BUSINESSBUSINESSWednesday 4 October 2017

French President Emmanuel Macron (second left), along with Amazon France Operations Director Ronan Bole, Amazon VP Europe Customer Fulfillment Roy Perticucci (left) and Amazon France Director Frederic Duval (second right), cuts a ribbon during a visit at the Amazon factory in Boves, near Amiens, France, yesterday.

Macron visits Amazon

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GCC needs more convertible

bond issuance

QBIC begins ‘LeanStartup Program’

Dow & Brent before going to press

Qatar’s strategic sectors attract foreign investorsMohammad Shoeb The Peninsula

As Qatar accelerates the pace of its economic diversification, more foreign companies and

investors are exploring oppor-tunities in the country. Many of them are looking for opportuni-ties in the food, manufacturing and downstream industries.

Economic reforms, business-friendly environment, and attractive taxation policy have made Qatar one of the most favourites destinations for inves-tors, said a top official of Qatar Chamber (QC).

Ali bin Abdulateef Al Misnad (pictured), Honorary Treasurer at QC, said: “ The opening of the mammoth world-class Hamad Port, rapidly expanding Qatar Airways, massive public invest-ments in infrastructure development, industrial parks, warehousing complexes and scores of other mega projects

have put Qatar on the spotlight of global investors.”

It is not only the hydrocar-bons industries that are attracting investments. A lot of investors are exploring oppor-tunities in the booming downstream industries, such as chemicals, petrochemicals, alu-minium and other manufacturing

sector. And a lot of them have already registered in Qatar, he said.

In August alone, some 1,766 new companies were registered in the country. Out of that 1,409 were main commercial records and 357 branch commercial records, according to official data released recently.

Al Misnad, who is also the

chairman of Al Baida Group, one of Qatar’s leading conglomerate with diversified business inter-ests which include Technical Services, Cargo & Customs Clear-ance, Real Estate, Logistics, Freight forwarding, and Engi-neering & Consultancy, noted that ongoing “unfair embargo” against Qatar, which has entered its 5th months, has embolden the spirit of Qatari businessmen.

“The unfair embargo has sig-nificantly changed the way we conducted business in the past. The country, including the pri-vate sector, have explored new sources of import destinations, which are supplying goods in a cost efficient and consistent manner complying all specifica-tions and standards,” said Al Misnad.

He noted that Qatar, as part of the GCC council, comple-mented each other in terms of trade, commerce, and coopera-tion in other fields. Qatar traditionally imported a lot of

goods from its sisterly countries, instead of producing everything of its own, and focused on pro-ducing goods that the country enjoyed comparative cost advan-tage and specialisation.

“Qatar was forced (by the blockading countries) to look for alternatives not only within the GCC but beyond. The unjust blockade has changed the way Qatar conducted its economic activities. Now the Qatari private sector, along with government and people, are determined to look for different opportunities,” said Al Misnad.

Qatar is not only empower-ing local businesses and producers to achieve self-suffi-ciency, especially in terms of food and other essentials, but also facilitating to establish long-term partnerships with companies in Oman, Kuwait, Turkey, Pakistan, India, and with host of other countries.

“The government of the Sul-tanate of Oman has created

separate authority dedicated to serve companies establishing partnerships with Qatari busi-nesses, to cut short the lengthy procedures. We highly appreci-ate the cooperation extended by all concerned entities in the Sul-tanate,” he added.

“We at Qatar Chamber are working in close cooperation with all government and private entities to achieve self-suffi-ciency and economic independence in all aspects. For this we are organising events, meetings, including exhibitions, B2B meetings for match making to engage directly. The idea is to establish new line of shipments, freight forwarding and other enabling services to ensure con-sistent supply.”

Qatar, the largest exporter of LNG in the world, is imports goods, including fruits, vegeta-bles, meat, poultry and dairy products, and other food & bev-erages, from far off countries across all continents.

Rising opportunities

A lot of investors are exploring opportunities in the booming downstream industries, such as chemicals, petrochemicals, aluminium and other manufacturing sector.

In August alone, some 1,766 new companies were registered in the country.

EU tightens rules for Chinese importsStrasbourg

AFP

The EU reached a landmark agreement on tough new rules against cheap

imports in a move that risks embittering already tense rela-tions with Beijing.

The European Commission, EU national governments and MEPs had been in talks since July on new rules to calculate import duties and curb unfair trading practises, especially

from China. “Europe stands for open and fair trade, but we are not naive free traders. Today we strengthened our anti-dumping rules,” European Commission chief Jean-Claude Juncker said.

Juncker insisted that the measure was “not about any country in particular”, and “sim-ply about making sure that we have the means to take action against unfair competition.”

But the EU has been under intense pressure from big indus-try in Europe to keep strong

trade defense measures due to China’s public subsidies and excess production, especially in steel and other metals.

“We believe that the changes agreed today to the legislation strengthen EU’s trade defence instruments and will ensure that our European industry will be well equipped to deal with the unfair competition they face from dumped and subsidised imports...,” EU Trade Commis-sioner Cecilia Malmstroem said after the talks..

Liquidity injection eases Qatar banks’ funding pressure: IIFSatish Kanady The Peninsula

The Qatar Central Bank’s (QCB) liquidity injection into the local banks and

increased public sector depos-its have mitigated the impact the banks’ funding pressure in recent months. The public sec-tor deposits in Qatari banks (estimated now at $80bn) grew by 70 percent from May to August 27, more than offsetting the decline in non-resident deposits, the Institute of Inter-national Finance (IIF) said yesterday.

The IIF, in its Emerging Mar-ket (EM) fund flow report, said non-resident deposits in Qatari banks fell from $51bn in May to $41bn in August 2017 in contrast to an estimated 60 percent increase in the first five months of 2017. Non-resident deposits in Qatar accounted for 19 per-cent of total bank deposits in August.

“We believe that further declines in non-resident depos-its will be limited. Meanwhile, the authorities in Qatar have taken steps to boost bank liquid-ity”, IIF’s fund flow report noted. Non-resident capital flows to EMs are projected to rise to $1.1trillion in 2017 and $1.2tril-lion in 2018.

Despite the decline in non-resident deposits, Qatari banks’ total deposits still increased by 1.3 percent from May to July and

the year-on-year increase in July is still very high at 12.7 percent. Growth in credit to the economy, however, has decelerated to 2.8 percent in July, year-on-year, largely due to the continued deceleration in non-hydrocar-bon growth.

Resident capital outflows have remained large in the past two years despite the shift in the current account balance from a surplus of $49bn in 2014 to a deficit of $8bn in 2016. Both portfolio and other investment outflows continued to rise and public foreign assets in the form of SWFs peaked at $295bn in 2016.

Qatar’s fiscal deficits were largely financed by borrowing from the international market rather than tapping the SWF. According to IIF, seeking foreign

funds in the current situation will be difficult and costly. But given the still-large size of public for-eign assets, the authorities in Qatar will remain in a strong position to meet domestic fund-ing requirements. Non-resident capital flows to EMs are pro-jected to rise to $1.1trillion in 2017 and $1.2trillion in 2018.

Meanwhile, Reuters reported QCB sold QR1bn ($275m) of Treasury bills in a monthly auc-tion yesterday, with yields barely changed from its previous sale.

The bank sold QR500m of three-month bills at a yield of 2.26 percent, QR350m of six-month at 2.47percent and QR150m of nine-month at 2.60 percent. Last month, QCB sold QR650m of three-month bills at 2.25 percent and QR350m of six-month at 2.49 percent.

$50.38$50.38-0.44-0.44

BRENT

8,284.68+17.11 PTS

0.21%

QE

22,640.90+83.30 PTS

0.37%

7,468.11+29.27 PTS

0.39%DOW FTSE100

22 WEDNESDAY 4 OCTOBER 2017BUSINESS

French Finance Minister Bruno Le Maire attends the questions to the government session at the National Assembly in Paris, France, yesterday.

Le Maire at assembly debate

QBIC begins ‘LeanStartup Program’

QIB announces winnersin the second round of summer campaign

The Peninsula

Qatar Business Incuba-tion Center (QBIC) founded by Qatar Development Bank (QDB) and Nama,

hosted a Speaker Series session with the inspirational Jawaher Al Fardan and Ghanim Al Sulaiti.

The co-founders of Ever-green Organics shared their journey and experiences with the participants of the 9th wave of QBIC’s LeanStartup Program (LSP) as they are about to embark on their own journey of learning and success.

QBIC witnessed a high 225

percent increase in applications from 2016 and a 47 percent increase in applications from the 8th wave to the 9th wave of LSP. For the first time ever, more than 100 startups were chosen to take part in this exciting 10-week journey. QBIC’s most recent out-reach campaign called on budding Qatari entrepreneurs to take part in diversifying their country’s economy in order to establish self-sufficiency. The successful initiative reached out to the nationalism within the Qatari population, and ended up greatly contributing to the record number of applications QBIC received over the past few

months. Abdulaziz bin Nasser Al Khalifa, Qatar Development Bank CEO and QBIC Chairman said: “We are so proud of how far QBIC has come and we are thrilled by the increased interest from our fellow aspiring Qatari entrepre-neurs, as this confirmed that our campaign’s message was pow-erful enough to make a difference. It’s our duty, as an organisation, to lend a helping hand to every budding Qatari entrepreneur that’s tirelessly per-severing in the efforts of growing and developing his/her country’s economy; which is why we were able to accept the largest number of startups to our LeanStartup

Programme.” The centre will continue to take on promising entrepreneurs of all ages with innovative ideas, as well as pro-vide them with the coaching, financing and support they need in order to establish successful startups.

QBIC has been hosting Speaker Series sessions with rep-utable local, regional and international speakers since its establishment. With their most recent outreach initiative having such a powerful message, QBIC was keen to keep up the momen-tum by hosting successful local Qatari Entrepreneurs for this Speaker Series session.

The Peninsula

Qatar Islamic Bank (QIB) has announced 34 win-ners in the second batch

of winners of the ‘Win every day with QIB VISA Card’ and the ‘Win every week with QIB MasterCard ’ summer promotions.

The draw was conducted in the presence of an official representative from the Min-istry of Economy and Commerce and QIB representatives.

30 QIB VISA credit and debit cardholders who made domestic or international pur-chases between August 8 and September 6, 2017 received a cash prize of QR 5,000 each under the ‘Win every day with QIB VISA Card’ scheme.

The campaign will run until October 24 to reward a total of 108 daily winners and one Grand Prize winner.

All QIB customers who use their VISA credit or debit cards for their purchases, domestic or international, for a mini-mum transaction of QR 500 get the chance to win QR5,000 daily.

In addition, Visa cardhold-ers who spend QR10,000 and above during the campaign period will get a chance to win a brand-new Lexus LX570. ATM cash withdrawals trans-actions are excluded. The next draw will take place in November for card purchases and payments until 24th Octo-ber 2017

QIB also announced 4 winners who used their QIB Platinum and World Master-Card debit cards in Qatar or abroad between 08th August and 06th September 2017. The winners received cash prizes of QR10,000 each.

This campaign also runs until October 24 to reward a total of 15 weekly winners and one Grand Prize winner.

QIB Tamayuz and Private Banking customers who spend a minimum of QR 500 using

their Platinum and World MasterCard debit cards dur-ing the promotion period are automatically eligible to enter the draw to win QR 10,000.

At the end of the cam-paign one QIB MasterCard customer will win a Grand Prize worth of QR100,000. ATM cash withdrawals trans-actions are excluded. The next draw will take place in November for card purchases and payments until 24th of October 2017.

Recently, QIB launched an award-winning and highly successful ‘Murabaha’ based credit card. The credit card offers customers the flexibil-ity to pay 5 percent or 100 percent based on their pref-erence, with monthly settlements automatically deducted from their accounts and the ability to perform early payments at the custom-er’s discretion at all times. In addition,

QIB launched its Ladies Credit Card after the Bank introduced its Ladies Banking proposition designed to cater to the financial needs of ladies in appreciation for their role in the Qatari society.

Speakers and participants of the QBIC Speaker Series session.

Pakistan 10 notches up in reformsPAKISTAN’S ranking in terms of Economic Freedom of the World 2017 report has improved by 10 notches and it stood at 127th position out of total 159 countries.

The annual report of the Economic Freedom of the World 2017 released yester-day by Policy Research Institute of Market Economy (PRIME) Pakistan in conjunc-tion with Canada’s Fraser Institute stated that Pakistan’s ranking stood at 137th position last year 2016.

The report states that Pakistan has improved its glo-bal ranking on economic freedom, climbing up 10 places since the last year.

Huawei to discuss future of region’s digital transformationThe Peninsula

The leading global ICT solu-tion provider Huawei is hosting its second annual

Innovation Day, with the theme “Exploration, Lights the Way Forward”. “Huawei ME Innova-tion Day” will explore the role of ICT innovations in driving digital transformation and building sustainable knowledge-based economies in the Middle East.

Huawei ME Innovation Day is part of a global initiative to address pioneering issues in the world of ICT.

The Middle East version aims to create an industry com-municat ions plat form, accelerate the digitization proc-ess and position the Middle East as leading hub of global innovation.

This year’s Innovation Day theme, “Exploration, Lights the Way Forward”, highlights the Middle East’s rich heritage of innovation, openness and per-severance, valuesalso embraced by Huawei.

Huawei will use the event to encourage an open conversa-tion on the ways in which ICT innovation will shape key sec-tors and assist countries in achieving their national vision goals. It will also serve as a

platform to explore the current and future challenges key sec-tors face in their pursuit of digital transformation. The agenda falls in line with Hua-wei’s regional vision of developing sustainable, smart cities through cutting edge tech-nology and strategic partnerships.

As part of the event, Huawei will launch a white paper enti-tled “Investing in ICT will improve Government KPI’s across Economic, Social and Sustainability domains“, which studies the impact of digital technologies on the transforma-tion of economies in the Middle East.

The event will address key topics such as tech’s growing ability to drive industries for-ward, the role of governments in encouraging ICT innovation and meeting the KPIs of national vision agendas, and how verti-cal industries in the Middle East can take advantage of new tech-nologies. There will also be a keynote speech by Ugo Valenti, CEO of the Barcelona Smart City World EXPO.

The event willinclude a panel discussion comprised of leaders from a variety of rele-vant sector such as education, telecommunications, banking and finance, set to deep-dive

into the role of ICT in business development, achieving com-mercial growth, and innovation’s impact on acceler-ating economies and driving government agendas.

“The Middle East is a historic center of exploration and inno-vation, from the invention of algebra to the creation of the first university. We are now see-ing an era where the region is reclaiming leadership in these areas, as pioneers of the digital transformation,”saidCharles Yang, President, Huawei Mid-dle East.

“We at Huawei are eager to assist our partners in the region in realisng this transformation, meeting their national visions through smart initiatives, the building of knowledge econo-mies and the expansion of the Middle East’s digital ecosystem,” he continued.

“Huawei continues to view the Middle East as a key market where we contribute to the development of the ICT sector through transforming industries, improving efficiencies, and rev-olutionizing the way in which people here live their everyday lives. At Innovation Day this year, we will explore these advances as enablers of explo-ration and innovation for the future.”

GCC food services sector registers consistent growthThe Peninsula

The GCC food services sec-tor is headed for further growth with key indicators

such as a growing population and tourism sector, disposable income, and changing dietary habits continuing to shore up demand for food and dining options despite sluggish eco-nomic conditions.

According to a report by Al Masah Capital Limited, the GCC foodservice marketis now firmly placed on a growth trajectory with its value expected to grow at a compound annual growth rate (CAGR) of eight percent and is tipped to hit the S$29.3bn mark by 2020, up from $21.5bn registered in 2016 and $20.1bn in 2015.

This growth, the report indi-cates, will largely be driven by a ballooning middle-class and increased penetration by inter-national and local retail outlets across the GCC region.

Moreover,with the region’s overall food consumption expected to have reached 48.1 million metric tonnes in 2016, up from 45.8 million metric tonnes in 2014 fuelled by an expanding consumer base, the GCC is now on course towards building a strong brand identity in the food services space and is likely to continue strengthening

its foothold in coming years. The GCC market is expected to grow substantially year-on-year mainly due to the rapid expan-sion by home-grown brands.

This growth will also be sup-ported by the regional private equity players who, despite eco-nomic slowdown, have clearly preferred to rebalance their portfolios by increasing their investment focus in the food services sector amid rising vol-atility and decline in oil prices since 2014.

The report further indicates that the fast food segment grew by 7.4 percent and is further expected to continue its domi-nance in the market followed by the full service restaurant segment,which grew by six per-cent CAGR. Cafes and bakerysegments, whose sales remained relatively subdued, with a CAGR of 7.5 percent between 2012 and 2016, arealso expected to grow at around three percent CAGR to reach $2.75bn by 2020.

A resilient economy weak-ened by a drop in oil prices and later supported and revived by a diversification strategy has also been largely responsible for growth within the food services sector. GCC’s GDP growth, which is estimated to reach $1.9 trillion by 2021, from $1.35 trillion in 2016, has led to higher personal

income levels thus supporting the market for food service pro-viders in the region.

According to the report, trends that are likely to acceler-ate the food service sector growth include a rise in demand for healthy and organic food. This is mainly due to a rising incidence of lifestyle related dis-eases as well as increased attention on health issues.

More players are now increasingly expanding their menus to also include healthier food options to cater to this expanding niche segment and thus widening their revenue base as they seek to attract and grow customer numbers.

With Doha’s casual dining scene gaining prominence, Qatar’s food services sector is expected to perform exception-ally well.

On its part, Kuwait is also primed for rapid growth in the coming years with its food serv-ices sector poised to grow at a CAGR of 4.5 percent to reach $2.05bn by 2020. Other notable growth markets include Oman, which until a few years ago, its food services sector was quite sluggish compared to other GCC nations. This is, however, chang-ing significantly with many international restaurants and franchises now being set up in the country.

23WEDNESDAY 4 OCTOBER 2017 BUSINESS

GCC needs more convertible bond issuanceThe Peninsula

Fisch Asset Management, a global leader in con-vertible and corporate bond strategies, has said that key economic

programmes being lined up in the region will facilitate greater investor interest in potential GCC convertible bond issuers across diverse sectors, including infra-structure and real estate.

Convertible and exchangea-ble bonds are unique and highly flexible forms of corporate financing that can be an attrac-tive option for companies seeking to raise money or mon-etise equity stakes.

There is currently strong investor appetite for GCC con-vertible and exchangeable bonds, in particular when issued using

standard structures rather than Sukuks.

Philipp Good, CEO of Fisch Asset Management, commented: “We expect issuance of conven-tional corporate and sovereign bonds in Q4 2017 to remain high, in part owing to the strong level of interest from global investors. In contrast, there has been no GCC equity-linked issuance since

2015. While the landscape for conventional bond issuance across the GCC remains encour-aging, we believe that convertible and exchangeable bonds are an untapped opportunity for GCC issuers.”

There are a number of opportunities presented by con-vertible bonds in the region. The GCC is home to numerous acces-sible and liquid underlying stocks, while Saudi Arabia’s equity market is rapidly expand-ing and becoming increasingly open to Qualified Foreign Inves-tors (QFIs).

Issuers can maximise inves-tor demand by tailoring the structure, size and terms of their equity-linked issues to the cur-rent sweet spots within the equity-linked market. Martin Haycock, Senior Partner

– Convertible Bonds, at Fisch Asset Management, said:

“Middle East convertibles have undergone a decade of evo-lution since the $3.5bn pre-IPO

sukuk into DP World launched the GCC convertible bond mar-ket in January 2006. Since this time, 20 issues with notional value of $23bn have been issued

in the region, with financial serv-ices and real estate companies comprising the majority of issu-ance. We believe the time is right for this market to expand further.”

Fisch Asset Management, in partnership with The Gulf Bond and Sukuk Association (GBSA), held a workshop in the Dubai International Financial Centre (DIFC) on 2nd October on the topic of Convertible Bonds in the Middle East.

The event analysed the untapped opportunities for both issuers and investors in GCC markets and offered insights into the future of this asset class in 2018 and beyond. The event was attended by leading regional investors, fund managers, capi-tal market advisories and issuers.

Strong appetite

There is currently strong investor appetite for GCC convertible and exchangeable bonds, in particular when issued using standard structures rather than Sukuks.

Martin Haycock (left) Senior Partner - Convertible Bonds at Fisch Asset Management and Philipp Good, CEO of Fisch Asset Management.

European Commission President Jean-Claude Juncker (left) and European Chief Negotiator for Brexit Michel Barnier attend a debate on the progress of the Brexit talks at the European Parliament in Strasbourg, eastern France, yesterday.

Jean-Claude Juncker at European ParliamentGold falls to 7-week lowLondon

Reuters

Gold fell to its lowest in seven weeks yesterday after strong US eco-

nomic data reinforced expectations of another inter-est rate rise in the United States this year and pushed the dollar and US bond yields higher.

The CME’s Fedwatch indi-cator showed markets were pricing in a 77 percent likeli-hood of a December rate rise after Monday’s data showed a surge in US manufacturing activity. World stocks also rose to new records as a pos-itive global growth outlook encouraged investment in riskier assets.

A strong dollar makes gold more expensive for hold-ers of other currencies, potentially undermining their desire to buy, while higher bond yields reduce the appeal of non-yielding gold. Higher interest rates meanwhile push bond yields higher and tend to boost the dollar.

Spot gold was flat at $1,270.39 an ounce at 1136 GMT. It earlier touched $1,267.76, the lowest since August 15 and down more than 6 percent from a one-year high of $1,357.54 in early September.

US gold futures for December delivery were 0.2 percent lower at $1,273.20 an ounce. “The factors that pushed gold toward $1,360 in early September are now reversing,” Julius Baer ana-lyst Carsten Menke (pictured) said. “The US dollar and yields have rebounded from their recent lows and it looks like positioning in the gold futures market is somewhat revers-ing, with some long covering and new shorts.” The net long position of hedge funds and money managers in COMEX gold rose nine-fold in the two months to mid-September, helping push prices higher, but has since fallen sharply.

Menke said he expected a strengthening dollar and normalisation of speculative positioning to push gold to $1,200 an ounce by the end of the year. Prices have also been supported by purchases of physical gold by bullion-backed exchange-traded funds. But ETF holdings tracked by Reuters dropped between Friday and Monday by the most since late July.

Brexit uncertainty prompts construction contraction in BritainLondon

Reuters

Britain’s construction com-panies in September reported the sharpest fall

in activity since just after June 2016’s Brexit vote, as clients put projects on hold due to uncer-tainty over the economy.

Although construction makes up just 6 percent of Brit-ain’s economy, the survey suggested it was likely to drag on official third quarter growth figures, just as the Bank of Eng-land gets ready to raise interest rates.

The IHS Markit/CIPS con-struction purchasing managers’ index (PMI) sank to 48.1 in Sep-tember from August’s reading of 51.1, its lowest since July 2016 and far below all forecasts in a Reuters poll of economists.

Anything below 50 is con-sidered a contraction. Sterling weakened by around a quarter of a cent against the dollar and fell to a day’s low against the euro after the data.

“The construction sector is entering its own recession,” Samuel Tombs of Pantheon Macroeconomics said. “The government’s shift to a more accommodating stance in Brexit talks has done little to convince builders that clients will sanc-tion delayed projects soon.”

IHS Markit said the prospect that the BoE will raise rates next month for the first time in a decade was also a factor behind slower house building.

Business investment over-all has grown since the Brexit vote, but many business lead-ers say the government is not making enough progress in

Brexit talks with the European Union. Construction - which has long lead times for projects, and relies heavily on labour from the EU - has been partic-ularly hurt.

Official data last month showed construction orders fell more than 12 percent year-on-year in the three months to June, and the PMI has shown lower orders for the past three months. Expectations for the future were at their second-lowest level since 2013, yesterday’s survey also showed.

However, shares in house builders have gained in recent days after Britain’s ruling Con-servative Party announced plans to revive a £10bn ($13.25bn) house-building subsidy.

The manufacturing PMI published on Monday showed a slowdown in growth although it remained solid, and a survey of Britain’s huge services indus-try due today will give a clearer idea of third-quarter growth.

“Following on from a softer manufacturing survey for Sep-tember, the weak construction survey fuels concern that an already lacklustre UK economy could be faltering,” said Howard Archer, chief econo-mist at consultancy EY ITEM Club. Britain’s economy has suffered its weakest growth so far this year since 2012. Con-sumer demand has borne the brunt of a rise in inflation to its highest in nearly five years, which is largely due to the pound’s tumble after the Brexit vote. The PMI data showed the cost of building supplies rose at its fastest rate in seven months in September.

ADNOC to start syndication of $6bn revolving loan this weekDubai

Reuters

State-owned Abu Dhabi National Oil Co (ADNOC), which manages almost all

of the proven oil reserves in the UAE, is expected to start syndi-cating a $6bn loan as early as this week, sources familiar with the matter said.

The loan, a revolving credit facility with maturities of three and five years, is expected to offer an interest rate in the region of 50 basis points over London Interbank Offered Rates for the five-year tranche and 35 bps over Libor for the three-year tranche, said the sources.

The pricing of the loan has decreased from initial discus-sions because of significant interest received from banks, they said, speaking on condition of anonymity as the matter is not yet public.

Asked about the loan, an ADNOC spokesman replied that the company was expanding its strategic partnership model and improving its capital structure to unlock value, free up capital and enhance returns. Bank of Tokyo-Mitsubishi UFJ, First Abu Dhabi Bank, HSBC and JPMor-gan have lead roles in the syndicated deal, the sources said. The UAE oil giant is also considering whether to raise at

a later stage a syndicated loan for its distribution unit, said one of the sources without disclos-ing details. ADNOC started talks with banks earlier this year on a number of fund-raising options, including a project bond of up to $3bn. Middle East energy companies are increas-ingly turning to the international capital markets to fund their expansion in an era of low oil prices.

The UAE company is work-ing on an initial public offer of shares in its fuel retail business, which could raise up to $2bn, sources told Reuters. It could list more than 10 percent of its fuel retail business by early 2018.

Oil prices ease as speculators grow impatientLondon

Reuters

Oil edged lower yesterday, as speculators took prof-its on some large

positions that have built up in the last couple of weeks, but the prospect of gradually ebbing oversupply lent support.

December Brent crude futures were down 7 cents at $58.05 a barrel at 1045 GMT, having lost almost 2.5 percent on Monday. US crude futures were down 7 cents at $50.51.

Brent notched up a third quarter gain of about 20 percent, the biggest increase for that quarter since 2004, and traded as high as $59.49 last week, but has since fallen about 6 percent.

Money managers have pushed their bullish bets on the Brent crude market to a record high in the last week, encour-aged by signs of rebalancing between supply and demand.

But when positioning becomes too stretched, this can lead to abrupt shifts in the price.

“It’s always problematic when you have this amount of speculative length in the

market,” Petromatrix strategist Olivier Jakob said. “The price action for me is all about posi-t ions and potential ly profit-taking on some of those speculative positions.”

Oil prices climbed last week on tension in Iraqi Kurdistan after the region’s independence vote, with Turkey threatening to close a pipeline that brings oil from the region in northern Iraq to the Mediterranean.

Turkey has not carried out the threat, analysts said. The recent rally had also been driven by signs that a three-year crude glut is easing, helped by a pro-duction-cutting deal among global producers led by Opec.

However, Middle Eastern oil producers are concerned the price rise will stir US shale

producers into more drilling and push prices lower again. Key Opec producers consider a price above $60 as encouraging too much shale output.

“The fourth quarter is not too kind to the price of oil, as we switch from summer demand to expectations of winter demand,” said Jonathan Barratt (pictured), chief investment officer at Ayers Alliance in Sydney. Offering a small boost was the expected drop in supply next month of the four largest North Sea crude grades that underpin the dated Brent benchmark. Output of Brent, Forties, Oseberg and Ekofisk will average 800,000 barrels per day (b/d) next month, down from 870,000 b/d in Octo-ber, and down 10 percent year-on-year.

Unilever could shut Norwich factory downUNILEVER said yesterday it was considering options including closing its fac-tory in Norwich after Britvic announced it would end oper-ations on the same site.

The Anglo-Dutch con-sumer goods maker, which makes Colman’s Mustard in Norwich, said it was launch-ing a review of its production at the plant.

“Although no decisions have been made, we need to recognise that Britvic’s pro-posed withdrawal would have serious implications for Unilever in Norwich,” the company said.

24 WEDNESDAY 4 OCTOBER 2017BUSINESS

A Honda booth displaying how energy can be saved in a community, at the Combined Exhibition of Advanced Technologies (CEATEC) Japan in Chiba City, suburban Tokyo. The exhibition will be held until October 6.

Honda booth at CEATEC

Washington

AFP

Growing household debt may offer a quick boost to economic growth but

can raise the risks of a financial crisis over the medium term, the International Monetary Fund warned yesterday.

The findings come as cen-tral bankers in some advanced and emerging economies warn of financial stability risks after years of easy money in the wake of the global financial crisis.

Research by IMF staff econ-omists published Tuesday shows household debt levels have steadily grown in the decade since the crisis — with median levels rising from 52 percent to 63 percent of GDP in advanced

economies between 2008 and last year. In the developing world, household debt levels were lower, rising from 15 per-cent to 21 percent over the same period.

The findings analyzed eco-nomic data across a sample of 80 advanced and developing economies and consistently showed economic gains in the short term but growing dangers thereafter. “Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high, and with greater risk of declines in bank equity prices,” the report found.

Borrowing lets households buy goods and services, driving up consumption and employ-ment and causing home and

bank equity prices to rise, result-ing in economic expansion, according to the report.

But after one or two years, these relationships turn nega-tive. As households remain in debt, they can be vulnerable to negative shocks. Higher debt burdens can also predict lower income growth.

“The negative medium-term consequences of increases in household debt are more pro-nounced for advanced than for emerging market economies,” the report also found.

Credit is more freely avail-able to larger shares of the population in wealthier nations while average debt levels are lower in emerging markets, per-haps explaining some of the disparity, the report said.

Singapore

AFP

Widening ine-quality in Asia’s teeming cities could lead to poten-

tially risky social divisions, the World Bank warned yesterday, urging governments to do more to help the urban poor.

Half of the region’s popula-tion live in cities and rapid urbanisation has helped lift 655 million people out of poverty, the bank said in a new report.

But East Asia and the Pacific are still home to the world’s big-gest population of slum dwellers at 250 million, sizeable portions of them found in China, Indone-sia and the Philippines, the bank said.

While studies on inequality often focus on the disparity between urban and rural areas, the expanding chasm among city dwellers was a major problem, it said. Victoria Kwakwa, the bank’s vice president for the region, said a growing number of people who move to cities lack access to basic services, housing and jobs, which was creating growing resentment over the gulf between urban rich and poor.

“Widening inequalities can create social divisions in society and it’s much more stark in cit-ies because you have the wealthy living right next door too often to the urban poor in small spaces,” said Judy Baker, the bank’s urban specialist and the report’s lead author.

“We’ve seen in other parts of the world that this can create some unrest,” she said. The bank urged governments to craft pol-icies targeted at connecting the

urban poor with job markets, ensuring quality and affordable housing and access to services such as public transport.

In the Mongolian capital Ulan Bator, low-income commuters can spend as much as 36 percent of their monthly expenses on bus fare because of inefficient pub-lic transport, the bank said. In Indonesia, 27 percent of the urban population do not have access to sanitation facilities, higher than 21 percent in the Philippines, it said.

Meanwhile, remittances, a major source of revenue for the world’s poorest countries, are due to grow again this year after falling two years in a row, the World Bank said.

Such cash transfers to low and middle-income countries are on course to rise by 4.8 percent in 2017, reaching $450bn.

Economic expansion in Rus-sia, Europe and the United States will see migrants and families

send increasing amounts of cash back to Sub-Saharan Africa, Europe, Central Asia, Latin America and the Caribbean, according to a World Bank report. But growth will be sub-dued for East Asia and South Asia, home to major recipient countries, the report found. As oil prices fall, Gulf countries, tra-ditionally large sources of outbound remittance flows, are spending less and discouraging recruitment of foreign workers.

“Remittances are a lifeline for developing countries,” Dilip Ratha, lead author of the bank’s Migration and Development Brief, said in a statement. “This is particularly true following nat-ural disasters, such as the recent earthquakes in Mexico and the storms devastating the Caribbean.”

But fees remain high. Send-ing $200 home cost 7.2 percent on average in the third quarter of this year, well above the Sus-tainable Development Goal target of three percent, accord-ing to the report.

Ratha called on countries to lower costs associated with remittances. Exclusive relation-ships between postal services and money transfer companies drive up prices. Strict money-laundering regulations are also barriers, causing banks to close accounts, he said.

India is on track to be the top recipient in 2017, taking in $65bn, followed by China, with $61bn, and the Philippines, with $33bn, while Mexico would reach a record at $31 bn.

The World Bank forecasts remittances to low and middle-income countries will rise by 3.5 percent next year.

Sydney

AFP

Australia’s central bank left interest rates at a record low yesterday with the

board upbeat about the economy, while sounding a warning about the strength of the local dollar.

The Reserve Bank has slashed rates by 300 basis points since November 2011 to 1.50 per-cent as the country wrestles with its transition away from an unprecedented boom in mining investment.

But it has left rates on hold since August last year and is yet to

show its hand regarding its next move. RBA Governor Philip Lowe acknowledged that the Australian economy had shrugged off the sluggish start to the year, boosted by government and consumer spending, with growth of 0.8 per-cent in the June quarter.

“This outcome and other recent data are consistent with the Bank’s expectation that growth in the Australian econ-omy will gradually pick up over the coming year,” he said after a monthly board meeting. “Over recent months there have been more consistent signs that non-mining business investment is

picking up. A consolidation of this trend would be a welcome development.”

But the bank remained con-cerned about high levels of housing debt in cities where property prices have soared, at a time when wages growth remains low.

It also noted the ongoing strength of the Australian dollar, which was keeping inflation below its target band.

“The higher exchange rate is expected to contribute to con-tinued subdued price pressures in the economy,” said Lowe. “It is also weighing on the outlook

for output and employment. “An appreciating exchange

rate would be expected to result in a slower pick-up in economic activity and inflation than cur-rently forecast.” The dollar fell following the rate announce-ment, dropping below 78 US cents for the first time since mid-July and remaining at that level by mid-afternoon.

AMP Capital chief economist Shane Oliver said the post-meet-ing statement “continues to imply a neutral short term bias on interest rates”.

“Basically the RBA and offi-cial interest rates remain stuck

between a rock and a hard place,” he said. “Improving glo-bal growth, strong business confidence and jobs growth, the RBA’s own expectations for a growth pick up and already high levels of household debt argue against a rate cut.

“But record low wages growth, low underlying inflation, the impending slowdown in housing construction, risks around the consumer and the strong dollar argue against a rate hike.” Westpac Institutional Bank’s Bill Evans said he expected rates to remain on hold in 2018 and 2019.

London

AFP

British short-haul carrier Mon-arch Airlines faced an annual loss in excess of £100m ($133m)

when it went bust, Chief Executive Andrew Swaffield said yesterday.

The airline declared bankruptcy on Monday after failing to secure fresh capital or sell the business, leaving British authorities racing to rescue tens of thousands of customers stranded abroad, while Monarch staff were made redundant.

“Yesterday was a heart-breaking day as 2,000 people lost their jobs and we are all absolutely devastated for the customers and for all of us,” Swaf-field told BBC Radio 4.

The Civil Aviation Authority reg-ulator launched an emergency repatriation scheme on Monday to fly back 110,000 Monarch customers to Britain at an estimated cost to taxpay-ers of £60m.

Monarch has been badly hit by a legacy of weak demand in previously key markets Turkey, Tunisia and Egypt that have each suffered terror-ist attacks in recent years. In turn, the events have sparked fierce competi-tion and oversupply for popular destinations Portugal and Spain.

Consequently, the airline suffered a 25-percent reduction in ticket prices which created a “massive economic challenge” for the group, Swaffield said. Monarch therefore faced the daunting prospect of a huge loss for the next financial year.

“The figure was well over £100m” (that the group was projected to lose next year) ... and we could not figure out a way of reducing those losses sig-nificantly,” Swaffield said.

He added: “We spoke to a variety of sources, trying to leave no stone unturned, including raising capital to fund trading losses, selling the company and part of the company, and concluded that we had no prospect.”

WB: Urban inequality a growing risk in Asia

Edinburgh

AFP

Fracking will be banned in Scotland following a widespread public

backlash against onshore drilling, the government said yesterday. The government said “fracking cannot and will not take place in Scotland” after a scientific review and a comprehensive public consultation.

Over 60,000 people responded to the consulta-tion, the second largest response to any consultation in Scotland, and 99 percent were in favour of a ban.

Scottish Energy Minister Paul Wheelhouse said the health impacts of fracking were unclear, insisted frack-ing would detract from Scotland’s climate change targets, and would add just 0.1 percent to GDP.

But Conservative Party opponents said the ruling Scottish National Party had disregarded the potential jobs and economic benefits frack-ing could deliver.

The semi-autonomous government does not cur-rently have the power to issue or revoke fracking licenses, but it can prevent fracking through the planning permis-sion system.

The Scottish Government has now written to local authorities informing them that any applications for fracking in Scotland will be opposed by ministers.

Wheelhouse said: “This action is sufficient to effec-tively ban the development of unconventional oil and gas extraction in Scotland”.

Mounting household debta stability risk, warns IMF

Australia keeps rates on hold; sounds dollar warning

Collapsed Monarch Airlines faced £100m loss: CEO

Scotland says no to fracking

Airport staff stand in the deserted check-in area for Monarch Airlines, in the departures lounge of Birmingham Airport in Birmingham, central England.

World Bank report

Half of the region’s population live in cities and rapid urbanisation has helped lift 655 million people out of poverty, the World Bank said in a new report.

The Bank urged governments to craft policies targeted at connecting the urban poor with job markets, ensuring quality and affordable housing and access to services such as public transport.

25WEDNESDAY 4 OCTOBER 2017 BUSINESS

Chicago

AFP

The US auto industry was boosted in September by shoppers replacing vehi-

cles destroyed in major hurricanes, and was poised to show the first reversal this year of sales declines.

The recovery in Texas and Florida from hurricanes Harvey and Irma, which destroyed hun-dreds of thousands of vehicles, was expected to help the indus-try in September, October, and even in November. The growth would reverse steady declines every month this year following record-setting sales in 2016 cap-ping a seven-year growth streak.

The major North American players reported good news — with Toyota, GM and Ford all recording significant sales growth. FCA US, the American subsidiary of Fiat Chrysler, struggled, but showed improve-ment in its retail sales.

The industry could notch a one-percent boost in Septem-ber for 1.44 million vehicles sold, according to a forecast by auto research firm Kelly Blue Book.

“While major hurricanes devastated parts of Texas and Florida in the past month, this is driving replacement demand for those drivers with vehicles destroyed,” Kelly Blue Book analyst Tim Fleming forecasted. “This demand has already started in some areas, but will continue into October and potentially November, as vehicle insurance payouts are received.”

GM, the biggest US car maker, reported an 11.9-percent sales jump compared to Sep-tember 2016 -- with a 17-percent rise in sales of its Chevrolet models driven by its newest crossovers. Retail sales to customers in showrooms made up the bulk of the sales growth, the company said.

“Retail sales should remain strong for the foreseeable

future,” the company’s econo-mist Mustafa Mohatarem said.

Toyota reported sales growth of 14.9 percent — with a skyrocketing 43.2 percent jump in SUV demand. Ford sold 21.4 percent more of its popular F-Series pickup trucks, com-pared to the year-ago period, helping lift the company’s over-all sales 8.7 percent.

“We’re pleased to say recov-ery in Houston and Florida is moving quickly, with all of our dealers in the area now back up,” Ford US sales chief Mark LaNeve said. FCA US’s retail sales to individual buyers were up only 0.3 percent, and were eclipsed by a planned draw-down of fleet sales to businesses and government agencies.

The company experienced a 10 percent decline in Septem-ber, but reported higher demand for its popular Jeep models, including a 20 percent sales increase for the Grand Chero-kee SUV.

Washington

AFP

Equifax said an inves-tigation into the massive data breach at the credit agency discovered 2.5 million

additional potential victims, bringing the total to 145.5 mil-lion. Interim chief executive Paulino do Rego Barros, made the disclosure in a statement, saying: “Our priorities are transparency and improving support for consumers. I will continue to monitor our progress on a daily basis.”

The statement said the cybersecurity firm Mandiant made the new estimate after a forensic review of the incident, which is believed to be one of the worst breaches because of the sensitivity of data leaked.

The review “also has con-cluded that there is no evidence the attackers accessed databases located outside of the United States,” the Equifax statement said. Mandiant found that about 8,000 Canadian consumers were impacted by the hack, fewer than the initial estimate of 100,000. The company said a review of the impact on British consumers was still being analyzed.

Former CEO Richard Smith said in testimony prepared for a congressional hearing that the security team at Equifax failed to patch a vulnerability in March after getting a warning about the flaw.

Smith offered a timeline of the cyber attack which leaked social security numbers and other sensitive data. Smith said in prepared remarks to a House panel that the company on March 9 circulated an internal

memo warning about a soft-ware flaw identified by the government’s Computer Emer-gency Response Team (CERT).

He added that Equifax pol-icy would have required a patch to be applied within 48 hours and that this was not done—but he could not explain why.

Equifax’s information secu-rity department ran scans that should have identified any sys-tems that were vulnerable but failed to identify any flaws in the software known as Apache Struts. “I understand that Equi-fax’s investigation into these issues is ongoing,” he said.

Smith said he was notified of the breach on July 31, but was not aware “of the scope of this attack.” He informed the com-pany’s lead director three weeks later, on August 22, and board meetings were held on the matter August 24 and 25.

Equifax, one of the major agencies gathering data used in credit ratings for banks, has come under fire for waiting until September 7 to publicly disclose the breach, and inves-tigators are looking into stock sales by two senior executives in August.

Brussels

AFP

The EU will today decide a landmark case against Luxembourg, which

stands accused of giving ille-gal tax breaks to internet shopping giant Amazon, according to two sources familiar with the matter.

If confirmed, a ruling against Amazon would come a year after the EU decided that US tech icon Apple had received similar favourable tax terms and ordered it to repay ¤13bn ($14.5bn) in back-taxes to Ireland.

A decision against tech giant Amazon would also land a few months after the EU slapped Google with a record ¤2.4bn ($2.8bn) fine for ille-gally favouring its shopping service in search results.

A report in the Financial Times said that Amazon would face a tax bill of several hun-dred million euros, although this could not be confirmed by AFP sources yesterday.

The commission, Ama-zon and the government of Luxembourg refused to com-ment. Launched three years ago, the European Commis-sion’s probe into Amazon’s deals with Luxembourg was part of several investigations into sweetheart tax arrange-ments between major companies and several EU countries.

Many came in the wake of the “Luxleaks” scandal which revealed details of tax breaks given by Luxembourg to dozens of major firms.

The revelations about the Luxembourg tax deals came as a particular embarrass-ment for European Commission President Jean-Claude Juncker, who served nearly 19 years as Luxem-bourg’s prime minister, covering the period when the tax deals were made.

London

AFP

European stock markets ended the session higher yesterday, underpinned by

firmer prices on Wall Street as investors remain optimistic about third-quarter earnings, traders said.

After Asian stocks had risen strongly earlier, Europe tracked Wall Street higher, with London and Paris both ending the session with gains of more than 0.3 per-cent, while Frankfurt was shut for a German public holiday.

In New York, the DOW was up 0.3 percent at 22,631.78 points in afternoon trade. In London, the FTSE 100 closed up 0.4 percent at 7,468.11 points,

while in Paris, the CAC 40 was up 0.3 percent at 5,367.41. The EURO STOXX 50 edged up 0.1 percent at 3,605.73 points.

“UK equities are holding their ground, even trying higher, helped by more record highs on Wall Street and Asia picking up the baton overnight,” said Accendo Markets analyst, Mike van Dulken.

London’s FTSE was getting an additional lift from further weak-ness in sterling, attributable to disappointing construction sec-tor data, a warning from the Bank of England that UK companies may not be able to borrow from EU banks, a lack of progress on Brexit talks and continued infight-ing within the ruling Conservative Party, the expert said.

In Asia, Tokyo’s benchmark Nikkei 225 index jumped one percent to finish at 20,614.07 points—the best close since August 2015, with a weaker yen boosting share prices of Japa-nese exporters. Hong Kong closed 2.25-percent higher, with its market playing catch-up after a long weekend.

Analysts said the markets were unaffected by a mass shooting from a Las Vegas hotel that left at least 59 dead and hundreds injured.

“The global markets trudge on, searching for opportunities, realising these tragedies are becoming all too common-place,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

Ankara

AFP

President Recep Tayyip Erdogan yesterday urged the Turkish central bank

to cut interest rates despite a jump in inflation to over 11 per-cent, warning of “calamities” if the rates were not snipped.

The Turkish state statistics agency said consumer prices rose 11.2 percent in September from the same period the year earlier, compared with 10.68 inflation in August.

But Erdogan, who is keen to encourage the economic growth that has been the bed-rock of his electoral success, warned the nominally inde-pendent central bank it was high time to slash rates.

“If the interest rates fall, inflation falls. If the interest rate is high, it (inflation) will also be high,” Erdogan told ruling Jus-tice and Development Party (AKP) lawmakers. Conventional economic wisdom suggests inflation should, however, go down as interest rates are raised as this softens demand and weakens the money sup-ply growth in an economy.

Central banks such as the European Central Bank have in the past used interest rate hikes as a monetary policy tool to bring inflation down in line with target levels. But Erdogan said: “The reduction of interest rates is, unfortunately, I say this openly, still not at the point we want it to be,” Erdogan said. “If

we cannot secure the fall in inter-est rates, if we cannot succeed here, then beware — plenty of calamities await us. We must definitely deal with this.”

But Liam Carson, emerging Europe economist at London-based Capital Economics, said in a note the inflation data meant expected rate cuts were “looking less likely”.

Economists say the Turkish central bank has limited room for manouevre as the president has previously indulged in repeated verbal assaults against the bank because of its reluc-tance to lower interest rates.

In recent months, it has opted to keep rates steady as inflation remains high. The one week repo rate is currently fixed at 8.0 percent, a level the bank left unchanged as its last meeting in September. Inflation had been at its highest level for over eight years in April, reach-ing 11.87 percent before falling to 9.79 percent in July and then rising again.

Turkey is set apart “in a world where few countries are troubled by too-high inflation,” said Inan Demir of Normura International. “We see head-line inflation climbing towards 11.5 percent over the coming two months, before declining in December due to supportive base effects,” he added.

The embattled Turkish lira lost 0.4 percent in value against the US dollar, rising to 3.58 lira to the greenback after 0900 GMT yesterday.

Sydney

AFP

The last Australian-made Toyota rolled off the pro-duction line yesterday,

ending over five decades of manufacturing by the Japanese firm as the once-booming local car-making industry grinds to a halt. Toyota announced in 2014 that it would stop mak-ing vehicles at its unprofitable Australian plants, joining the country’s other two large car-makers — Ford and US giant General Motors’ Holden offshoot.

Ford closed its production line last year and Holden will shutter its only remaining car factory in Adelaide later this month. All three companies blame the Australian dollar’s strength and an increasingly competitive market for the local sector’s decline.

“Toyota became the top automobile manufacturer in Australia,” Toyota Australia president Dave Buttner told close to 3,000 employees at the closure of the Altona plant in Melbourne yesterday.

“The vehicles produced here became a byword for quality and reliability not only in Australia but also in the world as the vehicles were exported to other regions like the Middle East.” Some 2,600 workers have lost their jobs, although the company has retained 1,300 for distribu-tion and sales, as well as research and design.

Equifax breach victims rise to 145.5 million

Car sales in US get a boost from hurricane recovery

Amazon tax break case decision today

Erdogan urges central bank to cut rates

Last Aussie-made Toyota rolls off production line

European stocks end higher

Ford compact cars for sale at a dealership in Chicago, Illinois.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York yesterday.

Cybersecurity firm Mandiant made the new estimate after a forensic review of the incident, which is believed to be one of the worst breaches because of the sensitivity of data leaked.

26 WEDNESDAY 4 OCTOBER 2017BUSINESS

QATAR STOCK EXCHANGE

QE Index 8,284.68 0.21 %

QE Total Return Index 13,892.92 0.21 %

QE Al Rayan Islamic Index 3,348.56 0.43 %

QE All Share Index 2,345.22 0.54 %

QE All Share Banks &

Financial Services 2,593.11 0.43 %

QE All Share Industrials 2,553.52 0.05 %

QE All Share Transportation 1,722.33 0.13 %

QE All Share Real Estate 1,696.14 3.57 %

QE All Share Insurance 3,311.91 1.51 %

QE All Share Telecoms 1,040.91 2.01 %

QE All Share Consumer

Goods & Services 5,002.21 0.16 %

QE INDICES SUMMARY QE MARKET SUMMARY COMPARISON WORLD STOCK INDICES

GOLD AND SILVER

03-10-2017Index 8,284.68

Change 17.11

% 0.21

YTD% 20.62

Volume 6,776,639

Value (QAR) 148,268,793.64

Trades 2,060

Up 15 | Down 23 | Unchanged 0002-10-2017Index 8,301.79

Change 9.69

% 0.12

YTD% 20.46

Volume 7,973,406

Value (QAR) 165,727,784.85

Trades 2,128

EXCHANGE RATE

GOLD QR149.2944 per grammeSILVER QR1.9500 per gramme

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

All Ordinaries 5764.191 -27.145 -0.47 5983.2 5635.1

Cac 40 Index/D 5361.34 10.9 0.2 5442.1 4733.82

Dj Indu Average 22557.6 152.51 0.68 22559.38 17883.56

Hang Seng Inde/D 28173.21 618.91 2.25 28248.12 21883.82

Iseq Overall/D 6885.48 6.29 0.09 7157.43 6369.05

Kse 100 Inx/D 41115.78 -903.12 -2.15 53127.24 40686.09

S&P 500 Index/D 0 0 0 2529.23 2245.13

Currency Buying SellingUS$ QR 3.6305 QR 3.6500

UK QR 4.7990 QR 4.8661

Euro QR 4.2506 QR 4.3108

CA$ QR 2.8880 QR 2.9442

Swiss Fr QR 3.7163 QR 3.7680

Yen QR 0.03195 QR 0.03257

Aus$ QR 2..8227 QR 2.8781

Ind Re QR 0.0551 QR 0.0562

Pak Re QR 0.0342 QR 0.0349

Peso QR 0.0706 QR 0.0720

SL Re QR 0.0235 QR 0.0240

Taka QR 0.0440 QR 0.0450

Nep Re QR 0.0345 QR 0.0351

SA Rand QR 0.2638 QR 0.2691

INTERNATIONAL MARKETS - A LIST OF SHARES FROM THE WORLD

A C C-A/D 1646.25 -7.9 9953

Aban Offs-A/D 182.45 0.5 228552

Ador Welding-B/D 518.75 85.8 75166

Aegis Logis-A/D 232.35 -3 92596

Alembic-B/D 38.4 -0.2 42398

Alok Indus-B/D 2.99 0.14 2297733

Apollo Tyre-A/D 243.65 -1.3 188147

Asahi I Glass-/D 393.35 11.85 18976

Ashok Leyland-/D 122.3 -0.75 1518411

Bajaj Hold-A/D 2890.75 96.75 6724

Ballarpur In-B/D 12.31 -0.3 385159

Bata India-A/D 695.3 5.85 17692

Beml Ltd-A/D 1598.35 11.1 53241

Bhansali Eng-B/D 82.6 1.2 260499

Bharat Ele-A/D 163.55 0 235467

Bharatgears-B/D 146.25 3.3 1666

Bhartiya Int-B/D 585.35 -1.4 15842

Bhel-A/D 83.15 -0.85 860559

Bom.Burmah-A/D 1356.95 69.15 222441

Bombay Dyeing-/D 185.65 8.8 1854279

Camph.& All-Xc/D 745 -13.95 4616

Canfin Homes-A/D 2636 -13.65 7053

Caprihans-Xc/D 97.1 -1.55 1119

Castrol India-/D 357.85 -2.05 50510

Century Enka-B/D 310.25 2.65 7873

Century Text-A/D 1227.3 5.55 30569

Chambal Fert-B/D 140.1 -0.2 27557

Chola Invest-A/D 1119.85 28 13375

Cimmco-B/D 85.05 -1.65 6230

Cipla-A/D 579.75 -5.2 122616

City Union Bk-/D 164 1.95 20420

Colgate-A/D 1061 2.6 17609

Container Cor-/D 1328 -18.3 9817

Dai-Xc/D 381.05 -1.95 2400

Dcm Financia-B/D 3.33 -0.17 1948

Dcm Shram Ind-/D 309.75 0.45 6914

Dhampur Sugar-/D 258 -1.4 52549

Dr. Reddy-A/D 2337.15 7.75 77873

E I H-B/D 134.15 0.15 2774

E.I.D Parry-A/D 343.9 1.45 36616

Eicher Motor-A/D 31099.9 -80.05 4648

Electrosteel-B/D 23.9 0.15 23002

Emco-T/D 18.1 -0.65 24609

Escorts-A/D 658.5 -1.2 233485

F D C-B/D 189 3.3 12349

Federal Bank-A/D 112.4 -0.2 232813

Ferro Alloys-X/D 13.52 0.32 343205

Finolex-A/D 630 -3.85 2991

Forbes-B/D 1808.05 -50.75 1703

Gail-A/D 433.6 14.5 2018974

Gammon India-Z/D 6.35 -0.04 224266

Garden P -B/D 33.35 -0.15 7978

Godfrey Phil-A/D 1020 10.95 23244

Goodricke-Xc/D 266 7.75 9879

Goodyear I -B/D 798.75 -19.05 17891

Hcl Infosys-A/D 47.6 0.3 366031

Him.Fut.Comm-B/D 23.15 -1 2759984

Himat Seide-B/D 333.8 4.1 25054

Hind Motors-B/D 7.65 -0.05 42182

Hind Org Chem-/D 18.9 -0.35 20426

Hind Unilever-/D 1191 15.85 44905

Hind.Petrol-A/D 433.25 6.75 393605

Hindalco-A/D 241.6 0.8 248202

Hous Dev Fin-A/D 1762 21.3 67270

I F C I-A/D 23 -0.1 376168

Idbi-A/D 52.2 -0.2 134255

India Cement-A/D 182.4 10.05 554091

India Glycol-B/D 248.45 4.6 55097

Indian Card-B/D 171.9 -3.05 1798

Indian Hotel-A/D 121.85 5.75 126946

Indo-A/D 98.6 -0.35 128834

Indusind-A/D 1690.65 11.6 73481

J.B.Chemical-B/D 275.95 -3.95 3167

Jagson Phar-B/D 31.75 1.15 7161

Jamnaauto-B/D 267.95 6.8 100398

Jbf Indu-B/D 160.1 8.7 8300

Jct Ltd-Xc/D 3.27 0 150801

Jenson&Nich.-T/D 7.87 0.08 5083

Jindal Drill-B/D 158.4 -3.1 4211

Jktyre&Ind-A/D 147.85 1.2 80391

Jmc Projects-B/D 371 -8.4 10709

Kabra Extr-B/D 134.5 2.25 3535

Kajaria Cer-A/D 707.1 -1.2 7588

Kakatiya Cem-B/D 350.25 2.55 4760

Kalpat Power-B/D 366.05 1.1 7226

Kalyani Stel-B/D 391.75 0.45 29447

Kanoria Chem-B/D 83.45 0.25 10844

Kg Denim-Xc/D 60.8 1.25 2980

Kilburnengg-Xd/D 76.5 -0.55 11143

Kinetic Eng-Xc/D 63.4 0.35 23005

Kopran-B/D 69.2 0.95 30869

Lakshmi Elec-X/D 634 -10.55 1338

Lakshmi Mach-A/D 5614.6 -85.7 16332

Lgb Broth-B/D 686.2 -0.3 1598

Lloyd Metal-Xd/D 17.5 -0.2 27115

Lupin-A/D 1020.75 7.5 135121

Lyka Labs-B/D 49.75 1.7 34296

Mah.Seamless-B/D 427.65 9.5 8658

Maha Scooter-B/D 2867 -4.55 5055

Mangalam Cem-B/D 333.35 -6.15 1110

Maral Overs-B/D 35.8 -0.6 7874

Mastek-B/D 285.35 1.4 58554

Max Financial-/D 596 5.8 26115

Mrpl-A/D 127 0.3 117742

Nagreeka Ex-B/D 29.55 -0.8 16638

Nagreeka Ex-B/D 29.55 -0.8 16638

Nahar Spg.-B/D 101.45 0.05 6334

Nation Alum -A/D 79.75 1.45 1087354

Navneet Edu-B/D 160.15 -5.2 3458

Nrb Bearings-B/D 118.7 0.2 2829

O N G C-A/D 170.45 -0.2 341489

Ocl India-B/D 1275 60.15 3480

Oil Country-B/D 44.1 -0.05 1676

Onward Tech-B/D 125 -5.8 79410

Orchid Pharm-T/D 17.9 -0.65 134662

Orient Hotel-B/D 38.3 1.05 28714

Orient.Carb.-B/D 1255.05 36.65 5298

Orient.Carb.-B/D 1255.05 36.65 5298

Patspin India-/D 24.25 -0.2 6496

Punjab Chem.-B/D 369.1 11.85 5280

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LONDON

First Alitalia, then Air Berlin and now Monarch Air-lines: Europe’s struggling carriers are falling like dominoes and the region’s biggest airlines are set to

chalk up bigger profits. The collapse of airlines gives rivals a chance to snap up planes, prized airport slots and much-needed pilots. It takes airplane seats out of the market, allowing airlines still flying to nudge prices higher and lift some of the pressure on yields that has plagued the indus-try for several years.

The shake-out this year is also seen as the start of more far-reaching industry consolidation that is expected to whittle the number of European airlines down to num-bers more on a par with North America - putting the survivors in a position to boost profitability to levels seen across the Atlantic. “The rationalization of financially inef-ficient capacity is good for the industry as a whole,” Liberum analyst Gerald Khoo said.

Expectations that the challenging environment for large, traditional European airlines is starting to ease has helped their shares outperform rivals and other sectors. So far in 2017, shares in Germany’s Lufthansa are up 98 percent, Air France-KLM has surged 163 percent and Brit-ish Airways parent IAG is 38 percent higher.

Those airlines have started to talk about a turnaround in ticket price trends as fewer seats are added to the mar-ket, and the collapse of a third carrier this year is likely to help even more. HSBC analyst Andrew Lobbenberg said the European short-haul market would grow just 3.2 percent this winter after stripping out Monarch, Air Ber-lin, Alitalia and Ryanair’s cancelled flights. Previously, growth had been expected to be 7.3 percent.

“The present circumstances will be trying for Mon-arch staff, management and passengers, let alone former shareholders. Yet its exit will be supportive for industry unit revenues,” Lobbenberg wrote in a note.

Despite efforts by Brussels to liberalize Europe’s air-line industry 25 years ago it has lagged North America in terms of consolidation, where nine major airlines became five in the decade to 2015. While Lufthansa and IAG have driven some consolidation, the top four airlines in Europe only account for 49 percent of the short-haul market whereas the top four in North America control 70 percent.

The different market dynamic is reflected in profita-bility. North American carriers are expected to post a net profit margin of 7.2 percent this year compared with 3.7 percent in Europe, industry body IATA said in June.

European rules restricting non-EU investors to own-ing less than 50 percent of carriers have limited the pool of investors willing to take part in consolidation. Lower oil prices since the collapse in crude in 2014 have also helped shield some financially weaker airlines in Europe.

Still, Ryanair CEO Michael O‘Leary predicts there will only be only four or five airline groups in Europe in five years - Ryanair, Lufthansa, Air France-KLM, IAG, and possibly easyJet. In the short term, Monarch’s collapse benefits airlines flying from the United Kingdom to tour-ist destinations - carriers such as easyJet, Ryanair and Jet2.com, said Liberum’s Khoo. Like Air Berlin, Monarch suffered from increased competition on routes to Spain and Portugal as rivals shifted flights from Turkey, Egypt and Tunisia when security concerns prompted tourists to take holidays closer to home.

Europe’s larger carriers are now moving in on the assets left by their toppled rivals. Lufthansa is bidding for the lion’s share of Air Berlin’s assets, hoping to shore up its position in the German market. EasyJet is bidding for up to 30 Air Berlin planes, including their crews and air-port slots mainly at Berlin’s Tegel airport.

Developing countries have been on a borrowing binge this year with nine months of bumper investment inflows and record bond sales, but a sharp US dol-

lar bounce into year-end could end the party early.

Signs of an upswing in the dollar’s for-tunes made the last week of September poor - equities fell 2 percent, bond yields rose about 10 basis points and currencies weak-ened on average by over 1 percent, their worst week since last November.

While emerging markets are still among the year’s best performing assets, the moves last week cast a chill on the sector. They closely emulated those in late-2016 when Donald Trump’s US election win and stimu-lus plans briefly boosted the dollar, ended a three-quarters emerging market rally.

Last week’s swings were driven by expec-tations of a December US rate hike. But possibly, a bigger threat is the revival, after many months, of the so-called Trumpflation bet - Trump’s plans for stimulus through tax cuts. The measures could be immensely dol-lar-supportive, especially if they induce US firms to repatriate cash held overseas. Esti-mates of such holdings are reckoned to be well over $1 trillion.

That could see the dollar repeating the 12 percent surge it witnessed in 2005, after a 2004 tax holiday lured home about $300bon. That’s a formidable hurdle for emerging markets, which usually suffer when the dollar strengthens.

“The last time they did it (encouraged dollar repatriation), it had a huge impact on the dollar and this time the scale could be much larger,” Abhishek Kumar, lead portfolio manager for emerging markets

at State Street Global Advisors.On top of that, emerging markets look

“frothy in some areas”, Kumar said, citing the fall in corporate dollar bond yields below those on sovereign debt, and successful bond issuance by junk-grade borrowers Tajikistan and Ukraine. Such frontier market, along with Chinese firms, led a borrowing frenzy that saw bond sales of almost $500bn in the first nine months of 2017, a quarter above year-ago levels.

Yield-hungry bond investors submitted orders of over $4bn for Tajikistan’s $500m issue, despite its doubtful economic pros-pects. But while such entities benefited from Treasury yields - the reference rate for glo-bal borrowing costs - bumping along near multi-year lows, Kumar predicts US tax changes to have “material” impact on the US curve.

Higher US yields, crowding out flows to riskier assets, can drive an exodus from emerging markets, especially when long-dated bond yields rise faster than shorter-maturity debt.

A taste of such curve steepening, as these yield moves are known, came last week as the Treasury curve steepened the most since August. That forced up yields on the new Saudi bonds by around 15 basis points. “We think we may see a moderation of inflows into emerging markets in the fourth quarter and going into 2018,” Hung Tran, managing director of the Institute of International Finance (IIF) said, though he did not see flows reversing.

While some argue that with global inter-est rates still low, a moderate rise will not be an issue, emerging markets are facing the prospect of tighter credit with record-high debt. The IIF estimates total developing world debt at $56 trillion, up $3 trillion in the past year. That is 218 percent of their combined economic output, a five percentage point rise over year-ago levels. On a more positive side, governments have moved to borrowing

mostly in domestic currencies, reducing dol-lar exposure. Only 14 percent of public emerging debt now is foreign currency, the Bank for International Settlements says.

Paul Greer, senior emerging debt trader at Fidelity International, says this segment should be relatively insulated; he calculates inflation-adjusted bond yields from the eight biggest emerging economies at some 300 basis points above developed markets, the widest in a decade. Unsurprisingly, local emerging debt has outperformed its dollar counterpart this year, with 14 percent returns.

On dollar bond markets, large amounts of debt fall due in coming years: governments must repay $70-$75bn in 2018 and 2019, ris-ing to $95bn in 2020, ICBC Standard Bank estimates. Emerging markets meanwhile face around $250bn in repayments in each of the coming three years. All was borrowed dur-ing the cheap-money years after 2009, but refinancing it may prove much costlier.

Greg Bowes, co-founder of Albright Cap-ital Management, an emerging markets-focused private equity firm, expects many companies will seek debt restructur-ing. “You’ve had a dramatic increase in the size of the EM corporate credit market in the last six years,” Bowes said. “A lot of that debt

issuance is approaching maturity and we’re at this trough in interest rates, so it will be interesting to see how that unfolds.”

Norihiko Shirouzu & Joseph White Reuters

US carmaker Ford Motor Co is overhauling its China plans as its global “One

Ford” strategy is holding it back in the world’s biggest auto mar-ket, two high-ranking company insiders said.

The review of its China oper-ations, part of a broader strategy re-think under new CEO Jim Hackett, will likely see Ford focus on electric commercial vans, which China is encouraging in its

polluted and congested city cen-tres, as well as electric cars.

A shift to e-vans and e-trucks in China would also fit with Ford’s reckoning that a best play globally for electrification and autono-mous driving might be in commercial and delivery vehicles - a part of the market where it is already strong in the United States and Europe. The “One Ford” strat-egy - which helped the automaker’s turnaround under former CEO Alan Mulally - doesn’t fit all situations, the two insiders said, particularly in China and India, two crucial markets where Ford’s sales have slowed.

“That’s why nobody internally talks about “One Ford” (in those markets) anymore,” said one of the insiders. In a sign that Ford is turning away from what is essen-tially a global push of its Ford and Lincoln brands, the Dearborn, Michigan automaker wants to drive its truck-making China partner Jiangling Motors Corp (JMC) more

towards electric commercial vans.Such a move is “potentially

lucrative” as China’s big cities effec-tively ban gas and diesel trucks and vans, and “none of the foreign auto-makers has made any major investment or strategic move in this emerging electric commercial vehi-cle segment,” said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight.

Sherif Marakby, Ford’s vice president of autonomous vehicles and electrification, told Reuters he couldn’t comment on specific partnerships that haven’t been announced. “But we are abso-lutely open to (EV) partnerships in different markets, and we con-tinue to talk to other companies and Tier One suppliers. Don’t be surprised to see more partner-ships in electric vehicles in different markets,” he said.

Hackett was scheduled to give a presentation to analysts in New York later on Tuesday. In India, Ford and local automaker

Mahindra and Mahindra said last month they will launch a strate-gic alliance in a market shifting to vehicle electrification.

In August, Ford said it was considering a joint venture with Anhui Zotye Automobile Co to build electric vehicles in China under a new brand, tapping Zotye’s low-cost electric-vehicle (EV) technology. One of the insid-ers said Ford was seeking Chinese regulatory approval for this.

It has also brought in Jason Luo, a Chinese-born American, from U.S.-based air bag maker Key Safety Systems to run its China operations. He has been tasked, one of the insiders said, with building closer ties with local partners including JMC and Changan Automobile Co, work-ing more effectively with regulators, and responding faster to changing consumer tastes.

Ford’s China sales are forecast to decline 4.6 percent this year, according to LMC Automotive, a

far cry from double-digit growth just five years ago.

Ford has no affordable elec-tric plug-in cars for the Chinese market, despite it being little secret that Beijing planned new quotas for all-electric battery cars and heavily electrified plug-in hybrid vehicles. Those quotas were announced late last month.

Nor does Ford have a high-volume brand of affordable entry cars for China - such as the Bao-jun cars sold by rival General Motors Co and its China partner SAIC Motor Corp. Launched in 2010, Baojun sold more than 2 million vehicles last year.

With JMC, its nearly one-third-owned venture with JMC Group, Ford was slow to expand the light commercial vehicle maker into low-cost entry passenger cars - a market that has now become sat-urated with Chinese-branded cars and foreign-operated China-only brands like Baojun and Nissan Motor Co’s Venucia.

European airline failures play into hands of richer rivalsVictoria BryanReuters

Dollar U-turn could call time on 2017’s emerging market boom

A man counting US dollar bills at a money exchange office.

Sujata Rao Reuters

Higher US yields, crowding out flows to riskier assets, can drive an exodus from emerging markets, especially when long-dated bond yields rise faster than shorter-maturity debt.

The review of its China operations, part of a broader strategy re-think under new CEO Jim Hackett, will likely see Ford focus on electric commercial vans, which China is encouraging in its polluted and congested city centres, as well as electric cars.

Ford Motor revamps China strategy amid EV push

BUSINESS VIEWS 27WEDNESDAY 4 OCTOBER 2017

28 WEDNESDAY 4 OCTOBER 2017BUSINESS

BACK TO BUSINESS

Kenyan debtors struggle to hold on to assets as repossessions rise

sight

Reuters

A severe drought earlier this year, a bank lend-ing slowdown and

prolonged political uncer-tainty are creating a growing pool of distressed borrowers whose assets are being seized by newly aggressive lenders in the east African power-house as Kenya’s economy slows and repossessions arise.

George Muiruri, manag-ing director of Leakey’s auctioneers, says they are holding 10 auctions a month, up from about four a year ago.

Kenya’s free market cre-dentials, staunch alliances with Western nations and relative stability in a region roiled by conflict has made it the richest economy in East Africa and a favoured regional headquarters for global firms like Google, IBM and General Electric.

But growth slowed to five percent in the second quarter(Q2) of this year, below the official year’s fore-cast of 5.5 percent, as a prolonged election season took its toll. Kenya held pres-idential, parliamentary and local elections on August 8, but a Supreme Court ruling on September 1 annulled President Uhuru Kenyatta’s re-election and ordered a fresh contest, now scheduled for October 26.

Now even that date is in doubt; opposition leader Raila Odinga says he will not participate unless the elec-tion board fires officials that he blames for irregularities in August polls.

Many businesses want elections over before

investing further, mindful of the weeks of post-election violence that followed the disputed 2007 presidential poll, killing around 1,200 people and plunging the economy into a nose-dive.

Those delays are choking John Wambua’s small busi-ness transporting plastic water tanks to retailers. His clients haven’t paid for three months so he has been una-ble to service the loan on his truck.

His story is common: there is a glut of repossessed vehicles, land, homes and office equipment being sold off cheaply across Kenya.

At Leakey’s, which also operates three separate stor-age yards around Nairobi, the number of vehicles stored awaiting sale doubled to 1,500 in the past year, Muiruri said.

Bank credit, formerly easily available, has dried up after the government capped commercial lending rates last year, leaving lenders unable to refinance seized assets.

Non-performing loans in the banking industry rose to 10.7 percent in August, from 9.9 percent in June, the cen-tral bank said, jumping into double digits for the first time since 2007.

Felix Apollo, chairman of the Association of Auction-eers, said banks were moving much faster to seize property from defaulters since the cap was put into place. There was a glut on the market of repos-sessed assets, he said.

But the economy retains stable macroeconomic fun-damentals like slow inflation and a stable foreign exchange rate, leading Apollo to believe seizures will ease next year.

Capital Comment

It was a heart-breaking day as 2000 people lost their jobs and we are all absolutely devastated for the customers and for all of us.

Andrew Swaffield, Chief Executive, Monarch Airlines

IPO Radar

Offshore wind farm in Baltic Sea near Copenhagen, Denmark.

Windy Denmark to fire up solarStine Jacobsen Reuters

Denmark plans to make wind and s o l a r p o w e r projects compete more equally for

subsidies, a change that could boost solar panel installations.

The Scandinavian country has used its natural windy con-ditions to take a world-leading position in wind energy, but ana-lysts say current subsidy schemes favor wind at the expense of solar power, for which far fewer subsidies are available.

Under new rules, agreed between the government and its ally the Danish People’s Party yesterday, the government will allow both wind and solar projects to compete on equal terms in tender auctions for sub-sidies over the next two years.

Like other countries in Europe, Denmark also seeks to curb spiraling costs of renewa-ble energy subsidies. As part of the new measures, it will limit total subsidies for all wind and solar projects that win tenders

in 2018 and 2019 to around 1bn Danish crowns ($158m) combined.

The chairman of the Danish Industry Association for Solar Energy, Flemming Kristensen, said the new rules would increase solar’s competitiveness and lead to more installed capacity.

“We are not afraid of the competition, but we think it should not be either solar or wind, but both solar and wind,” he said.

Wind power accounted for 71.8 percent of renewable energy electricity produced in Denmark last year, while solar power accounted for just 4.2 percent.

Danish-based Vestas (VWS.CO), the world’s largest wind turbine maker, was not satisfied with the new measures.

It criticized the government’s proposals to allocate only 150m crowns to subsidize test turbines over the next three years and the 1bn crowns in total subsidies for commercial projects.

The government said the lat-ter would allow the construction of 190 megawatts of renewable energy.

“We are disappointed with the low level of ambition in the agreement reached in terms of market volume and test tur-bines,” said a Vestas spokesman.

Denmark hopes to end green subsidies altogether before 2030, tracking a trend across Europe.

In Britain, where solar power capacity has soared in the last five years, the first solar power farm without a government sub-sidy began operations yesterday.

In Germany, the cost of pro-ducing solar power has fallen six-fold in the last 10 years, and the energy regulator has accepted bids to build and run wind turbines at zero subsidy costs from the middle of the next decade.

Denmark’s new rules may also increase the number of hybrid projects that utilize solar as well as wind resources to cre-ate a more steady flow of energy during changing weather con-ditions, Kristensen said.

Wind turbines generated 37.6 percent of total Danish elec-tricity consumption last year,

although that was down from a record 42 percent in 2015.

Solar power only accounted for a fraction of that.

For every project under the new system, state support per kilowatt-hour produced will be fixed for a 20-year period, and so will not fluctuate in line with energy prices.

That drew criticism from the Social Democrat-led opposition, which has called for a system in which the subsidy goes up when electricity prices fall.

That way electricity produc-ers receive the same amount for each produced kilowatt hour regardless of the current price - putting the risk on the government instead of the investors.

Opposition lawmakers say investors will take a hefty charge for taking on the risk of fluctu-ating energy prices, and Denmark will therefore get less green energy for its money than it otherwise would have.

The government said the experiences of the next two years would be used to set up a long-term subsidy scheme for the next decade.

Juice maker ‘Refresco’ receives sweetened bidThe Hague AFP

Refresco, Europe’s largest juice and soft-drink maker, said yesterday

that it has received an improved takeover bid from Paris-based investor PAI Partners worth ¤1.6bn ($1.9bn).

The Dutch independent bottler, which works with brands as Innocent and Del Monte, fended off an initial offer from the private equity firm in April worth ¤1.4bn.

The Rotterdam-based Refresco said its board will now “carefully review the proposal, taking into account all Refres-co’s stakeholders”.

Refresco’s share price jumped by more than 8.6 per-cent to ¤18.83 in afternoon trading on the Amsterdam stock exchange’s AMX index, where it has been listed since 2015.

Jos Versteeg (pictured), an analyst at the Amsterdam-based Theodoor Gilissen private

bank told AFP he did not expect the unsolicited bid to evolve into a hostile takeover attempt.

But he did predict that Refresco’s management might hold on for an even better price than the ¤19.75 per share PAI is currently offering.

“I think they (Refresco’s management) will play hard to get. It’s a good deal, but of course they may ask for a little bit higher. That is absolutely possible,” said Versteeg.

PAI’s new proposal comes after Refresco agreed in July to buy the soda business of Can-ada-based Cott Corp in a deal worth $1.25bn.