hike its 2020 business defi cit goal to
TRANSCRIPT
Monday, April 8, 2019Sha’baan 3, 1440 AH
BUSINESSGULF TIMES
DOWNTURN WOES: Page 12
Italy is said to hike its 2020 defi cit goal to around 2.1%
Ezdan is looking to nullify plan to delist from QSEEzdan Holding Group is contemplating
nullifying its earlier proposal to delist from the Qatar Stock Exchange (QSE) in
view of the robust momentum in the domes-tic economy.
In this regard, the group has decided to convene an extraordinary general assembly to discuss the issue. The time and date are yet to be decided, said a spokesman of Ezdan Hold-ing Group.
The Ezdan board had held a meeting on Saturday to consider the request of one of the shareholders of Al Tadawul Trading Group, which owns more than 25% stake, regarding nullifying the earlier proposal.
“The convention covered discussions about mulling a request for extraordinary general assembly to discuss the invalidating the previous extraordinary general assembly decision dated May 24, 2017 to transfer the Ezdan Holding Group initially from a public
joint stock company to a private joint stock company, Ezdan said in a regulatory fi ling with the bourse.
The letter presented by one of the share-holders stated that this request is based on the strength of the Qatari economy, despite the challenges, especially during the period of blockade, and considering that the QSE is one of the best performers in the Arab re-gion.
According to the Article 138 of the Compa-nies Law No. 11/2015, the extraordinary gen-eral assembly shall meet only at the invitation of the board of directors. “The board shall direct such an invitation if so requested by a number of shareholders representing (25%) stake at minimum of the company’s capital,” it added.
The index committee of the QSE had de-cided to temporarily remove Ezdan Holding Group from the components of the QSE in-
dex after the company agreed in principle to delist.
Earlier, the QSE had appealed to Ezdan to reconsider their resolution to delist.
In another communique, Ezdan said it will convene an ordinary general assembly to discuss and approve the budget and the profi t/loss ac-count for the fi scal year ended December 31, 2018 and also on the company’s plans for this year.
“The group is looking forward to expanding its real estate investment portfolio, which we hope will contribute to the provision of hous-ing units necessary to host the delegations of the World Cup 2022,” Ezdan Holding Group chairman Sheikh Dr Khalid bin Thani Abdul-lah al-Thani said.
Stemming from this strategy, the group was able to fi nalise the operation of a large number of outstanding projects, which included Ezdan Oasis mega project in Al Wukair that comprises 9,346 units.
Lord Mayor of London to visit Doha this week
Spot deals make up more of global LNG market as sellers get flexible
Lord Mayor of London Peter Estlin, the global ambassador for the UK’s financial and professional services industry, will be in Doha this week to strengthen trade links between Qatar and the City of London. He will meet leaders from the Qatar Central Bank, the Qatar Investment Authority and from key ministries. The visit begins a period of high-level engagement with key Qatari leaders and stakeholders ahead of a visit to Mansion House later this month by HE Sheikh Abdulla bin Saoud al-Thani, the QCB governor.Qatar has already invested more than half of the £5bn it pledged to invest in the UK in 2017, and the visit will be an opportunity to explore further possibilities, British Embassy
in Doha said yesterday. Estlin said, “Qatar presents huge long-term opportunities for the City of London and the UK’s financial services industry.“I anticipate that this month will be the start of great new chapter in the UK’s economic partnership with Qatar, a country whose considerable investments have brought significant job creation and prosperity across the UK. I look forward to discussing how we can continue that progress, as well as looking at how the UK can help to develop Qatar’s financial services industry.“The UK already has strong trading relationship with Qatar, and it is my ambition with this visit to contribute to the deepening and growth of this relationship in the years to come.”
ReutersSingapore
Spot trades and other short-term deals are making up more of the transactions in the global liquefied natural gas (LNG) market as producers in the US and Russia off er more flexible volumes and traders increasingly handle cargoes.Spot and short-term LNG trades, defined as cargoes delivered through contracts of four years or less, made up 32% of overall import volumes in 2018, up from 27% of imports in 2017, the Paris-based International Group of LNG Importers (GIIGNL) said last week in its annual report.Cargoes delivered in less than three months from the transaction date increased to 25% of the market in 2018, compared with 20% in 2017, the GIIGNL said.“For LNG importers, long-term partnerships, destination and volume flexibility as well as the ability to optimise or arbitrage between Asian and European markets remain key,” said GIIGNL president Jean-Marie Dauger in an emailed statement.“In China, in India and South East Asia, in particular, LNG’s environmental benefits and its versatility make it particularly attractive as a destination fuel for thermal power
generation and co-generation, in the industrial and commercial sectors as well as in a growing variety of fields like marine and road transportation.”Australia was the biggest exporter of spot and short-term volumes in 2018 as new projects in the country started up, followed by the US and Qatar, the GIIGNL said.The three biggest LNG importing countries — Japan, China and South Korea — absorbed just over half of the global spot volumes traded, while India’s spot purchases increased as its natural gas demand growth exceeded domestic production, the group said.Re-exports also increased due to better arbitrage opportunities.Overall, the global LNG market grew by 8.3% from the previous year to nearly 314mn tonnes in 2018, more than three times the size of the market in 2000, GIIGNL said.That was the third-largest annual increase after 2010 and 2017.The market is likely to reach a tipping point this year, with many long-term contracts starting to expire and as new supply comes on stream, Dauger said, adding that the industry needs to become more innovative and eff icient in trading.GIIGNL has 81 member companies headquartered in 26 countries and handles more than 90% of global LNG imports.
Commercial Bank scores double win at Asian Banker’s awards
Commercial Bank has won two awards at The Asian Banker’s Transaction Banking Awards
2018, Middle East and Africa. The Bank took home the award for
“Best Cash Management Bank in Qa-tar” for the third year in a row and won the “Best Transaction Banking service in Qatar” for the fi rst time.
The awards demonstrate Com-mercial Bank’s strength in cash man-agement and strategy of investing in Transaction Banking service solutions.
The Asian Banker’s Transaction Banking Awards is the “most rigorous, prestigious and transparent” annual awards programme in the region. It recognises leadership in the cash man-agement, trade fi nance and payments industries amongst international fi -nancial institutions in the Asia Pacifi c as well as the Middle East and Africa. Judged by an international board of advisers, applicants were subject to a stringent assessment process.
Commercial Bank Group CEO Joseph Abraham said, “Leading Transaction Banking in Qatar is a key
part of our fi ve-year strategic plan and we continually invest in our people, and in new technologies and proc-esses to achieve this strategic objec-tive. “Receiving two awards from a renowned awarding body is valida-tion of the capabilities of Commercial Bank Innovation Services (CBIS), our in-house innovation and technology arm based in the QFC, in develop-ing best-in-class Transaction Bank-ing products and services, including cash management. Our investment in CBIS gives us a competitive advantage through the application of technolo-gies such as robotics, artifi cial intel-ligence and analytics, together with the ability to roll new solutions to suit our customers’ needs in a short space of time.”
Commercial Bank executive general manager and head of Wholesale Bank-ing Raju Buddhiraju said, “Commercial Bank is once again the market leader for cash management and Transaction Banking in Qatar, and we are delighted to receive independent recognition by winning these awards.
“At Commercial Bank, we pride our-selves in off ering our corporate cus-tomers industry-leading digital solu-tions to support their business goals by providing services that are cost eff ec-tive, straight forward, and secure.”
Commercial Bank’s Transaction Banking Department has built strong relationships with Qatari corporates. In 2017, the bank became the fi rst bank in the country to off er “direct debit” to any utility company (Qatar Cool) for online bill payments, and the fi rst bank in Qatar to off er a bulk bill payment service to Ooredoo.
The bank has also introduced an electronic cheque solution, Remote Cheque Deposit service for the cor-porates for faster cheque processing and collection. It also has an in-house IT team that can create technology customisations to meet customer re-quirements, integrate customer en-terprise resource planning (ERP) with bank systems for secured transaction processing and auto-reconciliation.
The awards for “Best Cash Manage-ment Bank in Qatar” and “Best Trans-
action Banking service in Qatar” in 2018 add to several recent awards that underline Commercial Bank’s objec-tives of creativity, innovation, and cli-
ent experience as part of its fi ve-year strategic plan.
Most notably, Commercial Bank was awarded the “Best Bank in Qatar” from
Global Finance magazine on the side-lines of the 2018 Annual Meetings of the International Monetary Fund and World Bank Group.
The request by one of the shareholders to rethink Ezdan’s proposal to delist is based on the strength of the Qatari economy, and considering that the QSE is one of the best performers in the Arab region. PICTURE: Noushad Thekkayil
Abraham, Raju and the Commercial Bank team following their winning two awards at The Asian Banker’s Transaction Banking Awards 2018, Middle East and Africa.
The global LNG market grew by 8.3% from the previous year to nearly 314mn tonnes in 2018, more than three times the size of the market in 2000, according to GIIGNL
BUSINESS
Gulf Times Monday, April 8, 20192
QSE edges up amid strong real estate buying interestBy Santhosh V PerumalBusiness Reporter
The Qatar Stock Exchange yesterday witnessed strong buying interests, especially
in the real estate segment; even as it could gain only three points.
Foreign and Gulf funds’ buy-ing interests were visible as the 20-stock Qatar Index settled 0.03% higher at 10,192.19 points.
Local retail investors continued to be net sellers but with lesser in-tensity in the market, whose sensi-tive index is down 1.04% year-to-date.
Market capitalisation gained more than QR4bn, or 0.73%, to QR571.06bn mainly owing to mid and small cap segments.
Islamic equities were seen de-clining vis-a-vis gains in the main index in the market, where domes-tic institutions turned net profi t takers.
Trade turnover fell amidst higher volumes in the bourse, where the real estate, banking and industri-als sectors together accounted for about 83% of the total volume.
The Total Return Index gained 0.03% to 18,754.5 points and the All Share Index by 0.89% to 3,102.69 points; while the Al Rayan Islamic Index (Price) was down 0.08% to 2,387.82 points.
The realty index soared 5.93%, banks and fi nancial services (0.42%), transport (0.33%), tel-ecom (0.2%) and industrials (0.15%); while insurance and con-
sumer goods declined 2.2% and 0.16% respectively.
Major gainers were Ezdan, Ma-zaya Qatar, QNB, Al Khaliji, Qatar First Bank, Alijarah Holding and Industries Qatar; even as Commer-cial Bank, Qatari German Company for Medical Devices, Al Meera, Qa-tar Insurance and Al Khaleej Taka-ful were among the losers.
Gulf institutions turned net buy-ers to the tune of QR6.87mn com-pared with net sellers of QR3.24mn on April 4.
Non-Qatari institutions’ net buying increased considerably to QR6.61mn against QR0.67mn the previous trading day.
Non-Qatari individuals were net buyers to the extent of QR0.99mn
compared with net sellers of QR5.79mn last Thursday.
Gulf individual investors’ net buying strengthened perceptibly to QR0.9mn against QR0.05mn on April 4.
Local retail investors’ net sell-ing fell infl uentially to QR11.53mn compared to QR16.15mn the previ-ous trading day.
However, domestic institutions turned net profi t takers to the tune of QR3.84mn against net buyers of QR24.47mn last Thursday.
Total trade volume grew 57% to 15.12mn shares, while value fell 1% to QR236.82mn despite 7% higher transactions at 5,364.
The realty sector’s trade vol-ume more than doubled to 6.11mn equities, value soared 77% to QR62.24mn and deals by 38% to 1,556.
The telecom sector reported an 83% surge in trade volume to 1.7mn stocks, 82% in value to QR18.49mn and 66% in transactions to 426.
The industrials sector’s trade volume shot up 60% to 2.83mn shares, value by 35% to QR49.02mn and deals by 12% to 1,715.
The banks and fi nancial services sector saw a 44% increase in trade volume to 3.58mn equities but on an 8% fall in value to QR68.2mn despite 2% higher transactions at 1,110.
The consumer goods sector’s trade volume expanded 31% to 0.34mn stocks, whereas value de-clined 38% to QR24.22mn and deals by 23% to 255.
There was a 9% jump in the in-surance sector’s trade volume to 0.24mn shares and 6% in value to QR7.23mn but on a 12% fall in transactions to 170.
However, the transport sector’s trade volume plummeted 79% to 0.32mn equities, value by 80% to QR7.42mn and deals by 73% to 132.
In the debt market, there was no trading of treasury bills and sover-eign bonds.
Morocco returning to overseas bond market after fi ve-year absenceBloombergRabat
Morocco plans to raise at least $1bn from an international bond sale this year, ending a roughly fi ve-year hiatus, and switch to
a policy of more consistent off erings to fi nance its broader economic overhaul programme.
The North African kingdom – the region’s only in-vestment grade sovereign – has mandated a consor-tium of banks for the bond sale, its fi rst since 2014, Finance and Economy Minister Mohamed Benchaa-boun said in an interview. It also plans to go to the market again in 2020 amid eff orts to hold more con-sistent sales, he said.
King Mohammed last year told the government to come up with a new growth model for the $105bn economy as it steps up a crackdown on tax evasion. That directive has taken on even more urgency as the eruption of unrest in neighbouring Algeria sends a clear message about how a toxic mix of high youth unemployment and sputtering growth could snow-ball out of control.
The sale will take place “as soon as conditions per-mit it this year,” Benchaaboun said on Friday in Mar-rakesh, declining to elaborate further on the timing.
The former chief executive of Banque Centrale Populaire, Morocco’s second-biggest lender, said the country would continue to tap the market “in the most natural manner because debt, in essence, de-preciates, and so you have evidently to build up the share of external fi nancing in the overall debt.”
The plan marks a shift in strategy from his pred-ecessor, Mohamed Boussaid, who was relatively re-luctant to turn to the international market.
The proposed shift comes as authorities review how state-owned enterprises can fi nance the na-tion’s development plans and make them less reliant on government fi nancing. As it stands now, the debt is counted as quasi-sovereign, limiting the adminis-tration’s room to manoeuvre.
“When you are regularly present in the interna-tional bond market you set your pricing target for the debt you want to raise, and evidently you also move faster in the mobilization of fi nancing on behalf of the lenders because they know you,” Benchaaboun said.
Moroccan offi cials have struggled to revive growth that has been squeezed over the past two years by drought and weak consumer demand.
The International Monetary Fund, in the latest review of its precautionary and liquidity line ar-rangement with the country earlier this month, said that “improved fi scal management and economic diversifi cation” have made the economy more resil-ient, though unemployment remains high, especially among younger Moroccans.
The government needs to press on with the chang-es it’s making “in order to increase productivity gains, create jobs, and raise growth potential” in line with its medium-term objectives, the Washington-based fund said in an April 2 report.
“The growth story can’t be summed up in one quarter,” Benchaaboun said, pointing to the impact this year of drought on the country’s labour-inten-sive agricultural sector and “a non-agricultural GDP that is posting good growth levels.”
The government is sticking to its budgeted projec-tion of 3.2% growth, he said. The central bank last month cut the growth projection for 2019 to 2.7%, citing mostly lower farming output.
Among the measures the government is taking to boost growth is a draft bill - now with parliament - to protect minority rights in Corps, as well as the launch later this year of the fi rst real-estate invest-ment trust, or REITs, which he said would “provide a fundamental source of fi nancing for businesses across the board.”
“The repercussions will not be felt overnight,” Benchaaboun said, stressing that authorities are confi dent the measures would boost growth and cre-ate jobs.
IIA Qatar holds training on International Standards for Internal AuditingThe Institute of Internal Auditors Qatar chapter
recently conducted two full days training in
Arabic on International Standards for Internal
Auditing in the course titled ‘IPPF Standards:
Mastering the Principles’.
The International Standards for the Professional
Practice of Internal Auditing (Standards) serve
as mandatory guidance for professionals who
practice internal auditing. The trainer Elie Safar is
senior internal auditor at Notre Dame University
(NDU), Lebanon. “Internal auditing is a relatively
new profession. Thus, numerous misconceptions
and misunderstandings exist. The workshop
aimed at introducing the basics of internal audit-
ing and mastering the principles of the profes-
sional framework for internal auditing to enable
participants to complete their work according to
international standards” said Safar.
The IIA Qatar Board members Hassan al-Mulla,
Adel al-Hashmi, and Rajeswar Sundaresan, at-
tended the closing ceremony and distribution of
certificates to participants.
Meanwhile, the Qatar Chapter of the institute
will be hosting the 6th National Conference on
Internal Auditing under the theme “Taking the
Lead” on April 28 and 29 at the Hilton Doha.
About 15 international speakers are already
sourced to cover topics of interest such as
corporate governance, integrated assurance,
cybersecurity, soft skills, data privacy, and the
conference will focus on financial, oil and gas
and insurance sectors.
IIA Qatar Board members Hassan al-Mulla, Adel al-Hashmi, and Rajeswar Sundaresan attended the closing ceremony and distribution of certificates to participants.
Iran says reaches understanding with Iraq to develop two oilfieldsReutersGeneva
Iran and Iraq have reached an under-
standing about developing two oil-
fields on their mutual border, Iran’s oil
minister was quoted saying yesterday,
a day after Iranian President Hassan
Rouhani called for increased trade
between the two countries.
The focus of the understanding is the
development of the Naft Shahr and
Khorramshahr oilfields, Oil Minister
Bijan Zanganeh said according to a
report on Iran’s oil ministry website
yesterday, without giving any details
of the plan.
Rouhani called on Saturday for Iran
and Iraq to expand their gas, electric-
ity and oil dealings and boost bilateral
trade to $20bn, state TV reported,
despite diff iculties caused by US sanc-
tions against Tehran.
“We hope that our plans to expand
trade volume to $20bn will be realised
within the next few months or years,”
Rouhani said, after a meeting with
visiting Iraqi Prime Minister Adel
Abdul Mahdi, in remarks carried by
state television.
Iranian media reports have put the
current level of trade at about $12bn.
Zanganeh had in February criticised
Iraq for not agreeing to develop
shared oilfields because of sanc-
tions fears, according to comments
published by the oil ministry’s news
site SHANA.
However the energy industries in the
two countries have close links and
Iraq relies heavily on Iranian gas to
feed its power stations.
Iraq imports roughly 1.5bn standard
cubic feet of gas per day from Iran via
pipelines in the south and east of the
country.
Zanganeh noted Iraq owes Iran ap-
proximately $1bn for gas supplied in
the past.
“Given the lack of development in the
petrochemicals and gas industries in
Iraq, there is a bright perspective for
cooperation between the two coun-
tries,” Zanganeh said, again without
giving any further details. There was
no immediate comment from the
Iraqi oil ministry yesterday about the
oilfields understanding.
After a trip to Iraq last month by
Rouhani and Zanganeh, Iran had
agreed to help Iraq with technical and
engineering services in the oil sector.
Iran also agreed to help with the de-
velopment of mutual fields, rebuilding
old refineries, and helping build a net-
work for gas delivery, Amir Hossein
Zamaninia, Iran’s deputy oil minister
for trade and international aff airs, said
yesterday, according to SHANA, the
new site of the Iranian oil ministry.
US President Donald Trump reim-
posed sanctions on Iran’s energy
exports in November, citing its nu-
clear programme and meddling in the
Middle East, but has granted waivers
to several buyers to meet consumer
energy needs.
In March the US granted Iraq a 90-day
waiver exempting it from sanctions on
buying energy from Iran.
Rouhani earlier expressed hope that
work on building a railway linking the
two countries, would begin within the
next few months.
The railway project was part of deals
reached during Rouhani’s March visit
to Baghdad, meant to underline that
Tehran still plays a dominant role in
Iraq despite US eff orts to isolate Iran.
The focus of the understanding is the development of the Naft Shahr and Khorramshahr oilfields, Oil Minister Bijan Zanganeh said according to a report on Iran’s oil ministry website yesterday, without giving any details of the plan.
Foreign and Gulf funds’ buying interests were visible as the 20-stock Qatar Index settled 0.03% higher at 10,192.19 points yesterday
BUSINESS3Gulf Times
Monday, April 8, 2019
A reality check for the euro areaBy Christopher Dembik
The problems facing the eurozone economy are neatly illustrated by fresh German data showing soft exports and contracting factory orders. While Chinese fiscal stimulus should help get Europe’s biggest economy back on track, expansionary fiscal policy across the bloc, as well as interest rate normalisation, are also necessary to ameliorate the ills of the euro area as a whole.
Europe needs some fi scal stimulus
There is no such thing as global decoupling. Unsurprisingly, headwinds from China’s slowdown are starting to hit Europe and the US. The Organisation for Economic Co-operation and Development’s euro area leading indicator, which is widely used by asset allocators globally, has fallen sharply over the past few months. The year-on-year rate stands at its lowest level since the end of 2012.At the same time, large declines in core European industrial production data can be observed, especially in Germany, which accounts for one-third of European industrial activity. This slowdown came as a shock for many
policymakers, but we feel that it was predictable. Over recent quarters, our leading indicators (notably credit impulse) led us to warn clients and investors against the risk of lower growth in Europe.
Low credit impulse and China
The euro area faces two main issues: low credit impulse and the Chinese slowdown. The euro area credit impulse, a key driver of economic activity, is running at 0.4% of GDP, which is rather low compared with its four-year average of 0.8%. A country-by-country analysis shows that the risk of growth decoupling between core countries and the periphery of the euro area is emerging again. In France and Germany, credit impulse is positive, at 1.7% and 0.6% of GDP respectively. By contrast, the credit impulse is sharply decelerating in the periphery; it was close to zero in Q4‘18 in Italy and sits at -2.1% of GDP in Spain, a level not seen since the end of 2013. This tends to indicate that a more restrictive credit cycle, especially in the periphery, has started. This will have a negative impact on domestic demand as it is highly correlated to the flow of new credit in the economy, and ultimately on growth as well.
On the top of that, the euro area, which has been more and more reliant on Asian growth since the financial crisis, is hit hard by low economic activity in China. The two charts below show the drop in Germany’s export data; trade, which accounts for 46% of the country’s GDP, looks soft. Germany’s factory orders, at constant prices, are in contraction and close to their 2012 nadir. In other words, we are looking at a decline in the manufacturing sector months ahead as well as weak sentiment in the automotive industry. Digging further into the data, the most striking chart is German export growth to China, which has fallen sharply since
the beginning of 2018 and is now in contraction as well. The bright side is that China has opened the credit tap again, starting in the spring of 2018. We expect Chinese economic stabilisation by Q3 and a positive impact to Europe by Q4’19-Q1’20. Meanwhile, domestic measures to stimulate the economy need to be taken at the European level.
Monetary policy options
As it is so often the case, all eyes are on the European Central Bank. In a bid to win time and avoid a tightening squeeze hitting Eurozone banks, March saw the ECB announce a new round of TLTRO and a modification of forward guidance to extend its first rate hike into 2020.In our view, this is only a first step towards a more accommodative stance. As of today, discussions among ECB watchers are notably evolving around the idea of pushing the repo rate back to zero. The rationale behind this idea is that the benefit of negative rates is rather low; they are essentially a tax on banks that tends to further enfeeble the weakest banks. So far, the positive impact has been limited and has strongly depended on the structure of banks. The normalisation of the repo rate would be an easy move to reduce pressure on the
banking sector if the risk of a tightening squeeze appears again.
Fiscal push in H2’19
These measures alone will not be enough to stimulate growth. They may help to push the credit impulse higher but other measures to support demand are also required. As economic data will continue to disappoint in the coming months, we believe that a new consensus for looser fiscal policy will emerge in European countries in H2’19.An accumulation of negative German data could be the perfect trigger to set off expansionary fiscal policy in Europe. If fiscal expansion is equivalent to 1%
of GDP in Germany, it could lead to an average increase in the output of other European countries by 0.15% after two years, with the strongest impact on small, open economies sharing a land border with Germany to be around 0.4% according to Beetsma, Giuliodori and Klaassen1. Though the spillover eff ect of fiscal expansion usually tends to be small, it is largely positive and, coupled with the ECB’s accommodative monetary policy and China’s credit impulse, could be the right answer to ongoing headwinds.
Christopher Dembik is head of Macro Analysis at Saxo Bank.
FOCUS
Hedge funds keep sitting out $10tn global stock rallyBloombergNew York
Wondering who’s driving this year’s advance in stocks? Individual investors have played a role, and so have companies themselves. But to date one notable class of professional speculators has been absent.It’s hedge funds, who have stubbornly refused to embrace stocks even as global equities added $10tn in value over the last three months. At the end of March, their net exposure as measured by the ratio of bullish bets to bearish ones stood near the lowest level in more than a year, client data compiled by JPMorgan’s prime brokerage unit showed.The lack of conviction has been
cited by a chorus of strategist as evidence stocks have further to rise – a plank in a bull case that says Federal Reserve dovishness will eventually force everyone back into equities. The S&P 500 is up 2% last week and has less than that to go to erase losses from its worst fourth quarter in 10 years.“Funds initially missed the rally, and perhaps many think now is too late to enter the market,” said Marko Kolanovic, global head of macro quantitative and derivatives strategy at JPMorgan. “As some of these investors throw in the towel and add net exposure, it would provide additional fuel.” Of course, it’s possible hedge funds will stick to their guns and resist jumping in. Something like that happened in the second half of last year, and paid off
when the S&P 500 plunged to the brink of a bear market. This year’s skepticism isn’t denting demand for their services. About a third of respondents in a separate JPMorgan survey said they plan to boost allocations, up from 15% in 2018.“It’s for diff erentiated exposure but also some positive returns when the market turns south,” said Crit Thomas, global market strategist at Touchstone Advisors in Cincinnati. “I’m not sure the pressure really necessarily is there or not.” In the final week of March, hedge funds sold stocks and raised their bearish bets, particularly in financial and industrial shares, data compiled by Goldman Sachs showed. Their net leverage, a measure of industry risk appetite, fell by 2.2 percentage points to 61.7%. That’s in the
4th%ile of a one-year range.Hedge funds that focus on equities climbed 6% in the first quarter, according to Hedge Fund Research, compared with a 13% gain in the S&P 500. While comparing that two returns is arguably unfair, it remains the industry’s worst relative start of a year since 2012.Any number of concerns could be keeping hedge funds on the fence. The easiest to explain is the state of the economy and corporate earnings, both of which are forecast to see slowing growth in 2019.“They’re not participating because they see this rally as more driven by sentiment as opposed to underlying fundamentals,” Touchstone’s Thomas said. “It’d be better visibility of a true turn in fundamentals that would bring them back in.”
China’s March foreign exchange reserves rise to 7-month highReutersBeijing/Singapore
China’s foreign exchange reserves rose for a fi fth straight month in March,
with the increase exceeding ex-pectations, as growing optimism about the prospects for a US-China trade deal off set concerns over slowing economic growth.
Chinese reserves, the world’s largest, rose by nearly $9bn in March to $3.099tn, its highest since August last year, central bank data showed yesterday.
Economists polled by Reuters had expected reserves would rise $5bn to $3.095tn.
“The US dollar index strengthened slightly in March due to China-US trade talks, the revised policy outlooks of central banks in Europe and America as well as uncertainty over Brexit...China’s forex reserves expanded marginally,” China’s forex regu-lator said after the data release.
The State Administration of Foreign Exchange (SAFE) added that with the economy expected to maintain reasonable growth and improved fl exibility in the yuan exchange rate, the country’s forex reserves will remain stable.
The yuan fell 5.3% against the dollar last year as trade relations with the United States deterio-rated and the Chinese economy slowed. But it has rebounded over 2% so far in 2019 on hopes Washington and Beijing will reach an agreement to end their bruising trade war.
In March, the yuan fell 0.3% against the dollar due to the strength of the greenback.
The dollar was up 1% against a basket of major currencies. US and Chinese negotiators wrapped up their latest round of trade talks on Friday and were scheduled to resume discussions this week to try to secure a pact that would end a tit-for-tat tariff battle that has roiled global markets.
But the outlook for the dollar is expected to remain soft after
the Federal Reserve last month abandoned projections for fur-ther interest rate hikes this year on signs of an economic slow-down in the United States.
Assuming continued dollar weakness and progress in trade talks, the yuan will likely hold on to its recent gains and appreciate modestly over the coming year, according to analysts in a new Reuters poll. It last traded around 6.72 to the dollar. US President Donald Trump said on Thursday that a trade deal could be an-nounced in the next four weeks.
But the US trade offi ce said on Saturday that signifi cant work remains to be done. Discussions are set to resume this week. The value of China’s gold reserves fell slightly to $78.525bn from $79.498bn at the end of February.
For much of last year, global investors worried about the risk of capital fl ight from China as the economy cooled, and debated how much yuan weakness Beijing would allow, though strict capital controls kept outfl ows in check.
More recently, with the dol-lar on the backfoot, attention has turned to how much upward pressure Chinese policymak-ers will be comfortable with, as foreign infl ows into the coun-try’s fi nancial markets look set to boost the currency.
Chinese stocks have rallied more than 20% this year on trade deal hopes, while some Chinese bonds were added on April 1 to the Bloomberg Barclays Global Aggregate Index, one of the most widely tracked fi xed income benchmarks.
UBS Asset Management es-timated this phase of bond in-clusion will introduce $250-$500bn of passive money alone, and possibly trillions of dollars if active money is counted.
The tide may also be turn-ing for China’s economy, with business surveys showing March manufacturing activity returned to growth, suggesting months of government stimulus measures are starting to take hold.
Pound investors eye Brexit relief as May pursues deal or delayBloombergLondon
Once again, the day Britain is set to leave the European Union without a deal looms. And once
again, pound traders are barely batting an eyelid.
Sterling may get a temporary reprieve from the Brexit frenzy if the EU grants the UK’s request for a further exten-sion next week, allowing it to extend this year’s best performance among Group-of-10 currencies.
Markets have increasingly priced out the prospect of a no-deal Brexit, with falling one-week implied volatil-ity showing growing investor confi dence that the current April 12 deadline will be postponed.
The focus now turns to the EU’s emer-gency meeting on Wednesday, when many strategists see the bloc granting the UK a second Brexit extension after defer-ring it previously last month.
Although UK Prime Minister Theresa May has asked for a delay until June 30 and wants to leave even sooner if a di-vorce deal can be ratifi ed before Europe-an elections next month, some analysts predict a longer extension.
“Once we get this long extension, par-ticipation in European parliamentary elections, our view is that then eff ective-ly the markets can put Brexit to one side for a while,” said Kamal Sharma, direc-tor of G-10 currency strategy at Bank of America Merrill Lynch. “That will ulti-mately see sterling gravitate above $1.35 and eventually up to $1.40.’’
The UK currency has advanced more than 2% this year as the market bet against the risk of a chaotic separation. Although the threat of Britain crash-ing out of the EU without an agreement can’t be ruled out on April 12, one-week
pound implied volatility versus the dol-lar fell to its lowest level since March 20 on Friday.
Still, hedge funds are at their most bullish on sterling since December, ratcheting up long positions on the cur-rency, which increases the risk that a fail-ure to get an extension could see heavy selling as traders rush to get out.
Aberdeen Standard Investments is avoiding the currency and Investec Asset
Management closed its long position at the end of last month.
“There have been a lot of reports and comments that the pound is the best trade in town and that it should strengthen,” said Georgette Boele, a sen-ior foreign-exchange strategist at ABN Amro Group NV. “We are positive, but we think there is now too much focus that it is a done deal.”
However, for Nomura International
Plc, the positive signs are too good to ignore. UK lawmakers are expected to complete legislation ruling out a no-deal exit next week, while May is in talks with the opposition Labour Party in an at-tempt to break the impasse.
“April 12 is unlikely to be a hard Brexit day,” said Jordan Rochester, a currency strategist at Nomura, referring to the possibility of a no-deal exit. “Less hedg-ing is required.”
A man holds pound sterling banknotes in an arranged photograph in London. The UK currency has advanced more than 2% this year as the market bet against the risk of a chaotic separation.
BUSINESS
Gulf Times Monday, April 8, 20194
Pakistan to hold crucial talks on IMF package this week
InternewsIslamabad
Pakistan is likely to hold crucial dis-cussions on an IMF bailout pack-age this week when Finance Min-
ister Asad Umar arrives in Washington to attend the spring meetings of the World Bank group, which includes the Interna-tional Monetary Fund.
Umar said at a news briefi ng in Islam-abad on Friday that he hoped his discus-sions in Washington would be fruitful and Pakistan would be able to sign the bailout package by the end of this month.
He is expected in Washington on Tuesday, a day after the spring meetings (April 8-14) formally begin. An IMF mis-sion will visit Islamabad later this month to formally conclude the package.
On Friday, three congressmen Ted S Yoho, Ami Bera and George Holding sent a letter to US Secretaries of State and Treasury, asking them to prevent the IMF from concluding a deal with Pakistan.
The congressmen claimed that Paki-stan would use the IMF package to re-pay China for the loans incurred under the China-Pakistan Economic Corridor (CPEC) programme.
In October, Pakistan formally request-ed the IMF for an economic assistance package and backed it up with a series of meetings with senior IMF offi cials.
Pakistan’s persistent economic woes mammoth defi cits, shrinking foreign currency reserves, low exports, dimin-ishing tax revenues, a weak currency, ex-ternal debt payments, and soaring sov-ereign debt have forced the country to seek its umpteenth IMF bailout package in three decades.
So far measures to ease the impact of
this economic crisis, currency devalua-tions, loans from Saudi Arabia, the UAE and China and the issuance Pakistan bonds have failed to achieve the required result of not seeking an IMF bailout package.
In February, IMF Managing Director Christine Lagarde met Prime Minister Imran Khan in Dubai and said they had a “constructive” discussion on an IMF-supported programme for Pakistan. “I reiterated that the IMF stands ready to support Pakistan,” she said, but also emphasised the need for “decisive poli-cies and a strong package of economic reforms”.
Later, a senior Pakistani offi cial told journalists that the conditions associ-ated with a loan could “include some harsh measures and the government will have to be very prepared to explain why Pakistan has been forced to return to the IMF”.
On March 27, the fi nance minister met the new IMF mission chief for Pakistan, Ernesto Ramirez Rigo, in Islamabad and discussed fi scal, monetary, and struc-tural reforms with him.
Umar assured Ramirez that “the gov-ernment would continue to address the macroeconomic imbalances and would take necessary corrective measures in this regard”, according to an offi cial statement issued after the meeting.
This week, the Asian Development Bank (ADB) projected further decelera-tion of Pakistan’s GDP growth to 3.9% and rising infl ation pressures on average at 7.5% for the ongoing fi nancial year.
The ADB’s Asian Development Out-look (ADO) 2019 also noted that Pakistan was discussing a macroeconomic stabili-sation programme with the IMF to meet its large fi nancing needs.
International bond: Pakistan set to pay back $1.129bnInternewsIslamabad
Pakistan will have to pay back over
$1.129bn next week on maturity of five-year
international bond at a time when the
country’s net international reserves had
already fallen into negative, it was learnt.
Islamabad will have to make heavy
repayments of over $3bn in last quarter
(April-June) period of the current fiscal
2018-19 with $1bn in each month and the
largest lump sum due amount of over $1bn
on account of maturity of international
bond would become due next week.
“We will have to pay over $3bn in last
quarter of the current fiscal as principle
and mark up on foreign loans and bonds,”
said a top off icial while showing off icial
record of repayments for remaining period
of the ongoing fiscal.
Pakistan had launched $2bn bond on April
9, 2014 during the tenure of the PML-N out
of which $1bn was generated on five-year
note at a yield of 7.25% and another $1bn for
a period of 10 years at the rate of 8.25%. Now
the maturity of five years bond of $1bn would
become due next week on April 9, 2019.
However, in the aftermath of receiving
generous support from countries to the
tune of $9.1bn including $3bn from Saudi
Arabia, $2bn from the UAE and $4.1bn from
China during the first nine months of the
current fiscal year, the foreign reserves
held by State Bank of Pakistan (SBP) stood
at $10.4bn only. After excluding all kinds of
liabilities and swaps, the foreign reserves
held by the SBP had fallen into negative.
On other hand, the dollar inflows through
traditional international lenders is also
shrinking as the government could only
manage $2.94bn from all multilateral,
bilateral creditors and commercial lenders
in shape of loans and grants during the first
eight months (July-February) period of the
current fiscal year 2018-19 against $7.608bn
in the same period of the last fiscal.
The government could not launch any
international bond because Pakistan was
not under the IMF programme and there
was no story on the economic front that
could be narrated to apprise international
investors and second reason was reduced
appetite in international market for raising
funding for emerging markets.
“Yes a bond payment of $1bn is due in
first half of April. Adequate new financ-
ing has already been arranged for April
to smoothly ensure this payment. Thus
the payment will not cause any unusual
pressure on FX reserves,” said Dr Khaqan
Najeeb adviser and spokesperson of the
Ministry of Finance.
The government continues to follow a
multipronged strategy to ensure continued
stability in the country’s balance of pay-
ment (BoP) position.
The strategy includes attracting more
remittances and foreign direct investment,
sale of assets and bilateral and multilateral
flows, said Dr Khaqan Najeeb.
China’s market is getting closer to featuring its fi rst 1,000 yuan stockBloombergHong Kong
China’s booming equity market is getting closer to featuring its fi rst 1,000
yuan stock. Four analysts tracked by Bloomberg predict Kweichow Moutai Co will get there within the next 12 months. The shares have rallied 47% this year, helped by a surge in sales that defi ed concern of a consumer slowdown. The stock rose 2.4% on Thursday, closing at 865 yuan ($129).
Companies around the world of-ten split their shares when prices get too high, a way to boost hold-ings by individuals and ensure li-quidity remains suffi cient. But in China, a high-turnover market that’s dominated by day traders, that’s rarely been a problem for its largest and most popular stocks.
About 4.5mn Moutai shares changed hands daily this year on average, even though investors must buy them in multiples of 100.
“It’s essentially an issue of mar-ket liquidity and investor struc-ture,” said Kinger Lau, Goldman Sachs Group Inc’s chief equity strategist in Hong Kong. “For a big-cap stock and a foreigner favourite,
I’d say the impact would be quite small.
China’s A-share market has al-ways been one of ample liquidity.” Stock splits are rare in China and mostly occurred in the 1990s, ac-cording to data tracked by Bloomb-erg. A Moutai representative didn’t immediately return a call seeking comment on whether the company
plans to split its stock. Moutai has previously spurred debate around whether a stock that costs 1,000 yuan could be a problem for trad-ers. When it was nearing 800 yuan early last year, local media reported that the Shanghai exchange was testing its systems to ensure there would be no technical glitches.
A spokesperson for the ex-
change didn’t immediately reply to a request for comment on whether such tests have been conducted this time.
Moutai has long been a favour-ite of foreign investors. They’ve poured about 12bn yuan into the stock this year through March via the trading links with Hong Kong, according to data compiled by Bloomberg. Foreign trading ac-counted for an average of 36% of its daily turnover in the past month.
Changchun High & New Tech-nology Industry (Group) Inc is Chi-na’s second-highest priced stock at 308.49 yuan.
Analysts at Goldman Sachs, Macquarie Group Ltd, Citic Secu-rities Co and China Securities Fi-nance Corp all have a target price of at least 1,000 yuan for Moutai. At 1,016 yuan, Goldman’s target would make Moutai the fi fth highest-priced stock in the world outside the US, according to Bloomberg calcu-lations based on shares where daily volume is at least a million.
“Moutai enjoys the strongest branding power, highest margins, best return-on-capital and strong-est free cash fl ow in China’s indus-try,” Citigroup Inc analysts Xiaopo Wei and Richard Wenjia Lin wrote in a note last week.
China equity rally is just getting started, says top fund managerBloombergNew York
The fund manager who trounced 99% of peers
this year says Chinese stocks could be the most
alluring bet in the decade to come.
Lewis Kaufman, who oversees the $2bn Ar-
tisan Developing World fund in San Francisco,
has outperformed amid rebounds in Alibaba
Group Holding Ltd, liquor giant Kweichow
Moutai Co and TAL Education Group. Chinese
shares could get an extra boost from further
policy support, additional index inclusions and
a trade resolution between Washington and
Beijing, he said.
Kaufman, 43, is also overweight equities in
the other so-called BRIC nations of India, Brazil
and Russia. India is still largely untapped by for-
eign investors and benefits from a large base of
educated youth as well as economic overhauls
under Prime Minister Narendra Modi, he said.
Brazilian companies, including stock exchange
Brasil Bolsa Balcao and pharmacy chain Raia
Drogasil, have the domestic demand potential
to transcend the limitations of Latin America’s
largest economy, according to Kaufman.
He said he’s trimmed his Russian hold-
ings down to just two stocks – search engine
provider Yandex NV and Sberbank of Russia
PJSC – as the prospect of new US sanctions
concerns him.
“There’s a B, an R, an I and China,” Kaufman
said. “In China, our weighting is almost as big
as it’s ever been. Everything else in emerging
markets pales in robustness to that story.”
Kaufman has avoided South Korean and
Taiwanese shares, which make up almost 25%
of MSCI’s emerging-market index. Instead, 20%
of his portfolio is dedicated to multinationals
such as Visa Inc, which has exposure in the
developing world.
Japanese investors regret missing Treasury tradeBloombergTokyo
As Japan begins its new fi scal year, and the nation’s insurers take a fresh look at deploying
their giant stockpiles, an investment lesson from the last period looms large: Unhedged Treasuries may be the way to go.
Last fi scal year many funds plumped for European debt, given hedging costs that were about three percentage points lower than for dol-lar bonds. For example, they bought ¥1.17tn ($10.5bn) of French debt from April 2018 through January, almost double the ¥620.5bn net purchases of US Treasuries, the latest govern-ment data show.
Sovereign US debt would have giv-en an 8.5% gain for the year through March 31 - the most in four years, according to an index compiled by Bloomberg. By contrast, currency-hedged French notes off ered Japanese investors only 3.5% in fi scal 2018.
With Japan holding some $2.4tn of foreign debt, the investment decisions by its funds are closely scrutinised.
The Treasury yield’s surge dur-ing 2018, along with a jump in dollar-yen hedging costs to a 10-year high, prompted much debate among the typically risk-averse investors who were caught be-tween the desire for more yields and the cost of protection.
“US Treasuries don’t look attrac-tive when their high hedge costs are taken into account, but investors can’t simply avoid taking exposures to them,” said Satoshi Nagami, head of global strategies investment group at Sumitomo Mitsui DS Asset Man-agement Co. Japanese funds will seek to buy Treasuries without currency hedging when the dollar falls, he said.
Other than the higher yields Treas-uries off ered over major bond mar-kets, a strategy to buy the notes un-hedged would have also benefi ted from a stronger dollar during the fi scal year. The greenback rose more than 4% against the yen over the period.
While Japanese life insurers in-cluding Nippon Life Insurance Co
and Dai-Ichi Life Insurance Co an-nounced plans to buy more US bonds without hedging, the question is whether this trend will accelerate. That could add to the rally in Treas-uries, which has seen the benchmark 10-year yield drop more than 70 ba-sis points from an October high as the Federal Reserve turned dovish.
“It could be diffi cult for Treasury yields to rise given the Fed’s dovish stance, but we aren’t expecting the US economy to slip into recession,” said Nagami of Sumitomo Mitsui.
As things stand, the still-hefty yield premium commanded by US debt over Japanese bonds argues against currency hedging. More so when combined with expectations of a stable exchange rate, with a gauge of the dollar-yen’s one-year implied volatility near the lowest level since July 2007.
The Treasury 10-year yield was at 2.52% on Friday, compared with the minus 0.035% off ered by the compa-rable Japanese benchmark.
A diff erential of around 250 ba-sis points between the US and Japan yields means unhedged Treasuries would remain profi table as long as the dollar stays stronger than 108 yen. The median estimate in a Bloomberg survey of economists shows it reach-ing that level by March 31, 2020.
“Investment in Treasuries without hedging is a strategy that’s less likely to lose money,” said Kenta Inoue, a senior market economist at Mitsubi-shi UFJ Morgan Stanley Securities Co in Tokyo. “The dollar off ers the highest yields in developed markets and it’s been holding up well even as expectations of Fed rate hikes disap-peared.”
Interviews with Japanese money managers suggest that French sov-ereign bonds continue to remain a popular choice this fi scal year, along with Treasuries, though the funds fl ag some caution on the latter amid increasing calls for the dollar to weaken.
“Hedged French bonds still look
attractive,” said Eiichiro Miura, gen-eral manager of the fi xed-income in-vestment department at Nissay As-set Management Corp.
“There are political risks in France and some issues on the budget, but they aren’t too serious as the fi scal situation isn’t as severe as seen in countries like Italy.” Miura said Japa-nese investors may direct some funds into Spanish bonds as well.
Sompo Japan Nipponkoa Asset Management Co says it is waiting to see US consumption-related data to decide on whether to increase its ex-posure to Treasuries after boosting positions just late last year.
The Fed’s dovish turn was on ex-pected lines, “but the fact that the market is pricing a rate cut appears to be too much,” said Shinji Hiramatsu, senior investment manager at Som-po Japan. “Some soft data points to weakness, but most hard data don’t signal weakness to convince the market that the Fed will cut interest rates in the foreseeable future.”
China is on a major gold-buying spreeBloombergSingapore
China’s on a bullion-buying spree. The world’s second-largest economy expanded its
gold reserves for the fourth straight month, adding to optimism that cen-tral banks globally will continue to build holdings.
The People’s Bank of China raised reserves to 60.62mn ounces in March from 60.26mn a month earlier, ac-cording to data on its website.
In tonnage terms, last month’s in-fl ow was 11.2 tonnes, following the addition of 9.95 tons in February, 11.8
tonnes in January and 9.95 tonnes in December.
China, the world’s top gold pro-ducer and consumer, is facing signs of a slowing economy, even as some progress is being made in trade nego-tiations with the US.
The latest data from the PBoC in-dicate that the country has resumed adding gold to its reserves at a steady pace, much like the period from mid-2015 to October 2016, when the country boosted holdings almost every month.
Should China continue to ac-cumulate bullion at that pace over 2019, it may end the year as the top buyer after Russia, which added 274
tons in 2018. Governments world-wide added 651.5 tonnes of bullion in 2018, the second-highest total on record, according to the World Gold Council.
Russia quadrupled its reserves within the span of a decade amid President Vladimir Putin’s quest to break the country’s reliance on the US dollar, and data from the central bank show that holdings rose by 1mn ounces in February, the most since November.
Spot gold fell for a second straight month in March even after the Fed-eral Reserve said it would pause on interest rate hikes for the rest of the year, which lead to a surge in equities
instead. Still, the longer term outlook is more bullish as central bank pur-chases should be supportive of pric-es, with infl ows running as high as last year, said Goldman Sachs Group Inc, which expects a rally to $1,450 an ounce over 12 months. Bullion for immediate delivery was at $1,291.76 on Friday.
China has previously gone long periods without revealing increases in gold holdings.
When the central bank announced a 57% jump in reserves to 53.3mn ounces in mid-2015, it was the fi rst update in six years. The latest pause was from October 2016 until Decem-ber last year.
Pedestrians walk along a street in the Ginza shopping district in Tokyo (file). As Japan begins its new fiscal year, and the nation’s insurers take a fresh look at deploying their giant stockpiles, an investment lesson from the last period looms large: Unhedged Treasuries may be the way to go.
Investors look at computer screens showing stock information at a brokerage house in Shanghai (file). Analysts tracked by Bloomberg predict Kweichow Moutai Co will be featuring the equity market’s first 1,000 yuan stock within the next 12 months.
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 Exchange Index Etf
Qatar Cinema & Film DistribAl Rayan Qatar Etf
Qatar Insurance CoOoredoo Qpsc
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
Investment Holding GroupGulf Warehousing Company
Gulf International ServicesEzdan Holding Group
Doha Insurance CoDoha Bank Qpsc
Dlala HoldingCommercial Bank Pqsc
Barwa Real Estate CoAl Khaleej Takaful Group
Aamal CoAl Ahli Bank
146.00
62.50
7.70
14.25
4.43
5.54
66.50
72.55
178.90
58.89
39.00
70.80
24.81
155.56
22.13
43.00
5.49
200.54
4.45
171.05
105.00
18.00
25.45
38.97
64.70
8.58
9.04
21.86
147.00
63.00
48.00
35.89
11.86
123.99
24.50
5.27
45.35
15.65
10.64
11.56
21.40
10.22
45.51
35.74
13.20
9.88
29.00
0.68
-0.64
0.52
0.07
1.37
-0.54
0.53
-1.95
1.07
0.03
0.00
-0.84
0.81
0.10
0.36
0.00
-3.85
-0.48
3.01
-0.01
0.00
-9.23
0.00
-2.28
0.00
4.89
9.98
-1.09
-1.01
-0.02
2.70
-0.03
2.95
0.55
-2.58
0.38
-0.33
0.51
9.92
-2.53
-0.88
-1.26
-1.28
0.39
-4.35
0.82
2.44
3,602
28,483
1,603,881
649,350
89,548
518
4,329
3,177
47,204
16,001
1,282
80,488
48,361
157,006
311,335
857
59,408
61,692
1,968,427
8,171
-
33,243
-
121,640
94,245
648,658
3,105,230
638,452
49,618
13,331
520
159,368
88,930
86,573
108,678
224,484
5,233
106,394
2,336,906
1,000
140,851
138,122
33,596
23,247
104,294
395,573
3,230
QATAR
Company Name Lt Price % Chg Volume
Sultan Center Food ProductsKuwait Foundry Co Sak
Kuwait Financial Centre SakAjial Real Estate Entmt
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
A’ayan Real Estate Co Sak
8.22
3.70
0.00
0.72
8.67
-1.62
0.00
-1.75
0.00
0.59
2.83
0.77
1.17
1.86
1.24
0.00
2.72
0.00
0.00
1,408,800
181,554
11,082
3,951
33
662
4,000
461,851
301,774
11,500
2,411,240
3,540,774
326,869
4,798,366
11,736,026
20,050
1,960,032
225,100
48,000
KUWAIT
Company Name Lt Price % Chg Volume
OMAN
Company Name Lt Price % Chg Volume
Investors Holding Group Co.KAl-Mazaya Holding Co
Al-Madar Finance & Invt CoGulf Petroleum Investment
Mabanee Co SakcInovest Co Bsc
Al-Deera Holding CoMena Real Estate Co
Amar Finance & Leasing CoUnited Projects For Aviation
National Consumer Holding CoAmwal International InvestmeEquipment Holding Co K.S.C.C
Arkan Al Kuwait Real EstateGfh Financial Group Bsc
Energy House Holding Co KscpKuwait Co For Process PlantAl Maidan Dental Clinic Co KNational Shooting CompanyAl-Ahleia Insurance Co Sakp
Wethaq Takaful Insurance CoSalbookh Trading Co Kscp
Aqar Real Estate InvestmentsHayat Communications
Soor Fuel Marketing Co KscTamkeen Holding Co
Burgan Co For Well DrillingKuwait Resorts Co KsccOula Fuel Marketing Co
Palms Agro Production CoMubarrad Holding Co Ksc
Shuaiba Industrial CoAan Digital Services Co
First Takaful Insurance CoKuwaiti Syrian Holding Co
National Cleaning CompanyUnited Real Estate Company
AgilityKuwait & Middle East Fin Inv
Fujairah Cement IndustriesLivestock Transport & Tradng
International Resorts CoNational Industries Grp Hold
Warba Insurance CoFirst Dubai Real Estate Deve
Al Arabi Group Holding CoMobile Telecommunications Co
Eff ect Real Estate CoTamdeen Real Estate Co KscAl Mudon Intl Real Estate Co
Kuwait Cement Co KscSharjah Cement & Indus Devel
Kuwait Portland Cement CoEducational Holding Group
Asiya Capital Investments CoKuwait Investment Co
Burgan BankKuwait Projects Co Holdings
Al Madina For Finance And InKuwait Insurance Co
Al Masaken Intl Real EstateIntl Financial Advisors
First Investment Co KsccAl Mal Investment Company
Bayan Investment Co KsccEgypt Kuwait Holding Co Sae
Coast Investment DevelopmentPrivatization Holding Compan
Injazzat Real State CompanyKuwait Cable Vision Sak
Sanam Real Estate Co KsccIthmaar Holding 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 DevelopmKgl Logistics Company Kscc
Combined Group ContractingJiyad Holding Co Ksc
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 IndustrEkttitab Holding Co Sak
Real Estate Trade Centers CoAcico Industries Co Kscc
Kipco Asset Management CoNational Petroleum Services
Alimtiaz Investment Group
10.40
62.40
169.00
27.10
650.00
84.40
15.90
37.10
34.20
440.00
30.00
0.00
25.70
75.10
77.50
38.00
231.00
1,240.00
13.00
448.00
36.90
35.00
60.00
69.00
119.00
10.30
100.00
56.00
119.00
50.00
73.30
165.00
15.00
44.20
77.00
63.50
60.00
912.00
47.50
55.40
192.00
20.30
219.00
64.90
33.50
90.00
472.00
18.00
290.00
24.40
315.00
80.00
1,345.00
315.00
37.00
131.00
404.00
231.00
20.90
424.00
66.00
24.00
35.20
17.00
44.50
475.00
36.90
59.80
84.50
30.00
38.00
22.30
283.00
32.10
14.10
41.10
97.20
71.90
15.00
42.00
270.00
66.40
0.00
49.00
611.00
261.00
110.00
44.00
390.00
18.50
29.90
157.00
73.90
1,005.00
122.00
-1.89
3.31
-0.59
2.26
3.17
-0.12
-0.63
-4.38
0.00
0.00
0.00
0.00
3.63
0.00
0.00
-6.40
-3.35
0.00
-7.14
-0.22
0.00
0.00
0.00
129.24
0.00
0.00
0.00
-1.58
1.71
0.00
0.14
0.00
2.74
9.95
14.93
-0.78
0.00
0.11
1.06
0.54
0.00
0.00
6.83
0.00
2.13
4.90
0.43
11.80
0.00
0.00
0.00
0.00
0.00
0.00
3.06
-5.76
1.76
-0.43
-4.57
0.00
0.00
2.56
0.86
1.19
5.45
0.00
6.03
2.57
0.00
0.00
0.00
0.00
0.35
-0.93
0.00
-1.44
-10.00
2.71
0.67
-0.24
-2.53
-0.75
0.00
1.24
2.52
2.35
0.92
-0.45
0.00
2.78
-0.33
-1.88
5.42
-0.50
0.83
KUWAIT
Company Name Lt Price % Chg Volume
KUWAIT
Company Name Lt Price % Chg Volume
LATEST MARKET CLOSING FIGURES
Oman Education & Training InOman Chromite
Oman ChlorineOman Ceramic Company
Oman Cement CoOman Cables Industry
Oman & Emirates Inv(Om)50%Natl Aluminium Products
National Real Estate DevelopNational Pharmaceutical
National Mineral WaterNational Life & General Insu
National Gas CoNational Finance Co
National Detergent Co SaogNational Biscuit Industries
National Bank Of Oman SaogMuscat Thread Mills Co
Muscat Insurance Co SaogMuscat Gases Company Saog
Muscat FinanceMuscat City Desalination Co
Majan Glass CompanyMajan College
Hsbc Bank OmanHotels Management Co Interna
Gulf StoneGulf Mushroom Company
Gulf Investments ServicesGulf Invest. Serv. Pref-Shar
Gulf International ChemicalsGulf Hotels (Oman) Co Ltd
Global Fin InvestmentGalfar Engineering&Contract
Galfar Engineering -PreferFinancial Services Co.
Financial Corp/TheDhofar Tourism
Dhofar PoultryDhofar Intl Development
Dhofar InsuranceDhofar Generating Co Saoc
Dhofar Fisheries & Food InduDhofar Cattlefeed
Dhofar Beverages CoConstruction Materials Ind
Computer Stationery IndsBankmuscat Saog
Sohar International BankBank Nizwa
Bank Dhofar Saog-RtsBank Dhofar Saog
Arabia Falcon Insurance CoAloula Co
Al-Omaniya Financial ServiceAl-Hassan Engineering Co
Al-Fajar Al-Alamia CoAl-Anwar Ceramic Tiles Co
Al Suwadi PowerAl 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
Al Ahlia Insurance Co SaocAhli Bank
Acwa Power Barka SaogAbrasives Manufacturing Co S
A’saff a Foods Saog0Man Oil Marketing Co-Pref
0.23
3.64
0.40
0.42
0.27
0.90
0.08
0.34
5.00
0.00
0.09
0.29
0.21
0.14
0.70
3.92
0.18
0.08
0.76
0.15
0.08
0.12
0.18
0.18
0.12
1.25
0.12
0.31
0.06
0.11
0.14
9.50
0.08
0.09
0.39
0.18
0.10
0.49
0.18
0.30
0.17
0.19
1.28
0.07
0.26
0.03
0.26
0.41
0.11
0.09
0.00
0.14
0.11
0.53
0.15
0.02
0.75
0.09
0.09
0.08
0.82
0.20
0.09
0.03
0.38
0.55
0.27
0.12
0.09
0.88
0.09
1.13
0.09
0.09
0.36
0.13
0.66
0.05
0.60
0.25
0.00
0.00
0.00
0.00
3.89
-3.43
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.57
0.00
0.00
0.00
-3.57
0.00
0.00
0.00
1.72
0.00
0.00
0.00
1.69
0.00
0.00
0.00
0.00
2.22
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
1.50
0.91
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4.82
2.30
1.25
0.00
0.00
1.10
0.00
0.00
0.00
0.00
4.35
0.00
0.00
2.30
0.00
0.00
0.00
0.00
1.63
0.00
0.00
0.00
0.00
-
-
-
-
64,800
10,000
-
-
-
-
-
-
-
-
-
-
309,190
-
-
-
48,766
302
-
-
254,000
-
-
-
92,017
-
-
-
-
2,988,075
-
-
-
-
-
-
-
-
-
-
-
42,110
-
478,327
17,124
228,511
-
-
-
-
-
-
-
2,788,092
58,000
74,220
-
-
104,100
266,803
-
-
-
38,000
-
-
151,500
-
-
521,149
-
80,243
-
-
-
-
OMANCompany Name % Chg
Voltamp Energy SaogVision Insurance Saoc
United Power/Energy Co- PrefUnited Power Co Saog
United Finance CoUbar Hotels & Resorts
Takaful OmanTaageer FinanceSweets Of OmanSohar Power Co
Smn Power Holding SaogShell Oman Marketing - Pref
Shell Oman MarketingSharqiyah Desalination Co Sa
Sembcorp Salalah Power & WatSalalah Port Services
Salalah Mills CoSalalah Beach Resort Saog
Sahara HospitalityRenaissance Services Saog
Raysut Cement CoPhoenix Power Co Saoc
Packaging Co LtdOoredoo
OminvestOman United Insurance Co
Oman Telecommunications CoOman Refreshment Co
Oman Qatar Insurance CoOman Packaging
Oman Oil Marketing CompanyOman National Engineering An
Oman Investment & FinanceOman Intl Marketing
Oman Flour MillsOman Fisheries Co
Oman Europe Foods Industries
0.19
0.13
1.00
2.97
0.08
0.13
0.13
0.09
0.55
0.11
0.19
1.05
1.06
0.31
0.12
0.60
0.64
1.38
3.09
0.36
0.35
0.09
2.21
0.49
0.33
0.25
0.61
1.70
0.11
0.27
1.07
0.16
0.08
0.52
0.52
0.07
1.00
0.00
0.00
0.00
0.00
0.00
0.00
-7.97
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.56
4.79
0.00
0.00
0.00
0.00
0.00
0.66
0.00
0.00
0.00
0.00
0.00
1.20
0.00
0.00
1.43
0.00
-
-
-
-
7,546
-
9,622
-
-
-
-
-
-
-
10,000
-
-
-
-
390,652
492,854
54,919
-
2,032
-
-
283,460
-
-
-
-
-
1,829,258
-
1,000
1,017,359
-
Lt Price Volume
7,882,691
6,606,500
1,074,510
1,192,871
2,237,573
100,020
10,010
4,429,191
169,802
2,140
4,000
-
58,137
149,400
339,144
57,100
9,990
2,500
191,003
85,100
244,567
121,940
600
9,105
14,534
1,000
118,741
565,751
58,773
116,056
259,037
28,352
222,429
100
2,108,624
5,000
2,873
1,049,309
350,123
905
6,738
10
14,009,044
60,580
1,713,391
456,880
6,145,171
3,000
50,000
96,100
5,000
85,001
2,550
204,268
710,467
2,937,427
4,917,066
547,083
651,300
400,000
25
2,211,201
2,959,406
135,004
8,200
3,000
172,499
1,186,784
102,865
50,000
119,068
370,104
224,717
3,828,850
796,145
679,100
4,000
260,184
1,958,876
2,737,016
245,291
2,887,636
-
393,390
729,392
29,637,926
288,400
99,500
361,694
259,868
20,400
4,000
5,300
4,972
945,004
Ras Al Khaimah White CementKuwait Reinsurance Co Ksc
Kuwait & Gulf Link TransportHumansoft Holding Co Ksc
Automated Systems Co KsccMetal & Recycling Co
Gulf Franchising Holding CoAl-Enma’a Real Estate Co
National Mobile TelecommuniUnicap Investment And Financ
Al Salam Group Holding CoAl Aman Investment Company
Mashaer Holding Co KscManazel Holding
Tijara And Real Estate InvesJazeera Airways Co Ksc
Commercial Real Estate CoNational International Co
Taameer Real Estate Invest CGulf Cement Co
Heavy Engineering And Ship BNational 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 Ind
Kuwait Finance HouseGulf North Africa Holding Co
Hilal Cement CoOsoul Investment Kscc
Gulf Insurance Group KscUmm Al Qaiwain General Inves
Aayan Leasing & InvestmentAlrai Media Group Co KscNational Investments CoCommercial Facilities CoYiaco Medical Co. K.S.C.C
Munshaat Real Estate ProjectNoor Financial Investment Co
Al Tamdeen Investment CoCredit Rating & Collection
Ifa Hotels & Resorts Co. K.SSokouk Holding Co Sak
Warba Bank KscpViva Kuwait Telecom Co
Mezzan Holding Co Kscc
79.70
140.00
85.00
3,146.00
71.00
47.90
99.00
40.10
700.00
65.50
31.90
54.00
75.40
23.40
49.90
810.00
94.50
69.00
34.00
56.90
395.00
93.30
27.50
900.00
34.00
391.00
63.40
335.00
396.00
0.00
52.00
132.00
58.00
665.00
70.00
51.10
44.00
102.00
182.00
66.50
91.00
93.00
304.00
18.00
60.00
36.00
254.00
880.00
471.00
7.12
0.00
0.00
-1.04
0.00
215.13
0.00
1.52
0.86
0.77
0.95
-0.37
-0.66
-4.49
0.00
1.25
0.53
4.70
0.00
-9.39
1.28
2.64
-1.43
0.00
-0.87
-1.26
0.63
1.52
1.28
0.00
0.97
0.00
1.75
0.00
0.00
0.39
1.15
2.72
0.00
0.00
3.41
1.97
0.00
0.00
0.00
0.00
-0.39
-2.00
-0.63
8,749
19,050
114,799
353,992
20,026
35
71
1,100,239
1,907
132,300
12,400
329,800
382,150
102,873
38,525
447,509
382,495
147,204
2,355,000
179,600
819,877
2,324,984
67,740
19,755
23,170
55,850
2,900,617
151,700
652,339
-
103,334
9
27,251
4,050
15,000
2,849,132
58,433
3,306,371
75,000
4,000
349,312
1,269,800
60,405
10
2,510
888,022
7,161,040
6,639
178,709
Yen’s outlook worsens as traders turn bearish, outfl ows increaseBloombergSingapore
The omens are looking bad for the yen. Traders have boosted short positions on Japan’s
currency for six straight weeks as signs that economic growth is slow-ing make it more likely the central bank will maintain its record mon-etary stimulus.
At the same time, global risk sen-timent is improving as the US and China nears a deal to resolve their long-running trade dispute, sap-ping demand for haven assets.
Japanese data due this week may add to the bearish yen mood: econo-mists predict machine orders prob-ably shrank from a year earlier in February, while producer price in-fl ation was near a two-year low in March.
The Bank of Japan’s Tankan sur-vey released last week showed man-ufacturers’ confi dence tumbled the most in six years in the fi rst quarter, while the government is set to raise the sales tax to 10% from 8% in Oc-tober.
Even one normally yen-positive factor has so far failed to off er much relief. The extra yield on US Treas-
uries over Japanese government bonds fell to the lowest in more than a year last month, but only gave the yen a short-lived boost.
A more important factor than the yield spread appears to be in-vestment fl ows. Japanese investors bought a net ¥7.85tn ($70.3bn) of overseas stocks and bonds this year through March 29, compared with ¥20.1tn they sent abroad last year, according to Ministry of Finance data.
“The dollar tends to be supported during this time of the year as Japa-nese investors are expected to al-locate more of their funds abroad,” said Bart Wakabayashi, Tokyo branch manager at State Street Bank & Trust Co. “These seasonal fl ows are expected to keep the yen under pressure. USD/JPY could weaken toward 112.30,” he said.
The yen has fallen 2.8% versus the dollar over the past three months to trade at 111.67 per dollar late on Fri-
day in Tokyo. A break beyond the March 5 low of 112.14 would put it at the weakest this year.
The technical outlook remains bearish. The dollar-yen currency pair has rallied after dropping to support at around 110 at the end of March. Slow stochastics, a mo-mentum indicator, shows a per cent D reading of 63, still below over-bought territory, indicating there is still room for the pair to run higher.
Below are some of the major Asian economic data and events this week: On Monday, April 8: BoJ’s Kuroda speaks; Japan BoP current-account balance on Tuesday, April 9: Australia home loans on Wednes-day, April 10: BoJ’s Kuroda speaks; RBA’s Debelle speaks; Australia Westpac consumer confi dence; Ja-pan PPI and core machine orders; South Korea unemployment on Thursday, April 11: RBA’s Debelle speaks; China CPI and PPI; Philip-pine trade balance; Malaysia indus-trial production on Friday, April 12: RBA fi nancial stability review; New Zealand retail card spending and business NZ manufacturing PMI; China trade balance; Singapore re-tail sales; India CPI and industrial production-With assistance from Chikafumi Hodo.
Pedestrians cross a road in front of the Bank of Japan headquarters in Tokyo (file). Traders have boosted short positions on Japan’s currency for six straight weeks as signs that economic growth is slowing make it more likely the central bank will maintain its record monetary stimulus.
55.30
280.00
90.60
139.00
48.90
182.00
26.50
50.50
970.00
342.00
363.00
916.00
605.00
329.00
327.00
37.00
34.00
45.20
66.20
BUSINESS5Gulf Times
Monday, April 8, 2019
Norway’s bombshell looks like a dud to EM investorsBloombergLondon
The headline looked horrible for emerging-market debt – the world’s largest sovereign wealth
fund was going to dump all its holdings – yet read down, and the news isn’t as bad as it fi rst appears.
Norway’s $1tn sovereign fund got the go-ahead to cut government and corporate bonds from Chile to the Czech Republic from its portfolio as part of an overhaul of its $310bn fi xed-income holdings, the Finance Ministry said on Friday. That’s the bad news.
The good news is that this is not a vote of no confi dence in the developing world, but rather a simplifi cation of its structure as bonds become more correlated across the world. Moreover, the fund can continue to invest up to 5% of its bond portfolio in emerging-market debt, currently about $15bn, or more than half of the $28bn it now has in such investments.
Investors expect the fund to take years to unwind its position to prevent any big impact on asset prices.
“This is a strategic decision,” said Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt. “It’s not a sign that they get increasingly bearish on EM.”
Low interest-rate policies in the de-veloped world “should keep the hunt for yields in general alive.” Globally, dollar-denominated bonds from emerging mar-kets were the second best-performing debt this year after corporate junk bonds, according to Bloomberg Barclays indexes.
Data from EPFR Global showed EM debt funds attracted infl ows for 12 of the past 13 weeks as a dovish turn by the Federal Re-serve and the European Central Bank sup-ported appetite for riskier assets.
On Friday, the risk premium on emerg-ing-market sovereigns was up only two
basis points at 341, JPMorgan indexes show.Here’s what strategists and investors
are saying after the Norwegian announce-ment:
Jan Dehn, the head of research at Ashmore Group Plc in London: “Given their size, the total selling could be about $14bn, which is about 0.05% of the EM fi xed income uni-verse. Moreover, selling is likely to be slow, so I imagine markets will not even notice it.
Note that the Norwegian fund will still be able to invest in EM bonds and I feel certain it will do so, benchmark or no benchmark”.
Kit Juckes, chief FX strategist at Societe Generale: “One investor – even a big one – really shouldn’t make that much diff er-ence. I don’t think it ought to be a big fac-tor at all in EM, but this year’s pattern has been for credit-needy, high-beta markets to underperform and this won’t reverse that, for sure”.
Morgan Stanley strategists including James Lord: “The market impact of the proposed selling would depend on the time-frame over which it takes place. We should assume it would take place over a prolonged period of time to minimise the market eff ect”.
Mikolaj Raczynski, Warsaw-based head of fi xed income at Noble Funds TFI: “The statement is rather a conclusion to what they’ve been fl agging since last year when they signalled switching from local cur-rency into hard currency. They’re not left with too much of the zloty debt anyway so I wouldn’t get too excited in terms of the market impact in Poland. It’s not some great surprise, especially as they’re not announcing any fi re sale”.
Magne Ostnor, strategist at DNB Bank ASA: “A change in the bond benchmark will have eff ects, but like any other real money investor, Norway’s sovereign wealth fund will want eff ects to be as small as possible.”
BUSINESS
Gulf Times Monday, April 8, 201910
The gender pay gap in Britain gets another reviewBloombergLondon
The UK is the biggest country yet to examine the explosive
topic of the pay gap between women and men via mandatory
annual disclosures. For a second year, employers with at least
250 workers in Britain have reported gender wage data, after
the results from a debut survey in 2018 produced widespread
criticism. In aggregate, the gap is little changed from the previous
year, highlighting again how women are under-represented in
higher-paying roles, and why it will likely take years to narrow the
diff erence.
1. What do the latest numbers show?
About half of private employers saw their pay gap narrow, while
half said the diff erence was worse or there was no change,
according to preliminary data from the Government Equalities
Off ice. Analysis of 10,455 filings by Bloomberg shows the overall
figure was little changed, with a mean pay gap of 14.23% on April
5, 2018, compared with 14.21 a year earlier, based on all types of
organisations. The median diff erence was 9.6%, compared with
9.2%. The disparity in bonus payments however widened to 15.7%
from 8.4%. Men in aggregate were paid more at 88% of compa-
nies and public-sector bodies, according to Bloomberg.
2. How is the gap measured?
Employers had to submit a blunt, uniform assessment of the
gap between what men and women earn on average in their
workforces by April 4. The numbers don’t measure the pay of
men and women in the same job or attempt to adjust for any
other characteristics. Specifically, companies must report any dif-
ference between the salary and bonus of all male employees and
all female employees on a mean and median hourly basis, the
proportion of each gender receiving a bonus and the proportion
of men and women in each pay quartile. Publication of an “action
plan” showing how employers will try to close any gap is encour-
aged, but not mandatory, with the Equalities Off ice saying about
half of private firms put one in place in the last year.
3. Does that mean companies ignored the feedback?
Not necessarily. The latest figures are based on a snapshot on
April 5, 2018. Any changes made in the last 12 months won’t
show up until next year’s report. Many of the plans in place will
take time — building a pipeline of senior female employees can
mean hiring more women at all levels. On the other hand, some
reports have raised concerns about the trajectory of change in
certain companies: HSBC Bank Plc’s gender pay gap, for instance,
actually got worse. It widened to a mean 61%, in part because
just one-third of its highest-paid employees were female. In the
financial-services industry overall, the average diff erence held at
26% in the latest figures.
4. How far is the UK from ‘equal pay for equal work’?
That’s hard to say. The phrase refers to the idea that men and
women doing the same job at the same company should receive
the same salary. The disclosures by UK companies don’t provide
employee-to-employee comparisons. Reporting on a so-called
adjusted basis — taking into account job title, seniority, geogra-
phy and other factors that can aff ect compensation — is more
popular among US companies that have chosen to disclose their
pay gaps under pressure from activist shareholders.
5. What’s been the reaction in the UK?
The annual nature of the reporting has already helped build
greater awareness and understanding of the gender pay gap.
There’s been criticism over the lack of women in more sen-
ior — and thus well-compensated — positions. The disparity in
financial services was described as “astonishing” last year by
Nicky Morgan, a member of Parliament and chair of its powerful
Treasury Committee. She was also among politicians demanding
that some law and accounting firms revise their figures after they
classed their top-earning partners as owners, who are excluded
from the calculations, and thus potentially understated the gen-
der wage diff erence.
6. At what point does a wage gap violate the law?
That remains to be seen. The data could potentially provide fod-
der for existing or future lawsuits under the UK’s 2010 Equality
Act. The law gives women and men the right to equal pay for
equal work, and there’s a framework for comparing jobs by eff ort,
skill or decision making. In early 2019, thousands of women work-
ing for the Glasgow City Council in Scotland reached a financial
agreement over pay discrimination after fighting for more than a
decade and staging what is believed to be the UK’s biggest-ever
strike over equal wages.
7. What prompted the UK to disclose the pay gap?
David Cameron, who served as prime minister from 2010 to 2016,
made addressing the gender-pay “scandal” part of the Conserva-
tive Party’s agenda. Eliminating the diff erence could add £150bn
($196bn) to annual gross domestic product by 2025 by boosting
female participation in the workforce, encouraging women to
work longer hours and moving them into more productive jobs
such as those in science and engineering, according to a 2016
study by McKinsey & Co It’s also a question of fairness. The UK’s
Off ice of National Statistics, which publishes its own analysis, says
the gap is caused, in part, by more women working part-time,
clustering in occupations with lower pay and taking time out to
have children. The discrepancy widens with age, and women’s
pay stops climbing at a younger age than that of male colleagues.
8. Are other countries doing this?
Yes. Australia requires firms with more than 100 employees to
report on gender annually and publishes reports on their equality
objectives, while Germany has implemented new rules around
the issue. Austria and Belgium were other early adopters, though
they don’t force companies to release figures publicly. Mean-
while, the US has moved away from requiring more uniform or
transparent disclosures to the federal government.
9. Where is this heading?
After the first round of reporting, a group of UK lawmakers
suggested ways to make the figures less blunt, to bolster en-
forcement and to require remedial action, but the government
rejected the recommendations in order to maintain consistency
and comparability from one year to the next. The government
has also declined to increase the number of organisations re-
quired to file reports. However, it is considering the possibility of
mandatory pay reporting by ethnicity to expose the pay gap for
citizens of “Black, Asian and minority ethnic,” or BAME, origins.
A public consultation ended in January and already some firms,
such as Deloitte, KPMG and broadcaster ITN, have voluntarily
decided to release their numbers.
Bloomberg QuickTake Q&A
BUSINESS11Gulf Times
Monday, April 8, 2019
Trump’s border threats snarl truck traffic as wait times soarBloombergDallas
It’s become a complete mess for trucks
hauling goods from Mexico to the US,
snarling transport at some of the busi-
est border crossings in the world.
A week of heated threats from Donald
Trump to close the border means
Mexican companies are rushing to send
as much cargo into the US as they can,
in case of a shutdown that would limit
trade.
Meanwhile, as many as 750 US Cus-
toms and Border Protection off icers
were reassigned to border patrol sec-
tors in late March, crimping the staff ing
needed to allow for the flow of goods
from south to north. Cargo trucks wait in
line at Otay Mesa crossing port in Tijuana,
Mexico on April 4.
As a result, wait times to cross the border
have soared and can be as many as 10
hours longer than usual. With trucks
getting stuck at the border, Mexican
companies are being forced to pay more
to bring in additional vehicles for loading
shipments. While the US has yet to see
meaningful shortages in goods from
Mexico, prices for at least one import —
avocados — have soared amid worries
over a border closure. Buyers of berries,
limes and asparagus are making plans
to limit potential fallout from such a
shutdown.
“The delays have doubled, tripled,
quadrupled — it’s not an exact science,”
said Jaime Castaneda, vice-president
for trade policy at the US Dairy Export
Council. Lane closures and weekend
shutdowns are adding to delays, he
said.
The wait times are especially long in El
Paso, Laredo and the San Diego area,
said Ben Enriquez, senior vice president
of Mexico for Transplace, a logistics
service provider. In El Paso, it’s taking
as long as 12 hours to cross into the US,
up from about 1 to 2 hours on a normal
day, he said. Usually when one port has
congestion problems, trucks can be
re-routed to other crossings, but now
almost all entry points are confronting
similar issues.
“The shippers try to push as much
freight as possible and, at the same
time, you have fewer off icers” from US
Customs, Enriquez said. “So, it’s not a
good combination.”
The delays are tying up trucks at the
border that usually head back south
with a load and then are ready to pick
up freight again at factories in the inte-
rior of Mexico. That’s causing Mexican
companies to pay extra to bring in
empty trucks to load those goods, he
said.
So far, the delays have been primarily
for cargoes moving north and aren’t yet
impacting southbound shipments of US
goods like meat and dairy. Mexico is the
top buyer of American meat. “Obvi-
ously, we want the ports of entry running
smoothly,” said Joe Schuele, vice-presi-
dent of the US Meat Export Federation.
Cain says he faces ‘cumbersome’ vettingfor Fed board seat
ReutersWashington
Former Republican presidential candidate Herman Cain said he will face a “cumbersome” process as he is vetted for a seat on the Federal Reserve Board.In a video posted on Facebook late on Friday, Cain said he must turn over records from 50 years in business, including numerous professional jobs, service on boards, and extensive speeches.The 73-year-old said it was not clear if he will pass the ongoing FBI background check, a standard practice before a high-ranking nomination.“Whether or not I make it through this process — Time will tell,” Cain said. “Would I be disappointed if I don’t make it through this process? No. Would I be thrilled and honoured if I make it through this process? Yes. That’s the bottom line.”US President Donald Trump said on Thursday that he plans to nominate Cain, a former pizza chain executive. “I have recommended him highly for the Fed,” Trump said.“I’ve told my folks that’s the man.”Cain’s nomination would need to be approved by the US Senate. “They have to collect an inordinate amount of information on you, your background, your family, your friends, your animals, your pets, for the last 50 years,” Cain said.Cain said people who dislike him are “already digging up all of the negative stuff that’s in storage from eight years ago.” He added, “I will be able to explain it this time.”Cain led opinion polls for a while during the Republican nominating contests, buoyed by his signature 9-9-9 tax proposal, which would have levied a flat 9% corporate, income and sales tax.But his popularity slipped amid sexual harassment allegations from several women, which he denied as “completely false.”Cain made his fortune as chief executive of Godfather’s Pizza before launching a bid for the Republican presidential nomination in 2012.Trump has been a strident critic of the Fed’s rate hikes under Jerome Powell, whom the president picked two years ago to chair the UScentral bank.Trump’s other Fed appointees have also supported the Powell Fed’s rate hikes, which the president has said hurt the economy.
A UBS branch in Geneva. Switzerland’s Finance Ministry is weighing an amendment to capital adequacy rules to try to ensure that the parent companies of systemically important banks are sufficiently well capitalised in the event of a crisis, the government said in a statement.
Trudeau licks wounds and tries to change channel on SNC scandalBloombergOttawa
Justin Trudeau is trying to move on after
the most bruising two months of his time
in off ice — but the damage may already
be done.
Resignations have been piling up for the
Canadian prime minister amid a scandal
over whether he and his staff pressured
the former attorney general to intervene
in a legal case involving a Montreal-based
construction giant. It’s punished his Liberal
Party in opinion polls and put a dent in his
personal brand.
Last week, Trudeau expelled two former
ministers at the centre of the SNC-Lavalin
Group Inc ordeal and tried to stop the
bleeding. The lawmakers are viewed
either as dissident troublemakers or as
principled whistle-blowers, so the prime
minister is trying to change the channel to
an issue on which he feels he’s an unam-
biguous winner: climate change.
“The best thing the prime minister can re-
alistically do in the short term is get out of
the news and focus back on his agenda,”
Nik Nanos, chairman of Nanos Research,
said in an interview.
The pollster’s latest surveys show
Trudeau’s Liberals and the opposition Con-
servatives tied at 35% ahead of an election
this fall. The governing party’s support
seems to have levelled off but Trudeau’s
personal approval ratings are still falling,
Nanos said. “We’re headed to a minority
government.”
Canada’s 2015 election was a three-horse
race between the Liberals, former Prime
Minister Stephen Harper’s Conservatives
and the left-leaning New Democratic Party
under Thomas Mulcair. But this year’s
vote is shaping up as a head-to-head fight
between Trudeau and Harper’s successor,
Andrew Scheer.
Hearings into the scandal have shown that
Trudeau and aides had a series of con-
versations with his then-justice minister,
Jody Wilson-Raybould, and her staff over
whether to help SNC-Lavalin settle a fraud
and corruption case dating back to its
work in Moammar Qaddafi’s Libya. Issuing
a directive to seek a deferred prosecution
agreement would shield the firm from a
potential conviction and subsequent ban
on federal government contracts.
The controversy hinges on Wilson-
Raybould’s allegation that the interven-
tions amounted to judicial interference.
Trudeau and his aides, however, say they
were just trying to stave off job losses, and
chalk it all up to the normal operations of
government.
Wilson-Raybould was a star recruit to
federal politics in the Pacific Coast battle-
ground of Vancouver in 2015 who went on
to become Canada’s first indigenous jus-
tice minister. She quit cabinet after being
shuff led to a lesser role at the beginning
of the year, and was soon followed out the
door by another top rookie minister, Jane
Philpott.
The departure of two high-profile women
has called into question Trudeau’s com-
mitment to feminism. A group of young
women visiting parliament last week
turned their backs in protest during a
speech by the prime minister.
The SNC issue has been simmering since
the start of February, when the Globe and
Mail newspaper first revealed the allega-
tions of judicial interference. It flared up
again last week when Wilson-Raybould
revealed she’d recorded a conversation
with Canada’s top bureaucrat, Michael
Wernick, who announced his retirement as
clerk of the Privy Council in March. One of
Trudeau’s top aides, Gerald Butts, has also
resigned.
Despite many Liberals seeing Wilson-Ray-
bould’s actions as unacceptable disloyalty,
there was a push to keep the Vancouver
lawmaker in the fold. Jonathan Wilkinson
and Carla Qualtrough — two other cabinet
ministers from British Columbia — met
with her April 1 to try and find a way
forward.
“It was a diff icult conversation because
obviously we weren’t able to get to a point
where we could find common ground,”
Wilkinson, the fisheries minister, told
reporters last week.
Trudeau kicked Wilson-Raybould and
Philpott out of the Liberal caucus on April
2, saying trust had been broken. “The only
trust that has been broken is between
the prime minister and Canadians, who
have seen his abuse of power,” Scheer
countered in the legislature. “Why does
speaking truth to power disqualify mem-
bers from sitting as a Liberal?”
Liberals have struck an unfailingly unified
tone since Trudeau’s move, including fe-
male lawmakers who bristled at allegations
the self-avowed feminist has lost credibility.
“I would argue that loyalty and feminism
are two diff erent things,” Tourism Minister
Melanie Joly told reporters this week. “You
want to work in a team, or you don’t.”
Wilkinson said he didn’t think Wilson-
Raybould’s characterisation of the whole
saga was appropriate, and that he backs
Trudeau. “At the end of the day, we all get
involved in politics to make a contribution
in some areas,” he said. “For some of us,
like me, it was about climate change.”
Trudeau hopes voters agree. In announcing
his decision to cut Wilson-Raybould and
Philpott loose from caucus, Trudeau said
he would never apologise for defending
jobs and urged his caucus to focus on the
road ahead. “The next election is around
the corner and the stakes are high,” he said.
“Our opponents want to take us backwards.
For proof, look no further than their lack of
a climate change plan.”
The prime minister’s national carbon tax
kicked in last week, coming into eff ect in
four provinces where premiers aligned
with Scheer had baulked at introducing
emissions reduction plans of their own.
The Conservative leader is pledging to
repeal the federal levy but hasn’t yet
released a climate plan.
Andrew Scheer speaks to reporters after
the Trudeau government introduced its
budget on March 19, 2019.
Scheer’s team now leads most opinion
polls, with seat projections tabulated by
the Canadian Broadcasting Corp’s polling
analyst putting Conservatives on track to
win 164 seats in the Ottawa legislature,
six shy of the 170 required for a majority
government in Canada’s parliamentary
system. But history and a splintering of the
political spectrum bode well for Trudeau.
Canadian voters rarely tire of a govern-
ment after only one term. Meanwhile,
NDP voters dissatisfied with rookie leader
Jagmeet Singh are more likely to go to
Trudeau than to Scheer, plus the Con-
servatives are facing a right-wing upstart
populist party led by a Quebec lawmaker
who narrowly lost the 2017 leadership race
to Scheer.
Trudeau’s fate hinges on what voters want
to talk about — and where left-leaning vot-
ers turn if Scheer maintains his lead. “The
NDP are a bit of a stalking horse and a
parking place for disaff ected progressives
that in a tight race could easily move into
the Liberal camp,” Nanos said.
It will also be a contest between gains
Trudeau makes in SNC’s home province,
and losses everywhere else. “The Liberals
will definitely lose ridings in every region
with the exception of Quebec,” the pollster
said. “The question is, with this controver-
sy, how many ridings will they lose?”
A US Customs and Border Protection (CBP) off icer walks a drug detecting dog past a line of trucks from Mexico during an inspection at the Otay Mesa Cargo Port of Entry in San Diego, California (file). A week of heated threats from Donald Trump to close the border means Mexican companies are rushing to send as much cargo into the US as they can, in case of a shutdown that would limit trade.
Switzerland plans to tighten capital rules for its biggest banksBloombergGeneva
Switzerland is proposing bigger capital cushions for the country’s top banks
that could force UBS Group AG and Credit Suisse Group AGto set aside an additional 24bn Swiss francs ($24bn) in reserves.
The Finance Ministry is weighing an amendment to capital adequacy rules to try to ensure that the parent compa-nies of systemically important banks are suffi ciently well capi-talised in the event of a crisis,
the government said in a state-ment on Friday. It cited concern about the impact of possible in-terest-rate rises on real-estate loans.
“The additional funds the two big banks need to absorb the losses amount to a total of approximately 24bn francs,” a report accompanying the state-ment showed. “These must is-sue new lease-in bonds to the level of their holding for a simi-lar amount.”
The total refi nancing costs for the two banks would therefore increase each year by as much as 170mn francs, according to
the report. Consultations on the draft proposals will run until July 12.
“We will review the draft and provide a comprehensive com-ment,” UBS said in an emailed statement on Saturday. “Already today Switzerland has the most stringent capital requirements globally. It’s in the interest of the Swiss fi nancial centre to stay competitive internationally. We should have the same rules for all market participants.”
Credit Suisse said in a sepa-rate e-mailed statement that the proposal is “an important clarifi cation” with regards to
capital requirements. “The expected Total Loss Absorb-ing Capacity requirements for Credit Suisse” resulting from the draft proposal “are in-line with our existing guidance,” the bank said.
Swiss authorities want to further tighten capital require-ments because they are worried that in the event of another fi -nancial crisis large parts of big banks’ capital cushions could be reserved for foreign locations such as the US or the UK and that there may not be enough left for Switzerland, Swiss newspaper Neue Zuercher Zei-
tung reported on Saturday. The current proposal “is intended to ensure that suffi cient capital is available in the event of a crisis, particularly in parent banks and in the Swiss units that perform systemically important func-tions,” according to the govern-ment statement.
Switzerland introduced too-big-to-fail rules after the gov-ernment came to UBS’s rescue during the 2008 financial cri-sis.
It increased the amount and quality of capital the two lenders have to hold as a buff er against shocks in 2016.
Cain: Time will tell.
BUSINESSMonday, April 8, 2019
GULF TIMES
No breakthrough expected in EU-China summit this weekAFPBrussels
Top EU leaders meet Chinese Premier Li
Keqiang this week at a summit in Brussels,
but their hopes of winning solid commit-
ments on trade look set for disappoint-
ment.
Brussels is trying to beef up its approach
to the Asian giant as it shows little willing-
ness to listen to longstanding complaints
about industrial subsidies and access
to its markets, and as fears grow about
growing Chinese involvement in European
infrastructure.
But the half-day summit tomorrow is on
course to fizzle out with little to show
in terms of agreements, with European
sources saying it looks highly unlikely a
final joint statement will be agreed.
EU officials say China is unwilling to
give binding commitments on their
key demands, including the inclusion
of industrial subsidies as part of World
Trade Organisation reform, and they are
reluctant to agree the kind of anodyne
declaration of good intentions pushed
out after last year’s summit in Beijing.
The European Commission last month
issued a 10-point plan proposing a more
assertive relationship with Beijing, label-
ling China a “systemic rival” — a move
welcomed by French President Emmanuel
Macron as a belated awakening.
But while the EU’s €15tn market gives it
significant economic clout, it struggles to
maintain unity among its 28 members on
issues of foreign policy, allowing China to
pursue one-on-one deals with individual
countries.
“When economic policy intersects with
foreign policy and security, the EU lacks
the will and capacity to act strategically,”
Philippe Legrain, visiting senior fellow
at the London School of Economics’
European Institute, wrote in an analysis for
Project Syndicate magazine.
“Apart from France and the UK, which is
leaving the EU, member governments lack
a geopolitical mindset.”
This most striking recent example came
last month when Italy became the first G7
nation to sign up to China’s “Belt and Road
Initiative” (BRI), a massive network of
transport and trade links stretching from
Asia to Europe.
Concerns have been raised about the way
the BRI saddles countries with Chinese
debt and leaves key infrastructure nodes
owned by a potential strategic rival,
though Beijing insists the initiative is a
“win-win” arrangement.
Former Greek finance minister and
scourge of the EU, Yanis Varoufakis,
said Europe only had itself to blame if
Mediterranean countries turned to China.
“We created a vacuum and the Chinese
are filling it. The Chinese are coming in
because there is a dearth of investment in
this continent... We are failing to generate
investment that would give our business
the opportunity to compete with them,”
he said in Brussels last week.
Macron’s own China initiative last week
— hosting President Xi Jinping for a sum-
mit with German Chancellor Angela Mer-
kel and European Commission President
Jean-Claude Juncker — may also have
been a double-edged sword for the EU.
The meeting in Paris gave the EU —
through its two most powerful members
— the chance to press its concerns directly
with the paramount Chinese leader.
But analysts say it also seriously undercut
this week’s summit in Brussels, where Li
will hold talks not with heads of govern-
ment but with Juncker and EU Council
President Donald Tusk.
“The China summit has already taken
place. It is not Europe for China without
France and Germany in the same room,”
Hosuk Lee-Makiyama, director of the
ECIPE Brussels think-tank, told AFP.
“Xi has already spoken. Xi has already
shaken hands with his counterparts so
by default the summit has already taken
place. In a sense, they only bring out Li for
Europe or when something bad is going
to happen and somebody needs to take
the blame.”
At the same time, Lee-Makiyama warned,
Europe risks being left playing catch-up
if ongoing US-China trade talks result in
a deal between the world’s two biggest
economies.
“China is going to probably off er us some
watered down version of what they gave
to the Americans, but that also means that
we have to give something,” he said.
But while Tuesday’s meeting may not
yield a breakthrough in the EU’s complex
relationship with China, European off icials
insist it still has value in keeping up the
pressure.
“There is broad agreement within the
EU that it is important to communicate
to China that we are at a point where we
want to see...
concrete steps forward on their willing-
ness to work with us at the WTO,” an EU
diplomat told AFP.
“What is important is that we give a signal
to China that the EU is partner but also a
competitor and requires Beijing to make
some steps.”
Emmanuel Macron, France’s president (right), bids farewell to Xi Jinping, China’s president, in the courtyard of Elysee Palace in Paris (file). Analysts say a meeting between the two leaders last week seriously undercut this week’s summit in Brussels, where Li will hold talks not with heads of government but with European Commission President Jean-Claude Juncker and EU Council President Donald Tusk.
Italy is said to hike its 2020 defi cit goal to around 2.1%Economy minister under coalition pressure to raise deficit; new govt targets to be published by Wednesday; statistics bureau may hike 2018 debt level tomorrow; govt seen trimming 2020 GDP growth to just below 1%
ReutersRome
Italy will probably raise its 2020 budget defi cit goal to around 2.1% of gross domestic product when it
publishes new targets this week, three government sources told Reuters, and the fi gure could be hiked again after the summer.
Italy, whose public debt is propor-tionally the highest in the eurozone after Greece’s, is struggling to hold its fi nances in check while keeping costly promises made by the populist ruling coalition.
The new forecasts will be presented in the annual Economic and Financial Document (DEF) due to be issued by Wednesday, which sets the framework for the 2020 budget.
The current 2020 defi cit target, set in December, is 1.8% of GDP, down from 2.04% this year, but a recent economic downturn means both years will have to be revised up.
Next year’s GDP growth will be trimmed to just below 1% from the cur-rent forecast of 1.1%, two of the sources said.
They asked not to be named because they are not authorised to talk about the DEF.
The numbers in the DEF will not be fi nalised before the end of ongoing talks between the ruling coalition of the an-ti-establishment 5-Star Movement and the right-wing League.
The government will update its tar-gets again in September, when it will have to fi nd a way to avoid some €23bn ($25.81bn) of hikes in sales tax sched-uled to take eff ect in 2020, but which the ruling parties have promised to scrap.
Claudio Borghi, the League’s eco-
nomics spokesman, suggested last month the government might cancel the sales tax hikes simply by increasing public borrowing, which would raise the defi cit above the EU’s 3% of GDP ceiling.
This is sure to be resisted by Econ-omy Minister Giovanni Tria, an aca-demic who is not a member of either
ruling party. Promised tax cuts, cham-pioned in particular by the League, add to Tria’s diffi culties in keeping a lid on the defi cit.
The government will gradually lower income tax and simplify the system by reducing the number of tax bands from fi ve to two, and cut the company tax rate to 20%, according to a draft Na-
tional Reform Programme seen by Reu-ters, which will be published alongside the DEF.
This year’s GDP growth forecast will be probably be cut to 0.3% or 0.4% from 1.0%, and the defi cit will be raised to around 2.3%, Reuters reported on April 3, citing government sources.
The DEF will attempt to set the
public debt on a declining path from last year’s record of 132.1% of GDP, Tria said last week, though the eco-nomic slowdown makes the task harder.
On Tuesday statistics bureau ISTAT will issue revised debt fi gures for 2018 and 2017, which are expected to show an even higher debt-to-GDP ratio.
A view of the city skyline in Rome. Italy, whose public debt is proportionally the highest in the eurozone after Greece’s, is struggling to hold its finances in check while keeping costly promises made by the populist ruling coalition.
Nintendo andgame-making rivals probed over contracts in Europe
BloombergBrussels
The European Commission
accused Valve Inc, the owner of
Steam, and five other video-
game publishers of breaking
competition rules, while the UK
began a probe into the auto-
matic renewal of online gaming
deals from Nintendo Co and
Sony Corp’s PlayStation.
Contracts that penalise some
customers because of where
they live are a focus of several
EU antitrust probes that have al-
ready fined Nike Inc and Guess?
Inc for unfairly curbing sales
outside of one country. Britain’s
Competition and Markets Au-
thority is looking at the annual
rollover of contracts, and barri-
ers consumers face to cancelling
them. The investigations form
part of a larger push to knock
down barriers to online sales.
The EU’s preliminary view is
that Valve, Bandai Namco,
Capcom, Focus Home, Koch
Media and ZeniMax, prevent
consumers from purchasing
video-games in one country to
play in another, which would be
a breach of competition rules,
the regulator said on Friday.
“In a true digital single market,
European consumers should
have the right to buy and play
video-games of their choice
regardless of where they live
in the EU,” Competition Com-
missioner Margrethe Vestager
said. “Consumers should not
be prevented from shopping
around between member
states to find the best available
deal.”
The announcement arrived an
hour after the UK Competition
and Markets Authority started
a consumer-law investigation
of Nintendo, Sony’s PlayStation,
and Microsoft’s Xbox, into their
terms for the auto-renewal of
subscription products.
The EU began its investigation
in 2017, targeting retailers that
maybe setting unfair terms for
who buys what and where.
UK will fi ne Facebook, Instagram for hosting terrorist contentBloombergLondon
Technology fi rms including Fa-cebook, Instagram and Twitter face “substantial” fi nes or a UK
ban under a new law if they don’t act swiftly enough to remove content that encourages terrorism and child sexual exploitation and abuse.
The companies’ directors could also be held personally liable if illegal con-tent is not taken down within a short and pre-determined time-frame, the Home Offi ce said. The exact level of fi nes will be examined during a 12 week consultation following the legislation’s launch today. The spread of fake news and interference in elections will also be tackled.
The need for a new law over a vol-untary code has been highlighted by the terrorist attack in New Zealand last month in which 50 people were killed while footage was live-streamed on-line. In the UK, the case of 14-year-old
Molly Russell has also focused minds. According to her father, the teenager killed herself in 2017 after viewing self-harm and suicide content online.
“Put simply, the tech companies have not done enough to protect their users and stop this shocking con-tent from appearing in the fi rst place,” Home Secretary Sajid Javid said in a statement released by his offi ce. “Our new proposals will protect UK citizens and ensure tech fi rms will no longer be able to ignore their responsibilities.”
Search engines alongside online mes-saging services and fi le hosting sites will also come under the remit of a new regulator. Annual reports on what com-panies have done to remove and block harmful content will be required and streaming sites aimed at children, such as YouTube Kids, will be required to block harmful content such as violent imagery or explicit images and videos.
The move comes after Facebook chief executive offi cer Mark Zuckerberg called March 30 for “a more active role for governments and regulators.”
Facebook found to host cybercriminal groups trading stolen infoBloombergNew York
Facebook Inc. housed dozens of cybercriminal groups that set up shop on the platform as online marketplaces to sell a variety of illegal services, such as stolen credit card information, account theft and spamming tools, a team of researchers found.Cisco Systems Inc’s Talos security unit uncovered 74 groups with names like “Spam Professional” and “Facebook hack (Phishing),” it said in a blog post published on Friday. Those online marketplaces, which counted about 385,000 members, were quite easy to locate for anyone with a Facebook account, the group said. Once a person joined one such group, Facebook’s own algorithms would often suggest
similar groups, making criminal hangouts easy to find, according to Talos.Facebook confirmed that the groups, some of which Talos said had been on the platform for as long as eight years, have been removed.“These groups violated our policies against spam and financial fraud and we removed them. We know we need to be more vigilant and we’re investing heavily to fight this type of activity,” Facebook said in a statement.The revelation of cybercriminal activity adds to the mounting security and privacy concerns surrounding Facebook. Earlier this week, researchers at cybersecurity firm UpGuard found troves of user information inadvertently posted publicly on Amazon.com Inc’s cloud computing servers.
Signage is displayed outside Facebook headquarters in Menlo Park, California. Cisco Systems’ Talos security unit uncovered 74 groups on Facebook with names like “Spam Professional” and “Facebook hack (Phishing),” it said in a blog post last week.