BUSINESSTuesday 6 March 2018

PAGE | 23PAGE | 22Days of tax cuts are over in UK,

think-tank warns

Qatar’s PPI increased 5.9%in January

QSE’s first ETF evokes huge market responseSATISH KANADY THE PENINSULA

DOHA: Riding a wave of popu-larity in the global market, the Qatar Stock Exchange (QSE) yesterday listed the market’s first Exchange Traded Fund (QETF) on the bourse under the ticker ‘QETF’.

Investors looking for exposure to Qatari market, but wanted to avoid selecting stocks themselves, now have the additional choice. The Fund will track the QE Index that measures the price perform-ance of the top 20 largest and most liquid companies on Qatar Stock Exchange.

Investors can now buy a QSE replica in one single decision. QETF can be bought and sold like any other stocks on the exchange through brokers. As QETF tracks the QSE benchmark index, it allows investors to obtain exposure to a diversified portfolio with one single decision.

The listing of the QETF was formally announced in a ceremo-nial bell-ringing held at Qatar Stock Exchange. Established by Doha Bank and managed by Amwal, the QETF is arguably the largest ETF in the GCC. The Group Securities, as the QETF’s Liquidity

Provider will support trading by making competitive “two-way” pricing, allowing investors to trade QETF with ease. The Group will maintain the supply of ETF units and ensure the ETF’s price is in line with the value of its underlying index portfolio. Standard Char-tered Bank will act as custodian

and fund administrator. After launching the Fund, Rashid Ali Al Mansoori, CEO of the Qatar Stock Exchange said: “Great thought and effort has gone into the development of an ETF market at QSE and a listing based on our main index was always going to be a proud moment.

There’s no denying the popularity of ETFs globally and we’re excited at the new trading opportunities the ETF provides to our investors.”

Speaking on the sidelines of the event, Dr R Seetharaman, Group CEO, Doha Bank said:” It’s a milestone for Qatari economy.

The Fund is a very unique in value proposition for local inves-tors, international investors indi-viduals as well as institutional investors…. The initial size of the fund is QR150m. It is subjected to change as the market fluctu-ates. We are targeting $2bn during the first year.”

““Through our collaboration with Amwal and The Group Secu-rities, we believe the QETF holds immense promise and opens a gateway to the Qatari market for

global investors. We expect this to be the first of many future products focused on Qatar,” Dr Seetharaman said.

Sheikha Hanadi Nasser bin Khaled Al Thani, Chairperson of Amwal commented: “Amwal is proud to have the QETF as part of its product portfolio. Passive investment strategies are playing a bigger role for institutional investors looking for emerging market exposure as part of their global asset allocation.”

Rashid Ali Al Mansoori, CEO of the Qatar Stock Exchange (right) Sheikha Hanadi Nasser bin Khaled Al Thani (centre), Chairperson of Amwal; Dr R Seetharaman (second right), Group CEO, Doha Bank along with other officials during the listing of ETF at Qatar Stock Exchange, yesterday. PIC: ANWAR SADATH

GIS to invest QR1.5bn to improve efficiencyMOHAMMAD SHOEB THE PENINSULA

DOHA: Gulf International Serv-ices (GIS) has announced plans to make a huge capital expend-iture in the coming years. The company, which is the largest services group in Qatar, will be investing QR1.5bn over the next five years, the Chairman of the Board of Directors of GIS, Sheikh Khalid bin Khalifa Al Thani said yesterday.

Much of these investments are aimed to respond to improving the efficiency and reducing operating costs so that the group will continue to remain competitive.

“The capital expenditure relating to the new opportuni-ties arising from the potential growth strategy implementation will be assessed on a case-by-case basis, the details of which will be made available to share-holders,” Sheikh Khalid noted in his address at the group’s Annual General Meeting held yesterday.

Commenting on the compa-ny’s future performance, he added: “I am optimistic about the future performance of GIS in the medium and long run. There are a number of opportunities which are potentially available to GIS in the immediate future.”

Some of the important job

opportunities GIS is banking upon include additional drilling requirements and aviation serv-ices with Qatar Petroleum’s (QP) recent plans to develop the North Field; new drilling serv-ices arising from the commence-ment of operations of QP’s new joint venture, North Oil Com-pany among others.

GIS is one of the largest com-panies in Qatar with interests in a broad cross-section of indus-tries, ranging from insurance, re-insurance, onshore and offshore drilling, accommodation barge, helicopter transportation, and catering services.

Sheikh Khalid also noted that Al Koot, an insurance arm

of the GIS, is now better equipped to provide a broader insurance services as the gov-ernment is considering the pro-vision of health insurance to the Qatari citizens via private insurers.

The GIS shareholders approved all the items on the agenda of the meeting, including the Board of Direc-tors recommendation for no dividend distribution for the 2017, as it intends to use the funds for investment opportu-nities identified in the Compa-ny’s growth strategy; where GIS will deploy the retained funds to invest in the group’s activi-ties, capturing the growing

d e m a n d l o c a l l y a n d internationally.

GIS reported a net profit of QR85m for last financial year ended December 31, 2017, up by 27 percent compared to previous year.

For the period from the ini-tial public offering in February 2008 to 2016, the group’s share-holders have received accumu-lated cash dividends of QR2.6bn, which is equivalent to circa QR14.2 per share, with an average payout ratio of approx-imately 55 percent. In addition, shareholders have received a total of 63 million additional shares through three bonus issuances.

The Chairman of Gulf International Services, Sheikh Khalid bin Khalifa Al Thani (centre), with Vice Chairman, Suleiman Haidar Al Haidar (second left), Managing Director, Ebrahim Ahmed Al Mannai (right), and other members of board of directors, attending the AGM of the company held at the La Cigale Hotel in Doha yesterday. PIC: SALIM MATRAMKOT/THE PENINSULA

THE market gave an over-whelming reception to the QETF as the first day witnessed the trading of over 60,000 units at a value of over QR5m. The Fund, however, closed 1.6 percent down.

The bid-offer spread of 3-4 dirhams was maintained for most of the trading session. This is useful as it encourages investor participation, a top market expert told The Peninsula.

“It was a great start. We are expecting higher trade going forward as the investors

will understand more about the product”, Talal F Samhouri, Head of Asset Management, Amwal, told The Peninsula.

Akber Khan, Senior Director-Asset Management Group, Al Rayan Investment,” commented: “A successful day for Doha Bank, Amwal and Qatar as the largest ETF in the region is now listed in Doha. Trading liquidity and the bid-offer spread were enhanced by the liquidity provider.”

The QSE’s benchmark index was down 3.16 percent.

Better-than-expected response

Qualcomm requests national security review of Broadcom bidAFP

WASHINGTON: US chipmaker Qualcomm postponed its annual shareholders’ meeting after secretly requesting a national security review of Broadcom’s bid to take over the company, the Singapore-based Broadcom announced yesterday.

Qualcomm shareholders were due to meet today, but Broadcom said it was informed Sunday night Qualcomm secretly filed a voluntary request on January 29 for US regulators to investigate the deal, and was ordered to post-pone the meeting for 30 days.

“It should be clear to eve-ryone that this is part of an unprecedented effort by Qual-comm to disenfranchise its own stockholders,” Broadcom said in a statement.

The Committee on Foreign Investment in the United States (CFIUS) can review any acqui-sition by a foreign corporation of a US firm that may have an impact on national security, and can recommend the President block the deal. CFIUS has blocked some deals, but

frequently foreign companies withdraw once it appears a transaction will be prohibited.

Broadcom said it will fully cooperate with the review, but rejected any national security concerns since it is a US-con-trolled company, and is in the process of relocating its head-quarters back to the US.

If finalized, the Broadcom-Qualcomm tie-up, estimated at $117bn, would be the largest merger in a sector awash with consolidation amid the devel-opment of technologies for autonomous vehicles and 5G mobile services.

Qualcomm has repeatedly rejected multiple Broadcom offers it says undervalue the company, and which could face opposition from the antitrust regulators. The shareholders were due to consider on sev-eral candidates to the board of directors supported by Broadcom. “This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom’s independent director nominees,” the state-ment said.

8,454.18 -275.88 PTS3.16 %

QSE FTSE100 DOW BRENT7,115.98 +46.08 PTS0.65%

24,798.89 +260.83 PTS1.06% Dow & Brent before going to press

$62.55 +1.30

22 TUESDAY 6 MARCH 2018BUSINESS

Qatar’s PPI increased 5.9%in JanuaryTHE PENINSULA

DOHA: The Producer Price Index (PPI) for the industrial sector for January 2018 increased by 5.9 percent to 66.1 points compared to the previ-ous month and rose by 18.7 percent (y-o-y) compared to the PPI of January 2017.

The Index data, released yesterday by the Ministry of Development Planning and Sta-tistics, consists of three main sectors including mining, 72.7 percent of the general index, manufacturing, 26.8 percent, and electricity and water, 0.5 percent.

The mining PPI of January, 2018 showed an increase of 7.6 percent when compared with PPI of December 2017, prima-rily due to the increase of prices of “Crude petroleum and nat-ural gas”. PPI of January 2018, when compared with its coun-terpart in the previous year (January 2017), there has been a considerable increase of 19.9 percent.

Manufacturing saw an increase of 3.1 percent has been recorded in January, 2018, when compared with the pre-vious month’s Manufacturing index ( December,2017). The prices increased are seen in: basic metals by 6.5 percent, basic chemicals by 5.1 percent, refined petroleum products and by 2.3 percent, cement and other non-metallic products by 0.6 percent.

However, the decreasing prices are noticed in rubber and

plastics products by 2.3 percent, grain mill and other products by 0.3 percent, no monthly change noticed in juices, dairy products, beverages, paper and paper products, other chemi-cal products and fibers.

Comparing with the index of counterpart in the previous year (January 2017), manufac-turing PPI of January, 2018 showed a rise of 16.4 percent. the major groups which explain this price increase are refined petroleum products by 20.1 percent, followed by basic met-als by 19.5 percent,basic chemicals by 10.1 percent, other chemical products and fibers by 5.0 percent, dairy products by 4.2 percent, paper and paper products by 4.0 percent, grain mill and other products by 1.4 percent, and juices by 0.7 percent.

However, prices fall also noticed in cement and other non-metallic products by 4.5 percent, beverages by 1.0 per-cent rubber and plastics products by 0.8 percent.

Electricity and water the PPI of this group showed a decrease of 2.5 percent com-pared to December 2017, resulting from a decreasing price seen in water by 9.1 per-cent, and an increasing in electricity by 2.0 percent.

When compared, the PPI of January, 2018, to the PPI of Jan-uary, 2017, showed an increase Y-o-Y of 3.0 percent, affected by a rise in electricity by 9.0 percent and a fall in water by 5.4 percent.

Alfardan Premier Motors launches special offersTHE PENINSULA

DOHA: Alfardan Premier Motors Co., the exclusive retailer of Jaguar and Land Rover in Qatar, is offering customers special deals on Jaguar Land Rover vehicles during the month of March.

Customers can benefit from unmatchable offers by getting the easiest payment plans and extra benefits on financed vehi-cles with up to 3 months grace period with interest covered by

Alfardan Premier Motors and up to 9 months instalments covered by Alfardan Premier Motors.

The offers come atop com-plimentary 24/7 roadside assistance, 5 years warranty / 250,000 Km (whichever comes first) on Jaguar models and 5 years warranty / 150,000 Km (whichever comes first) on Land Rover models.

Commenting on the special offers, Samer Bou Dargham, General Manager for Alfardan

Premier Motors, said: “At Alfardan Premier Motors, we are dedicated to provide the very best in customer satisfac-tion and first-class service. These new deals mean that our customers will not only drive away in exceptional vehicles but will also be able to take advantage of outstanding offers to purchase their dream cars.”

These exclusive offers will be available until March 31, 2018 at Alfardan Premier Motors showrooms in Qatar.

A model of Jaguar F Pace.

Barwa Bank names winners of National Day cards campaignTHE PENINSULA

DOHA: Barwa Bank, announced the winners of its “National Day Debit & Credit Cards” campaign, which was launched on November 11, 2017 and ended on January 31, 2018.

Barwa Bank celebrated National Day by launching its limited-edition debit and credit cards, that offered cus-tomers a host of privileges.

Using Barwa Bank Master-card credit card locally and internationally for every pur-chase worth QR1,000, provided customers the eligi-bility to enter a draw and win one of the 18 QR 5,000 cash prizes. Same chance was granted to customers using their debit cards internation-ally. The draw took place at Barwa Bank head office in the presence of the Ministry of Economy and Commerce rep-resentatives alongside Barwa Bank officials. As part of the campaign, Barwa Bank offered 10,000 loyalty points to new customers applying to their credit cards.

QIC Group honours long-serving employeesTHE PENINSULA

DOHA: Qatar Insurance Group recently honoured its employees with long service award certifi-cates for completing 10, 20 and 30 years of dedicated service at the company. The long-service award certificates were handed over to the awardees by Ali Al Fadala, Senior Deputy Group President & CEO of QIC Group in the presence of Abdulla Al Mulla, Group Chief Administrative Officer QIC Group and other QIC officials.

“This event reflects the sig-nificance that Qatar Insurance Group has towards its employ-ees. In view of this and in order to recognise the wide spectrum of capabilities and skill sets of our

staff, we constantly organize employee retention initiatives to empower them further,” Al Fadala said.

Al Mulla commented: “The

employee recognition ceremony, clearly highlights our way of treating our human capital as the ‘most treasured asset. It is because of our employees’

dedication and commitment that has shaped and defined QIC Group’s growth trajectory and has placed us as a market leader in the MENA region’”

QDB organises customer relations trainingTHE PENINSULA

DOHA: The Business finance department at Qatar Develop-ment Bank (QDB), through its Al-Dhameen programme, recently organsied a training session titled “Best Practices and Innovation in Customer Rela-tionship Management” . The session was attended by senior representatives from local banks under the Al-Dhameen programme in Qatar.

The Annual Partner Banks training session aimed at pro-viding the participants with the right knowledge and skills to attract the entrepreneurs and maintain loyalty, improving their knowledge on best practices in relationship management, empowering them to develop innovative strategies, guiding them to achieve the highest lev-els of customer satisfaction by understanding their customer’s requirements and providing them with attractive offers that meets their aspiration, as well as training them to communi-cate effectively with clients and address any possible challenges.

More than 20 delegates attended the training session from partner banks of its Al Dhameen indirect lending pro-gramme which included: Al Ahli Bank, QNB, Bank Al Jazeera, Al Khaliji Bank, Barwa Bank, Com-mercial Bank of Qatar, Doha Bank, International Bank of Qatar, Mashreq bank, Qatar Islamic Bank, Qatar International

Islamic Bank, First Finance and United Bank Limited.

The session was delivered by Dr Omar Merlo who is the Assist-ant Professor in Marketing at Imperial College Business School in London to provide lectures and training. Dr. Merlo is best known for his work on market-ing’s strategic role within organizations and on innovation in customer and services man-agement, and has a vast consulting experience in the financial sector around the globe including banks within the State of Qatar. Previously Dr. Merlo was a Lecturer in Marketing at Cambridge University and at the University of Melbourne and held visiting professor positions in many other academic

institutions. Dr Merlo holds degrees in Economics & Com-merce and in Political Science, as well as a Master in Business Strategy. He was awarded his Ph.D. in Marketing Strategy from the University of Melbourne.

“The training session is a result of QDB’s efforts to uplift-ing the financial service sector to new heights and levels by pro-viding educational programmes, and training courses for employ-ees of the financial institutions in Qatar,” said Abdulaziz bin Nasser Al Khalifa, Chief execu-tive officer of Qatar Development Bank.:

“The training session which was hosted by the Business Finance Department (Al Dhameen Programme) at QDB

was attended by senior employ-ees and customer service managers from local partner banks, and delivered by one of the most experienced lecturer and academic in strategic mar-keting and customer service management who offered many lectures and practical exercises which highlighted the session’s main objectives and goals. Such programmes, initiatives and courses, which we continue to provide to the financial sector in Qatar, are primarily designed in developing the human capital which is the most essential ele-ment for a successful and sustainable economy and con-tributes to the achievement of the Qatar National Vision 2030,” Al Khalifa added.

Officials and participants at the QDB training session on ‘Best Practices and Innovation in Customer Relationship Management.’

The mining PPI of January, 2018 showed an increase of 7.6% when com-pared with PPI of December 2017, primarily due to the increase of prices of “Crude petroleum and natural gas.”

Manufacturing PPI of January, 2018

showed a rise of 16.4%

Euro-area economy looked a little less buoyant in FebruaryBLOOMBERG

LONDON: The euro-area economy may have lost a little more momentum than initially estimated in February, adding to signs that the pace of growth may be moving past its peak.

IHS Markit’s composite Purchasing Managers’ Index slipped to 57.1 from 58.8 in January.

That’s the weakest in four months and below the flash estimate of 57.5. Separately, Sentix said yesterday that Don-ald Trump’s threat of tariffs on imported steel and aluminum undercut optimism among investors, with euro-area sen-timent dropping to the lowest in almost a year.

The PMI report showed that Germany, the region’s largest economy, grew the least in three months, while France also cooled. Spain bucked the trend among the major economies, with the best PMI reading in eight months.

In Italy, which held national elections the compos-ite PMI also declined, albeit from a 10 1/2-year high.

The latest euro-area eco-nomic f igures fol low confidence surveys in recent days that show expansion in the 19-nation region may be coming off the boil after the

best year in a decade in 2017. The drop in the Sentix index was far greater than economists had anticipated and took the gauge to its weak-est since April.

The readings also come just days before the European Central Bank’s policy meeting on Thursday. While some offi-cials have already argued in favor of advancing down the exit route, President Mario Draghi has pushed back.

“These new economic question marks reduce the pressure on the ECB to tighten its monetary policy reins -- something that Mario Draghi does not favor at the moment anyway,” Manfred Huebner, managing director at Sentix, said.

While the PMIs have weakened, IHS Markit noted that they remain well above the key 50 level and indicate growth is running at a quar-terly pace close to 1 percent. Economists surveyed by Bloomberg see total output slowing to 2.3 percent in 2018, down from 2.5 percent in 2017.

“It’s too early to read too much into the February fall,” said Chris Williamson, IHS Markit’s chief business econ-omist. “Some pull-back from January’s high was always on the cards.”

QIC officials with the employees during the event.

23TUESDAY 6 MARCH 2018 BUSINESS

Days of tax cuts are over in UK, think-tank warnsREUTERS

LONDON: The days of tax cuts in Britain are over and the baby-boomer generation should prepare for higher wealth taxes to fund an inevitable surge in healthcare costs, the Resolution Foundation think tank saidye-sterday.

The new research showed spending on education, social security and above all health looks set to rise by £20bn ($28bn) a year in today’s money by the end of the next decade and by £60bn a year by 2040.

Britain has steadily brought down a budget deficit that stood at 10 percent of economic output in 2010 mostly through spending cuts for many government

departments. But many of the easier-to-make cuts to spending have already been made, putting pressure on the government to consider raising more revenues through taxes.

Finance minister Philip Hammond, who is due to deliver a half-yearly budget statement

on March 13, has cut Britain’s budget deficit faster than expected this financial year.

But the Resolution Founda-tion report showed the govern-ment will have its hands tied by rising public spending over the coming years.

Most of the increase will be

caused by spending on health as Britain’s population ages - a demographic timebomb that means the “age of tax cuts is over”, David Willetts, chair of the Resolution Foundation and a former Conservative government minister, said.

“The time has come when we boomers are going to have reach into our own pockets. The alternative could be an extra 15 (pence) on the basic rate of tax, paid largely by our kids.”

Baby-boomers are consid-ered to be people who were born before the mid-1960s.

Underlining why baby-boomers will need to shoulder more of the tax burden, the Res-olution Foundation said millen-nials - born between 1981 and

2000 - spend more of their income on housing costs than any generation since the late 19th century. But home ownership in Britain has plummeted over the last 20 years among young adults, who have had to pay more towards pensions while bearing the brunt of weak wage growth since the financial crisis.

As a result, wealth has become increasingly skewed towards older people.

“For many years, higher wealth taxation has been off the political agenda,” Willetts said.

“But unless we act, at some point we will face a choice between changing our approach to taxation, or cutting access to the NHS and letting social care get into an even deeper crisis. We

can’t delay that debate any longer.”

Willetts added that politi-cally difficult reforms on wealth, inheritance and local council taxes would be needed.

Tax as a share of economic output in Britain rose to 33.2 per-cent in 2016, the highest level since 2011, according to the Organisation of Economic Co-operation and Development (OECD).

Still, this stands slightly below the average of OECD countries of 34.3 percent. Britain ranks above the OECD average in terms of revenue collected from income and property taxes, but is below average when it comes to social security and cor-poration tax.

WTO chief warns against tipping ‘first dominoes’ in trade warAFP

GENEVA: The head of the World Trade Organization warned senior diplomats yesterday against tipping “the first dominoes” in a trade war that would be hard to reverse and trigger a deep recession.

The stark alert from WTO director-general Rob-erto Azevedo (pictured) came days after President Donald Trump’s announce-ment last week that Wash-ington was set to impose heavy tariffs on steel and aluminium imports into the US.

US trading partners, including China and the European Union, already are preparing to retaliate and have pledged to file a dis-pute at the 164-member WTO.

“In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of trig-gering an escalation of trade barriers across the globe”, WTO director-general Rob-erto Azevedo told a heads of delegation meeting at the organisation’s Geneva headquarters.

“We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully.

“Once we start down this path it will be very dif-ficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession”, he said.

“We must make every effort to avoid the fall of the first dominoes”, Azevedo continued, adding that “there is still time”.

Azevedo, a former Bra-zilian trade envoy, on Friday said that he was “clearly concerned” about Trump’s promised new tariffs -- 25 percent on steel and 10 per-cent on aluminium.

Trump said yesterday on Twitter that he would only scrap planned tariffs on aluminium and steel if a “new & fair” deal to revamp the North American Free Trade Agreement is reached.

Toyota adds $2.8bn to software push for self-driving vehiclesBLOOMBERG

CHICAGO: Toyota Motor Corp. plans to spend $2.8bn to make sure its system for writing the software for self-driving cars will be just as efficient as the factories that build them.

The company needs faster and more reliable methods for writing software because self-driving cars require “millions and millions’’ of lines of com-puter code, according to James Kuffner (pictured), who’ll lead the new effort. That compares with tens of thousands of lines of code in cars just a generation ago.

The Japanese automaker is seeking an edge over rival car giants as well as newcomers such as Alphabet Inc.’s Waymo as the industry charts a path toward self-driving vehicles. Kuffner said he plans to hire 1,000 programmers as soon as he can find them, seeking to lure global talent.

“We’re not just doubling down but quadrupling down in terms of the budget,’’ Kuffner said in an interview. “We have nearly $4bn to really have Toyota become a new mobility company that is world class in software.’’ For the effort, Toyota is setting up a new company in Tokyo with two of its suppliers. On Friday, Kuffner was named chief executive officer of the venture, called Toyota Research Institute -- Advanced Development.

Toyota had already allocated

$1bn to start a free-standing unit called Toyota Research Institute in 2015 to study self-driving, robotics and artificial intelli-gence. Kuffner, has been serving as chief technology officer for TRI, which now has about 250 employees. Before that, he was the leader of robotics and cloud computing research at Alphabet’s Google unit.

Toyota’s two biggest sup-pliers, Denso Corp. and Aisin Seiki Co., will invest in the new venture, each taking a five per-cent stake, the carmaker said.

Currently, Kuffner said, teams of programmers work in isolation to solve portions of a big problem like self-driving and then spend “years and years’’ piecing their work together and testing it with AI and other tools. Toyota plans

to streamline this process by validating each chunk of soft-ware as it’s written to make sure it’s robust enough for the cars and trucks that Toyota sells to the public. Kuffner com-pared the process he hopes to establish to the Toyota Produc-tion System, which achieved industry-leading quality and efficiency in the 1980s by requiring workers to shut down assembly lines rather than tol-erate defects that need to be repaired later.

He said he hopes to use the new system for the electric, fully self-driving delivery vans that Toyota plans to showcase at the 2020 Tokyo Olympics, and for the increasingly-sophisticated safety equipment Toyota is installing in vehicles on sale today.

James Kuffner chief executive officer of Toyota Research Institute- Advanced Development, is seen in this file picture.

Shadow banking sector worth $45.2trn in 2016: RegulatorsAFP

ZURICH: The global non-bank or “shadow” financial sector was estimated to be worth some $45.2 trillion at the end of 2016, marking a clear hike from a year earlier, financial regula-tors said yesterday.

In a report, the Financial Stability Board (FSB) said shadow banking activities across 29 jurisdictions, which together represent more than 80 percent of global GDP, grew 7.6 percent in 2016.

The sector includes hedge funds and finance companies or securities entities that pro-vide credit or credit guarantees without being regulated like a bank.

The international regula-tory body said the growth in the sector seen in 2016 was largely driven by collective investment vehicles, like credit hedge funds and money market funds.

This segment swelled by 11 percent during the year to an estimated value of $32.3 trillion, FSB said.

Following the 2008 finan-cial crisis, when the collapse of international banks threatened to bring down entire econo-mies, the size and systemic risk of the little-regulated shadow sector also came under scrutiny.

This sparked the creation of the Switzerland-based FSB,

which monitors and makes recommendations about the global financial system to the G20, and which publishes annual reports into the parallel banking system under its remit to promote internationally t r a n s p a r e n t f i n a n c i a l stability.

“Market-based finance provides increasingly critical alternatives to bank lending in the financing of economic growth,” said FSB chair Mark Carney, who also serves as governor of the Bank of Eng-land. “It is vital that resilience of the sector is maintained as it continues to evolve,” he said in a statement, stressing that “a close understanding of emerging risks helps guide our judgement on appropriate policy responses.”

In 2015, FSB introduced a narrower definition of the shadow banking sector, con-centrating particularly on credit intermediation that may pose financial stability risks.

According to its previous, larger definition of the sector, comprising all financial insti-tutions except central banks, banks, insurance corporations, pension funds, public financial institutions, and financial aux-iliaries, it was valued at $99 trillion at the end of 2016, accounting for 30 percent of global financial system assets, FSB said.

Nigeria’s inflation threatens to curb rate-cut hopesBLOOMBERG

ABUJA: Nigeria’s long-awaited interest rate-cutting cycle risks being short-lived, if it starts at all.

Governor Godwin Emefiele said last month the Central Bank of Nigeria may reduce its benchmark from a record-high 14 percent before July if infla-tion drops closer to single digits. But with fuel costs surging and government spending swelling before next year’s election, he may struggle to reach that threshold at a time when the pace of price growth is still just over 15 percent.

“With inflation remaining sticky, it is unlikely that the CBN would want to cut rates so soon,” Gaimin Nonyane, the London-based economic-research head at Ecobank Tran-snational Inc., said by email.

Complicating the picture is the Senate’s refusal to approve President Muhammadu Buhari’s nominees to the Monetary Policy Committee, which means the panel lacks a quorum to hold meetings to formally set rates, further delaying any hope of cuts. The MPC didn’t sit in January, and it’s not clear if the

March 20 decision will be made. The inflation rate in Afri-

ca’s most-populous nation rose to 15.1 percent in January from a year earlier and has exceeded the target range of 6 percent to 9 percent for 2 1/2 years. The statistics agency is due to release data for February on March 14.

Africa’s largest oil producer imports almost all its refined-fuel requirements because local

capacity can’t match demand. While higher crude prices have increased Nigeria’s revenue, they have also raised the cost of processed products, with the average gasoline price surging 27 percent in January from a year earlier. The resultant fuel shortages prompted retailers to boost pump prices above the official cap of 145 naira ($0.40) a liter, adding to inflationary pressures.

“Unless fuel pricing is resolved, bouts of fuel shortages could keep prices sticky, feeding into other items,” said Razia Khan, head of macroeconomic research at Standard Chartered Bank Plc in London.

Price growth might fall fur-ther before rising again in the second half because of election spending, Statistician-General Yemi Kale said Feb. 16. Buhari hasn’t declared if he will seek re-election in the planned Feb-ruary 2019 vote, but attempts to appease voters may see spending increases.

The Nigerian National Petroleum Corp. said yester-dayday that a 70 percent increase in gasoline consump-tion was costing it 774 million naira ($2.1m) daily. The increase

was due to a “proliferation of fuel stations” and smuggling to neighboring countries, the state-run company said in a statement.

Capital investments will continue as planned, and that will help the ruling All Progres-sives Congress win votes, Finance Minister Kemi Adeosun said in a Jan. 23 interview. There will be no fiscal indiscipline, and no inflation attributed to such spending, she said.

Lawmakers are debating Buhari’s proposal to increase spending plans this year by 16 percent to 8.6 trillion naira, with a focus on increasing invest-ment in roads, rail and power.

The International Monetary Fund forecast gross domestic product expansion at 2.1 per-cent this year, strengthening the recovery in an economy that contracted for the first time in a quarter century in 2016.

“With oil prices and pro-duction outlook appearing pos-itive and with external reserves strengthening, the CBN has greater scope to than a year ago to reduce the policy rate,” Ecobank’s Nonyane said. “How-ever, this would depend on how fast consumer prices fall.”

Finance minister Philip Hammond, who is due to deliver a half-yearly budget statement on March 13, has cut Britain’s budget deficit faster than expected this financial year.

Tax as a share of economic output in

Britain rose to 33.2% in 2016

Greece returns to growth for second time in a decadeAFP

ATHENS: Greece’s economy grew by 1.4 percent last year, the national statistics agency Elstat said yesterday, only the second time in a decade of crisis the eurozone nation has managed any growth.

The country’s economy shrank by a quarter during an eight-year long recession, aggravated by spending cuts and tax hikes required under its international bailouts.

Debt-laden Greece managed 0.7 percent growth in 2014, but the recovery was squelched by a period of brinkmanship that nearly led to a default and the country exiting the euro before a third inter-national rescue was agreed.

The 1.4 percent growth rate is below the 1.8 percent estimated by the govern-ment in the 2018 budget it submitted in December.

The inflation rate in Africa’s most-populous nation rose to 15.1 percent in January from a year earlier and has exceeded the target range of 6 to 9% for 2 1/2 years. The statistics agency is due to release data for February on March 14.

24 TUESDAY 6 MARCH 2018BUSINESS

China keeps growth target at 6.5%REUTERS

BEIJING: China aims to expand its economy by around 6.5 percent this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said yester-day.

The goal was kept unchanged, even though the economy grew 6.9 percent last year and exceeded the govern-ment’s target, suggesting Beijing will deepen its push to contain risks from an explosive build-up in debt.

Sources previously told Reuters that China will main-tain its growth target at “around 6.5 percent”.

Economists had already expected the world’s second-largest economy to lose some momentum this year as the gov-ernment continues to rein in corporate debt, while a war on pollution and a cooling prop-erty market will weigh on manufacturers and real estate investment.

But last week’s sharp esca-lation in trade tensions with the United States has jumped to the top of the list of uncertainties facing China this year.

Premier Li said China opposes protectionism and sup-ports the settlement of trade disputes through negotiation, but will “resolutely safeguard” its legitimate rights and interest.

Yet, China will keep its cur-rency, the yuan, basically stable, Li said in remarks to the open-ing of the annual meeting of parliament.

Li said China’s economy and financial risks “are generally under control” but more needs to be done to resolve issues such as local government debt.

He also said China will improve supervision over shadow banking, internet finance and financial holding companies, and step up risk con-trols at financial institutions.

While maintaining “pro-active” fiscal policy, Li said China will cut its budget deficit target to 2.6 percent of gross domestic product (GDP) this year from 3 percent in 2017.

The cut, the first since 2012, suggests Beijing will be more watchful of fiscal spending as it tries to slow the rapid accumu-lation of debt, without tapping the brakes so hard that it risks a sharper slowdown in economic growth.

Most analysts had expected the 2018 budget deficit target would be largely maintained or come in slightly lower.

Heavy government infra-structure spending was a major driver behind China’s forecast-beating growth last year, but Beijing has been cracking down in recent months on some rail and road projects launched by

local governments as it seeks to curb their massive debts. Li also reiterated that China will keep its prudent monetary policy neu-tral, with easing or tightening only as appropriate.

China will keep monetary policy neither too loose nor too tight, and will maintain reason-ably steady liquidity, he said.

While the central bank has been gingerly raising money market rates as part of its crack-down on riskier lending practices, it has also kept mar-kets generally well supplied with funds whenever there are wor-ries of a deeper cash squeeze, and bank lending hit a fresh record last year.

Li also said he expects rea-sonable growth in broad M2 money supply and total social financing this year, without stat-ing a target.

The National Development and Reform Commission, the state planner, said in a separate report that outstanding total social financing (TSF) and M2 growth will grow at a similar pace this year as in 2017.

TSF grew 12 percent last year, in line with the target, but M2 growth slowed to 8.2 percent, below the goal of around 12 per-cent. ANZ had expected both targets to be set at 10 percent or lower this year.

China also set its consumer price index at “around 3 percent” compared with 3 percent last year, as widely expected.

Stability will be the watch-word this year as President Xi Jinping pursues his vision of turning China into a “modestly prosperous” nation by 2020 and into a “strong power” on the world stage by 2050.

Lei Jun (centre), Chairman and CEO of Xiaomi Technology and Chairman of Kingsoft Corp arrives at the Great Hall of the People ahead of the opening session of NPC, China’s legislature, in Beijing, yesterday.

French insurer AXA goes large with XL Group purchaseAFP

PARIS: French insurer AXA snapped up Bermuda-based XL Group yesterday in a move it says will make it the leading provider of property and casualty cover-age for businesses.

The deal, for about $15.3bn (¤12.4bn) in cash, will “create a new AXA”, CEO Thomas Buberl told reporters.

The deal has been agreed by the boards of both companies and is expected to be completed in the second half of this year, AXA said in a statement.

It will see AXA speeding up its refocus away from the US market as it aims to shift towards more robust settings “less sensi-tive to financial markets”, it said.

Branding it “a major leap for-wards in AXA’s strategic journey”, the French company said the acquisition offered “significant long-term value creation for our stakeholders with increased risk diversification, higher cash

remittance potential and rein-forced growth prospects”.

“The combination of AXA’s and XL Group’s existing position will propel the Group to the #1 global position in P&C (property and casualty) commercial lines with combined 2016 revenues of 30 billion euros and total P&C revenues of 48 billion euros,” the Paris-based insurer said.

The purchase price of $57.60 represents a premium of 33 per-cent over XL Group’s closing share price on Friday.

The acquisition is AXA’s larg-est since it purchased Swiss insurer Winterthur in 2006 for 8.6 billion euros.

AXA described XL Group as “a highly agile company renowned for innovative client solutions and has a comprehen-sive business model of originating, packaging and sell-ing risks”.

XL has some 7,400 employ-ees around the world, whom AXA CEO Thomas Buberl described as

“world-class teams with recog-nised expertise.”

The merger comes as AXA seeks to focus its activity on around 15 out of the 60 coun-tries where it currently operates.

“The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks,” Buberl said.

This planned shift comes as AXA -- like many of its European rivals -- struggles with low inter-est rates on life insurance premiums, and with strong r i v a l r y f r o m o n l i n e competitors.

The insurer’s shares dropped 7.92 percent on the Paris stock exchange to 23.23 euros, however, with Bloomb-erg news citing an analyst as saying the price was at the upper end of expectations.

But Frederic Rozier of the Mirabaud France investor group said the pricing was not actually

the biggest problem. “It is not the cost of the operation that has triggered some concern today,” Rozier said. “Rather, it is the financing of the operation that has raised some doubts.”

Of the $15.3 billion price tag on the deal, the company will be able to finance about a third

itself, with the rest projected to come from financial market investors, the analyst said.

“The problem is that some believe that that might be a bit tight, and are therefore antici-pating a potential capital increase of about 10 percent for AXA,” he added.

Thomas Buberl, Chief Executive Officer of French insurer AXA, is seen speaking during the company’s 2017 annual results presentation in Paris, France, in this file picture

Bangladesh & Vietnam aim to raise trade to $2bn by ’20REUTERS

DHAKA: Bangladesh and Vietnam aim to raise their two-way annual trade to $2 billion over the next three years from nearly $1bn, a business association official said on yesterday.

“We had a meeting with the visiting president of Viet-nam today and focused on trade and investment,” Mohammad Shafiul Islam, president of Federation of Bangladesh Chambers of Commerce and Industries, told Reuters.

Vietnamese President Tran Dai Quang arrived in Bangladesh for a state visit on Sunday.

At present, the volume of annual trade between two countries is worth $900m. Islam said the aim was to more than double that in coming years. Bangladesh mainly imports agriculture products, such as rice and livestock products from Viet-nam while it imports textiles and cloths, leather and leather products, plastic products and medicine from Bangladesh.

Bangladesh and Vietnam also inked three deals to pro-mote cooperation in fisheries and livestock, industry and cultural exchanges.

BoJ has tools when needed to exit in stable manner: AmamiyaBLOOMBERG

TOKYO: The Bank of Japan has the tools to eventually exit its record monetary easing without disrupting markets, according to Masayoshi Amamiya, a nominee for one of the two deputy gover-nor positions at the central bank.

The BoJ can adjust bond yields in a stable manner when the time comes for it to start nor-malizing its policy, Amamiya said at a confirmation hearing in par-liament yesterday.

The comments came after Governor Haruhiko Kuroda said that during the fiscal year start-ing in April 2019 the BoJ would probably be considering the details of any exit.

Amamiya’s position on exit and a comment that monetary policy is not all powerful con-trast starkly with the views of Masazumi Wakatabe, the nominee for the other deputy governor post. Wakatabe, also speaking in parliament, said there were theoretically no lim-its to what the BoJ can do to achieve the 2 percent inflation

target, and it should mull boost-ing stimulus if it became hard for prices to hit that level.

“Amamiya and Wakatabe

played it safe at the hearing” said Kyohei Morita, chief Japan economist at Credit Agri-cole, noting that Kuroda’s

comments had stirred up mar-kets last week. “They indicated that it’s very unlikely for the BoJ to change policy anytime soon.”

The two men are likely to be approved by parliament, and will join the policy board for the April meeting. Along with Kuroda, who was nominated for another term, they will continue to face questions and doubts about the sustainability and future of the BoJ’s policies. Even after five years of stimulus under Kuroda, inflation is still less than half the bank’s target and it’s bought so many assets over that period that its balance sheet is almost the same size as Japan’s annual output.

The two men had the same take on the overall effects of BoJ policy - the positives outweigh the side-effects, including the impact that the negative rate is having on financial institutions. However, while Amamiya cau-tioned that the position of Japan’s banks were getting worse and that was partly due to the BoJ’s low-interest rate policy, Wakat-abe said that the negative

side-effects of BoJ stimulus hadn’t manifested much yet.

The yen fluctuated as the two nominees spoke. It was trad-ing at 105.55 per dollar as of 6:03 pm. in Tokyo after hitting a high of 105.25 against the greenback on March 2, the highest in more than a year.

Amamiya said the BoJ has tools to normalise its balance sheet and raise interest rates, saying that the bank won’t need to sell lots of JGBs to raise rates. Instead it could use maturing debt to cut its balance sheet, undertake operations to absorb short-term funds, or raise the interest rate it charges banks on part of the money that they have to keep at the central bank.

“When that situation arrives, I think it’s technically possible to adjust rates gradually while maintaining the market’s stabil-ity,” Amamiya said. “In what order and how we use policy options will depend on economic conditions at that time. That’s why we’ve been saying it’s too early.”

Morita said it was

interesting to see Amamiya admitting limits and costs of monetary policy while Wakat-abe said there was no limit. Amamiya pledged to be watch-ful about costs and benefits of current easing, while Wakatabe offered the expected dovish tone with his comments on the impor-tance of hitting 2 percent inflation target before any exit, according to Morita.

For Wakatabe, just reaching 2 percent inflation isn’t enough - prices in Japan need to continue at that level for some time before it’s safe to start cutting back on stimulus, he said. “The BoJ must especially avoid the risk of slip-ping back into deflation as a result of changing its policy too early.”

“From an academic eco-nomic perspective, there is no limit to monetary policy,” Wakatabe said. “We must think deeply about the sustain-ability of monetary policy, and what would be most sustaina-ble, but I think there are no p r o b l e m s c o n c e r n i n g sustainability.”

Masazumi Wakatabe (foreground) and Masayoshi Amamiya, the government’s nominees for next Bank of Japan deputy governors, attend a confirmation hearing in the lower house of parliament in Tokyo, Japan, yesterday.

China will improve supervision over shadow banking, internet finance and financial holding companies, and step up risk controls at financial institutions.

UK car sales slide for 11th monthAFP

LONDON: Sales of new cars in Britain fell in February for the eleventh month in a row, as demand for diesel vehicles collapsed by almost a quarter, industry data showed yester-day.

New registrations for vehicles sank 2.8 percent year-on-year last month to 80,805 cars, the Society of Motor Manufacturers and Traders said. And the number of newly-purchased diesel-powered cars tanked 23.5 percent to 37,020, with demand sliding on UK govern-ment plans to improve air quality. Consumers continued to ditch diesel cars last month for automobiles that are regarded as more environmentally-friendly.

25TUESDAY 6 MARCH 2018 BUSINESS

Japan car giants join to build hydrogen stationsAFP

TOKYO: Top Japanese carmakers said yesterday they were teaming up to nearly double the amount of hydrogen stations in Japan, as the car-mad country seeks to head off competition from China and Germany.

Toyota, Nissan and Honda formed a joint venture with major gas and energy compa-nies, including French industrial gases company Air Liquide, to build 80 new hydrogen stations in the next four years, to add to the 101 stations currently in Japan. “At this stage, we believe there is significant space for cooperation, rather than searching for areas of competi-tion,” Shigeki Terashi, Toyota executive vice president told reporters.

The new venture -- “Japan H2 Mobility” or “JHyM” -- comes as the world’s top economies rush to issue tougher environ-mental regulations that are spurring development of new clean cars and trucks.

Japan has focused on pro-moting fuel-cells, which com-bine hydrogen and oxygen in an electrochemical reaction, pro-ducing clean electricity to power

vehicles or home generators. But fuel-cell vehicles cannot get off the ground without a network of hydrogen stations, and vice versa, and the chicken-and-egg dilemma has stalled the roll-out of the technology, say industry professionals.

Hydrogen stations and fuel cell vehicles must be promoted in tandem in order to lower their cost, executives said.

“Unless infrastructure makers team up, new hydrogen stations tend to be concentrated in urban areas,” said Hideki Sugawara, president of the new

firm. “In order to maximise the demand for FCVs (fuel cell vehi-cles), we have to expand geo-graphically,” he said.

The 101 hydrogen stations serve around 2,400 fuel-cell cars in Japan, according to

official data, but a lack of viable stations has been a major hurdle for carmakers as they seek to boost production.

The Japanese government and the auto industry aim to introduce 160 stations and

40,000 fuel-cell vehicles by March 2020.

The government is also pushing to deregulate the sector to lower costs.

Toyota launched the Mirai, the world’s first mass-market

hydrogen fuel-cell vehicle, in late 2014 as it looked to push further into the fast-growing market for environmentally friendly cars. Nissan and Honda also have their version of fuel-cell projects.

Japan H2 Mobility President Hideki Sugawara (fifth left) and representatives of its joint establishment companies hold hands during a photo session after their joint press conference in Tokyo, yesterday.

European Car of the Year trophyThe European Car of the year 2018 trophy, seen in Geneva ahead of the start of the Geneva International Motor Show 2018, yesterday.

BoE to offer Islamic liquidity tool more widelyREUTERS

LONDON: The Bank of England plans to offer a proposed Shari’ah-compliant liquidity tool to a wider range of financial institutions beyond Islamic banks to boost demand, a senior offi-cial said yesterday.

London has long sought to position itself as a global hub for Islamic finance, aiming to attract business from core centres in the Middle East and Southeast Asia.

The central bank has been working on a fund-based deposit model that would help Islamic lenders meet regulatory require-ments for liquid asset buffers.

But the tool will also be available to institutions whose articles of association incorporate Shari’ah compli-ance, Arshadur Rahman, manager in the bank’s ster-ling markets division, said during an industry confer-ence at the London Stock Exchange, which was webcast.

Such institutions may include Islamic mortgage firms, Islamic insurance firms and Islamic leasing firms, although the Bank did not specify whether these would be eligible for the new tool.

Offering the product more widely would allow the Bank to “future proof” the facility by ensuring there is adequate demand, said Rahman, who is also the Bank’s Islamic finance specialist.

While there is no fixed date for the launch of the facility, the bank will work on its legal documentation and risk hedging aspects this year, he added.

As part of its strategy to broaden liquidity provision to the market, the Bank of England commenced work in the second half of 2015 to assess the feasibility of estab-lishing a Shari’ah compliant facility.

The facility will be based on an agency contract known as wakala and would be backed by high quality liquid assets.

Airbus signals job cuts for jumboBLOOMBERG

LONDON: Airbus is preparing to announce jobs cuts at two troubled aircraft programmes that have been weighing on earnings for years.

The planemaker’s manage-ment will meet with its

European Works Council tomorrow to explain reductions in the manufacturing rates of the A380 superjumbo and A400M military-transport pro-grammes. It will also “discuss associated implications for the workforce,” it said in a statement.

Some 3,600 jobs are likely to be affected, with plants in Bremen and Augsburg, Ger-many; Seville in Spain; and Filton in UK.

Airbus said the reports may be “excessive” and that it deeply regrets leaks concerning the two programmes.

EU must ‘react quickly’ to protectionist US policies: MacronAFP

PARIS: French President Emmanuel Macron said yesterday that the European Union must “react quickly” to US plans for tariffs on steel and aluminium imports which he said clearly breached global trade rules.

“I believe it is important for the EU to react quickly, within the framework of the WTO (World Trade Organiza-tion) and in a balanced manner,” Macron said at a press conference.

He was it “clear that these (tariffs) would go against WTO rules.”

US President Donald Trump has said he wants to set tariffs of 25 percent on steel and 10 percent on aluminium to protect US producers from what he calls unfair competition.

The plan has sparked an outcry among American allies such as Canada, the European Union, Mexico and Australia as well as China, the world’s big-gest steel producer.

“Nationalism is a war where everyone loses,” Macron said at a press conference with

the visiting leader of Canadian province Quebec, Philippe Couillard.

The European Commission has said it is drawing up retal-iatory measures against leading US brands, such as Levi’s jeans and Harley Davidson motorcycles.

But Trump has shown little indication that he will back down, appearing to welcome the prospect of a trade war in a series of Twitter posts since last week.

“If the EU wants to further increase their already massive tariffs and barriers on US com-panies doing business there, we will simply apply a Tax on their Cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!” he tweeted on Saturday.

Couillard also condemned Trump’s proposed move, saying Quebec would be affected because of its large aluminium industry which produces about three million tonnes per year.

“But it’s American con-sumers who are going to pay,” Couillard said, referring to the increased prices of the metal for the end user.

IEA sees American energy dominance squeezing Opec into 2020s BLOOMBERG

LONDON: The US will dominate global oil markets for years to come, satisfying 80 percent of global demand growth to 2020 as the shale boom keeps OPEC under pressure, the International Energy Agency said.

“The US is set to put its stamp on global oil markets for the next five years,” IEA Execu-tive Director Fatih Birol (pic-tured) said in a report published yesterday.

Opec’s surging rivals, which also include Brazil and Canada, will leave little space for the cartel to expand even after its production curbs expire this year.

The Organization of Petro-leum Exporting Countries is riding high right now, defying the skeptics by going deeper than their pledged cuts and main-taining them for long enough to deplete bloated oil inventories.

However, the ensuing price recovery has “unleashed a new wave of growth from the US,” said the Paris-based IEA, which advises most of the world’s major economies.

Thanks to the shale boom, new US supply will cover more than half the world’s oil demand growth to 2023, the agency said. Production from the prolific Per-mian Basin will double over the period and the country’s total liquid hydrocarbon output will rise to 17 million barrels a day from 13.2 million last year.

The bullish forecast kick-starts the annual CERAWeek conference, a gathering of thou-sands of oil executives, traders, bankers and investors in Houston.

The American surge and a slightly weaker outlook for global demand growth make uncomfortable reading for OPEC. The IEA slashed projections for the amount of crude needed

from the cartel, indicating its supply cuts would need to stay in place until 2021 to avoid creating another prolonged surplus.

Closer to 2023, global mar-kets will start to tighten and the IEA warned that more investment is needed to meet growth in con-sumption and to make up for pro-duction lost to natural declines.

Opec will struggle to start new production of its own. The IEA’s five-year outlook for new output capacity from the group was reduced by about 62 percent from the previous report. The group will add 750,000 barrels a day by 2023 -- just 2.1 percent -- as gains in Iran and Iraq are offset by economically troubled Venezuela, where capacity will slump to the lowest since the 1940s.

There’s a risk the wider industry may also fall short after an unprecedented drop in spending from 2015 to 2016, and little sign of a rebound in the

subsequent two years, the IEA said. Constant investment is essential because the world loses about 3 million barrels of output each year -- equivalent to the production of the North Sea -- as oil fields age and their reservoir pressure drops.

As a result, by 2023 the level of spare production capacity that could be used in the event of a disruption will be the lowest since 2007. That increases the

risk that prices will become more volatile, the agency said.

Still, that process isn’t hap-pening as rapidly as previously feared. Despite expectations that lower investment would accel-erate the depletion of maturing non-Opec oil fields, the opposite is happening. Lower operating costs have so far offset the impact of reduced spending.

The average decline rate eased to 5.7 percent last year, compared with 7 percent between 2010 and 2014, the IEA said. That shift was aided by a “remarkable deceleration in decline rates” in the North Sea.

Global oil demand will increase by a total of 6.9 million barrels a day to reach 104.7 mil-lion a day by 2023, with China remaining the “main engine of demand growth.” That’s an average annual growth rate of about 1.2 million barrels a day, little changed from last year’s forecast.

Toyota, Nissan and Honda formed a joint venture with major gas and energy companies, including French industrial gases company Air Liquide, to build 80 new hydrogen stations in the next four years, to add to the 101 stations currently in Japan.

26 TUESDAY 6 MARCH 2018BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,454.18 3.16 %

QE Total Return Index 14,673.57 2.22 %

QE Al Rayan Islamic

Index - Price 2,240.31 2.04 %

QE Al Rayan Islamic Index 3,564.04 1.44 %

QE All Share Index 2,427.02 1.83 %

QE All Share Banks &

Financial Services 2,696.32 2.12 %

QE All Share Industrials 2,700.13 1.97 %

QE All Share Transportation 1,890.18 2.17 %

QE All Share Real Estate 1,684.17 2.10 %

QE All Share Insurance 3,093.73 0.25 %

QE All Share Telecoms 1,082.88 1.62 %

QE All Share Consumer

Goods & Services 5,353.85 0.12 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

05-03-2018Index 8,454.18

Change 275.88

% 3.16

YTD% 0.81

Volume 13,407,105

Value (QAR) 265,456,656.36

Trades 4,795

Up 10 | Down 32 | Unchanged 001-03-2018Index 8,730.06

Change 76.74

% 0.89

YTD% 2.42

Volume 10,989,981

Value (QAR) 248,066,718.23

Trades 3,936

EXCHANGE RATE

GOLD QR155.5745 per grammeSILVER QR1.9424 per gramme

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

All Ordinaries 5996.4 -32 -0.53 6256.5 5887.3

Cac 40 Index/D 5155.47 18.89 0.37 5567.03 5051.21

Dj Indu Average 24538.06 -70.92 -0.29 26616.71 20379.55

Hang Seng Inde/D 29886.39 -697.06 -2.28 33484.08 29129.26

Iseq Overall/D 6584.66 -83.58 -1.25 7257.41 6570.87

Kse 100 Inx/D 43829.07 88.58 0.2 45494.52 40169.62

S&P 500 Index/D 2691.25 13.58 0.507157 2872.87 2532.69

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.9996 QR 5.069

Euro QR 4.4551 QR 4.5181

CA$ QR 2.7967 QR 2.8518

Swiss Fr QR 3.8613 QR 3.9163

Yen QR 0.0342 QR 0.0349

Aus$ QR 2.7967 QR 2.8524

Ind Re QR 0.0554 QR 0.0565

Pak Re QR 0.0325 QR 0.0333

Peso QR 0.0693 QR 0.0707

SL Re QR 0.0233 QR 0.0238

Taka QR 0.0432 QR 0.0441

Nep Re QR 0.0347 QR 0.0353

SA Rand QR 0.3025 QR 0.3086

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

Aarti Drugs-B/D 590.5 -15.45 1438

Aban Offs-A/D 167.05 -2.85 124640

Acc Ltd-A/D 1607 -26.65 13878

Aegis Logis-A/D 244 -6.1 14236

Alembic-B/D 62.8 0.75 54172

Alkyl Amines-B/D 619 -14 9833

Alok Indus-T/D 3.13 -0.03 192868

Apollo Tyre-A/D 259.25 -6.85 112443

Asahi I Glass-/D 338.15 -13.55 8556

Ashok Leyland-/D 140.05 -0.7 1530139

Ballarpur In-B/D 13.16 -0.33 316832

Bannari Aman-B/D 1708.95 8.95 40006

Bata India-A/D 714.4 -8.3 14213

Bayer Crop-A/D 3816.6 23.9 10779

Beml Ltd-A/D 1361.9 128.8 185790

Bhansali Eng-B/D 174.1 -1.9 210285

Bharat Bijle-B/D 1714.25 -15.65 11261

Bharat Ele-A/D 155.3 1.9 225824

Bharat Heavy-A/D 90.25 -0.45 934732

Bhartiya Int-B/D 412 11.05 1049

Bom.Burmah-X/D 1415.3 -1.6 19348

Bombay Dyeing-/D 256.65 1.1 732359

Camph.& All-X/D 1017.95 4.95 1094

Canfin Homes-A/D 546.65 11.2 141099

Caprihans-X/D 91.55 -1.95 2849

Castrol India-/D 200.95 -0.65 133656

Century Enka-B/D 332 -8.7 2579

Century Text-A/D 1209.85 -12.65 39271

Chambal Fert-A/D 162.5 -1.05 206669

Chola Invest-A/D 1456 3.95 21583

Cimmco-T/D 94.5 -3.7 5720

Cipla-A/D 579.4 -2.5 49242

City Union Bk-/D 180.6 -0.35 1704828

Colgate-A/D 1048.5 -9.55 11539

Container Cor-/D 1272.5 -37.05 14225

Dai-X/D 455 -16.85 9278

Dcm Financia-B/D 2.65 0.11 1250

Dcm Shram Ind-/D 243.25 -6.15 6799

Dhampur Sugar-/D 183.25 -6.9 60478

Dr. Reddy-A/D 2182.45 -45.6 20581

E I H-B/D 168.4 -1.25 3607

E.I.D Parry-A/D 308.7 -10.6 15397

Eicher Motor-A/D 27600 -134.85 12481

Electrosteel-B/D 30.15 -0.65 138870

Emco-B/D 17.45 0.25 5454

Escorts Fin-Xt/D 3.57 -0.18 1350

Escorts-A/D 872.8 -11.9 74322

Eveready Indu-/D 393 -0.7 4586

F D C-B/D 287.45 0.1 5277

Federal Bank-A/D 92.75 -1.3 266047

Ferro Alloys-X/D 9.05 -0.37 838362

Finolex-A/D 656 -0.95 84541

Forbes-B/D 3380.05 -143.5 1193

Gail-A/D 443.75 -9.35 125262

Garden P -B/D 37 -0.7 11968

Godfrey Phil-A/D 856.45 -14.8 12005

Goodricke-X/D 357.4 -13.6 10362

Goodyear I -B/D 1187.2 -7 3535

Hcl Infosys-A/D 60.6 -1.65 445771

Him.Fut.Comm-A/D 29 -0.7 1174455

Himat Seide-X/D 348.05 -0.6 2257

Hind Motors-T/D 8.72 -0.07 40518

Hind Org Chem-/D 23.65 0.25 61959

Hind Unilever-/D 1300.5 -25.15 126210

Hind.Petrol-A/D 366.55 -10.3 124709

Hindalco-A/D 229.9 -10.3 465776

Hous Dev Fin-A/D 1790 -22.65 334340

Idbi-A/D 84.4 4.1 11718926

Ifb Ind.Ltd.-B/D 1363.5 -64.95 1619

Ifci Ltd-A/D 22.3 -0.4 457657

India Cement-A/D 153.3 -3.85 189104

India Glycol-B/D 504.1 18.2 75074

Indian Hotel-A/D 134.15 -2.4 31346

Indo-A/D 98.8 -0.6 135707

Indusind-A/D 1695 -2.25 25238

J.B.Chemical-B/D 317.5 -1.25 2316

Jagatjit Ind-X/D 86 3 1000

Jamnaauto-B/D 78.6 -1.55 169011

Jbf Indu-B/D 147.45 -1.75 103742

Jct Ltd-X/D 3.16 -0.09 112639

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LONDON

A consortium of Chinese private equity funds are investing up to $250m to create a biotech firm that seeks to build on the work of Gaithersburg, Maryland-based

MedImmune, bringing 100 jobs to Montgomery County’s biotechnology corridor.

Investment companies Boyu Capital, 6 Dimensions Capital and Hillhouse Capital announced last week that they have teamed up with MedImmune, the research and development arm of AstraZeneca, to spin off six of the firm’s drug candidates into a new company focused on severe autoimmune diseases.

MedImmune Senior Vice-President Bing Yao will become chief executive of Viela Bio, which will also base its operations in Gaithersburg. Under the terms of the investment deal, MedImmune would be the largest minority shareholder in the new firm.

“We are very excited because we absolutely believe in this (Maryland biotechnology) ecosystem, we have a strong pipeline, and this is a very

entrepreneurial way for us to bring this medicine to patients,” MedImmune President Bahija Jallal said.

Viela will inherit the right to develop six drug candidates from MedImmune’s portfolio, drugs that target diseases such as neuromyelitis optica, a rare condition that affects the optical nerve and spinal cord. All are in the early stages of development, meaning it could take years of research and hundreds of millions of dollars before they are approved for sale.

For Montgomery, the deal promises to open up dozens of specialized pharmaceuticals jobs as teams of scientists push the drugs through the Food and Drug Administration review process.

Viela has committed to creating 100 positions in the area over the next three to five years, a target that was negotiated as a condition of a $750,000 grant from the county.

That funding came on top of a $2m conditional loan from the state’s Department of Commerce, all of it meant to help the young firm offset real estate and start-up costs.

The foreign investment was a welcome sign for county leaders, who have looked to biotechnology as a source of new employment and economic growth.

“Chinese money is going to be flowing in,” said Montgomery County Council member Roger Berliner, D-District 1, who was involved in negotiations with the company.

He said Montgomery was competing with another Maryland jurisdiction to keep the firm in Gaithersburg, though he declined to name the jurisdiction. Viela “could one day be a $1bn company and we definitely wanted to keep it here,” he said.

Montgomery’s biotechnology industry has been eager to celebrate a win. There is a local leadership gap after the Maryland Technology Council, a common convening point for the regional business community, disbanded and merged with another trade association last year.

It has been a rocky road for some of the state’s standout firms.

Chinese investment gives US biotech industry a boost

As US Congress moves to drop tariffs, some firms cry foulAARON GREGG

THE WASHINGTON POST

ANDY SULLIVAN REUTERS

MICHAEL Korchmar was hiring. His family-owned travel-goods company was planning to make a

new product, an insulated food bag, and he had put out help-wanted notices for up to 30 workers to run the sewing machines in his small factory on Florida’s Gulf Coast.

Those plans are now on hold. The reason: a bill quietly moving through Congress that would temporarily reduce or eliminate protective tariffs on 1,662 products, including the type of bag Korchmar had planned to produce. The bill would cut costs for rivals who make their bags in low-cost countries like China, he said, squeezing him out of the market before he had even entered it.

“Given that these products will be able to come into the country duty free, it’s not likely that there’s any ability for us to compete,” Korchmar said in a recent interview at his

factory, which currently employs about 20 people.

Even as President Trump threatens to slap protective tariffs on steel and aluminum, lawmakers are moving forward with legislation to lower trade barriers on hundreds of other products, from chemicals to toasters, in a

bid to lower costs for US companies and consumers.

Supporters of the so-called miscellaneous tariff bill, which unanimously passed the House of Representatives in January, say it would boost the economy by getting rid of tariffs designed to protect US industries that no longer exist. The National Association of Manufacturers says US companies pay hundreds of millions of dollars each year on unnecessary import fees.

Critics say that miscellaneous tariff bills, which began decades ago as modest efforts to help US manufacturers, have in recent years become sprawling packages of tariff reductions that undercut domestic producers without the means to defend their interests in Washington.

Ohio Senator Sherrod Brown, a Democrat who worked to get several products removed from the current bill, said Congress should do a better job to ensure tariff reductions do not impede US producers.

“Miscellaneous Tariff Bills should help, not hurt American manufacturers,” Brown said in a

statement to Reuters.Miscellaneous tariff bills were

originally conceived in the 1980s as a way of lowering costs for US manufacturers that could not get chemicals and other component products from domestic sources. The original point of the efforts “was to encourage domestic manufacturing,” recalls Jennifer Hillman, who worked on the legislation as a Senate staffer in the 1980s and 1990s.

All but two of the 163 items in a 1999 version of the bill, for example, were used in the manufacturing process, according to a House Ways and Means Committee report.

Since then, Congress has broadened successive tariff bills to include many finished products that can go straight to store shelves.

Only 55 percent of the items in the current bill are “intermediate goods” used in manufacturing, according to applications filed with the International Trade Commission. Many of the rest are finished consumer products.

Hamilton Beach Brands, for example, would pay reduced tariffs on Chinese-made toaster ovens, steam irons and other household items it used to make domestically.

Gap Inc would be able to import vests, sweaters and 14 other types of clothing duty-free, while PetSmart Inc would no longer have to pay tariffs on certain pet crates and chew toys. Camera maker GoPro Inc would be able to import 31 types of camera accessories duty-free.

None of the companies responded to requests for comment about the inclusion of their products.

Ron Sorini, a lobbyist who has helped clothing manufacturers get items in the bill, says consumers benefit from reduced tariffs, too, since companies can lower their prices.

“Why in the world would we put a tariff on a product that’s not made in the US? It’s kind of crazy,” he said.

Any importer can take advantage of rates lowered by the bill, not just the

ones that applied for them, and the reductions last only three years to help ensure they don’t permanently freeze out would-be domestic manufacturers.

Under the latest rules, set in 2016, companies seeking lower tariffs submit applications to the International Trade Commission, which then works with the Commerce Department to determine whether any of the items are made domestically. If the agencies learn of US producers, they invite the companies to submit objections. ITC staffers then assess whether the objections are legitimate.

In the current bill, the ITC eliminated 385 products because of objections from domestic producers. Even so, the bill includes 145 items that are made domestically, according to a Reuters analysis of ITC records.

An ITC spokeswoman declined to comment on the commission’s actions beyond pointing to the recommendations it ultimately made.

Several companies told Reuters that the ITC was receptive to their concerns.

“I’m just glad we got wind of it when we did and stopped it,” said Anson Martin, a vice president at Illinois battery company Inventus Power, which successfully objected to the inclusion of 18 types of batteries in the bill. He said he learned of the proposed tariff reductions through his trade association.

Other companies said they were not aware they had missed a chance to defend their interests.

Alan Peppel, president of Massachusetts-based knife manufacturer Dexter-Russell Inc, said he had no idea until receiving a call from Reuters that Congress was poised to eliminate tariffs on a type of kitchen knife his company produces.

Kansas City dentist Don Closson, who makes athletic mouth guards at a Colorado factory, and Paul Cacciotti, who manufactures fingernail clippers in upstate New York, also said they were unaware the bill contained items competing with those they make.

PRESIDENT Donald Trump said the US won’t lower tariffs on steel and aluminum

from Mexico and Canada unless the two countries agree to a revamped Nafta that’s fair to the US.

“NAFTA, which is under renegotiation right now, has been a bad deal for USA. Massive relocation of companies & jobs,” the president said in a tweet yesterday. “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

Canada must treat American farmers “much better,” and Mexico must stop drugs from “pouring into the US,” he added.

It’s the latest sign that Trump’s plan to impose stiff tariffs on steel and aluminum is overshadowing talks to overhaul the North American Free Trade Agreement. The president’s intervention may complicate a process that had already been yielding little progress on the most contentious issues.

Until recently, the US probe into the national-security risks of steel and aluminum has been considered separate from the Nafta discussions. Over the weekend, Trump advisers gave no indication that any countries would be excluded from the tariffs. The seventh round of negotiations wrapped up yesterday in Mexico City, with US Trade Representative Robert Lighthizer due to meet with Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister

Chrystia Freeland, just hours after Trump’s tweet. The three will address the media in the afternoon.

Trump’s decision on tariffs came on Thursday in the middle of talks, catching negotiators off guard. On Sunday, Trump’s senior trade advisers said the president doesn’t want any nation excluded from the tariffs, set to be imposed as early as this week. Canada, the biggest supplier of steel and aluminum to the US, and Mexico, the No. 4 source of steel, have asked to be excluded, and both indicated they will strike back if Trump includes them in the stiff duties.

At the Nafta talks in Mexico City, negotiators agreed on two more topic areas and discussed details of Canada’s idea to redraw the way regional content for cars is measured. Yet work on the autos issue, which may hold the key to the

entire deal, has been slow. It now looks impossible for negotiators to meet their goal of getting an agreement by the end of this month, especially amid the prospect of escalating trade tensions from the steel dispute.

“I applaud the president for targeting unfairly traded steel and aluminum,” Representative Kevin Brady, a Texas Republican and chairman of the House Ways and Means Committee, told reporters in Mexico City on Sunday. “But blanket tariffs that also sweep up fairly traded steel and aluminum, especially with trading partners like Canada and Mexico -- they should be excluded.”

Progress was made on the “nuts and bolts” of a new Nafta deal, Brady said after being briefed. Trump’s announcement that he plans to impose tariffs of 25 percent on

imported steel and 10 percent on aluminum landed like a bombshell during the seventh round of Nafta talks, prompting expletives from a least one negotiator and casting a pall over the painstaking efforts to update the 24-year-old deal.

Mexico and Canada began negotiating with the US in August at the initiative of Trump, who’s repeatedly said the Nafta accord led US companies to fire workers and move factories to Mexico. Trump has promised to negotiate a better deal for America or withdraw.

The most contentious issues include a proposal to require more auto manufacturing in the US, seasonal barriers to farming goods, access to US procurement deals, dispute resolution mechanisms, and a clause that would terminate the deal after five years.

Trump says no steel break for Mexico & Canada without fair NaftaERIC MARTIN & ANDREW MAYEDA BLOOMBERG

Viela has committed to creating 100 positions in the area over the next three to five years, a target that was negotiated as a condition of a $750,000 grant from the county.

A bill quietly moving through Congress that would temporarily reduce or eliminate protective tariffs on 1,662 products, including the type of bag Korchmar had planned to produce.

“NAFTA, which is under renegotiation right now, has been a bad deal for USA. Massive relocation of companies & jobs,” the president said in a tweet yesterday.

27TUESDAY 6 MARCH 2018 BUSINESS VIEWS

Korchmar President Mike Korchmar (left) and CEO Michael Korchmar display a bag assembled at the Naples, Florida factory of Korchmar, a family-owned business in Naples, Florida, in the US.

28 TUESDAY 6 MARCH 2018

INsightback to BUSINESS

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NAME IN THE MARKET: VIDEO GAME

Geneva showcase for swanky cars is shadowed by trade warFRANKFURT/BLOOMBERG

The Geneva International Motor Show is known as a staging ground for the

glitzy luxury models that swad-dle the wealthy and deliver them in style.

This year’s no exception, with a new version of the Bent-ley Bentayga SUV, Bugatti’s $2.6m Chiron and the Ferrari special-edition 488 Pista among the cars that will jostle for pho-tographers’ attention.

But a separate plot line is emerging this year. European auto executives face the threat of a trade war, after US President Donald Trump singled out the car industry as the next battleground after steel and aluminum tariffs. Europe’s largest annual automo-tive gathering that started yesterday (the alternating Paris and Frankfurt shows draw more visitors but each runs every two years) with two days of press con-ferences before it opens to the public.

Here are some things to look for: While the show will have its usual displays of top-end cars -- this time largely without the skimpily clad female models that have been a staple in the past -- manufacturers will continue

unveiling the technology that may eventually come to rule the industry. Tata Motors Ltd.’s lux-ury Jaguar brand provided a sneak online preview last week of its fully battery-powered I-PACE sport-utility vehicle ahead of its official premiere in Geneva. Volkswagen AG’s Audi division presents the production version of its competing electric E-Tron at the show. Among new-comers offering battery cars will be Chinese producer LVCHI, pre-senting the Venere sedan that it wants to build as of 2019, and Italian design company Icona, debuting the self-driving, steer-ing-wheel-less Nucleus concept.

Industry executives at the show will be asked whether they’re holding tight to a strategy of developing cleaner diesel tech-nology to meet ever-tighter regulations on fleet emissions of carbon dioxide, a greenhouse gas. They’ve come under scrutiny on two fronts. Authorities are ques-tioning whether current model lines already violate rules, par-ticularly after Volkswagen’s disclosure in 2015 that it rigged diesel engines to cheat on emis-sions tests. Separately, a top court ruling in Germany last week put into question whether the fuel is

permissible in city centers, given that the motors also produce nitrogen oxide, a key component of health-threatening smog. Car buyers are already responding: diesel cars’ market share in Ger-many has dropped to 32.5 percent as of February from about half before VW’s scandal erupted.

On US Trade Trump’s announcement last week of impending tariffs on US steel and aluminum imports means raw-material supply costs are likely to rise at the American plants that German carmakers set up years ago -- partly to reduce the effects of any trade barriers. It’s an indi-rect but potentially important hit at an industry that the US leader has already targeted with blame for a widening German trade

surplus. And it may be only a start. Trump is now threatening to tax car imports directly if Europe retaliates against the steel and aluminum tariffs. And then there’s Nafta, which presents carmakers with another wild card, and Brexit, which is chilling sales in the UK.

The political developments come on top of General Motors Co.’s pullout from Europe with the sale of its Opel and Vauxhall brands to Peugeot owner PSA Group. The French carmaker is using mobility services to revive its presence in the US, a market it left in 1991. Watch for com-ments from Chief Executive Officer Carlos Tavares on whether the Trump administra-tion’s stance is affecting his strategy, and from leaders of BMW AG, Mercedes-Benz owner Daimler AG and Volkswagen on whether it’s changing any calcu-lations for their American factories.

The press events kick off with trade journalists naming the Car of the Year . The show will be the first for Renault SA Chief Oper-ating Officer Thierry Bollore since his promotion last month to the post, which put him in line to succeed Carlos Ghosn as head of the French carmaker.

TUNIS/REUTERS

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Islamic Development Bank to launch $2.5bn sukuk soonREUTERS

LONDON: The Islamic Devel-opment Bank (IDB), the largest development organisation in the Muslim world, will launch a $2.5bn sukuk “soon”, its pres-ident Bandar Hajjar said yesterday.

Addressing a sukuk con-ference at the London Stock Exchange Hajjar said the IDB’s funding plan for first half 2018 was the largest since the bank’s inception and the sukuk’s pro-ceeds would support spending on infrastructure, education and health.

The IDB is also planning to set up a $500m fund to support science and technology start-ups, Hajjar added.

The Jeddah-based multi-lateral development bank is a regular issuer of international

Islamic bonds, which it raises to fund its business activities, but also to promote the inter-national sukuk market by building a liquid sukuk yield curve.

The institution has recently hired banks as joint lead man-agers and bookrunners for a new US dollar-denominated sukuk, a document issued by one of the banks showed.

The banks are CIMB, Citi, Emirates NBD Capital, Gulf International Bank, HSBC, NATIXIS, SMBC Nikko and Standard Chartered Bank.

IDB is meeting fixed income investors in London this week ahead of a potential five-year debt sale. It is also considering issuing a 10-year sukuk, the document showed.

Speaking to Reuters on the sidelines of the conference,

Hajjar said he expected to sign a memorandum of understand-ing with the China-led Asian Infrastructure Investment Bank (AIIB) soon, on joint investing in Africa.

“A collaboration and coop-eration with the Chinese and others to finance infrastructure mainly -- roads, transporta-tion, energy and other -- is very important,” he said. “So we are going toward this direc-tion and then planning to visit them there and also to sign an MoU (memorandum of under-standing) with the Chinese bank in order to cooperate, especially in Africa.”

Hajjar declined to give fur-ther details on the timing and size of the cooperation, but said it would target the 26 poorest countries on the continent.

This year’s no exception, with a new version of the Bentley Bentayga SUV, Bugatti’s $2.6m Chiron and the Ferrari special-edition 488 Pista among the cars that will jostle for photographers’ attention.

How unstable is Libya’s oil production?

Two of Libya’s largest oilfields with combined pro-duction of nearly 400,000 barrels per day (bpd) have suffered shutdowns in quick succession,

casting fresh doubt on a partial recovery in the OPEC member’s oil output.

Libya’s national output has been sustained at about one million bpd for months, and most recent closures have been quickly resolved. A shutdown that began on Sunday at El Sharara, Libya’s biggest field, lasted less than 24 hours.

But the latest disruptions - caused by guards at El Feel field complaining about pay and benefits, and by a property owner who said he wanted rubbish cleared from his land - highlight continuing risks to output in a country without centralised security forces or political control. Libya has the largest proven reserves of oil in Africa, and has been a key supplier of light, sweet crude to Europe.

Around 1970 it produced more than 3 million bpd, and before the NATO-backed uprising in which Muam-mar Gaddafi was toppled and killed seven years ago, it was pumping more than 1.6 million bpd.

Last year the state-owned National Oil Corporation (NOC) outlined plans that would raise production to 2.2 million bpd by 2023, but said this would need around $18bn of investment.

Foreign oil companies including Italy’s Eni, Total of France and US firms Cono-coPhillips and Hess have production stakes through joint ventures with the NOC.

Since Libya’s 2011 upris-ing, power in the sparsely populated nation has frag-mented and local groups have used oil facilities as bargaining chips to press financial and political demands.

Armed factions across the country have cut off pro-duction at key fields and ports, including a long

blockade of terminals in Libya’s eastern oil crescent from 2014-2016. Prolonged and haphazard shutdowns have reduced pressure at oil wells. As Libya’s revenue fell due to production disruptions and lower oil prices, demands for salaries, local development and jobs that feed into blockades became more widespread.

Islamic State militants attacked oilfields and ports in 2015-2016 before being driven back by local forces. Their destruction of storage tanks at two of Libya’s big-gest terminals, Es Sider and Ras Lanuf, has yet to be repaired. Fields including Mabruk and Ghani remain closed. After disputed elections in 2014 led to rival gov-ernments being set up in Tripoli and the east, eastern-based factions tried to sell oil independently. They failed, but the split added to uncertainty in Libya’s oil sector. The causes of recent shutdowns include eco-nomic protests by guards, armed groups pushing for the release of jailed members, and apparent political manoeuvring in the east.

Libya’s national output has been sustained at about one million bpd for months, and most recent closures have been quickly resolved. A shutdown that began on Sunday at El Sharara, Libya’s biggest field, lasted less than 24 hours.