Thursday, January 4, 2018Rabia II 17, 1439 AH

BUSINESSGULF TIMES

Pakistan allows use of yuan

US factory activity increases

TRADE LIFT | Page 5 NEW DATA| Page 12

STILL UNRESOLVED : Page 2

Alwaleed balking at demands to let go of Kingdom Holding

Qatargas-RasGas merger creates a global gas giantMerger to save country QR2bn in annual operating costs

By Pratap JohnChief Business Reporter

The merger of Qatargas and RasGas will save the country QR2bn in operating costs annually, Qatar Petroleum presi-

dent and CEO, Saad Sherida al-Kaabi said yesterday.

The new entity, which is called Qatargas, started operations on January 1.

This follows the successful completion of its integration with RasGas, which was an-nounced in December 2016.

Before the merger, Qatargas and RasGas were already the world’s two biggest LNG producers.

The combined company will handle all of Qatar’s 77mn tonnes of LNG export capacity annually sold through a mix of joint venture agreements with oil majors including Exxon-Mobil and Shell.

Current Qatargas CEO Sheikh Khalid bin Khalifa al-Thani has been appointed as the CEO of the new Qatargas.

“This integration is an integral part of Qa-tar Petroleum’s vision to become one of the best national oil and gas companies in the

world, with roots in Qatar and a strong inter-national presence, al-Kaabi said.

“Our aim was to integrate the two com-panies’ resources and capabilities to create a truly unique global energy operator in terms of size, service and reliability. We also aimed to create higher value for our stakeholders,

and enhance the competitive position of the Qatari gas industry.

“As of the fi rst of January 2018, all the ventures that were operated by Qatargas and RasGas are now operated by the new ‘Qatar-gas’, which is the result of the integration of two great energy centres of excellence.”

“Today, I am pleased to announce that we have accomplished our objective with great success, and on time. Qatargas will be the single entity exporting Qatari LNG to the world, under a one shared vision, one man-agement system, and one work culture.”

Asked whether the foreign shareholders of pre-merger Qatargas and RasGas would be on board the new entity, al-Kaabi told Gulf Times that “everybody is in the new com-pany.”

Al-Kaabi extended “sincere thanks and appreciation to all the buyers of Qatari gas around the world for their trust and confi -dence in Qatar Petroleum and in the State of Qatar, assuring them that Qatar will do its ut-most to ensure the continued safe and reliable LNG delivery to their friendly countries.”

He also took the opportunity to thank all management teams from Qatar Petroleum, its international partners, Qatargas, and Ras-Gas, for their contributions in creation of the new Qatargas.

QP said, “The integration process will con-tinue to focus on providing enhanced serv-ice, reliability, effi ciency and eff ectiveness, as well as strengthening operations groups, which remained unimpacted by the integra-tion, as the highest priority was given to en-suring safe, seamless and risk-free business continuity.”

Qatar Re acquiring Gibraltar-based Markerstudy Group insurance fi rms

Qatar Re, the reinsurance subsid-iary of Qatar Insurance Com-pany (QIC) Group, is acquiring

Gibraltar-based Markerstudy Group insurance companies.

The companies proposed to be ac-quired are Markerstudy Insurance Company, Zenith Insurance, St Julians Insurance Company and Ultimate In-surance Company.

The transaction is subject to regu-latory approvals and is expected to be completed in the fi rst half of 2018. However, the fi nancial size of the pro-posed deal has not been disclosed.

Qatar Re has signed a sales purchase agreement to buy Markerstudy’s Gi-braltar-based insurance fi rms.

Markerstudy underwrites more than 5% of the UK motor insurance market, generating premiums of about £750mn.

The QIC Group has an existing sub-stantial relationship with Markerstudy through Qatar Re and QIC Europe (QEL).

“This deal allows QIC Group to grow its lower volatility business while lev-eraging our existing success in QEL,” according to Khalifa al-Subaey, QIC Group president and chief executive.

He said it is natural next step in the strategy it has pursued over recent years in relation to the group inter-national businesses, which diversifi es QIC’s overall portfolio.

“This transaction builds on the

strong foundation of our existing re-lationship. It provides Qatar Re with a greater share of lower volatility busi-ness that has performed consistently well for us, balancing our specialty and catastrophe book,” Gunther Saacke, Qatar Re’s chief executive said.

In addition, the transaction would enable Qatar Re to write UK business under any post-Brexit scenario, he said, adding through this acquisition, it reaf-fi rms its commitment to supporting in-novative entrepreneurship in insurance marketing, distribution and servicing.

Qatar Re, licensed as a Class 4 Insurer by the Bermuda Monetary Authority, is a global multi-line reinsurer writing all major property, casualty and specialty lines of business.

“This strategic alliance has three-fold benefi ts; it enables us to simplify our product off ering and processes for our intermediaries and broker partners; it provides us with A rated capital back-ing, and ensures we maintain the conti-nuity of marketing, distribution, serv-ice and support,” said Kevin Spencer, chief executive of Markerstudy Group.

Stressing that for a long time, Mark-erstudy has had a tremendous rela-tionship with Qatar Re; he said their proactive approach has assisted its development and “this is a natural evolution; to combine our strengths to establish a primary player in the UK in-surance sector.”

‘Qatar has strong economic foundation to build on Islamic finance industry’Qatar has strong economic founda-

tion that helps support and enhances

the investment trends in the Islamic

finance industry, according to a top

off icial of the Qatar Financial Center

Authority (QFCA).

This was disclosed by the QFCA chief

executive Yousuf Mohamed al-Jaida,

while announcing the details of the

fourth Doha Islamic Finance Forum,

which will get underway next week.

Qatar is one of the first countries in the

region to adopt Islamic banking and

create the regulatory environment

for Islamic focused inward foreign

direct investment through various

regulatory bodies, including the QFC

Regulatory Authority, he said.

The conference, organised by Bait

Al Mashura Finance Consultations

in association with the QFC, College

of Business and Economics at Qatar

University, College of Islamic Studies

at Hamad bin Khalifa University and

Barwa Bank, will see the QFC launch

its first economic report on Islamic

banking in Qatar in partnership with

Thomson Reuters.

The conference on January 9 at

Sheraton is expected to be attended

by a number of local and international

financial off icials and bankers, elite of

scholars, academicians, and experts

from the financial sector in the Arab

countries and worldwide.

The event aims to enhance Islamic

finance tools for benefiting from

the digital world, devise the sci-

entific and practical solutions for

contemporary challenges, contribute

towards bringing Shariah and law

closer for drafting and structur-

ing the Islamic finance contracts

and enhancing the arbitration for

Islamic finance issues, said Dr Khalid

al-Sulaiti, vice chairman of Bait Al

Mashura Finance Consultations.

Dr Osama al-Dereai, managing direc-

tor and chief executive of Bait Al

Mashura Finance, emphasised that the

growing development of the Islamic

finance industry reflects the eff iciency

and eff ectiveness of the Islamic fi-

nance instruments to contain financial

shocks and adapt to developments,

despite the economic changes and

challenges in the arena.

“This is due to the nature of these

instruments, as they are based on

Islamic Shariah principles that protect

them from risk, and on fair distribution

of potential risks between contracting

parties, in addition to the flexibility of

these instruments to accommodate

all developments according to Islamic

Shariah principles,” he added.

Qatar among top five countries for deal activity in 2016-17: KPMGQatar was within the top five

countries for deal activ-

ity in the energy and natural

resources (ENR) sector during

the 2016-17 financial year,

a KPMG report focused on

mergers and acquisitions

(M&A) activity showed

yesterday.

The ‘M&A Predictor’ analyses

historical deal information and

provides an outlook on what can be expected in the

coming year.

The report highlights that, with ENR-related deals worth

over $11.6bn, Qatar ranks fifth in the world, with the US,

China, Canada and Russia taking the top four spots on

the list.

On the findings, Hady Kotry (pictured), deals advisory

expert at KPMG in Qatar said, “Mergers and acquisitions

are fundamental growth factors for any economy, and

for Qatar to be in the top list of global energy mergers

is a notable landmark, with the QIA’s investment in

National Grid in UK being an obvious turning point.”

“It is still too early to comment on future global energy

trends given the volatility that impacts this industry,

including the trade-off between investors’ appetite

towards renewable, safe energy versus higher return on

investments, which will be key factors in driving future

trends,” Kotry said.

Overall, the report highlighted that globally, M&A

appetite (which is measured by market confidence or

price-to-earnings ratio), was predicted to only margin-

ally increase during FY17, largely due to flat market

capitalisation and modest net profit growth.

Qatar’s M&A appetite is forecast to grow by 11.5% by the

end of FY2017-18.

On this, Kotry noted, “A prediction of 11.5% appetite for

deals in Qatar shows a positive future outlook. However,

caution is required to ensure eff icient and eff ective post-

merger integration/post acquisition strategies to ensure

value is realised.”

In the coming year, Qatar is expecting to see mergers in

a number of sectors including banking, technology and

telecommunications, construction and food and bever-

ages, in line with global trends, the report said.

Kotry said, “An increase in M&A activity is likely to have

a positive impact on the country’s economy, enabling

businesses to consolidate assets, increase value and

avoid duplicate costs through synergies, ultimately

improving profitability. Reduced costs can also lead to

businesses off ering lower prices to customers, giving

them critical competitive advantage, positively impact-

ing inflation and leading to a better quality of life.”

The introduction of new International Financial Report-

ing Standards (IFRS) in Qatar and around the world

could also aff ect M&A activity FY2017-18.

Al-Jaida and other off icials outlining the agenda for the fourth Doha Islamic Finance Forum in Doha.

Al-Subaey: Leveraging existing success in Europe.

Al-Kaabi addressing a press conference at the QP headquarters yesterday. Right: Qatargas CEO

Sheikh Khalid. PICTURES: Shaji Kayamkulam

Senior off icials attending the press conference.

BUSINESS

Gulf Times Thursday, January 4, 20182

‘Iran oil output not impacted by protests’ReutersDubai

Iran’s crude oil production and exports have not been impacted by the unrest spreading across the country, Iranian oil and shipping sources said on

Tuesday, as a crackdown intensifi ed against anti-government demonstrations that began last week.

Iran, Opec’s third-biggest oil producer, pumps around 3.8mn bpd.

“I see no impact on the production and export,” one Iranian oil industry source said, speaking on con-dition of anonymity. “Everything is going normally,” another source said, adding that the protests had not spread into the energy sector and “remained in the streets”.

Many Iranians have been killed during the anti-government protests.

Police arrested more than 450 protesters in the capital Tehran as of Tuesday, the deputy provincial governor said.

Protesters also attacked police stations elsewhere in Iran late into the night on Monday, news agency and social media reports said.

Alwaleed balks at demands to let go of Kingdom HoldingBloombergRiyadh

Among the most prominent cases still unresolved in Saudi Arabia’s declared crackdown on corruption

is that of billionaire investor Prince Al-waleed bin Talal. People with knowledge of the matter say Alwaleed is balking at demands that could see him relinquish control of Kingdom Holding Co, and is re-sisting any suggestion of wrongdoing.

But a prominent Saudi offi cial detained has returned to work, joining the architect of the purge at a weekly meeting of the cabinet.

Ibrahim al-Assaf, a minister of state and former fi nance minister, appeared unsmiling in a photograph of the gather-ing released by the Saudi Press Agency on Tuesday. The meeting was also attended by Crown Prince Mohammed bin Salman, who led the anti-graft sweep in early No-vember that ended with dozens of promi-nent princes, offi cials and businessmen detained at the luxurious Riyadh Ritz-Carlton.

Al-Assaf was among a group reportedly released late last month, and his resump-tion of offi cial duties is the latest sign the kingdom may be preparing to end one of its stranger episodes in recent years. Au-thorities have said they hope to collect as much as $100bn from fi nancial set-tlements with detainees, in exchange for their freedom. The government is now trying to wrap up the probe, and the at-torney general said last month that settle-ment talks are “expected to be concluded within a few weeks.”

Prince Miteb bin Abdullah, a former head of the national guard who is said to have paid $1bn for his release, was recently photographed attending a horse race with Prince Mohammed. His arrest fuelled speculation that the crackdown was more about tightening the crown prince’s grip on power ahead of a crucial few months for his blueprint to reinvent Saudi Arabia.

The Ritz-Carlton, previously avail-able for reservations on February 1, is now fully booked through February 14 - when rooms should be available from 2,489 riy-als ($664) a night.

QSE stays above 8,600 level despite minor correctionBy Santhosh V PerumalBusiness Reporter

The Qatar Stock Exchange yesterday remained above the 8,600 level although it witnessed a minor correction owing to selling pressure, especially in insurance, real estate, industrials and consumer goods.The weakened buying support from foreign institutions and individual investors was largely instrumental in the 0.14% dip in the 20-stock Qatar Index to 8,608.31 points.Small- and large-cap equities, however, witnessed strong buying interests in the bourse, which saw Gulf individuals

and funds turn bullish. Islamic equities were seen declining faster than the main market, whose capitalisation was up mere 0.04% to QR477.25bn.Trade turnover and volumes were on the decline in the bourse, where the real estate, banking and industrials sectors together accounted for more than 82% of the total volume.The Total Return Index fell 0.14% to 14,435.62 points, the Al Rayan Islamic Index by 0.56% to 3,467.83 points and the All Share Index by 0.25% to 2,472.39 points.The insurance index shrank 1.4%, followed by realty (1.26%), industrials (0.47%), consumer goods (0.35%) and telecom (0.06%); whereas banks and

financial services gained 0.35% and transport 0.09%.Major gainers included QNB, Qatar Islamic Bank, Doha Bank, Islamic Holding Group, Salam International Investment, Qatar Electricity and Water, Mesaieed Petrochemical Holding, Mazaya Qatar, Gulf Warehousing and Nakilat.Nevertheless, Industries Qatar, Aamal Company, Qatari Investors Group, Commercial Bank, Qatar First Bank, Al Khaliji, Ezdan, Barwa, Milaha, Medicare Group and Widam Food were among the losers.Non-Qatari institutions’ net buying weakened considerably to QR9.05mn compared to QR25.26mn on January 2.

Non-Qatari retail investors’ net buying declined perceptibly to QR5.15mn against QR9.54mn the previous day.However, Gulf individual investors turned net buyers to the tune of QR0.66mn compared with net sellers of QR0.26mn on Tuesday.Gulf institutions were also net buyers to the extent of QR0.18mn against net sellers of QR4.16mn on January 2.Domestic institutions’ net selling declined influentially to QR14.53mn compared to QR20.73mn the previous day.Local individuals’ net profit-booking shrank substantially to QR0.46mn against QR9.68mn on Tuesday.Total trade volume fell 10% to 8.61mn

shares, value by 16% to QR198.8mn and deals by 14% to 3,739.There was an 82% plunge in the insurance sector’s trade volume to 0.06mn equities, 60% in value to QR2.29mn and 26% in transactions to 53.The banks and financial services sector’s trade volume plummeted 50% to 1.66mn stocks, value by 38% to QR60.28mn and deals by 31% to 977.The industrials sector reported a 36% shrinkage in trade volume to 1.48mn shares but on a 3% rise in value to QR36.2mn despite 9% lower transactions to 779.The transport sector’s trade volume tanked 21% to 0.5mn equities, value by

30% to QR10.49mn and deals by 23% to 294.The market witnessed an 8% decline in the telecom sector’s trade volume to 0.48mn stocks, 49% in value to QR7.66mn and 55% in transactions to 228.The consumer goods sector’s trade volume shrank 8% to 0.48mn shares and value by 13% to QR29.59mn, while deals were up 5% to 510.However, the real estate sector’s trade volume more than doubled to 3.94mn equities, value soared 53% to QR52.3mn and transactions by 46% to 898.In the debt market, there was no trading of treasury bills and sovereign bonds.

New in West Bank: A credit boom waiting for a real economyBloombergTel Aviv

The Palestinian economy is crippled

by restrictions on trade, investments

and access to natural resources, but

driving around Ramallah you might

get the impression it’s booming. Un-

derground parking lots are brimming

with Audis and BMWs, residential

buildings are popping up at a frenetic

pace, and cafes and restaurants are

buzzing with customers.

Helping drive the appearance of

wealth in the West Bank city, just 6

miles from Jerusalem, is the emer-

gence of a consumer loan market

that was all but non-existent just a

decade ago. Its growth can be can be

attributed to a 2008 law that forced

banks operating in the Palestinian

territories – which preferred to lend

their money abroad – to extend at

least 40% of their credit to locals. In

the past four years, the debt market

has more than doubled to $6.4bn,

of which $2.6bn has gone to local

residents, according to the Palestine

Monetary Authority.

“This is a relatively new phenom-

enon,” said Samir Abdullah, a former

Palestinian Authority planning and

labour minister who now does

research at the Palestine Economic

Policy Research Institute. “It’s opened

a new world of possibilities for some

Palestinians, and of course the banks

are quite happy too, because they

charge relatively high margins on the

loans.”

The credit growth has allowed mem-

bers of the Palestinian middle class

– those who already have a steady job

– to boost their quality of life.

But the overall picture for the West

Bank’s economy is still one of stagna-

tion. Israeli restrictions on trade and

investments and a shallow production

base mean that large parts of the lo-

cal society are falling behind.

Unemployment in the West Bank and

Gaza is at about 30% (versus a low of

4.3% in Israel) and economic growth

in the West Bank is expected to be

about 2% in coming years, which

won’t be enough to keep up with

population growth, according to the

World Bank. Palestinians import more

than three times what they manage to

export – a trade structure the World

Bank says resembles failed states

such as Somalia.

The danger is the expansion of credit

could lead to an asset bubble and

widen inequalities between those

with a steady job – typically people

working for NGOs or the Palestinian

Authority – and those who don’t have

a reliable income.

“In many ways it’s just leading to

higher prices, which makes life unaf-

fordable for many,” said Chris Harker,

a lecturer at the Institute for Global

Prosperity at the University College

London who has researched Palestin-

ian debt. “Because there’s nowhere

to build, the price of housing has

skyrocketed in Ramallah.”

“All this debt is a coping mechanism,”

he says. “A way to deal with the disil-

lusionment of the failed Oslo peace

process.”

But those in charge of the economy

aren’t concerned. The debt buildup

is still low by global standards and

the banks are careful in their lending,

according to Palestine Monetary

Authority governor Azzam Shawwa,

a former banker. He says defaults are

relatively low and that the economy

is on solid footing, though he’s con-

cerned that recent turmoil following

US President Donald Trump’s decision

to recognise Jerusalem as Israel’s

capital could derail growth.

“There’s no credit bubble here and

there won’t be one, because banks

are very conservative,” said Shawwa,

from his glimmering new central bank

building in Ramallah. “We have a very

sophisticated credit scoring system

here. Banks aren’t lending wildly.”

With Trump’s envoys shuttling back

and forth in pursuit of the elusive

peace deal, Shawwa stressed there is

much to do to strengthen the econ-

omy, including granting Palestinians

more control of lands and resources

in the West Bank.

“The Palestinian economy is being

managed conservatively, we are

doing everything we can to boost

growth,” he said. “But eliminating

restrictions and allowing us to invest

in infrastructure would really help the

economy to take off .”

Prince Alwaleed bin Talal attends a news conference in Riyadh (file). Among the most prominent cases still unresolved in Saudi Arabia’s declared crackdown on corruption is that of the billionaire investor prince.

Iran, Opec’s third-biggest oil producer, pumps around 3.8mn bpd

Turkey infl ation edges down in DecemberAFPAnkara

Infl ation in Turkey eased slightly in December after reaching the highest rate in

14 years the month earlier, but remained high at almost 12%, in a continued headache for poli-cymakers, according to statistics released yesterday.

Consumer prices rose by 11.92% year-on-year in Decem-ber, the Turkish statistical in-stitute said, down slightly from 12.98% in November, which was the highest annual rate recorded since 2003.

On a month-on-month basis, infl ation stood at 0.69% in De-cember from November, with the biggest price hikes seen in trans-portation, while clothing prices declined.

The Turkish central bank’s of-fi cial infl ation target is an annual rate of 5% despite the double-digit data over the last months.

Nevertheless, the bank has been unwilling to make any sub-stantial rate hikes to combat in-fl ation, as President Recep Tayy-ip Erdogan is wary that raising borrowing costs could put the brakes on growth.

Economists at QNB Finansbank in Istanbul said the December reading of 11.92% was the highest year-end fi gure since 2003.

They forecast that double-digit core infl ation would persist throughout the fi rst half of 2018 and could take longer to fall if the lira stayed weak.

“We think infl ation will con-tinue to ease over the coming months,” added William Jack-son, economist at Capital Eco-nomics in London, arguing the latest reading would take some pressure off the central bank for further tightening.

BUSINESS3Gulf Times

Thursday, January 4, 2018

AFPBeijing

Ant Financial, an affi liate of Chi-nese Internet titan Alibaba, has been forced to abandon a $1.2bn

deal to buy US remittances fi rm Money-Gram after failing to get approval from regulators in Washington.

The decision by the Committee on Foreign Investment (CFIUS) will deal a blow to Alibaba boss Jack Ma’s push into the world’s biggest fi nancial market and follows a number of moves to prevent Chinese purchases of US fi rms.

The companies jointly announced the termination of the proposed takeover on Tuesday, with MoneyGram chief execu-tive Alex Holmes saying: “The geopo-litical environment has changed con-siderably since we fi rst announced the proposed transaction with Ant Financial nearly a year ago.

“Despite our best eff orts to work co-operatively with the US government, it has now become clear that CFIUS will not approve this merger.”

The deal, announced a year ago, had been submitted to the CFIUS several times, but failed to allay concerns about the security of US customers’ data.

“We hope the US can create a level playing fi eld and predictable environ-ment for Chinese enterprises to in-vest and start up businesses in the US,” Chinese foreign ministry spokesman Geng Shuang said during a regular news briefi ng in response to a question about the deal. Controlled by Ma, Ant Finan-cial – which provides mobile payment, lending and credit services to a mostly Chinese clientele – has looked to expand abroad along with Alibaba, China’s larg-est e-commerce platform.

Nasdaq-listed MoneyGram’s shares sank in after-hours trading.

The two companies will still look to cooperate in other ways despite the setback, Doug Feagin, president of Ant Financial International, said in a state-

ment. “While Ant Financial won’t have a direct ownership relationship with MoneyGram, we look forward to work-ing closely with the MoneyGram team to make our platform even more accessible – particularly to unbanked and unders-erved communities globally.”

The news comes almost a year after Ma met then-President-elect Donald

Trump, promising to bring a million jobs to the US.

The personal relationship did not sway the Trump Administration, though, which has launched a number of anti-dumping trade cases against China and is in the process of investigating it over intellectual property issues.

The administration labelled China

a “revisionist” power last month. The CFIUS, which reviews all foreign take-overs of US fi rms with potential na-tional security concerns, has squashed a number of Chinese purchases of US businesses in recent years, as concern grows in Washington about selling criti-cal technology to China.

In September, Trump blocked the sale

of Oregon-based Lattice Semiconductor to private equity fi rm Canyon Bridge, its Chinese partner Yitai Capital and Yitai’s parent the China Venture Capital fund Corp over national security concerns. The CFIUS has also thwarted takeovers of US chip makers Micron Technology and Sandisk by state-owned Tsinghua Unigroup.

China fi rm Ant Financial drops MoneyGram deal

Ant Financial, an aff iliate of Chinese Internet titan Alibaba, has been forced to abandon a $1.2bn deal to buy US remittances firm MoneyGram after failing to get approval from regulators in Washington.

No fanfare for Indonesia as economy touches$1tn mark

BloombergJakarta

Indonesia’s economy, the largest in Southeast Asia, hit a milestone last year by

reaching $1tn, yet the mood wasn’t celebratory as the gov-ernment continued to miss its revenue targets.

Gross domestic product was an estimated $1.004tn in 2017, but economic growth was prob-ably lower than the 5.2% initially projected, according to fi gures released by Finance Minister Sri Mulyani Indrawati on Tuesday.

Despite having the fourth-biggest population in the world – at more than 260mn – the government collects little tax from its citizens. Government revenue was 14% of GDP in 2016, lower than its peers, and a key obstacle to faster growth and credit-rating upgrades. Revenue was 80tn rupiah ($5.9bn) short of its target last year.

Indrawati, who pledged tax reforms after taking offi ce in 2016, said the government has to strike a balance in chasing its revenue goals, and doesn’t want to increase pressure on com-panies that are already taking strain because of volatile com-modity prices.

“If we look back to 2014, 2015 and 2016, the tax targets were too high and created doubts about the credibility of the state budget. The public also felt that we were breathing down their neck,” she said. “In the future, we will improve our tax collec-tion process and coordination between agencies.”

Despite the lower tax take, the government also underspent on its budget, resulting in an esti-mated fi scal defi cit of 2.6% of GDP compared with a previous forecast of 2.9%. The govern-ment is mandated to keep the shortfall under 3% of GDP.

‘Pakistan economy suffered more than US payments’InternewsIslamabad

The US-led war against terror has inflicted

three times more damages on Pakistan’s

economy than $33.4bn total economic as-

sistance that Islamabad has received in the

past 16 years. Interestingly, these $33.4bn

include payments made for supporting the

US mission in Afghanistan.

The total economic losses that Pakistan

sustained directly or indirectly since the US

invasion of Kabul in October 2001 stand at

$123.13bn, according to Economic Survey of

Pakistan 2016-17. The losses are $89.73bn

higher than the amount the US ‘generously’

gave to Pakistan.

The $33.4bn reimbursements to Pakistan

include $14.573bn payments under the

Coalition Support Fund (CSF), which is

technically not aid but service payments for

providing logistical and operational support

to the US-led military operations in Afghani-

stan. The US disbursed the $14.573bn after

vetting bills against every cent and rejected

billions of dollars in claims that it found not

genuine, said some former off icials of the

Ministry of Finance.

The $14.573bn is 44% of $33.4bn aid to

Pakistan. By excluding the $14.573bn cost of

logistics and aerial support, the approved

civilian and security-related aid to Pakistan

from 2002 to 2016 will stand at only

$18.8bn, said the statistics compiled by US

authorities. Hypothetically speaking, the US

should pay $104.3bn more to Pakistan just

to make good these losses.

On Monday, the US President Donald

Trump accused Pakistan of giving Washing-

ton ‘nothing but lies and deceit’. Trump said

the US had ‘foolishly’ given Pakistan more

than $33bn in aid over the last 15 years. This

has triggered a debate in Pakistan about the

Pak-US relations.

Compared to the actual foreign aid of

$18.8bn to Pakistan, the finance ministry’s

statistics showed that Islamabad sustained

$123.13bn losses since 9/11. The per annum

losses due to this war range from $2.67bn

to $23.8bn. Pakistan reported maximum

annual losses from 2010 to 2013.

Washington’s economic leverage over

Islamabad has significantly reduced since

2014, as it came down to $1.6bn per annum

against the average of $2.3bn per annum

between 2002 and 2013.

The flow of funds from the US to Pakistan

saw another drastic reduction in 2017.

The US economic assistance historically

remained around 1% of Pakistan’s budget,

which can easily be met from other sources.

Pakistan can replace the US assistance

by focusing on enhancing remittances that

currently stand at over $19bn annually. The

Pakistani immigrants still send a significant

portion of remittances through informal

channels and the federal government can

tap this by giving more incentives.

Since 2002, the US has given $7.96bn

in security assistance to Pakistan with

an annual average of $530.4mn, which is

23.83% of total US budgetary appropriations

for Pakistan. A major chunk of it – $3.8bn –

has been given under the Foreign Military

Financing Programme. Another sum of

$2.35bn has been given under the Pakistan

Counterinsurgency Fund and Counterinsur-

gency Capability Fund. The third major por-

tion was $911mn, which the US gave under

the International Narcotics Control and Law

Enforcement programme.

Against the 12-year average of $576.7mn,

the US gave $1.03bn from 2014 to 2016

with an average of only $345mn under the

security-related assistance to Pakistan. Most

of this sum came under the foreign military

financing programme.

The US has given $10.85bn in economic

assistance to Pakistan during the past

15 years at an average of $723.5mn per

annum. The 12-year average was $788mn

per annum. The economic assistance was

about one-third of the total US budgetary

appropriations for Pakistan.

Out of $10.85bn, the US gave $8.5bn

under the Economic Support Fund, followed

by $918mn under the International Disaster

Assistance Programme and another

$623mn in food aid to Pakistan.

Pakistan is largest recipient of China soft loansInternewsIslamabad

Pakistan has become the largest recipi-ent of Chinese concessional loans in the world with over $4bn soft loan already

approved for ongoing infrastructure projects and an additional $8bn being considered for upgrading railway line under the China Paki-stan Economic Corridor (CPEC), sources in foreign office claim.

“Despite this massive cooperation with Pakistan, negative and inaccurate reporting against China is creating grave concerns in Bei-jing,” a source privy to Chinese discussions said yesterday.

He added that Chinese are complaining about false reporting in some Pakistani media outlets about CPEC amidst external propagan-da by the enemies of the two countries.

Giving example of fake news, he quoted ex-amples of reports that China has halted financ-ing for CPEC project and reports about massive Pakistan borrowing for the corridor.

China is already providing Pakistan with $4bn soft loan for two ongoing projects namely Karakoram Highway (KKH) and Multan-Su-kkur Motorway.

Sources said another crucial infrastructure project namely Karachi-Peshawar Main Line (ML-1) will be started soon with $8.2bn Chi-nese concessional loan.

Under the project the entire railway track will be upgraded to enable train to run between Karachi and Peshawar at 160km/hour speed instead of existing 70km/hour.

They said soft loans offered to Pakistan for various infrastructure projects including un-der the CPEC are payable only in 20 years at

just 2.5% to 2.6% interests rate. In addition, Gwadar Airport and master city are being con-structed with a grant from Beijing.

Sources said it was incorrect that Pakistan was taking massive loans for CPEC. “Most of the energy projects are funded by Independ-ent Power Producers (IPPs) which are obtain-ing loans from Chinese banks to later sell power to Pakistan under power purchase agreement. The infrastructure projects are being financed by China with soft loans,” they added.

They also claimed that it was totally ficti-tious that China had halted financing for any project. For some CPEC projects financial ar-rangements have not been agreed upon yet, they said but there is no halting as claimed in media reports.

Talking about reports in Pakistani media, sources said CPEC is not lifeline for China as claimed by some people.

They said CPEC is not the only option avail-able to China as there are five other corridors being built under Belt and Road Initiative (BRI) of China. “Last year alone about 3,000 cargo trains shuttled between China and Europe, a fact which speaks volumes about Chinese eco-nomic outreach”.

On the other hand, according to the Foreign Office, CPEC is a great opportunity for Paki-stan under which apart from power and infra-structure projects, nine industrial zones would be constructed across all regions of Pakistan which will greatly boost country’s economy and create employment opportunities.

To a question about concerns over cost of Chinese produced electricity, sources said at the time China agreed to work on power projects no one was ready to invest in Pakistani power sector and country was facing severe loadshedding of up to 18 hours a day.

Sources said there is absolutely no truth in claims that China wants to colonise Pakistan through CPEC. “We have 60-year history of exemplary bilateral cooperation and never once China has dictated terms on Pakistan”.

In 2013, at a time when no country was in-terested in investing in Pakistan, China stepped forward and extended full support to Islama-bad. To another question, sources said Chinese are not concerned about change of government after the elections as they know that it is a state-to-state cooperation and there is a po-litical consensus in Pakistan about the future of CPEC.

“The chief ministers of all the four provinces have attended the Joint Cooperation Commit-tee (JCC) meeting and working groups also rep-resent all four provincial governments” they added.

Under CPEC, work is underway on 16 develop-ment projects in Sindh, 10 in Balochistan, 10 in Punjab and 9 in KP which shows that each prov-ince is getting its share in the development pie.

Currently there are about 25,000 to 26,000 Chinese nationals in Pakistan, according to Chinese Embassy. However, Foreign Of-fice sources denied the impression that CPEC projects are being constructed exclusively with Chinese workforce.

“For example, at Sahiwal Power Plant, only 30% workforce is Chinese. It is true that Chi-nese bring their own managers for projects but for other staff positions mainly local labour force is employed,” said a source.

He added that China offered special conces-sions to Pakistani banks and financial institu-tions to setup their branches inside the country. Taking advantage of these relaxes conditions, Habib Bank Limited (HBL) has opened up its branch in Urumqi, China.

Indrawati: The government has to strike a balance in chasing its revenue goals.

BUSINESS

Gulf Times Thursday, January 4, 20184

PBoC seen raising money market rates 3 times in ’18 BloombergBeijing

China’s central bank will make modest increases in money-market rates in 2018 as it aims

to keep up the pressure on deleveraging and prevent too much divergence with US policy, according to a Bloomberg survey.

The People’s Bank of China is seen raising interest rates on reverse-repur-chase agreements by fi ve basis points three times this year, starting in the fi rst quarter, the survey shows. That would raise the rate – now at 2.5% – more slowly than last year, when policy makers lifted it by fi ve basis points in December after two 10 basis-point hikes in the fi rst quarter.

Economists don’t forecast any change to the benchmark rate, which sets borrowing costs economy-wide, through early 2020, according to a separate survey by Bloomberg. The central bank has kept the one-year lending rate unchanged since Octo-ber 2015.

Such a trajectory would help keep China more in step with the US Federal Reserve, which projects three hikes of its own this year, and help Beijing maintain fi nancial stability by keeping liquidity tight and preventing capital outfl ows. The PBoC surprised inves-tors last month by following the Fed’s quarter-point increase with its own smaller move.

The PBoC is more likely to raise open-market interest rates in the fi rst half because there will probably be more headwinds for the economy in the latter six months, according to Wang Yifeng, a Beijing-based analyst at China Minsheng Banking Corp’s re-search institute.

“A de facto tightening bias will be the main policy stance, which helps balance cutting leverage and stabilis-ing growth,” he said. “It’s diffi cult to see monetary policy easing for quite a long period of time.”

A summit of China’s economic pol-icy makers led by President Xi Jinping

last month set risk prevention as the top “critical battle” for the next three years. The annual Central Economic Work Conference took a stronger tone than the prior year, by pronouncing that the fl oodgates of monetary sup-ply should be “controlled,” compared

with the prior year’s announcement calling for “adjustment.” Forecasters also project a broad-based cut to the reserve requirement ratio in the fourth quarter, to 16.5% from 17%, separate surveys show. That’s in addition to a targeted reduction to help small busi-

ness that was announced last year and took eff ect January 1.

Still, the PBoC may not fully follow Fed interest rate hikes this year, Liu Li-gang, chief China economist at Citi-group Inc in Hong Kong, said yesterday in a Bloomberg Television interview.

The central bank is likely to make a maximum of two increases to its over-night Standing Lending Facility, which sets a ceiling for PBoC rates, but “if the fi nancial tightening were to be too ex-cessive, we can’t exclude a RRR cut,” Liu said.

The People’s Bank of China building in Beijing. The PBoC is more likely to raise open-market interest rates in the first half because there will probably be more headwinds for the economy in the latter six months, according to a Beijing-based analyst.

RIL to become cash fl ow-positive: CLSAIANSMumbai

Retaining its “buy” recommenda-tion on the Reliance Industries (RIL) stock, global brokerage fi rm

CLSA yesterday said RIL is likely to turn cash fl ow-positive this fi scal by reaping benefi ts of its downstream expansion and expects the company to monetise its Jio telecom network.

During 2017-18, the Mukesh Ambani-led RIL was expected to end a four-year run of negative cash fl ows and report a consolidated free cash fl ow of nearly $1bn, according to the Hong Kong-headquar-tered CLSA. “This year will see a big cash-fl ow boost as projects of over $40bn start to deliver in full swing while capex falls.

“Stabilisation of ROGC (refi nery off -gas cracker) and petcoke gasifi cation would boost Ebitda (earning before interest, tax-es, depreciation and amortisation),” said the CLSA research report.

On Tuesday, RIL announced the suc-cessful commissioning of the world’s larg-est 1.5mn tonne per annum (MTPA) capac-ity ROGC complex at Jamnagar in Gujarat along with downstream plants and utili-ties. According to the brokerage, moneti-sation of the ROGC complex, coupled with

the petcoke gasifi cation plant, which is in an advanced stage of commissioning, will boost the Ebitda, or operating income, of the company. However, RIL “should allow almost a full year of benefi t to fl ow in fi s-cal 2018-19. Stabilisation of these projects would give a big boost to oil and gas earn-ings over 12-15 months”, the report said.

Noting that RIL’s telecom network Jio’s

monetisation plan entails raising smart-phone Arpus, and expanding 4G feature phone subscribers, along with the launch of its broadband and enterprise off ering, CLSA said: “We will also start to see cross-selling and other ways to monetise Reli-ance’s wide customer base, which will be the key long-term value driver.”

Focusing on its telecom venture in 2017,

RIL managed to gather nearly 150mn sub-scribers on the back of cheap plans and high capacity data network, while CLSA now expects the company to monetise not only Reliance Jio Infocomm customers but also its “industry leading capacities”.

RIL’s telecom venture can monetise its customer base by cross-selling retail prod-ucts, CLSA said.

HNA-owned shadow banking platformto see late payments

BloombergBeijing

Some investment products sold

through a peer-to-peer lending

platform owned by debt-laden

Chinese conglomerate HNA

Group Co have delayed pay-

ments to investors, according to

people familiar with the matter.

While details of the products

weren’t available and it wasn’t

clear if the products were

issued by the group, HNA

units have previously used

the Jubaohui platform to raise

shadow-banking loans. The

instances of the delays began

occurring in November, the peo-

ple said. Some payments have

subsequently been made, while

others haven’t, according to the

people, who asked not to be

identified because the details

are private.

Though HNA executives

have said that the company’s

debts are under control, surging

borrowing costs at the Chinese

conglomerate have fuelled

investor concerns about the

company’s ability to repay debt.

A Bloomberg News review of

more than 100 investment

documents and corporate fil-

ings last year showed how the

conglomerate has employed

a network of trusts and asset

management products, in

addition to more conventional

financing, to fund everything

from takeovers to day-to-day

expenses.

Read more about how HNA

raised billions from shadow

banks

A representative for HNA

couldn’t immediately comment.

There was no immediate reply

to a request for comment from

the People’s Bank of China,

which has been leading eff orts

to better regulate online

lending.

During 2017-18, the Mukesh Ambani-led Reliance Industries is expected to end a four-year run of negative cash flows and report a consolidated free cash flow of nearly $1bn, according to the Hong Kong-headquartered brokerage firm CLSA.

IANSSeoul

Samsung Electronics vice chairman Lee Jae-yong is likely to step down from

the board of the Boao Forum by not extending his term which ends in April, industry watch-ers said yesterday.

“Lee’s term is expected to end in April,” a business official said, adding it would be diffi-cult for Lee to continue his role as a member behind bars.

Lee was named as a board member of the regional forum in 2013, succeeding SK Group chairman Chey Tae-won, Yon-hap News Agency reported.

The Boao Forum, held every April, aims to expand coopera-tion among countries and busi-nesses in Asia.

It is a non-profit organisa-tion that hosts high-level fo-rums for leaders from govern-ment, business and academia in Asia and other continents to

share their vision on the most pressing issues in this region and the world at large.

The 49-year-old Lee has been behind bars since Febru-ary 2017 amid allegations that he took part in a major politi-cal scandal that led to the im-peachment of former South Korean President Park Geun-hye last year.

A court sentenced him to five years in jail in August after be-ing convicted of bribery, em-bezzlement and other charges.

Samsung’s global strategies are facing hurdles due to the ab-sence of major leaders, accord-ing to industry watchers.

Lee’s father Lee Kun-hee also has been hospitalised since 2014 after suff ering a heart attack and is currently unable to participate in the group’s management.

The older Lee also stepped down from his membership on the International Olympic Committee (IOC) in August. He had been an IOC member since 1996.

Samsung’s Lee likely to quit Boao Forum’s board

Chaotic tax overhaul in India becoming bad news for truckersBloombergNew Delhi

Trucking firms like Caravan Roadways

Ltd, which has more than 500 brightly-

painted vehicles crisscrossing India, were

meant to see immediate benefits from

the biggest tax reform in India’s modern

history.

But the chaotically-implemented

goods and services tax is derailing the

government’s revenue target and hasn’t

much improved trade within Asia’s No 3

economy. “Suspicious states” – anxious to

retain pre-GST earnings - are stepping up

vigilance at their borders, according to

Crisil Ltd, and there’s little in the legisla-

tion to deter off icials seeking bribes.

“The people who were earlier on the

check posts, who were getting money,

they are getting the same through

other means,” said Rakesh Kaul, a vice-

president at Caravan Roadways. While

some border posts were replaced by

a system of supposedly-randomised

checking, “right now, they’re not doing

random checking, they’re checking every

vehicle,” he said.

These developments are eroding the

eff ectiveness of a tax that was supposed

to erase internal borders and convert In-

dia into one of the world’s biggest single

markets. Although the GST is expected to

widen India’s tax net over the medium-

to-long-term, it has done short-term

damage to the economy at a time when

Prime Minister Narendra Modi needs to

accelerate job creation.

Launched July 1, the GST – despite

numerous tweaks – has been such a

headache for small businesses that it has

prevented many from filing returns, lead-

ing to lower revenues. Collections dipped

to Rs808bn ($12.69bn) in November

from Rs833bn in October and Rs921bn in

September.

Collections will get even worse, said

two off icials familiar with the issue. A

substantial shortfall is expected in the

budgetary target of Rs9.27tn for indirect

taxes, the off icials said, asking not to be

identified as they are not authorised to

speak. India’s 58mn small enterprises,

which make up around 40% of the coun-

try’s GDP, are struggling with complex

rules, a glitch-ridden IT backbone and

onerous filing processes.

Problems with the compensation

scheme has left smaller businesses wary

of signing up. “Because of these condi-

tions, the registered buyers and large

companies are unwilling to take supplies

from us,” Gopal K Krishan, secretary

general, All India Confederation of Small

and Micro Industries Associations, said

over phone in New Delhi. “We have cut

down production.”

The GST Council, headed by Finance

Minister Arun Jaitley, has reviewed rates

on more than 200 goods, simplified

returns and introduced a fixed tax rate

for small firms. However, “nothing much

has changed for us except that now we

are forced to compete with large players,

who have a cost advantage” said Prakash

Jain, chairman of a regional chamber of

commerce in New Delhi.

Finance ministry spokesman DS Malik

said: “Several steps have been taken to

ease the problems of small and medium

units.”

While observers predicted small firms

would struggle, many also said GST

would yield gains by easing onerous red

tape at state borders and help make India

resemble a single market for the first

time. Trucks could travel faster, high lo-

gistics costs would drop and businesses

would become more eff icient.

But companies and a new report sug-

gest only modest gains. A November 9

report from research firm Crisil, majority

owned by S&P Global Inc, said trucks are

only able to travel an additional 25 kilo-

metres per day instead of an expected

extra 100 kilometres. They are also

waiting longer to receive freight because

there hasn’t been a significant uptick in

demand, according to the report.

Trucking firms like Caravan Roadways, which has more than 500 brightly-painted vehicles crisscrossing India, were meant to see immediate benefits from the biggest tax reform in India’s modern history. But the chaotically-implemented goods and services tax is derailing the government’s revenue target and hasn’t much improved trade within Asia’s No 3 economy.

BUSINESS5Gulf Times

Thursday, January 4, 2018

ReutersSeoul

South Korea will look at ways to direct capital fl ows off shore if the won continues to soar, people

familiar with the matter said, a move that could take heat out of the currency without upsetting Washington over the thorny topic of foreign exchange man-agement.

Asia’s fourth largest economy is highly reliant on shipments of high-end goods such as ships, automobiles and electronics for its growth but also had one of the region’s hottest currencies in 2017, which has weighed on its export competitiveness.

People familiar with matter told Reu-ters yesterday the nation’s foreign ex-change authorities may look into ways to spur investment abroad should the local currency appreciate on a consist-ent basis.

This would be separate to regulators’ market operations to curb the won’s volatility, which would still be conduct-ed when required.

A spokesperson for the fi nance min-istry, which is responsible for foreign exchange regulation, declined to com-ment on the matter.

The sources did not provide details on the potential measures and declined to elaborate when asked if the steps could include tax breaks similar to those announced in 2015.

Back then, South Korea off ered up to 10 years in tax exemptions on invest-ment gains from funds that put more than 60% of assets into overseas stocks.

The scheme took eff ect in February 2016 and expired in December.

Rising domestic interest rates, strong exports and heightened US scrutiny on South Korea’s foreign exchange regime have made it harder for Seoul to tame the won, which rose 13% last year, its best annual gain in 13 years.

Measures that encourage capital out of the country could help policymak-ers remove some of the upward pres-sure on the currency without needing to use direct intervention in the foreign exchange market, a sticking point in Seoul’s relations with the Washington.

South Korea posted current ac-count surpluses for 68 straight months through to October last year, data from the Bank of Korea showed.

In October, the US Treasury Depart-ment kept South Korea on a “monitor-ing list” of countries in its report on foreign exchange policies of its major trading partners, along with China, Ja-pan and Germany.

In value terms, South Korean exports surged to their highest on record in 2017 thanks to soaring global demand for memory chips, cars and petrochemical products.

The government sees exports grow-ing 4% this year, slowing from the 15.8% growth in 2017.

In terms of the value of goods sold, South Korea exported $573.9bn in 2017,

marking it the best year since 1956 when such records began. At the same time, the strong won has been a point of pain for local manufacturers. A think tank from Hyundai Motor last month fl agged risks from the won’s strength against the Japanese yen, warning cur-rent levels could hurt demand for South Korean cars in markets such as Europe and the US in the year ahead. Citing its

Hyundai Sonata sedan as example, Lee Bo-sung, a director at the think tank, said the model was only 2% cheaper than Honda’s Accord as of 2017 in the US market, compared with 10% in 2011.

The won snapped six days of gains and weakened 0.3% against the dol-lar yesterday but closed just below its three-year high of 1,064.5 per dollar, hit on Tuesday.

South Korea planning to boost outfl ows if won rally continues

Pakistan allows use of yuan for trade, investmentAFPIslamabad

Pakistan will allow the Chinese yuan to be used for imports, exports and fi nancing transac-tions for bilateral trade and investment ac-

tivities, in a move economists said yesterday would simplify a massive Chinese investment project.

Both public and private sector enterprises may use the yuan for bilateral trade and investment, the central State Bank of Pakistan said in a statement issued Tuesday.

“As per current foreign exchange regulations, Chinese yuan (CNY) is an approved foreign curren-cy for denominating foreign currency transactions in Pakistan,” it said.

“In terms of regulations in Pakistan, CNY is at par with other international currencies such as US dollar, euro and Japanese yen,” it added.

The bank said that in light of a massive Chinese infrastructure project in Pakistan, the move would “yield long-term benefi ts for both the countries”.

The China-Pakistan Economic Corridor (CPEC), a $54bn project launched in 2013 linking western China to the Indian Ocean via Pakistan, has been hailed as a “game changer” by Pakistani offi cials.

They hope the power stations and transmission lines built as part of the project will help ease Paki-stan’s chronic power crisis.

Economic analyst and former government ad-viser on fi nance Salman Shah welcomed the State Bank’s move, saying that avoiding dollar transac-tions in the implementation of CPEC would “sim-plify matters very considerably”.

The Chinese economy is now one of the biggest in the world, he said, justifying the use of the Chinese currency of choice.

Hanjin Shipping’s container terminal is seen at the Busan New Port. South Korea is highly reliant on shipments of high-end goods such as ships, automobiles and electronics for its growth but also had one of the region’s hottest currencies in 2017, which has weighed on its export competitiveness.

BlackBerry and Baidu partner to work on driverless car software

BloombergNew York

BlackBerry Ltd’s eff orts to push into self-driving cars took a new step forward as

the former smartphone maker signed a deal with Chinese In-ternet giant Baidu Inc to work together on automotive soft-ware.

Baidu will bundle BlackBer-ry’s QNX vehicle operating sys-tem into its Apollo self-driving car platform, a set of tools that automakers can use when de-signing autonomous vehicles. The partnership also includes integrating BlackBerry’s more established in-car entertain-ment software into Apollo.

BlackBerry’s QNX unit has long been a leader in building systems to run entertainment and mapping programmes in cars. Now, the Waterloo, On-tario-based company is trying to transform that expertise into building operating systems that can run much more complex and demanding driverless car soft-ware, an enormous emerging market.

Baidu, China’s largest search engine provider, has been build-ing the Apollo system and sign-ing up dozens of partners around the world in a bid to eventually become a dominant automotive software company. In Septem-ber, the Beijing-based company announced a $1.5bn fund to in-vest in self-driving car projects over the next three years.

Chinato curb power supply for Bitcoin minersBloombergBeijing

China plans to limit power use by some bitcoin min-ers, people familiar with

the matter said.The People’s Bank of China

outlined the plan yesterday at a closed-door meeting, according to the people, who asked not to be identifi ed because it wasn’t pub-lic. They didn’t detail how au-thorities plan to enact the curbs.

Offi cials are concerned that bitcoin miners are taking ad-vantage of low power prices in some areas and aff ecting normal electricity use in some cases, the people said. Local offi cials have been asked to investigate the high consumption associated with the industry, they said.

The curbs will also involve other regulators such as the Na-tional Development and Reform Commission, which oversees the power supply. The PBoC didn’t immediately respond to a fax requesting comment after the close of regular business hours.

“This may have contributed to bitcoin coming off its daily highs and electricity usage certainly ap-pears to be a signifi cant challenge for the cryptocurrency in the years ahead,” said Craig Erlam, senior market analyst at online trading fi rm Oanda in London. “Bitcoin is trading relatively fl at on the day. The size of the moves we’ve seen are small in comparison to what we’ve become accustomed to in recent months.”

China is home to many of the world’s largest bitcoin miners, who use massive computing power to verify transactions in the cryptocurrency.

Pakistan will allow the Chinese currency yuan to be used for imports, exports and financing transactions for bilateral trade and investment activities, in a move economists said yesterday would simplify a massive Chinese investment project.

Baidu has been building the Apollo system and signing up dozens of partners around the world in a bid to eventually become a dominant automotive soft ware company

Samling to prepare $250mn IPO for Bentley dealerBloombergKuala Lumpur

Samling Group, the Malaysian timber gi-

ant, is planning an initial public off ering of

its automotive operations that could raise

more than 1bn ringgit ($250mn), people

with knowledge of the matter said.

Samling is working with advisers to ex-

plore a possible dual listing of the business

in Kuala Lumpur and Singapore later this

year, according to the people. The share

sale could include Samling’s domestic car

dealership division as well as operations

under StarChase, a luxury auto distribu-

tor backed by the group’s controlling Yaw

family, one of the people said, asking not

to be identified because the information is

private.

StarChase runs dealerships in Hong

Kong and mainland China selling brands in-

cluding Porsche, Aston Martin and Volvo. In

2014, it paid S$455mn ($342mn) to acquire

United Engineers Ltd’s Wearnes Automo-

tive Pte unit, which distributes Bentley and

Jaguar cars in Singapore and Indonesia.

Samling itself sells Bentley, Mitsubishi and

Honda vehicles in Malaysia and provides

after-sales services for those marques, ac-

cording to its website.

Any deal will add to the $11.3bn raised

through first-time share sales in Southeast

Asia last year, up from $6.1bn in 2016, data

compiled by Bloomberg show. Samling

would join Malaysian state-backed hospital

operator IHH Healthcare Bhd, which com-

pleted a dual listing in Kuala Lumpur and

Singapore in 2012. Deliberations are at an

early stage, and Samling may opt to list the

business in only one stock market, accord-

ing to one of the people.

A representative for Samling, which is

based in Sarawak state on the island of

Borneo, didn’t immediately respond to

requests for comment. StarChase didn’t

immediately answer a call to its Shanghai

off ice and an e-mail sent to a general

inquiry address.

Samling, founded in 1963, is focused on

forestry management and timber produc-

tion as well as wood product manufactur-

ing. It is also involved in oil palm cultivation

and property development.

Samling is working with advisers to explore a possible dual listing of the business in Kuala Lumpur and Singapore later this year, sources said yesterday.

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

Qatar Islamic BankQatar Gas Transport(Nakilat)Qatar General Insurance & ReQatar German Co For Medical

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Cinema & Film Distrib

Qatar Insurance CoOoredoo 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 Co

81.00

63.51

8.09

14.36

7.00

7.95

55.01

62.86

128.00

55.22

42.62

55.05

36.50

97.92

16.30

47.49

6.52

102.51

6.44

181.50

25.00

51.50

91.76

11.00

9.14

12.90

146.00

75.14

58.40

38.61

14.05

96.60

38.00

6.10

46.51

17.94

12.12

15.00

29.29

15.00

28.30

32.50

13.80

8.76

0.00

-1.38

-0.12

-0.49

1.30

-0.63

-1.27

-0.06

0.71

-1.92

0.14

0.09

-1.40

0.82

0.68

-3.08

0.62

0.50

-0.92

0.97

0.00

-0.96

-0.04

-0.54

2.12

2.30

-1.35

-2.20

-0.92

-0.13

-0.71

-1.23

2.18

0.99

1.11

0.00

-1.38

0.00

1.98

0.00

-1.63

-1.52

-1.43

-1.57

-

205,024

439,738

1,361,522

83,607

4,868

41,908

9,374

123,854

6,444

2,657

25,860

196,007

165,927

440,026

31,877

8,190

30,164

489,152

27,151

-

4,550

44,832

113,962

2,053,849

182,709

7,757

141,345

6,006

216,165

61,534

128,666

116,212

542,760

21,940

182,488

173,372

-

101,402

89,402

148,076

355,490

14,437

209,257

QATAR

Company Name Lt Price % Chg Volume

United Wire Factories CompanEtihad Etisalat Co

Dar Al Arkan Real Estate DevSaudi Hollandi Bank

Rabigh Refining And PetrocheBanque Saudi Fransi

Saudi Enaya Cooperative InsuMediterranean & Gulf Insuran

Saudi British BankMohammad Al Mojil Group Co

Red Sea International CoTakween Advanced Industries

Sabb TakafulSaudi Arabian Fertilizer Co

National GypsumSaudi Ceramic Co

National Gas & IndustrializaSaudi Pharmaceutical Industr

ThimarNational Industrialization C

Saudi Transport And InvestmeSaudi Electricity Co

Saudi Arabia Refineries CoArriyadh Development Company

Al-Baha Development & InvestSaudi Research And MarketingAldrees Petroleum And Transp

Saudi Vitrified Clay Pipe CoJarir Marketing Co

Arab National BankYanbu National Petrochemical

Arabian CementMiddle East Specialized Cabl

Al Khaleej Training And EducAl Sagr Co-Operative Insuran

Trade Union Cooperative InsuArabia Insurance Cooperative

Saudi Chemical CompanyFawaz Abdulaziz Alhokair & C

Bupa Arabia For CooperativeWafa Insurance

Jabal Omar Development CoSaudi Basic Industries Corp

Saudi Kayan Petrochemical CoEtihad Atheeb Telecommunicat

Co For Cooperative InsuranceNational Petrochemical Co

Gulf Union Cooperative InsurGulf General Cooperative Ins

Basic Chemical IndustriesSaudi Steel Pipe Co

Buruj Cooperative InsuranceMouwasat Medical Services Co

Southern Province Cement CoMaadaniyah

Yamama Cement CoJazan Energy And Development

Zamil Industrial InvestmentAlujain Corporation (Alco)

Tabuk Agricultural DevelopmeUnited Co-Operative Assuranc

Qassim Cement/TheSaudi Advanced Industries

Kingdom Holding CoSaudi Arabian Amiantit Co

Al Jouf Agriculture DevelopmSaudi Industrial Development

Bishah AgricultureRiyad Bank

The National Agriculture DevHalwani Bros Co

Arabian Pipes CoEastern Province Cement Co

Al Gassim Investment HoldingFiling & Packing Materials M

Saudi Cable CoTihama Advertising & Public

Saudi Investment Bank/TheAstra Industrial Group

Saudi Public Transport CoTaiba Holding Co

Saudi Industrial Export CoSaudi Real Estate Co

Saudia Dairy & Foodstuff CoNational Shipping Co Of/The

Methanol Chemicals CoAce Arabia Cooperative Insur

Mobile Telecommunications CoSaudi Arabian Coop Ins Co

Axa Cooperative InsuranceAlsorayai Group

Weqaya For Takaful InsuranceBank Albilad

Al-Hassan G.I. Shaker CoWataniya Insurance Co

Abdullah Al Othaim MarketsHail Cement

16.22

16.02

10.69

0.00

16.66

29.81

18.09

27.00

27.20

0.00

18.90

10.08

23.70

64.59

12.14

26.41

30.46

31.47

29.63

16.13

0.00

20.73

30.88

18.39

23.15

59.20

25.90

57.62

145.31

25.21

59.10

34.70

8.58

19.46

24.50

19.38

16.78

31.90

30.63

93.15

20.21

59.01

101.50

11.04

7.08

94.19

18.23

16.67

16.99

21.10

16.36

32.73

152.20

48.13

19.65

17.44

17.18

26.95

21.01

12.72

12.62

45.04

13.76

8.60

8.24

29.40

9.88

0.00

12.64

31.88

50.51

12.08

26.65

0.00

32.18

10.81

48.28

15.02

15.89

16.57

34.25

146.18

22.54

131.40

31.32

9.99

23.20

7.25

17.68

19.40

12.42

0.00

21.42

11.34

27.36

123.00

9.81

0.12

-1.60

-8.94

0.00

-0.42

2.97

1.01

0.22

-0.18

0.00

0.48

0.40

-0.42

-0.48

-1.06

-0.34

0.40

1.81

-0.87

1.83

0.00

0.83

0.32

-0.16

-0.60

0.14

-0.12

0.38

-0.19

0.80

0.03

0.46

0.12

0.31

0.62

1.04

1.27

0.16

2.17

-0.83

0.20

0.77

0.51

0.45

-1.12

0.20

-0.05

-0.36

0.59

-0.24

-0.49

0.25

0.40

-0.74

0.56

-0.51

1.84

-0.92

0.72

-1.47

0.00

-0.71

2.00

0.12

-1.32

1.62

0.30

0.00

1.12

-0.72

0.02

-0.25

-0.26

0.00

0.31

0.00

-1.11

0.13

-0.56

0.55

-0.46

0.44

-0.70

-0.45

-0.10

-0.99

0.78

-1.36

0.51

1.36

-2.59

0.00

0.75

-0.44

-0.91

0.15

-0.30

330,358

7,091,989

109,395,680

-

1,355,509

150,237

670,250

180,076

175,047

-

44,486

256,048

230,402

80,643

144,111

46,010

199,506

833,222

111,952

1,298,955

-

607,737

56,235

68,465

160,309

112,505

334,244

7,455

10,371

94,150

152,224

187,676

459,094

98,211

29,222

63,981

66,794

55,032

291,411

55,981

679,232

126,802

7,413,881

22,809,407

295,600

43,440

45,415

41,773

236,380

12,556

48,942

120,803

13,401

27,907

215,141

129,900

254,815

110,535

206,273

645,240

85,514

34,227

1,149,338

185,987

2,506,904

202,210

400,268

-

544,133

52,635

1,339

274,676

54,168

-

64,380

-

465,530

21,076

123,653

521,507

217,102

22,937

332,775

33,528

226,419

3,524,432

61,371

2,296,276

312,962

88,263

549,194

-

490,512

116,692

58,208

1,762

379,719

SAUDI ARABIA

Company Name Lt Price % Chg Volume

Saudi Re For Cooperative ReiSolidarity Saudi Takaful Co

Amana Cooperative InsuranceAlabdullatif Industrial Inv

Saudi Printing & Packaging CSanad Cooperative Insurance

Saudi Paper Manufacturing CoAlinma Bank

Almarai CoFalcom Saudi Equity Etf

United International TranspoHsbc Amanah Saudi 20 Etf

Saudi International PetrocheFalcom Petrochemical Etf

Walaa Cooperative InsuranceBank Al-Jazira

Al Rajhi BankSamba Financial Group

United Electronics CoAllied Cooperative Insurance

Malath InsuranceAlinma Tokio Marine

Arabian Shield CooperativeSavola

Wafrah For Industry And DeveFitaihi Holding Group

Tourism Enterprise Co/ ShamsSahara Petrochemical Co

Herfy Food Services Co

9.20

20.12

21.60

13.35

20.03

0.00

8.35

19.35

53.54

27.90

27.10

28.45

17.00

26.00

31.63

12.60

65.94

23.92

47.98

19.69

15.71

21.50

41.46

38.13

20.31

12.48

27.54

16.56

46.73

0.00

0.55

0.37

-0.67

-0.99

0.00

0.24

1.26

1.46

-0.71

2.57

0.00

-1.11

0.00

-0.16

-0.79

1.96

1.79

-3.03

1.55

0.90

-0.05

0.63

-2.75

-1.17

-0.95

-0.86

0.49

1.30

-

311,806

437,076

81,605

452,664

-

942,421

32,817,050

264,516

101,432

328,608

-

540,818

-

79,575

3,363,058

3,992,279

730,740

281,287

258,110

262,126

64,072

32,815

509,347

77,611

368,099

208,385

1,414,939

162,286

SAUDI ARABIA

Company Name Lt Price % Chg Volume

Securities Group CoSultan Center Food Products

Kuwait Foundry Co SakKuwait Financial Centre Sak

Ajial Real Estate EntmtGulf Glass Manuf Co -Kscc

Kuwait Finance & InvestmentNational Industries Co Ksc

Kuwait Real Estate Holding CSecurities House/The

Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait

Ahli United Bank (Almutahed)National Bank Of Kuwait

Commercial Bank Of KuwaitKuwait International Bank

Gulf BankAl-Massaleh Real Estate Co

Al Arabiya Real Estate CoKuwait Remal Real Estate Co

Alkout Industrial Projects CA’ayan Real Estate Co Sak

Investors Holding Group Co.KAl-Mazaya Holding Co

Al-Madar Finance & Invt CoGulf Petroleum Investment

Mabanee Co SakcCity Group

Inovest Co BscKuwait Gypsum Manufacturing

Al-Deera Holding CoAlshamel International Hold

Mena Real Estate CoNational Slaughter House

Amar Finance & Leasing CoUnited Projects For Aviation

National Consumer Holding CoAmwal International Investme

Jeeran HoldingsEquipment Holding Co K.S.C.C

Nafais HoldingSafwan Trading & Contracting

Arkan Al Kuwait Real EstateGfh Financial Group Bsc

Energy House Holding Co KscpKuwait Slaughter House Co

Kuwait Co For Process PlantAl Maidan Dental Clinic Co KNational Shooting Company

Al-Themar Real InternationalAl-Ahleia Insurance Co Sakp

Wethaq Takaful Insurance CoSalbookh Trading Co Kscp

Aqar Real Estate InvestmentsHayat Communications

Kuwait Packing Materials MfgSoor Fuel Marketing Co KscAlargan International RealBurgan Co For Well Drilling

Kuwait Resorts Co KsccOula Fuel Marketing Co

Palms Agro Production CoIkarus Petroleum Industries

Mubarrad Holding Co KscAl Mowasat Health Care Co

Shuaiba Industrial CoAan Digital Services Co

First Takaful Insurance CoKuwaiti Syrian Holding Co

National Cleaning CompanyEyas For High & Technical EdUnited Real Estate Company

AgilityKuwait & Middle East Fin Inv

Fujairah Cement IndustriesLivestock Transport & Tradng

International Resorts CoNational Industries Grp Hold

Marine Services Co KscWarba Insurance Co

Kuwait United Poultry CoFirst Dubai Real Estate Deve

Al Arabi Group Holding CoKuwait Hotels Sak

Mobile Telecommunications CoAl Safat Real Estate Co

Tamdeen Real Estate Co KscAl Mudon Intl Real Estate Co

Kuwait Cement Co KscSharjah Cement & Indus Devel

Kuwait Portland Cement CoEducational Holding Group

Bahrain Kuwait InsuranceAsiya Capital Investments Co

Kuwait Investment CoBurgan Bank

Kuwait Projects Co HoldingsAl Madina For Finance And In

Kuwait Insurance CoAl Masaken Intl Real Estate

Intl Financial AdvisorsFirst Investment Co Kscc

Al Mal Investment CompanyBayan Investment Co Kscc

Egypt Kuwait Holding Co SaeCoast Investment Development

Privatization Holding CompanKuwait Medical Services Co

Injazzat Real State CompanyKuwait Cable Vision Sak

Sanam Real Estate Co KsccIthmaar 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 DevelopmDar Al Thuraya Real Estate C

Al-Dar National Real EstateKgl Logistics Company Kscc

Combined Group ContractingJiyad Holding Co Ksc

Qurain Holding Co

0.00

0.00

235.00

108.00

176.00

0.00

45.00

209.00

32.00

52.60

690.00

288.00

351.00

740.00

409.00

231.00

239.00

38.00

29.10

36.60

630.00

74.00

17.20

112.00

24.00

30.70

710.00

0.00

78.30

95.00

27.80

0.00

15.80

0.00

55.00

585.00

0.00

32.90

0.00

34.30

844.00

0.00

83.50

121.00

28.90

0.00

140.00

1,220.00

0.00

0.00

470.00

36.00

47.30

67.00

69.00

0.00

111.00

160.00

84.00

72.00

111.00

84.00

0.00

64.80

0.00

264.00

0.00

65.90

27.60

49.00

0.00

77.00

810.00

24.00

76.00

245.00

29.50

155.00

0.00

60.00

0.00

44.50

80.00

246.00

462.00

0.00

400.00

31.40

470.00

90.00

951.00

309.00

0.00

39.50

118.00

303.00

329.00

36.00

274.00

79.00

28.70

43.00

26.50

49.00

261.00

32.50

53.90

0.00

82.40

19.00

35.00

47.90

377.00

30.90

26.80

45.70

100.00

72.30

22.10

0.00

0.00

45.00

474.00

0.00

0.00

0.00

0.00

-2.08

0.00

0.00

0.00

4.65

0.97

0.00

0.19

2.99

-0.35

0.57

2.35

2.25

0.87

0.84

0.00

1.39

-2.92

5.00

0.00

1.78

0.00

2.13

5.50

0.85

0.00

-0.63

0.00

0.00

0.00

-1.86

0.00

0.00

0.00

0.00

-2.37

0.00

2.69

19.89

0.00

1.83

-0.82

0.35

0.00

0.00

0.00

0.00

0.00

1.08

-20.00

-14.00

0.00

0.00

0.00

0.00

0.00

0.00

2.86

0.00

0.00

0.00

-0.61

0.00

-1.12

0.00

1.54

1.47

-8.41

0.00

2.67

1.63

0.00

1.33

0.00

5.36

1.97

0.00

-0.17

0.00

0.23

-5.88

0.00

5.48

0.00

0.00

-4.85

0.00

0.00

2.81

0.00

0.00

-1.99

0.85

-0.33

0.30

3.15

-0.36

0.00

0.70

0.94

-4.33

-0.81

3.16

1.56

0.94

0.00

0.00

0.00

0.00

4.13

0.53

4.75

-10.67

0.88

0.00

0.00

7.80

0.00

0.00

1.12

0.00

0.00

0.00

-

-

40,000

8,945

25

-

182,256

319

113,050

787,300

703,824

313,419

366,724

4,095,726

59

1,323,637

749,694

9,445

58,300

1,114,450

11,000

154

4,226,812

1,319,638

100,000

4,737,808

277,720

-

4,254,970

50,000

4,242

-

369,801

-

56,001

1,478

-

130,616

-

266,178

79

-

16,000

376,143

1,660

-

14,355

65,575

-

-

91,472

2,500

389

11

1,100

-

27,521

250,000

1,875,000

111

14,736

914

-

99,900

-

2

-

500

319,996

280,932

-

8,030

2,017,167

45,000

1,047,393

200

100,979

9,170,637

-

14,888

-

621,457

35,200

275,920

7,126,857

-

30,421

72,690

400

300

5,000

4,050

-

20,000

844,098

313,036

4,780

150,970

94,000

44

1,217,770

97,500

1,138,333

198,800

200,000

749,450

618,463

-

260,000

1,028

298

27,705,661

2,800

34,500

14,363,619

546,900

54

47,177

9,260,209

-

-

123,179

3,856

-

-

KUWAIT

Company Name Lt Price % Chg Volume

Voltamp Energy SaogUnited Power/Energy Co- Pref

United Power Co SaogUnited Finance Co

Ubar Hotels & ResortsTakaful Oman

Taageer FinanceSweets Of OmanSohar Power Co

Sohar PoultrySmn Power Holding Saog

Shell Oman Marketing - PrefShell Oman Marketing

Sharqiyah Desalination Co SaSembcorp Salalah Power & Wat

Salalah Port ServicesSalalah Mills Co

Salalah Beach Resort SaogSahara Hospitality

Renaissance Services SaogRaysut Cement Co

Port Service CorporationPhoenix Power Co Saoc

Packaging Co LtdOoredoo

OminvestOman United Insurance Co

Oman Textile Holding Co SaogOman Telecommunications Co

Oman Refreshment CoOman Packaging

Oman Orix Leasing Co.Oman Oil Marketing Company

Oman National Engineering AnOman Investment & Finance

Oman Intl MarketingOman Hotels & Tourism CoOman Foods International

Oman Flour MillsOman Fisheries CoOman Fiber Optics

Oman Europe Foods IndustriesOman Education & Training In

Oman ChromiteOman Chlorine

Oman Ceramic CompanyOman Cement Co

Oman Cables IndustryOman Agricultural Dev

Oman & Emirates Inv(Om)50%Natl Aluminium Products

National SecuritiesNational Real Estate Develop

National PharmaceuticalNational Mineral Water

National Hospitality InstituNational Gas Co

National Finance CoNational Detergent Co Saog

National Biscuit IndustriesNational Bank Of Oman Saog

Muscat Thread Mills CoMuscat National Holding

Muscat Gases Company SaogMuscat Finance

Majan Glass CompanyMajan College

Hsbc Bank OmanHotels Management Co Interna

Gulf StoneGulf Plastic Industries Co

Gulf Mushroom CompanyGulf Investments Services

Gulf Invest. Serv. Pref-SharGulf International Chemicals

Gulf Hotels (Oman) Co LtdGlobal Fin Investment

Galfar Engineering&ContractGalfar Engineering -Prefer

Financial Services Co.Financial Corp/The

Dhofar UniversityDhofar Tourism

Dhofar PoultryDhofar Intl Development

Dhofar InsuranceDhofar Fisheries & Food Indu

Dhofar Cattlefeed

0.56

1.00

3.90

0.14

0.13

0.17

0.13

1.34

0.15

0.21

0.66

1.05

1.78

3.96

0.23

0.60

1.33

1.38

2.50

0.30

0.78

0.18

0.14

2.21

0.53

0.46

0.38

0.00

1.18

2.05

0.28

0.18

1.46

0.20

0.14

0.52

0.44

0.00

0.93

0.16

0.00

1.00

0.15

3.64

0.44

0.42

0.41

1.14

0.00

0.08

0.17

0.04

5.00

0.11

0.05

0.00

0.29

0.14

0.65

3.75

0.20

0.08

0.00

0.56

0.11

0.18

0.44

0.13

1.25

0.12

0.00

0.31

0.08

0.11

0.25

10.50

0.16

0.08

0.39

0.18

0.10

0.00

0.49

0.18

0.32

0.20

1.28

0.19

0.00

0.00

0.00

0.72

0.00

0.00

5.04

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

1.35

0.00

0.00

-2.17

0.00

0.00

0.00

0.00

0.00

-0.42

0.00

0.00

0.00

0.69

0.00

0.72

0.00

0.00

0.00

-0.43

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

3.31

0.00

0.00

1.35

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-

-

-

19,000

-

-

20,760

-

-

-

-

-

-

-

-

-

-

-

-

217,098

-

-

17,377

-

192,000

-

-

-

55,025

-

-

-

110,802

-

212,959

-

-

-

43,200

1,290,686

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

18,000

-

-

-

4,700

-

-

300

37,515

-

-

-

-

-

-

-

450,000

-

98,637

-

-

1,221,489

-

-

-

-

-

-

-

-

-

-

OMAN

Company Name Lt Price % Chg Volume

Dhofar Beverages CoConstruction Materials Ind

Computer Stationery IndsBankmuscat Saog

Bank SoharBank Nizwa

Bank Dhofar SaogAreej Vegetable Oils Saoc

Aloula CoAl-Omaniya Financial Service

Al-Hassan Engineering CoAl-Fajar Al-Alamia Co

Al-Anwar Ceramic Tiles CoAl Suwadi Power

Al Shurooq Inv SerAl Sharqiya Invest Holding

Al Maha Petroleum Products MAl Maha Ceramics Co SaocAl Madina Takaful Co Saoc

Al Madina Investment CoAl Kamil Power Co

Al Jazerah Services -PfdAl Jazeera Steel Products Co

Al Jazeera ServicesAl Izz Islamic Bank

Al Buraimi HotelAl Batinah PowerAl Batinah Hotels

Al Batinah Dev & InvAl Anwar Holdings Saog

Ahli BankAcwa Power Barka Saog

Abrasives Manufacturing Co SA’saff a Foods Saog

0Man Oil Marketing Co-Pref

0.26

0.03

0.26

0.40

0.15

0.09

0.22

0.00

0.53

0.28

0.04

0.75

0.12

0.14

0.00

0.11

1.00

0.29

0.10

0.06

0.31

0.55

0.28

0.15

0.07

0.88

0.14

1.13

0.08

0.15

0.17

0.76

0.05

0.58

0.25

0.00

0.00

0.00

0.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.82

0.00

0.00

0.00

0.00

0.00

4.00

1.79

0.00

0.00

0.00

-0.68

1.52

0.00

0.00

0.00

0.00

1.32

-2.30

0.00

0.00

0.00

0.00

-

100

-

1,258,137

-

100,075

-

-

-

-

-

-

2,116,147

5,461

-

70,000

3,000

-

3,615,200

29,333

-

-

-

31,458

21,566

-

14,250

-

-

211,100

50,000

-

-

-

-

OMAN

Company Name Lt Price % Chg Volume

Waha Capital PjscUnited Insurance Company

United Arab Bank PjscUnion National Bank/Abu Dhab

Union Insurance CoUnion Cement Co

Umm Al Qaiwain Cement IndustSharjah Islamic Bank

Sharjah Insurance CompanySharjah Group

Sharjah Cement & Indus DevelRas Al-Khaimah National Insu

Ras Al Khaimah White CementRas Al Khaimah Ceramics

Ras Al Khaimah Cement Co PscRas Al Khaima Poultry

Rak PropertiesOoredoo Qpsc

Oman & Emirates Inv(Emir)50%Nbad Oneshare Msci Uae Ucits

National Takaful CompanyNational Marine Dredging Co

National Investor Co/TheNational Corp Tourism & Hote

National Bank Of Umm Al QaiwNational Bank Of Ras Al-Khai

National Bank Of FujairahFirst Abu Dhabi Bank Pjsc

Methaq Takaful InsuranceManazel Real Estate Pjsc

Invest BankIntl Fish Farming Co Pjsc

Insurance HouseGulf Pharmaceutical Ind Psc

Gulf Medical ProjectsGulf Cement Co

Fujairah Cement IndustriesFujairah Building Industries

Foodco Holding PjscFirst Gulf BankFinance House

Eshraq Properties Co PjscEmirates Telecom Group Co

Emirates Insurance Co. (Psc)Emirates Driving Company

Dana GasCommercial Bank Internationa

Bank Of SharjahAxa Green Crescent Insurance

Arkan Building Materials CoAlkhaleej InvestmentAldar Properties Pjsc

Al Wathba National InsuranceAl Khazna Insurance Co

Al Fujairah National InsuranAl Dhafra Insurance Co. P.S.

Al Buhaira National InsurancAl Ain Ahlia Ins. Co.

Agthia Group PjscAbu Dhabi Ship Building Co

Abu Dhabi Natl Co For BuildiAbu Dhabi National Takaful C

Abu Dhabi National InsuranceAbu Dhabi National Hotels

Abu Dhabi National Energy CoAbu Dhabi Islamic Bank

1.94

2.00

2.15

3.85

1.79

1.35

1.04

1.35

3.49

1.15

1.08

3.69

1.10

2.70

0.63

3.40

0.73

85.00

0.53

6.20

0.46

3.50

0.51

2.14

3.00

4.65

5.00

0.00

0.76

0.59

2.55

1.46

0.85

2.41

2.00

1.02

0.95

1.56

4.94

0.00

1.72

0.74

17.55

6.00

8.00

0.78

0.92

1.23

0.86

0.68

2.40

2.28

12.75

0.30

300.00

3.80

2.20

38.00

4.70

1.80

0.42

5.15

3.40

2.85

0.56

3.76

1.57

0.00

0.00

-1.28

0.00

0.00

0.00

-0.74

0.00

0.00

0.00

0.00

0.00

0.00

3.28

0.00

1.39

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.90

0.00

0.00

0.00

-1.67

0.00

1.39

0.00

0.00

0.00

-5.56

0.00

0.00

0.00

0.00

0.00

2.78

0.29

0.00

0.00

-1.27

0.00

0.00

-9.47

1.49

0.00

1.33

0.00

0.00

0.00

0.00

0.00

0.00

1.08

0.00

0.00

0.00

0.00

0.00

0.00

-0.53

587,022

-

-

7,068,158

-

-

-

116,137

-

-

-

-

8,300

22,200

5,350

-

1,777,929

-

-

-

-

-

-

-

-

160,195

-

-

1,658,745

14,117,647

-

2,565,816

-

-

-

293,352

-

-

-

-

-

5,069,607

882,239

-

-

3,935,065

-

50,000

5,000

1,048,731

-

3,995,762

-

-

-

-

-

-

2,804,001

-

-

-

-

-

114,268

427,967

UAE

Company Name Lt Price % Chg Volume

Zain Bahrain BsccUnited Paper Industries Bsc

United Gulf Investment CorpUnited Gulf BankTrafco Group Bsc

Takaful International CoTaib Bank -$Us

Seef PropertiesSecurities & Investment Co

National Hotels CoNational Bank Of Bahrain Bsc

Nass Corp BscKhaleeji Commercial Bank

Ithmaar Holding BscInvestcorp Bank -$Us

Inovest Co BscGulf Monetary Group

Gulf Hotel Group B.S.CGfh Financial Group Bsc

Esterad Investment Co B.S.C.Delmon Poultry Co

Bmmi BscBmb Investment Bank

Bbk BscBankmuscat Saog

Banader Hotels CoBahrain Tourism CoBahrain Telecom Co

Bahrain Ship Repair & EnginBahrain National Holding

Bahrain Kuwait InsuranceBahrain Islamic Bank

Bahrain Flour Mills CoBahrain Family Leisure Co

Bahrain Duty Free ComplexBahrain Commercial Facilitie

Bahrain Cinema CoBahrain Car Park Co

Arab Insurance Group(Bsc)-$Arab Banking Corp Bsc-$Us

Aluminium Bahrain BscAlbaraka Banking Group

Al-Salam BankSolidarity Bahrain BscAhli United Bank B.S.C

0.00

0.00

0.00

0.00

0.30

0.00

0.00

0.21

0.00

0.00

0.65

0.12

0.11

0.16

8.30

0.29

0.00

0.53

0.42

0.12

0.00

0.70

0.00

0.41

0.00

0.05

`

0.21

1.50

0.00

0.48

0.15

0.00

0.00

0.78

0.69

1.19

0.00

0.50

0.28

0.61

0.38

0.11

0.24

0.70

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-7.09

-5.08

6.90

0.00

0.00

0.00

0.00

-1.19

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-1.00

-1.75

-1.61

0.00

0.92

0.00

2.21

-

-

-

-

5,000

-

-

138,000

-

-

15,000

308,000

902,000

1,810,000

4,000

108,230

-

5,000

32,643

35,286

-

100,000

-

54,000

-

30,000

-

27,767

5,000

-

41,007

15,100

-

-

75,000

80,000

-

-

1,850,486

50,000

143,963

20,000

600,000

52,069

2,702,190

BAHRAIN

Company Name Lt Price % Chg Volume

Boubyan Intl Industries HoldGulf Investment House Ksc

Boubyan Bank K.S.CAhli United Bank B.S.C

Osos Holding Group CoAl-Eid Food Ksc

Qurain Petrochemical IndustrAdvanced Technology Co

Ekttitab Holding Co SakKout Food Group Ksc

Real Estate Trade Centers CoAcico Industries Co Kscc

Kipco Asset Management CoNational Petroleum ServicesAlimtiaz Investment Co Kscc

Ras Al Khaimah White CementKuwait Reinsurance Co Ksc

Kuwait & Gulf Link TransportHuman Soft Holding Co Ksc

Automated Systems Co KsccMetal & Recycling Co

Gulf Franchising Holding CoAl-Enma’a Real Estate Co

National Mobile TelecommuniAl Bareeq Holding Co Kscc

Housing Finance Co SakAl Salam Group Holding Co

United Foodstuff IndustriesAl Aman Investment Company

Mashaer Holding Co KscManazel Holding

Mushrif Trading & ContractinTijara And Real Estate Inves

Kuwait Building MaterialsJazeera Airways Co Ksc

Commercial Real Estate CoFuture Communications Co

National International CoTaameer Real Estate Invest C

Gulf Cement CoHeavy Engineering And Ship B

Refrigeration Industries & SNational Real Estate Co

Al Safat Energy Holding CompKuwait National Cinema CoDanah Alsafat Foodstuff Co

Independent Petroleum GroupKuwait Real Estate Co Ksc

Salhia Real Estate Co KscGulf Cable & Electrical IndAl Nawadi Holding Co Ksc

Kuwait Finance HouseGulf North Africa Holding Co

Hilal Cement CoOsoul Investment Kscc

Gulf Insurance Group KscKuwait Food Co (Americana)

Umm Al Qaiwain Cement IndustAayan Leasing & Investment

Alrai Media Group Co KscNational Investments CoCommercial Facilities Co

Taiba Kuwaiti Holding Co KscAfaq Educational Services Co

Kuwait Pillars For FinancialYiaco Medical Co. K.S.C.C

Dulaqan Real Estate Co

36.90

0.00

450.00

208.00

92.00

0.00

321.00

0.00

31.40

0.00

32.50

263.00

73.00

813.00

161.00

82.00

192.00

63.50

3,737.00

141.00

75.00

71.00

33.40

1,046.00

0.00

0.00

40.00

0.00

50.60

69.50

31.50

0.00

57.00

0.00

665.00

93.90

0.00

54.40

28.50

80.00

208.00

0.00

122.00

34.40

1,210.00

69.50

383.00

56.80

355.00

425.00

0.00

592.00

35.60

156.00

55.00

824.00

1,112.00

0.00

36.20

118.00

100.00

171.00

0.00

90.00

0.00

0.00

0.00

0.00

0.00

2.27

0.97

0.00

0.00

-0.93

0.00

3.29

0.00

0.00

0.00

0.97

1.75

1.90

0.00

0.00

5.83

4.97

2.17

0.00

0.00

1.21

0.00

0.00

0.00

-0.25

0.00

1.20

12.10

-4.26

0.00

0.00

0.00

0.00

1.08

0.00

0.00

-1.38

0.00

0.97

0.00

3.39

-1.71

-3.20

2.21

0.00

1.43

0.28

1.19

0.00

2.25

-1.11

0.00

0.00

0.00

0.00

0.00

1.97

-0.84

0.20

1.79

0.00

0.00

0.00

0.00

0.00

43,000

-

486,917

5,135,813

50

-

116,730

-

600

-

2,600

156,000

135,000

100

2,229,541

65,377

5,000

35,582

4,744

11,595

80

75

67,417

2,807

-

-

279,850

-

298,323

100

79,600

-

1,117

-

109,463

20,762

-

20,000

130,700

410,660

130

-

96,212

1,501

400

19,978

1,112

988,450

10,000

40,920

-

4,456,142

89,970

6,010

10,000

57,000

29

-

4,882,682

20,000

1,410,932

67,000

-

266,900

-

-

-

KUWAIT

Company Name Lt Price % Chg Volume

LATEST MARKET CLOSING FIGURES

Gulf Times Thursday, January 4, 2018

BUSINESS6

BUSINESS

Gulf Times Thursday, January 4, 201810

Bullish Wall Street liftsAsia markets furtherAFPHong Kong

Asian equities continued their posi-tive start to the year yesterday fol-lowing more record closes on Wall

Street, but the dollar faced further selling pressure.

Analysts warned that global markets could face an uncertain year as Donald Trump’s tax cuts have already been priced into valuations, while central banks are on course to start winding back on years of cheap money.

Investors have kicked off 2018 off in buoyant mood as the world economy stirs to life and job creation, particularly in the US, picks up.

After Tuesday’s broad advances, Asia was given a strong lead from Wall Street where technology fi rms were the standout performers — with Apple, Amazon and Google-parent Alphabet all gaining close to 2%. The tech-rich Nasdaq and the S&P 500 ended at all-time highs while the Dow ended just shy of a new record.

Hong Kong was up 0.2%, building on a six-day rally, while Shanghai closed up 0.6%, Sydney gained 0.2% and Singa-pore put on 0.5%. Seoul rose 0.3%, with investors given some cheer by North Ko-rea’s promise to restore a hotline with the South and Kim Jong-un’s softer tone to-wards its neighbour.

Wellington was 0.3% higher and Taipei jumped 0.9%. Tokyo was closed for a pub-lic holiday.

Tech fi rms were among the big win-ners, with AAC Technologies up 1.8% in Hong Kong, adding to Tuesday’s 7.5% jump, while Tencent rose 1.1%. Samsung climbed more than 1% in Seoul.

Greg McKenna, chief market strategist at AxiTrader, warned: “The punchbowl is going to be taken away this year and for the fi rst year in many neither the Federal Reserve nor European Central Bank, and

perhaps even the Bank of Japan, will be injecting free cash into the global mon-etary system.

“It’s a risk that I strongly believe is un-der-appreciated and underpriced in mar-kets at the moment.”

The dollar weakened, with market-watchers pointing to the fact that central banks outside the US would be winding down their stimulus, bringing them into line with the Fed, which has been tighten-ing for more than a year.

The euro was testing three-year highs,

while the pound was on course to hit its best mark since mid-2016, when Britain voted to leave the European Union.

“The backdrop for the dollar is just not very good,” Mark McCormick, head of FX strategy for North America at Toronto Dominion Bank, told Bloomberg News. “The global refl ation trade is progressing along.” Oil prices dipped but were around two-and-half-year highs as traders watch events in Iran, where protesters have taken to the streets over economic griev-ances, fuelling concern about the supplies from the crude-rich country.

“We need to watch what happens be-cause the geopolitical risk is genuinely a factor once more in global oil markets,” said McKenna. Bitcoin rose more than 10% to above $15,000, recovering some of the recent losses fuelled by profi t-taking in recent days, after a report that billion-aire investor Peter Thiel had bet big on the cryptocurrency.

The Wall Street Journal said his Found-ers Fund venture-capital fi rm had bought hundreds of millions of dollars of the dig-ital unit, without citing sources.

It soared 25-fold through 2017 to a record high above $19,500 on December 18 before tumbling to just above $12,000 less than a week later.

In Hong Kong, the Hang Seng closed up 0.2% at 30,560.95 points and Shanghai — Composite rose 0.6% at 3,369.11 points yesterday. Tokyo was closed for holiday.

Traders work at the Hong Kong Stock Exchange. The Hang Seng closed up 0.2% to 30,560.95 points yesterday.

Sensex falls for third day; rupee weakensBloomberg/ReutersMumbai

India’s benchmark equity index

closed lower for a third day,

reaching a two-week low as inves-

tors braced for company earnings

that start next week.

The S&P BSE Sensex fell less

than 0.1% in Mumbai. The bench-

mark has failed to click gains

since a record close on the last

trading day of 2017.

The benchmark Sensex

fell 0.06%, or 18.88 points, to

33,793.38 points.

Five of 19 sectoral sub-indexes

compiled by BSE dropped, led

by a gauge of auto makers. Dr

Reddy’s Laboratories and Wipro

were the worst performers on the

main measure.

Adani Ports and Special

Economic Zone was the best per-

former while Adani Enterprises

surged to a record high.

“Investors are now positioning

themselves for both earnings and

the budget,” said Jitendra Panda,

managing director at Peerless Se-

curities in Kolkata. “Expectations

are that the third quarter profits

should improve further.”

Companies will start announc-

ing results for the October-

December period from next

week, and some investors expect

a comparatively lower base will

lead to higher profits. The govern-

ment’s invalidation of high-value

currency notes in November 2016

had hurt corporate earnings.

Meanwhile the rupee ended

marginally lower against US

dollar ahead of the minutes of

the Federal Reserve’s December

policy meeting.

The home currency closed at

63.53 a dollar, down 0.07% from

its Tuesday’s close of 63.48.

The rupee opened at 63.58

a dollar and touched a high

and a low of 63.46 and 63.58,

respectively.

According to a Bloomberg

report, the minutes of the Federal

Open Market Committee meeting

will be scrutinised closely to fur-

ther assess how close the Fed is

to potentially shifting the planned

pace of tightening.

In the year 2017, the rupee

gained 6.35% and Sensex rose

28%, while foreign institutional

investors have bought $7.73bn

and $23.27bn in equity and debt,

respectively.

The 10-year bond yield ended

at 7.32% compared to its previous

close of 7.38%. Bond yields and

prices move in opposite direc-

tions.

Asian currencies were trading

higher. Thai baht was up 0.46%,

Indonesian rupiah 0.29%, Taiwan

dollar 0.19%, Malaysian ringgit

0.13%, China off shore 0.09%,

Philippines peso 0.09%. However,

South Korean won was down

0.3%, China renminbi 0.12%.

The dollar index, which meas-

ures the US currency’s strength

against major currencies, was

trading at 92.074, up 0.22%, from

its previous close of 91.872.

BUSINESS11Gulf Times

Thursday, January 4, 2018

How systematicinternalisers willchange tradingBy Will HadfieldLondon

The transformation of Europe’s financial markets under the new MiFID II rules that took eff ect yesterday will be accompanied by swathes of new jargon. Two words will be more important than most: systematic internalisers. That’s the name that banks and algorithmic trading firms will now go by when they trade directly with clients. Regulators created the category to impose some rules on the unregulated trading that happens away from public markets, yet exchanges complain that SIs are likely to increase the amount of over-the-counter trading. Banks aren’t complaining.

What does a systematic internaliser do?

Any firm that trades with clients using its own capital can register as a systematic internaliser, or SI. In contrast to traditional exchanges or other venues that match multiple client orders, SI venues are designed to fill clients’ buy or sell orders directly. SIs have to use their own capital to meet customers’ demands. It’s old-fashioned market-making, but within a new regulatory framework. Most of the big global banks plan to register as a systematic internaliser in at least one asset class.

Why were SIs created?

The category came into existence under an earlier round of reforms called MiFID I. But almost no one used them because banks were able to run unregulated dark pools called broker-crossing networks to match their customers’ orders of stocks and other securities. Alarmed by the rise of dark trading – where prices are not displayed before a trade takes place – the writers of MiFID II banned broker-crossing networks and put caps on other forms of dark pools. The banks need a new home for their customers’ trades. The SIs, which are unaff ected by the dark-trading caps, could meet that need.

Why would anyone trade with an SI?

Thanks to MiFID II, SIs have some big advantages over conventional markets, such as stock exchanges and the electronic platforms where bonds and derivatives are increasingly traded. SIs are attractive to bond investors because it means they won’t be burdened with MiFID’s onerous trade-reporting rules; the SI does it for them.

Even better, anyone using an SI no longer needs to submit personal data when they place an order. That’s a big deal for funds based outside the EU where in some cases (hello Switzerland and South Korea), it’s illegal to send personal information, such as your passport number, to a commercial organisation.

Why are SIs controversial?

Stock exchanges thought they were getting a great deal with MiFID II. Then they read the rules on SIs. And now they’re not so happy. Euronext NV and Deutsche Boerse both argue that SIs could siphon trades away from stock exchanges because the rules give them greater flexibility in how they price orders. As MiFID also compels fund managers to prove that they are getting the best prices for clients, stock exchanges fear that SIs will off er slightly better prices to win business.

What are the critics of SIs doing about them?

Responding to lobbying by exchanges, lawmakers and even some proprietary trading firms, the EU’s markets regulator, the European Securities and Markets Authority, jumped into action just two months before MiFID went into force. ESMA proposed making SIs abide by the same so-called tick-price regime as everyone else, a move that would end the new venues’ ability to price securities more flexibly. Unfortunately for the critics of SIs, the planned change cannot take eff ect until May at the earliest.

Does that mean SIswill fail?

No. The tick-size complaint was always a convenient stick with which to beat the SIs. Several firms that registered to become SIs, including Sun Trading, have already said that they never want to use the greater pricing flexibility to win business. It will take months before fund managers are comfortable with using SIs, but when they do, they are likely to find that SIs are able to off er them a better price than other venues.

Why would that be?

For a very simple reason: an SI always knows who it’s trading with, while traders in a stock market never know who they’re trading with. Not needing to price defensively means that a bank or a speed trader working as an SI should be able to provide keener prices. That’s the theory. Whether it becomes the reality will not be apparent for many months to come.

Bloomberg QuickTake Q&A

Bulls to retain upper hand in EMs this yearBloombergLondon

Bulls will retain the upper hand in emerging markets this year, though some assets may face a bumpier ride than in 2017.

Bonds and equities in developing countries will continue to streak ahead, outpacing their developed-nation peers into 2018, according to a Bloomberg survey of 20 investors, traders and strategists. Currencies, however, may struggle to stay in front. The survey was conducted December 5-14.

And while the Federal Reserve’s actions will re-main key in determining the fate of what has been the strongest equity rally for emerging-market stocks since 2009, geopolitical risks will be less of a focus as investors zero in on Donald Trump and the outlook for the world’s second-largest econo-my: China.

“The environment for emerging markets was great in 2017 with the Goldilocks factors of eco-nomic growth and low infl ation in industrialised countries,” said Hideo Shimomura, chief fund manager in Tokyo at Mitsubishi UFJ Kokusai Asset Management Co, which oversees the equivalent of $114bn. “The EM rally we saw this year will prob-ably extend into 2018, but after a period of strong growth and low infl ation, some adjustment will be inevitable.”

Investor darlings in 2017 thanks to their high yields and buoyant growth prospects, emerging markets have weathered Trump’s protectionist rhetoric and a swathe of geopolitical brush fi res - from the Middle East to the Korean peninsula.

But after the rally in stocks and currencies last

year, investors may become more selective in 2018 as headwinds like Fed tightening weaken the ap-peal of emerging markets.

Consistent with a survey in October, market watchers continue to see the Fed and President Trump’s policy moves to be key for developing-country assets. What happens with China – where authorities are waging a battle against debt and President Xi Jinping is cementing his power – has edged up in the rankings.

Going forward, Mexico’s peso and bond market as well as Brazilian equities are among the most-favoured emerging-market assets, while Turkey’s assets ranked low given the country’s political un-certainty. The lira, one of the worst performers in emerging markets last year, will remain in the dol-drums in 2018. The currency plunged to a record

low as President Recep Tayyip Erdogan criticised the central bank in November, saying it was on the “wrong path” in tackling soaring infl ation.

But in general, the stars will continue to align from a macroeconomic perspective, with global growth expected to be steady and infl ation sub-dued, said Colin Harte, a London-based fund manager and strategist for multi-asset solutions at BNP Paribas Asset Management, which oversaw the equivalent of $673bn at the end of September.

“This Goldilocks environment will be one where central banks will continue to pursue accommo-dative monetary policy and follow their existing reaction functions,” he said.

Survey respondents were also asked about infl a-tion and general economic outlooks for 11 develop-ing nations.

Germany’s jobless rate drops to record low as economy boomsBloombergFrankfurt

Germany’s unemployment rate fell to a

record low as the number of people out

of work slid for a sixth month, reflecting

a boom in Europe’s largest economy that

could push up wages and inflation.

The jobless rate was 5.5% in December,

and the previous month’s rate was revised

down to the same level, the Federal Labor

Agency in Nuremberg said on Wednesday.

The number of unemployed plunged by

29,000 last month, more than twice as

much as the median estimate in a Bloomb-

erg survey of economists.

Germany has been enjoying a strong

economic run supported by domestic

spending and solid global trade, with

Purchasing Managers’ Indexes on Tuesday

showing factory activity for the country

and the euro area jumping to records in

December. At the same time, business op-

timism has slipped from an all-time high as

corporate executives fret over production

constraints such as finding skilled workers

that may start to lift their costs.

“People are not afraid to spend money

because unemployment is so low and that

boosts domestic demand,” said Jens Kram-

er, an economist at NordLB in Hanover. “It’s

something of a miracle that wage growth

was so moderate after we eff ectively had

full employment for two years in Germany.

We should eventually see pressure for high-

er wages this year.” In a sign of that pressure,

pay talks between employers and IG Metall,

Germany’s 2.3mn-member industrial union,

appear to be struggling to make progress af-

ter an initial deadline to reach an agreement

passed on December 31. IG Metall has asked

for a 6% increase in wages and the option to

work just 28 hours a week.

“The collective bargaining talks are

gridlocked,” the union said on Tuesday in a

statement on its website. It is now consider-

ing so-called warning strikes, temporary

walkouts that usually have little impact on

production.

Weak pay growth so far means the na-

tion is facing the same struggle as the rest

of the euro area in generating sustained

inflation. Bundesbank President Jens Wei-

dmann, who has repeatedly called for the

European Central Bank to set an end-date

for its crisis-era stimulus measures, said

last month that he’s confident the picture in

Germany will soon change.

“We expect that the increased capac-

ity utilisation and regionally appearing

bottlenecks in some labour markets will

lead to somewhat higher wage pressure,”

he told reporters on December 18. Nascent

pressures elsewhere in the bloc mean that

the ECB is “therefore on track toward our

definition of price stability.”

That reasoning was bolstered earlier

yesterday as data showed Spanish jobless

claims slid by 61,500 last month, the big-

gest decline since June and snapping a run

of four months of increases.

MiFID shake-up goes smoothly even astrade volumes dry upBloombergLondon

The biggest regulatory change in Europe in 10 years got off to a comparatively smooth start as

the chairman of the European Securities and Markets Authority said he’s seen no teething problems.

“What we can see, for our part, is no glitches so far,” Steven Maijoor said in a conference call with reporters. The rules mean that “for the fi rst time we see data of all fi nancial instruments in the EU.”

After seven years of preparation, $2bn in compliance costs and one false start, the fi nance industry was bracing for one of the most seismic regulatory shifts in history, aff ecting everything from re-search to dark pools. Regulators eased the burden on companies ahead of the start period, giving grace periods on some of the biggest issues as banks and asset man-agers struggled to comply in time.

Investors have been sitting on their hands with trading volumes below av-erage though the fi rst week of the year tends to be quiet anyhow. Client business at one major brokerage in Europe was al-most non-existent as the rules took eff ect yesterday, a person with knowledge of the matter said.

TP ICAP, the world’s largest interdealer broker, expects trading volume in bonds, swaps and other securities typically trad-ed off -exchange to be lower than usual across the board and across most markets this month, according to a representative at the fi rm. Another brokerage told clients that it wouldn’t accept swap trade orders from the last trading week in December through Jan. 3, said one of the people, who asked not to be named because the infor-mation isn’t public.

“Reality is, it’s going to need a lot of refi ning as we see the market and clients take on the rules,” said Neil McLean, head of execution trading for Asia ex-Japan at Nomura Holdings’ Instinet Pacifi c Serv-ices in Hong Kong. “We have some chal-lenges with categorising clients and mak-ing sure they receive only what the rules allow.”

His fi rm expects less business in the short term from Europe as clients get used to the rules, McLean said, adding that trading in Asia was quiet yesterday with Japan shut for the New Year holiday.

The rules present banks with oppor-tunities to grow businesses off ering pas-sive investing, research and systematic internalisers but also leave them facing competition from research boutiques and platforms that off er low-cost trade ex-ecution.

Retail lenders may also suff er from the ban on some inducements for investment advice and portfolio management. That’s because banks that distribute mutual funds to their retail clients often receive and retain a portion of the initial sales charge from the fund manager, or receive an annual fee, S&P Global Ratings analyst Giles Edwards wrote in a note on Tuesday.

“Over the longer term, the disruptive

nature of this major regulatory change will become more apparent, and the win-ners and losers will likely emerge more clearly,” Edwards wrote. “There will likely be more losers than winners.”

The legislation may also dissuade com-panies from becoming publicly traded, as the unbundling of research and execution is widely expected to lead to less coverage of smaller fi rms by analysts.

“If a corporate broker would only mar-ket a fi rm to investors who pay for re-search, getting new money in the door will be far more challenging,” said Nick Burchett, UK equities manager at Caven-dish Asset Management. “Limited access to capital is going to be a huge hurdle for companies coming to market if they now fi nd they have only a very concentrated shareholder base. It may also be tougher to secure those cornerstone investors who are prepared to support a company for the long-term.”

The regulator is unbundling research in an attempt to get a better deal for as-set owners. That means asset managers must stop receiving analysis they haven’t purchased. One investment bank, in an attempt to stem the hundreds of research e-mails that have traditionally been re-ceived, is sending automated emails ask-ing not to be sent analysis and seeking written confi rmation that the sender will comply.

“There’s going to be a lot of fund man-agers who have to walk over to the com-pliance person and say, ‘look I’ve been sent this, or opened this envelope, what do I do?’”, said Alistair Haig, who teaches

fi nancial markets at the University of Ed-inburgh Business School.

Firms in Asia will also be aff ected by the changes, according to Sumit Indwar, a fi -nancial regulation lawyer at Linklaters in Hong Kong.

“Everyday, you’ll be dealing with Euro-pean-regulated counterparties and they’ll be looking to you to change the way you service them,” Indwar said in a Bloomberg Television interview with Rishaad Sala-mat. “You’re going to fi nd a lot of indirect compliance being pushed out here in Asia and that’s the thing that my clients and the regulated industry here in Asia is re-ally struggling with.”

The unbundling has sent pricing for analysis plunging. Sydney-based money manager AMP Capital, which oversees about $140bn, expects its payments for analysis to fall by 30% to 50% from last year for a like-for-like service.

Deutsche Bank AG said in August it would halve the price of some research packages, citing competition from com-petitors, according to a memo seen by Bloomberg at the time.

Germany’s biggest bank off ered fur-ther discounts to some clients through December, according to two people with knowledge of the matter who asked not be identifi ed because the discussions were private. A Deutsche Bank spokeswoman declined to comment.

Morgan Stanley also off ered discounts to some clients, the people said. It had earlier quoted a small client $25,000 an-nually for basic equity research and some access to analysts, Bloomberg reported in

October. A London-based spokesman for the bank declined to comment on further discounts.

Separately, some providers appear to be willing to take any price to be kept on a money manager’s books, according to the chief operating offi cer of an equity hedge fund that manages more than $1bn. An executive at another stock-focused hedge fund overseeing about $300mn said it’s paying on average $21,000 annually to each of its research providers. Corporate access is included in the price, the person said. They asked not to be identifi ed as the details are private.

Low prices for research could have implications later. Russell Napier, co-founder of research marketplace ERIC, said the UK regulator should intervene if a price war for analysis begins.

Despite the long buildup, at least nine of the 28 European Union members have yet to convert the rules into national legislation or regulations. Valdis Dom-brovskis, the EU commissioner in charge of fi nancial-services policy, has said mar-kets could face disruption caused by the late transposition.

Others disagree, with Michael Mc-Kee, head of fi nancial services regulation at law fi rm DLA Piper, arguing it will be “more of a whimper than a bang.”

“While it is one of the most impor-tant pieces of EU legislation for secu-rities markets in years,” he said, the fact some countries haven’t passed the laws mean “consequently it will still be some time before these major market changes hit home.”

Brokers look at their computer screens on the dealing floor at ICAP in London yesterday. The biggest regulatory change in Europe in 10 years got off to a comparatively smooth start as the world’s largest interdealer broker is expecting trading volume in bonds, swaps and other securities typically traded off -exchange to be lower than usual across the board and across most markets this month.

Thursday, January 4, 2018

BUSINESSGULF TIMES

All talk, few answers from FOMC for Yellen’s long infl ation missBloombergNew York

Janet Yellen’s Federal Reserve probably

didn’t make much progress last month

towards resolving the biggest topic of de-

bate during her tenure leading the central

bank: low inflation.

Minutes of the US central bank’s De-

cember 12-13 policy-setting Federal Open

Market Committee gathering will probably

show the outlook for consumer prices

continued to dominate the discussion

when they are published in Washington.

A review of the closed-door debates

at FOMC meetings since Yellen took over

as Fed chair in 2014 shows the number

of mentions of “inflation” in November

surged to 84, the most of her tenure.

The latest minutes also should help

explain why the forecast for three interest-

rate hikes next year pencilled in by Fed

off icials was unchanged from previous

projections in September, despite an

upgrade to their outlook for economic

growth.

In her final press conference on

December 13, the Fed chair cited below-

target inflation as the one thing left on

her “undone list.” She added that “most

of my colleagues and I do believe that it’s

being held down by transitory factors, but

there’s work undone there in the sense

we need to see it move up in line with our

objective” after spending most of the past

decade below the FOMC’s 2% goal.

That will be a task for Fed Governor

Jerome Powell, nominated to replace

Yellen when her term as chair ends Febru-

ary 3. He’s heard the discussion escalate

first-hand.

Fed staff economists who present at

each FOMC meeting marked down their

projections for inflation in 2018, “reflecting

the judgment that a bit of the unexplained

weakness in core inflation this year may

carry over into next year,” according to the

minutes of the November gathering.

Yellen’s comments following the

December meeting didn’t indicate much

progress.

“There could be a rethink of inflation,”

she said during the press conference. “I

think it is important to watch inflation

outcomes carefully, and if we do not see

inflation moving in the manner that the

committee anticipates, to alter policy so

that we do achieve our 2% objective, but

at the moment, most of my colleagues and

I believe we are on track to achieve it.”

“Fed off icials only expect a relatively

short-term fiscal stimulus, and do not see

a longer-term change in the economy’s

‘speed limit.’ As a result, the hawks are

not likely to be placated by some notion

of capital deepening preventing a more

material pickup in inflation as GDP growth

exceeds its potential rate.”

After rising almost to 2% at the end of

2016, so-called core inflation – a widely

followed measure that excludes volatile

food and energy prices – fell unexpectedly

in 2017, despite a decline in the unemploy-

ment rate to near a 17-year low.

A November 27 study by San Francisco

Fed researchers split the core inflation

gauge up into two categories: “procycli-

cal” inflation, which historically has risen

as the unemployment rate has fallen, and

“acyclical” inflation, which hasn’t typically

responded to tighter labor markets in the

past.

About half of the decline in the core in-

flation rate between January and October

was due to a moderation in procyclical

price pressures, while the other half was

accounted for by acyclical categories.

A notable outcome of the inflation

discussion at the December meeting was

Chicago Fed President Charles Evans’s

dissent against the interest-rate increase

the FOMC authorised, marking his first

since 2011. In a December 15 statement,

Evans justified his decision on the grounds

that “the public’s inflation expectations

appear to me to have drifted down below

the FOMC’s 2% symmetric inflation target,”

which he said could prevent actual infla-

tion from rising back to its goal.

The minutes will also give an important

sense of how FOMC participants view

the balance of risks around their inflation

forecasts. Minutes of the September

meeting – the last time projections were

updated before the December meeting –

showed that four of the 16 policy makers

viewed risks as weighted to the downside,

whereas only one perceived risks to be

weighted to the upside.

The FOMC projections released after

the meeting on December 13 showed

a median forecast for 2.5% economic

growth in 2018, up from September’s 2.1%

estimate. Yellen said that the upgrade was

induced in part by the prospect of tax cuts,

subsequently signed into law by President

Donald Trump.

“That would perhaps push in the direc-

tion of slightly tighter monetary policy,”

she said during the press conference. “But

again, counterbalancing that is that infla-

tion has run lower than we expected, and

you know, it could take a longer period

of a very strong labor market in order to

achieve the inflation objective.”

Bitcoin falls into grey area of disclosure rules for CongressBloombergWashington

To guard against insider trading and fi nancial confl icts, members of Congress and federal offi cials

must fi le regular reports on their assets – including stocks, bonds and deriva-tives.

Yet there’s no explicit mention in the disclosure requirements about bit-coin and the other cryptocurrencies that are drawing intense interest from investors and confounding regulators worldwide.

It’s a grey area that highlights how digital currencies have left govern-ments racing to catch up with rapid changes in fi nance. It’s also one that’s generating concern from ethics spe-cialists as lawmakers and US agencies weigh how to regulate the emerging market.

“Whether a member of Congress has holdings of bitcoin is relevant to our understanding of where someone’s interests might lie,” said Alex Howard,

deputy director of the Sunlight Foun-dation, an advocacy group for govern-ment transparency.

The result is an informal arrange-ment on disclosure. Bitcoin isn’t yet listed in the rules given to members of Congress and federal offi cials. But when lawmakers and offi cials seek the counsel of the Offi ce of Govern-ment Ethics, which governs executive branch employees, or congressional ethics committees, they’re being ad-vised to disclose bitcoin holdings of more than $1,000, according to con-gressional aides and offi cials.

Representative Louise Slaughter, who sponsored a 2012 law called the Stock Act, which requires disclosure of trades in assets including stocks, bonds and derivatives, said she be-lieves the law as written also applies to bitcoin. Still, she advocates rewriting rules to make it explicit.

The Stock Act was written “so the public could trust that members of Congress weren’t personally profi ting from the offi ce they hold,” Slaughter, a New York Democrat, said in a state-

ment. “No one should be able to get around this law, including members who invest in digital currencies.”

Part of the initial appeal of bitcoin was the idea it could replace cash, granting users anonymity and free-

dom from government interference to make everyday transactions. As its price has risen, bitcoin and similar cryptocurrencies are being hoarded as investments.

The US government has already

grappled with how to apply money laundering and tax statutes to bitcoin and lawmakers and offi cials could act this year.

Offi cials around the world are exam-ining broader questions of how to po-lice bitcoin. European governments are seeking global bitcoin regulation amid mounting alarm that it’s being used by money launderers, drug traffi ckers and terrorists.

The US Congress is looking to ad-dress the legal framework for crypto-currency. The 11-member Congres-sional Blockchain Caucus was formed last year “to help policy makers imple-ment smart regulatory approaches to the issues raised by blockchain-based technologies and networks,” according to the group’s website.

Caucus chairmen Jared Polis, a Colorado Democrat, and David Sch-weikert, an Arizona Republican, in September introduced the Cryptocur-rency Tax Fairness Act of 2017.

It would exempt bitcoin transac-tions of less than $600 from tax re-porting requirements. The bill, which

the House declined to add as an amendment to tax overhaul legisla-tion that passed in December, is de-signed to ease bitcoin’s use as a cur-rency, something that would tend to increase its value.

Schweikert and Polis don’t have any holdings in bitcoin, according to spokeswomen for both lawmakers. Ashley Sylvester, a spokeswoman for Schweikert, said in an email that the “decision was purposeful because he had an interest in the regulatory sphere of bitcoin and thought it would be in-appropriate to invest.”

Polis, one of the wealthiest members of Congress and a venture capitalist, said he plans to start a discussion with the Securities and Exchange Commis-sion about an eff ective rule to make sure members of Congress and their top staff report cryptocurrency hold-ings.

“Members of Congress should abso-lutely be required to disclose their bit-coin holdings, as to avoid any confl ict of interests,” Polis said. “The public deserves transparency.”

European governments are seeking global bitcoin regulation amid mounting alarm that it’s being used by money launderers and drug traffi ckers

Eurozone yields edge lower as EU fi nancial market rules kick inReutersLondon

Euro area borrowing costs edged lower yesterday, as a sweeping reform of EU

fi nancial market rules took eff ect a day after hawkish comments by ECB rate-setters triggered a sharp bond market sell-off .

Germany’s 10-year govern-ment bond yield fell 2 basis points to 0.44%, off two-month highs hit on Tuesday after week-end comments from the Europe-an Central Bank’s Benoit Coeure that there was a “reasonable chance” ECB stimulus will not be extended this year.

It held near those highs in early trade after ECB rate setter Ewald Nowotny echoed those comments in a German newspa-per, before heading down.

Analysts said that a signifi cant bond redemption in Germany helped explain the fall in yields.

Most core eurozone bond yields were down 1-4 bps on the day, with the gap between Ital-ian and German 10-year bonds yields tightened to 160 basis points as Italian yields dropped as much as 6 bps to 2.03%.

“We’ve come a long way

down in prices and we had a redemption in Germany, so there many have been some cash being put back to work,” said Orlando Green, Europe-an fixed income strategist at Credit Agricole.

Ireland meanwhile kicked off its annual funding drive by rais-ing €4bn with a syndicated 10-year bond, covering around a quarter of its issuance target just three days into the year.

European stock and bond vol-umes were generally light after major new securities regulations came into force, although trad-ers said there was little in the way of serious disruption.

Under the new MiFID II — or Markets in Financial Instru-ments Directive II — rules, trades in fi nancial assets and in-struments must all be logged in a repository, forcing banks, asset managers and traders to report detailed information on trillions of euros of transactions.

Fixed income volumes were lower yesterday compared to their average at that time over the previous 30 days, according to data provider Trax, a subsidi-ary of MarketAxess that tracks around 65% of all secondary market deals.

ECB cuts credit purchases to record low in Dec

The European Central Bank’s pur-

chases of corporate bonds slowed

last month to their lowest level

since it started buying company

debt almost two years ago, data

showed yesterday.

The ECB has been buying

government bonds since 2015, in

an eff ort to boost inflation in the

eurozone, and added credit to the

programme a year later.

It is widely expected to wind

down the programme this year,

having already reduced its pace

to €30bn ($36bn) per month.

Credit is expected to account

for a growing share of the pur-

chases this year as the ECB nears

a cap on how many government

bonds it can own in countries

such as Germany and Portugal.

But Frankfurt bought just

€3.08bn ($3.7bn) worth of com-

pany debt last month, less than

half the amounts acquired in each

of the previous three months.

While purchases of gov-

ernment bonds, the largest

component of the ECB’s stimulus

programme, were also curbed,

the reduction there was less

marked as they fell to €46.2bn

from €50.7bn a month earlier.

In total, the ECB bought

€50.2bn worth of assets in De-

cember, a month when it normally

reduces the pace of buying due to

low trading volumes on financial

markets around Christmas.

As has been the case for

months, the ECB bought fewer

government bonds from Ger-

many, Portugal and Finland than

its rules dictate, making up for

it with oversized purchases in

Spain, France and Italy.

The ECB set out to buy bonds

based on how much capital

each country has paid into

Frankfurt’s coffers, which in

turn depends on the size of its

economy.

US factory activity rises; construction spending at an all-time high in NovReutersWashington

US factory activity increased more than expected in December, boosted by a surge in new orders

growth, in a further sign of strong eco-nomic momentum at the end of 2017.

The economy’s robust fundamentals were also underscored by other data yes-terday showing construction spending rising to a record high in November amid broad gains in both private and public outlays. The Institute for Supply Man-agement (ISM) said its index of national factory activity jumped to a reading of 59.7 last month from 58.2 in November.

A reading above 50 indicates growth in manufacturing, which accounts for about 12% of the US economy.

The survey’s production sub-index rose 1.9 points to a reading of 65.8 and a gauge of new orders shot up 5.4 points to 69.4. Manufacturers also reported an increase in export orders. A measure of factory employment, however, fell to 57.0 last month from 59.7 in November.

Manufacturing is likely to get a boost this year from a $1.5tn tax cut approved by the Republican-controlled US Con-gress last month. The overhaul of the tax code, the most sweeping in 30 years, slashed the corporate income tax rate to 21% from 35%. Business spending surged in anticipation of the corporate tax cuts.

Recent weakness in the dollar and a strengthening global economy are ex-pected to buoy exports of US-made goods, which would underpin manu-facturing.

US stock indexes hit new record highs, while prices of US Treasuries were mixed.

In a separate report yesterday, the Commerce Department said construc-tion spending rose 0.8% to an all-time high of $1.257tn in November. Construc-tion spending advanced 2.4% on a year-on-year basis.

The manufacturing and construction reports added to data ranging from the labour market to housing and consumer spending in sketching a robust picture of the US economy. Gross domestic prod-uct estimates for the fourth quarter are converging around a 2.8% annualised rate. The economy grew at a 3.2% pace in

the third quarter. In November, spend-ing on private residential projects soared 1.0% to the highest level since February 2007 after rising 0.3% in October.

The increase was in line with a recent jump in homebuilding and supports the view that housing would boost economic growth in the fourth quarter after acting as a drag on gross domestic product since the April-June period.

Spending on nonresidential structures rebounded 0.9% in November after fall-ing 0.2% in the prior month.

Overall, spending on private construc-tion projects climbed 1.0% in November to a record high. That followed a 0.3% increase in October. Outlays on public construction projects rose 0.2% in No-vember after jumping 3.5% in October.

Spending on state and local govern-ment construction projects rose 0.7%. Federal government construction spend-ing tumbled 4.8%.

Workers review an assembled New Holland round baler at the company’s Haytools factory in Pennsylvania (file). US factory activity increased more than expected in December, boosted by a surge in new orders growth, in a further sign of strong economic momentum at the end of 2017.

Major automakers post lower December US sales

Most major automakers yesterday report-

ed lower December US sales despite hefty

consumer discounts, as higher interest

rates and a new tax code cast uncertainty

over their prospects in 2018.

Automakers had benefited in 2017 from

the continued shift in consumer tastes

away from passenger cars to far more prof-

itable pickup trucks and SUVs, with final US

new vehicle sales set to come in just under

the record 17.55mn in 2016.

But industry observers expect sales to

edge lower again in 2018 after a long bull run,

thanks to a saturated market and rising rates

that will boost consumers’ monthly payments

and reduce their purchasing power.

Last month, the Federal Reserve raised

rates a quarter of a percentage point to a

range of 1.25% to 1.50% and maintained its

forecast of three more increases in 2018 and

2019. It is unknown if sales will see any ben-

efit from the sweeping tax overhaul passed

by the Republican-controlled US Congress.

In a conference call with analysts, Ford

Motor Co said the new tax code should be

a “net positive” for the industry.

Consumer discounts aimed at moving

vehicles off dealer lots will likely remain

a concern for the industry. Discounts of

more than 10% of a vehicle’s sticker price

can hurt resale values, in turn weighing on

new vehicle sales.

In December, auto consultancies JD

Power and LMC estimated discounts had

topped 10% for the 17th time in the last

18 months. General Motors Co reported

a 3.3% drop in sales in December, driven

by a decline in lower-margin fleet sales

to government agencies and rental car

companies.