for higher credit card delinquencies. The dan-ger is that if the US economy takes a turn for the worse, delinquencies could be an affliction because people are bearing bad credit card debt in good times which will be tough to pay in hard times.

Capital Comment

A noticeable rise in delinquency rates - even from very low levels - is worth paying attention to.

Andrew Haughwout, Senior Vice President, NY

Federal Reserve.

Economic History

Race to build luxury submarineMatt Gross Bloomberg

For those bored with multimillion-dollar megayachts, with their ho-hum helipads and s n o o z e - i n d u c i n g

jacuzzis, consider the 928-foot-long M7, designed by the Austrian company, Migaloo Pri-vate Submersible Yachts.

The M7 not only has a place for your chopper to land, it has a swimming pool, VIP suites, multiple hangar bays, and a design inspired by the US Navy’s Zumwalt-class destroyers.

The M7 can dive to 1,500 feet and cruise underwater at 20 knots. The real excitement, as Sebastian the Crab once sang, is “under the sea.”

There’s no precise price tag yet, says Christian Gumpold, CEO of Migaloo. But the $2.3bn figure mentioned in this report is close. “This would make it for sure to the most expensive pri-vate object worldwide,” Gumpold told us via email.

For a couple of decades, companies such as Triton Sub-marines, DeepFlight Adventures, U-Boat Worx BV, and Seamag-ine Hydrospace Corp. have been producing and selling

“submersibles.” These are smaller vehicles, capable of tak-ing from two to eight passengers thousands of feet down to explore the ocean for hours at a time. OceanGate Inc., founded by the adventure-loving entre-preneur Stockton Rush, is planning to take passengers to the remains of the Titanic in 2018.

Submersibles can’t, how-ever, regenerate their own power, and they rely on yachts or other vessels for long-dis-tance transport and servicing.

Three companies—Migaloo, the Florida-based US Subma-rines Inc., and Ocean Submarine in the Netherlands—produce sub designs that aspiring Bond vil-lains dream of: capable of traveling 1,000 miles or more, luxuriously appointed, and the kind of underwater headquar-ters from which you can plot world domination, or maybe just host friends for a week of exploration.

US Submarines’ top-of-the-line, 213-foot-long Phoenix 1000, which has more than 5,000 square feet of interior, is estimated to cost $90m.

It’s also possible that safety concerns hinder potential buy-ers, though all sub makers

adhere to safety standards issued by organizations such as the American Bureau of Shipping and the Norwegian DNV GL, as well as the US Navy’s Subsafe specifications.

They all also claim perfect records, with about 1 million passengers per year going on dives as tourists.

Of the three manufacturers, only Ocean Submarine (which supplies subs to the military) is under contract to complete a civilian vessel, for what CEO Martin van Eijk calls “a very rich client.” Set to be delivered in 2018, the 64-foot Neyk L3 can seat up to 20 passengers, depending on the configuration, with a bar, galley, and library. (Van Eijk did not know which books will go into the library.)

The L3 may be smaller than Migaloo’s offerings, but its size offers some advantages.

The company’s idea of lux-ury is, according to its brochures, about “more than Connolly leather.”

Vertical thrusters let the L3 remain in one place, despite ocean currents; landing gear allows the sub to pull up on beaches (no marina necessary); and the ride is quiet and precise, with a range of 500 to 1,500

nautical miles. Plus, it’s only ¤20m ($23.8m).

Ocean Submarines, he said, has a German training center, with the same simulator as air-planes. “We can do the same interior as the cockpits, so the client can see how exactly the submarine will work,” he said. The training typically takes four months.

Once you’ve got your sub and your trained crew, you can go wherever you like, the man-ufacturers told me. There are no specific legal restrictions on civilian subs anywhere in the world. Which is not to say coast guards won’t take note of your presence.

“When you bring a submers-ible into someone else’s territorial waters, not everybody is as enthusiastic about allow-ing you to go diving,” said Patrick Lahey, the founder and president of Triton Submarines. “The areas that people seem to be most concerned about sub-mersibles being used are Greece and France, because they have antiquities on the bottom and they’re concerned that a person that owns a submersible might be going down and taking things that might be an important part of history.”

A rendering of a “private submersible yacht” by Migaloo Private Submersible Yachts, an Austrian company.

An infrastructure deal should be easy, but isn’tAlbert R. Hunt Bloomberg

The lingering devasta-t ion from the hurricanes that crip-

pled Houston and Florida underscored the national problems of crumbling roads and bridges, inadequate transportation systems and aging electrical grids. Presi-dent Donald Trump and congressional Democrats both want Washington to spend billions on repairs and construction.

The American Society of Civil Engineers recently gave the country’s infrastructure a D-plus grade and esti-mated that its deficiencies will cost the economy $4 tril-lion over the next decade. As Floridians go days, stretch-ing into weeks, without power, and with old people dying in nursing homes, the urgency is clear.

Representative Josh Gottheimer (pictured), a New Jersey Democrat who’s

trying to assemble biparti-san coalitions on issues like infrastructure, was in a meeting with Trump last week and came away cau-tiously optimistic.

“We talked about differ-ent issues but he really emphasized infrastructure and was open to putting it together with tax reform,” Gottheimer said. “There are a lot of tough questions but at least it’s an encouraging first step.”

Although Trump made big promises during the cam-paign and in his first days in the White House, the admin-istration’s initial plan is for a

meager $200bn spread out over a decade and is reliant on private partnerships. Advocates like LaHood don’t object to public-private col-laboration on some road and airport projects, but say the Trump plan isn’t close to adequate.

There are, for example, about 58,000 deficient US bridges, almost a tenth of all the bridges in the country. Tolls could finance a small portion of the necessary repairs, but the real money would probably have to come from a hefty boost in the federal gasoline tax, which been stuck at 18.4 cents per gallon since 1993. LaHood said that 25 states have raised their own gaso-line taxes, and “no one has lost an election because of it.”

Gottheimer and other Democrats, accepting this reality, argue that the best route to a bipartisan deal is to bundle tax reform with infrastructure spending.