VAT between Jan 2018 BUSINESS - Gulf Times
Transcript of VAT between Jan 2018 BUSINESS - Gulf Times
Tuesday, October 4, 2016Muharram 3, 1438 AH
BUSINESSGULF TIMES
Singapore home pricesat 7-year low
GOVT CURBS | Page 3
Sterling near 3-decade low at $1.284
BREXIT NEARS | Page 13
Qatar expected to introduce VAT between Jan 2018 and Jan 2019: BDO Qatar
LIMITED OFFICIAL INFORMATION AVAILABLE: Page 16
Ahli Bank (Ahlibank) has announced the “successful” closing of a three-year $195mn club term loan facility. The mandated lead arrangers and bookrunners are Arab Banking Corporation, Barclays Bank, Commerzbank Aktiengesellschaft Filiale Luxemburg, First Gulf Bank, HSBC Bank Middle East, Mizuho Bank, and Standard Chartered Bank. Union National Bank is also a mandated lead arranger. The facility will be used for general corporate funding purposes of Ahlibank, the bank said. Ahlibank chairman and managing director Sheikh Faisal bin Abdul-Aziz bin Jassim al-Thani said: “We are extremely pleased to receive the continued balance sheet support of our core relationship banking partners. This club loan assists our important stable funding requirements. We are thankful for the trust given by these leading regional and international institutions in Ahlibank.” The picture shows a view of the Ahlibank head off ice in Doha.
Ahlibank closes $195mn club term loan facility
Qatar outperforms world in sustainable development: BCG
Qatar has outperformed the Gulf Cooperation Council (GCC) and the rest of the world in most di-
mensions of sustainable economic devel-opment, according to Boston Consulting Group (BCG).
The Gulf sovereign topped the aver-age scores of both the GCC and the rest of the world, particularly in income, em-ployment, health, infrastructure, income equality, civil society and governance, BCG said, revealing its Sustainable Eco-nomic Development Assessment (SEDA) scores of 163 countries.
The fact-based, comprehensive analy-sis measures the relative well-being of countries — including Qatar — through ten key areas, including economic stabil-ity, health, governance, and environment.
SEDA scores countries in two ways: the current level of well-being and recent progress in well-being from 2006 to 2014. It also assesses how countries convert wealth and growth into well-being.
Although Qatar lagged behind other GCC countries in economic stability,
education, and environment; BCG found that the country showed the strongest recent progress scores in income and gov-ernance — compared to the GCC region and the rest of the world.
The analysis, nevertheless, shows that Qatar is able to translate its economic growth into well-being improvements for its citizens only at an average rate.
“Overall, when looking at Qatar’s cur-rent level of well-being as well as its re-cent progress in that measure, the nation fi nds itself in the ‘good and improving’ category,” BCG said, adding that from a regional perspective, Qatar’s current-level scores are “mostly above par”.
All in all, when assessing Qatar’s per-formance against the rest of the world, it is clear that across various dimensions — such as income, employment, infrastruc-ture, governance, education, and income equality — the nation is higher and mov-ing further ahead, according to the report.
Highlighting that among countries with the same income (gross domestic product per capita) level, those with high-
er levels of fi nancial inclusion are likely to have higher well-being levels; BCG said its study fi nds that two factors are critical to improving fi nancial inclusion: a regu-latory structure that provides safeguards but allows innovation and a solid infra-structure, including communications networks and payment systems.
“With those two elements in place, private-sector innovation in Qatar can fl ourish,” said Douglas Beal, BCG’s Direc-tor of Social Impact and an author of the report.
“We have found a clear and measurable association between fi nancial inclusion — access to basic fi nancial services such as a bank account — and national well-being,” he said.
At present, in the UAE, private sector innovation can play a signifi cant role in improving living standards, but to make meaningful progress in this area, banks must pursue fi nancial inclusion using their core business, and not just pursue typical corporate social responsibility strategies, according to him.
Beal: Private-sector innovation in Qatar can flourish.
Margin trading to begin on QSE from tomorrowBy Santhosh V PerumalBusiness Reporter
Margin trading will begin on the Qatar Stock Exchange (QSE) from tomorrow, a move that will stimulate trading volumes and liquidity as well as extend new financing sources for investors.The Group Securities, one of the11 stock intermediaries, will be allowed to execute margin trading on the QSE after completing the preparations necessary to put the decision into practice in collaboration with the Qatar Central Securities Depository, a bourse spokesman said.“This new service would enhance the stock market performance and stimulate trading volumes, adding that the implementation of this initiative primarily aims to boost liquidity in the market and provide new financing channels for investors, especially those who are willing to buy large amounts of stocks for their portfolios,” the QSE chief executive Rashid bin Ali al-Mansoori said.Through margin trading, which will be applicable only for 20 stocks in the main index, a financial services company funds a percentage of the securities’ market value purchased for its client, pursuant to the agreement governing the relation between them. Margin trading will allow investors to purchase securities that are partially financed by a loan or credit facility made available by a margin lender, a member licensed to provide such services.It is understood that Qatar has adopted a 60:40 method wherein a financial services company funds 40% of the securities’ market value purchased for its client pursuant to the agreement governing the relation between them.The customers would have to open a new margin trading
account with the brokerage firm. As per the Qatar Financial Market Authority rules, it is not permissible to open more than one margin trading account per person at more than one financial services company.The margin trading account is used to deal in securities traded in the market, and must not be used for subscription in new securities’ issuances, as per the guidelines of the financial market regulator.The move (of introducing margin trading) would help facilitate greater transaction volume and diversity, which could influence price formation in the market. This, in turn, has the potential to improve liquidity and further facilitate fair and smooth price discovery, market sources said.It is seen as a precursor to the advent of derivatives trading such as futures and options. The move also comes in the backdrop of Qatar being upgraded to ‘emerging’ market by global index compilers such as MSCI, Standard and Poor’s-Dow Jones and more recently FTSE Russell.In light of its policy to promote investment knowledge and awareness, the QSE had already held several introductory seminars on the margin trading service that allows investors to purchase securities that are partially financed by a brokerage firm licensed to provide margin trading service.
Al-Mansoori: New service.
Qatar Airways celebrates induction into TTG Travel Hall of Fame
Qatar Airways has been inducted into the ‘TTG Travel Hall of
Fame’, having been crowned as the ‘Best Middle Eastern Airline’ for the 11th consecu-tive time at this year’s TTG Travel Awards.
The honour establishes Qatar Airways as the fi rst Middle Eastern carrier to be recognised for its “com-mitment” to best-in-class hospitality and customer satisfaction and places it among some of Asia’s most renowned and reputable brands.
The TTG Travel Hall of Fame represents the “best” of the travel industry — the induction criteria to join this elite circle include winning the same TTG Travel Award at least 10 consecutive times — a testament to the organi-sation’s continued dedica-tion to excellence.
Its entry into the TTG Travel Hall of Fame further cements Qatar Airways’ reputation as a world-class carrier and a leading force in regional and global aviation.
Qatar Airways Group Chief Executive Akbar al-Baker said, “We are delighted to be
inducted into the TTG Travel Hall of Fame — this bears tes-tament to the consistency of our performance day in, day out, on all our fl ights over the last decade and count-ing. These are exciting times for our industry and our air-line, which now, more than ever before, is committed to delivering great service, as our guests travel farther and more frequently than ever before. I would like to thank the entire Qatar Air-ways team for continuously delivering a high standard of service and meeting the ever-changing needs of our passengers both in the air and on the ground.”
This latest award comes at a time when Qatar Airways is experiencing remarkable growth. A new aircraft joins the fl eet every 15 days, and the carrier is committed to expanding its global network of destinations.
Qatar Airways senior vice-president (Asia Pacifi c) Mar-wan Koleilat, who received the award on behalf of the airline, said: “We are hum-bled to know that our eff orts are recognised by our col-leagues and peers in the in-
dustry throughout the past decade. We are very proud to have been awarded this hon-orary title and will continue bringing to life our brand promise of ‘Going Places To-gether’.”
Soon to celebrate its 20th anniversary, Qatar Airways has become one of the avia-tion industry’s largest suc-cess stories. The airline con-stantly scales new heights and has grown exponentially to be one of the fastest grow-ing airlines with one of the youngest aircraft fl eet in the world.
In December 2015, Qatar Airways launched its brand campaign ‘Going Places To-gether’ to refl ect its core val-ues as a contemporary and innovative company that wants to encourage passen-gers to take journeys that will help them achieve their dreams and ambitions.
The TTG Travel Awards are the region’s most prestig-ious annual travel industry awards, honouring the con-tributions and achievements of organisations and individ-uals as voted by the readers of TTG Asia and those who work in the travel industry. Qatar Airways senior vice-president (Asia Pacific) Marwan Koleilat (middle) receiving the award on behalf of the airline.
BUSINESS
Gulf Times Tuesday, October 4, 20162
Ooredoo delivers progress throughglobal projectsOoredoo has continued to build
on the power of mobile broad-band to enrich people’s lives and
make a diff erence in the communities where it operates a year after pledging its commitment to the United Nations’ Global Goals for Sustainable Develop-ment.
Responding to the fi rst anniversary of the launch of the Global Goals in 2015, Ooredoo provided an update on its on-going initiatives across its international footprint. It also pledged to build on and further the reach of these programmes, and continue to innovate as they work to transform the UN’s mission statements into reality.
Ooredoo’s initiatives align with three of the 17 Global Goals — Goal 3: Good Health; Goal 5: Gender Equality, and Goal 9: Innovation & Infrastructure.
One of Ooredoo’s fl agship projects, ‘MayMay’, is an example of the direct contribution mobile technology can make to improve the lives of people and create an all-round healthier world for tomorrow.
MayMay is Myanmar’s fi rst mo-bile app for maternal and child health, which is bridging the mobile and health sectors to help ensure that a wealth of useful maternal, child health and well-ness information is readily available to women across the country both dur-ing and after pregnancy. There is fast-growing demand for the service, which is a great example of the benefi ts of having a mobile phone in today’s digital world.
Achieving gender equality by em-powering women is another key area for Ooredoo, and one that sits at the heart of its own corporate culture. Ooredoo’s companies are proud to take the lead in providing award-winning services for women in markets ranging from Iraq to Indonesia, bringing more women online, boosting national GDP, and helping create fair and equal ac-cess.
Indosat Ooredoo’s Wobe (short for ‘Women Benefi t’), a micro-business app with e-wallet, was developed pre-cisely with that vision. By facilitating access to mobile phones and improv-ing fi nancial literacy and business skills, Wobe’s ultimate goal is to empower women in Southeast Asia and provide them with new opportunities.
Ooredoo Group CEO Sheikh Saud
bin Nasser al-Thani said: “The mobile sector has an important role to play in helping the UN achieve the Global Goals. Across our footprint, we are witnessing how we can make a real difference around some of the funda-mental issues that the Goals address. The social impact of mobile technol-ogy in general is unprecedented, and is driving extraordinary economic growth and new ways of delivering education, health and rural develop-ment.
“Over the past year we have worked hard to contribute to the sustainable development of the communities where we operate. Today, we look back with great satisfaction at our achievements, but also aware that there is still a long way ahead of us. At Ooredoo we are determined to continue playing our part to achieve the Global Goals.”
The latest State of Broadband report, released last week, concluded that while Internet access is approaching satura-tion in richer nations, connectivity is still not advancing fast enough to help bridge development gaps in areas like education and healthcare for those in poorer parts of the world.
The report highlighted how the po-tential of mobile technology towards achieving the UN’s targets is yet to be fully unleashed, but this requires fur-ther combined investments in access, skills, and education.
Sheikh Saud added: “The report reconfi rms that we are heading in the right direction. According to the latest fi gures, 3.5bn people will be using the Internet by the end of this year, up from 3.2bn in 2015 and equating to 47% of the global population.
“However, more still needs to be done to ensure the full potential of broad-band connectivity is fully unleashed, particularly if we want to maximise the contribution it could actually have to achieve the Sustainable Development Goals.”
The State of Broadband 2016 is the sixth edition of the commission’s broadband connectivity report. Re-leased annually, it is the only report that features country-by-country rankings based on access and aff ordability for over 160 economies worldwide. http://www.broadbandcommission.org/pub-lications/Pages/SOB-2016.aspx
Saudi Telecom may lose, others win from industry shake-upGovernment keen to boost competition, drive investment; part of sweeping economic reforms to cut oil dependence; shares in Saudi Telecom plunge on fears it may lose out; Zain Saudi, Mobily, Atheeb could be winners
ReutersDubai
Shares in Saudi Telecom Co (STC), the kingdom’s largest telecommunica-
tions operator, tumbled as much as 8.5% yesterday as investors feared it could lose market share because of government plans to foster more competition.
As part of economic reforms to cut Saudi Arabia’s depend-ence on oil, the government will provide operators with “unifi ed licences” allowing them to of-fer a full range of telecommu-nications services, the Capital Market Authority (CMA) said on Sunday.
Telecommunications analysts said this represented a major shake-up of the industry — and that there might be losers as well as winners.
Previously, operators had to apply for separate licences to of-fer services such as mobile and fi xed-line.
Now they will need only a sin-
gle licence, making it easier for fi rms to challenge STC, the main operator of fi xed-line services, said Nishit Lakhotia, head of research at Securities & Invest-ment Co.
In particular, Zain Saudi Ara-bia and Etihad Etisalat (Mobily), an affi liate of the United Arab Emirates’ Etisalat, which now mainly operate in the mobile market, will be able to expand into fi xed services, he said.
“STC should get ready for
competition in the fi xed-line business. For consumers, this should provide more options and kinds of services and better prices.”
The economic reform plan includes goals such as stimulat-ing investment in broadband by telecommunications providers and doubling the contribution of the information technology in-dustry to non-oil gross domestic product to 2.24% by 2020.
The CMA’s statement did
not give details of the new li-cences or say when they would be awarded, and offi cials of the Communications and Informa-tion Technology Commission could not be contacted to com-ment.
STC, a former monopoly, is-sued a brief statement saying the licensing changes would give it and other operators opportu-nities to grow, but added that it was too early to determine the fi nancial impact.
Shares in Saudi Arabia’s three other listed telecommu-nications fi rms were suspended pending their statements on the reform.
Zain said the unifi ed licences would enable it “to off er all tel-ecommunication services, in-cluding fi xed services”, while Mobily said they would improve its positioning in the market; neither company elaborated.
Lakhotia said the new policy could also be positive for the smallest operator, Atheeb Tel-ecommunication Co, which currently operates mainly in the fi xed-line business and might now be able to launch mobile services.
The CMA said the commis-sion would extend licensing periods for the companies by 15 years, in exchange for 5% of each company’s annual net income during the extension period.
Zain Saudi said the exten-sion would reduce its annual amortisation charge by 433mn riyals ($115.4mn), while Mobily predicted a positive annual im-pact of up to 260mn riyals and Atheeb estimated an annual sav-ings of 9.7mn riyals.
However, Lakhotia said he understood the extensions would only begin to take eff ect when the companies’ current licence periods expired, in 2028 for STC, 2033 for Zain Saudi and 2029 for Mobily.
STC has issued a statement saying the licensing changes would give it and other operators opportunities to grow, but added that it was too early to determine the financial impact.
Iran oil exports hitpre-sanctions highReutersSingapore/Beijing
Iran’s total crude oil and condensate sales likely reached around 2.8mn barrels per day in September, two sources with knowledge of the matter said, nearly matching a 2011 peak in shipments before sanctions were imposed on the Opec producer.The run-up from shipments of around 2.5mn bpd in August comes mainly from condensate, a light oil excluded from Opec supply quotas that is often produced with natural gas and can be used to make naphtha for petrochemical production.Iran sold 600,000 bpd of condensate for September, including about 100,000 bpd shipped from storage, to meet robust demand in Asia, the two sources said.September crude exports increased slightly from the previous month to about 2.2mn bpd, they said.Iran, along with Libya and Nigeria, is allowed to produce “at maximum levels that make sense” as part of any output limits in a surprise deal reached last week by the Organisation of the Petroleum Exporting Countries (Opec).Still, the Middle Eastern producer has surprised the market by ramping up its oil output faster than expected, to 3.63mn bpd in August, according to Opec, up a quarter from end-2015 since sanctions were lifted in January.“Iran cannot produce much more than the present, so around 3.7mn bpd may be the max,” said Fereidun Fesharaki, chairman of consultancy FGE.Even if Iran’s output hit 3.8mn bpd — as an oil off icial said it had in September — it would
not be able to sustain that volume as decline rates at its oilfields are about 400,000 bpd each year, Fesharaki said.National Iranian Oil Co (NIOC) off icials did not immediately respond to an emailed request for comment.Iran has said it plans to raise its output to 4mn bpd, although other analysts agreed production has probably peaked for now because investments to pump out more oil are lagging.Condensate instead of crude oil will drive Iran’s export growth for the remainder of 2016, thanks to developments at its giant South Pars gas field, the sources said.NIOC drew on condensate stocks from floating storage and onshore tanks in September to help meet growth in demand from China, South Korea, Japan and India.Iranian ports loaded 2.153mn barrels of crude and 486,000 bpd of condensate in September, according to Thomson Reuters Supply Chain and Commodities Research.That put the month’s total at 2.639mn bpd — excluding the condensate loaded out of storage — up from 2.472mn bpd in August, the Reuters data showed.Condensate sales could reach 800,000 bpd in October, in excess of production at about 550,000 bpd, one of the sources said, suggesting further draws from floating tankers.“Korea was the main demand driver for the growth. Japanese and Indian plants were also raising imports,” said one of the two sources with knowledge of the matter from Beijing, adding that China’s Sinopec has also boosted its off take of condensate since August.
Qatar’s Ras Laffan 2 condensate splitter to launch this month: Sources
ReutersDoha/Singapore
Qatargas, the world’s larg-
est LNG producer, will start
operations at its new Ras Laff an
2 condensate splitter by the
end of this month, doubling the
Gulf state’s capacity to process
condensate, two sources with
knowledge of the matter said
yesterday.
The 146,000 barrel per day
(bpd) facility had been due to
open in September but was
delayed due to technical prob-
lems, traders said.
It will process deodorised field
condensate (DFC) and low sul-
phur field condensate to extract
mostly naphtha and middle
distillates.
Condensate exports from Qatar
will drop from 500,000 bpd
to about 350,000 bpd when
the 146,000-bpd splitter starts
operating, an off icial at Qatar
Petroleum, Qatargas’s state-
owned majority shareholder,
has said.
That will enable the Gulf state to
soak up some of its condensate
at home as it faces growing
competition for condensate
sales overseas from US and
Iranian light oil shipments.
Commissioning of the new
splitter is “99 percent” complete
and an imminent handover to
operator Qatargas is likely to
see the plant start up “within
the next two weeks,” a Doha-
based source, who declined to
be named because he was not
authorised to speak publicly,
told Reuters.
Japan’s Chiyoda Corp is building
the refinery in a joint venture
with Taiwan’s CTCI Corp. “We
are at the final moment. There
were no technical problems
from our end,” Chiyoda’s gen-
eral manager in Qatar, Toshiyuki
Ito, told Reuters, but would not
confirm a start-up date.
Qatari state-marketer Tasweeq
withdrew off ers for at least
1.5mn barrels of prompt
November-loading DFC last
week, traders with knowledge
of the matter said, possibly
indicating the splitter is likely to
open imminently.
Initial off ers for November-
loading cargoes had indicated
that the condensate splitter was
more likely to start operations
in November than October.
BUSINESS3Gulf Times
Tuesday, October 4, 2016
BloombergSingapore
Singapore home prices dropped by the most in more than seven years as developers off ered discounts
amid signals from the government that it won’t roll back property curbs initiated in 2009.
An index tracking private residential prices fell 1.5% in the three months ended September 30 from the previous quarter, the biggest decline since June 2009. Prices fell for the 12th straight quarter, the long-est streak of quarterly losses since prices were fi rst published in 1975, according to
preliminary data from the Urban Redevel-opment Authority yesterday. The head of Singapore’s central bank, Ravi Menon, said last month that the city-state doesn’t plan to ease property curbs anytime soon, even as home prices have fallen 11% from a peak in September 2013 and sales have halved. That’s increasing the pressure on develop-ers to off er discounts, payment programmes and other incentives to stoke sales.
“The haemorrhage continues for home prices,” said Nicholas Mak, an executive di-rector at SLP International Property Con-sultants in Singapore. “The prices could be taking into account the delayed discounts off ered in creative marketing by developers, which could be coming in with a lag.”
For example, developer OUE Ltd of-fers four payment plans for its Twin Peaks condominium project off the prime Or-chard Road shopping belt. The most pop-ular of those is the deferred payment pro-gram where the home buyer pays a small amount upfront and the rest over the next two years, according to its website.
The existing stock of unsold homes may take three years to sell, according to Au-gustine Tan, President of the Real Estate Developers’ Association of Singapore. In addition to the oversupply, home vacancy rates are at their highest in more than 11 years, Tan said last month.
The residential curbs have included a cap on debt-repayment costs at 60% of a bor-
rower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.
Apartment prices fell 1.8% in prime dis-tricts in the three months ended Septem-ber 30, reversing a 0.3% gain in the previ-ous quarter, Monday’s data showed. Those in the suburbs slid 1.2%, while areas near prime districts declined 1.3% from the previous quarter.
Still, Singapore remains a high-end housing market in Asia. The city was ranked the most expensive to buy a luxury home after Hong Kong in the region, ac-cording to a 2016 Knight Frank wealth report.
Singapore home prices slide by most in 7 years
An index tracking private residential prices in Singapore fell 1.5% in the three months ended September 30 from the previous quarter, the biggest decline since June 2009.
ReutersTokyo
Japan’s small fi rms, many of which are “mom-and-pop” operations, are dy-ing out as their ageing owners struggle
to fi nd successors, in another sign that the fast-ageing population is taking its toll on the world’s third-largest economy.
Prime Minister Shinzo Abe has targeted more business start-ups as a crucial part of regenerating activity, but the impact has been minimal so far, with the number of small fi rms that are closing their doors at a near record high.
Takayasu Watanabe, 72, has closed a chalk-making business in Nagoya, central Japan, that his family had operated for more than 80 years. He sold technology, equip-ment and trademark rights to a South Ko-rean company last year.
“My physical condition has been deteri-orating. I was unable to fi nd a successor and
business performance was not good,” Wa-tanabe said, adding that none of his three daughters wanted to take over the fi rm.
The Bank of Japan’s tankan business sur-vey showed yesterday that small manufac-turers remained pessimistic in September as the economy continues to fl ounder more than three years after the prime minister pledged to reboot it with refl ationary poli-cies which markets have dubbed “Abenom-ics”. Shutdowns among small fi rms that serve as subcontractors for big fi rms and employ seven out of 10 workers could pose the risk of a prolonged low growth, some analysts say.
The rate of startups among manufac-turers has hovered well below shutdowns – at 3.4% versus 5.5% in 2014. “Ageing of business owners and diffi culty in securing successors are becoming a serious prob-lem for Japanese fi rms,” said Yumi Tanaka of Teikoku Databank, a private corporate credit research fi rm. “From cars to elec-tronics, more and more companies may
start seeking overseas subcontractors, which could accelerate industrial hollowing out and hamper technology transfer.”
The construction industry is facing a se-vere shortage of workers as well as ageing owners. Small hospitals, clinics and sake breweries are also facing acute shortages.
In the last fi scal year that ended in March, about 26,700 fi rms shut down voluntarily as owners could not fi nd successors or faced a dim business outlook, according to Tokyo Shoko Research. The number of voluntary closures has tripled that of bankruptcies, hovering above 25,000 cases since the 2008 global fi nancial crisis, compared with some 16,000 at the start of this decade.
The average age of company owners is at an all-time high of 59.2 years old, versus 54 years in 1990. About two-thirds of them lack successors and the ratio is on the rise.
“It is futile to expand the factory with high interest loans,” said Hitoshi Iwai, 80, who works alone in his factory in Tokyo’s Ota ward, once bustling with small fac-
tories considered the foundations of Ja-pan’s post-war industrial strength. Iwai and some other small factories in the area have survived this long by producing high-quality, specialty products and working to-gether.
“Only those who have a technological edge can survive,” said Toshiaki Funakubo, chairman of machine-tool manufacturer Showa Seisakusho Co Ltd, which his son has taken over.
In his neighbourhood in Tokyo’s manu-facturing hub, a metal mould factory closed down in July and another business owner gave up last year – both having failed to nurture talented people to succeed them.
“These back street workshops may be the smallest part of the supply chain. Still, even one screw they produce may be crucial for products of their clients,” said Masashi Seki of Tokyo Shoko Research. “Two decades of defl ation has sapped owners’ appetite for business, many of whom have not benefi ted from ‘Abenomics’.”
Small Japan fi rms dying out as ageing owners struggle to fi nd successors
Birla sees India raid bringing stock pricesto attractive levels
BloombergMumbai
Pricey stock valuations had
prompted Birla Sun Life Asset
Management Co to double its
cash levels. Now, India’s fourth-
biggest money manager says it
will reduce the hoard as declines
after the nation’s attacks on ter-
rorists camps in Pakistan present
a buying opportunity.
“We will look to deploy into this
correction as we don’t want to
hold cash for long,” Mahesh Patil,
who oversees $22.4bn in assets
as co-chief investment off icer,
said in an interview in Mumbai.
Birla Sun Life over the past few
months boosted its cash to about
8% of assets from 4% it usu-
ally holds as Indian stocks neared
record highs and concerns about
weakness among European banks
buff eted markets. While US stocks
posted a second monthly drop, the
S&P BSE Sensex capped its worst
week since February on concern
tensions between India and Paki-
stan may sour sentiment among
foreign funds who bought the most
shares last quarter since March
2015. “It doesn’t look like the
conflict will escalate but if there’s
a slight correction, even for global
factors, we will look at it as a buy-
ing opportunity,” said Patil.
Both nations moved to curb
tensions after Prime Minister
Narendra Modi’s government said
it killed terrorists just across the
border late Wednesday. There’s
no plan to aggravate the situa-
tion, an Indian Foreign Ministry
off icial told reporters Thursday.
While Pakistan is ready to defend
its territory, the country wants
peace to focus on economic de-
velopment, Prime Minister Nawaz
Sharif said in a statement on
Friday. The Sensex rallied 3.2% for
the quarter and the rupee capped
a third monthly climb. The gauge
climbed 1.4% at the close on Mon-
day, recouping half of last week’s
2.8% retreat.
The gains have come as India’s
world-beating expansion lured in-
vestors, while optimism that slow-
ing inflation will allow new Reserve
Bank of India Governor Urjit Patel
to reduce interest rates from a five-
year low at a review on Tuesday
has also bolstered sentiment. Birla’s
Patil said he is bullish on compa-
nies tied to the local economy
including automakers, media and
cement makers because they gain
from lower borrowing costs. He’s
not alone in seeing equity losses
arising from the military off ensive
as an opportunity.
“It’s a good time to use the
declines to buy stocks linked to
the economy as strikes by India
don’t alter the economic outlook,”
Sunil Subramaniam, chief execu-
tive off icer at Sundaram Asset
Management Co, which oversees
the equivalent of $3.7bn, said by
phone from Mumbai on Thursday.
The attacks don’t “represent
diplomatic, economic change in
the government’s stance,” he said.
Maruti Suzuki India jumped
3.7% to a record yesterday after
the nation’s largest carmaker
posted its biggest monthly sales
growth in more than two years.
Birla Asset held 2.13mn shares, or
0.7% of the company, on August
31, according to data compiled by
Bloomberg.
Takayasu Watanabe holds a box of chalks at his off ice where he used to run chalk-making business for decades before closing down last year. Ageing of business owners and diff iculty in securing successors are becoming a serious problem for Japanese firms, said Yumi Tanaka of Teikoku Databank, a private corporate credit research firm.
Toyota unveils robot baby
ReutersTokyo
Toyota Motor Corp yesterday unveiled a doe-eyed palm-sized
robot, dubbed Kirobo Mini, designed as a synthetic baby
companion in Japan, where plummeting birth rates have left
many women childless.
Toyota’s non-automotive venture aims to tap a demo-
graphic trend that has put Japan at the forefront of ageing
among the world’s industrial nations, resulting in a popula-
tion contraction unprecedented for a country not at war, or
racked by famine or disease.
“He wobbles a bit, and this is meant to emulate a seated
baby, which hasn’t fully developed the skills to balance itself,”
said Fuminori Kataoka, Kirobo Mini’s chief design engineer.
“This vulnerability is meant to invoke an emotional connec-
tion.” Toyota plans to sell Kirobo Mini, which blinks its eyes
and speaks with a baby-like high-pitched voice, for ¥39,800
($392) in Japan next year.
It also comes with a “cradle” that doubles as its baby seat
designed to fit in car cup holders. The Toyota baby automa-
ton joins a growing list of companion robots, such as the
upcoming Jibo, designed by robotics experts at the Massa-
chusetts Institute of Technology that resembles a swivelling
lamp, and Paro, a robot baby seal marketed by Japanese
company Intelligent System Co Ltd as a therapeutic machine
to soothe elderly dementia suff erers.
Around a quarter of Japan’s population is over 65 with a
dearth of care workers putting a strain on social services.
Exacerbated by a reluctance to invite immigrants to bol-
ster its working-age population, Japan’s demographic crunch
shows little sign of easing, with the government looking at
robots to replenish the thinning ranks of humans. In the past
half century births in Japan have halved to around a million a
year, according to government statistics, with one in 10 wom-
en never marrying. Births out of wedlock are frowned upon
in Japan and much less common than in Western developed
nations. Japan is already a leading user of industrial robots.
It has the second-biggest concentration after South Korea
with 314 machines per 100,000 employees, according to the
International Federation of Robots. New technology to help
them better interact with humans means robots have begun
moving beyond factory floors into homes, off ices, shops and
hospitals. Kataoka said Toyota, which is investing heavily to
develop artificial intelligence for self-driving cars, sees Kirobo
Mini as a stepping stone to more advanced robots that will be
able to recognise and react to human emotions.
BUSINESS
Gulf Times Tuesday, October 4, 20164
Hitachi planning to sell majority stake in $1.9bn Kokusai unit
BloombergLondon
Hitachi Ltd is considering a sale of its controlling stake in Hitachi Kokusai Electric Inc that could
ultimately lead to a takeover of the en-tire unit, people familiar with the matter said.
Hitachi Kokusai, which produces equipment for semiconductor makers and wireless-network gear manufactur-ers, has drawn interest from potential bidders, said the people, who asked not to be identifi ed because the discussions are private. The deliberations are at an early stage, and Hitachi may decide against a sale, the people said. Hitachi Kokusai has a market value of about $1.9bn.
Hitachi, Japan’s second-largest man-ufacturer, is reviewing its portfolio amid a slowdown in demand from China as well as oil- and gas-producing coun-tries, hit by low prices for crude. Chief executive offi cer Toshiaki Higashihara said in April that he plans to spin off non-core units while focusing on dig-ital technology to help boost sales in its car parts, train and energy businesses. Hitachi owns just over 50% of Hitachi Kokusai.
Hitachi Kokusai’s sales for the year ended in March fell 2.4% to ¥180.7bn ($1.8bn), according to the company’s annual report. Net income dropped 26% to ¥13bn.
The company said it failed to meet its targets for its video and wireless net-
work segment last year because of “rapid change in the business environment.” The eco- and thin-fi lm processing unit, which serves the semiconductor indus-
try, reported its highest-ever sales, the company said. “We are always consider-ing various measures to strengthen the company,” said Masayuki Takeuchi, a
Tokyo-based representative for Hitachi, declining to comment further. A repre-sentative for Hitachi Kokusai didn’t im-mediately answer calls seeking comment.
World Bank secretly finances Asian ‘coal boom’, group saysAFPWashington
The World Bank is indirectly financing a
boom in some of Asia’s dirtiest coal-fired
power generation despite commitments
to end most funding for the sector, a
development advocacy group charged
yesterday.
The power plants, which contribute
to climate change and deforestation as
well as premature deaths due to illness,
are cropping up from Bangladesh to the
Philippines, all with financing provided
by financial intermediaries supported
by the Bank, said a report produced by
the organisation Inclusive Development
International.
In a policy shift in 2013, the Bank
said it would end virtually all support
for the creation of coal-burning power
plants, supporting them only in “rare
circumstances” where there are no viable
alternatives.
However, since that pledge, 41 coal
projects have received funding from
banks and investment funds supported
by the World Bank’s private-sector arm,
the International Finance Corp, according
to the report.
In response to questions from AFP, Fre-
derick Jones, an IFC spokesman, said the
global lender took the report seriously.
“It raises important long-term ques-
tions about how we need to create
stronger markets for clean energy and
create incentives for countries and the
private sector not to invest in coal, but
rather in renewable energy,” he said.
Jones added that since 2005 the IFC
had already invested more than $15bn in
renewable energy, energy eff iciency and
other areas, and had mobilised $10bn
more. However, Jones conceded that
IFC policy did not prohibit equity clients
from funding coal plants, meaning the
institution might be indirectly exposed to
the industry.
This is despite the fact that IFC loans
to financial services industry players
are not intended to finance coal-related
projects and targeted lending is “ring-
fenced” to prevent this, according to
Jones.
The report’s release coincided with
the start of this week’s high-profile an-
nual meetings of the Bank and the Inter-
national Monetary Fund, as the world’s
finance chiefs gather to discuss eff orts at
poverty reduction.
Campaigners in recent years have
been sharply critical of the IFC’s support
for third parties in the financial services
sector, such as banks and investment
funds, saying they can represent an end-
run around environmental and social
safeguards that apply to projects directly
supported by the IFC.
Financial-sector lending now ac-
counts for 52% of the IFC’s long-term
commitments, according to IDI, which
jointly produced the report with other
advocacy organisations including the
Bank Information Center and Account-
ability Counsel.
Founded in 2011, IDI is an advocacy
organisation focusing on human rights
and ethics in development.
The IFC does not identify the end
recipients of financing received by such
intermediaries.
That can make it diff icult for people
harmed by such projects to demand
compensation or seek redress, the report
said.
However, through an analysis of
records, the report identified 56,127
megawatts of new coal capacity funded
indirectly by the IFC.
These included the planned
1,360-megawatt Rampal power station in
Bangladesh, to be situated on the edge
of the sprawling Sundarbans mangrove
forest, which is home to endangered
species and supports the livelihoods of
two million people.
The report said the World Bank itself
declined to support the project, which
could threaten the Sundarbans with air
and water pollution.
But six local banks, all IFC-financed,
agreed to support the project instead.
The report also cited power con-
struction in the Philippines, where coal
burning is estimated to result in almost
a thousand premature deaths annually
and where more than thirty environmen-
tal activists were killed in 2015 alone.
IFC-financed banks have supported at
least 20 new coal projects since 2013 in
the Philippines.
They include the proposed 540-mega-
watt Lanao Kauswagan power station,
which is expected to begin operations
next year and may threaten marine life in
nearby Panguil Bay and the livelihoods
of fishing communities, Inclusive Devel-
opment International said.
“While the IFC has tried to distance
itself from the projects funded by its
intermediaries, the fact is that these
banks are brazenly disregarding the IFC’s
environmental and social requirements,”
David Pred, IDI’s managing director, said
in a statement.
Hitachi, Japan’s second-largest manufacturer, is reviewing its portfolio amid a slowdown in demand from China as well as oil- and gas-producing countries, hit by low prices for crude.
AFPTaipei
The head of Taiwan’s top fi -nancial regulator resigned yesterday after US au-
thorities fi ned a local bank linked to the so-called Panama Papers scandal.
Ding Kung-wha, chairman of the Financial Supervisory Com-mission (FSC), had been criti-cised over his handling of the controversy involving Mega In-ternational Commercial Bank, which was hit with a $180mn fi ne in the US in August.
American regulators accused the bank of showing “fl agrant disregard” for anti-money laun-dering laws, saying they had identifi ed “suspicious transac-tions” between the bank’s New York and Panama Branches.
The Panama Papers, which were released by media in April, comprised a trove of leaked doc-uments that revealed a murky fi nancial underworld of tax eva-sion by politicians, celebrities, and sports stars using shell com-
panies. Mega Bank had dealings with a Panamanian law fi rm at the centre of the scandal, the US Department of Financial Serv-ices said.
The US order does not specify whether the Taiwanese bank ac-tually engaged in money laun-dering.
Some lawmakers criticised Ding for being slow in handling Mega and another case in which a local entertainment company was accused of insider trading and market manipulation. The fi rm is now under investigation.
“I resigned to maintain my in-nocence and hope that it will end the harm for the FSC,” Ding said in a statement, adding that the FSC had launched a probe into the Mega case at the earliest pos-sible time. Ding was appointed by Premier Lin Chuan in May and is the fi rst cabinet minister to leave offi ce under the new government.
The FSC hit Mega Bank with a Tw$10mn ($316,000) fi ne last month and demanded the bank fi re six people, including its legal representative and former chair-man McKinney Tsai.
Top fi nancial regulator quits over bank scam
Financial Supervisory Commission chairman Ding Kung-Wha (left) and Mega Financial’s chairman Michael Chang attend a parliamentary session at Legislative Yuan in Taipei. Ding had been criticised over his handling of the controversy involving Mega International Commercial Bank, which was hit with a $180mn fine in the US in August.
Amazon bets billions on taking title as India’s top web retailerBloombergBengaluru
When Jeff Bezos donned a bandhgala
jacket two years ago and posed for photo-
graphs in India, he wasn’t just promoting
Amazon.com Inc’s year-old business in the
country. The web retailer’s chief executive
off icer was also putting his reputation
on the line to break into the emerging
e-commerce market.
Now, with 80mn products for sale,
120,000-plus merchants and more than
two dozen warehouses, Bezos’s protégé
Amit Agarwal is aiming to make Amazon
the country’s top online store by sales
ahead of the Diwali shopping season.
Known as the “festival of lights,” the
run-up to the celebration is India’s big-
gest retail event, when consumers buy
everything from clothes and electronics
to jewellery and cars. Indians will spend as
much as $1.7bn online during Diwali this
year, according to RedSeer Consulting.
Flipkart Ltd, India’s top web retailer,
and local rival Snapdeal, are well aware
that they’re facing a critical test this year
amid Amazon’s onslaught. All three are
flooding newspapers, billboards and TV
shows with ads and are off ering discounts
for Diwali, which now makes up a third of
annual e-commerce sales. At stake is the
future of India’s online shopping market,
as well as Amazon’s global expansion
plans, which had faltered after it failed to
conquer China.
“This season could decide who’ll be the
ultimate winner,” said Haresh Chawla, a
Mumbai-based partner at private equity
firm India Value Fund Advisors and an
angel investor. “The loser will get un-
nerved and the victor can build internal
confidence and rally the troops for the
bigger game.”
Reaching consumers in India has never
been easy-just ask Unilever NV or Procter
& Gamble Co, which spent decades mak-
ing inroads into the market. There are
22 off icial languages, and consumption
habits diff er from place to place. On top
of that, there are supply chain ineff icien-
cies, high real estate costs, lack of skilled
workers, along with poor infrastructure
and labyrinthine regulations.
Even so, the prospect of becoming the
main web store in a country of 1.25bn
people who are just learning how to shop
online is tantalising. RedSeer Consultancy
Pvt. estimates that annual online sales will
be $80bn to $100bn by 2020 from the
current estimate of about $13bn.
“Barely 2% of the population shops
online,” said Mrigank Gutgutia, who
covers consumer Internet trends at the
Bangalore-based researcher. “It is still only
the tip of the India e-commerce iceberg.”
Merrill Lynch estimates that Amazon
may sell as much as $81bn in merchandise
by 2025, up from $3.7bn last year. Becom-
ing India’s top web retailer would be a
vindication for Amazon. In China, the only
other market with more than a billion peo-
ple, the company has little to show after a
dozen years, thanks to the dominance of
Alibaba Group Holding Ltd and other local
web retailers. “The biggest opportunity
and the biggest challenges are both in In-
dia,” said Agarwal, chief of Amazon India.
“It’s going to be a great Diwali.”
After graduating from Stanford Uni-
versity, the 42-year-old spent part of his
career at Amazon’s Seattle headquarters
as Bezos’s technical shadow, a coveted po-
sition at the company that grooms future
leaders by giving them a front-row view of
how the business is run.
To expand inventory, Amazon has been
recruiting sellers at breakneck speed.
The web retailer has deployed an army
of white-and-orange Chai Carts with
emissaries who teach sellers how to list
inventory and handle returns over cups
of milky chai tea. Another service, called
Feet-on-Street, sends people on motor-
bikes to help merchants photograph and
market their wares.
Another big task will be moving beyond
India’s eight big urban areas and into
smaller towns and cities. “There could be
a protest on the streets, potholes on the
road, labour challenges, warehouses in
diff erent regions with varied rules, goods
trucks passing through state checkpoints-
and after all this, the package still has to
arrive at the customers’ doorstep over-
night if not within hours,” Agarwal said.
One key goal for Amazon-its tagline for
Diwali is tyohar bade dilwala (the festival
with a big heart) – is to lure dormant
shoppers and first-time buyers. There are
important trends working in Amazon’s fa-
vor. Exploding smartphone use off ers the
promise of bringing online commerce to
hundreds of millions of buyers and sellers.
All of these eff orts in India cost money;
in June, Amazon said it will invest an ad-
ditional $3bn in India on top of an already
allocated $2bn. “An open funding tap
could help Amazon off er discounts and
bleed out some of its rivals,” said Red-
Seer’s Gutgutia. For Flipkart and Snapdeal,
the upcoming Diwali season will deter-
mine their ability to stay in the game. For
smaller e-commerce startups, survival is
at stake. Many, like AskmeBazaar – which
advertised aggressively during Diwali last
year – shut down before they could make
it to this one.
Flipkart, the current market leader with
more than 100mn registered users, is
getting ready. Amazon’s top rival in India
is in advanced discussions with Wal-Mart
Stores Inc to sell a minority stake to the
US retailer for as much as $1bn. The Indian
web retailer is adding 10,000 temp work-
ers to handle last-mile logistics, and is
off ering financing plans to put expensive
purchases within customers’ reach. Flip-
kart’s tagline this year is ab itne me itnaaa
milega: now you’ll get so much for so little.
Delhi-based Snapdeal, whose backers
include Alibaba and Softbank Group Corp,
re-branded itself ahead of the shopping
season, with a red box logo (its pitch:
unbox zindagi, or unbox life).
Consumers like Nivedita Raju, are
already noticing the diff erence. The
Bangalore-based government off icial,
who buys DVDs, herbs and knickknacks
online, said that when she was looking for
a computer title that was out-of-stock on
Amazon, the web retailer had it printed
and dispatched within 10 days. “It’s a very
diff erent level of customer service than
Indians have been used to,” she said.
Merrill Lynch estimates that Amazon may sell as much as $81bn in merchandise by 2025, up from $3.7bn last year. Becoming India’s top web retailer would be a vindication for the web retailer.
BUSINESS5Gulf Times
Tuesday, October 4, 2016
AFPHong Kong
Asian markets rallied yesterday with fi nancials up on easing fears about the future of German giant
Deutsche Bank after a source said it was nearing a deal to slash a multi-billion-dollar US fi ne.
Traders fl ed for cover last week, sending stocks reeling Friday, after US offi cials slapped the lender with a $14bn charge over its role in the subprime mortgage crisis.
The gigantic fi gure fuelled fears the bank could go under and spark an-other global fi nancial downturn, while Bloomberg News said several hedge funds had withdrawn their investments in the fi rm – though the company said it was in a “stable fi nancial position”.
However, on Friday, a person familiar with the matter told AFP that the Ger-man bank is near an agreement to pay a much more manageable $5.4bn to re-solve the case.
“A lot of the market sentiment has improved because obviously people were worried that Deutsche Bank might be going to recreate the Lehman mo-ment,” Andrew Sullivan, managing di-rector for sales trading at Haitong In-ternational Securities Group in Hong Kong, said referring to the US bank whose fall precipitated the fi nancial crisis.
“The fact that actually Deutsche Bank came out and said it’s well capi-talised and that it’s close to securing a deal with US Department of Justice over that fi ne has just given the market more confi dence that we’re not going to have another breakdown in the global bank-ing system,” he told Bloomberg News.
In Japan, the Nikkei ended 0.9% higher, with investors brushing off the closely watched Tankan survey show-ing Japanese business confi dence at its lowest in three years.
Hong Kong gained 1.2%, Sydney closed 0.8% higher and Jakarta put on 1.3%. There were also strong gains in Taipei and Manila.
The advance tracked a rally on US and
European markets. Investors also wel-comed the weekend release of a gauge of Chinese factory activity that indicated continued improvement in the world’s number two economy.
Among the main winners were banks, with Sydney-listed Commonwealth Bank up 1.5%, while HSBC was up 1.6%
in Hong Kong. Mitsubishi UFJ Financial Group added 0.4% in Tokyo.
Shanghai, Seoul and Kuala Lumpur were closed for public holidays.
In currency markets, the pound slid against the dollar after British Prime Minister Theresa May set a timetable to leave the European Union by 2019.
The announcement sets up Britain for years of horsetrading after June’s shock referendum vote to leave the EU.
Sterling fell to $1.2870 – its lowest since June – from $1.2974 in New York late Friday, while it also eased to 1.1446 euros from 1.1543 euros.
“We’re back to the Brexit risks,”
Vishnu Varathan, a senior economist at Mizuho Bank in Singapore, said.
“Sterling has taken a bit of a knock fi rst. If the concerns become wider concerns about fi nancial market conta-gion we will fi nd that the slight soften-ing that we’ve seen in the dollar trend will be shaken off .”
Asian markets recover as Deutsche Bank woes ease
A businessman takes a cellphone picture of Australia’s stock exchange index on an electronic board in Sydney. The bourse closed 0.8% higher yesterday.
BloombergMumbai
Automakers helped Indian stocks climb for a second day after the nation’s largest carmaker re-
ported its biggest sales growth in more than two years.
The benchmark gauges recouped half of last week’s 2.8% tumbled spurred by India’s attacks on militants in Pakistan late Wednesday. Investors looked past the off ensive as both nations have since moved to curb military tensions.
“There’s a sense of relief as the border tension doesn’t seem to have escalated further,” Jagannadham Thunuguntla, head of research at Karvy Stock Brok-
ing Ltd, said by phone from Hyderabad. “Some smart investors are using it as a buying opportunity.”
Indian stocks on Friday capped their worst week since February on concern the attacks may sour sentiment among for-eigners who bought the most shares last quarter since March 2015. Birla Sun Life Asset Management Co said it will look to deploy cash as the declines present a buy-ing opportunity. India’s fourth-largest money manager had doubled its cash lev-els to 8% as local equities neared record highs and concerns about weakness among European banks buff eted markets.
Investors are also awaiting new Re-serve Bank of India governor Urjit Pa-tel’s fi rst monetary policy review today. Economists are divided on the outcome,
with 20 of the 37 surveyed by Bloomb-erg predicting no change in the bench-mark rate and the rest seeing a cut.
The government last month an-nounced three candidates to join an equal number of central bank repre-sentatives on a new monetary policy committee, paving the way for India’s fi rst collective interest-rate decision. Each of the six members will have a vote, with governor Patel holding an additional tie-breaker, though he won’t be able to veto a majority decision.
Buoyancy in Asian equities rubbed off on India, with the MSCI Asia Pacifi c In-dex recouping more than half of the last session’s decline. Relief spread across US and European stock markets on Fri-day as Agence France-Presse reported
Deutsche Bank AG is lining up a less-costly settlement with US regulators than investors had feared. The fi nancial woes of Germany’s biggest lender as it struggles with tougher capital stand-ards and soaring legal bills adds to a list of market risks that includes Brexit and tightening US monetary policy.
Maruti Suzuki India Ltd, the maker of half the cars sold in India, said its sales last month increased 31%, the most since June 2014. The company sold 149,143 vehicles locally, a record. Tata Motors Ltd, owner of Jaguar Land Rover, added 1.1%. Mahindra & Mahi-ndra Ltd rallied to a three-week high. “Disposable incomes are rising and consumers are willing to spend more on cars and other consumer durable
items,” said Arun Kejriwal, a director at Kejriwal Research & Investment. “This also could be due to salary increases paid out to government staff , access to easy fi nance and stable fuel prices.”
Hero MotoCorp Ltd climbed 3.2%, the most since August 5, after its Sep-tember sales rose 11% to a record 674,961 units. Larsen & Toubro Ltd increased 2.6% after winning an order valued Rs60bn ($900mn). Indraprastha Gas Ltd advanced 1.6% and Mahana-gar Gas Ltd gained 1.4% after lowering prices of compressed natural gas.
Meanwhile, the rupee ended margin-ally higher by 2 paise at 66.59 against the US dollar yesterday on mild selling of the American currency by exporters and banks.
Indian stocks climb; rupee up marginally
ConvaTec to raise $1.8bn in Londonpublic issue
ReutersLondon/Bengaluru
Medical products maker Con-
vaTec Ltd plans to raise around
$1.8bn in an initial public off ering
(IPO) of new shares on the
London Stock Exchange, it said
yesterday, in a test of investor
confidence after Britain’s vote to
leave the European Union.
The flotation would be the
biggest in Britain so far this year,
according to Thomson Reuters
Eikon data.
ConvaTec, whose products
include wound dressings and
colostomy bags, said it expected
at least 25% of its shares would
be freely tradeable following the
flotation.
It could have a market value of
about $7.2bn.
The company will use pro-
ceeds from the listing, which is
expected in late October or early
November, to pay down debt.
Global equity deals are down
30% this year, with Britain’s sur-
prise vote on June 23 to leave the
EU adding to an uncertain global
economic outlook..
However, some companies are
pressing ahead with UK listings.
Spain’s Telefonica is looking to
list about 30% of its British mo-
bile unit, O2, sources close to the
matter have told Reuters, while
British fitness club chain Pure
Gym Group, waste-management
firm Biff a and auto parts maker TI
Fluid Systems are all working on
London listings.
ConvaTec chief executive Paul
Moraviec said the company had
been preparing the IPO for the
best part of a year and that it had
not been delayed by the “Brexit”
vote.
“It’s a very resilient business...
(the IPO) is taking place as per
our plans,” he said.
ConvaTec, which was sold by
Bristol-Myers Squibb to private
equity firms for $4.1bn in 2008,
did not say how many shares
it would sell, nor the expected
price range.
Finance chief Nigel Clerkin
said the IPO prospectus would be
released in two or three weeks.
ConvaTec added the off ering
could also allow its owners
Nordic Capital, Avista Capital
Partners and members of the
management team to sell part of
their stakes in the company.
Christopher Gent, former CEO
of mobile phone group Vodafone
and former chairman of drug-
maker GlaxoSmithKline, has been
lined up to be non-executive
chairman of the company.
ConvaTec, which has more
than 9,000 employees and con-
ducts business in more than 100
countries, made $828.9mn of
revenue in the six months ended
June 30, and adjusted core earn-
ings (EBITDA) of $226.2mn.
It said banks had committed
to new debt financing of about
$1.8bn and a $200mn revolving
credit facility.
BofA Merrill Lynch, Goldman
Sachs and UBS Investment Bank
are joint bookrunners and co-
ordinators for the off ering.
Emerging markets rise on robust factory dataReutersLondon
Emerging equities rose 0.8% yes-terday, buoyed by robust factory activity data in Europe and Asia,
and reports that a fi ne imposed on Ger-many’s Deutsche Bank may be smaller than initially feared.
The benchmark emerging equity in-dex rose off 10-day lows hit on Friday, tracking developed market gains after a report said Deutsche Bank and the US Department of Justice were close to agreeing a settlement of $5.4bn, well be-low the initial $14bn demand.
The threat of a fresh European bank-ing crisis had pushed Deutsche Bank shares to record lows last week, dragging on European and emerging market sen-timent.
Robust manufacturing activity data across emerging markets also lifted in-vestor sentiment, with Hungary, Po-land, China, Indonesia and Taiwan per-forming strongly.
“Overall this goes with our view that emerging markets are doing fairly well – the tide has to some extent turned,” said Jakob Christensen, head of emerg-ing markets research at Danske Bank in Copenhagen.
Mainland China was closed for a
week-long holiday but Hong Kong gained 1.2% and Indonesia shares rose 1.7% after export orders touched a four-year high.
Taiwan shares also rose 0.7% after September factory activity hit a two-year high.
The strong Asian performance was echoed across emerging Europe, where Budapest shares rose 0.7% after factory activity touched its highest September fi gure since 1995, although this survey tends to be volatile.
The forint weakened slightly against the euro, however, following a referen-dum on Sunday in which a majority re-jected the EU’s migrant quotas, although low turnout made the poll invalid.
Polish stocks rose 0.5%, with factory activity expanding at the fastest pace in six months, whilst Russian dollar-de-nominated shares rose almost 1.2% after Russian manufacturing was boosted by the sharpest rise in output in nearly two years.
“Clearly the fairly strong macro eco-nomic management, together with higher oil prices, is bringing some re-sults (for Russia) and we are looking for positive growth possibly in Q4 and defi -nitely in 2017,” said Christensen.
The Russian rouble fi rmed 0.8% against the dollar, helped by a rise in oil prices of almost 1% to above $50 a barrel.
The Kazakh tenge also fi rmed 0.3 % before an interest rate review that could cut rates by 50 basis points to 12.5 %.
The central bank has cut rates twice this year by 200 basis points each time.
South African telecoms stock MTN fell one % and its 2024 Eurobond was down 0.9 cents to the lowest since end-June following a downgrade by Standard & Poor’s on Friday to BB+ from BBB-.
The company has denied allegations it illegally repatriated $13.92bn from Ni-geria, its biggest market, where it also faces a fi ne in a dispute over unregistered SIM cards.
Overall South African shares slipped 0.2% but the rand fi rmed 0.7% against the dollar.
Turkish stocks rallied 1.2% but the lira slipped 0.23% after consumer and pro-ducer prices rose less than expected.
Tim Ash, an analyst at Nomura, the data would help the central bank justify its rate-cutting stance and perhaps also lay the way for further easing.
“The (central bank) likely will con-tinue cutting rates and selling this as ‘simplifi cation’ until it unifi es its main policy rates.”
Colombian dollar bonds fell around one cent across the curve after voters rejected a peace deal with Marxist FARC guerrillas, plunging the nation into un-certainty.
Zad Holding CoWidam Food CoVodafone Qatar
United Development CoSalam International Investme
Qatar & Oman Investment CoQatar Navigation
Qatar National Cement CoQatar National Bank
Qatar Islamic InsuranceQatar Industrial Manufactur
Qatar International IslamicQatari Investors Group
Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical
Qatar Fuel QscQatar First Bank
Qatar Electricity & Water CoQatar Cinema & Film Distrib
Qatar Insurance CoOoredoo Qsc
National LeasingMazaya Qatar Real Estate Dev
Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co
Medicare GroupMannai Corporation Qsc
Masraf Al RayanAl Khalij Commercial Bank
Industries QatarIslamic Holding Group
Gulf Warehousing CompanyGulf International Services
Ezdan Holding GroupDoha Insurance Co
Doha Bank QscDlala Holding
Commercial Bank QscBarwa Real Estate Co
Al Khaleej Takaful GroupAamal Co
Al Ahli Bank
78.20
63.90
10.93
19.80
10.98
10.79
88.00
85.50
154.10
54.00
40.50
64.00
49.50
103.90
23.14
45.00
10.42
147.10
10.60
214.60
30.05
87.50
93.80
16.47
13.48
17.11
203.00
88.90
82.10
34.90
17.90
105.00
60.00
54.90
34.50
16.86
20.75
36.80
23.70
38.60
33.20
22.61
14.80
40.05
0.00
-0.78
-0.27
-1.00
-0.18
-0.55
-1.12
-0.70
-1.85
0.00
-2.88
-1.23
-1.98
-1.05
-1.53
0.00
-2.53
-0.88
-1.12
-0.51
0.00
-1.46
-0.95
0.06
-2.25
-0.06
-0.98
-0.56
0.00
-0.85
2.29
0.38
-0.17
-1.08
-1.15
0.36
0.00
-1.74
1.28
-1.03
-0.90
-3.79
-2.18
0.00
-
11,100
2,276,134
150,723
109,221
42,797
129,125
13,012
169,202
-
196
32,682
255,260
34,246
123,532
-
40,548
13,218
467,987
98,784
-
26,088
492,998
68,695
210,086
101,188
13,369
7,066
-
379,037
21,116
61,223
34,832
8,683
63,587
505,673
-
41,372
89,185
83,905
136,109
2,622
19,548
-
QATAR
Company Name Lt Price % Chg Volume
United Wire Factories CompanEtihad Etisalat Co
Dar Al Arkan Real Estate DevSaudi Hollandi Bank
Rabigh Refining And PetrocheBanque Saudi Fransi
Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran
Saudi British BankMohammad Al Mojil Group Co
Red Sea Housing Services CoTakween Advanced Industries
Sabb TakafulSaudi Arabian Fertilizer Co
National GypsumSaudi Ceramic Co
National Gas & IndustrializaSaudi Pharmaceutical Industr
ThimarNational Industrialization C
Saudi Transport And InvestmeSaudi Electricity Co
Saudi Arabia Refineries CoArriyadh Development Company
Al-Baha Development & InvestSaudi Research And MarketingAldrees Petroleum And Transp
Saudi Vitrified Clay Pipe CoJarir Marketing Co
Arab National BankYanbu National Petrochemical
Arabian CementMiddle East Specialized Cabl
Al Khaleej Training And EducAl Sagr Co-Operative Insuran
Trade Union Cooperative InsuArabia Insurance Cooperative
Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C
Bupa Arabia For CooperativeWafa Insurance
Jabal Omar Development CoSaudi Basic Industries Corp
Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat
Co For Cooperative InsuranceNational Petrochemical Co
Gulf Union Cooperative InsurGulf General Cooperative Ins
Basic Chemical IndustriesSaudi Steel Pipe Co
Buruj Cooperative InsuranceMouwasat Medical Services Co
Southern Province Cement CoMaadaniyah
Yamama Cement CoJazan Development Co
Zamil Industrial InvestmentAlujain Corporation (Alco)
Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc
Qassim Cement/TheSaudi Advanced Industries
Kingdom Holding CoSaudi Arabian Amiantit Co
Al Jouf Agriculture DevelopmSaudi Industrial Development
Bishah AgricultureRiyad Bank
The National Agriculture DevHalwani Bros Co
Arabian Pipes CoEastern Province Cement Co
Al Qassim Agricultural CoFiling & Packing Materials M
Saudi Cable CoTihama Advertising & Public
Saudi Investment Bank/TheAstra Industrial Group
Saudi Public Transport CoTaiba Holding Co
Saudi Industrial Export CoSaudi Real Estate Co
Saudia Dairy & Foodstuff CoNational Shipping Co Of/The
Methanol Chemicals CoAce Arabia Cooperative Insur
Mobile Telecommunications CoSaudi Arabian Coop Ins Co
Axa Cooperative InsuranceAlsorayai Group
Weqaya For Takaful InsuranceBank Albilad
Al-Hassan G.I. Shaker CoWataniya Insurance Co
Abdullah Al Othaim MarketsHail Cement
18.40
18.71
4.69
9.63
9.57
19.76
6.11
16.36
18.12
12.55
22.35
11.09
18.65
64.05
9.03
24.29
23.90
28.71
20.68
12.04
37.60
14.81
23.86
18.65
13.50
18.38
28.28
60.23
86.19
14.79
44.01
35.77
5.49
14.04
29.32
8.55
7.59
28.80
28.02
102.05
11.04
47.80
81.20
5.40
2.86
80.20
14.00
8.34
10.32
31.00
12.96
14.30
115.00
59.40
16.43
17.57
7.85
20.84
11.54
8.17
9.59
49.31
7.79
10.20
5.66
27.01
7.23
69.75
9.72
17.54
51.30
12.49
24.80
7.19
26.67
4.25
25.67
9.93
12.32
11.25
34.00
23.15
16.18
123.00
29.92
5.25
24.97
6.73
12.56
10.43
7.51
19.39
14.80
12.60
17.26
72.83
9.89
0.71
0.00
3.76
-0.21
1.38
-0.10
-5.27
4.07
0.67
0.00
0.86
1.93
3.38
0.47
-0.77
-1.38
1.44
-3.01
1.12
-2.27
-1.83
-4.39
2.89
-0.90
0.00
-3.77
-2.45
-3.31
-3.97
-1.40
0.32
-0.78
0.00
1.74
-7.62
-1.16
-3.31
2.09
-7.52
2.18
-1.60
-5.50
0.88
3.65
0.00
-2.21
3.47
2.58
0.58
0.00
4.43
8.58
-0.65
0.88
2.30
-2.55
2.75
-0.10
2.12
1.87
1.16
-3.80
3.73
-0.39
1.98
1.01
2.12
0.00
-0.82
-0.06
8.07
2.21
-0.40
-0.69
-0.67
0.95
0.00
0.10
1.65
6.33
-0.29
-0.22
-0.12
3.73
3.46
3.35
2.59
0.00
-0.24
0.19
0.13
0.00
-0.13
0.40
2.92
4.06
0.82
73,631
-
49,824,080
143,554
901,948
413,909
1,089,513
628,193
256,286
-
56,398
714,819
149,385
142,399
965,805
699,331
46,329
280,083
413,164
2,026,443
1,271,927
3,806,091
289,182
445,038
-
795,720
95,119
51,841
269,616
402,779
316,814
301,811
2,264,226
496,937
2,666,860
719,552
1,331,605
146,919
2,402,522
88,213
2,997,673
570,669
4,192,471
20,166,756
-
110,933
505,625
662,888
854,479
93,206
107,240
1,425,225
50,349
24,468
255,168
489,121
735,421
450,235
1,059,848
1,271,742
883,531
103,139
665,456
1,131,945
332,140
89,252
1,268,439
-
1,131,695
321,487
265,905
953,569
69,710
1,170,071
894,902
1,384,011
-
159,132
260,233
1,152,655
188,460
829,839
379,483
31,516
1,424,397
1,403,470
158,867
-
1,647,713
674,653
326,833
-
480,220
2,817,270
873,064
362,747
392,074
SAUDI ARABIA
Company Name Lt Price % Chg Volume
Saudi Re For Cooperative ReiSolidarity Saudi Takaful Co
Amana Cooperative InsuranceAlabdullatif Industrial Inv
Saudi Printing & Packaging CSanad Cooperative Insurance
Saudi Paper Manufacturing CoAlinma Bank
Almarai CoFalcom Saudi Equity Etf
United International TranspoHsbc Amanah Saudi 20 Etf
Saudi International PetrocheFalcom Petrochemical Etf
Saudi United Cooperative InsBank Al-Jazira
Al Rajhi BankSamba Financial Group
United Electronics CoAllied Cooperative Insurance
Malath Cooperative & ReinsurAlinma Tokio Marine
Arabian Shield CooperativeSavola
Wafrah For Industry And DeveFitaihi Holding Group
Tourism Enterprise Co/ ShamsSahara Petrochemical Co
Herfy Food Services Co
4.46
5.74
5.64
12.15
10.23
15.23
7.20
11.04
52.32
21.50
26.26
24.80
12.89
22.20
13.22
9.82
49.98
16.65
16.37
12.05
7.56
15.95
18.34
30.48
16.90
9.71
22.16
9.23
64.95
-0.67
-2.71
-4.57
0.91
-3.03
0.00
-0.83
1.38
-0.91
-4.02
0.42
0.00
2.06
0.00
-4.89
1.55
-1.61
1.34
0.74
2.55
-6.67
-0.93
2.23
1.30
0.06
0.00
-0.14
2.78
2.69
3,118,448
2,669,807
2,010,587
295,531
2,642,500
-
1,972,302
56,321,475
447,815
84,414
152,674
67
127,905
-
1,026,977
2,029,177
3,484,742
546,840
205,635
664,611
2,835,630
678,326
224,431
376,745
429,243
240,343
356,173
1,823,767
58,490
SAUDI ARABIA
Company Name Lt Price % Chg Volume
Securities Group CoSultan Center Food Products
Kuwait Foundry Co SakKuwait Financial Centre Sak
Ajial Real Estate EntmtGulf Glass Manuf Co -Kscc
Kuwait Finance & InvestmentNational Industries Co Ksc
Kuwait Real Estate Holding CSecurities House/The
Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait
Ahli United Bank (Almutahed)National Bank Of Kuwait
Commercial Bank Of KuwaitKuwait International Bank
Gulf BankAl-Massaleh Real Estate Co
Al Arabiya Real Estate CoKuwait Remal Real Estate Co
Alkout Industrial Projects CA’ayan Real Estate Co Sak
Investors Holding Group Co.KAl-Mazaya Holding Co
Al-Madar Finance & Invt CoGulf Petroleum Investment
Mabanee Co SakcCity Group
Inovest Co BscKuwait Gypsum Manufacturing
Al-Deera Holding CoAlshamel International Hold
Mena Real Estate CoNational Slaughter House
Amar Finance & Leasing CoUnited Projects For Aviation
National Consumer Holding CoAmwal International Investme
Jeeran HoldingsEquipment Holding Co K.S.C.C
Nafais HoldingSafwan Trading & Contracting
Arkan Al Kuwait Real EstateGfh Financial Group Bsc
Energy House Holding Co KscpKuwait Slaughter House Co
Kuwait Co For Process PlantAl Maidan Dental Clinic Co K
National Ranges CompanyAl-Themar Real International
Al-Ahleia Insurance Co SakpWethaq Takaful Insurance Co
Salbookh Trading Co KscpAqar Real Estate Investments
Hayat CommunicationsKuwait Packing Materials Mfg
Soor Fuel Marketing Co KscAlargan International RealBurgan Co For Well Drilling
Kuwait Resorts Co KsccOula Fuel Marketing Co
Palms Agro Production CoIkarus Petroleum Industries
Mubarrad Transport CoAl Mowasat Health Care Co
Shuaiba Industrial CoHits Telecom Holding
First Takaful Insurance CoKuwaiti Syrian Holding Co
National Cleaning CompanyEyas For High & Technical EdUnited Real Estate Company
AgilityKuwait & Middle East Fin Inv
Fujairah Cement IndustriesLivestock Transport & Tradng
International Resorts CoNational Industries Grp Hold
Marine Services Co KscWarba Insurance Co
Kuwait United Poultry CoFirst Dubai Real Estate Deve
Al Arabi Group Holding CoKuwait Hotels Sak
Mobile Telecommunications CoAl Safat Real Estate Co
Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co
Kuwait Cement Co KscSharjah Cement & Indus Devel
Kuwait Portland Cement CoEducational Holding Group
Bahrain Kuwait InsuranceAsiya Capital Investments Co
Kuwait Investment CoBurgan Bank
Kuwait Projects Co HoldingsAl Madina For Finance And In
Kuwait Insurance CoAl Masaken Intl Real Estate
Intl Financial AdvisorsFirst Investment Co Kscc
Al Mal Investment CompanyBayan Investment Co Kscc
Egypt Kuwait Holding Co SaeCoast Investment Development
Privatization Holding CompanKuwait Medical Services Co
Injazzat Real State CompanyKuwait Cable Vision Sak
Sanam Real Estate Co KsccIthmaar Bank Bsc
Aviation Lease And Finance CArzan Financial Group For Fi
Ajwan Gulf Real Estate CoKuwait Business Town Real Es
Future Kid Entertainment AndSpecialities Group Holding C
Abyaar Real Eastate DevelopmDar Al Thuraya Real Estate C
Al-Dar National Real EstateKgl Logistics Company Kscc
Combined Group ContractingZima Holding Co Ksc
Qurain Holding Co
85.00
54.00
170.00
87.00
142.00
325.00
36.50
194.00
20.00
44.00
485.00
320.00
385.00
580.00
405.00
186.00
230.00
40.50
30.00
50.00
600.00
60.00
21.00
110.00
0.00
38.50
790.00
0.00
60.00
0.00
35.00
0.00
19.50
0.00
59.00
700.00
0.00
20.00
0.00
47.50
180.00
385.00
75.00
90.00
44.50
138.00
170.00
0.00
29.00
90.00
455.00
29.50
61.00
0.00
42.50
0.00
112.00
168.00
90.00
77.00
110.00
96.00
31.00
53.00
0.00
260.00
36.50
42.50
29.50
39.00
0.00
96.00
470.00
24.00
79.00
236.00
25.00
110.00
0.00
106.00
176.00
58.00
54.00
0.00
335.00
0.00
540.00
28.00
370.00
80.00
950.00
192.00
0.00
29.50
82.00
325.00
540.00
41.50
240.00
48.00
29.50
47.00
21.50
31.50
126.00
41.50
0.00
0.00
69.00
30.00
30.50
35.00
210.00
30.00
36.50
38.00
0.00
95.00
20.50
0.00
0.00
76.00
650.00
39.00
0.00
0.00
-1.82
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-3.00
0.00
-1.28
-1.69
-1.22
-1.06
0.00
0.00
-3.23
2.04
0.00
0.00
0.00
0.00
0.00
1.32
0.00
0.00
0.00
0.00
-2.78
0.00
0.00
0.00
0.00
0.00
0.00
-4.76
0.00
-5.00
0.00
-1.28
0.00
-2.17
0.00
-6.76
1.19
0.00
0.00
0.00
-2.15
0.00
3.39
0.00
3.66
0.00
0.00
0.00
0.00
-1.28
-3.51
0.00
-6.06
0.00
0.00
0.00
-2.67
0.00
-1.67
2.63
0.00
-2.04
-1.05
0.00
-1.25
-2.48
-5.66
-3.51
0.00
-1.85
0.00
0.00
-1.82
0.00
0.00
0.00
-1.82
-3.45
0.00
0.00
-1.04
0.00
0.00
-3.28
-1.20
0.00
-1.82
-5.68
0.00
-5.88
-1.67
-3.09
-4.44
-3.08
0.00
-2.35
0.00
0.00
0.00
0.00
0.00
-5.41
-0.94
-1.64
-5.19
0.00
0.00
0.00
-4.65
0.00
0.00
-1.30
0.00
-1.27
0.00
5,000
364,510
135,296
63,000
77,729
5,540
1,000
4,094
75,000
45,047
291,469
326,000
200
3,932,072
110,000
489,905
73,814
12,266
263,000
4,918,869
2,000
60,919
1,525,453
555,000
-
775,027
324,676
-
684,930
-
600,827
-
7,000
-
50,000
5,000
-
104,595
-
1,761,811
200,000
10,000
9,998
1,784,668
92,500
12,400
50
-
555,152
156,706
3,475
18,387
54,998
-
10,000
-
41,917
1,000
65,000
219,900
76,770
5,250
17,560
26,200
-
1
526,898
3,300
256,310
283,070
-
76,450
236,602
142,000
704,796
5,573
175,300
2,645,864
-
6,043
39,810
162,800
140,500
-
3,493,577
-
3,650
3,765,822
100
20,000
31,320
5,000
-
14,004
14,720
301,108
990,278
390,000
31,500
11,500
597,500
271,700
1,682,499
633,806
300,000
1,820,516
-
-
10,000
18,000
100,001
2,299,099
120,525
260,262
83,588
29,000
-
5,005
4,028,910
-
-
35,200
503
472,000
-
KUWAIT
Company Name Lt Price % Chg Volume
Voltamp Energy SaogUnited Power/Energy Co- Pref
United Power Co SaogUnited Finance Co
Ubar Hotels & ResortsTakaful Oman
Taageer FinanceSweets Of OmanSohar Power Co
Sohar PoultrySmn Power Holding Saog
Shell Oman Marketing - PrefShell Oman Marketing
Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat
Salalah Port ServicesSalalah Mills Co
Salalah Beach Resort SaogSahara Hospitality
Renaissance Services SaogRaysut Cement Co
Port Service CorporationPhoenix Power Co Saoc
Packaging Co LtdOoredoo
OminvestOman United Insurance Co
Oman Textile Holding Co SaogOman Telecommunications Co
Oman Refreshment CoOman Packaging
Oman Orix Leasing Co.Oman Oil Marketing Company
Oman National Engineering AnOman Investment & Finance
Oman Intl MarketingOman Hotels & Tourism CoOman Foods International
Oman Flour MillsOman Fisheries CoOman Fiber Optics
Oman Europe Foods IndustriesOman Education & Training In
Oman ChromiteOman Chlorine
Oman Ceramic ComOman Cement Co
Oman Cables IndustryOman Agricultural Dev
Oman & Emirates Inv(Om)50%Natl Aluminium Products
National SecuritiesNational Real Estate Develop
National PharmaceuticalNational Mineral Water
National Hospitality InstituNational Gas Co
National Finance CoNational Detergent Co Saog
National Biscuit IndustriesNational Bank Of Oman Saog
Muscat Thread Mills CoMuscat National Holding
Muscat Gases Company SaogMuscat Finance
Majan Glass CompanyMajan College
Hsbc Bank OmanHotels Management Co Interna
Gulf StoneGulf Plastic Industries Co
Gulf Mushroom CompanyGulf Investments Services
Gulf Invest. Serv. Pref-SharGulf International Chemicals
Gulf Hotels (Oman) Co LtdGlobal Fin Investment
Galfar Engineering&ContractGalfar Engineering -Prefer
Financial Services Co.Financial Corp/The
Dhofar UniversityDhofar Tourism
Dhofar PoultryDhofar Intl Development
Dhofar InsuranceDhofar Fisheries & Food Indu
Dhofar Cattlefeed
0.45
1.00
3.40
0.16
0.13
0.13
0.11
1.34
0.26
0.21
0.71
1.05
1.90
4.50
0.24
0.65
1.48
1.38
2.50
0.23
1.50
0.24
0.14
2.01
0.69
0.53
0.28
0.32
1.55
2.15
0.30
0.12
1.88
0.16
0.19
0.52
0.40
0.00
0.64
0.06
4.57
1.00
0.18
3.64
0.50
0.40
0.45
1.72
0.00
0.14
0.21
0.17
5.00
0.11
0.06
0.00
0.63
0.13
0.70
3.75
0.23
0.11
1.79
0.62
0.12
0.19
0.52
0.10
1.25
0.11
0.00
0.34
0.12
0.11
0.27
10.50
0.17
0.10
0.39
0.17
0.11
1.49
0.49
0.18
0.39
0.21
1.28
0.22
-0.88
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.64
0.00
0.00
0.00
0.00
0.00
-0.66
0.00
-2.05
0.00
-1.71
-1.85
-1.74
0.00
-0.32
0.00
0.00
0.00
-0.27
0.00
-1.52
0.00
0.00
0.00
0.00
-3.13
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.94
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.75
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
159,978
-
-
-
-
-
-
-
9,510
-
-
-
5,030
-
250,000
-
125,000
-
-
28,900
11,237
80,267
600,682
-
430,910
385,440
203,000
-
129,259
-
-
-
10,000
-
236,900
-
-
-
13,465
287,200
-
-
-
-
-
-
-
-
-
-
3,000
-
-
-
-
-
14,327
-
-
-
1,286,635
-
300
-
-
-
-
274,029
-
-
-
-
-
-
72,600
-
-
193,790
-
-
-
-
-
-
-
-
-
-
OMAN
Company Name Lt Price % Chg Volume
Dhofar Beverages CoConstruction Materials Ind
Computer Stationery IndsBankmuscat Saog
Bank SoharBank Nizwa
Bank Dhofar SaogAreej Vegetable Oils
Aloula CoAl-Omaniya Financial Service
Al-Hassan Engineering CoAl-Fajar Al-Alamia Co
Al-Anwar Ceramic Tiles CoAl Suwadi Power
Al Shurooq Inv SerAl Sharqiya Invest Holding
Al Maha Petroleum Products MAl Maha Ceramics Co SaocAl Madina Takaful Co Saoc
Al Madina Investment CoAl Kamil Power Co
Al Jazerah Services -PfdAl Jazeera Steel Products Co
Al Jazeera ServicesAl Izz Islamic Bank
Al Buraimi HotelAl Batinah PowerAl Batinah Hotels
Al Batinah Dev & InvAl Anwar Holdings Saog
Ahli BankAcwa Power Barka Saog
Abrasives Manufacturing Co SA’saff a Foods Saog
0Man Oil Marketing Co-Pref
0.26
0.03
0.26
0.41
0.17
0.08
0.22
4.05
0.53
0.30
0.07
0.75
0.20
0.20
1.04
0.12
1.44
0.49
0.07
0.06
0.31
0.55
0.24
0.20
0.06
0.88
0.20
1.13
0.09
0.19
0.19
0.71
0.05
0.86
0.25
0.00
0.00
0.00
0.50
-2.34
1.30
-2.65
0.00
0.00
0.00
-4.17
0.00
0.00
-0.50
0.00
-1.59
0.00
0.00
0.00
-1.67
0.00
0.00
0.00
0.00
0.00
0.00
-0.50
0.00
-2.22
-0.53
0.00
0.00
0.00
0.00
0.00
-
-
-
1,082,174
650,000
1,298,284
562,670
-
-
-
21,700
-
-
100,010
-
244,690
-
176,524
46,700
23,840
-
-
-
-
77,400
-
100,000
-
56,450
326,309
-
-
-
-
-
OMAN
Company Name Lt Price % Chg Volume
Waha Capital PjscUnited Insurance Company
United Arab Bank PjscUnion National Bank/Abu Dhab
Union Insurance CoUnion Cement Co
Umm Al Qaiwain Cement IndustSharjah Islamic Bank
Sharjah Insurance CompanySharjah Group
Sharjah Cement & Indus DevelRas Al-Khaimah National Insu
Ras Al Khaimah White CementRas Al Khaimah Ceramics
Ras Al Khaimah Cement Co PscRas Al Khaima Poultry
Rak PropertiesOoredoo Qsc
Oman & Emirates Inv(Emir)50%Nbad Oneshare Msci Uae Ucits
National Takaful CompanyNational Marine Dredging Co
National Investor Co/TheNational Corp Tourism & Hote
National Bank Of Umm Al QaiwNational Bank Of Ras Al-Khai
National Bank Of FujairahNational Bank Of Abu Dhabi
Methaq Takaful InsuranceManazel Real Estate Pjsc
Invest BankIntl Fish Farming Co Pjsc
Insurance HouseGulf Pharmaceutical Ind Psc
Gulf Medical ProjectsGulf Cement Co
Fujairah Cement IndustriesFujairah Building Industries
Foodco Holding PjscFirst Gulf BankFinance House
Eshraq Properties Co PjscEmirates Telecom Group Co
Emirates Insurance Co. (Psc)Emirates Driving Company
Dana GasCommercial Bank Internationa
Bank Of SharjahAxa Green Crescent Insurance
Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc
Al Wathba National InsuranceAl Khazna Insurance Co
Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.
Al Buhaira National InsurancAl Ain Ahlia Ins. Co.
Agthia Group PjscAbu Dhabi Ship Building Co
Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C
Abu Dhabi National InsuranceAbu Dhabi National Hotels
Abu Dhabi National Energy CoAbu Dhabi Islamic Bank
1.89
2.00
2.25
4.00
1.43
1.16
0.90
1.51
3.85
1.50
0.93
4.10
1.10
2.72
0.79
2.52
0.58
92.00
1.18
6.26
0.98
4.24
0.60
3.29
3.80
5.20
4.78
9.03
0.85
0.50
2.21
1.85
0.81
2.12
2.70
0.91
0.85
1.56
4.60
11.50
1.72
0.82
19.80
6.00
7.20
0.54
1.99
1.40
0.87
0.77
1.62
2.56
4.40
0.36
300.00
5.00
2.33
60.00
6.01
2.45
0.54
3.99
2.10
3.10
0.58
3.65
-2.07
0.00
0.00
0.00
0.00
0.87
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-6.21
-1.25
0.00
-3.33
0.00
0.00
0.00
0.00
-7.83
0.00
-9.86
0.00
-5.28
0.00
-1.63
-3.41
0.00
0.45
6.32
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-2.54
-4.44
-1.20
-1.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-4.12
0.00
-7.69
0.00
0.00
0.00
0.00
-4.60
-3.16
0.00
0.00
-4.55
0.00
7.41
0.00
820,716
-
-
16,180
-
37,024
-
115,000
-
-
-
-
-
490,521
47,949
-
708,154
-
-
-
-
8,602
-
8,555
-
213,763
-
421,395
1,511,543
5,422,132
179,100
1,157,613
-
3,300
-
25,000
-
-
-
2,240,391
11,000
61,992,673
1,528,801
183,331
-
4,218,522
-
-
-
20,000
-
15,789,621
-
17,522
-
-
-
-
1,460,892
8,000
35,000
-
7,000
140,069
14,524,336
244,180
UAE
Company Name Lt Price % Chg Volume
Zain Bahrain BsccUnited Paper Industries Bsc
United Gulf Investment CorpUnited Gulf BankTrafco Group Bsc
Takaful International CoTaib Bank -$Us
Seef PropertiesSecurities & Investment Co
National Hotels CoNational Bank Of Bahrain Bsc
Nass Corp BscKhaleeji Commercial Bank
Ithmaar Bank BscInvestcorp Bank -$Us
Inovest Co BscGulf Monetary Group
Gulf Hotel Group B.S.CGfh Financial Group Bsc
Esterad Investment Co B.S.C.Delmon Poultry Co
Bmmi BscBmb Investment Bank
Bbk BscBankmuscat Saog
Banader Hotels CoBahrain Tourism CoBahrain Telecom Co
Bahrain Ship Repair & EnginBahrain National Holding
Bahrain Kuwait InsuranceBahrain Islamic Bank
Bahrain Flour Mills CoBahrain Family Leisure Co
Bahrain Duty Free ComplexBahrain Commercial Facilitie
Bahrain Cinema CoBahrain Car Park Co
Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us
Aluminium Bahrain BscAlbaraka Banking Group
Al-Salam BankAl-Ahlia Insurance Co
Ahli United Bank B.S.C
0.00
0.00
0.00
0.38
0.00
0.00
0.00
0.20
0.00
0.00
0.70
0.10
0.06
0.12
7.60
0.00
0.00
0.64
0.31
0.00
0.00
0.84
0.00
0.34
0.00
0.00
`
0.29
0.00
0.41
0.00
0.09
0.00
0.00
0.77
0.67
1.24
0.00
0.28
0.34
0.29
0.48
0.09
0.27
0.64
0.00
0.00
0.00
-2.06
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1.17
0.00
0.00
0.00
-3.33
0.00
0.00
0.00
0.00
0.00
0.00
0.66
0.00
0.00
0.00
3.70
0.00
-1.35
0.00
0.00
0.00
0.00
-
-
-
20,000
-
-
-
10,000
-
-
55,000
20,000
32,883
1,400,000
10,700
-
-
10,455
28,000
-
-
15,000
-
30,000
-
-
-
204,634
-
10,000
-
47,000
-
-
10,000
100,000
8,844
-
144,890
100,000
37,000
41,561
500,000
58,763
422,207
BAHRAIN
Company Name Lt Price % Chg Volume
Boubyan Intl Industries HoldGulf Investment House Ksc
Boubyan Bank K.S.CAhli United Bank B.S.C
Osos Holding Group CoAl-Eid Food Ksc
Qurain Petrochemical IndustrAdvanced Technology Co
Ekttitab Holding Co SakKout Food Group Ksc
Real Estate Trade Centers CoAcico Industries Co Kscc
Kipco Asset Management CoNational Petroleum ServicesAlimtiaz Investment Co Kscc
Ras Al Khaimah White CementKuwait Reinsurance Co Ksc
Kuwait & Gulf Link TransportHuman Soft Holding Co Ksc
Automated Systems Co KsccMetal & Recycling Co
Gulf Franchising Holding CoAl-Enma’a Real Estate Co
National Mobile TelecommuniAl Bareeq Holding Co Kscc
Housing Finance Co SakAl Salam Group Holding Co
United Foodstuff IndustriesAl Aman Investment Company
Mashaer Holdings Co KscManazel Holding
Mushrif Trading & ContractinTijara And Real Estate Inves
Kuwait Building MaterialsJazeera Airways Co Ksc
Commercial Real Estate CoFuture Communications Co
National International CoTaameer Real Estate Invest C
Gulf Cement CoHeavy Engineering And Ship B
Refrigeration Industries & SNational Real Estate Co
Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co
Independent Petroleum GroupKuwait Real Estate Co Ksc
Salhia Real Estate Co KscGulf Cable & Electrical IndAl Nawadi Holding Co Ksc
Kuwait Finance HouseGulf North Africa Holding Co
Hilal Cement CoOsoul Investment Kscc
Gulf Insurance Group KscKuwait Food Co (Americana)
Umm Al Qaiwain Cement IndustAayan Leasing & Investment
Alrai Media Group Co KscNational Investments CoCommercial Facilities Co
Taiba Kuwaiti Holding Co KscAfaq Educational Services Co
Strategia Investment Co KscYiaco Medical Co. K.S.C.C
26.50
25.00
385.00
190.00
106.00
0.00
196.00
0.00
36.50
0.00
31.00
285.00
0.00
770.00
70.00
90.00
190.00
45.00
1,560.00
0.00
0.00
30.00
40.50
1,100.00
0.00
36.00
44.50
0.00
46.00
0.00
27.00
56.00
39.50
0.00
830.00
75.00
97.00
54.00
20.00
75.00
152.00
300.00
75.00
32.00
950.00
85.00
345.00
50.00
365.00
375.00
0.00
465.00
34.00
0.00
44.50
700.00
2,500.00
0.00
29.50
146.00
108.00
168.00
0.00
0.00
0.00
218.00
-1.85
0.00
0.00
-1.04
0.00
0.00
-1.01
0.00
-6.41
0.00
-7.46
0.00
0.00
0.00
-1.41
-1.10
0.00
0.00
0.00
0.00
0.00
0.00
-1.22
-1.79
0.00
0.00
-5.32
0.00
-2.13
0.00
0.00
-1.75
0.00
0.00
0.00
-1.32
0.00
-3.57
-2.44
-1.32
0.00
0.00
-1.32
-4.48
0.00
0.00
0.00
0.00
0.00
-1.32
0.00
-1.06
0.00
0.00
-1.11
2.94
-0.79
0.00
-3.28
1.39
-1.82
-2.33
0.00
0.00
0.00
0.00
220,000
102,234
81,990
671,063
8,000
-
524,103
-
318,376
-
5,000
25,000
-
961
300,000
15,199
5,000
489,652
500
-
-
40,500
429,812
796
-
1,837,208
2,401,697
-
1,700
-
287,200
332,664
223,788
-
10,256
108,123
35,892
185,000
375,105
142,191
3,176
2,118
361,718
68,834
890
393,351
3,438
1,055,224
38,500
69,746
-
3,191,164
118,709
-
8,800
30,250
349,872
-
1,075,540
500
546,270
40,069
-
-
-
43,556
KUWAIT
Company Name Lt Price % Chg Volume
LATEST MARKET CLOSING FIGURES
Gulf Times Tuesday, October 4, 2016
BUSINESS6
CURRENCIESDOLLAR QATAR RIYAL SAUDI RIYAL UAE DIRHAMS BAHRAINI
DINARKUWAITI
DINAR
Stocks climb as British pound slips to 3-yr low against euroAFPLondon
The British pound slumped to a three-year low against the euro and fell against the dollar yes-
terday after Prime Minister Theresa May said Brexit negotiations would begin by March.
Better-than-expected British man-ufacturing data, ironically thanks to recent strong falls for the pound, how-ever helped London’s benchmark FTSE 100 stocks index to close 1.2% higher at 6,983.52 points.
Sterling dropped to 87.46 pence against the euro, the lowest level since August 2013, after May gave more de-tails over the weekend about how Brit-ain would exit the European Union.
“While the latest dip in sterling has partly refl ected concerns over the prospect of a ‘hard Brexit’, the cur-rency’s depreciation should continue to cushion the economic impact of the vote to leave the EU,” Capital Econom-ics’ Jonathan Loynes said in an inves-tors’ note.
The pound also slid to a three-month low of $1.2846 — before re-covering against both the dollar and euro.
The pound has faced severe pres-sure on currency markets since Britain voted in June to leave the EU — handing a boost to the country’s exporters.
In a key indicator of the strength of the manufacturing sector, the Markit/CIPS UK manufacturing PMI (pur-chasing managers’ index) rose to its highest level since mid-2014, accord-ing to fi gures yesterday.
“It is apparent that sterling’s marked weakening is giving an important lift to foreign demand for UK manufactured goods,” said Howard Archer, chief Eu-ropean economist at IHS Global In-sight.
The pound struck a 31-year low against the dollar in the immediate wake of the Brexit vote, at $1.2798.
Before now, May had only said that Britain would not trigger Article 50 of the EU’s Lisbon Treaty — which sets a maximum two-year clock ticking until a country’s departure from the
28-member bloc — before the end of this year.
In the eurozone, the Paris CAC 40 closed 0.1% higher at 4,453.56 points, while Frankfurt was shut owing to a public holiday in Germany. The Euro Stoxx 50 closed down 0.1% at 2,998.56 points.
Dutch bank ING became the latest lender yesterday to announce plans to shed some 7,000 jobs, mainly in Bel-gium and The Netherlands, sending its shares 1.0% lower on the Amsterdam stock exchange.
In other currency news, the Colom-bian peso fell to its lowest level since September 16 after voters rejected a peace deal between the government and communist Farc rebels.
Wall Street dropped ahead of a US jobs report and the annual meeting of the International Monetary Fund later this week.
Asian stock markets closed higher with fi nancials up on easing fears about the future of German giant Deutsche Bank after a source said it was nearing a deal to slash a multi-billion-dollar US fi ne.
Sterling dropped to 87.46 pence against the euro, the lowest level since August 2013, after Prime Minister Theresa May gave details about how Britain would exit the EU.
Apple IncMicrosoft Corp
Exxon Mobil CorpJohnson & JohnsonGeneral Electric Co
Jpmorgan Chase & CoProcter & Gamble Co/The
Wal-Mart Stores IncVerizon Communications Inc
Pfizer IncVisa Inc-Class A Shares
Chevron CorpCoca-Cola Co/The
Intel CorpMerck & Co. Inc.
Cisco Systems IncHome Depot Inc
Intl Business Machines CorpWalt Disney Co/The
Unitedhealth Group Inc3M Co
Mcdonald’s CorpNike Inc -Cl B
United Technologies CorpBoeing Co/The
Goldman Sachs Group IncAmerican Express Co
Du Pont (E.I.) De NemoursCaterpillar Inc
Travelers Cos Inc/The
112.76
57.32
86.60
117.96
29.60
66.70
88.61
71.85
51.72
33.57
82.81
101.98
41.96
37.68
62.40
31.39
128.11
157.49
92.22
138.12
174.53
114.67
52.67
102.05
131.71
160.82
63.73
68.11
88.73
112.95
-0.26
-0.49
-0.78
-0.14
-0.06
0.17
-1.28
-0.37
-0.50
-0.90
0.13
-0.91
-0.85
-0.19
-0.02
-1.06
-0.44
-0.86
-0.69
-1.34
-0.96
-0.60
0.04
0.44
-0.02
-0.28
-0.48
1.70
-0.05
-1.40
8,006,972
7,580,972
2,606,274
1,689,097
7,397,587
4,021,584
17,184,992
1,788,391
3,665,600
7,613,634
2,504,315
1,583,553
4,702,535
5,337,201
2,831,754
4,864,032
1,086,573
782,033
1,851,024
942,489
651,024
1,249,539
3,120,350
1,303,224
897,003
816,191
913,442
977,331
1,996,047
478,784
DJIA
Company Name Lt Price % Chg Volume
Wpp PlcWorldpay Group Plc
Wolseley PlcWm Morrison Supermarkets
Whitbread PlcVodafone Group Plc
United Utilities Group PlcUnilever Plc
Tui Ag-DiTravis Perkins Plc
Tesco PlcTaylor Wimpey Plc
Standard Life PlcStandard Chartered Plc
St James’s Place PlcSse Plc
Smith & Nephew PlcSky Plc
Shire PlcSevern Trent Plc
Schroders PlcSainsbury (J) Plc
Sage Group Plc/TheSabmiller Plc
Rsa Insurance Group PlcRoyal Mail Plc
Royal Dutch Shell Plc-B ShsRoyal Dutch Shell Plc-A Shs
Royal Bank Of Scotland GroupRolls-Royce Holdings Plc
Rio Tinto PlcRexam Plc
Relx PlcReckitt Benckiser Group Plc
Randgold Resources LtdPrudential Plc
Provident Financial PlcPersimmon Plc
Pearson PlcPaddy Power Betfair Plc
Old Mutual PlcNext Plc
National Grid PlcMondi Plc
Merlin EntertainmentMediclinic International Plc
Marks & Spencer Group PlcLondon Stock Exchange Group
Lloyds Banking Group PlcLegal & General Group PlcLand Securities Group Plc
Kingfisher PlcJohnson Matthey Plc
Itv PlcIntu Properties Plc
Intl Consolidated Airline-DiIntertek Group Plc
Intercontinental Hotels GrouInmarsat Plc
Informa PlcImperial Brands Plc
Hsbc Holdings PlcHargreaves Lansdown Plc
Hammerson PlcGlencore Plc
Glaxosmithkline PlcGkn Plc
Fresnillo PlcExperian Plc
Easyjet PlcDixons Carphone Plc
Direct Line Insurance GroupDiageo Plc
Dcc PlcCrh Plc
Compass Group PlcCoca-Cola Hbc Ag-Di
Centrica PlcCarnival Plc
Capita PlcBurberry Group Plc
Bunzl PlcBt Group Plc
British Land Co PlcBritish American Tobacco Plc
Bp PlcBhp Billiton Plc
Berkeley Group Holdings/TheBarratt Developments Plc
Barclays PlcBae Systems Plc
Babcock Intl Group PlcAviva Plc
Astrazeneca PlcAssociated British Foods Plc
Ashtead Group PlcArm Holdings Plc
Antofagasta PlcAnglo American Plc
Admiral Group Plc3I Group Plc
#N/A
1,832.00
300.50
4,419.00
219.70
3,953.00
224.90
1,000.00
3,708.00
1,109.00
1,592.00
185.30
155.60
347.30
634.20
969.50
1,573.00
1,269.00
914.00
5,063.00
2,499.00
2,770.00
245.00
752.00
4,495.00
552.00
491.50
2,044.00
1,952.50
179.30
737.50
2,606.50
0.00
1,485.00
7,290.00
7,790.00
1,395.00
3,112.00
1,821.00
763.00
8,835.00
203.70
4,743.00
1,102.00
1,649.00
445.60
924.00
326.00
2,880.00
54.71
216.60
1,058.00
378.60
3,372.00
183.80
296.20
396.90
3,542.00
3,279.00
709.00
722.00
4,042.50
587.60
1,296.00
593.00
214.95
1,665.00
323.90
1,827.00
1,569.00
1,006.00
370.90
369.00
2,245.00
7,075.00
2,581.00
1,523.00
1,809.00
230.60
3,829.00
668.00
1,397.00
2,334.00
385.10
629.00
4,983.00
458.40
1,183.00
2,570.00
501.00
168.20
531.50
1,053.00
444.50
5,041.00
2,603.00
1,287.00
1,700.00
535.50
995.40
2,093.00
652.00
0.00
0.99
1.45
1.47
0.83
0.94
1.42
-0.30
1.46
1.09
3.11
1.28
0.97
0.99
0.94
2.27
0.32
2.01
2.24
1.30
-0.24
2.74
-0.33
1.90
0.00
1.10
0.41
2.35
2.01
0.28
2.43
1.24
0.00
1.50
0.34
0.06
2.09
2.60
0.33
1.33
1.55
0.64
-0.69
0.92
1.60
1.36
-0.27
-1.54
2.86
0.29
-0.96
0.00
0.45
2.37
-1.82
-0.07
-0.48
1.52
3.11
0.57
1.40
1.74
1.54
1.81
1.02
1.32
1.34
1.12
0.72
1.62
-0.10
0.65
1.15
1.56
0.71
0.74
1.87
0.95
1.05
1.62
-0.30
1.31
2.37
-1.02
-0.55
1.08
1.87
1.76
-0.39
1.36
0.24
1.43
1.74
0.91
0.74
0.12
1.26
0.00
2.19
2.87
2.15
0.23
0.00
2,792,773
3,995,445
852,270
17,291,664
365,853
49,897,672
1,726,341
1,535,081
595,646
1,103,017
23,870,588
37,731,214
2,931,403
5,396,709
934,618
2,623,595
5,538,434
3,390,581
1,603,522
726,170
491,420
6,393,295
2,504,705
10,031,616
1,487,038
2,941,442
5,241,805
6,630,977
17,291,466
3,490,558
3,522,571
-
2,318,972
1,180,604
452,754
3,779,977
282,630
1,573,710
2,782,994
82,412
10,062,135
503,169
7,178,930
1,032,560
4,781,408
1,184,257
6,598,246
307,433
127,272,826
18,225,253
2,301,776
6,535,152
409,078
13,225,684
2,174,108
6,390,060
336,853
585,386
1,941,675
1,112,460
2,141,156
25,275,575
599,456
2,625,000
41,905,477
8,540,402
4,485,308
837,254
2,074,751
2,078,632
3,113,883
2,969,773
5,019,095
190,269
953,950
2,224,506
603,062
19,187,184
614,039
4,688,627
2,599,630
702,361
15,910,280
6,106,789
2,112,413
24,034,232
8,494,894
645,413
7,039,875
31,860,812
6,736,550
960,600
4,789,668
1,332,401
796,563
1,728,609
34,136,764
2,575,747
6,475,583
433,609
2,709,856
-
FTSE 100
Company Name Lt Price % Chg Volume
East Japan Railway CoItochu Corp
Fujifilm Holdings CorpYamato Holdings Co Ltd
Chubu Electric Power Co IncMitsubishi Estate Co Ltd
Mitsubishi Heavy IndustriesToshiba Corp
Shiseido Co LtdShionogi & Co Ltd
Tokyo Gas Co LtdTokyo Electron Ltd
Panasonic CorpFujitsu Ltd
Central Japan Railway CoT&D Holdings Inc
Toyota Motor CorpKddi Corp
Nitto Denko Corp
9,127.00
1,257.00
3,709.00
2,357.00
1,478.50
1,874.00
412.10
338.00
2,692.00
5,214.00
450.80
8,898.00
1,002.50
541.70
17,395.00
1,128.50
5,791.00
3,140.00
6,542.00
0.52
-0.40
-0.24
0.58
0.85
-0.74
-1.67
0.90
1.03
1.20
0.71
0.24
0.05
0.31
1.07
-0.09
0.21
0.80
0.55
606,500
3,407,200
2,306,200
627,400
1,680,200
3,081,000
20,131,000
26,303,000
1,065,300
1,233,000
8,978,000
872,400
6,272,400
8,547,000
265,500
2,754,200
5,842,300
3,123,000
762,300
TOKYO
Company Name Lt Price % Chg Volume
Rakuten IncKyocera Corp
Nissan Motor Co LtdHitachi Ltd
Takeda Pharmaceutical Co LtdJfe Holdings Inc
Ana Holdings IncMitsubishi Electric Corp
Sumitomo Mitsui Financial GrHonda Motor Co Ltd
Fast Retailing Co LtdMs&Ad Insurance Group Holdin
Kubota CorpSeven & I Holdings Co Ltd
Inpex CorpResona Holdings Inc
Asahi Kasei CorpKirin Holdings Co Ltd
Marubeni CorpMitsubishi Ufj Financial Gro
Mitsubishi Chemical HoldingsFanuc Corp
Daito Trust Construct Co LtdOtsuka Holdings Co Ltd
Oriental Land Co LtdSekisui House Ltd
Secom Co LtdTokio Marine Holdings Inc
Aeon Co LtdMitsui & Co Ltd
Kao CorpDai-Ichi Life Holdings Inc
Mazda Motor CorpKomatsu Ltd
West Japan Railway CoMurata Manufacturing Co Ltd
Kansai Electric Power Co IncDenso Corp
Sompo Holdings IncDaiwa House Industry Co Ltd
Jx Holdings IncNippon Steel & Sumitomo Meta
Suzuki Motor CorpNippon Telegraph & Telephone
Ajinomoto Co IncMitsui Fudosan Co Ltd
Ono Pharmaceutical Co LtdDaikin Industries Ltd
Bank Of Yokohama Ltd/TheToray Industries IncAstellas Pharma Inc
Bridgestone CorpSony CorpHoya Corp
Sumitomo Mitsui Trust HoldinJapan Tobacco Inc
Osaka Gas Co LtdSumitomo Electric Industries
Daiwa Securities Group IncSoftbank Group Corp
Mizuho Financial Group IncNomura Holdings Inc
Daiichi Sankyo Co LtdFuji Heavy Industries Ltd
Ntt Docomo IncSumitomo Realty & Developmen
Sumitomo Metal Mining Co LtdOrix Corp
Asahi Group Holdings LtdKeyence Corp
Nidec CorpIsuzu Motors Ltd
Unicharm CorpShin-Etsu Chemical Co Ltd
Smc CorpMitsubishi CorpNintendo Co Ltd
Eisai Co LtdSumitomo Corp
Canon IncJapan Airlines Co Ltd
1,329.50
4,839.00
983.00
464.80
4,827.00
1,471.50
274.50
1,293.00
3,379.00
2,930.50
32,980.00
2,787.50
1,520.50
4,756.00
899.20
425.70
802.30
1,707.00
517.00
507.20
631.20
17,265.00
16,195.00
4,600.00
6,132.00
1,708.50
7,620.00
3,838.00
1,508.00
1,390.00
5,860.00
1,363.50
1,539.50
2,318.50
6,325.00
12,975.00
929.40
3,986.00
2,976.50
2,765.00
402.10
2,075.50
3,393.00
4,688.00
2,263.00
2,128.50
2,790.00
9,534.00
0.00
970.90
1,571.00
3,721.00
3,335.00
4,144.00
3,264.00
4,141.00
423.20
1,423.50
574.90
6,478.00
168.70
459.00
2,435.50
3,748.00
2,552.00
2,598.50
1,391.00
1,444.00
3,798.00
75,000.00
9,281.00
1,193.50
2,639.00
7,141.00
28,805.00
2,298.00
26,445.00
6,392.00
1,125.00
2,933.00
2,975.00
1.41
0.33
0.03
-0.81
0.08
0.72
0.29
0.82
-0.03
1.49
2.14
-0.07
0.46
-0.02
-1.10
0.81
0.19
2.12
0.29
0.42
0.48
1.50
0.12
0.24
-0.03
-0.15
1.49
0.10
1.28
-0.04
2.97
-0.58
0.52
1.02
1.39
-0.42
1.55
-0.35
0.37
0.34
-1.23
0.92
0.98
1.60
0.91
-0.33
-0.59
1.96
0.00
-0.83
-0.16
0.40
1.28
2.63
-0.18
0.53
0.26
0.53
1.86
-0.67
0.06
2.89
0.85
-0.19
-0.39
0.04
0.32
-2.27
3.60
2.10
0.21
1.19
1.17
1.99
-0.29
0.57
-0.60
1.67
0.18
0.32
0.54
TOKYO
Company Name Lt Price % Chg
Aluminum Corp Of China Ltd-HBank Of East Asia Ltd
Bank Of China Ltd-HBank Of Communications Co-H
Belle International HoldingsBoc Hong Kong Holdings Ltd
Cathay Pacific AirwaysCk Hutchison Holdings Ltd
China Coal Energy Co-HChina Construction Bank-H
China Life Insurance Co-HChina Merchants Port Holding
China Mobile LtdChina Overseas Land & Invest
China Petroleum & Chemical-HChina Resources Beer Holdin
China Resources Land LtdChina Resources Power Holdin
China Shenhua Energy Co-HChina Unicom Hong Kong Ltd
Citic LtdClp Holdings Ltd
Cnooc LtdCosco Shipping Ports Ltd
Esprit Holdings LtdFih Mobile Ltd
Hang Lung Properties LtdHang Seng Bank Ltd
Henderson Land Development
2.86
32.55
3.55
5.97
5.39
26.25
10.86
99.45
4.12
5.82
20.25
21.25
95.65
25.80
5.69
16.90
21.40
13.46
15.38
9.47
11.16
80.30
9.75
8.04
6.59
2.62
17.66
139.50
46.30
1.78
3.50
0.28
1.02
1.32
0.19
0.56
0.86
-1.67
1.22
1.25
2.91
1.92
-1.90
0.71
2.67
-0.93
0.75
1.45
1.72
0.90
0.19
1.35
1.13
4.77
2.34
1.26
0.72
0.65
4,487,604
1,132,070
140,647,591
19,052,253
8,427,964
12,644,645
3,899,134
3,730,767
16,512,216
117,347,614
27,264,019
7,533,118
7,641,965
39,838,445
52,280,120
16,456,481
16,197,595
4,533,244
16,028,499
29,596,880
6,014,910
2,298,483
56,948,777
1,839,796
3,032,079
2,293,000
3,786,048
843,137
2,494,486
HONG KONG
Company Name Lt Price % Chg Volume
Hong Kong & China GasHong Kong Exchanges & Clear
Hsbc Holdings PlcHutchison Whampoa Ltd
Ind & Comm Bk Of China-HLi & Fung Ltd
Mtr CorpNew World Development
Petrochina Co Ltd-HPing An Insurance Group Co-H
Power Assets Holdings LtdSino Land Co
Sun Hung Kai PropertiesSwire Pacific Ltd - Cl ATencent Holdings Ltd
Wharf Holdings Ltd
14.68
205.80
58.05
0.00
4.91
4.00
42.80
10.10
5.12
40.70
76.10
14.10
116.90
84.75
216.80
56.85
0.27
0.98
1.57
0.00
1.24
0.76
0.23
0.20
0.59
1.24
0.66
2.77
-0.17
1.44
1.78
0.71
10,034,384
2,687,243
18,634,915
-
114,681,900
12,131,757
1,493,899
10,487,015
67,435,619
14,481,654
1,730,870
4,540,456
3,621,309
526,842
10,019,132
2,851,359
HONG KONG
Company Name Lt Price % Chg Volume
Zee Entertainment EnterpriseYes Bank Ltd
Wipro LtdVedanta Ltd
Ultratech Cement LtdTech Mahindra Ltd
Tata Steel LtdTata Power Co Ltd
Tata Motors LtdTata Consultancy Svcs Ltd
Sun Pharmaceutical IndusState Bank Of India
Reliance Industries LtdPunjab National Bank
Power Grid Corp Of India LtdOil & Natural Gas Corp Ltd
Ntpc LtdMaruti Suzuki India Ltd
Mahindra & Mahindra LtdLupin Ltd
Larsen & Toubro LtdKotak Mahindra Bank Ltd
Itc LtdInfosys Ltd
Indusind Bank LtdIdea Cellular Ltd
Icici Bank LtdHousing Development Finance
Hindustan Unilever LtdHindalco Industries Ltd
Hero Motocorp LtdHdfc Bank Limited
Hcl Technologies LtdGrasim Industries Ltd
Gail India LtdDr. Reddy’s Laboratories
Coal India LtdCipla Ltd
Cairn India LtdBosch Ltd
Bharti Airtel LtdBharat Petroleum Corp Ltd
Bharat Heavy ElectricalsBank Of Baroda
Bajaj Auto LtdAxis Bank Ltd
Asian Paints LtdAmbuja Cements Ltd
Adani Ports And Special EconAcc Ltd
578.85
1,270.25
478.95
178.75
3,928.45
420.70
382.85
76.45
540.80
2,411.70
757.05
255.30
1,090.70
143.35
181.20
260.25
150.60
5,681.00
1,443.85
1,493.55
1,470.70
788.05
242.30
1,038.10
1,232.90
81.10
256.15
1,425.50
868.75
154.10
3,521.15
1,287.20
808.60
4,900.20
385.85
3,160.55
327.90
588.85
208.45
22,752.95
318.70
627.75
137.20
168.90
2,880.90
550.90
1,193.00
258.90
264.50
1,631.95
5.87
1.24
0.00
3.89
2.00
0.20
2.30
1.39
1.11
-0.79
1.93
1.61
0.65
1.88
2.63
1.40
1.76
3.72
2.71
0.49
2.62
1.42
0.39
0.20
3.09
2.53
1.59
2.30
0.10
0.92
3.15
1.13
1.09
1.32
2.99
1.71
1.74
1.52
4.20
-0.20
1.50
2.47
1.86
0.90
1.88
1.76
2.78
2.84
3.02
2.01
SENSEX
Company Name Lt Price % Chg
WORLD INDICESIndices Lt Price Change
GCC INDICESIndices Lt Price Change
Dow Jones Indus. AvgS&P 500 Index
Nasdaq Composite IndexS&P/Tsx Composite Index
Mexico Bolsa IndexBrazil Bovespa Stock Idx
Ftse 100 IndexCac 40 Index
Dax IndexIbex 35 Tr
Nikkei 225Japan Topix
Hang Seng IndexAll Ordinaries Indx
Nzx All IndexBse Sensex 30 Index
Nse S&P Cnx Nifty IndexStraits Times Index
Karachi All Share IndexJakarta Composite Index
18,218.61
2,158.23
5,285.66
14,705.28
47,282.84
59,252.55
6,983.52
4,453.56
10,511.02
8,751.60
16,598.67
1,330.72
23,584.43
5,564.84
1,376.49
28,243.29
8,738.10
2,870.84
28,005.58
5,463.92
-89.54
-10.04
-26.35
-20.58
+37.04
+885.50
+84.19
+5.30
+105.48
-27.80
+148.83
+7.94
+287.28
+39.69
+1.23
+377.33
+126.95
+1.37
+323.33
+99.11
Doha Securities MarketSaudi Tadawul
Kuwait Stocks ExchangeBahrain Stock Exchage
Oman Stock MarketAbudhabi Stock MarketDubai Financial Market
10,309.92
5,416.47
5,358.53
1,144.64
5,674.70
4,396.37
3,408.06
-93.46
-31.73
-39.86
-5.36
-51.50
-79.95
-66.32
“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”
7,667,600
743,600
11,853,500
23,687,000
2,276,000
4,914,300
9,595,000
3,739,200
6,792,700
3,664,500
421,000
1,071,900
2,946,000
5,095,500
5,594,400
9,094,400
3,098,000
2,416,400
4,469,700
56,929,200
4,909,600
574,800
314,000
972,400
577,600
2,493,200
603,900
1,330,300
1,905,800
4,210,800
2,264,300
6,723,900
3,957,300
4,911,600
400,300
719,100
2,263,900
2,166,800
819,000
1,151,800
7,636,700
2,590,000
2,477,500
2,975,000
1,009,300
2,797,000
3,759,000
1,189,100
-
4,867,000
4,813,600
1,591,300
4,254,900
1,130,100
1,707,600
3,270,600
6,530,000
2,213,800
5,992,000
4,351,000
133,991,800
25,054,500
2,142,900
2,716,900
3,856,500
1,241,000
2,994,000
10,032,200
1,968,300
221,300
916,400
2,234,600
1,769,900
1,058,300
171,100
5,703,800
2,022,700
503,200
2,458,100
2,451,800
1,449,700
4,094,708
2,307,294
1,038,995
11,228,320
259,120
2,060,619
4,956,940
3,313,668
4,877,605
1,001,186
2,203,957
11,393,527
5,099,061
19,002,746
5,440,162
5,626,771
2,164,605
918,120
2,060,155
671,940
1,594,901
1,099,596
7,866,729
1,919,592
1,216,554
7,211,088
17,897,196
1,255,774
2,133,534
11,448,436
414,745
1,045,490
1,559,507
87,167
3,076,471
228,790
3,281,386
1,292,907
4,399,311
21,441
1,564,148
1,959,656
6,892,715
12,829,523
359,843
6,006,181
819,940
1,941,803
4,208,711
166,411
BUSINESS7Gulf Times
Tuesday, October 4, 2016
BUSINESS13Gulf Times
Tuesday, October 4, 2016
US factories rebound, resisting global downward pullUS factory activity grows in September; construction spending falls in August; major automakers report weaker sales in September
ReutersWashington
US factories ramped up activ-ity in September, shaking off a one-month contraction in a
sign America was resisting the down-ward pull of the sluggish global econ-omy.
The Institute for Supply Manage-ment (ISM) said yesterday its in-dex of national factory activity rose to 51.5 from 49.4 the prior month, beating analyst expectations in a
Reuters poll. Levels above 50 indicate the sector is expanding.
“This is a relief,” said Ian Shepherd-son, an economist at Pantheon Macr-oeconomics.
Factory output was a weak spot for the US economy early in the year as a global slump weighed on American factories.
More recently, net exports added to economic growth in the sec-ond quarter and yesterday’s report showed signs factories’ future sales could increase, with the ISM index for new orders rising to 55.1 from 49.1 in August.
The dollar rose against a basket of currencies while Treasury yields also moved higher and US stock markets fell.
Manufacturing is grappling with the lingering eff ects of a strong dollar and lower oil prices.
Economic growth is also listless in major US trading partners in the Euro-pean Union and Asia.
Activity in manufacturing, which accounts for 12% of the US economy, has also been undercut by an inventory correction.
Another report on Monday showed US construction spending fell for the second straight month in August to its lowest level in eight months, an unex-pected drop driven by weakness across public and private sectors, including in home building.
The Commerce Department said construction spending dropped 0.7% to a seasonally adjusted annual
rate of $1.142tn in August. Econo-mists had expected outlays to rise 0.2%.
The successive monthly declines in outlays suggest home building might not help economic growth in the third quarter and forecasting firm Macroeconomic Advisers cuts its expectation for Gross Domestic Product (GDP) growth in the July-September quarter to a 2.6% annual rate from a 2.9% rate.
Consumer spending has been a ma-jor prop for economic growth this year but major automakers yesterday re-ported lower September US sales de-spite high consumer discounts, with pickup truck volumes down for both General Motors Company and Ford Motor Company.
Henderson-Janus JV signals fee pressures spurring M&ABloombergLondon
Henderson Group’s tie-up with Janus Capital Group to create a $320bn asset manager may be
the precursor to a wave of consolida-tion in an investment industry grap-pling with increased regulation and competition.
“Others will say they wish they’d done it or they’ll contemplate it as well,” London-based Henderson’s Chief Executive Offi cer Andrew For-mica said in a Bloomberg TV interview yesterday. “It’s the most appropriate thing for our clients, our employees and our shareholders.”
Active managers specialising in stock and bond picking have been losing market share to lower-fee pas-sive investment fi rms in recent years. The combined fi rm, Janus Henderson Global Investors, will still be a relative minnow compared with BlackRock’s $4.9tn of assets under management and Vanguard Group’s $3.5tn.
BlackRock’s Laurence D Fink said in May that he expects to see con-solidation as fi rms struggle to beat benchmarks and regulation favours index strategies. Analysts from Jeff er-ies Group and Cantor Fitzgerald said Henderson’s deal will focus interest on more deals in the industry.
Both Formica and Janus Chief Ex-ecutive Offi cer Richard Weil, based in Denver, Colorado, have sought to diversify their businesses through acquisitions, new fund off erings and overseas expansion. In 2014, Weil hired Bill Gross from Pacifi c Investment Management Co to manage its Global Unconstrained Bond Fund, which now has $1.5bn in assets.
“There are immediate headwinds for the industry,” said Alex Birkin, head of wealth and asset management at con-sultants EY in Europe. “The organic growth strategy is diffi cult and slow particularly in today’s environment, so if you want to take signifi cant step in terms of growth quickly it’s your only option.”
Henderson’s shares surged as much
as 20.2%, the most since January 2009, and closed 17% higher at 270.7 pence in London. Janus investors will receive 4.719 new Henderson shares for each
share they hold. Henderson investors will own 57% of the new company, with 43% going to Janus shareholders. The deal is expected to close in the sec-
ond quarter of 2017. Janus rose as much as 19% in New York trading, the most since September 26, 2014 when Bill Gross was hired.
“This deal may kick off a round of merger speculation involving other as-set managers such as Jupiter,” Cantor analyst Keith Baird said in a note to cli-ents. Jupiter Fund Management, whose shares rose as much as 6.2% in London trading, declined to comment.
Formica said talks with Janus started in February, before the British vote to leave the European Union which saw investors pull more money from UK funds than any equivalent period in the global fi nancial crisis. Brexit “didn’t accelerate the deal, nor did it have any impact,” he said.
He will lead the merged entity with Weil, who will move to London where the fi rm will be headquartered. It will have a market value of at least $6bn and generate annual net-cost savings of at least $110mn, the companies said in the statement. It is also expected to attract as much as 3 percentage points of additional net new money.
Janus Henderson will be a UK tax
resident and the fi rm is set to become one of the 50 largest asset managers in the world. Formica said that while the deal fi ts the description of corporate inversion, it will not reduce the tax bill in the US.
Japanese insurer Dai-ichi Life Hold-ings, Janus’s biggest shareholder, will have a 9% stake in the combined company and plans to increase that to at least 15%. The fi rm will apply to have its primary listing on the New York Stock Exchange, because it of-fers greater liquidity, with a secondary listing in Australia to appeal to Asian investors, according to the statement. Janus Henderson will not trade on the London Stock Exchange because of the costs involved.
“We passionately believe this is the best way forward to build a global actively-managed asset management company,” said Weil, who took over as CEO of Janus in 2010. “I have kept my eyes and ears open the last seven years for opportunities in the market place. I didn’t have a specific design on Henderson.”
The headquarters of Janus Capital Group is seen in Denver, the US. Henderson’s tie-up with Janus to create a $320bn asset manager may be the precursor to a wave of consolidation in an investment industry grappling with increasedregulation and competition.
Spain’s 10-year bond yield hits record lowReutersLondon
Spain’s 10-year bond yield touched a record low yesterday, outperform-
ing most other eurozone peers on hopes that the resignation of the Socialist party leader at the weekend would pave the way for the formation of a new government.
Low-rated eurozone debt started the fi nal quarter of the year broadly backfoot as the fo-cus turned to looming risks in the peripheral eurozone states.
There were also renewed worries about the fallout from Brexit on news that Britain will trigger the process to leave the European Union by the end of March.
The leader of Spain’s Social-ists, Pedro Sanchez, resigned on Saturday after losing a vote triggered by a party revolt, a step that could end a nine-month political deadlock.
Sanchez had been in a stand-off with acting Prime Minister Mariano Rajoy’s People’s Party, frustrating eff orts to form a gov-ernment after two elections left the conservatives with the most votes but shy of a majority.
The Spanish constitution al-lows for another attempt to form a government by the end of Oc-
tober and if that is unsuccessful, a third election will be called in December.
“It’s not clear that the Social-ist party will abstain in another vote by Rajoy to form a govern-ment, but markets have taken the resignation of Sanchez well,” said Mizuho strategist Antoine Bouvet.
Spain’s 10-year bond yield fell almost 2 basis points to a record low at 0.865%, before pulling back to 0.91% as Italian and Por-tuguese bonds came under pres-sure.
Italian 10-year bond yields were 5 bps higher on the day at 1.25%, while Portuguese yields rose 4 bps to 3.39%.
German Bund yields were up 2 bps at minus 0.10 % with trading subdued due to a public holiday in Germany.
A decision by ratings agency S&P to affi rm Spain’s BBB+ credit rating with a stable out-look late on Friday helped to lift sentiment towards Span-ish bonds since some banks had highlighted the risk of a down-grade to the outlook.
S&P said the stable outlook refl ected a view that momentum in the economy would continue.
Spanish manufacturing ac-tivity grew in September at the fastest rate since April, a survey showed on Monday, with new orders expanding rapidly.
RBS to pay $120mn to resolve mortgage bond probe
Royal Bank of Scotland Group
will pay $120mn to resolve a
Connecticut state investigation
into the bank’s underwriting of
toxic mortgage-backed securities
ahead of the 2008 financial crisis,
authorities said yesterday.
The deal, announced by Con-
necticut Attorney General George
Jepsen and state Department of
Banking Commissioner Jorge Perez,
came as the bank has been seeking
to resolve a series of probes and
lawsuits over mortgage bonds.
Before the financial crisis,
authorities said, the bank’s RBS
Securities Inc unit was the lead
underwriter on $250bn worth
of residential mortgage-backed
securities, an investment product
backed by payments by thou-
sands of homeowners.
When home prices collapsed
and the economy faltered,
subprime mortgage borrowers
whose loans were linked to the
securities were unable to make
payments, Connecticut authori-
ties said. The state claimed RBS
conducted inadequate due dili-
gence on the loans pooled into its
deals and engaged in dishonest
or unethical conduct that resulted
in untrue statements to investors
about loans contained in the
securities products.
“RBS failed to properly de-
termine — and misstated — the
quality of the mortgage loans
comprising many mortgage-
backed securities,” Jepsen said in
a statement.
As part of the settlement, RBS
also resolved claims with the
state’s Department of Banking
stemming from its 2015 agree-
ment to plead guilty to trying to
manipulate foreign exchange
rates, as part of a deal with the US
Justice Department.
Sterling trades near three-decade lowon Brexit timetableReutersLondon
Sterling slid towards a three-decade low against the dollar yesterday af-ter British Prime Minister Theresa
May set a March deadline for the formal departure process from the European Union to begin, sending UK shares to a 16-month high.
The pound fell more than 1% to $1.2841, its weakest since early July and not far from the 31-year low of $1.2798 hit on July 6, days after the June 23 refer-endum on EU membership.
It hit a three-year low versus the euro. Against the Bank of England’s trade-weighted currency index, the pound closed at a 6-1/2-year low of 76.7, more than 1% down on the day following May’s comments.
May told her Conservative Party’s an-nual conference on Sunday that she was determined to move on with the process and win the “right deal”, in a move to ease fears inside the party that she might de-lay the divorce.
She said she would invoke Arti-cle 50 no later than the end of March next year, referring to the EU’s Lisbon Treaty that formally puts the divorce proceedings between the EU and Brit-ain in place.
This means she kicks off the nego-tiations process before the French and German elections next year and implies the two-year Brexit clock triggered un-der Article 50 will wind down by March 2019, a year before Britain’s next general election.
While the March deadline off ers some clarity to the process and underpinned stocks, many in the market worry that the government’s stance points to a “hard Brexit” where Britain quits the single market in favour of retaining con-trol on migration.
The economy has shown resilience post-referendum, but fears of a slow-down in business investment and the wider economy will undermine the pound and raises the prospect of possible
further easing by the Bank of England in the coming months. British fi nance min-ister Philip Hammond vowed to protect the economy from any turbulence dur-ing the negotiations, assuring businesses and consumers he would act if needed.
“For market participants the key soundbite was that regaining control over EU immigration into the UK would be the priority ahead of membership of the single market,” Shilen Shah, bond strategist at Investec Wealth and In-vestment, said.”Sterling has the po-tential to come under further pressure given the probable stalling of foreign direct investments.”
Investors worry a “hard exit” from Eu-rope’s single market, or ‘Smexit’ as Royal
Bank of Canada have called it, would send Britain into a recession and blow out its current account defi cit, already among the highest in the developed world.
A wider current account gap and slow-ing foreign investment tend to act as drags on the currency.
“May’s stance is a reminder that un-certainties related to ‘Smexit’ turbulence could be costly for the economy in the short run,” said RBC Capital Markets senior economist Sam Hill.
For now though, sterling’s weakness has helped British exports and the econ-omy.
Data released on Monday showed factory activity grew at the fastest rate in more than two years last month and
suggested manufacturing growth in the third quarter will be the strongest so far this year.
JPMorgan raised its forecasts for growth in the third quarter and expects the British economy to expand at 1.3% in 2017, compared with a previous forecast for 0.9% growth.
The positive impact from sterling’s weakness and the good news from the manufacturing sector helped Britain’s blue chip FTSE 100 index reach its high-est level since June 2015.
The index had fallen sharply just after the June vote, but has since recovered 21%, thanks to its large number of inter-nationally facing companies that benefi t when sterling falls.
The pound fell more than 1% to $1.2841 yesterday, its weakest since early July and not far from the 31-year low of $1.2798 hit on July 6, days aft er the June 23 referendum on EU membership
BUSINESS
Gulf Times Tuesday, October 4, 201614
Pimco trims India bond holdings as economistssplit on RBI outcomeBloombergMumbai
Pacifi c Investment Manage-ment Co and Aberdeen Asset Management are trimming
exposure to a rupee bond rally that’s driven yields to seven-year lows, concerned the central bank will be cautious on monetary policy.
Economists are divided on the outcome of today’s Reserve Bank of India (RBI) meeting, with 20 of the 37 surveyed by Bloomberg predict-ing no change in the benchmark re-purchase rate and the rest seeing a cut. Speculation the newly-formed monetary-policy panel will ease helped lift sovereign bonds to the best quarter in almost two years, amid a global yield hunt and im-proving access to funds for local banks. Benchmark yields fell for a second day yesterday.
“The RBI may have room to cut rates if and when infl ation falls, yet we think that the new leader-ship will tread cautiously,” Luke Spajic, head of portfolio manage-ment for emerging Asia at Pimco, which oversees about $1.5tn in as-sets globally, wrote in an e-mailed response to questions last week. “We have scaled back some of our weighting towards Indian bonds. We still like it, but felt it prudent to trim.”
Pimco has pulled back at a time when global holdings of rupee-denominated government and corporate notes jumped last quar-ter by the most since March 2015. Aberdeen says the rally has already priced in an October interest-rate cut, prompting it to shift some funds to shorter-duration Indian debt and bonds in Malaysia. Longer duration bonds suff er greater price declines when interest rates rise.
India’s fi nancial markets were jolted on Thursday, with the bench-mark 10-year yield rising the most in 13 months after the nation an-nounced it attacked terrorist camps in Pakistan the previous night, es-calating tensions between the two nuclear- armed countries. Spajic didn’t comment on the geopolitical issues.
Bonds rebounded on Friday, taking the 10-year yield’s decline last quarter to 63 basis points, the most since the three months end-ed December 2014. The yield fell further yesterday, dropping four
basis points to 6.78%, suggesting the market is more optimistic than economists about a rate cut.
“The market is largely expect-ing a 25-basis-point cut along with a dovish statement on liquidity,” said Vijay Sharma, executive vice-president for fi xed income at PNB Gilts in New Delhi. “We are also not ruling out a surprise 50-basis point cut.”
The rupee too recovered from Thursday’s drop, which was the biggest since June, to end the quar-ter with a 1.4% gain. That followed fi ve straight quarters of losses. The currency was up 0.1% at 66.5250 a dollar in Mumbai.
Prime Minister Narendra Modi’s
government last month announced three candidates to join an equal number of RBI representatives on a new monetary policy committee, or MPC, paving the way for India’s fi rst collective interest-rate deci-sion. Each of the six members will have a vote, with RBI Governor Ur-jit Patel holding an additional tie-breaker, though he won’t be able to veto a majority decision.
“It’s a close call, but we would expect the new MPC to err on the side of caution and wait,” Spajic said about Tuesday’s decision in an interview in Singapore yesterday.
The consumer price index rose 5.05% in August from a year ear-lier, the smallest increase in fi ve
months. Patel, who took charge at the central bank last month, bur-nished his infl ation-fi ghting cre-dentials after a panel he headed in 2014 suggested a CPI goal.
“We have steadily been reducing duration gradually on the back of initial expectations of an extremely dovish new governor, the recent pricing in of a rate cut in October and heavy positioning,” said Leong Lin Jing, Singapore-based invest-ment manager at Aberdeen Asset, which oversaw $403bn as of June 30. “Some were shifted to shorter-duration Indian bonds, while a per-centage was shifted to the Malay-sian bond market.”
Overseas holdings of rupee debt
rose by Rs225bn ($3.4bn) last quar-ter, the most since the period ended March 2015. Modi has lured foreign investors to Indian bonds, which off er the highest 10-year yield among major Asian markets after Indonesia, with his economic poli-cies, said Leong.
“The interest seen from foreign investors isn’t surprising given recent developments,” she said. “There have been quite a few re-forms which have been passed un-der Prime Minister Modi, such as the bankruptcy code and the goods and services tax, leading to positive sentiment on India. We do look to increase duration again as and when the bond market consolidates.”
Pimco warns of Asia debt risk after record dollar bond salesBloombergHong Kong
Pacific Investment Management Co is wary of the risks of rising debt levels after sales of dollar bonds by borrowers in the Asia-Pacific region ballooned to a record.Issuance surged 66% last quarter from the year earlier to $152bn, according to data compiled by Bloomberg. Borrowers have rushed to lock in lower financing costs as the average yield premium on the securities has fallen 72 basis points this year to 206, near the lowest since 2007, according to Bank of America Merrill Lynch indexes. Zhuzhou City Construction Development Group Co, a local-government financing vehicle, starts investor meetings in Singapore, Hong Kong and London from today, a person familiar said.Investors have plowed money into riskier assets despite warning signs, in a hunt for yield as central banks in the US, Europe and Japan keep interest rates near zero. Median net debt at listed Asia-Pacific firms has jumped to 3.1 times earnings before interest, taxes, depreciation and amortisation, from 1.9 five years ago, data compiled by Bloomberg show. It’s becoming harder for companies to service obligations as the region’s economic growth cools this year to what analysts forecast will be the weakest since 2009.“Credit is increasing in Asia but growth isn’t rising” at the same speed, said Roland Mieth, a Singapore-based emerging markets portfolio manager at Pimco. “We don’t expect leverage or increasing debt to slow down in Asia.”China’s policy makers have been keeping monetary policy relatively supportive. Yet central Deputy Governor Yi Gang said last month that the nation’s short-term goal has to be curbing leverage. CLSA estimates total debt may reach 321% of gross domestic product in 2020 from 261% in the first half.BNP Paribas in September warned that investors aren’t paying suff icient attention to default risks in the Asia dollar bond market as they hunt for yields, highlighting issuance linked to Chinese regional authorities.“LGFVs could see exacerbated fundamentals if they continue to issue a lot of bonds very cheaply overseas and that will have an impact on the risk of default,” said Charles Chang, the head of Asia credit strategy and sector specialists at the firm in Hong Kong. “This may take a bit of time to play out but that risk is building as we speak.”Chang also highlighted Chinese developers with high leverage levels as a long term risk to the health of the market. Haitong International Securities Group said that many real estate companies will need to issue bonds to redeem notes that mature in 2017.Aberdeen Asset Management Asia is avoiding Chinese dollar bonds as it says a lot of the demand comes from mainland investors who are willing to accept low yields because the issuers are household names to them.“China is a big underweight for us,” said Donald Amstad, a director at the firm. “Chinese US dollar corporate bonds are generally very low yielding assets.” BEA Union Investment Management said valuations on some of the sales have been stretched. It flagged risks such as the US elections and the weakness of European banks, which could trigger a sell-off .“It’s true that some of the deals don’t really compensate investors for taking the risk,” said Pheona Tsang, the Hong Kong-based head of fixed income at BEA Union Investment.
Nordic bond managers explore new way toset investment gradeBloombergOslo
The European Union’s ban of so-called shadow ratings is making it harder for Nordic bond managers to buy high quality debt.“When these ratings are gone, we have to find another way to define investment grade,” Jacob Boers Lind, head of Norwegian fixed income at Danske Capital, Danske Bank’s asset management arm, said in an interview in Oslo.The European Securities and Markets Authority has decided that only registered rating companies, like Moody’s, S&P and Fitch, can provide ratings. Nordic shadow ratings, or ratings provided by credit analysts at banks, have been a cornerstone of the region’s corporate debt market, allowing smaller companies to issue bonds and reducing issuer costs.The Nordic region, which includes Finland, Denmark, Sweden and Norway, has the highest share of unrated bonds in Europe, according to Moody’s.“It’s a pity,” Boers Lind said. “It has been an important tool in the Norwegian market to provide liquidity for the smaller banks. Many mandates have requirements on investment grade – when these banks don’t get a rating any more, it’s
diff icult to define the universe.”DNB ASA, Norway’s largest bank, decided yesterday to discontinue shadow ratings with immediate eff ect. Five of the six largest banks in the Nordic region, including Nordea Bank AB, have now chosen to drop shadow ratings. The shift may put liquidity for bonds issued by Norway’s smaller banks at risk.“If we can’t formulate a mandate that allows us and other funds to trade those banks it will aff ect liquidity because there aren’t many other investors that buy smaller banks,” Boers Lind said.Norwegian fund managers are discussing possible solutions within the Fund and Asset Management Association, according to Boers Lind, 43, who manages about 33bn kroner ($4bn) and buys senior unsecured bonds from Norwegian banks for his funds.“Norwegian savings banks are solid, low risk of default,” he said. “You get a good pickup compared to government. It’s enough for the risk plus a liquidity premium.”More financial regulation has made it more complicated for asset managers to invest in banking debt in particular. It requires more manpower, systems and the customers must pay for it in the end, Boers Lind said.
Global bond markets shackled to Japan by Kuroda’s 0% questBloombergSingapore
Haruhiko Kuroda might have set his sights on Japan, but his latest move is turning out to have far-
reaching consequences for bond markets all over the world.
Almost two weeks ago, the Bank of Ja-pan governor unveiled a plan to anchor yields on 10-year bonds at around zero, after trillions of yen of quantitative eas-ing and the introduction of negative in-terest rates failed to revive the economy. While the shift was ostensibly aimed at helping the fi nancial industry and quashing defl ation, investors far and wide responded by pushing yields lower. From Japan to the US and Europe, vola-tility all but vanished and correlations rose to levels rarely seen in the past.
It’s perhaps the clearest example yet of how the drastic steps that central banks have taken to revive their economies fol-lowing the fi nancial crisis have imbued just about every facet of today’s $100tn global debt market - even as more and more ques-tion whether they’re running out of options.
In the early years, the Federal Reserve and the BoJ exerted their infl uence by ag-gressively buying bonds. Then, the Eu-ropean Central Bank led the move among major central banks into negative rates. Now, the BOJ’s decision to shift away from its “shock-and-awe” approach to stimulus is calling attention to the limits of mon-etary policy in a world where tepid growth, a lack of infl ation and ageing societies have conspired to keep yields lower for longer.
“They are going to converge,” said Mi-zuho Asset Management’s Yusuke Ito,
referring to global bond markets. “Econ-omies are more and more intertwined. Add in demographics – all the countries are somewhat similar.”
Ito, who helps oversee about $50bn as Mizuho Asset’s senior fund manager, predicts bond yields will all eventually meet at the same level.
It’s already starting to happen. Demand for bonds worldwide has pushed down average yields for all types of investment-grade debt to 1.13%, less than 0.1 percent-age point from the record low, according to the Bloomberg Barclays Global Aggre-gate Index. In more than half of the de-veloped markets tracked by Bloomberg, yields on 10-year government bonds are under 1%, with many near or below zero. The diff erence between those in the US
and Japan has dropped by almost half in the past decade to 1.68 percentage points.
The latest bond rally came after the BoJ refrained from another rate cut and introduced its “yield curve control” policy on September 21. In the weeks leading up to the move, bonds retreated in anticipation of a bold policy move to spur infl ation. While the announcement itself initially suggested the BoJ wanted to steepen the yield curve, or increase the amount of income long-term bonds pay over shorter ones, it disappointed economists who had hoped for more. Kuroda later explained the policy would keep yields roughly at current levels, which many traders interpreted as a cap – at home and abroad. “I really don’t think you can justify a major selloff in the
market, particularly with what the BoJ has done,” said Roger Bridges, chief global strategist for rates and currencies at Nikko Asset Management’s Australia unit, which oversees $14.6bn. “Correlations between bonds are increasing all the time.”
The move has sucked much of the tur-bulence out of bond markets. Implied volatility for 10-year Japanese debt tum-bled by the most since 2008 on the day of the BoJ’s announcement. Expected price swings in Treasuries plummeted to a two-year low, while those on German bunds have also declined.
They’re also moving more in tandem. Benchmark bond yields in the US and Japan have stuck within half-percentage point range this year, the narrowest in at least three decades. The spread between the US and Germany has held in the tightest annual range in at least 27 years.
That partly refl ects how Japan has come to the fore in the world of fi xed income. And it’s occurring at a time when the BoJ’s outsize presence in the $10tn market has crowded out investors and left some se-curities untraded on certain days. A limit on Japanese yields risks sending inves-tors fl ooding into overseas debt markets, keeping a lid on yields globally.
It’s already spurring a resurgence in Japanese purchases of foreign bonds, which rose to the highest since July in the two weeks ended September 23.
But just as important is the growing recognition among bond investors that deeper structural forces like demo-graphics and wealth inequality – which may depress growth and inflation for years to come – are probably beyond the reach of even the most aggressive central bank policies.
Kuroda: Major shift in monetary policy.
The off ices of Pacific Investment Management Co (left) are seen in Newport Beach, California. Pimco and Aberdeen Asset Management are trimming exposure to a rupee bond rally that’s driven yields to seven-year lows, concerned the central bank will be cautious on monetary policy.
BUSINESS15Gulf Times
Tuesday, October 4, 2016
Dutch bank ING plans to cut 7,000 jobs
AFPThe Hague
Dutch bank ING, the coun-try’s biggest lender, an-nounced yesterday it was
planning to shed some 7,000 jobs mainly in Belgium and The Netherlands to save €900mn ($1.01bn) by 2021.
The move is partly directed by the bank’s bid to reshape its services for the digital banking market, in which it said it would be investing some €800mn.
“Over the coming fi ve years, around 7,000 functions might be impacted by these eff ects,” said chief executive Ralph Hamers.
Stressing the plans were not yet fi nal, Hamers said the work-force could be reduced by 3,500 posts in Belgium and another 2,300 in The Netherlands.
The remaining positions were expected to be cut by external suppliers.
Belgian and Dutch unions re-acted angrily, but analysts said the job losses were the result of the online transformation of the banking industry.
“Customers are increasingly digital and bank with us more and more through mobile devic-es,” Hamers said in a statement.
They “expect us to adopt new technology as fast as compa-nies in other sectors,” Hamers said, adding ING needs “to off er a better customer experience, that’s instant, personal, fric-tionless and relevant.”
He also highlighted that ING had been hit — like other Eu-ropean banks — by low interest rates in the eurozone and tough regulation.
The “huge reorganisation” would hit 12 to 14% of ING’s em-ployees, Joost Vespers, an ana-lyst with the Theodoor Gilissen bank, told AFP.
“ING actually needs that, be-cause the situation is urgent.
It’s a very diffi cult time for banks. And many banks have a high cost base,” he said, adding ING wanted to stay ahead of the competition.
The Amsterdam-based ING employs some 52,000 people in 40 countries around the world.
Saved by the Dutch govern-ment with 10-billion-euro bailout in 2008 amid the global fi nancial crisis, it was forced by the European Commission to exit the insurance business.
It paid off the loan plus in-terest in November 2014, well ahead of time. Monday’s an-nouncement comes after ABN Amro, the country’s third larg-est bank, said last month it was shedding 1,375 jobs over the next three years as it moves towards greater digitalisation.
“Traditional banking is go-ing to be considerably reduced,” analyst Thomas Cool told AFP.
But he added the loss of 7,000 jobs was “a small number for the company itself”, adding “inves-tors might see it as a better for profi tability”.
Hamers told the NOS Dutch broadcaster “that every job that disappears is of course one too many”.
And the markets seemed to take the announcement in their stride. Hamers acknowledged yesterday that “banks are con-fronted with continuous regula-tory burden and a prolonged pe-riod of ultra-low interest rates”.
Deutsche Bank shares slip again in race to reach US settlementReutersFrankfurt
Deutsche Bank shares resumed falling yesterday after recover-ing from a record low at the end
of last week, as hopes faded of a swift deal with US authorities over a multi-billion dollar penalty.
The German lender is throwing its energies into reaching a settlement before next month’s US presidential election, with the Department of Jus-tice demanding a fi ne of up to $14bn for mis-selling mortgage-backed securi-ties.
Its shares didn’t trade in Germany yesterday because of a public holi-day, but its US-listed stock was down around 2.8% at mid-morning.
The threat of such a large fi ne has pushed Deutsche shares to record lows, and a cut-price settlement is urgently needed to help restore confi dence in Germany’s largest lender.
A media report late on Friday that Deutsche and the DOJ were close to agreeing a much lower penalty of $5.4bn lifted the stock 6% higher, but yesterday that report remained uncon-fi rmed.
The Wall Street Journal reported on Sunday that the bank’s talks with the DOJ were continuing.
Details are in fl ux, with no deal yet presented to senior decision makers for approval on either side, the paper said, citing people familiar with the matter.
“Clearly, so long as a fi ne of this order of magnitude ($14bn) is an even remote possibility, markets worry,” UniCredit Chief Economist Erik F Nielsen wrote in a note on Sunday.
Ratings agency Moody’s said it would be positive for bondholders if the lend-er could settle for around $3.1bn, while a fi ne as high as $5.7bn would dent 2016 profi tability but not signifi cantly im-pair the bank’s capital position.
Deutsche is much smaller than Wall Street rivals such as JPMorgan and Cit-igroup.
But it has signifi cant trading rela-tionships with all of the world’s largest fi nance houses and the International Monetary Fund this year identifi ed it as a bigger potential risk to the wider fi nancial system than any other global bank.
Deutsche Chief Executive John Cry-an will be in Washington this week for the annual meeting of the IMF, and the Frankfurter Allgemeine Zeitung report-
ed that other executives would join him to try to negotiate a settlement with the US authorities.
Like fellow large European banks also under investigation for mis-selling mortgage-backed securities — Credit Suisse and Barclays — Deutsche will want to get a deal done with the current administration still in power.
A new administration to be installed after the November 8 election will bring unknown risks and likely delays.
Domestically, Deutsche Bank is fi ghting a rearguard action, seeking to shore up confi dence among the pub-lic, politicians and regulators who say the bank brought many of its problems upon itself by overreaching itself and
then reacting too slowly to the 2008 fi -nancial crisis.
It suff ered a further blow to its image this weekend with a third IT outage in the space of a few months on Saturday, denying some customers access to their money for a short time.
German business leaders from companies including BASF, Daimler, E.ON, RWE and Siemens lined up to defend the bank in a front-page ar-ticle in the Frankfurter Allgemeine Sonntagszeitung.
“German industry needs a Deutsche Bank to accompany us out into the world,” BASF Chairman Juergen Ham-brecht said.
A spokesman for a blue-chip compa-
ny that did not feature in the article told Reuters he had been asked by Deutsche for an executive to provide a similar supportive comment.
Deutsche Bank and the government in Berlin have had to play a delicate bal-ancing act, emphasising the substance and importance of the bank without implying any need for state aid or will-ingness to supply it.
The bank has a market capitalisation of only about €15.9bn ($17.9bn) and would almost certainly have to raise fresh cash to pay the full DOJ demand.
Both the bank and Berlin this week denied reports that the government was preparing a rescue plan.
The Bild am Sonntag newspaper
wrote on Sunday that Deutsche’s chair-man had informed Berlin just before it disclosed the potential $14bn fi ne but had not asked for help.
The same newspaper quoted the president of the Bavarian Finance Cen-tre, Wolfgang Gerke, as saying that the German government should step in and buy a 20% stake in the bank before its value fell any further.
The group represents fi nancial serv-ices companies in the southern German state.
“Fundamentally, I’m against state interventions,” he told the newspa-per, but added that in this case a gov-ernment stake would be “a signal that could turn the whole market”.
Falling US natural gas production meets stronger demandBy John KempLondon
The US natural gas market is on an
unsustainable trajectory as consumption
grows rapidly while domestic production
is falling.
Gas production was down nearly
4% in July compared with the same
month a year earlier, according to data
published by the Energy Information
Administration.
Marketed dry gas production amounted
to 2,212bn cubic feet in July 2016 com-
pared with 2,304bn cubic feet in July 2015.
Low gas prices have discouraged drilling
of gas-rich formations and caused produc-
tion to start falling after rapid growth in
2014 and 2015.
There were just 86 rigs drilling for gas
at the end of July, down from 209 at the
end of July 2015, according to oilfield
services company Baker Hughes.
Drillers are becoming more eff icient,
targeting a small number of super wells
that produce enormous amounts of gas,
but higher productivity has not been
enough to off set the drilling downturn.
At the same time, consumption is hit-
ting record levels, especially for electricity
generation, where cheap gas has captured
market share from coal.
Power producers burned a record 1,184
bn cubic feet of gas in July, 9% more than
in July 2015, and easily beat the previous
record of 1,118bn cubic feet set in July
2012.
Some of the increase in gas consump-
tion has been driven by unusually high
temperatures and air-conditioning
demand this summer.
Temperatures across the most popu-
lated areas of the United States have been
consistently above normal since the end
of May.
But gas consumption has been unusu-
ally high even once the high temperatures
and air-conditioning demand are taken
into account.
Power producers’ gas consumption was
almost 6% higher in July 2016 than in the
previous peak in July 2012 even though
population-weighted cooling degrees days
were nearly 5% lower.
Climate policy is encouraging power
producers to retire old and ineff icient coal-
fired generation plants and replace them
with more eff icient and cleaner burning
combined cycle gas units.
Low gas prices have accelerated the
switch by encouraging power producers
to reduce run rates at coal units and max-
imise run rates at gas-fired plants instead.
Power producers have burned their way
through most of the surplus of gas left
over at the end of the record warm winter
2015/16.
Working gas stocks in underground
storage stood at 3,600bn cubic feet on
September 23, an increase of just 90bn
cubic feet or 2.6% compared with a year
ago.
The year-on-year storage surplus has
shrunk from 1,017bn cubic feet or 70%
back on March 23, according to data
from the Energy Information Administra-
tion. Gas stockpiles have shown below-
average increases for 21 consecutive
weeks as high air-conditioning demand,
strong underlying gas consumption and
falling gas output have rebalanced the
market.
Within the next 2-3 weeks, US gas
stocks are likely to decline below year-ago
levels, as stocks continue to build slowly.
Winter of 2016/17 will almost certainly be
colder than the record warm winter of
2015/16, ensuring higher gas consump-
tion for heating, though how much colder
remains uncertain.
But with gas stocks normalising, supply
falling, demand increasing, and more gas-
fired power plants scheduled to start up
over the next 12 months, prices will have
to rise to moderate the power burn and
spur more drilling in 2017.
John Kemp is a Reuters market analyst.
The views expressed are his own.
German lender set to advance on 1,000 planned job cutsBloombergLondon
Deutsche Bank is poised to reach an agreement with labour rep-resentatives this week that will
pave the way for the German lender to eliminate about 1,000 jobs in its home market as part of chief executive offi cer John Cryan’s cost cuts announced last year, said people with knowledge of the matter.
The planned job cuts, which need to be signed off by the works council, will mostly aff ect back-offi ce staff such as in information technology services, said the people, who asked not to be identifi ed because negotiations are private. The Frankfurt-based lender in June struck an agreement with its works council to eliminate about 3,000 full-time positions, including 2,500 jobs at its private and commercial cli-ents business.
Cryan, 55, has sought to reassure investors that he’s able to boost prof-
itability as concerns about mounting legal costs prompted some clients to pull funds and investors to question the lender’s fi nancial health. As part of his overhaul announced in October 2015, the CEO plans to eliminate 9,000 jobs, or about 9% of the global workforce, including 4,000 positions in Germany.
“Deutsche Bank has two challenges - on one hand it needs to increase its capital ratio, and on the other it needs to change its business model and im-prove profi tability,” said Daniel Regli, an analyst at MainFirst. “For the latter, one way are cost cuts, and the nod from the works council is a small step forward.”
Cryan has struggled to reverse a slide in shares that eroded almost half of the company’s market value this year. Deutsche Bank shares touched a record low last month after the US Depart-ment of Justice requested $14bn to set-tle a probe into the sale of residential mortgage-backed securities, more than twice what the lender has set aside for litigation.
The CEO told Germany’s Bild news-
paper last week that he doesn’t plan to raise capital and ruled out govern-ment assistance. The stock rebounded on Friday after Agence France Presse reported that the lender was nearing a settlement of $5.4bn with the Justice Department.
The lender’s €1.75bn ($2bn) of 6% additional Tier 1 bonds, the fi rst to take losses in a crisis, fell 0.4 cents on the euro to about 75 cents, according to data compiled by Bloomberg. The notes fell as low as 69 cents last week. After jumping 17 basis points on Septem-ber 26, credit-default swaps insuring Deutsche Bank’s senior bonds against losses erased their earlier increase, fall-ing 24 basis points during the rest of the week, according to data from CMA. The swaps were up 10 basis points on Mon-day to 234, the data show.
“The CDS movement last week was about uncertainty,” Chris Whalen, a senior managing director at Kroll Bond Rating Agency, told Bloomberg Televi-sion yesterday. “We don’t see any credit issues with Deutsche Bank.” Adding to
the lender’s legal woes, six current and former managers including former asset and wealth management head Michele Faissola, along with former executives of Nomura Holdings Inc and Banca Monte dei Paschi di Siena, were charged in Milan for colluding to fal-sify the accounts of the Italian lender. A judge on Saturday approved a request by prosecutors to try 13 bankers on charges over separate derivative trans-actions Monte Paschi arranged with the securities fi rms, according to a lawyer attending the hearing.
While a potential $5.4bn settlement with the Justice Department would leave Deutsche Bank’s key capital ra-tio “comfortably” above regulatory minimums, the lender may also face a penalty of as much as €2bn ($2.3bn) in a money-laundering probe tied to its Russia operations, analysts at Barclays wrote in a note.
Goldman Sachs Group analysts said a Justice Department settlement of that amount without consumer relief would reduce the bank’s common eq-
uity Tier 1 ratio by up to 51 basis points.The lender’s CET1 ratio, a measure of
fi nancial strength, was at 10.8% at the end of June. Deutsche Bank is seeking to reach a ratio of at least 12.5% by the end of 2018.
Cryan and other top German execu-tives are scheduled to travel to Wash-ington this week as business leaders and central bankers gather for the In-ternational Monetary Fund and World Bank meetings, according to the peo-ple. The managers may use the trip to also continue negotiations with the Justice Department to settle the inves-tigation, they said.
Europe’s largest lenders have slashed costs and eliminated thousands of jobs to help shore up earnings and meet tougher capital rules. Cryan has already said that 2016 will be the peak restruc-turing year and that the lender may fail to be profi table after posting the fi rst annual loss since 2008 last year. The CEO signalled in July that the bank may have to deepen cost cuts after second-quarter profi t was almost wiped out.
The headquarters of Deutsche Bank is seen in Frankfurt. The biggest German lender’s shares resumed falling yesterday after recovering from a record low at the end of last week, as hopes faded of a swift deal with US authorities over a multi-billion dollar penalty.
BUSINESSTuesday, October 4, 2016
GULF TIMES
Qatar expected to introduce VAT between Jan 2018 and Jan 2019, says BDO QatarQatar is expected to in-
troduce value added tax (VAT) between January
2018 and January 2019, a semi-nar organised in Doha by audit fi rm BDO Qatar was told.
BDO speaker, Ivor Feerick, chair of the BDO International VAT Centre of Excellence said, “Having made presentations to a total number of 1400-1500 clients of BDO local fi rms in each of the six GCC States over the past 10 days and hav-ing fi elded about 130 individual questions from the partici-pants, I have no doubt that the proposed introduction of a value added tax (VAT) system into the region will present sig-nifi cant challenges for the local government authorities.”
VAT, although expected for quite some time, will fi nally be introduced at an expected 5% rate in both the United Arab Emirates and Kuwait eff ective January 1, 2018, with Bahrain, Oman, Qatar and Saudi Arabia obliged to introduce the tax be-tween then and January 1, 2019.
Although there has been very limited offi cial information re-leased regarding the specifi cs of how the VAT system to be in-troduced will operate, Feerick said his expectation was that the GCC Countries would rep-licate a lot of the features of the European Union VAT System, particularly bearing in mind the similarity between the GCC countries and cooperation of 28 countries in Europe.
“Whereas I expect that cer-tain educational and healthcare services will be purely ‘exempt’ from value added tax with no entitlement to VAT recovery on costs by the related service pro-
vider, I expect the provision of basic foodstuff (such as bread, milk, fruits, vegetables and meat) to be ‘zero-rated’ (exempt with credit, thus enabling the suppliers of basic foodstuff s to recover VAT on their operating costs etc.
Increasing the price of most goods and services by about 5% will act as a further disincen-tive to consumer spending so
in the early days following the introduction of the new value added tax system it is likely that retailers may reduce their profi t margins and absorb some or all of the VAT costs with a view to maintaining the sales volume required to sustain their busi-nesses, he said.
Although, he said VAT is ul-timately a tax on the supply of goods and services to consum-
ers, the charge of value added tax on all supplies to both busi-nesses and consumers will mean that businesses will be-come tax collectors on govern-ments’ behalf.
“And apart from increasing their administration and IT re-lated costs, they are likely to be exposed to signifi cant interest, penalties and potentially more serious exposures for any non-
compliance with the new legis-lation”, said Feerick.
Gavin Brown, managing part-ner of BDO in Qatar said, “In the circumstances, it is imperative for them to start planning their VAT strategy without delay and this is the message that I , to-gether with my BDO Partners in the six GCC countries have been sharing with our clients in the region over the past 10 days”.
The BDO Qatar seminar on VAT in progress.
Samba revises down oil price to $57 on slower market rebalancing
By Pratap JohnChief Business Reporter
Elevated Opec production and
a smaller decline in non-Opec
output than anticipated are
delaying the expected rebalanc-
ing of the market, Samba said,
even as the financial group has
revised down its price projec-
tion for next year to $57 a barrel.
However, while lower costs
producers have been maintain-
ing or even increasing produc-
tion, the large scale cuts in
new investment will eventually
impact market balances, Samba
said, and noted “the big ques-
tion is when”.
It is now increasingly thought
that non-Opec supply will grow
(by a small amount) in 2017 af-
ter a large contraction this year.
Meanwhile, demand growth
is expected to slow (to around
1.1mn bpd for 2017) as the
boost from lower prices fades,
and global growth prospects
remains muted.
Since Opec abandoned its
traditional role of trimming
supply to balance the market
and support prices back in
November 2014, crude oil
supply from the organisation
has soared. It is now running at
nearly 33.7mn bpd according to
Bloomberg data, up from under
30m/b at the start of 2014. Most
of the increase has come from
Iraq, Saudi Arabia, and Iran,
which have boosted average
annual output levels by 1.1mn
bpd, 0.7mn bpd and 0.5mn bpd
respectively over 2015-16.
Given that Opec production
is now likely very close to maxi-
mum capacity (Saudi output
hit a record 10.8mn bpd this
summer), it may be that Opec
does not need a formal agree-
ment for there to be an eff ective
freeze on output.
At the least it appears that,
absent a surprise restoration of
full Libyan production, there is
not much room for further large
production gains in 2017-18.
According to Samba, oil
prices have been volatile over
the last few months as markets
look for clear signs, or other-
wise, that fundamental balances
are tightening.
However, the outlook
remains uncertain and data sig-
nals unconvincing. While global
demand seems to be holding
up (expected to grow by 1.3mn
bpd), there are so many vari-
ables at play on the supply side;
ranging from the resilience of
US shale oil producers, the shift-
ing prospects for production in
countries such as Libya, Nigeria,
Iran and Iraq, and talks about a
potential Opec output freeze as
well as coordination between
Saudi Arabia and Russia.
Meanwhile, the widely
anticipated drawdown in stocks
is happening much more slowly
than expected, and is being
interrupted by weeks of gains
which are unnerving markets.
Thus, Samba said, while
prices for Brent have recovered
from their near $40/b lows in
July/August, they have been
volatile in a $45-50/b trading
range since.
“Nonetheless, developments
to date have caused us to revise
up our 2016 average price pro-
jection to $45/b,” Samba said.
Outlook remains negative for motor insurance in Mideast, says A M BestBy Santhosh V PerumalBusiness Reporter
The outlook for motor insurance in the Middle East region remains “negative”, given the high levels of competition lead-
ing to cut-throat pricing, according to A M Best, an international insurance rating agency.
Whilst some regulators, like Saudi Arabian Monetary Agency, have attempted to impose discipline in the market by requiring actuarial pricing for motor insurance contracts, pricing in the rest of the region remains largely driven by undercutting rivals, the agency said in a re-port.
Rates are also impacted by relatively poor quality of data available to adequately under-write the profi ciency of drivers, it said, adding poor pricing, particularly on motor third-party
liability (MTPL), impacts operating perform-ance as well as erode capital, it said.
Trends towards commoditisation and reduc-ing customer loyalty indicate a period of further pressure on motor profi tability, it said, adding insurers with poor distribution networks and unsophisticated pricing are likely to suff er fur-ther in the medium to long term.
“The ability to generate profit from under-writing activities is increasingly under strain due to the market pressures, with many com-panies undercutting rates and chasing market share over profitability,” A M Best said, ex-pecting further pressure build up in the sec-tor.
Finding that motor insurers in the region have tended to concentrate on large group accounts to obtain market share and grow top-line rev-enue; it said the resulting competition has led to signifi cant pricing pressure.
In extreme cases, underwriters and sales staff keen to retain large clients have resorted to breaching underwriting authorities and mini-mum pricing controls, translating into large losses for insurers, particularly in Saudi Arabia and the UAE, it said.
Low oil prices are likely to reduce inwards reinsurance commissions on heavily reinsured corporate risks stemming from the slowdown of both public and private infrastructure and en-ergy projects, it cautioned.
Expecting motor insurance pricing pressure to increase across the region; it said owing to rigidity in pricing and the unprofi table nature, some insurers are unable to compensate for MTPL losses through other profi table lines of business and have abandoned the motor market completely.
However, the ability to offset MTPL losses is dependent on the individual insurer’s abil-
ity to generate sufficient margin on other product classes, through charging appropri-ate premium rates, managing claim costs and prudent risk selection, as well as achieving sufficient economies of scale to absorb ex-penses, it said.
In countries where MTPL is tariff ed, there have been calls from market participants and insurance associations for the government to either increase tariff s to a profi table level or for a move towards liberalisation of premium rates, A M Best said.
The extremely high-level of competition is compounded by the prevalence of broker/agency distribution channels in the Mena re-gion, which drive the bulk of motor premiums, it noted.
Brokers and agents are given commissions based on premium generation rather than being incentivised with profi t commissions, showing
a tilt towards volume over quality, which can be detrimental to the profi tability of the risk car-rier, it said.
With price being retail customers’ primary concern, insurers are forced to compete on rates rather than service quality, which places further pressure on underwriting performance.
Moreover, given the pricing pressures in-herent within Middle East markets, more in-surers are shifting their focus towards claims management with the aim to reduce claims costs. Over the past few years, many insurers have performed a review of claims manage-ment processes, the use and cost of motor repair garages and controlling the costs of car parts.
While such initiatives may assist in shaving a few points off the combined ratio the pressure still remains within these markets, according to A M Best.
Vodafone bags award for best digital experience
Vodafone Qatar has won the ‘Best Digital Experi-ence’ award during the
‘3rd Annual Customer Experi-ence Middle East Summit’ for its deployment of ‘Hani’, the company’s virtual assistant.
‘Hani’, which is built on an intelligent platform and comes in the form of a smart Vodafone Hedgehog who knows every-thing about Vodafone and can quickly fi nd the right answers for customers, was recognised by the judges for its innova-tion and customer-centric ap-proach coupled with business results.
Mohamed al-Sadah, Voda-fone Qatar’s chief operating offi cer, said: “Hani is a critical aspect of our digital customer engagement strategy, Artifi -cial Intelligence coupled with live agent chat support off ers a world-class experience and I am very proud of our teams’
accomplishments to win this prestigious award.” ‘Hani’ uses Natural Language Processing to understand the customer’s question and provides a single accurate response. Hani has a strong understanding of all Vo-dafone products and services, which, to date, has seen more than 80,000 questions per month answered with an accu-racy rate of over 90%.
Digital self-care forms a crit-ical strategy for Vodafone and coupled with the MyVodafone application have seen expo-nential growth in both custom-er acceptance and satisfaction.
This is the second customer care award that Vodafone Qatar has received this year. In April, the company was recognised with the ‘Best Culture Trans-formation’ award at the ‘5th Annual Customer Experience Management in Telecoms Mid-dle East’.
Digital self-care forms a critical strategy for Vodafone.
Across-the-board selling leads QSE settle marginally above the 10,300 markBy Santhosh V PerumalBusiness Reporter
An across-the-board sell-ing — particularly in transport, banking and
insurance stocks — yesterday led the Qatar Stock Exchange lan-guish in bearish sentiments for the fi fth straight session and set-tle marginally above the 10,300 mark.
Domestic and Gulf institu-tions’ net profi t booking pressure rather knocked off 93 points or 0.9% in the 20-stock Qatar Index to 10,309.92 points.
Trade turnover otherwise in-creased amid lower volumes in the bourse, whose year-to-date losses widened 1.15%.
Islamic stocks were seen de-clining slower than the conven-tional ones in the market, where telecom, banking and realty stocks accounted for about 83% of the total volumes.
However, local retail investors turned bullish and there was in-creased buying support from for-eign institutions in the bourse, where large, micro and small cap equities were seen fast losing sheen.
Market capitalisation erod-ed 0.87% or about QR5bn to QR554.28bn as large, micro, small and midcap stocks shrank 1.15%, 0.95%, 0.84% and 0.57% respectively.
The Total Return Index shed 0.9% to 16,680.77 points, All Share Index by 0.85% to 2,848.32 points and Al Rayan Islamic In-dex by 0.79% to 3,876.54 points.
Transport stocks shrank 1.32%, banks and financial services as well as insurance (1.21% each), telecom (0.81%), consumer goods (0.64%), in-dustrials (0.56%) and real es-tate (0.09%).
More than 86% of the traded equities were in the red with major losers being QNB, Qatar Islamic Bank, Qatar Insurance, Ooredoo, Vodafone Qatar, Na-kilat, Milaha, Commercial Bank, Doha Bank, Qatar First Bank, Aamal Company, Gulf Interna-tional Services, Mazaya Qatar, United Development Compa-ny, Barwa and Qatari Investors Group; even as Industries Qatar, Ezdan and al khaliji were among the gainers.
Domestic institutions turned net sellers to the extent of QR39.41mn compared with
net buyers of QR7.92mn on Sunday.
The GCC (Gulf Coopera-tion Council) institutions were also net sellers to the tune of QR9.24mn against net buyers of QR2.59mn on October 2.
However, non-Qatari institu-tions’ net buying strengthened perceptibly to QR29.61mn com-pared to QR15.08mn the previous day.
Local retail investors turned net buyers to the extent of QR18.8mn against net sellers of QR18.79mn on Sunday.
Non-Qatari individual inves-tors were also net buyers to the tune of QR0.89mn compared with net sellers of QR4.19mn on October 2.
The GCC individual investors’ net profi t booking declined to QR0.64mn against QR2.64mn the previous day.
Total trade volume was down 9% to 6.33mn shares, while value rose 19% to QR221.66mn; even as deals declined 22% to 2,586.
There was 47% plunge in the consumer goods sector’s trade volume to 0.19mn equi-ties but on 11% jump in value to QR7.61mn. Transactions shrank 33% to 292.
The insurance sector’s trade volume plummeted 25% to 0.03mn stocks, value by 27% to QR2.35mn and deals by 33% to 39.
The market witnessed 25% shrinkage in the telecom sector’s trade volume to 2.77mn shares but on 17% increase in value to QR71.25mn. Transactions de-clined 42% to 322.
The industrials sector’s trade volume tanked 12% to 0.61mn equities; while value gained 87% to QR45.77mn. Deals fell 29% to 417.
However, the transport sec-tor reported 53% surge in trade volume to 0.26mn stocks to more than double value to QR14.85mn on 5% rise in trans-actions to 184.
The banks and fi nancial serv-ices sector’s trade volume soared 34% to 1.47mn shares, value by 2% to QR60.98mn and deals by 10% to 985.
The real estate sector saw 6% jump in trade volume to 1mn eq-uities but on 22% decline in value to QR18.86mn and 44% in trans-actions to 347.
In the debt market, there was no trading of treasury bills and government bonds.
Saudi stocks swing widely; Gulf weak
ReutersDubai
Gulf stock markets were weak
yesterday as Saudi Arabia
swung widely, hit by plans for
reforms to the telecommunica-
tions industry, but Egypt rose
sharply on hopes that its Inter-
national Monetary Fund loan
would be finalised soon.
The Saudi index fell more
than 2% at one stage as Saudi
Telecom, the country’s top
operator, tumbled as much
as 8.5% after the government
said it would provide telecom-
munications firms with “unified
licences” allowing them to off er
a full range of services.
The stock closed 4.9% lower
and the Saudi index finished
down 0.6% at 5,416 points, its
lowest close since March 2011,
in active trade.
Elsewhere in the Gulf, where
most bourses had been closed
on Sunday for Islamic New
Year holidays, sentiment was
weak partly because of concern
about the Saudi market.
Dubai’s index fell 1.9% to 3,408
points, breaking technical
support on the August and
September lows of 3,430-3,442
points. In Kuwait, the key index
fell 0.7% to 5,359 points, the
Oman index dropped 0.9% to
5,675 points and the Bahrain
index lost 0.5% to 1,145 points.