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Tuesday, May 7, 2019 Ramadan 2, 1440 AH BUSINESS GULF TIMES INVESTMENT SUPPORT: Page 16 QFMA issues new listing rules and governance code for funds Trump plays hardball with China KEY TALKS | Page 15 Qatar Islamic banks’ total assets rise 1.77% in 9 months in 2018: OBG By Pratap John Business Editor T he total assets of Qatar’s four Islamic banks rose by 1.77%, while their fi- nancing assets climbed by 3.81% in the first nine months of 2018, Oxford Busi- ness Group has said in a report. The sector also remained profitable dur- ing this period, with y-o-y (year-on-year) net profit showing an 8.36% gain. Impor- tantly, the margins secured during this “challenging” period were made without any significant deterioration in financial stability indicators, OBG said in its The Re- port: Qatar 2019. According to Malaysia-based Islamic Fi- nancial Services Board, Qatar’s four Islamic banks – QIB, Masraf Al Rayan, QIIB and Barwa – Bank showed a capital adequacy ratio of 17.3% in the second quarter of 2018, against 17.5% at the end of 2016. Non-performing financing, meanwhile, showed only a modest gain over the same period, rising from 0.6% to 1.2%. Qatar’s Islamic banks have grown more quickly than their conventional counter- parts over recent years, and collectively posted a 9.1% growth in assets over 2017 to continue this trend. However, the diplo- matic crisis that began in 2017 led to con- cerns regarding the performance of the na- tion’s Islamic financial institutions. Following the June 2017 economic block- ade of the country, the government “moved quickly” to defend the banking sector with injections of public liquidity, a capability it enjoys thanks in large part to Qatar’s size- able reserves and the revenues it receives from its hydrocarbons exports. “Qatar’s four Islamic banks have also to some degree been protected from the dip- lomatic rift by their focus on the domestic market,” OBG said. Qatar’s Islamic banks operate in a highly competitive domestic market in which they compete with seven conventional national players, licensed by the Qatar Central Bank. More competition comes in the form of seven foreign banks, which have played an important part in Qatar’s economic life for over half a century. As well as the institutions licensed by the QCB, a number of banks operate from with- in the distinct regulatory environment of the Qatar Financial Centre, although their activity is generally conducted through rel- atively small representative offices. In 2011, the QCB instructed conventional banks to cease accepting deposits through Islamic windows and wind down their Shariah- compliant operations (windows or subsidi- aries). This has helped Qatar’s four full-fledged Islamic banks to establish themselves as uni- versal institutions, offering Shariah-com- pliant services across the areas of corporate and retail banking, including the increasingly important small and medium-sized enter- prise segment, as well as the more specialist fields of private banking, real estate finance, structured finance, investment and asset management, OBG noted. Qatar’s Islamic banks operate according to the same regulatory framework as their conventional counterparts, and are over- seen by the QCB. On matters of Shariah, the country operates the self-regulation model, whereby Islamic finance institutions turn to their own Shariah supervisory boards for rulings on new products and services. The QCB has not established a central- ised Shariah board to determine policy and pronounce on points of law but has recourse to Shariah scholars on an as-needed basis should a regulatory question arise. “While the lack of a centralised Shariah advisory board is sometimes viewed as a hurdle to sector development, the consist- ency of Shariah rulings is greatly aided by the fact that Shariah advisers normally sit on more than one of the banks’ proprietary boards. Islamic institutions also have re- course to a number of external references, including the Supreme Shariah Council at- tached to the Ministry of Awqaf and Islamic Affairs and the accounting, auditing, gov- ernance and ethical principles established by the Accounting and Auditing Organisa- tion for Islamic Financial Institutions,” OBG noted. The regulatory framework supporting Qatar’s Islamic finance sector may soon, however, undergo a significant alteration, it said. In 2018, the QCB revealed that it was planning to establish a central Shariah com- mittee for Islamic banks as part of a broader reform outlined by the Second Strategic Plan for Financial Sector Regulation (2017– 22). Qatar is one of a number of Gulf jurisdic- tions to come to the conclusion that a cen- tralised system is the solution to the chal- lenge of a rapidly evolving market. Qatar trade surplus drops 4% to QR12.75bn in March By Santhosh V Perumal Business Reporter Q atar witnessed more than 4% year-on-year decline in trade surplus to QR12.75bn in March this year even as imports fell faster than exports, according to the official statis- tics. The country’s trade surplus saw a 7.4% fall month-on-month in the review peri- od with imports growing at double digits, according to figures released by the Plan- ning and Statistics Authority (PSA). In absolute terms, Japan, South Korea, India, China and Singapore were among the largest export markets of Qatar; while imports mainly came from the US, China, Turkey, Germany and India in the review period. In March 2019, total exports of goods (including exports of goods of domes- tic origin and re-exports) amounted to QR22.35bn, showing a decline of 6.3% compared to March 2018, but was up a marginal 0.4% against February this year. The exports of petroleum gases and other gaseous hydrocarbons amounted to QR13.5bn, which registered 8.9% and 6.7% decline on yearly and monthly basis respectively; crude amounted to QR3.82bn, which, however, grew 0.7% and 13.8% year-on-year and month- on-month; non-crude QR1.42bn (11.6% and 10.4% shrinkage respectively); and other commodities QR2.6bn (down 5.5% on yearly basis but up 11.9% on monthly basis). Petroleum gases constituted 63.23% of the exports of domestic products com- pared to 64.46% a year ago period, crude 17.89% (16.53%), non-crude 6.65% (7%) and other commodities 12.18% (12.06%). In March this year, Japan was at the top of the countries of destination of Qatar’s exports with QR4.54bn, a share of 20.3% of total; followed by South Ko- rea, QR3.18bn (14.2%); India, QR2.63bn (11.8%); China, QR2.09bn (9.4%) and Singapore QR1.99bn (8.9%). On a yearly basis, Qatar’s exports to South Korea, China, India and Singa- pore declined 28.05%, 18.04%, 5.73% and 0.5% respectively; whereas those to Ja- pan expanded 14.36%. On a monthly basis, shipments from Qatar to Singapore, India and Japan had grown 17.06%, 16.37% and 0.22% respec- tively; while those to China and South Korea plunged 31.48% and 27.73%. The country’s re-exports amounted to QR0.99bn in March 2019, which grew 15.7% and 9.13% on yearly and monthly basis respectively. Qatar’s total imports (valued at cost insurance and freight) amounted to QR9.59bn in March this year, which showed a 9% fall year-on-year but 13% growth month-on-month. In March 2019, the US was the lead- ing country of origin of Qatar’s imports worth QR2.2bn, a share of 22.9% of the total, China QR0.94bn (9.8%), Turkey QR0.72bn (7.5%), Germany QR0.61bn (6.3%) and India QR0.53bn (5.5%). On a yearly basis, Doha’s imports from China and India shrank 36.05% and 19.33%; while those from Turkey, the US and Germany grew 96.73%, 8.91% and 4.48% respectively. On a monthly basis, shipments from Turkey almost tripled, those from the US more than doubled and India soared 14.85%; whereas those from Germa- ny and China plummeted 39.84% and 25.98% respectively. During March 2019, motor cars and other passenger vehicles were at the top of the imported group of commodities, with a value of QR0.35bn, which how- ever showed a year-on-year decrease of 33.2%; parts of aircraft QR0.28bn (-9.5%); turbojets QR0.26bn (-38.1%); and other commodities QR8.7bn (-6.3%). Commercial Bank’s long-term foreign currency rating affirmed at ‘A-’ by Capital Intelligence By Santhosh V Perumal Business Reporter Capital Intelligence (CI), an international credit rating agency, yesterday affirmed the long-term foreign currency rating (LT FCR) of Commercial Bank at ‘A-’. At the same time, CI has adjusted the bank’s short- term foreign currency rating (ST FCR) to ‘A1’ from ‘A2’. The lender has also been assigned a bank standalone rating (BSR) of ‘bbb-’, a core financial strength (CFS) rating of ‘bb+’ and an extraordinary support level (ESL) of ‘high.’ The bank’s LT FCR is set three notches above the BSR to reflect the high likelihood of extraordinary support from the government in the event of financial distress. This is based on the government’s strong track record of support for Qatari banks. At different points in time such support has included the transfer of ‘difficult investments’ to the State, the transfer of real estate loans and the injection of additional equity. Its BSR is based on a CFS rating of ‘bb+’ and an operating environment risk anchor of ‘bbb’. Given the weaknesses in overall financial metrics, the main supporting factors are non-financial. These include the good domestic franchise as the second largest conventional bank in Qatar and the diversification and future growth opportunities provided by the Turkish subsidiary. The one positive area of the financial metrics is the profitability where operating and net profitability both improved. As real estate often forms the basis of collateral for non-real estate lending, overall exposure is higher, it said, adding real estate values have shown considerable volatility in the past in Qatar and any downward shift in values would impact both asset quality and collateral coverage. Highlighting that although capital ratios remain acceptable in global terms, they are not strong; CI said it would mean higher than average reliance on wholesale funding and a rather higher than average ratio of loans to customer deposits. Funding is also an area of challenge, it said; adding system liquidity in Qatar has historically tended to be rather tighter than in other Gulf Cooperation Council countries. However, at end 2018 liquidity ratios at Commercial bank were tighter than at most of its peers; and the bank has a lower share of customer deposits in its overall funding mix. Qatar’s Islamic banks have grown more quickly than their conventional counterparts over recent years, and collectively posted a 9.1% growth in assets over 2017 to continue this trend, according to OBG In absolute terms, Japan, South Korea, India, China and Singapore were among the largest export markets of Qatar Lost Iranian oil seen leaving global spare capacity thin Bloomberg Singapore President Donald Trump may rely on Opec to immediately fill the supply shortfall caused by US sanctions on Iran, but that doesn’t mean he’ll be able to depend on the group to keep prices down over the longer term. That’s the view of Fereidun Fesharaki, chairman of industry consultant FGE, who said that about 800,000 to 1mn barrels a day of Iranian oil would be lost from the market in the most extreme scenario. That compares with spare global capacity of around 2mn barrels a day, he said. “If Saudis replace it with the help of the United Arab Emirates and Kuwait, the spare capacity will be so thin that any developments in Venezuela and Libya can send the prices through the roof,” Fesharaki said in a Bloomberg TV interview yesterday. Brent could go as high as $85 a barrel, he said, based on a scenario of Iran still exporting at least 200,000 barrels a day and Venezuelan output dropping by another 500,000 barrels a day. The White House surprised markets last month by announcing it would end waivers allowing eight nations to buy Iranian oil when they expired on May 2. While President Trump has said that Saudi Arabia and other members of the Organization for Petroleum Exporting Countries will make up for the lost barrels, Khalid al-Falih, the kingdom’s oil minister, has been less clear-cut. He said last week that it was possible that Opec and its allies could extend an agreement to curb output through the end of the year. After spiking on the US announcement, oil has been in retreat on signs the supply outlook isn’t as bad as feared and the health of the global economy is improving. Those losses accelerated yesterday, with Brent crude falling 1.3% to $69.95 a barrel as of 10.33am in London, after President Trump threw US-China trade talks into disarray with a threat to raise tariffs. An oil tanker is pictured off the Iranian port city of Bandar Abbas. The White House surprised markets last month by announcing it would end waivers allowing eight nations to buy Iranian oil when they expired on May 2.

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Page 1: total assets rise 1.77% in - Gulf Times

Tuesday, May 7, 2019Ramadan 2, 1440 AH

BUSINESSGULF TIMES

INVESTMENT SUPPORT: Page 16

QFMA issues new listing rules and governance code for funds

Trump plays hardball with China

KEY TALKS | Page 15

Qatar Islamic banks’ total assets rise 1.77% in 9 months in 2018: OBG

By Pratap JohnBusiness Editor

The total assets of Qatar’s four Islamic banks rose by 1.77%, while their fi -nancing assets climbed by 3.81% in

the fi rst nine months of 2018, Oxford Busi-ness Group has said in a report.

The sector also remained profi table dur-ing this period, with y-o-y (year-on-year) net profi t showing an 8.36% gain. Impor-tantly, the margins secured during this “challenging” period were made without any signifi cant deterioration in fi nancial stability indicators, OBG said in its The Re-port: Qatar 2019.

According to Malaysia-based Islamic Fi-nancial Services Board, Qatar’s four Islamic banks – QIB, Masraf Al Rayan, QIIB and Barwa – Bank showed a capital adequacy ratio of 17.3% in the second quarter of 2018, against 17.5% at the end of 2016.

Non-performing fi nancing, meanwhile, showed only a modest gain over the same period, rising from 0.6% to 1.2%.

Qatar’s Islamic banks have grown more quickly than their conventional counter-parts over recent years, and collectively posted a 9.1% growth in assets over 2017 to continue this trend. However, the diplo-matic crisis that began in 2017 led to con-cerns regarding the performance of the na-tion’s Islamic fi nancial institutions.

Following the June 2017 economic block-ade of the country, the government “moved quickly” to defend the banking sector with injections of public liquidity, a capability it enjoys thanks in large part to Qatar’s size-able reserves and the revenues it receives from its hydrocarbons exports.

“Qatar’s four Islamic banks have also to some degree been protected from the dip-lomatic rift by their focus on the domestic market,” OBG said.

Qatar’s Islamic banks operate in a highly

competitive domestic market in which they compete with seven conventional national players, licensed by the Qatar Central Bank. More competition comes in the form of seven foreign banks, which have played an important part in Qatar’s economic life for over half a century.

As well as the institutions licensed by the QCB, a number of banks operate from with-in the distinct regulatory environment of the Qatar Financial Centre, although their activity is generally conducted through rel-

atively small representative offi ces. In 2011, the QCB instructed conventional banks to cease accepting deposits through Islamic windows and wind down their Shariah-compliant operations (windows or subsidi-aries).

This has helped Qatar’s four full-fl edged Islamic banks to establish themselves as uni-versal institutions, off ering Shariah-com-pliant services across the areas of corporate and retail banking, including the increasingly important small and medium-sized enter-

prise segment, as well as the more specialist fi elds of private banking, real estate fi nance, structured fi nance, investment and asset management, OBG noted.

Qatar’s Islamic banks operate according to the same regulatory framework as their conventional counterparts, and are over-seen by the QCB. On matters of Shariah, the country operates the self-regulation model, whereby Islamic fi nance institutions turn to their own Shariah supervisory boards for rulings on new products and services.

The QCB has not established a central-ised Shariah board to determine policy and pronounce on points of law but has recourse to Shariah scholars on an as-needed basis should a regulatory question arise.

“While the lack of a centralised Shariah advisory board is sometimes viewed as a hurdle to sector development, the consist-ency of Shariah rulings is greatly aided by the fact that Shariah advisers normally sit on more than one of the banks’ proprietary boards. Islamic institutions also have re-course to a number of external references, including the Supreme Shariah Council at-tached to the Ministry of Awqaf and Islamic Aff airs and the accounting, auditing, gov-ernance and ethical principles established by the Accounting and Auditing Organisa-tion for Islamic Financial Institutions,” OBG noted.

The regulatory framework supporting Qatar’s Islamic fi nance sector may soon, however, undergo a signifi cant alteration, it said.

In 2018, the QCB revealed that it was planning to establish a central Shariah com-mittee for Islamic banks as part of a broader reform outlined by the Second Strategic Plan for Financial Sector Regulation (2017–22).

Qatar is one of a number of Gulf jurisdic-tions to come to the conclusion that a cen-tralised system is the solution to the chal-lenge of a rapidly evolving market.

Qatar trade surplus drops 4% to QR12.75bn in MarchBy Santhosh V PerumalBusiness Reporter

Qatar witnessed more than 4% year-on-year decline in trade surplus to QR12.75bn in March

this year even as imports fell faster than exports, according to the offi cial statis-tics.

The country’s trade surplus saw a 7.4% fall month-on-month in the review peri-od with imports growing at double digits, according to fi gures released by the Plan-ning and Statistics Authority (PSA).

In absolute terms, Japan, South Korea, India, China and Singapore were among the largest export markets of Qatar; while imports mainly came from the US, China, Turkey, Germany and India in the review period.

In March 2019, total exports of goods (including exports of goods of domes-tic origin and re-exports) amounted to QR22.35bn, showing a decline of 6.3% compared to March 2018, but was up a marginal 0.4% against February this year.

The exports of petroleum gases and other gaseous hydrocarbons amounted to QR13.5bn, which registered 8.9% and 6.7% decline on yearly and monthly basis respectively; crude amounted to QR3.82bn, which, however, grew 0.7% and 13.8% year-on-year and month-

on-month; non-crude QR1.42bn (11.6% and 10.4% shrinkage respectively); and other commodities QR2.6bn (down 5.5% on yearly basis but up 11.9% on monthly basis).

Petroleum gases constituted 63.23% of the exports of domestic products com-pared to 64.46% a year ago period, crude 17.89% (16.53%), non-crude 6.65% (7%) and other commodities 12.18% (12.06%).

In March this year, Japan was at the top of the countries of destination of Qatar’s exports with QR4.54bn, a share of 20.3% of total; followed by South Ko-rea, QR3.18bn (14.2%); India, QR2.63bn (11.8%); China, QR2.09bn (9.4%) and Singapore QR1.99bn (8.9%).

On a yearly basis, Qatar’s exports to South Korea, China, India and Singa-pore declined 28.05%, 18.04%, 5.73% and 0.5% respectively; whereas those to Ja-pan expanded 14.36%.

On a monthly basis, shipments from Qatar to Singapore, India and Japan had grown 17.06%, 16.37% and 0.22% respec-tively; while those to China and South Korea plunged 31.48% and 27.73%.

The country’s re-exports amounted

to QR0.99bn in March 2019, which grew 15.7% and 9.13% on yearly and monthly basis respectively.

Qatar’s total imports (valued at cost insurance and freight) amounted to QR9.59bn in March this year, which showed a 9% fall year-on-year but 13% growth month-on-month.

In March 2019, the US was the lead-ing country of origin of Qatar’s imports worth QR2.2bn, a share of 22.9% of the total, China QR0.94bn (9.8%), Turkey QR0.72bn (7.5%), Germany QR0.61bn (6.3%) and India QR0.53bn (5.5%).

On a yearly basis, Doha’s imports from China and India shrank 36.05% and 19.33%; while those from Turkey, the US and Germany grew 96.73%, 8.91% and 4.48% respectively.

On a monthly basis, shipments from Turkey almost tripled, those from the US more than doubled and India soared 14.85%; whereas those from Germa-ny and China plummeted 39.84% and 25.98% respectively.

During March 2019, motor cars and other passenger vehicles were at the top of the imported group of commodities, with a value of QR0.35bn, which how-ever showed a year-on-year decrease of 33.2%; parts of aircraft QR0.28bn (-9.5%); turbojets QR0.26bn (-38.1%); and other commodities QR8.7bn (-6.3%).

Commercial Bank’s long-term foreign currency rating affirmed at ‘A-’ by Capital Intelligence By Santhosh V PerumalBusiness Reporter

Capital Intelligence (CI), an international credit rating agency, yesterday affirmed the long-term foreign currency rating (LT FCR) of Commercial Bank at ‘A-’.At the same time, CI has adjusted the bank’s short-term foreign currency rating (ST FCR) to ‘A1’ from ‘A2’.The lender has also been assigned a bank standalone rating (BSR) of ‘bbb-’, a core financial strength (CFS) rating of ‘bb+’ and an extraordinary support level (ESL) of ‘high.’The bank’s LT FCR is set three notches above the BSR to reflect the high likelihood of extraordinary support from the government in the event of financial distress. This is based on the government’s strong track record of support for Qatari banks.At different points in time such support has included the transfer of ‘difficult investments’ to the State, the transfer of real estate loans and the injection of additional equity.Its BSR is based on a CFS rating of ‘bb+’ and an operating environment risk anchor of ‘bbb’. Given the weaknesses in overall financial metrics, the main supporting factors are non-financial.These include the good domestic franchise as the second largest conventional bank in Qatar and the diversification and future growth opportunities provided by the Turkish subsidiary. The one positive area of the financial metrics is the profitability where operating and net profitability both improved.As real estate often forms the basis of collateral for non-real estate lending, overall exposure is higher, it said, adding real estate values have shown considerable volatility in the past in Qatar and any downward shift in values would impact both asset quality and collateral coverage.Highlighting that although capital ratios remain acceptable in global terms, they are not strong; CI said it would mean higher than average reliance on wholesale funding and a rather higher than average ratio of loans to customer deposits.Funding is also an area of challenge, it said; adding system liquidity in Qatar has historically tended to be rather tighter than in other Gulf Cooperation Council countries. However, at end 2018 liquidity ratios at Commercial bank were tighter than at most of its peers; and the bank has a lower share of customer deposits in its overall funding mix.

Qatar’s Islamic banks have grown more quickly than their conventional counterparts over recent years, and collectively posted a 9.1% growth in assets over 2017 to continue this trend, according to OBG

In absolute terms, Japan, South Korea, India, China and Singapore were among the largest export markets of Qatar

Lost Iranian oil seen leaving global spare capacity thinBloombergSingapore

President Donald Trump may rely on Opec to immediately fill the supply shortfall caused by US sanctions on Iran, but that doesn’t mean he’ll be able to depend on the group to keep prices down over the longer term.That’s the view of Fereidun Fesharaki, chairman of industry consultant FGE, who said that about 800,000 to 1mn barrels a day of Iranian oil would be lost from the market in the most extreme scenario. That compares with spare global capacity of around 2mn barrels a day, he said.“If Saudis replace it with the help of the United Arab Emirates and Kuwait, the spare capacity will be so thin that any developments in Venezuela and Libya can send the prices through the roof,” Fesharaki said in a Bloomberg TV interview yesterday. Brent could go as high as $85 a barrel, he said, based on a scenario of Iran still exporting at least 200,000 barrels a day and Venezuelan output dropping by another 500,000 barrels a day.The White House surprised markets last month by announcing it would end waivers allowing eight nations to buy Iranian oil

when they expired on May 2. While President Trump has said that Saudi Arabia and other members of the Organization for Petroleum Exporting Countries will make up for the lost barrels, Khalid al-Falih, the kingdom’s oil minister, has been less clear-cut. He said last week that it was possible that Opec and its allies could extend an agreement to curb output through the end of the year.

After spiking on the US announcement, oil has been in retreat on signs the supply outlook isn’t as bad as feared and the health of the global economy is improving. Those losses accelerated yesterday, with Brent crude falling 1.3% to $69.95 a barrel as of 10.33am in London, after President Trump threw US-China trade talks into disarray with a threat to raise tariff s.

An oil tanker is pictured off the Iranian port city of Bandar Abbas. The White House surprised markets last month by announcing it would end waivers allowing eight nations to buy Iranian oil when they expired on May 2.

Page 2: total assets rise 1.77% in - Gulf Times

BUSINESS

Gulf Times Tuesday, May 7, 20192

Strong profit booking by foreign funds weighs on QSE

By Santhosh V PerumalBusiness Reporter

The Qatar Stock Exchange yesterday lost sizeable 165 points to settle below 10,300 levels, mainly on strong profit booking from foreign funds.The consumer goods, real estate, insurance, industrials and banking counters witnessed higher than average selling pressure as the 20-stock Qatar Index tanked 1.58% to 10,296.92 points.The Gulf institutions’ selling pressure also dampened the market, whose sensitive index is down 0.02% year-to-date.Market capitalisation shrank more than QR10bn, or 1.74%, to QR575.83bn mainly owing to large and midcap segments.Islamic equities were seen declining slower than the other indices in the market, domestic funds turned bullish and local retail investors were increasingly net buyers.Trade turnover grew amidst lower volumes in the bourse, where the industrials and banking sectors together accounted for more than 65% of the total volume.The Total Return Index shed 1.58% to 18,946.6 points, the All Share Index by 1.67% to 3,124.24 points and the Al Rayan Islamic Index (Price) by 1.28% to 2,341.12 points.The consumer goods sector index tanked 2.58%, realty (2.11%), insurance (2.08%), industrials (1.75%), banks and financial services (1.72%) and transport (0.01%); whereas telecom was up 0.05%.More than 74% of the traded stocks were in the red with major losers being Industries Qatar, QNB, Qatar Insurance, Ezdan, Commercial Bank, Doha Bank, Qatar Islamic Bank, Qatar First Bank, Dlala, Qatar Electricity and Water, Mazaya Qatar, Gulf Warehousing and Barwa; even as Milaha, Ooredoo and Qatar National Cement were among the prime gainers.Non-Qatari institutions were net sellers to the tune of QR21.92mn against net buyers of QR12.1mn the previous day.

The Gulf institutions also turned net sellers to the extent of QR6.14mn compared with net buyers of QR4.24mn on May 5.The Gulf individuals were net profit takers to the tune of QR0.27mn against net buyers of QR1.53mn on Sunday.However, domestic funds turned net buyers to the extent of QR11.99mn compared with net sellers of QR22.32mn the previous day.Local retail investors’ net buying increased noticeably to QR10.25mn against QR3.05mn on May 5.Non-Qatari individuals’ net buying also strengthened perceptibly to QR6.07mn compared to QR1.43mn on Sunday.Total trade volume fell 19% to 8.7mn shares, while value rose 14% to QR245.7mn despite 4% lower transactions at to 4,471.The market witnessed a 55% plunge in the consumer goods sector’s trade volume to 0.32mn equities, 9% in value to QR42.47mn and 39% in deals to 355.The industrials sector’s trade volume plummeted 43% to 3.44mn stocks, value by 30% to QR66.98mn and transactions by 25% to 1,733.The transport sector reported a 32% shrinkage in trade volume to 0.21mn shares, 41% in value to QR5.48mn and 15% in deals to 211.The telecom sector’s trade volume was down 6% to 0.75mn equities, while value increased 27% to QR10.25mn and transactions by 20% to 247.However, the realty sector saw an 84% surge in trade volume to 1.56mn stocks to more than double value to QR23.27mn on a 65% growth in deals to 747.The banks and financial services sector’s trade volume soared 19% to 2.23mn shares and value more than doubled to QR90.09mn on a 44% jump in transactions to 1,051.There was an 84% expansion in the insurance sector’s trade volume to 0.2mn equities and 50% in value to QR7.18mn but on flat deals at 127.In the debt market, there was no trading of treasury bills and sovereign bonds.

Asian buyers forced to pay more for Saudi crude on supply crunchBloombergDubai/Singapore

Saudi Arabia has hiked June pric-ing for all crude grades to Asia just as the region scrambles for

replacement barrels to make up for a supply shortfall.

The kingdom raised its offi cial sell-ing price of Arab Light crude for June to the biggest premium to Middle East benchmark prices in 11 months, in-creasing the cost of its fl agship grade to Asia by more than traders had fore-cast. The price of Arab Medium crude was set at the highest since December 2013, while Arab Heavy was priced at the most in more than six years.

The spike in prices for Asian buy-ers comes as refi ners across the top oil-importing region seek more Saudi Arabian crude for June and July load-ing after the expiration of US-issued waivers permitting imports of Iranian oil. A fall in supplies from Iran – cou-pled with declining exports from Ven-ezuela and outages across Africa – are creating a sellers’ market, handing crude producers the upper hand in negotiations and sales.

Flagship Arab Light grade gained 70 cents to $2.10 a barrel over the Oman-Dubai benchmark, the biggest spread for the grade since July.

The June pricing follows increases in Asia for May, refl ecting short sup-ply of heavy crudes in market.

Saudi Arabia is the fi rst Gulf pro-ducer to release forward pricing each month and many countries price their crudes off of Aramco’s.

Opec and its allies are committed to reducing supply of the heavy, high-sulphur grades that Saudi Arabia and

other Gulf producers pump. US com-panies are boosting supply of lighter grades from shale deposits.

Aramco raised pricing to all buy-ers in Northwest Europe, and boosted pricing for most grades to the Medi-

terranean region. The company, how-ever, cut its offi cial selling prices for all grades to buyers in the US.

A general view of the production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter (file). Saudi Arabia hiked June pricing for all crude grades to Asia just as the region scrambles for replacement barrels to make up for a supply shortfall.

Page 3: total assets rise 1.77% in - Gulf Times

BUSINESS3Gulf Times

Tuesday, May 7, 2019

Assumptions shattered as EMs get trade wake-up callBloombergLagos

Emerging-market assets have risen this year based largely on two assumptions: the US Federal Reserve would stay dovish and trade talks between Washington and Beijing would gradually progress toward a deal.While the former might still hold true, two tweets from US President Donald Trump on Sunday have clearly shattered the latter, sending emerging markets into a tailspin. China’s yuan plummeted yesterday and its main stock index sank the most in more than three years, dragging assets including South Africa’s rand and Turkish stocks down with them.The retreat suggests investors may have underestimated the prospects of the trade negotiations stalling or, worse, collapsing altogether. The MSCI Emerging Markets stock index

has climbed more than 10% this year, while a Bloomberg Barclays index of developing-nation dollar debt has advanced 6%.“This is reality checking in,” said Per Hammarlund, chief emerging-market strategist at SEB AB in Stockholm. “Even if they do reach an agreement – and I think they will – the risk of a delay is quite significant. It’s a risk that will linger for the better part of the year and probably into next year as well. The market had pretty much ignored this.” The rand and Turkish lira – the two biggest losers globally yesterday – will be among the hardest-hit currencies, according to Hammarlund, while the Russian rouble may be relatively unscathed.How markets move in the coming weeks depends on whether there’s much bite behind Trump’s bark, according to Societe Generale.

Funds seeking to buy China’s new Nasdaq 17 times oversubscribedBloombergBeijing

Funds looking to buy shares on China’s hotly awaited trading venue for technology companies (China’s new Nasdaq) attracted on average 17 times more than the amount targeted.The first batch of seven mutual-fund type products that will invest in stocks listed on the so-called tech board in Shanghai received a combined 122.6bn yuan ($18.1bn) in subscriptions, company filings show. They’d each aimed to raise 1bn yuan.Nearly 100 firms – from state-owned China Railway Signal & Communication Corp to cloud storage provider UCloud Technology Co – have applied to go public on the new venue in Shanghai, which is a laboratory for rules that could eventually ripple across the nation’s equity market. Trading may start as early as June as off icials say they will limit the review period for potential initial public off erings to three months.“The intense interest in the new tech board funds has to do with Chinese investors’ belief they will always make money on IPOs,” said Zhang Gang, Beijing-based analyst at Southwest Securities Co. “It is also diff icult for investors to pick stocks on this new board, so they may

prefer to invest through a fund.” The Science and Technology Innovation Board intends to pilot some of the most experimental measures yet in China’s capital market, including wider trading bands and a more streamlined listing process.Wary of the risk investors may face in the new trading environment, regulators are only allowing those with half a million yuan in their trading accounts and two years of experience to buy into the technology board. Others that don’t meet the threshold are encouraged to invest through mutual funds.Seventy-eight other funds have applied and are awaiting approval, according to China Galaxy Securities Co. The brokerage estimates there will be more than 200 funds primarily investing in the new trading venue within a year of its operation.The seven funds approved so far are ICBC Credit Suisse Asset Management Co, E Fund Management Co, China Asset Management Co, Fullgoal Fund Management Co, Harvest Fund Management Co, China Universal Asset Management Co, and China Southern Asset Management Co.IPO investors in China have generally earned a profit from early trading by taking advantage of rules and practices that help them lock in first-day gains. The new venue has no such restrictions.

Asia’s dollar bond rally shows signs of strainBloombergHong Kong

A surge in Asian dollar bond sales is testing investor appetite after the market’s best rally in years.

Orders for dollar bonds in Asia ex-cluding Japan eased to 4.2 times their issuance sizes in April, the weakest this year, amid the highest monthly sales so far in 2019.

That follows the best quarter on record for dollar bond orders, accord-ing to data compiled by Bloomberg us-ing available deal statistics.

Asian dollar bonds drew manic de-mand from yield-starved investors for much of the year after the Federal Re-serve’s dovish pivot and China’s policy loosening.

That catapulted the market to its strongest fi rst quarter in a decade in a comeback from last year’s turmoil. But some investors are becoming cautious, with DeepBlue Global Investment say-ing they are turning more defensive.

Valuations have gone “from cheap to fair at the end of the fi rst quarter af-ter the great run this year,” said Leong Wai Hoong, a senior portfolio man-ager at Nikko Asset Management Co in Singapore. “It’s normal to see inves-tors take a breather for now.

The primary market is getting tougher and it’s hard to see much relative value on the curves at the moment.”

Average spreads on Asian dollar notes slid about 63 basis points so far this year to rack up returns of 5.4% fol-lowing losses in 2018, Bloomberg Bar-clays indexes show.

“Going forward we still have to see

whether the China economy can hold up and property sales can sustain the momentum, and how US macro data turns out.

The heavy supply problem is still there,” said Roy Kwok, a partner and senior portfolio manager at DeepB-lue Global Investment in Hong Kong. “Valuation now is almost back to the heyday around early 2018.” China suf-fered from a tumble in government bonds, along with sinking stocks and a weakening yuan last month.

The first official gauge of China’s manufacturing sector fell in April,

signaling that the economic stabi-lisation seen in the first quarter re-mains fragile.

China is considering delaying a trip by its top trade negotiators to Wash-ington this week, according to peo-ple familiar with the matter, after US President Donald Trump threatened the country with steeper tariff s over the pace of trade talks.

Volatility in China and Hong Kong stocks have started to impact senti-ment, while the bond market typically enters a lull over the approaching sum-mer months, said Steve Wang, deputy

head of research at BOC International.Investors are also growing increas-

ingly bearish on emerging markets, evident from the reversal to outfl ows in bonds and equities, according to Oversea-Chinese Banking Corp, citing data from the bank and EPFR Global.

“Cash levels in the market are fi ne but one needs to keep a close watch on infl ows, which are tapering off a bit,” said Shankar Narayanaswamy, head of credit strategy at Standard Chartered. Concerns on the demand would come from macro worries and valuations of the bonds, he added.

Wall St investors ask whether Trump’s tariff threat is a tactic or notBloombergNew York

Policy analysts are off ering a vari-ety of interpretations of President Trump’s latest tariff threat. Some,

like Goldman and Citi, are optimistic a US-China deal can still be reached. Others, including Raymond James and Cowen, are more cautious, warning the process may have been derailed, and point to rising global risks.

Investors weren’t happy about the news, with S&P 500 futures lower by about 50 points. Tech and machinery companies were particularly hard hit, with Alibaba Group, Apple Inc, Boeing Co and Caterpillar Inc all sliding. Bell-wether banks such as Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co were all lower pre-market.

Here’s a sample of what analysts are saying:

Goldman, Alec Phillips: Goldman believes a tariff increase may be “nar-rowly avoided,” putting odds that tariff s rise on Friday at 40%, Phillips wrote in a note.

Will be watching whether a large del-egation of Chinese offi cials comes to Washington on May 8, as scheduled; cancelling would mean an agreement in the coming week would “seem very un-likely,” and would make an increase in the tariff rate to 25% “the base case.”

China trade issues have “negative im-plications for the outlook for auto tariff s and passage of the USMCA (US-Mexico-Canada Agreement).”

Trump’s “willingness to risk a market disruption by threatening an unexpected tariff hike suggests that he might also be willing to risk the disruption that for-mally proposing auto tariff s or announc-ing the intent to withdraw from Nafta might cause.” Phillips raised the prob-ability that auto tariff s will be imple-mented later this year to 20% from 10%, and lowered the probability that USMCA will pass to 60% from 70%.

Citi, Cesar Rojas: “Cautiously opti-mistic” on a US-China trade deal in the second quarter, though tariff threats will likely “remain as a way to get concessions from China and to enforce the agree-ment,” Rojas wrote in a note.

Rojas had expected that as the Chinese economy stabilised, “China would be less willing to provide additional conces-sions to the US”.

The new threat is “consistent with the US adding more pressure on China to get these concessions.” The Trump admin-istration “pays attention to equity mar-kets,” which means stocks diving could lead to a retreat from implementing the tariff s threat.

Even so, he continues to believe “un-certainty is likely to remain high as the tariff s threat remains in place and second

round eff ects from a reallocation of glo-bal trade remain underestimated.”

RBC, Lori Calvasina: A trade deal with China has been widely anticipated by investors, and was a “key contribu-tor to the early 2019 rally in US equities,” Calvasina wrote in a note.

That means the weekend’s devel-opments were a negative catalyst for the market not only because of inves-tor sentiment, but also “because of the downward earnings revisions that are likely to occur if the tariff s are expand-ed.” Sees “these steps backwards on the trade deal with China as particularly negative” for industrial and semicon-ductor companies.

Raymond James, Ed Mills: “The progress towards a US-China deal has been up-ended with renewed tariff threats by President Trump ... apparent balks by the Chinese (especially on tech transfers), and the threat of the Chinese delegation cancelling this week’s round of negotiations,” Mills wrote in a note.

Conversations with Raymond James’s trade contacts point to “a universal belief that this is not negotiating leverage, but what was almost a done deal last week, has derailed in recent days.

There is some hope that negotiations could be salvaged, but this situation

highlights how tenuous any US-China deal remains.”

Contacts have revealed questions about “what led to the latest breakdown, and whether developments related to Venezuela, the Iran oil sanctions deci-sion, North Korea’s weekend missile test, or lessening worry about the economic conditions in both the US and China in-fl uenced the direction.”

Geopolitical volatility spiking in re-cent weeks may signal “ a more diffi cult path ahead for negotiations.” MUFG, Chris Rupkey “For weeks now markets have been lulled to sleep on the US trade war with China thinking an agreement was imminent. No more,” Rupkey wrote in a note.

“This has all the makings of a complete disaster that could lead the stock market to crater this week,” he said. It may also jack up “external risks to the US eco-nomic outlook,” just a few days after Fed Chairman Jerome Powell said global risks had moderated somewhat.

Compass Point, Isaac Boltansky: Trump’s threat to hike tariff s is “a stand-ard part of his negotiating style and we remain bullish on the prospects for a deal in the coming weeks,” Boltansky wrote in a note. Though there “will be puts and takes in this story,” believes “pressure on

both sides of the Pacifi c will ultimately catalyse a deal.”

“Beijing is sending roughly 100 rep-resentatives to Washington this week, which we view as indicative of their belief that a deal is within striking dis-tance.” At the same time, he warned that “once attention turns from China to other trade matters – including the US-MCA – market sentiment regarding trade policy could turn more cautious.”

Cowen, Chris Krueger: The “return of Tariff Man” is “pretty shocking and surprising - even grading off the Trump Curve,” Krueger wrote in a note.

Krueger off ered several interpreta-tions. The “cautious” one suggests “this is simply an intemperate tweet (s) by a president that can’t help himself during a rainy Sunday afternoon...Trump really, really wants to see this deal fi nished by Friday and (perhaps mistakenly) believes this gives the US leverage.”

The “not-so-cautious” interpretation is that “this is not an outer-borough real estate transaction.

Trump issued a Presidential State-ment last week highlighting his gift as the world’s premier hostage negotiator; tariff s are a very dangerous hostage and we be-lieve will be seen as both provocative and insulting by Beijing.

Pedestrians walking past the New York Stock Exchange. Investors weren’t happy about Trump’s latest tariff threat, with S&P 500 futures lower by about 50 points.

Commodities slump as Trump throws spanner into China trade talksBloombergTokyo

Industrial commodities sank as trade talks between China and the US were thrown into

doubt after President Donald Trump threatened Beijing with steeper tariff s, citing the slow pace of negotiations.

Bloomberg reported that China is considering delaying a trip by its top trade negotiators to Washington this week after Trump threatened the country with steeper tariff s over the pace of trade talks.

While a Ministry of Foreign Aff airs spokesman said yester-day that a Chinese delegation was still preparing to travel to the US for talks, he didn’t an-swer a question about the date or whether the group would be led by Vice Premier Liu He.

Commodities keyed to eco-nomic health from copper to steel and oil fell as other risk assets such as equities also took a hit. Safe havens like gold strengthened.

Copper futures in New York fell 0.4% to $2.807 a pound. Steel reinforcement bar, used in construction, dropped 1.8% in Shanghai, while rubber retreated 0.3%. Brent crude oil declined 0.7%. Spot gold was trading 0.2% higher.

“The news is a big surprise to the market,” said Jiang Hang, vice director of trading at Jin-

chuanmaike Metal Resources Co in Shanghai. “It seems the trade talks are moving in a negative di-rection and this is aff ecting the sentiment around commodities.

Copper, which is most tied to the macro economy, has been hit the most.” The backdrop for prices has been more precarious of late after a stumble in China’s factory data last week shaded optimism around the economic recovery of the world’s top buyer of industrial commodities. A surge in the dollar and slump in the yuan are exacerbating the turn in sentiment for products priced in the greenback.

“The Chinese government’s reaction is very crucial,” said Jiang. “If they can’t take meas-ures to stop the tariff hike on Friday, prices may see another round of declines.”

An escalation in the US-China trade war “bodes most negatively for base metals be-cause of their strong relation-ship with financial markets,” according to Commonwealth Bank of Australia.

Oil is also at signifi cant risk but supply-side factors will like-ly drive prices for the foreseeable future, analyst Vivek Dhar said in a note, adding that coal and iron ore are most immune.

Grain futures in Chicago also tumbled as traders had expect-ed that a trade truce would lead to the reduction or elimination of China’s 25% tariffs on US farm imports.

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BUSINESS

Gulf Times Tuesday, May 7, 20194

Sensex sinks; rupee weakens to 69.41Bloomberg, ReutersMumbai

Indian markets yesterday fell nearly 1% tracking the fall in global equity markets following US President Trump’s threat to increase tariff s on goods imported from China.The benchmark S&P BSE Sensex fell 0.93% to close at 38,600.34, while the NSE Nifty 50 index declined 0.97% to end at 11,598.25 points.“This (US tariff s on China) will be taken as a negative development by the economies across the world, which were under the impression that a trade deal would be possible in the immediate near future”, said Rajnath Yadav Research Analyst – Fundamental Research Desk Choice Broking.US President Donald Trump on Sunday raised pressure on Beijing to strike a trade deal by announcing he would increase tariff s on $200bn of Chinese imports to 25%. He also floated the possibility of extending the new 25% duty to another $325bn worth of imports that aren’t now covered. China responded to Trump’s threat by saying it was considering pulling out of trade talks scheduled for this week.“The worsening situation has put the entire world in a state of flux where even a tiny escalation can cause big damage. If US continues to impose further restrictions on free trade flow with China and sanctions on export of Iranian oil, US’ dictatorship will turn all the other economies against them”, said Umesh Mehta, Head of Research, Samco Securities.Investors also assessed the quality of latest quarterly corporate earnings. Early March quarter earnings indicate that the Indian economy has

slowed down and the much-awaited revival in earnings growth may be delayed further, developments that are likely to deepen investor unease about stock valuations and a more than two-month-old rally in share prices.Meanwhile the rupee yesterday weakened along with its Asian peers as the fate of trade talks between the world’s two biggest economies was left in doubt after the US threatened to raise tariff s.The rupee ended at 69.41 a dollar, down 0.26% from its previous close of 69.22. The Indian currency had opened at 69.37 a dollar.The 10-year bond yield closed at 7.395% compared with Friday’s close of 7.393%. Bond yields and prices move in opposite directions.US President Donald Trump on Sunday increased pressure on Beijing to strike a trade deal by announcing he would increase tariff s on $200bn of Chinese imports to 25% from 10%. He also floated the possibility of extending a new 25% duty on another $325bn in imports that aren’t now covered, Bloomberg reported.So far this year, the rupee is up 0.7%. During the period, foreign investors bought $9.85bn in equity and sold $320.10mn in debt market. Asian currencies were trading lower. China Off shore was down 0.97%, China renminbi 0.75%, Indonesian rupiah 0.45%, Singapore dollar 0.32%, Philippines peso 0.27%, South Korean won 0.23%, Thai Baht 0.23%, South Korean won 0.2%, Malaysian ringgit 0.11%, Taiwan dollar 0.08%. The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.541, up 0.02% from its previous close of 97.52.

Japan set for Golden Week hangover as trade war roils marketsBloombergHong Kong

Stock traders in Japan are set for a diffi cult return to work after the longest market holiday since

World War II.Japanese markets reopen today af-

ter an extended “Golden Week” holi-day period, which included the May 1 ascension of Emperor Naruhito to the Chrysanthemum Throne. The Topix index of the nation’s equities, which hasn’t traded since April 26, is poised for a delayed reaction to yesterday’s market turmoil after US President Donald Trump abruptly re-escalated the trade war with China.

Trump announced on Twitter Sun-day that the US would more than double tariff s on $200bn of Chinese imports,

and may slap a new 25% duty on anoth-er $325bn. That sent Chinese equities and US stock index futures tumbling, with the CSI 300 gauge of large-cap shares traded in Shanghai and Shen-zhen sliding 5.8%. The yen strength-ened on the news, while futures on the Nikkei 225 Stock Average traded in Sin-gapore dropped as much as 1.7%.

“This will certainly put some heavy pressure on Asian stock markets,” said Nick Twidale, chief operating offi cer of Rakuten Securities Australia in Sydney. “If this results in an escalation of ten-sions between the two trading partners then it can only lead to further down-side for Asian stocks.”

China’s yuan plunged more than 1% against the dollar yesterday, the most in more than three years. Futures on the S&P 500 Index tumbled as much as 2.2%. Haven assets such as US Treasury

futures climbed, while the Australian dollar and crude fell, as volatility re-turned to markets. After Trump’s com-ments, the focus shifted to how China would respond. China is considering delaying a trip by its top trade negotia-tors to Washington this week, according to people familiar with the matter.

While a Ministry of Foreign Af-fairs spokesman said yesterday that a Chinese delegation was still prepar-ing to travel to the US for trade talks, he didn’t answer a question about the date or whether the group would be led by Vice Premier Liu He.

Here’s a look at some other events that happened while the Japanese market was closed: Economic Data US payrolls climbed by 263,000 in April, exceeding all estimates in a Bloomberg survey.

The jobless rate unexpectedly fell to 3.6%, while average hourly earnings

growth was unchanged at 3.2%, be-low projections China’s April. Manu-facturing purchasing managers index slipped to 50.1, falling short of esti-mates South Korean exports fell for a fi fth straight month in April, albeit less than expected Coming this week: China trade data for April on May 8, followed by infl ation May 9.

Japan’s Nikkei manufacturing PMI is releasing today. Federal Reserve chair-man Jerome Powell put the brakes on interest-rate cut speculation for 2019 in a press conference last week, arguing that infl ation was being pulled down by “transitory” forces. “We don’t see a strong case for moving in either di-rection,” Powell said after offi cials left the main rate unchanged. US stocks fell Still, two Fed offi cials laid out the case for a possible cut just days later.

St Louis Federal Reserve Bank Presi-

dent James Bullard and Chicago Fed President Charles Evans, both policy voters this year, expressed caution Fri-day over weak prices and said the cen-tral bank may have to act to lift infl a-tion out of a persistently low trend.

It’s a busy week for rate decisions: Australia and Malaysia (Tuesday), New Zealand and Thailand (May 8) and the Philippines (May 9), with the potential for rate cuts across the region.

China and Hong Kong were fi rmly in the spotlight on April 29, as more than 60 companies worth some $2.6tn from the two markets reported, according to data compiled by Bloomberg.

Profi t rose at China’s largest banks including Industrial & Commercial Bank of China, China Construction Bank Corp, Bank of China and Bank of Communication Co.

But bad loans are also growing. In

Tokyo, SoftBank Group Corp is set to report on May 9. Separately, a group of executives at SoftBank are reportedly considering an initial public off ering for its $100bn Vision Fund, according to a person familiar with the situation.

Kim Jong-un oversaw a live-fi re military exercise on Saturday that po-tentially included North Korea’s fi rst ballistic missile launch since 2017. Two US Navy destroyers conducted “free-dom of navigation” operation in South China Sea yesterday, Reuters reported, citing a US military spokesman.

The US said on Sunday it’s sending an aircraft carrier strike group and bomber force to the Middle East to send an “unmistakable message” to the Iranian regime, citing “a number of troubling and escalatory indica-tions and warnings” it suggested were linked to Tehran.

Japanese currency gains as Trump springs China trade shockReutersSydney

The safe-haven yen climbed and the yuan slid yesterday after US President Donald Trump threat-

ened to raise tariff s on China, sending stocks and commodities into a tailspin.

Some losses were recouped when the South China Morning Post report-ed China Vice-Premier Liu He would travel to Washington on Thursday after a delay, rather than cancelling planned talks altogether.

However, the SCMP later said no de-cision had been made on the trip and it might indeed be cancelled, leaving the market guessing.

In a surprise twist on Sunday, Trump announced he would hike US tariff s on $200bn worth of Chinese goods this week and target hundreds of

billions more soon. The Twitter mes-sage marked a major shift in tone from Trump, who has cited good progress in trade talks and praised his relationship with Chinese President Xi Jinping.

Nor was sentiment helped by news the United States was deploy-ing a carrier strike group to the Mid-dle East to deter any attack from Iran amid heightened tensions over sanctions.

Investors responded by bidding up the yen, which is considered a safe harbour in times of stress given Japan’s status as the world’s largest creditor and its huge hoard of assets abroad. The dollar eased to ¥110.720, having earlier touched a fi ve-week trough at 110.335 on Reuters dealing.

It had ended on Friday around 111.12.The market was again thin as Japan

remains on holiday, though China was back from its break.

The euro hit its lowest since Janu-ary around ¥123.33 before steadying to 123.93.

The single currency was calm

against the dollar at $1.1190, while the dollar index was barely changed at 97.567.

The dollar climbed 0.8% on the Chi-

nese yuan to 6.7825, while Shanghai blue chips lost 5.8%. The Australian dollar took a spill given the country’s exposure to Chinese trade and lost around 0.6% at one stage to $0.6960 before steadying to $0.6994.

“An increase in tariff s would be bad news for risk assets and would threaten the prospect of a global growth recov-ery,” said Rodrigo Catril, a senior FX strategist at NAB.

“An aggressive response from China that halts current negotiations, with higher tariff s by the end of the week would be a disaster for risk assets,” he added.

As a taste of what was to come, E-Mini futures for the S&P 500 slid 1.5% in and Treasury futures jumped 18 ticks.

Nikkei futures were down 2.2%, though the cash market will not open until today.

The US dollar had already softened on Friday when jobs data beat expec-tations but a soft reading for wages meant the Federal Reserve could aff ord to stay patient on policy.

The futures market yesterday moved to price in an even great-er chance of a rate cut this year as Trump’s tariff warnings were seen as a risk to the global economy and busi-ness sentiment.

Futures imply a funds rate around 2.220% by December compared with the current eff ective rate of 2.40%.

“Investors will be hoping that this step by the president is more of a ne-gotiating tactic than a statement of in-tent,” said Nick Twidale, chief operat-ing offi cer at broker Rakuten.

“Any signs that a deal will be pushed further down the track or not progress at all could send markets into a tailspin.”

The safe-haven yen climbed yesterday after US President Donald Trump threatened to raise tariffs on China, sending stocks and commodities into a tailspin

The Bombay Stock Exchange building in Mumbai. The Sensex closed down 0.93% to 38,600.34 points yesterday.

China stocks fall most in over 3 years on tariff threats; yuan tumblesReutersShanghai

Chinese investors, caught off guard by US President Donald Trump’s tariff threats, dumped stocks and

sold the yuan currency yesterday as a fresh deterioration in Sino-US trade ten-sions roiled Asian fi nancial markets.

The country’s major stock indexes fell the most in more than three years.

The blue-chip CSI300 index and the Shanghai Composite Index both tumbled more than 5%, posting their steepest sin-gle-day drop since February 2016.

Around 1,000 mainland fi rms plum-met the maximum allowed 10% daily limit. Market sentiment was lifted some-what after China said its trade delegation is preparing to go to the United States.

Hong Kong’s Hang Seng index ended down 2.9%, recouping some lost ground in the late afternoon session. “Afternoon trading was quieter.

MOFCOM’s announcement helped, at least people know that the negotiations will carry on,” said Steven Leung, sales director at broker UOB Kay Hian in Hong Kong.

The yuan’s losses also narrowed after the news, closing at 6.7666 per dollar in onshore trade.

In earlier trade, the yuan dropped to as low as 6.7994 per dollar, its weak-est level in 3-1/2 months, while the off -shore yuan fell as much as 1.3%. Trump stunned global markets with a tweet late on Sunday announcing he would hike US tariff s on $200bn worth of Chinese goods this week and target hundreds of billions more soon, saying trade talks with China were going too slowly.

Markets had largely priced in expecta-tions that a trade deal would be reached soon, further reducing pressure on Chi-na’s economy, which has recently shown tentative signs of steadying.

Fanning expectations that fresh trade uncertainty could lead to additional monetary easing, China’s central bank said yesterday it would cut reserve re-quirement ratios (RRRs) for small and medium-sized banks.

Yields on 10-year Treasury bonds slipped to 3.387%, a two-week low.

Trump’s move marked a major escala-tion in trade tensions between the world’s two largest economies and raises the prospect of a collapse in the trade talks which would further pressure the global

economy. “The market is re-pricing the situation, as investors had thought trade negotiations were coming to an end,” said Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong.

“If the trade war reignites, some mar-ket participants may speculate about re-newed yuan depreciation to counteract the negative impact from rising tariff s,” he said.

But China’s bond market would ben-efi t from “diversion from equities, and renewed expectation for easing,” said Frances Cheung, head of Asia macro strategy at Westpac in Singapore.

China’s Vice Premier Liu He is “very unlikely” to go to the United States this week following Trump’s “threat” to hike tariff s, the editor-in-chief of China’s in-fl uential Global Times said yesterday.

The newspaper is published by the rul-ing Communist Party’s People’s Daily but is not considered an offi cial publication and does not speak for the government.

Chinese offi cials were scheduled to meet their US counterparts in Washing-ton on Wednesday after meeting in Bei-jing last week for a round that Treasury Secretary Steven Mnuchin described as “productive.”

“Optimism toward the trade talks turned into pessimism overnight,” said Stephen Huang, chief risk offi cer at Shanghai See Truth Investment Man-agement.

“The government needs to roll out more stimulus to stabilise the market,” he said, expecting broader reductions in reserve ratios, and even a possible cut in interest rates.

Stocks fell across the board on Mon-day, with technology shares among the worst casualties. The agriculture sec-tor was the only bright spot, with shares including Hefei Fengle Seed Co and Great-Sun Foods Co surging 10% on ex-pectations they could benefi t if Beijing retaliates against US imports if Washing-ton hikes tariff s.

Chinese shares have surged some 30% so far this year, partly due to optimism that a trade deal would be reached, but they have pulled back in recent weeks as investors scaled down expectations for further stimulus in light of better March economic data.

“In the near term, investors are right-fully worried since the lingering threat of a trade war weighed on risk assets in 2018, especially in Asia,” Tai Hui, Chief

Market Strategist, Asia Pacifi c, JP Mor-gan Asset Management, said in a note.

But Huang at Shanghai See Truth In-vestment said that unlike 2018, when Chinese stocks suff ered from a double-whammy of the trade war and Beijing’s clampdown on debt, “liquidity condi-tions are much better this year.” In a move to bolster domestic growth, Chi-na’s central bank said yesterday it would cut reserve requirements for small and medium-sized banks.

The People’s Bank of China (PBoC) said in a statement that the reduction will release about 280bn yuan ($41.25bn) in long-term funding, which will be used for loans to small and private companies.

Such a move had been expected this year, but it was announced right before China’s stock market opened, and just hours after Trump’s tweets.

While the move failed to provide any immediate support to market sentiment, it was expected to give some help to parts of the economy aff ected by the trade war and a wider slowdown.

“It is in line with the domestic need, which is targeted, while the timing is convenient in view of the heightened ex-ternal risk,” said Westpac’s Cheung.

Investors look at computer screens showing stock information at a brokerage house in Shanghai. The blue-chip CSI300 index and the Shanghai Composite Index both tumbled more than 5% yesterday, posting their steepest single-day drop since February 2016.

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BUSINESS5Gulf Times

Tuesday, May 7, 2019

Trump blows up trade complacency, commodities to feel painBy Clyde RussellLaunceston, Australia

US President Donald Trump has just given commodity markets a reminder that stormy waters can blow up quite quickly even if the voyage ahead was looking like smooth sailing. Investors were becoming complacent with the idea that the US-China trade dispute was heading toward an eminently sensible and mutually beneficial resolution before Trump’s latest Twitter outburst.Trump tweeted on Sunday that he will raise US tariff s on $200bn worth of Chinese imports to 25% from 10% on Friday, and threatened to targets hundreds of billions of dollars more in trade.His ire appears to be at what he termed the slow pace of progress in the trade talks and Chinese attempts to “renegotiate”. Trump’s comments stand in contrast to the recent positive signals emanating from both the USand Chinese camps that progress to end the tit-for-tat tariff war was being made and a deal was within sight.

There is a whole cottage industry of analysts dedicated to trying to understand Trump’s tactics and motivations, but possibly the most sensible method of dealing with the mercurial US leader is to assume no progress and the worst outcome until proven otherwise.The key question is how will Beijing respond to the latest outburst?It’s unlikely that China’s leaders will want to be seen to be caving in front of threats by a bullying US president, but at the same time they are also keen to reach an agreement that will alleviate some of the pressure on their export-led manufacturing sector.Looking at the scenarios available it would seem the best outcome would be for virtually everybody to ignore Trump and continue to try and reach an acceptable deal.The worst outcome would be for the United States to go ahead and raise tariff s this week, which would likely scupper the current negotiations and force Beijing to retaliate.The problem for China is that relatively quickly they will run out of things to retaliate against, unless they are

prepared to go nuclear and impose tariff s on the big ticket imports items such as aircraft.The tactic that Beijing has followed so far in imposing relatively limited retaliatory tariff s, and mainly on goods that they could acquire with some

degree of ease from other suppliers, hasn’t worked insofar as Washington clearly doesn’t feel the trade dispute is hurting the US economy.That judgement by the Trump administration that the US is so far immune to those tariff s may be

challenged in coming months if the early signs of slowing growth become more visible.In the meantime, it’s likely that US exporters of crude oil, coal and liquefied natural gas (LNG) will likely remain largely frozen out of the world’s biggest energy importer.Growing exports of energy products from the United States to China were one of the few areas actually working to reduce the trade imbalance between the world’s two largest economies, at least until the trade dispute got going in earnest in the middle of last year.Since then they have plummeted and have yet to recover in any significant way, with Refinitiv vessel-tracking and port data showing just four cargoes of crude oil have been delivered from the United States to China this year, down from 42 in the January to May period in 2018.A smattering of coal cargoes have arrived in China from the United States so far this year, but this is also sharply down from levels before the trade dispute, while only three LNG cargoes have been imported this year, down from 23 in the first five months of 2018.

But the main threat to commodities is that the risk of a prolonged and escalating trade war has come into play, and this would be bearish across the board.Brent crude futures off ered an early verdict to Trump’s tweets, falling as low as $69.22 a barrel in early Asian trade, a drop of as much as 2.3% from Friday’s close.Iron ore futures on the Dalian Commodity Exchange were also weaker at the start of the weak, dropping as low as 622.5 yuan ($92.50 a tonne) in early trade, a decline of 1.9% from the close on April 30.The Dalian exchange was closed for three days last week because of the May Day holidays, and iron ore would likely have opened stronger given news of a drop in shipments from Brazil, the world’s second-biggest exporter of the steel-making ingredient.Instead, investors are clearly fretting about the latest US-China trade escalation.

Clyde Russell is a columnist for Reuters. The views expressed are those of the author.

Fast-money traders vulnerable to episodic swings in pricesBloombergNew York

Beneath the calm in global

stocks lies a brittle market

prone to violent spasms. As

central banks snuff out market

fears for now and the brewing

melt-up banishes memories

of last year’s meltdown, the

threat of brief but extreme price

swings looms over fast-money

traders.

In financial parlance, gap

risk – sudden moves with little

trading in between – is growing,

according to HSBC Holdings.

Blame robots and electronic

market-makers for creating

an illusion of liquidity that can

vanish on a dime. Post-crisis

regulation, or the boom in

volatility-sensitive investing.

Whatever the reason, the

likes of Goldman Sachs Group

warn hot-money flows from

systematic traders may awaken

volatility from its slumber, as

hedge funds double down on

bets the tranquillity will endure.

“Volatility has become more

volatile,” Mark Spitznagel,

founder of hedge fund Universa

Investments, said in an interview

in London. “It’s incredible that

after what happened in February

2018 and in the fourth quarter,

so soon after that we’re hitting

new lows in implied volatility.”

Limited macro threats thanks

to dovish central banks and

stable inflation expectations

are capping lasting volatility for

now. But it’s an unstable peace,

as convulsions like last Febru-

ary and December laid bare.

It’s all feeding into fears that

the hot money could beat a

retreat in an unloved rally bereft

of buy-and-hold flows. And it’s a

big risk for volatility sellers, in par-

ticular those with a propensity for

levered bets with muted hedging.

As realised volume declines

and equities trend higher, the

stars are aligning for systematic

traders to add more money to

stocks – potentially raising the

risk of a volatility event if senti-

ment suddenly swings.

“Vol of vol is likely to remain

high as procyclical investors

such as CTAs, vol target and risk

parity as well as option hedging

have again been a key driver

of demand for risky assets

year-to-date,” strategists led by

Christian Mueller-Glissmann

wrote. “A trend reversal, due to

a macro shock, could drive a

material unwind of positioning.”

Systematic selling tends to

have an outsized impact these

days given weaker liquidity.

JPMorgan quant strategist

Marko Kolanovic has highlighted

the relationship between trading

in S&P 500 futures and the VIX.

As the volatility gauge rises, the

number of equity contracts that

an investor can expect to trade

without moving the market di-

minishes at an exponential rate.

Increased demand for calls

from investors playing rally

catch-up could also cause risks.

Dealers that are “short gamma”

from these trades would be

forced to sell in a downturn,

exacerbating losses, according

to Goldman.

Biggest listing for years: Anticipation mounts ahead of Uber IPODPANew York

The fi nancial world has been in a fever of anticipation for months over one of the largest stock ex-

change listings in recent memory, and now the time has come.

US-based transport networking service Uber is set to make its debut on the New York Stock Exchange this week.

The company, which seeks to revolu-tionise mobility and transport, is aim-ing at the largest fl otation since Ali-baba’s in 2014, but by contrast with the Chinese online giant, Uber has posted only large losses to date.

Investors face the question: Can the hyped California company make a profi t? Uber boss Dara Khosrowshahi has not helped to boost hopes.

“If they want a predictably profi table company, go buy a bank.

Do not come to us. It’s simple,” he said in December at a Stanford Busi-ness School event. Khosrowshahi is looking to the long term, and even in its

prospectus for potential shareholders, Uber cautions that it might never make a profi t.

But one thing is clear. The Uber ini-tial public off ering (IPO) will be on a huge scale, with the company aiming at a total valuation of up to $90bn.

Earlier estimates ran even higher.The share price range has been set in-

itially at between $44 and $50, but this could change depending on demand. Uber aims to place 180mn shares, re-sulting in proceeds of between $7.9bn and $9.0bn on current estimates.

Talk in the markets is that Uber will announce the fi nal issue price on Thursday.

The shares will then be traded for the fi rst time on Friday under the ticker symbol “UBER.” The roadshows were in full swing right up to the last, with Uber trumpeting its virtues to investors.

In the meantime, the investment banks underwriting the IPO have sug-gested a valuation of up to $120bn, ac-cording to US media reports. Uber’s growth is the main drawcard for inves-tors. Last year, revenues rose 42% year-on-year to $11.3bn. Losses, by contrast,

came in at almost $1.9bn, after special items resulting from the sale of busi-ness components.

According to the Wall Street Journal, Uber’s losses rose further in the fi rst quarter of this year.

Over the 12 months to the end of March, losses of $3.7bn were appar-ently incurred, a record for a company in the year ahead of its IPO.

Over the past 10 years, Uber has se-

cured almost $20bn from investors with the aim of going for aggressive global growth.

At the same time, the company has faced repeated confl ict with govern-ment authorities and the traditional taxi sector.

Co-founder and chief executive Chef Travis Kalanick had to resign after a se-ries of scandals.

His successor, Khosrowshahi, has

brought stability to the company and striven to give Uber a friendlier face following allegations of discrimination, sexism, a macho culture and numerous infringements of the rules.

To date, Uber has dominated the ride-sharing market via smartphone apps, but Khosrowshahi aims to grow the company into an all-round service provider for all possible modes of mo-bility. Uber already has food delivery services, freight intermediation for truck drivers, and e-bike and scooter sharing.

The long-term business plan banks heavily on technological advances, with autonomous cars — doing away with the cost of a driver — seen as the key to profi tability. Uber’s smaller rival Lyft listed in March.

Currently active only in the US and Canada, Lyft pushed its issue price to $72s, and the IPO was initially seen as a success, but the price has come under pressure in recent weeks. Analysts sus-pect that this fact may be behind Uber’s more cautious initial target after the two competitors conducted a race over recent months to be the fi rst to list.

US-based transport networking service Uber is set to make its debut on the New York Stock Exchange this week

Buff ett confronts tech-driven change amid investor queriesBloombergNew York

Berkshire Hathaway overpaid for part of venerable food giant Kraft Heinz Co and failed to realise the

potential of Amazon.com Inc, snapping up stock in the Internet retailer only after it had already risen by thousands of%.

That was the assessment by War-ren Buff ett and Charles Munger of two recent bets, leaving them in an unu-sual position on Saturday: Answering shareholder questions about whether changes are needed to an approach that has made them investing legends.

At Berkshire’s annual meeting in Omaha, Nebraska, holders fi ltered past the Kraft Heinz Co booth featuring an infl atable ketchup bottle and a giant hot dog. The displays served as a reminder of a rough bet by Buff ett, 88, and of questions about whether traditional consumer brands still carry weight in the age of Internet stocks including Amazon, Berkshire’s latest investment.

Investors wanted to know how Berk-shire’s businesses are working to stave off the risk that the world is changing faster than the conglomerate can react. For some, the questions about strategy reminded them of the days before the dot-com bubble burst or the fi nancial crisis occurred.

“They’ve stayed relevant through lots of upheaval in their careers,” said Richard Cook, who oversees $335mn including Berkshire shares at Cook & Bynum Capital Management. “He’s nimble enough and now understands that a lot of those brands have been overstretched and now are no longer as durable as they were.”

Buff ett has long searched for busi-nesses with “moats,” or a long-term competitive advantage. Facing ques-tions on new technology and Amazon, the billionaire investor acknowledged the shifting trends and said his man-agers were tasked with making sure they’re staying ahead. “The world is going to change in dramatic ways,” said Buff ett, Berkshire’s chairman and chief executive offi cer. “Just think how much

it changed in the 54 years that we’ve had Berkshire – and some of those changes hurt us,” he said, citing the namesake tex-tile business and some shoe operations.

“But we do adjust and we’ve got a group, overall, of very good business-es,” Buff ett said. “We’ve got some that will be actually destroyed by what hap-pens in this world, but I still am a card-carrying capitalist and I believe that that’s a good thing.”

Kraft Heinz has been a headache for Berkshire. The food maker in Febru-ary reported a $15.4bn write-down and disclosed a subpoena from the Securi-ties and Exchange Commission. Berk-shire, which reported fi rst-quarter results on Saturday, couldn’t include results from Kraft Heinz, which is late publishing certain fi lings.

Kraft Heinz dropped in early trad-ing yesterday after announcing that it would restate some earnings and found

evidence of employee misconduct in procurement. Buff ett said yesterday in a CNBC interview that he learned of the news from his deputies, Greg Abel and Tracy Britt Cool, and didn’t ex-pect Berkshire to have to restate results based on the news. He said he contin-ues to have confi dence in Kraft Heinz.

On Saturday, Buff ett reiterated that Berkshire and 3G Capital, which part-nered on the deal to create Kraft Heinz, paid too much for the Kraft assets.

“The idea of Berkshire and 3G joining to own a consumer company has always confounded the Berkshire sharehold-ers and it continues to,” said Lawrence Cunningham, a professor at George Washington University and author of the book “Berkshire Beyond Buff ett.” The investment could still turn around, Cunningham said.

The packaged-food giant was just one focus at the annual meeting of

Berkshire shareholders. Amazon was another. An investment in Jeff Bezos’s online retailer was announced days ago by Buff ett, who said it was the idea of one of his investing deputies, Todd Combs or Ted Weschler.

Combs and Weschler have helped Berkshire push into tech invest-ments like Apple Inc, and Munger, the 95-year-old vice chairman, has cred-ited them with having “younger eyes.”

Shareholders on Saturday asked about buying tech shares that had al-ready exploded in price years ago, and whether that marks a change in Buff ett’s well-known preference for value invest-ing. Buff ett said technology fi rms can be evaluated on a basis similar to other stocks. Munger, though, admitted that Berkshire missed opportunities, specifi -cally with Alphabet Inc’s Google.

“We just sat there sucking our thumbs,” Munger said of failing to in-

vest in Google. “Maybe Apple was atonement.” While Buff ett has long praised Bezos, it was the growing in-fl uence of his deputies that led to the Amazon bet. Buff ett mostly avoided technology stocks for years, saying he didn’t understand those operations. Since Combs and Weschler have joined, Berkshire piled into Apple, a holding that was valued at more than $48bn at the end of the fi rst quarter.

Throughout Berkshire’s history, Buf-fett favoured a decentralised model. He highlighted that Saturday when confronted with a question about the impact of changing consumer habits, saying the executives who run Berk-shire’s diverse units are responsible for accommodating shifting markets.

Jim Weber, who runs Brooks Sports, said before the meeting that fast-mov-ing consumer and digital demands are a daily challenge as he seeks to compete with the likes of Nike Inc and Under Armour Inc.

“Every brand, typically on the pre-mium side, has to justify its value to the customer every day,” Weber said in an interview Friday. “As soon as you’re not the big brand, you’re a niche player.”

International Dairy Queen Inc’s Troy Bader said the company is working to modernise its brand, using its app to create rewards for consumers. And Ben-jamin Moore & Co’s new chief executive offi cer, Dan Calkins, said the paintmaker experiments with some brands to make sure it’s staying ahead of the curve.

“We can’t put our head in the sand,” Calkins said on Friday. Two of Berk-shire’s managers, Greg Abel and Ajit Jain, fi elded questions from sharehold-ers Saturday in a move that allowed the new vice chairmen to have more of a public spotlight at the meeting. Abel has oversight of non-insurance operations while Jain runs the insurers. Jain ex-plained how Geico competes with rival Progressive Corp on certain metrics.

Buff ett’s capital-allocation strategy has also been shifting. The billionaire investor has long favoured snapping up stocks of other companies or acquir-ing businesses outright, but that’s been hard with “sky-high” prices.

Buff ett: Technology firms can be evaluated on a basis similar to other stocks.

Page 6: total assets rise 1.77% in - Gulf Times

Zad Holding CoWidam Food CoVodafone Qatar

United Development CoSalam International Investme

Qatar & Oman Investment CoQatar Navigation

Qatar National Cement CoQatar National Bank

Qatar Islamic InsuranceQatar Industrial Manufactur

Qatar International IslamicQatari Investors Group

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

Qatar Fuel QscQatar First Bank

Qatar Electricity & Water CoQatar Exchange Index Etf

Qatar Cinema & Film DistribAl Rayan Qatar Etf

Qatar Insurance CoOoredoo Qpsc

National LeasingMazaya Qatar Real Estate Dev

Mesaieed Petrochemical HoldiAl Meera Consumer Goods Co

Medicare GroupMannai Corporation Qsc

Masraf Al RayanAl Khalij Commercial Bank

Industries QatarIslamic Holding Group

Investment Holding GroupGulf Warehousing Company

Gulf International ServicesEzdan Holding Group

Doha Insurance CoDoha Bank Qpsc

Dlala HoldingCommercial Bank Pqsc

Barwa Real Estate CoAl Khaleej Takaful Group

Aamal CoAl Ahli Bank

122.00

60.00

7.69

13.50

4.85

5.86

68.00

68.00

190.50

53.00

38.60

69.30

23.65

164.00

22.00

39.50

6.00

208.60

4.78

163.00

101.50

19.53

24.85

36.95

64.99

8.35

8.00

20.80

143.00

61.99

42.50

35.96

11.80

118.01

21.59

5.76

48.00

18.79

9.96

12.00

22.49

10.36

49.00

34.76

15.75

8.71

30.00

1.37

-0.33

-0.52

-0.52

-1.82

0.00

2.26

2.26

-2.30

-3.34

-1.28

-0.29

-0.42

-1.57

-0.90

0.00

-1.15

-3.87

-3.82

-1.22

-2.03

0.00

0.00

-2.20

0.42

-1.76

-1.23

-1.00

0.00

0.00

-1.16

-0.17

0.17

-2.83

1.17

-3.68

-1.74

1.02

-2.83

0.67

-2.05

-1.99

-2.00

-1.31

0.19

-1.80

-0.99

340

36,782

670,177

574,791

68,781

2,389

3,357

298

219,331

5,000

3,000

74,260

30,605

100,547

187,610

-

16,397

181,503

989,742

30,434

3,000

-

-

181,197

79,327

138,277

148,434

306,728

11,484

-

4,352

324,884

107,669

205,286

4,690

747,705

23,768

595,180

594,658

1,800

113,205

58,536

80,669

239,463

12,186

279,193

12,220

QATAR

Company Name Lt Price % Chg Volume

KUWAIT

Company Name Lt Price % Chg Volume

OMAN

Company Name Lt Price % Chg Volume

KUWAIT

Company Name Lt Price % Chg Volume

KUWAIT

Company Name Lt Price % Chg Volume

LATEST MARKET CLOSING FIGURES

Oman Oil Marketing CompanyOman National Engineering An

Oman Investment & FinanceOman Intl Marketing

Oman Flour MillsOman Fisheries Co

Oman Europe Foods IndustriesOman Education & Training In

Oman ChromiteOman Chlorine

Oman Ceramic CompanyOman Cement Co

Oman Cables IndustryOman & Emirates Inv(Om)50%

Natl Aluminium ProductsNational Real Estate Develop

National PharmaceuticalNational Mineral Water

National Life & General InsuNational Gas Co

National Finance CoNational Detergent Co Saog

National Biscuit IndustriesNational Bank Of Oman Saog

Muscat Thread Mills CoMuscat Insurance Co Saog

Muscat Gases Company SaogMuscat Finance

Muscat City Desalination CoMajan Glass Company

Majan CollegeHsbc Bank Oman

Hotels Management Co InternaGulf Stone

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 TourismDhofar Poultry

Dhofar Intl DevelopmentDhofar Insurance

Dhofar Generating Co SaocDhofar Fisheries & Food Indu

Dhofar CattlefeedDhofar Beverages Co

Construction Materials IndComputer Stationery Inds

Bankmuscat SaogSohar International Bank

Bank NizwaBank Dhofar Saog-Rts

Bank Dhofar SaogArabia Falcon Insurance Co

Aloula CoAl-Omaniya Financial Service

Al-Hassan Engineering CoAl-Fajar Al-Alamia Co

Al-Anwar Ceramic Tiles CoAl Suwadi Power

Al Sharqiya Invest HoldingAl Maha Petroleum Products M

Al Maha Ceramics Co SaocAl Madina Takaful Co Saoc

Al Madina Investment CoAl Kamil Power Co

Al Jazerah Services -PfdAl Jazeera Steel Products Co

Al Jazeera ServicesAl Izz Islamic Bank

Al Buraimi HotelAl Batinah PowerAl Batinah Hotels

Al Batinah Dev & InvAl Anwar Holdings Saog

Al Ahlia Insurance Co SaocAhli Bank

Acwa Power Barka SaogAbrasives Manufacturing Co S

A’saff a Foods Saog0Man Oil Marketing Co-Pref

1.07

0.16

0.08

0.52

0.53

0.06

1.00

0.23

3.64

0.40

0.42

0.24

0.90

0.08

0.34

5.00

0.00

0.09

0.30

0.20

0.14

0.70

3.92

0.16

0.08

0.84

0.16

0.07

0.11

0.18

0.18

0.12

1.25

0.12

0.31

0.06

0.11

0.14

9.50

0.08

0.08

0.39

0.18

0.10

0.49

0.18

0.30

0.17

0.19

1.28

0.10

0.26

0.03

0.26

0.40

0.11

0.09

0.00

0.14

0.11

0.53

0.12

0.02

0.75

0.10

0.08

0.08

0.82

0.19

0.09

0.03

0.38

0.55

0.27

0.12

0.08

0.88

0.08

1.13

0.08

0.10

0.36

0.12

0.66

0.05

0.60

0.25

0.00

0.00

-2.33

0.00

0.00

-1.64

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

-1.83

0.00

0.00

0.00

-2.99

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-3.45

0.00

0.00

0.00

0.00

-2.41

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-38.18

0.00

0.00

0.00

0.00

0.00

2.21

0.00

0.00

0.00

0.00

0.00

-3.85

1.27

-3.75

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-0.86

-1.19

0.00

-3.75

0.00

0.00

0.00

0.00

-0.83

0.00

0.00

0.00

0.00

-

3,080

90,000

-

437

340,424

-

-

-

-

-

12,468

112

-

-

-

-

-

5,000

-

-

-

-

899,411

-

-

2,530

547,400

-

-

600

96

-

-

-

30,000

-

-

-

-

343,770

-

-

-

-

-

-

-

-

-

-

-

60,000

-

3,474,362

705,602

250,000

-

2,049,705

-

-

-

-

-

53,000

6,875

45,000

-

-

247,790

10,000

-

-

-

50,000

38,623

-

10,000

-

45,045

2,807,913

-

2,702,584

-

-

-

-

Gulf Petroleum InvestmentMabanee Co Sakc

Inovest Co BscAl-Deera Holding CoMena Real Estate Co

Amar Finance & Leasing CoUnited Projects For Aviation

National Consumer Holding CoAmwal International InvestmeEquipment Holding Co K.S.C.C

Arkan Al Kuwait Real EstateGfh Financial Group Bsc

Energy House Holding Co KscpKuwait Co For Process PlantAl Maidan Dental Clinic Co KNational Shooting CompanyAl-Ahleia Insurance Co Sakp

Wethaq Takaful Insurance CoSalbookh Trading Co Kscp

Aqar Real Estate InvestmentsHayat Communications

Soor Fuel Marketing Co KscTamkeen Holding Co

Burgan Co For Well DrillingKuwait Resorts Co KsccOula Fuel Marketing Co

Palms Agro Production CoMubarrad Holding Co Ksc

Shuaiba Industrial CoAan Digital Services Co

First Takaful Insurance CoKuwaiti Syrian Holding Co

National Cleaning CompanyUnited Real Estate Company

AgilityKuwait & Middle East Fin Inv

Fujairah Cement IndustriesLivestock Transport & Tradng

International Resorts CoNational Industries Grp Hold

Warba Insurance CoFirst Dubai Real Estate Deve

Al Arabi Group Holding CoMobile Telecommunications Co

Eff ect Real Estate CoTamdeen Real Estate Co KscAl Mudon Intl Real Estate Co

Kuwait Cement Co KscSharjah Cement & Indus Devel

Kuwait Portland Cement CoEducational Holding Group

Asiya Capital Investments CoKuwait Investment Co

Burgan BankKuwait Projects Co Holdings

Al Madina For Finance And InKuwait Insurance Co

Al Masaken Intl Real EstateIntl Financial Advisors

First Investment Co KsccAl Mal Investment Company

Bayan Investment Co KsccEgypt Kuwait Holding Co Sae

Coast Investment DevelopmentPrivatization Holding Compan

Injazzat Real State CompanyKuwait Cable Vision Sak

Sanam Real Estate Co KsccIthmaar Holding Bsc

Aviation Lease And Finance CArzan Financial Group For Fi

Ajwan Gulf Real Estate CoKuwait Business Town Real Es

Future Kid Entertainment AndSpecialities Group Holding C

Abyaar Real Eastate DevelopmKgl Logistics Company Kscc

Combined Group ContractingJiyad Holding Co Ksc

Boubyan Intl Industries HoldGulf Investment House Ksc

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

Osos Holding Group CoAl-Eid Food Ksc

Qurain Petrochemical IndustrEkttitab Holding Co Sak

Real Estate Trade Centers CoAcico Industries Co Kscc

27.10

661.00

79.90

15.60

38.50

30.80

418.00

30.00

51.30

25.80

80.00

75.00

29.50

237.00

1,260.00

14.40

407.00

31.00

48.30

60.00

30.20

117.00

11.80

90.00

56.50

118.00

40.00

60.00

150.00

12.70

44.90

54.00

63.40

60.90

759.00

47.50

55.40

200.00

20.30

226.00

73.10

32.50

89.10

480.00

20.50

330.00

20.20

290.00

72.00

1,200.00

326.00

36.20

127.00

329.00

218.00

19.90

330.00

70.00

23.70

37.50

17.70

42.00

455.00

39.60

60.50

83.90

25.50

49.50

22.30

270.00

32.80

13.70

41.60

98.00

72.50

13.50

42.50

231.00

56.90

0.00

56.20

576.00

255.00

103.00

48.20

389.00

18.50

29.90

150.00

0.37

-1.34

0.00

0.00

-5.87

0.00

1.95

0.00

-10.00

0.00

0.00

2.04

-18.73

0.00

0.00

0.00

0.00

0.00

-1.02

0.00

-32.89

0.86

0.00

0.00

0.00

0.00

0.00

-0.99

0.00

0.79

0.00

1.89

-9.43

0.00

0.13

-0.84

-2.29

1.01

9.14

0.44

5.79

0.00

0.00

-0.21

-18.00

10.00

-3.81

-3.65

0.00

-9.77

0.00

1.69

1.60

-0.60

0.00

-5.24

0.00

0.00

0.85

-1.32

0.00

0.00

0.00

0.00

0.83

-0.12

0.00

0.00

0.00

-2.53

-0.61

0.74

0.00

0.00

0.00

-3.57

0.00

0.43

0.00

0.00

-6.18

-0.69

-0.39

1.98

0.00

0.26

0.00

0.00

-0.66

754,510

608,555

-

-

1,080,488

-

10

-

10,000

-

-

225,782

2,000

-

-

-

-

-

579,990

-

2,000

42,005

-

-

-

18,101

-

263,275

-

156,501

-

5

339,020

-

306,891

50

43,100

21,070

6,486

3,054,706

950

188,673

-

1,846,649

50,000

21,898

405,456

200

-

2,637

-

21,405

8,315

44,134

-

1,960,079

20,150

-

581,097

882,197

100,000

11,528

-

-

501,244

50,000

-

-

-

60,693

441,555

762,240

-

-

-

1,013,434

219,853

5,004

-

-

378,650

481,516

1,807,663

10,000

-

76,809

-

-

114,634

Kipco Asset Management CoNational Petroleum Services

Alimtiaz Investment GroupRas Al Khaimah White Cement

Kuwait Reinsurance Co KscKuwait & Gulf Link Transport

Humansoft Holding Co KscAutomated Systems Co Kscc

Metal & Recycling CoGulf Franchising Holding Co

Al-Enma’a Real Estate CoNational Mobile Telecommuni

Unicap Investment And FinancAl Salam Group Holding Co

Al Aman Investment CompanyMashaer Holding Co Ksc

Manazel HoldingTijara And Real Estate Inves

Jazeera Airways Co KscCommercial Real Estate Co

National International CoTaameer Real Estate Invest C

Gulf Cement CoHeavy Engineering And Ship B

National Real Estate CoAl Safat Energy Holding Comp

Kuwait National Cinema CoDanah Alsafat Foodstuff Co

Independent Petroleum GroupKuwait Real Estate Co Ksc

Salhia Real Estate Co KscGulf Cable & Electrical Ind

Kuwait Finance HouseGulf North Africa Holding Co

Hilal Cement CoOsoul Investment Kscc

Gulf Insurance Group KscUmm Al Qaiwain General Inves

Aayan Leasing & InvestmentAlrai Media Group Co KscNational Investments CoCommercial Facilities CoYiaco Medical Co. K.S.C.C

Munshaat Real Estate ProjectNoor Financial Investment Co

Al Tamdeen Investment CoCredit Rating & Collection

Ifa Hotels & Resorts Co. K.SSokouk Holding Co Sak

Warba Bank KscpViva Kuwait Telecom Co

Mezzan Holding Co Kscc

71.10

1,000.00

133.00

65.00

132.00

83.00

3,399.00

96.50

30.00

59.00

38.80

679.00

63.50

37.80

64.60

68.50

26.00

50.00

876.00

92.00

73.50

27.00

59.90

394.00

80.90

26.00

900.00

33.40

420.00

71.00

345.00

379.00

0.00

54.00

125.00

59.10

637.00

58.70

46.50

42.60

117.00

200.00

66.50

89.00

89.50

280.00

23.00

69.90

35.50

243.00

801.00

505.00

0.00

0.00

0.00

2.52

0.00

-0.60

1.46

23.24

0.00

0.00

-6.51

-0.29

-3.79

-2.07

4.19

-2.00

0.00

0.00

-0.23

0.00

5.00

1.89

0.00

0.00

1.25

0.00

0.00

5.70

0.96

-0.28

0.00

0.53

0.00

-0.55

0.00

2.25

-0.16

0.00

-3.13

0.00

0.00

0.00

0.00

0.00

0.56

-6.67

0.00

0.00

-1.39

0.41

0.00

0.00

20

-

203,891

6,000

-

95,383

69,215

30

-

-

2,040,003

24,100

255,000

2,965,700

4,026,835

35,000

-

-

51,299

816

342,950

387,004

-

665,166

323,146

-

-

41,073

30,219

215,972

500

140

-

50

-

1,648

2,020

-

4,385,728

-

677,150

-

-

-

9,340

71,870

-

-

282,100

585,475

8,053

2,623

OMAN

Company Name % Chg Volume

Voltamp Energy SaogVision Insurance Saoc

United Power/Energy Co- PrefUnited Power Co Saog

United Finance CoUbar Hotels & Resorts

Takaful OmanTaageer FinanceSweets Of OmanSohar Power Co

Smn Power Holding SaogShell Oman Marketing - Pref

Shell Oman MarketingSharqiyah Desalination Co Sa

Sembcorp Salalah Power & WatSalalah Port Services

Salalah Mills CoSalalah Beach Resort Saog

Sahara HospitalityRenaissance Services Saog

Raysut Cement CoPhoenix Power Co Saoc

Packaging Co LtdOoredoo

OminvestOman United Insurance Co

Oman Telecommunications CoOman Refreshment Co

Oman Qatar Insurance CoOman Packaging

0.18

0.12

1.00

2.97

0.08

0.13

0.13

0.10

0.55

0.11

0.09

1.05

1.07

0.30

0.12

0.60

0.56

1.38

3.09

0.48

0.31

0.09

2.21

0.49

0.32

0.25

0.54

1.66

0.09

0.27

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

-3.10

0.00

0.00

-4.80

0.00

0.00

0.00

0.00

0.00

0.00

-5.56

0.00

0.00

0.00

-

-

-

-

-

-

-

-

-

-

-

-

2,325

-

-

-

10,407

-

-

92,500

3,000

11,000

-

4,790

-

-

497,529

-

-

-

Sultan Center Food ProductsKuwait Foundry Co Sak

Kuwait Financial Centre SakAjial Real Estate Entmt

Kuwait Finance & InvestmentNational Industries Co Ksc

Kuwait Real Estate Holding CSecurities House/The

Boubyan Petrochemicals CoAl Ahli Bank Of Kuwait

Ahli United Bank (Almutahed)National Bank Of Kuwait

Commercial Bank Of KuwaitKuwait International Bank

Gulf BankAl-Massaleh Real Estate Co

Al Arabiya Real Estate CoKuwait Remal Real Estate Co

A’ayan Real Estate Co SakInvestors Holding Group Co.K

Al-Mazaya Holding CoAl-Madar Finance & Invt Co

-4.26

4.49

-4.60

0.00

-5.48

-8.63

4.59

-1.51

2.16

0.00

1.30

0.32

7.91

1.45

0.64

0.00

1.31

-6.98

-0.31

-1.87

-0.50

0.63

91,336

2,000

41,412

-

42,520

40

400

2,339,053

131,194

914,800

222,221

2,539,974

6,983

1,638,969

6,052,314

-

307,733

500,388

232,501

8,185,687

143,000

693,905

54.00

256.00

83.00

140.00

39.70

180.00

31.90

52.10

945.00

330.00

311.00

944.00

546.00

280.00

314.00

37.00

30.90

32.00

64.70

10.50

60.20

159.00

Trading bots converge on yuan as China plugs into global marketsBloombergNew York

As China’s integration with global fi nancial markets intensifi es, some of the

most sophisticated electronic traders are stepping up to buy and sell more of the country’s cur-rency.

Jump Trading LLC and XTX Markets Ltd say they are boost-ing volumes in the off shore yuan market as well as Asian non-de-liverable forwards, a type of cur-rency derivative. They come from a cohort of computerised trading fi rms that have grabbed market share from banks in currencies and transformed other assets like stocks and futures.

The two companies probably aren’t the only ones. Exchange gi-ant CME Group Inc’s recently ac-quired EBS platform – one of the key places where automated trad-ers do business – saw off shore yuan volume surge 57% last year, and yuan-dollar is sometimes the second-most-active currency pair there.

Internationalising the world’s second-largest economy has long been a keen target for markets. It’s happening for the Chinese currency amid some important shifts. During the past year, Chi-nese stocks and bonds were added to indexes that guide investments by passive money managers with trillions of dollars in assets, po-tentially creating the need to trade yuan as a hedge.

Chicago-based Jump is trading off shore yuan and Asian NDFs on exchanges and directly with in-vestors – bilaterally, in industry

parlance. That’s partly because the business has shifted away from the old-fashioned way bro-kers used to get currency deals done: by phone.

“Five years ago, it was very much a voice market,” Mark Bruce, Jump’s head of fi xed in-come and foreign exchange, said in an interview. “As electronic data has accumulated, quanti-tative research fi rms are able to build reliable and accurate pricing models that in turn are providing substantial liquidity.”

Historically, there wasn’t a “widely available and active” electronic order book for off shore yuan or Asian NDFs, according to Matt Clarke, XTX’s head of dis-

tribution and liquidity manage-ment for Europe, the Middle East and Africa. Then, in 2016, EBS started letting liquidity provid-ers that weren’t banks trade the Asian products. London-based XTX doubled its trading in off -shore yuan and Asian non-de-liverable forwards in 2018 versus 2017, Clarke said.

The presence of Jump, XTX and their ilk points to an increas-ingly automated future. Futures and equities markets around the world are dominated by auto-mated traders, who have also been making inroads in currencies.

Two computerised fi rms – Cit-adel Securities and Virtu Finan-cial Inc – have grown so much

that they together handle about 40% of volume in the $32tn US stock market. They, plus two oth-ers, IMC Financial Markets and GTS, oversee nearly all trading at the New York Stock Exchange fl oor as designated market mak-ers. XTX made a splash in 2016 when it came from nowhere to rank among the world’s biggest currency traders.

Banks still play an important role in the overall currency mar-ket since they have huge customer bases. And banks have comput-ers, too. JPMorgan Chase & Co and Citigroup Inc are “at the top of the fi eld” among major banks when it comes to electronic trad-ing, research fi rm Greenwich As-

sociates LLC said in a report last month.

Still, electronic traders have dramatically changed the invest-ing landscape. They create liquid-ity that helps to reduce transac-tion costs, generating even more volume, according to a senior Virtu executive.

“As these markets develop and become more open to glo-bal competition, as more people price into these markets, it makes it cheaper for people to transact, thus increasing people’s inter-est in trading it,” said Andrew Smith, Virtu’s head of corporate strategy, investor relations and communications. “They trade it, the volumes go up. It’s a virtu-ous feedback cycle.” He declined to comment on whether Virtu is trading the yuan.

MSCI Inc last year started add-ing Chinese shares to its global benchmarks and began increas-ing their allocation this month. Bloomberg LP, the parent com-pany of this news organisation, started adding some of China’s onshore bonds to the Bloomberg Barclays Global Aggregate Index a month ago.

Those are potential catalysts for the yuan. The world’s second-largest economy is seeking more foreign direct investment at a time when its domestic consumers are already boosting foreign spending.

“As China’s current account trends toward a more balanced picture, portfolio fl ows will be another important indicator to drive currency strength and weakness going forward,” said Stephen Chang, portfolio man-ager for Asia at Pacifi c Investment Management Co.

An employee counts Chinese one-hundred yuan banknotes at the Hang Seng Bank headquarters in Hong Kong (file). As China’s integration with global financial markets intensifies, some of the most sophisticated electronic traders are stepping up to buy and sell more of the country’s currency.

Lt Price

BUSINESS

Gulf Times Tuesday, May 7, 20196

Private equity’s returns questioned again, this time by Buff ett

BloombergNew York

Private equity fi rms, which are attracting record amounts of in-

vestor funds, have for years faced criticisms that they game their returns. Over the weekend, billionaire Warren Buff ett joined the chorus.

The Berkshire Hathaway Inc chairman and chief ex-ecutive offi cer said fi rms make their performance ap-pear better than it is. Firms will include money that’s waiting to be deployed, such as funds sitting in Treasury bills, when charging man-agement fees. But they’ll exclude those funds when calculating the internal rate of return – the perform-ance measure in which most funds are judged, Buff ett said.

“We have seen a number of proposals from private equity funds where the returns are really not cal-culated in a manner that I would regard as honest,” Buff ett, 88, said on Saturday at Berkshire’s annual share-holder meeting in Omaha, Nebraska. “It’s not as good as it looks.”

Representatives for the largest private equity fi rms either didn’t immediately respond to a request for comment on Buff ett’s al-legations, or declined to comment by deferring to the American Investment Council lobbying group.

“Pension funds across

America choose to invest in private equity because private equity investments historically outperform the public markets and de-liver substantial benefi ts to public servants and re-tirees,” AIC president and chief executive offi cer Drew Maloney said on Sunday in an e-mail.

Verdad Advisers founder Dan Rasmussen, who runs a fi rm that can compete with the private equity model, said “there are tonnes of issues” with internal rate of return. “The fact that IRR math is easily gamed is extremely well-known,” he said.

Companies rush money into deals to shorten the time during which they cal-culate the returns, he said. If you take the same results over the entire decade of a private equity vehicle, the returns would look a lot worse.

Rasmussen said so-called public-market equivalents are a better way to track performance. By that meth-od, buyout fi rms are trailing stock markets, according to a study by Pitchbook pub-lished in September.

Cambridge Associates has found that PE fi rms can infl ate performance with their math. But the biggest investors are savvy enough to see through it, said An-drea Auerbach, global head of private investments at Cambridge Associates, which manages funds on behalf of endowment, foun-dation and pension clients.

Page 7: total assets rise 1.77% in - Gulf Times

World markets dive as Trump threatens $200bn China tariff sAFPParis

US President Donald Trump sent global stock markets plung-ing yesterday by threatening

to hike tariff s on $200bn of Chinese goods to force the pace in stuttering trade talks between the economic su-perpowers.

Equities in Asia, Europe and the US were a sea of red as Trump’s remarks rekindled fears of a trade war with po-tentially devastating consequences for world growth.

“For 10 months, China has been paying Tariff s to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump tweeted Sunday night. “The 10% will go up to 25% on Friday.”

Many markets, however, pared early steep losses as analysts suggested that Trump was playing a game of brink-manship and would ultimately save ongoing trade talks.

The Dow Jones index, which fell by over 400 points at the opening bell, had clawed back more than half of that loss by the late New York morning.

Eurozone stocks were also in better shape at the end of the European trad-ing day than at the start

Frankfurt’s DAX 30 fell 1.0% to close at 12,286.88, while Paris’ CAC 40 was down 1.2% at 5,483.52.

The London market was shut for a public holiday.

Earlier, Asian investors took no chances, infl icting some of the worst falls on the region’s exchanges, with Shanghai plunging more than 5%, and the Chinese yuan also taking a batter-ing after the president threw a spanner into the high-level negotiations.

Trump’s warning threw a shadow over a visit by a Chinese delegation to Washington this week which, however, a Chinese foreign ministry spokesman said was going ahead as planned.

“The period of historic calm across global fi nancial markets is staring at the prospect of a rude awakening,” said Han Tan, market analyst at FXTM. “Risk-off sentiment has been the re-sponse to this swerve from Trump.”

The two sides have imposed tariff s on $360bn in two-way trade since last year.

But Trump and China’s Xi Jinping agreed a truce in December, fuelling a surge in global stocks for the past four months.

“Trump has taken the proverbial sledgehammer to the walnut this morning and the only two words likely to be on the minds of traders and in-vestors this week are ‘trade talks’,” said OANDA senior market analyst Jeff rey Halley.

News that the People’s Bank of China would slash the amount of cash lenders must keep in reserve, to sup-

port small businesses, had little impact in the face of Trump’s warning.

Andrew Tilton, chief Asia-Pacifi c economist at Goldman Sachs, said on Bloomberg TV that Trump’s threat now “raises the spectre of a signifi cant hit to growth.”

The yuan’s fall, at 1.3% at one point against the dollar, was its heaviest in more than three years.

“Investors will remain bearish on the yuan, as they reprice in trade war risks,” Ken Cheung, senior foreign-exchange strategist at Mizuho Bank. “The news was unexpected.”

Flight to safety saw the dollar surge across the board, particularly against higher-yielding, higher-risk units, al-though the yen held its own against the greenback.

On oil markets, both main contracts were hammered by worries that a trade war between the world’s top two econ-omies could hit demand, before com-ing off their early lows.

Stephen Innes at SPI Asset Man-agement called Trump’s tweet “quite the shocker” but also said it was prob-ably prompted by “political posturing” rather than any real intention of slam-ming the door on trade talks.

“I still think a trade deal in some form or another gets done,” he said.

Raoul Leering, head of international trade analysis at ING, said both sides had invested too much political capital in the talks to allow them to fail.

Apple IncAmerican Express Co

Boeing Co/TheCaterpillar Inc

Cisco Systems IncChevron Corp

Walt Disney Co/TheDowdupont Inc

Goldman Sachs Group IncHome Depot Inc

Intl Business Machines CorpIntel Corp

Johnson & JohnsonJpmorgan Chase & Co

Coca-Cola Co/TheMcdonald’s Corp

3M CoMerck & Co. Inc.

Microsoft CorpNike Inc -Cl B

Pfizer IncProcter & Gamble Co/The

Travelers Cos Inc/TheUnitedhealth Group Inc

United Technologies CorpVisa Inc-Class A Shares

Verizon Communications IncWalgreens Boots Alliance Inc

Walmart IncExxon Mobil Corp

207.77

118.53

370.05

136.05

54.43

119.09

134.69

33.68

204.29

199.11

139.34

50.86

140.69

114.60

48.35

198.18

181.29

78.93

127.81

83.18

41.36

105.46

142.19

231.98

139.23

161.62

57.00

53.64

101.81

77.12

-1.88

-0.69

-1.70

-2.16

-0.93

1.55

0.27

-3.47

-1.56

-0.72

-0.65

-1.72

-0.93

-1.31

-0.76

0.33

-2.12

-1.34

-0.85

-2.94

-0.07

-0.58

-0.81

0.01

-1.69

-0.26

-0.42

-0.81

-0.26

-0.45

4,415,451

201,197

470,730

464,575

2,225,288

786,557

685,679

1,225,456

155,677

213,133

269,529

2,877,953

396,903

1,136,252

709,525

210,955

381,923

719,852

2,856,598

954,073

2,109,760

675,673

61,385

278,969

198,933

455,548

909,534

445,623

532,901

1,241,985

DJIA

Company Name Lt Price % Chg Volume

Anglo American PlcAssociated British Foods Plc

Admiral Group PlcAshtead Group Plc

Antofagasta PlcAuto Trader Group Plc

Aviva PlcAstrazeneca PlcBae Systems Plc

Barclays PlcBritish American Tobacco Plc

Barratt Developments PlcBhp Group Plc

Berkeley Group Holdings/TheBritish Land Co Plc

Bunzl PlcBp Plc

Burberry Group PlcBt Group Plc

Coca-Cola Hbc Ag-DiCarnival PlcCentrica Plc

Compass Group PlcCroda International Plc

Crh PlcDcc Plc

Diageo PlcDirect Line Insurance Group

Evraz PlcExperian Plc

Easyjet PlcFerguson Plc

Fresnillo PlcGlencore Plc

Glaxosmithkline PlcGvc Holdings Plc

Hikma Pharmaceuticals PlcHargreaves Lansdown Plc

Halma PlcHsbc Holdings Plc

Hiscox LtdIntl Consolidated Airline-Di

Intercontinental Hotels Grou3I Group Plc

Imperial Brands PlcInforma Plc

Intertek Group PlcItv Plc

Johnson Matthey PlcKingfisher Plc

Land Securities Group PlcLegal & General Group PlcLloyds Banking Group Plc

London Stock Exchange GroupMicro Focus International

Marks & Spencer Group PlcMondi Plc

Melrose Industries PlcWm Morrison Supermarkets

National Grid PlcNmc Health Plc

Next PlcOcado Group Plc

Paddy Power Betfair PlcPrudential Plc

Persimmon PlcPearson Plc

Reckitt Benckiser Group PlcRoyal Bank Of Scotland Group

Royal Dutch Shell Plc-A ShsRoyal Dutch Shell Plc-B Shs

Relx PlcRio Tinto Plc

Rightmove PlcRolls-Royce Holdings PlcRsa Insurance Group Plc

Rentokil Initial PlcSainsbury (J) Plc

Schroders PlcSage Group Plc/The

Segro PlcSmurfit Kappa Group Plc

Standard Life Aberdeen PlcDs Smith Plc

Smiths Group PlcScottish Mortgage Inv Tr Plc

Smith & Nephew PlcSpirax-Sarco Engineering Plc

Sse PlcStandard Chartered Plc

St James’s Place PlcSevern Trent Plc

Tesco PlcTui Ag-Di

Taylor Wimpey PlcUnilever Plc

United Utilities Group PlcVodafone Group Plc

John Wood Group PlcWpp Plc

Whitbread Plc

1,980.80

2,551.00

2,179.00

2,111.00

878.80

576.00

426.20

5,741.00

481.50

163.68

2,897.50

593.80

1,778.40

3,730.00

595.20

2,246.00

548.10

2,000.00

226.50

2,763.00

4,013.00

105.40

1,736.50

5,080.00

2,603.00

6,834.00

3,207.50

320.50

607.40

2,216.00

1,117.00

5,452.00

748.20

298.40

1,552.20

633.20

1,759.50

2,292.00

1,803.00

680.60

1,628.00

525.00

4,944.00

1,066.00

2,350.50

777.80

5,278.00

134.70

3,342.00

260.20

926.20

276.60

62.64

5,116.00

1,784.20

279.00

1,708.00

200.50

215.60

829.10

2,799.00

5,700.00

1,380.50

6,410.00

1,738.50

2,188.00

810.60

6,064.00

237.70

2,454.50

2,472.50

1,726.00

4,407.50

546.00

934.20

549.80

387.60

220.30

3,162.00

712.40

681.00

2,328.00

278.80

362.00

1,538.50

530.50

1,569.00

8,195.00

1,145.00

710.40

1,126.00

2,004.00

247.40

863.20

181.20

4,603.00

816.00

140.06

461.70

978.00

4,554.00

2.34

0.43

-0.37

0.52

0.94

1.05

-0.33

0.93

-0.12

-0.52

0.61

-0.47

0.90

0.51

-1.29

0.40

0.11

1.88

0.33

0.18

-1.64

0.86

0.29

-0.29

0.31

0.80

0.30

-1.17

0.30

0.64

-2.10

0.41

1.03

0.67

0.31

-0.13

0.09

0.97

0.87

1.93

-1.93

-2.05

-1.08

-0.23

-0.34

0.91

-0.79

-0.55

0.12

-0.12

-0.47

-0.32

-0.25

0.31

1.48

0.32

0.89

-0.74

0.33

0.72

0.68

-0.28

2.60

0.16

-0.20

-0.95

0.42

-0.36

0.64

0.04

-0.10

1.20

1.11

1.39

1.39

0.73

0.41

-0.99

0.13

0.20

0.65

0.26

-0.75

0.00

0.95

1.43

3.29

0.49

1.28

0.40

0.09

0.20

-0.32

-0.83

-0.22

0.29

0.10

-0.69

1.21

0.45

0.53

3,865,876

435,065

1,065,817

816,328

1,662,833

2,322,963

5,055,646

1,580,422

5,780,986

14,342,622

2,444,596

2,356,111

2,661,055

346,034

2,698,867

502,911

19,647,550

789,511

9,658,174

535,363

426,874

13,053,159

1,110,881

218,437

872,514

96,377

2,708,419

5,562,508

1,437,561

982,466

1,581,101

448,193

738,975

22,436,006

5,569,104

1,365,390

351,005

560,716

926,384

24,137,075

858,377

5,288,043

499,340

907,162

2,025,680

4,297,500

195,172

9,779,699

154,222

3,121,336

1,001,199

11,857,707

83,509,382

349,828

1,494,873

3,135,787

931,659

12,320,643

5,229,912

3,506,562

325,132

499,974

1,435,506

240,390

2,072,004

1,343,235

2,184,243

983,370

10,442,063

4,984,817

3,858,250

3,077,594

1,874,599

1,362,751

6,536,876

2,493,715

2,851,606

8,574,405

339,198

1,607,786

1,882,694

362,979

5,628,953

2,630,825

513,209

2,248,104

7,383,367

200,352

2,582,278

5,922,688

2,103,796

568,958

11,391,909

1,318,329

6,491,838

1,243,322

1,608,074

43,882,784

1,575,953

3,399,470

869,653

FTSE 100

Company Name Lt Price % Chg Volume

Hitachi LtdTakeda Pharmaceutical Co Ltd

Jfe Holdings IncSumitomo Corp

Canon IncNintendo Co Ltd

Eisai Co LtdIsuzu Motors Ltd

Unicharm CorpShin-Etsu Chemical Co Ltd

Smc CorpMitsubishi Corp

Asahi Group Holdings LtdKeyence Corp

Nidec CorpNomura Holdings Inc

Daiichi Sankyo Co LtdSubaru Corp

Ntt Docomo Inc

3,689.00

4,112.00

1,905.00

1,589.50

3,089.00

38,000.00

6,454.00

1,595.50

3,649.00

10,430.00

46,060.00

3,056.00

4,829.00

69,120.00

15,785.00

417.80

5,481.00

2,720.50

2,410.50

0.60

-1.46

-0.57

-0.25

0.16

-1.32

-0.84

1.40

0.00

-0.43

1.21

1.16

-0.39

-0.76

0.38

0.24

5.91

-1.02

0.77

3,435,200

6,542,700

2,384,900

3,232,100

3,893,200

4,716,900

856,900

1,684,900

990,300

1,368,300

371,700

3,835,500

1,062,500

549,800

1,112,200

21,107,500

3,360,800

1,831,600

6,703,300

TOKYO

Company Name Lt Price % Chg Volume

Sumitomo Realty & DevelopmenSumitomo Metal Mining Co Ltd

Orix CorpDaiwa Securities Group Inc

Softbank Group CorpMizuho Financial Group Inc

Central Japan Railway CoNitori Holdings Co Ltd

T&D Holdings IncToyota Motor Corp

Hoya CorpSumitomo Mitsui Trust Holdin

Japan Tobacco IncOsaka Gas Co Ltd

Sumitomo Electric IndustriesOno Pharmaceutical Co Ltd

Ajinomoto Co IncMitsui Fudosan Co Ltd

Daikin Industries LtdToray Industries Inc

Bridgestone CorpSony Corp

Astellas Pharma IncJxtg Holdings Inc

Nippon Steel CorpSuzuki Motor Corp

Nippon Telegraph & TelephoneSompo Holdings Inc

Daiwa House Industry Co LtdKomatsu Ltd

West Japan Railway CoMurata Manufacturing Co Ltd

Kansai Electric Power Co IncDenso Corp

Dai-Ichi Life Holdings IncMazda Motor Corp

Mitsui & Co LtdKao Corp

Sekisui House LtdOriental Land Co Ltd

Secom Co LtdTokio Marine Holdings Inc

Aeon Co LtdFanuc Corp

Daito Trust Construct Co LtdOtsuka Holdings Co Ltd

Resona Holdings IncAsahi Kasei Corp

Kirin Holdings Co LtdMitsubishi Ufj Financial Gro

Marubeni CorpMitsubishi Chemical Holdings

Fast Retailing Co LtdMs&Ad Insurance Group Holdin

Kubota CorpSeven & I Holdings Co Ltd

Inpex CorpSumitomo Mitsui Financial Gr

Ana Holdings IncMitsubishi Electric Corp

Honda Motor Co LtdTokyo Gas Co Ltd

Tokyo Electron LtdPanasonic Corp

Fujitsu LtdEast Japan Railway Co

Itochu CorpFujifilm Holdings Corp

Yamato Holdings Co LtdChubu Electric Power Co Inc

Mitsubishi Estate Co LtdMitsubishi Heavy Industries

Shiseido Co LtdShionogi & Co Ltd

Recruit Holdings Co LtdJapan Airlines Co Ltd

Nitto Denko CorpKddi Corp

Rakuten IncKyocera Corp

Nissan Motor Co Ltd

4,103.00

3,479.00

1,571.50

515.10

11,555.00

173.50

23,895.00

13,250.00

1,196.50

6,905.00

7,815.00

3,864.00

2,576.00

2,055.00

1,474.50

2,079.50

1,792.50

2,567.00

14,100.00

758.00

4,406.00

5,212.00

1,509.00

540.70

1,980.50

5,065.00

4,616.00

4,161.00

3,111.00

2,852.00

8,262.00

5,960.00

1,345.50

4,853.00

1,595.00

1,315.50

1,794.00

8,557.00

1,792.00

12,270.00

9,338.00

5,602.00

2,054.50

20,775.00

14,865.00

3,969.00

469.70

1,143.00

2,519.50

549.90

795.10

789.10

64,260.00

3,438.00

1,683.00

3,859.00

1,081.00

4,021.00

3,888.00

1,582.00

3,101.00

2,827.00

17,645.00

1,021.00

8,135.00

10,465.00

2,000.00

5,184.00

2,412.50

1,616.00

1,875.50

4,621.00

8,718.00

6,476.00

3,329.00

3,729.00

5,990.00

2,540.50

1,235.00

7,190.00

893.30

-0.17

-0.43

0.70

-0.81

-0.26

0.29

-3.38

-1.38

-1.77

0.06

2.37

-0.13

-0.06

-0.68

-1.47

0.80

-0.14

-0.25

2.58

0.46

0.30

-0.86

1.86

-1.66

-0.63

-1.90

0.04

-0.86

-0.99

0.53

-0.49

-0.43

-1.97

-1.90

-0.99

-0.64

0.59

-0.31

0.39

-2.81

0.13

-0.11

0.10

-2.69

-2.65

0.61

-0.63

0.62

0.12

0.09

0.09

-0.87

0.19

-0.15

-0.27

0.94

0.98

-0.22

-1.27

3.84

-0.13

1.78

-1.15

-0.24

1.38

1.41

-0.02

-1.29

-1.39

0.75

-0.50

0.98

1.25

0.78

1.19

0.11

0.96

1.54

1.40

4.90

0.49

TOKYO

Company Name Lt Price % Chg

Ck Hutchison Holdings LtdHang Lung Properties Ltd

Ck Infrastructure Holdings LHengan Intl Group Co Ltd

China Shenhua Energy Co-HCspc Pharmaceutical Group Lt

Hang Seng Bank LtdChina Resources Land Ltd

Ck Asset Holdings LtdSino Biopharmaceutical

Henderson Land DevelopmentAia Group Ltd

Ind & Comm Bk Of China-HWant Want China Holdings Ltd

Sun Hung Kai PropertiesNew World Development

Geely Automobile Holdings LtSwire Pacific Ltd - Cl A

Sands China LtdWharf Real Estate Investment

Clp Holdings LtdCountry Garden Holdings Co

Aac Technologies Holdings InShenzhou International GroupPing An Insurance Group Co-H

China Mengniu Dairy CoSunny Optical Tech

Boc Hong Kong Holdings LtdChina Life Insurance Co-H

Citic LtdGalaxy Entertainment Group L

Wh Group Ltd

81.20

17.50

63.20

66.75

17.22

14.42

206.00

33.55

61.90

7.33

47.10

80.45

5.77

6.23

134.40

12.76

14.58

96.80

41.45

59.10

88.20

12.24

49.75

102.70

90.85

29.60

91.05

34.75

20.95

11.28

57.30

8.44

-1.22

-2.67

-1.33

-2.05

-2.16

-5.26

-3.10

-2.04

-2.83

-4.81

-2.38

-3.59

-2.37

-0.95

-1.97

-3.63

-7.13

-2.37

-4.93

-2.96

-1.40

-3.92

-6.13

-4.64

-4.77

-3.90

-5.79

-3.07

-6.05

-2.25

-4.42

-6.84

7,996,424

5,980,663

2,190,117

3,352,192

32,447,482

42,499,222

2,254,589

11,718,024

8,879,153

75,781,390

11,503,764

37,557,223

325,602,270

9,900,110

4,853,943

15,743,702

166,237,438

737,518

15,752,873

3,783,454

2,759,883

56,590,386

18,727,938

1,924,186

77,769,283

16,927,526

14,680,624

18,706,703

99,548,574

21,512,218

25,738,992

155,272,297

HONG KONG

Company Name Lt Price % Chg Volume

Hong Kong & China GasBank Of Communications Co-HChina Petroleum & Chemical-HHong Kong Exchanges & Clear

Bank Of China Ltd-HHsbc Holdings Plc

Power Assets Holdings LtdMtr Corp

China Overseas Land & InvestTencent Holdings Ltd

China Unicom Hong Kong LtdLink Reit

Sino Land CoChina Resources Power Holdin

Petrochina Co Ltd-HCnooc Ltd

China Construction Bank-HChina Mobile Ltd

18.70

6.52

5.88

266.00

3.69

68.10

54.70

46.70

28.70

375.60

9.09

95.15

13.46

10.94

4.79

13.48

6.82

73.90

-1.27

-1.95

-1.84

-4.39

-1.86

-2.30

-0.73

-1.99

-2.05

-3.15

-1.94

-0.83

-2.75

-2.32

-1.84

-1.46

-2.43

-0.54

15,064,874

29,819,745

199,438,034

10,175,617

614,236,968

37,862,198

5,151,828

3,122,128

12,298,530

22,726,831

25,191,471

5,418,227

3,688,126

8,837,165

131,481,796

81,632,556

501,589,270

21,349,425

HONG KONG

Company Name Lt Price % Chg Volume

Adani Ports And Special EconAsian Paints Ltd

Axis Bank LtdBajaj Finance Ltd

Bharti Airtel LtdBharti Infratel Ltd

Bajaj Auto LtdBajaj Finserv Ltd

Bharat Petroleum Corp LtdCipla Ltd

Coal India LtdDr. Reddy’s Laboratories

Eicher Motors LtdGail India Ltd

Grasim Industries LtdHcl Technologies Ltd

Housing Development FinanceHdfc Bank Limited

Hero Motocorp LtdHindalco Industries Ltd

Hindustan Petroleum CorpHindustan Unilever Ltd

Icici Bank LtdIndiabulls Housing Finance L

Indusind Bank LtdInfosys Ltd

Indian Oil Corp LtdItc Ltd

Jsw Steel LtdKotak Mahindra Bank Ltd

Larsen & Toubro LtdMahindra & Mahindra Ltd

Maruti Suzuki India LtdNtpc Ltd

Oil & Natural Gas Corp LtdPower Grid Corp Of India Ltd

Reliance Industries LtdState Bank Of India

Sun Pharmaceutical IndusTata Steel Ltd

Tata Consultancy Svcs LtdTech Mahindra Ltd

Titan Co LtdTata Motors Ltd

Upl LtdUltratech Cement Ltd

Vedanta LtdWipro Ltd

Yes Bank LtdZee Entertainment Enterprise

379.80

1,412.80

747.45

3,034.30

333.45

271.85

3,026.20

7,667.95

390.35

563.35

251.35

2,920.60

20,349.90

346.25

896.55

1,136.05

1,965.45

2,328.45

2,531.30

198.90

292.25

1,668.90

401.30

686.55

1,528.25

718.40

156.70

307.00

296.70

1,410.40

1,352.70

638.50

6,709.65

135.00

170.15

190.45

1,384.90

308.75

453.15

535.95

2,157.85

820.15

1,082.85

199.80

949.80

4,518.55

166.75

290.85

166.25

387.75

-1.92

-1.79

-1.30

-2.49

0.60

-0.78

-1.10

0.57

2.52

-0.20

-0.30

0.45

-0.01

0.23

-0.23

-0.61

-2.04

-1.67

-1.33

-3.02

2.17

-1.46

-0.12

-2.71

-1.82

-0.72

0.35

0.90

-3.93

-0.52

-0.80

-1.13

-0.01

-0.33

-0.06

-0.21

-1.70

-0.40

-0.02

-2.16

1.21

0.34

-5.43

-4.61

-2.12

-1.04

-0.57

-0.02

-5.49

-5.75

SENSEX

Company Name Lt Price % Chg

WORLD INDICESIndices Lt Price Change

GCC INDICESIndices Lt Price Change

Dow Jones Indus. AvgS&P 500 Index

Nasdaq Composite IndexS&P/Tsx Composite Index

Mexico Bolsa IndexBrazil Bovespa Stock Idx

Ftse 100 IndexCac 40 Index

Dax IndexIbex 35 Tr

Nikkei 225Japan Topix

Hang Seng IndexAll Ordinaries Indx

Nzx All IndexBse Sensex 30 Index

Nse S&P Cnx Nifty IndexStraits Times Index

Karachi All Share IndexJakarta Composite Index

26,259.04

2,919.73

8,080.90

16,427.06

44,129.57

95,027.80

7,380.64

5,483.52

12,286.88

9,331.00

22,258.73

1,617.93

29,209.82

6,369.85

1,702.67

38,600.34

11,598.25

3,290.62

26,232.32

6,256.35

-245.91

-25.91

-83.10

-67.37

-147.66

-980.09

+29.33

-65.32

-125.87

-78.60

-48.85

-2.35

-871.73

-57.35

-16.78

-362.92

-114.00

-101.67

-305.47

-63.11

Doha Securities Market

Kuwait Stocks Exchange

Oman Stock Market

10,296.59

4,845.34

3,905.24

-164.90

+27.96

-27.45

“Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on this data.”

1,414,900

1,661,400

3,991,000

7,458,100

4,430,300

77,014,200

574,300

462,200

2,614,100

3,999,400

1,286,000

860,400

4,198,500

2,262,500

2,452,500

1,203,600

1,816,200

2,851,400

1,279,700

3,483,500

1,916,900

5,976,100

7,323,800

19,823,500

2,682,700

2,545,500

3,671,100

1,109,700

2,950,700

5,275,500

568,100

2,916,800

5,316,400

3,852,300

6,044,600

2,710,000

7,266,800

1,969,500

1,909,100

1,308,000

434,200

1,699,600

2,548,600

1,430,600

404,900

1,125,200

10,168,200

3,466,100

1,559,200

47,322,800

5,579,100

6,530,800

612,100

1,031,900

2,839,300

3,797,000

4,239,200

3,470,300

1,846,700

9,584,600

3,315,900

2,067,100

1,561,600

6,082,300

980,800

1,291,400

9,640,800

1,858,000

2,043,900

1,860,200

4,955,000

991,400

2,086,900

705,800

4,112,800

1,791,500

1,067,600

7,980,600

15,253,700

2,641,800

16,644,900

1,648,057

1,161,960

5,909,936

966,487

14,596,079

2,351,319

259,117

118,824

9,270,990

1,715,311

3,270,067

411,016

55,068

4,334,526

872,860

1,413,565

2,216,418

3,437,023

463,670

8,845,838

7,424,394

2,373,878

20,751,521

5,942,049

2,018,992

8,858,265

7,947,973

6,737,627

7,433,027

2,109,507

1,515,052

1,498,420

480,317

6,080,575

18,962,836

3,081,345

7,237,910

10,639,216

3,104,707

9,964,839

2,891,422

1,247,845

4,064,781

30,117,667

3,209,489

488,749

6,683,022

4,304,345

49,500,412

5,717,642

Volume

Volume

The German share price index DAX graph is pictured at the stock exchange in Frankfurt. The DAX 30 fell 1.0% to close at 12,286.88 yesterday.

BUSINESS7Gulf Times

Tuesday, May 7, 2019

Page 8: total assets rise 1.77% in - Gulf Times

BUSINESS11Gulf Times

Tuesday, May 7, 2019

ReutersBeijing

China’s central bank said yes-terday it will cut reserve re-quirement ratios (RRRs) to

release about 280bn yuan ($41bn) for some small and medium-sized banks, in a targeted move to help companies struggling amid an economic slow-down.

The cut in the amount of cash that banks must hold as reserves would be the smallest since January 2018, when the People’s Bank of China (PBoC) started its latest round of policy easing to support the world’s second-largest economy.

The cut, while widely expected at some point, was announced right be-fore China’s stock market opened, and just hours after US President Donald Trump sharply escalated trade tensions between the world’s two largest econo-mies.

The PBoC said the reduction will be implemented in three phases, giving the dates of May 15, June 17 and July 15.

The funds will be used for loans to small and private companies.

“This is aimed at helping small- and medium-sized banks to better serve small and private enterprises, which will in turn support the overall econo-my,” the PBoC said on its website.

The central bank said it will cut the RRR for about 1,000 rural commer-cial banks operating in counties to 8%, equal to the RRR for smaller rural credit cooperatives.

The move will help lower funding costs for small and micro fi rms, the PBoC said.

Small and medium-sized banks cur-rently have RRRs ranging from 10% to 11.5%.

The PBoC has already delivered fi ve RRR cuts since early 2018, lowering the ratio to 13.5% for big banks and 11.5% for small-to medium-sized lenders.

The central bank pumped out 3.35tn yuan in net liquidity through the fi ve re-serve cuts, according to Reuters calcu-lations based on PBoC data and analyst estimates.

Analysts believe PBoC has less room to ease policy after it cut RRRs and in-terest rates aggressively during the glo-bal fi nancial crisis, and delivered more cuts in 2012 and 2015 – a year marked by a stock market crash and a slide in the yuan.

The government, which is rely-ing more on increased infrastructure

spending and tax cuts to support eco-nomic growth this year, has repeated said it will not resort to “fl ood-like” stimulus.

Previous policy announcements usu-ally fell on non-trading times after the market closed, analysts from Citic Se-curities noted, making the timing of this announcement intriguing.

Just hours earlier, Trump issued a se-ries tweets in which he complained that trade talks with China were proceeding “too slowly”, and that he would raise tariff s on $200bn of goods to 25% on Friday from 10%.

His comments upended markets that had been enjoying a period of calm thanks to signs of robust growth in China and the United States, and from previous comments from Trump and other senior US officials that

trade talks were going well. Some analysts believed the PBoC was seek-ing to reassure investors unnerved by Trump’s latest comments.

“I think it is a move to calm the mar-ket, to off set the impact from the trade talks, telling you that ‘I can give some stimulus during the most diffi cult times, but I will not give too much’,” said Zhou Hao, analyst at Commerzbank in Singapore, adding that the PBoC’s tar-geted cut showed Beijing’s resolve to keep its debt level in check.

Despite the policy boost, China’s ma-jor stock indexes still extended heavy losses.

The blue-chip CSI300 index and the Shanghai Composite Index both tumbled more than 5%, posting their steepest single-day drop since Febru-ary 2016.

Hong Kong’s Hang Seng index slumped more than 3%.

China’s currency, the yuan, dropped to as low as 6.7994 per dollar, its weak-est level in 3-1/2 months, while the off -shore yuan fell as much as 1.3%.

“Beijing has been sounding less do-vish over the past two weeks.

We believe a worsening of the trade confl ict between the US and China will evoke another dovish turn by Bei-jing, especially on its monetary easing stance,” Ting Lu, chief China econo-mist at Nomura in Hong Kong, wrote in a note.

Economists had expected further tar-geted cuts on the RRR this year as Bei-jing seeks to underpin growth.

The State Council, or cabinet, said on April 17 that a policy framework would be set up to implement relatively low

RRRs for small- and medium-sized banks.

The PBoC is likely to cut RRRs for small banks to encourage more lend-ing to small and private fi rms – which are vital for economic growth and job creation – policy insiders told Reuters previously, who pencilled in at least one such “targeted” RRR cut this year.

China’s Vice Premier Liu He, who was scheduled to meet US offi cials in Washington for further trade talks this week, is “very unlikely” to go after Trump’s tariff “threat”, editor-in-chief of China’s Global Times newspaper said yesterday.

China’s foreign ministry said yester-day a Chinese delegation is preparing to go to the United States for trade talks, although it did not say if Vice Premier Liu would be part of the delegation.

China gives modest boostto economy with RRR cut

A pedestrian walks past the People’s Bank of China building in Beijing. China’s central bank said yesterday it will cut reserve requirement ratios to release about 280bn yuan ($41bn) for some small and medium-sized banks, in a targeted move to help companies struggling amid an economic slowdown.

Sequoia China to cut up to 20% ofinvestment employees

ReutersHong Kong

Sequoia Capital China, widely

viewed as a bellwether for Chi-

nese tech investment, is set to lay

off as much as 20% of investment

staff as a slowdown in the coun-

try’s tech sector saps appetite

for risk, said two people with

knowledge of the matter.

The Chinese arm of Silicon

Valley venture capitalist Sequoia

Capital is looking to cut the

number of venture investment

professionals from about 70, the

people said.

Two other people said the cut

would be at least 10%.

Sequoia China told Reuters it

regularly reviews its workforce

which may result in personnel

adjustments.

“Within the last 12 months,

we had 13 new investment

professionals join Sequoia China,

which slightly increased our total

number of employees,” it said in

a statement.

The layoff s would come after

a government campaign against

debt financing left start-ups

vying for shrinking pools of fresh

capital.

Meanwhile disappointing

returns from firms going public

amid market volatility has made

investors bearish, resulting in

down rounds – where a firm’s

valuation in a round of fundrais-

ing falls below that of a previous

round.

Chinese venture capital and

private equity managers raised a

combined $1.5bn for investment

across all sectors in the first three

months of 2019, a far cry from the

$9.4bn of the same period last

year, according to data provider

Preqin.

Reflecting broader industry

malaise, major tech firms have

cut headcount and salaries

to maintain performance as

economic slowdown and Sino-US

trade war weigh on customer

sentiment, while at the same time

seeking opportunities as growth

plateaus.

Sequoia China’s job cuts began

in late March and have mainly

aff ected the venture capital arm’s

technology & media, healthcare,

consumer and industrial technol-

ogy teams, two of the people told

Reuters, declining to be identified

as the information was not yet

public.

Investment professionals

including one partner, one man-

aging director, and several vice

presidents and associates have

agreed to leave the firm during

these cuts, said one of the people.

The cuts mirror similar moves

across the much-hyped tech

industry in the world’s second-

biggest economy.

In February, ride-hailing firm

Didi Chuxing said it would axe

15% of staff , mostly in non-core

business units.

The same month, online media

outlet Sina Tech said e-commerce

firm JD.com Inc planned to lay

off 10% of senior executives this

year.

In March, Bloomberg said

gaming and social media leader

Tencent Holdings Ltd planned

to demote or axe about 10% of

managers.

Neither JD.com nor Tencent

responded to Reuters’ requests

for comment. Sequoia China was

founded in 2005 by entrepre-

neur-turned-investor Neil Shen.

The firm employs about

150 people at off ices in Beijing,

Shanghai, Hong Kong and else-

where in China.

Pakistan doesn’t need additional taxes to cover shortfall: World BankInternewsIslamabad

Pakistan has substantial potential to

increase tax receipts without imposing

new taxes or increasing their rates, said the

World Bank.

The country’s tax revenue potential

would reach 26% of GDP, if tax compliance

were to be raised to 75%, which is a realistic

level of compliance for lower middle income

countries.

This means that Pakistan’s tax authori-

ties are currently capturing only half of this

revenue potential – the gap between actual

and potential receipts is 50%, according to a

new document prepared by the World Bank

titled Pakistan Revenue Mobilisation Project,

published recently. This comes against the

backdrop of revenue shortfall which the

government has sought to diminish with

the Washington-based lender’s assistance

of $400mn for the revenue mobilisation

project to be implemented by the Federal

Board of Revenue (FBR) aiming to contrib-

ute to a sustainable increase in domestic

revenue by broadening the tax base and

facilitating compliance.

The credit of $400mn will come from

World Bank aff iliate, International Develop-

ment Association (IDA).

However, the FBR has internal challenges

which it needs to overcome as it has a nega-

tive impact on tax receipts.

According to the project document, un-

like most revenue authorities in the world,

the FBR is not organised along functional

lines, nor does it have a clear hierarchical

structure. FBR is a large organisation with a

nationwide presence and more than 21,000

staff , of whom about two thirds work for the

Inland Revenue Service (IRS) and one third

for the Pakistan Customs.

Also, lack of coordination between the

federal and provincial governments has a

negative impact on total tax receipts, as well

as complicating taxpayer compliance.

The diff erent rules applied by the federa-

tion and the provinces generate frequent

disputes, especially over input adjustments

for GST taxpayers.

The document says that Pakistan needs

to increase its tax revenues to ensure fiscal

sustainability and generate fiscal space to

finance much needed investments in hu-

man capital and infrastructure. The project

document also highlights the share of tax

revenue collected by the provinces remains

small at nine per cent of total receipts but

has been growing rapidly, from 0.4% of GDP

in 2010-11 to 1.2% in 2017-18.

Despite this progress, tax receipts still fall

short of 15% of GDP, which is the mini-

mum that international experts consider

adequate to cover the basic expenditure

needs of developing countries, it says.

Nevertheless, the country’s revenue

performance has improved significantly

in recent years, rising from 9.5% of GDP in

2011-13 to 13% in 2017-18.

This increase in tax revenues has resulted

from tax policy measures, notably reduction

in tax exemptions for specific industries, and

improvements in tax administration at the

federal and provincial levels.

The current government is quite keen to

increase tax revenues and improve perform-

ance of the FBR which has, according to the

policy document, developed a transforma-

tion roadmap which envisions that the FBR

would become a semi-autonomous revenue

authority with financial, managerial and

operational autonomy.

This would involve a degree of financial

and managerial autonomy from the regular

controls and procedures of the federal

government.

Key changes would include security

of tenure for the FBR chairman for a fixed

mandate, a financing formula whereby the

FBR’s budget would be fixed as a share of

previous year’s receipts – one per cent and

flexibility to use its budget across budget

lines as needed.

The proposed project will support the

implementation of the FBR’s roadmap over

the next five years.

The roadmap consists of three parts: a

ten-year vision for the FBR’s institutional

transformation, three-year dynamic imple-

mentation plan (1920-22) to be updated

annually and short-term action plan for

accelerating revenue collection in 2019.

The roadmap also highlights measures

to strengthen the technical expertise and

improve the performance of the FBR’s hu-

man resources.

Technical expertise will be strengthened

by establishing technical streams for core

tax administration functions for career FBR

off icials and by externally hiring specialised

staff for procurement, human resources,

and communications.

ReutersJakarta

Indonesia’s economy expanded more slowly than expected in the fi rst quarter of this year, as investment

dropped ahead of elections and cam-paign spending failed to sustain growth momentum.

Southeast Asia’s largest economy grew 5.07% in January-March from a year earlier, the slowest pace in a year, data from the statistics bureau showed yesterday. A Reuters poll had expected gross domestic product growth of 5.18%, in line with fourth-quarter expansion.

Alongside soft investment, cooling household consumption, which ac-counts for more than half of the econ-omy, also contributed to the slowdown, the bureau said.

Analysts had expected campaign spending and logistical preparations ahead of the world’s biggest single-day election on April 17 to cushion weaker investment and exports. President Joko

Widodo won a second term in offi ce based on sample counts from private pollsters, though his opponent Prabowo Subianto has also claimed victory.

Offi cial results are due by May 22.Indonesia’s rupiah showed little

reaction to the data, but had slipped ahead of the release on concerns over

a fresh deterioration in the US-China trade dispute. The benchmark stock in-dex extended its fall slightly.

“The stimulus from election-related spending was not as strong as we had initially expected,” said Satria Sam-bijantoro, an economist with Bahana Sekuritas, labelling growth “a relative underachievement” considering the election bump. Still, DBS analyst Masy-ita Crystallin said growth had held up relatively well given the broader global economic slowdown.

Some economists said Bank Indone-sia (BI) was unlikely to immediately re-spond by cutting interest rates, noting BI had signalled it would wait until the current account defi cit narrows.

BI last year raised rates six times by 175 basis points to defend the rupiah, making it one of Asia’s most aggressive central banks amid growing pressure from US interest rate hikes and a bal-looning current account gap.

Some analysts have argued BI has room to unwind these hikes to sup-port economic growth this year, as the

United States turns more dovish with its monetary policy and Indonesia’s in-fl ation stays near the lower end of BI’s target range. There are also calls for President Widodo to take bolder steps to boost GDP with annual growth fall-ing short of his 7% growth target in his fi rst term, having stalled at around 5%.

“The government needs to provide a policy incentive to improve the invest-ment climate and at the same time sup-port exports,” said Josua Pardede, an economist at Bank Permata.

The government’s growth target for 2019 is 5.3%, while the central bank has forecast a range of 5%-5.4%.

The statistics bureau said election-related spending, which includes events by political parties and promotion ma-terials such as fl ags and banners, boost-ed sectors like textile, which saw orders rise in January-March.

Household consumption on items such as food, health and education also remained relatively strong, but the high price of airline tickets slowed spending on travel.

Indonesia Q1 GDP growth misses forecast

Warning signs are posted on the construction site of Indonesia’s mass rapid transit in Jakarta. Indonesia’s economy grew 5.07% in January-March from a year earlier, the slowest pace in a year, data from the statistics bureau showed yesterday.

Page 9: total assets rise 1.77% in - Gulf Times

BUSINESS

Gulf Times Tuesday, May 7, 201912

ReutersBeijing/Washington

China said yesterday that a dele-gation was still preparing to go to the United States for trade talks,

even as US President Donald Trump dramatically increased pressure on Bei-jing to reach a deal, saying he would hike tariff s on Chinese goods this week.

Trump’s comments on Sunday marked a major escalation in ten-sions between the world’s two largest economies, and a shift in tone from the president, who as recently as Friday had cited progress toward a deal.

Stock markets sank and oil prices tumbled on his remarks, as negotiations to end the months-long trade war were thrown into doubt.

“We are also in the process of under-standing the relevant situation.

What I can tell you is that China’s team is preparing to go to the United States for the discussions,” Chinese Foreign Ministry spokesman Geng Sh-uang told a news briefi ng.

But Geng did not say if Vice Premier Liu He, who is China’s lead offi cial in the negotiations, will be part of the del-egation as originally planned.

Negotiations are set to start May 8 in Washington.

“What is of vital importance is that we still hope the United States can work hard with China to meet each other half way, and strive to reach a mutually ben-efi cial, win-win agreement on the basis of mutual respect,” Geng said.

The Wall Street Journal reported ear-lier that China was considering cancel-ling this week’s meetings in Washington in light of Trump’s comments, which took Chinese offi cials by surprise.

Trump appeared to defend his deci-sion in a tweet early yesterday, slam-ming the US-China trade defi cit and vowing not to lose out to Beijing.

A less-than-rosy update from US Trade Representative Robert Light-hizer, including details that China was pulling back from some previous com-mitments, prompted Trump’s weekend decision.

“The Trade Deal with China contin-ues, but too slowly, as they attempt to renegotiate.

No!” Trump said in a tweet.Trump said tariff s on $200bn of

goods would increase on Friday to 25% from 10%, reversing a decision he made in February to keep them at 10% due to progress between the two sides.

The president also said he would tar-get a further $325bn of Chinese goods with 25% tariff s “shortly,” essentially covering all products imported to the United States from China.

US offi cials did not weigh in on whether they expected talks to go ahead this week. The White House and the US Trade Representative’s Offi ce declined to comment.

China’s commerce ministry did not immediately respond to a request for comment.

“The atmosphere of the negotiations has changed,” said a Chinese offi cial with knowledge of the situation.

Whether and how the talks proceed are being re-evaluated, the offi cial told Reuters on condition of anonymity.

“All that depends on the attitude of the United States,” the offi cial said.

Chinese news outlets have been told not to independently report on Trump’s tweets, and instead adhere to any report from the offi cial Xinhua news agency, said a source with direct knowledge of the matter.

Global fi nancial markets, which had been expecting news of a trade deal soon, went into a tailspin.

US equity futures fell more than 2 % and stocks across trade-reliant Asia tumbled.

China’s main indexes slid 5%.“There is still a question of whether

this is one of the famous Trump nego-tiation tactics, or are we really going to see some drastic increase in tariff s,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia. “If it’s the latter, we’ll see massive downside pres-sure across all markets.”

Mindful of his 2020 re-election bid, Trump had also suggested the duties were not leading to price increases for US consumers. “The Tariff s paid to the USA have had little impact on product cost, mostly borne by China,” he tweet-ed.

Tariff s on Chinese goods are actually paid to the United States by companies that import the goods, and most of those companies are US-based.

American businesses, while support-ive of Trump’s crackdown on China’s

trade practices, are eager for the tariff s to be removed, not expanded.

“Raising tariff s means raising taxes on millions of American families and inviting further retaliation on Ameri-can farmers,” said Christin Fernandez, a spokeswoman for the Retail Industry Leaders Association.

Nevertheless, the president’s aggres-sive strategy drew rare bipartisan sup-port from US Senate Democratic leader Chuck Schumer, who urged Trump to “hang tough” in a tweet: “Don’t back down.

Strength is the only way to win with China.”

One Chinese trade expert said recent signs of resilience in both economies were breeding over-confi dence.

“The urgency is gone. So, it’s likely to see a longer trade war,” the expert said, speaking on condition of anonymity due to the sensitivity of the topic.

The trade war resulted in billions of dollars in losses for both sides in 2018,

hitting autos, technology and above all, agriculture, while infl icting collateral damage on export-reliant economies and companies from Japan to Germany.

On Friday, Trump said talks with China were going well.

Last week, industry sources said they believed the talks were in the end game, but a Trump administration offi cial said aides had told the president that signifi -cant hurdles remained.

The increase in US tariff s on Friday would be the fi rst since Trump imposed 10% tariff s on $200bn of Chinese goods in September, coming on top of 25% tariff s on $50bn of goods enacted earlier last year.

Negotiations about tariff s have been one of the remaining sticking points between the two sides.

China wants the tariff s to be removed, while Trump wants to keep some, if not all, as part of any fi nal deal to ensure China lives up to its commitments, a White House offi cial said on Sunday.

China team still planningto go to US for trade talks

US President Donald Trump (right) speaks as Liu He, China’s Vice Premier, listens during a meeting in the Oval Off ice of the White House in Washington, on April 4, 2019. Negotiations about tariff s have been one of the remaining sticking points between the two sides. China wants the tariff s to be removed, while Trump wants to keep some, if not all, as part of any final deal to ensure China lives up to its commitments, a White House off icial said on Sunday.

Malaysia sends ex-Goldman banker to US over 1MDB chargesAFPKuala Lumpur

A former Goldman Sachs banker has been

extradited from Malaysia to the United

States to face charges linked to the multi-

billion-dollar 1MDB scandal, Malaysia said

yesterday.

Huge sums of public money were stolen from Malaysian state fund

1MDB and used to buy everything from yachts to artwork, in a scheme alleg-edly overseen by former premier Najib Razak and his cronies.

Goldman’s role is under scrutiny as the Wall Street bank helped arrange $6.5bn in bonds for 1MDB.

Authorities in Malaysia accuse former employees and some of the bank’s subsidiaries of stealing $2.7bn during the process, and investigators

believe cash was laundered through the US fi nancial system.

Malaysian Ng Chong Hwa – a former managing director at the bank charged in both Malaysia and America over 1MDB – was extradited to the US on Friday, Malaysian attorney-general Tommy Thomas said.

Thomas said in a statement that an agreement had been reached for “a temporary surrender by Malaysia of

Roger Ng for a period of 10 months to enable him to be extradited to the US, and for the US prosecution to proceed fi rst”.

“Roger Ng was temporarily surren-dered to the US on May 3, 2019, and shall be returned to Malaysia to face our charges as soon as the proceedings in the US are concluded,” he added.

Ng, more commonly known as Rog-er Ng, had been in custody in Malaysia

since November when the US unveiled 1MDB-linked charges against him and lodged an extradition request.

Malaysia later fi led its own charges against Ng over the scandal.

Ng asked to be sent to the US but Malaysia initially insisted he remain in the country until legal proceedings there had been completed.

Malaysia and the US have also charged former Goldman partner Tim

Leissner for his part in the controver-sy. Leissner has already pleaded guilty in the US to 1MDB-linked charges.

The DoJ estimates that $4.5bn was looted from the fund by Najib and his associates.

The allegations played a major role in Najib’s government losing power last year. He has since been hit with dozens of charges linked to the scandal and last month went on trial.

How US-China trade war has reached a turning pointBy Enda CurranHong Kong

Since December, a truce has kept the trade war between the world’s two biggest economies from escalating. Under the agreement between US President Donald Trump and Chinese President Xi Jinping, the US postponed indefinitely a threatened increase, to 25% from 10%, in tariff s on almost half the goods it buys from China, worth some $200bn. After weeks of signals that the US and China were getting close to a deal, Trump said via Twitter that the talks were going “too slowly” and threatened to call off the truce. The dispute has already shaken the world economy and caused companies to reconfigure their supply chains. The International Monetary Fund warned that the global economy remains vulnerable to trade tensions and urged governments to be “very careful.”

What progress has been made?

China has agreed in principle to increase imports of US agricultural products, along with energy, industrial products and services, as part of a path to eliminate its imbalance in

trade with the US. That promise might form the basis of a preliminary agreement. One option on the table is for China to shift some punitive tariff s on agricultural goods that it imposed in 2018 to other products, helping Trump to sell any eventual trade deal to farmers ahead of the 2020 election.

What are the sticking points?

The US is said to be frustrated with what it considers to be China’s backpedalling, including on the crucial matter of forcing foreign companies to hand over technology. China has denied it requires such transfers. The two sides are said to remain far apart on US demands for structural change to the heavy involvement of the state in China’s economy. Protection of intellectual property is another prime US concern. China in March passed a new foreign investment law it said would deal with some of those issues. Trump says he wants “strong enforcement language’’ to police any deal. Chinese off icials are said to want the US to remove its tariff s.

What would escalation entail?

Trump has said he could go forward with the higher 25% tariff s and other restrictions on

Chinese investment in the US as early as May 10; China could reply with more countermeasures, such as diverting its purchases away from the US. That could prompt Trump to follow through on threats to slap duties on a further $325bn of goods. The risk of economic damage on both sides – plus political damage to Trump in the 2020 election – might make one or both sides reluctant to escalate.

Why are we in a trade war?

Trump points to the large US trade deficit, the diff erence between imports and exports, as a symbol of a declining manufacturing base and the loss of American might. Trump aims to reduce the trade gap by both browbeating and enticing US companies to import less and export more. In addition to goods from China, he’s imposed tariff s (which act like a tax on imports) on steel and aluminium from allies including Canada, Mexico and the European Union. But the fight is also about who gets to set the rules for the global economy of the future. The widening US government crackdown on Huawei Technologies Co., a Chinese telecommunications giant, underscores a deepening strategic competition that will persist beyond the trade war.

What’s been impact of trade war?

Investors and executives routinely say it’s hurt business confidence and upended supply chains. Apple, Starbucks, Volkswagen and FedEx are among companies that cited a slowing Chinese economy in their outlooks. More than 400 publicly traded Chinese companies warned on their earnings. The IMF, cutting its forecast for the world economy for the third time in six months due in part to trade tensions, said in April that global growth would be 3.3% in 2019, which would be the weakest since 2009. Meanwhile the US trade deficit widened in 2018 to a 10-year high of $621bn, partly because the stronger dollar made US exports pricier.

How has the confl ict been felt in US?

American shoppers have been mostly insulated, because inflation remains tame and the tariff s haven’t hit staples such as clothing, footwear and toys. That could change. A January report by Bank of America Corp analysts said any escalation of the trade war “would be much more painful” for the US, triggering renewed market volatility and undermining investor confidence.

How has it been felt in China?

China’s economic growth has been slowing in recent years, a weakness that US officials sought to leverage in their push for a trade agreement. But China’s economy rebounded through the first quarter of 2019, offering the government more room for manoeuvre. Authorities in Beijing have already promised almost $300bn of tax cuts to stoke growth, and are said to be considering other stimulus measures to bolster sales of cars and appliances. Bloomberg Economics calculates tariffs at the current 10% add up to a 0.5 percentage-point drag on China’s growth this year. An increase to 25% on $200bn in Chinese exports would raise the drag to 0.9 percentage point. Tariffs on all of China’s exports to the US would increase the burden to 1.5 point.

Where is this going?

Trump will want a deal that boosts the stock market, and to declare a political victory as he gears up to run for re-election. But Xi will not want to be portrayed as having surrendered. As tensions ease with China, they are starting to simmer against Europe and Japan.

Bloomberg QuickTake Q&A

India’s services PMI drops to 7-month low in AprilBloombergNew Delhi

Expansion in India’s domi-nant services sector weakened in April ahead

of an election, a private survey showed on Monday, suggesting a delayed recovery to Asia’s third-largest economy.

The Nikkei India services purchasing managers’ index fell to a seven-month low of 51 in April from 52 in the previous month on the back of slower in-creases in new business and out-put growth. A survey last week showed manufacturing also weakened in April.

“Although the Indian pri-vate sector economy looks to be settling into a weaker growth phase, much of the slowdown was linked to disruptions aris-ing from the elections and companies generally foresee improvements once a govern-ment is formed,” said Pollyanna De Lima, principal economist at IHS Markit, and author of the report.

India’s seven-phase election started in April and will con-clude on May 19, with results due on May 23.

The PMI survey showed in-put costs and output charges re-mained weak by historical stand-ards, helping to keep infl ation anchored well below the central bank’s 4% medium-term target. The Reserve Bank of India cut its benchmark rate twice this year.

Earlier yesterday, Kotak Insti-tutional Equities Research cut its growth forecast for the fi nancial year to March 2020 to 6.8% from 7.1%, citing prospects of a weak monsoon season, subdued rural demand and reduced space for government expenditure.

The PMI survey showed input costs and output charges remained weak by historical standards, helping to keep infl ation anchored well below the central bank’s 4%medium-term target. The Reserve Bank of India cut its benchmark rate twice this year

Page 10: total assets rise 1.77% in - Gulf Times

BUSINESS13Gulf Times

Tuesday, May 7, 2019

ReutersBeijing

China is expected to report much slower export growth for April after a strong rebound in March,

while imports likely shrank for a fi fth straight month but at a milder pace, a Reuters poll showed.

If Wednesday’s readings are in line with forecasts, they could reinforce views that the economy lost some growth momentum at the start of the second quarter, as suggested by softer factory activity gauges last week.

But hopes for a modest China export recovery in the second half of the year may have been turned on their head on Monday, after US President Don-ald Trump said he would hike tariff s on Chinese goods this week and target hundreds of billions more, escalating tensions between the two sides.

“The Trade Deal with China contin-ues, but too slowly, as they attempt to renegotiate. No!” Trump said in a tweet, sparking fears that trade talks may be unravelling. As recently as Friday, he had said progress was being made.

China’s exports in April are expected to have risen 2.3% from a year earlier, according to the median estimate of 24 economists in a Reuters poll, cooling from a 14.2% rise in March.

Some economists believe the unex-pected strength in March was mainly due to temporary distortions including sea-sonal factors and changes in exporters’ and importers’ activity ahead of a cut in the value-added tax (VAT) on April 1.

Global demand still appears sluggish, with factory surveys pointing to softer export orders in April, due in part to continued business uncertainty as the US-China trade war drags on.

The total value of export orders signed at China’s biggest trade fair last month fell slightly from a year earlier.

Import data is expected to show China’s domestic demand also remains weak, but a more modest drop is fore-cast for April, suggesting that a fl urry of government growth-boosting meas-

ures since last year are starting to have a more noticeable eff ect.

Economists predict April imports fell 3.6% from a year earlier, narrow-ing from the previous month’s 7.6% decline. Higher global prices for com-modities such as oil and iron ore may also have provided some cushion to import readings, economists at Bank of

America Merrill Lynch (BAML) said.In March, Beijing announced billions

of dollars in additional tax cuts and in-frastructure spending as it looked to put the economy back on more solid footing after growth last year slowed to a near 30-year low. The economy defi ed expec-tations for a further slowdown in the fi rst quarter, growing at a steady 6.4% pace.

March data also was largely stronger than expected, raising hopes that condi-tions were starting to stabilise.

However, the latest factory surveys suggested the economy unexpectedly lost a step in April, indicating more policy support may be needed to ensure a sus-tainable recovery. China’s overall trade surplus is expected to have expanded to

$35bn in April from $32.65bn the previous month, according to the Reuters poll.

“Beijing has been sounding less do-vish over the past two weeks. We believe a worsening of the trade confl ict be-tween the US and China will evoke an-other dovish turn by Beijing, especially on its monetary easing stance,” analysts at Nomura said in a note.

China April export growth seen cooling; imports staying weak

Buses wait to be exported in Lianyungang port. China’s overall trade surplus is expected to have expanded to $35bn in April from $32.65bn the previous month, according to a Reuters poll.

Singaporepursuing ‘promising leads’ for region’sinfrastructure

BloombergSingapore

Singapore is making “good

progress” and has “promising

leads” on brokering much-

needed infrastructure projects

across Southeast Asia, a senior

off icial said.

Infrastructure Asia, the

government agency created

six months ago to spur such

investment in Southeast Asia,

is actively discussing specific

projects with off icials from the

region’s economies, Indranee

Rajah, Singapore’s second min-

ister for finance, told Bloomberg

Television’s Haslinda Amin on

the sidelines of Asian Develop-

ment Bank meetings in Fiji.

Singapore’s Second Minister

for Finance Indranee Rajah

discusses Infrastructure Asia.

ADB had estimated develop-

ing economies in Asia will

need to invest about $26tn in

infrastructure projects between

2016 and 2030, or $1.7tn a year.

Rajah said in October that only

about $880bn was being spent

annually.

In recent discussions, off icials

throughout Southeast Asia have

expressed interest in working

with Singapore on building

public-private partnerships,

especially to address urban

planning amid a burgeoning

middle class and migration to

cities, she said in Fiji. Priori-

ties include water, sanitation,

waste, telecommunications and

electrification issues.

As criticism lingers about a

lack of transparency and the

sustainability of debt in China’s

Belt and Road Initiative projects

throughout Asia, Singapore has

promoted itself as a responsible

broker, eager to involve private

financiers who have tradition-

ally balked at the risk of such

endeavours.

Norway’s Telenor and Malaysia’s Axiata plan Asian telecoms giant

ReutersOslo/Kuala Lumpur

Norway’s Telenor and Malaysia’s

Axiata Group are in talks to run a

jointly owned telecoms giant in

South and Southeast Asia with

nearly 300mn customers, as

they seek to drive up growth in a

highly competitive market.

The merged group would be

worth $40bn, including debt, a

person with knowledge of the

matter said, making the deal the

largest cross-border merger in

Asia, excluding China and Japan.

Telenor declined to comment

and Axiata did not respond to

a request for comment on the

value of the combined firm.

“The bottom line is we need

the scale, we need the synergy,

we need the balance sheet, we

need the strong capabilities of

both companies.

If we can combine that it will

be powerful,” Axiata group CEO

Jamaludin Ibrahim told a news

conference. The proposed deal

would combine the two compa-

nies’ South Asian and Southeast

Asian operations, with the Nor-

wegian mobile operator owning

56.5% and Axiata owning 43.5%,

and no cash changing hands, the

companies said.

“With its unique portfolio, the

MergedCo will be one of the larg-

est telecommunications groups

in the region in terms of value,

revenue and profit,” Axiata said.

The joint firm will have opera-

tions in nine countries with a total

population of nearly 1bn people,

including Thailand, Malaysia,

Bangladesh, Pakistan, and Indone-

sia, and will compete with firms

such as Singapore Telecommu-

nications Ltd. The merged com-

pany will be among the top three

operators in the nine markets,

analysts said, adding its scale

would help it fund itself better in

a market where telcos are facing

margin pressure as consumers

opt for free-voice services.

Telenor last year sold its central

European business, seeking to

consolidate its operations around

a Nordic and an Asian unit.

Last month, it bought a $1.7bn

majority stake in Finland’s DNA.

The combined entity will have

firepower to invest in markets

such as Indonesia, driving more

regional consolidation, said the

person familiar with the deal, who

declined to be named as he was

not authorised to speak to the

media. The merged company will

operate around 60,000 cellphone

towers across Asia, making it one

of the largest mobile infrastruc-

ture firms in the region.

Telenor said a separate stock

market listing of the towers busi-

ness would be possible.

Annual pro-forma revenue

for the merged company is

estimated at $13bn, with earnings

before interest, tax, deprecia-

tion and amortisation of $5.5bn

before savings are realised.

The companies expect the

combined group to generate sav-

ings of around $5bn but did not

provide a breakdown of where

those would come from.

The two have overlapping

businesses in Malaysia, where

they will merge their respective

units, Celcom and Digi, under the

new umbrella.

Axiata’s shares were sus-

pended from trading ahead of

the announcement, while Telenor

shares rose as much as 4.9%

after news of the deal.

Analysts were optimistic about

the proposed deal but cautioned

on regulatory hurdles.

“Overall, we would be positive

if this deal materialises as this

could reduce the number of

competitors, eff ectively enabling

the merged entity to leapfrog to

top positions in terms of market

share in countries which are

involved in the merger,” said Alex

Goh, an analyst at AmInvestment

Bank in Kuala Lumpur.

The merged company will be

listed on an international stock

exchange as well as in Malaysia

in the next few years.

The merger talks come

months after Axiata’s 37% stake-

holder Khazanah Nasional Bhd

announced a new investment

strategy that entailed restructur-

ing its $33bn portfolio into com-

mercial and strategic holdings.

The companies aim to com-

plete the deal in the third quarter.

Citigroup is advising Telenor

on the transaction, while Morgan

Stanley is advising Axiata.

SoftBank has a big Sprint problem on its hands without T-MobileBloombergTokyo

No one has more riding on Sprint Corp’s $26.5bn sale to T-Mobile US Inc than SoftBank Group and

its founder Masayoshi Son.Sprint has been going broke for more

than a decade, and the wireless carrier’s executives have told regulators the com-pany faces “serious challenges” if the takeover by T-Mobile is blocked. With a $19bn stake in Sprint, SoftBank will bear the brunt of the fallout if the deal col-lapses.

“It would be a test of SoftBank’s will-ingness to save Sprint,” said Amy Yong, a Macquarie analyst. “The ownership stake is so high they’d probably look to save it, but plan B isn’t obvious or very attrac-tive.”

If it’s forced to absorb Sprint and the carrier’s $39bn debt load, Tokyo-based SoftBank and Son may have to rethink other, higher-profi le ventures or sell as-sets, analysts say. They may also have to revisit the M&A circuit, where potential Sprint buyers have been less than enthu-siastic. The carrier reports fi nancial re-sults Tuesday after markets close.

SoftBank “continues to believe the deal will be approved,” according to an emailed statement. Sprint declined to comment.

A week ago, the companies extended the expiration of the deal agreement by three months, to July 29, as reviews by the US Justice Department and Federal Communications Commission continue. Analysts have started lowering the odds for approval. Last week, Raymond James analysts cut the chances to 55% from 80%.

If the deal falls through, a new agree-ment with a new partner for Sprint would be the best option for SoftBank, but cir-cumstances have changed over the past year for the usual list of candidates. Dish Network Corp. has been a Sprint suitor in the past, but recently started building its own wireless network. Both Comcast Corp and Charter Communications Inc have started selling wireless service using Verizon Communications Inc’s network. It’s not clear if either company wants to own a network.

“The natural will be the cable com-panies, but they’ve not shown much appetite for a full-blown merger,” said Chetan Sharma, a wireless industry consultant. “They will try to go through

a sales process or restructure.” Sprint executive chairman Marcelo Claure – together with Son, SoftBank’s chair-man – led the carrier through a three-year go-for-broke recovery effort. Using steep price cuts, Sprint stopped a mass subscriber exodus. The company, based in Overland Park, Kansas, also borrowed billions of dollars, using air-wave licences and network equipment as collateral. The goal was to stabilise the business for a deal.

It took three tries, but Son fi nally got T-Mobile parent Deutsche Telekom AG to agree to a takeover. The combined company, they assert, will have enough scale and resources to compete with larger rivals Verizon and AT&T Inc – and build a new 5G network that off ers a fresh menu of wireless services.

Critics of the deal, federal regulators and some state attorneys general are concerned that if the wireless indus-

try’s two most-aggressive price-cutters are reduced to one, consumers will pay more and see less innovation. Sprint and T-Mobile executives are still fi ghting for approval, with Sprint casting it as a mat-ter of survival.

Future 5G services underpin their case. Sprint’s eff orts to survive came at the cost of needed network spending. And without the T-Mobile merger, the No 4 US wireless carrier risks being left behind. Not lost on industry observers is the fact that Sprint owns the largest supply of midrange airwaves in the US, a key component of any coast-to-coast 5G network and a valuable asset trapped in a cash-constrained company.

Claure has told regulators and law-makers that losses totalling $25bn over the past decade have left Sprint critically wounded. Without Bellevue, Washing-ton-based T-Mobile, there is “no obvious path to solve key business challenges,”

Sprint said in a fi ling. Son has said he al-ways held the combination of Sprint and T-Mobile as central to his US wireless strategy.

But an even bigger worry for Sprint now may be that SoftBank’s founder has moved on. Son, the second-richest per-son in Japan and largest SoftBank share-holder, is consumed by multibillion-dollar projects like the Vision Fund and focused on a goal of raising a new $100bn fund every couple years. His commit-ment to Sprint is fading, analysts say, even though his company holds an 84% stake.

“Masa Son has lost interest in being a wireless carrier,” said Roger Entner, an analyst with Recon Analytics LLC. “You can see that in him selling off part of SoftBank’s wireless operations in Japan, his underinvesting in the US and trying to sell Sprint to T-Mobile. So the problem is signifi cantly beyond money.”

No one has more riding on Sprint Corp’s $26.5bn sale to T-Mobile US Inc than Soft Bank Group and its founder Masayoshi Son. Sprint has been going broke for more than a decade, and the wireless carrier’s executives have told regulators the company faces “serious challenges” if the takeover by T-Mobile is blocked

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BUSINESS

Gulf Times Tuesday, May 7, 201914

Distressed Greeks say ‘what recovery?’ as banks seize homesBloombergAthens

To hear many investors tell it, Greece is in the midst of a su-percharged recovery after being

the euro debt crisis’s poster child and suff ering under years of recession and austerity.

But Greeks like Dimitra D are not buying the turnaround story.

The 53-year-old civil engineer is poised to lose her family home after her bank threatened to seize the €140,000 ($157,000) apartment used as collat-eral against a €50,000 loan she’s un-able to repay. After years of going back and forth with her bank, she says she no longer has the will to fi ght for the property.

“I prefer to lose my home even though I know that it doesn’t make sense in fi nancial terms,” she said, de-clining to give her family name because she’s embarrassed by her fi nancial situ-ation. “I don’t care any more. I’ll live in a 50 square-metre rental apartment but I’ll have peace of mind.”

By many measures Greece has turned a corner: Its stock benchmark has jumped 26% in 2019, set for its best fi rst half in two decades, and trumping

European shares’ 8.1% gain. Last year, the country recorded the strongest economic growth since 2007. Greece’s 10-year bonds yield 3.3%, a fraction of the 37% the country had to pay at the

height of the fi nancial crisis. For all that, many Greeks are still struggling to claw out from under mountains of debt after a decade during which the economy cratered, contracting by more

than a quarter. The country’s unem-ployment rate of 18.5% is still among the highest in the European Union.

Since the start of the fi nancial cri-sis in 2010, more than 87,500 small and medium-sized businesses have folded, while personal disposable in-come has shrunk by 14.5%, national statistics show. About 4mn taxpayers, or about 37% of the population, owe the state €104.4bn in back payments — more than triple the arrears in 2010 of €32.5bn.

Many Greeks are exhausted and are no longer putting up a fi ght to pre-serve their assets. With cases winding their way through Greek courts, which can take years, many people who were once determined to protect their prop-erties, have seen the ceaseless pressure take its toll, said Dimitris Anastasopo-ulos, a lawyer who handles cases to stop banks from taking over primary residences.

“It’s not so much a fi nancial issue as a psychological one, with the whole pro-cedure wearing them down,” he said. “They now say let the bank take the home. They can’t stand collection agen-cies reaching out to them for their debt.”

Borrowers feel harassed, with the collection agencies calling them on a daily basis, Anastasopoulos said.

“I know of some cases where my cli-ents had a heart attack or a stroke due to the constant pressure,” he said.

Repossession of Greek homes, which was unheard of, is becoming more prevalent as banks themselves face pressure to slash bad loans. Bank non-performing exposures stand at €81.8bn, or almost half of the coun-try’s gross domestic product. They are the biggest drag on the Greek econo-my.

Faced with an election year, the government of Prime Minister Alexis Tsipras is seeking to help protect pri-mary residences. At the end of March, parliament voted a primary-residence protection framework after a long-drawn dispute with the country’s cred-itors over the eligibility criteria.

Distressed home owners can apply for help, and if they meet the criteria, banks will restructure the loan with the state subsidising a part of the instal-ments and the borrower having to repay the rest without any new delays.

The new framework covers bad loans worth around €25bn, based on data from the Hellenic Bank Association. Of that, the trade body expects about €10bn — corresponding to around 160,000 debtors — to use the new legislation and eventually some €5bn

may be restructured and turned into performing loans. If the estimates are right, the new plan will help both bor-rowers and lenders. Greece’s creditors and the European Central Bank have identifi ed the reduction of bad debt as the country’s top priority.

Greek banks are auctioning off repos-sessed residences to clean up their bal-ance sheets but so far the main buyers of these properties have been the banks themselves — with few other bidders emerging. In 2018, some 10,000 prop-erties, or about 85% of the ones put on the block, were bought by the banks. Lenders estimate they’ll buy back some 15,000 homes this year.

While the government is diving in to try and help, for some that aid is com-ing too late.

Georgia D gave up her primary resi-dence in an auction in 2018. She and her husband lost their jobs during the crisis and stopped servicing their loan. They even migrated to the US to fi nd jobs, but found life there too expensive, forcing them to return to Greece. They man-aged to fi nd small jobs to make ends meet, but were too dispirited to try and save their home.

“I was so depressed that I didn’t even try to reach a deal with the bank,” she said. “We were left to our own fate.”

A customer takes his purchase from a fruit and vegetable stall vendor in Athens. Many Greeks are still struggling to claw out from under mountains of debt after a decade during which the economy cratered, contracting by more than a quarter.

Race to replace Draghi spurs ECB calls for Fed-style rethinkBloombergFrankfurt

The race to succeed Mario Draghi could end up pro-ducing not only a new Eu-

ropean Central Bank president, but even a revamped mandate.

That’s a potential outcome from a review of the institution’s strategy called for by Olli Rehn, a contender for the job who is willing to shake things up in his attempt to stand out from the crowd of candidates. The Bank of Finland governor wants a re-think of the ECB’s master plan for ensuring price stability, at a time when no amount of stimu-lus seems enough to boost infl a-tion.

His idea is short on specif-ics but has raised his profi le in a fi eld of hopefuls that includes the heads of the German and French central banks, a serving ECB board member and even Rehn’s own predecessor. It could also backfi re though, by splitting

ECB policy makers and alarm-ing some of the political leaders whose job it is to pick the next president this summer.

“Rehn is clearly one of the guys angling for the top job,” said Peter Dixon, an economist at Commerzbank. Irrespective of his motivation, “it’s incum-bent on central banks to ask themselves after ten years of zero, or in the ECB’s case nega-tive, rates what more can they do to achieve their objectives.”

The 57-year-old Finn, a former European Union Com-missioner who took over as gov-ernor in July, is tapping into the zeitgeist by identifying seem-ingly entrenched low infl ation and rates as a fundamental con-cern. The US Federal Reserve is the most prominent central bank now rethinking how it operates in the post-crisis economy.

Rehn isn’t off ering solutions though. He says he simply wants to ensure ECB monetary policy remains credible, and reiterated that desire last week.

“I wish that the outcome of a strategy review, if and when launched, will lead to more ef-fective and timely monetary policy that fulfi ls our primary objective of price stability,” Rehn said.

The ECB last dived into its policy framework in 2003. For all the bank’s claims that its negative interest rates, massive bond purchases and other un-conventional policies have been a success, eurozone infl ation has persistently fallen far short of the goal of “below, but close to, 2%.”

“It’s just good practice for central banks to review occa-sionally what they are doing,” said Stefan Gerlach, chief econ-omist at EFG International and a former deputy governor of the Irish central bank. “One can’t help but feel that some disagree-ments in the Governing Council have come from people having diff erent interpretations of what the ECB’s defi nition of price sta-bility meant in practice.”

The calls for a rethink have some support. Austrian Gov-ernor Ewald Nowotnysaid last week that “aspects” of the man-date warrant revisiting. Agustin Carstens, the head of the Bank for International Settlements, said central banks are “acutely aware of the need to adapt” their frameworks.

That opens the way to ideas such as allowing inflation to temporarily overshoot to com-pensate for past years of weak price growth. Rehn doesn’t necessarily go that far but he does support a “symmetrical” approach to inflation, as does Draghi. Yet a Finnish central bank study last year showed the ECB has more often acted as if 2% is an upper limit.

A more flexible approach to inflation is likely to raise hackles in countries such as Germany, whose government will have an influential say in appointing the next president. The nation’s conservative monetary stance is typically

articulated by Bundesbank President Jens Weidmann, an-other contender for the top job, who has said he’s “convinced” that the inflation goal remains appropriate.

There may also be internal op-position. Chief economist Peter Praet cautioned against major changes in a speech last week, saying “the framework has served us well.” While his eight-year term ends this month, his views could reverberate within the organisation.

Draghi leaves in October, with political leaders likely to make their choice after EU elections in late May.

“Rehn defi nitely caught some attention and has gone up in the rankings, but at the end of the day it’s not the ECB watchers or investment community that will decide,” said Nick Kounis, an economist at ABN Amro. “I’m not sure it will do him much good from the political perspec-tive even if it makes total macr-oeconomic sense.”

Olli Rehn, governor of the Bank of Finland, reacts before a Bloomberg Television interview in Helsinki. Rehn wants a rethink of the ECB’s master plan for ensuring price stability, at a time when no amount of stimulus seems enough to boost inflation.

Sandvik to explore spinning off SMT steel businessBloombergStockholm

Sandvik AB will explore a separate listing of its steel business as chief ex-

ecutive offi cer Bjorn Rosengren moves to end a longstanding debate about the future of the unit.

The company will initi-ate an internal separation of Sandvik Materials Technology, or SMT, to “allow full focus” on the unit’s “key strengths and its further improved per-formance,” Rosengren said. The company may list SMT on Nasdaq Stockholm, should that strengthen the division’s “position and future develop-ment.”

SMT’s profi tability has trailed other parts of Sand-vik, which also makes min-ing equipment and tools for metal cutting. There’s been debate about its future in the company since 2011, when former CEO Olof Faxander said he might divest the busi-ness unless returns improved. A spinoff of SMT would be the biggest structural change by Rosengren, who has pruned the company’s business and divested smaller units since he took Sandvik’s helm in 2015.

Sandvik recouped some ear-lier losses after the announce-ment, to trade down 2.2% as of 2:40pm local time. Swedish stock markets are among the

worst performing in Europe on Monday, as the threat of an es-calation of the global trade war weighs on its exporters.

“The decision to initiate an internal separation of Sandvik Materials Technology is based on the board’s belief that each part will develop more favour-ably by itself,” Sandvik chair-man Johan Molin said Monday in a statement.

Sandvik had revenues of some 100bn kronor ($10.4bn) last year, of which SMT ac-counted for about 15% as well as about 8% of adjusted oper-ating profi t. The separation and preparation for a possible list-ing is expected to take at least a year, according to the company founded in 1862. It focused pri-marily on steel production for decades before it started tool production.

SMT makes specialty steel products such as tubes for off -shore oil production and nucle-ar power plants. It also supplies metal powders for industrial 3D-printing.

Sandvik is following a trend that’s seen a raft of big Swedish companies separate divisions in recent years, including Atlas Copco AB, Autoliv Inc, Getinge AB, Lundin Petroleum AB and Svenska Cellulosa AB.

Electrolux AB is proceed-ing with plans to spin off Elec-trolux Professional, which makes food-service, beverage and laundry equipment for res-taurants and hotels.

Profit hit from Boeing 737 MAX plane crash, says Swiss Re

BloombergZurich

Swiss Re AG said its first quarter performance was hit by a slew of large losses including floods in Australia and the fatal crash of an Ethiopian Airlines plane.Net income fell short of company-compiled estimates on claims of around $210mn from the North Queensland floods in Australia and around $90mn from the jet crash and the subsequent grounding of the Boeing 737 MAX fleet. Earnings were most of all hurt by an increase in the loss estimate for Typhoon Jebi in the Philippines, the company said.CFO John Dacey discusses how extreme weather and climate change impact the insurance business.Swiss Re has indicated it faces pain on two fronts from the Ethiopian Air crash

as it’s a part of the insurance panel that covers Boeing Co’s airline-manufacturer liability policy and also a co-insurer of Ethiopian Airlines. The crash will probably be among the larger loss events for Talanx AG, the majority owner of Hannover Re, its chief executive off icer, Torsten Leue, said last month.Zurich Insurance Group AG has a directors and officers liability insurance policy of up to $35mn with Boeing, people familiar with the matter said in March.The company said it is “undertaking a comprehensive review of all business lines and reserve positions” at its corporate solutions commercial lending arm, after man-made losses. Swiss Re’s property & casualty unit had a combined ratio of 110.3%, which means payouts and costs exceeded revenue from premiums. Group net income fell 6% to $429mn.

Page 12: total assets rise 1.77% in - Gulf Times

BUSINESS15Gulf Times

Tuesday, May 7, 2019

Trump plays hardball with China ahead of key talksAFPWashington

US President Donald Trump decided to play hardball with Beijing ahead of a key round of

negotiations this week, threatening to impose tariff s on all of the $550bn in Chinese goods imports.

The threat tanked stock markets worldwide and frightened US farmers and businesses caught in the crossfi re who have been banking on a resolution to the year-long confl ict.

The Dow Jones Industrial Average plunged 1.6% at the open — a loss of just under 400 points — before recovering some losses, refl ecting the market con-cern over a trade war that could under-mine business prospects even further.

Comments from offi cials in recent weeks indicated the sides were making progress towards an agreement aimed at addressing longstanding concerns about the forced transfer or outright theft of American technology, as well as reducing the US trade defi cit with the world’s second largest economy.

But after his weekend threats — which prompted reports the Chinese might cancel the talks in Washington due to begin tomorrow — Trump re-mained defi ant.

“The United States has been losing, for many years, $600bn to $800bn a year on Trade. With China we lose 500 Billion Dollars,” he said on Twitter yes-terday. “Sorry, we’re not going to be doing that anymore!”

Trump has continued to equate the US trade defi cit as a loss or as payments to trading partners, and tariff s as pay-ments from the off ending country to the United States.

Economists stress that it is American businesses and consumers who pay the tariff s and are hurt by higher prices.

US manufacturers and farmers were becoming more optimistic amid signs of progress and comments from offi -cials that the talks were entering their fi nal phase.

The hope was that tariff s and coun-ter-tariff s on a total of $360bn in two-way trade would be lifted, helping farmers and manufacturers who had suff ered in the trade war.

But Trump in a Twitter screed on Sunday accused China of trying to “re-negotiate” the trade deal, threatened to more than double the existing tariff s to 25% from the current 10%, and then extend the higher tariff s to the remain-ing goods that had been spared so far.

Trump credited the tariffs with the strong first quarter growth but econ-omists and businesses have com-plained that the trade conflict is in

fact hurting the bottom line and the uncertainty is causing them to delay investment.

“We know, however, that the US tariff s are ultimately borne by US con-sumers and businesses facing higher input costs,” said Gregory Daco of Ox-ford Economics.

“What is more, the US economic performance of late has been re-strained, not facilitated, by tariff s.”

And escalating the tariff s to the re-maining Chinese goods, which would be expected to spark further retaliation from Beijing, would cut 0.3 percentage points off US growth, according to Ox-ford Economics.

Despite Trump’s tweetstorm, Chi-nese Foreign Ministry spokesman Geng Shuang said a Chinese team was “cur-rently preparing to go to the US for ne-gotiations” — but he did not say when

or whether top negotiator Liu He would lead the delegation. Geng said “positive progress” had been made in 10 rounds of high-level negotiations and that the whole world was watching.

“We still hope that the US can work together with China, walk shoulder to shoulder and strive for a mutually ben-efi cial win-win agreement on the basis of mutual respect,” he said at a regular media briefi ng.

Occidental tweaks $38bn Anadarko bid to remove shareholder voteReutersNew York

Occidental Petroleum Corp in-creased the cash component of its $38bn bid to acquire Ana-

darko Petroleum Corp on Sunday, re-moving a requirement for any deal to receive the approval of Occidental’s shareholders.

The move means Occidental share-holders who oppose the bid, including T Rowe Price, will not get an opportu-nity to vote it down.

It adds more certainty to the of-fer for Anadarko, but also risks the ire of billionaire investor Carl Icahn, who sources have said has been amassing a stake in Occidental to challenge its Anadarko off er.

Occidental is trying to convince Anadarko to accept its off er and aban-don the agreed $33bn sale to Chevron Corp. Anadarko confi rmed that it re-ceived the revised bid from Occidental and said its board will review the pro-posal.

The merger agreement with Chevron remains in eff ect, Anadarko said and reaffi rmed its existing recommenda-

tion of the deal with Chevron at this time.

Earlier on Sunday, France’s Total SA said it has agreed with Occidental to buy the African assets of Anadarko for $8.8bn, should the two US oil and gas companies clinch a deal to combine.

This removes the risk of Occidental not being able to shed Anadarko assets it considers non-core to the deal.

On Tuesday, Occidental also secured a $10bn investment from Warren Buf-fet’s Berkshire Hathaway Inc in support of its bid for Anadarko.

The terms of that deal were seen as particularly favourable to Buff ett by analysts and investors.

Occidental submitted a new $76 per share off er to Anadarko on Sunday structured as 78% cash and 22% stock, as opposed to an even cash/stock split in its $76 per share off er previously.

This brought the number of Oc-cidental shares required to fund the bid below the issuance threshold that would have triggered a vote on the deal by Occidental shareholders.

Anadarko shareholders would still get to vote on the deal.

The bidding war for Anadarko un-derscores the value of its assets in the

lucrative Permian Basin of West Texas and New Mexico.

The vast shale fi eld holds oil and gas deposits that can produce supplies for decades using low-cost drilling tech-niques.

“The fi nancial support of Berkshire Hathaway as well as the agreement we announced with Total allows us to de-liver our balance sheet while focusing our integration eff orts on the assets that will provide the most value for us,” Occidental Chief Executive Vicki Hol-lub said in a statement announcing the amended terms.

However, a request made on Thurs-day evening by Anadarko’s counsel for three board seats in the merged en-tity had not been granted, Occidental added.

Should Occidental’s bid be declared superior by Anadarko, Chevron will be given four days to match Occidental’s off er, according to the terms of the con-tract between Chevron and Anadarko.

Should Anadarko abandon Chevron for Occidental, it will have to pay Chev-ron a $1bn deal breakup fee.

The proposed sale of Anadarko’s Af-rican assets to Total includes a 26.5% interest in a Mozambique liquefi ed nat-

ural gas project, which is moving closer to a fi nal investment decision, and stakes in two off shore fi elds in Ghana.

Occidental said this does not impact the planned $2bn of annual cost savings and $1.5bn of annual capital reductions already outlined as part of its potential acquisition of Anadarko.

Total’s previously outlined plan to increase its dividend by 10% and buy back 5mn shares by the end of 2020 will not be impacted by the deal, the French company said in a separate statement.

Chevron declined to comment on the Occidental move or say whether it will change its $65-a-share bid.

Separately, Occidental said its fi rst-quarter adjusted profi t fell 10.9% as lower prices for its crude hurt oil and gas revenue.

Adjusted profi t fell to $631mn, or 84 cents per share, in the quarter ended March 31, from $708mn, or 92 cents per share, a year earlier.

Production rose 18% to 719,000 barrels of oil equivalent per day in the quarter, Occidental said.

Its Permian Resources unit saw output rising 47% year-over-year to 261,000 barrels of oil equivalent per day.

US President Donald Trump speaks during a meeting in the Oval Off ice of the White House in Washington, D.C. “The United States has been losing, for many years, $600bn to $800bn a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!,” Trump said on Twitter yesterday.

Occidental Petroleum Corp’s onshore Goldsmith field in the Permian Basin, near Midland, Texas (file). Occidental is trying to convince Anadarko to accept its off er and abandon the agreed $33bn sale to Chevron Corp. Anadarko confirmed that it received the revised bid from Occidental and said its board will review the proposal.

US-China trade dilemma: How to hold Beijing’s feet to the fireAFPWashington

US and Chinese off icials say a key question on ending

their ongoing trade war is how can Washington be

sure Beijing will live up to its end of the bargain?

With up to 100 Chinese off icials reportedly expected

next week in Washington, with the possibility of un-

veiling a grand agreement after months of tensions,

that question is hanging over the talks.

Beijing may make eye-popping off ers to buy Ameri-

can energy and agriculture exports as a means of

cutting the soaring US-China trade deficit ($378.7bn

in 2018, including services trade), but all eyes will be

on whether the agreement has any teeth.

US Vice-President Mike Pence said on Friday the en-

forcement mechanism would be key to the decision

on whether to remove the punishing US tariff s which

now cover more than $250bn in Chinese imports.

“The reason enforcement has become central to this

negotiation is the long history of China not living up

to the spirit of the commitments it has made in the

WTO and in bilateral negotiations with the US and

other countries,” Edward Alden, a trade expert at the

Council on Foreign Relations, told AFP.

US President Donald Trump has repeatedly accused

China of stealing from the United States by buying

less from America than it sells.

But Trump also has demanded structural changes

to the Chinese economy, including an end to forced

transfer of American technology, theft of intellectual

property and the massive role the Chinese govern-

ment plays in markets and industry.

US Trade Representative Robert Lighthizer, who is

leading the US delegation along with Treasury Secre-

tary Steven Mnuchin, has insisted Washington will not

accept empty promises and will demand verification

Beijing is keeping its word.

Reaching trade agreements with China can be espe-

cially challenging, given that its regulations are not

transparent, Alden said.

“China can change its laws in ways that please the

United States, but then use regulatory tools to thwart

implementation.”

To ensure strict compliance, US negotiators have pro-

posed monthly, quarterly and semi-annual meetings,

with the twice-yearly meetings to involving the most

senior off icials.

And should American businesses report violations of

the agreement, Washington could begin a series of

consultations with their Chinese counterparts, and

then unilaterally impose new tariff s if no resolution is

achieved, according to US media reports.

But China also would have recourse to the same tariff

tool in case of a US violation.

“The enforcement mechanism is crucial to the agree-

ment,” Doug Barry, spokesman for the US-China

Business Council, told AFP.

“Without a credible, time specific, verifiable means to

hold parties accountable, we will miss an opportunity

to put the trade relationship on a new and better

footing.”

Alden says the tool under discussion appears novel

because bilateral free trade agreements typically

resolve disputes through arbitration panels which

oversee retaliatory tariff s, similar to the World Trade

Organisation dispute settlement process.

Businesses on both sides of the Pacific want the talks

to wrap up as soon as possible to reduce uncertainty

in international commerce at a time when the trade

war has weighed on manufacturing sectors in both

countries.

Among the top 15 US states exporting to China, many

have been hit hard by China’s retaliatory tariff s on

soy, pork or in the aviation sector, including Alabama,

Illinois and Washington State, according to the US-

China Business Council.

Companies are calling for the tariff s imposed last

year — which cover more than $360bn in two-way

trade — to be lifted.

But Washington hopes to retain the ability to resort to

tariff s as a cudgel.

“We have to maintain the right to be able to — what-

ever happens to the current tariff s — to raise tariff s in

situations where there’s violations of the agreement,”

Lighthizer said in Senate testimony in March.

“That’s the core. If we don’t do that, then none of it

makes any diff erence.”

But, according to Alden, that could create “ongoing

uncertainty” for businesses unaware of when either

side could seek to impose unilateral tariff s.

Park Hotelsagrees to buy Chesapeake Lodging in $2.7bn deal

BloombergNew York

Park Hotels & Resorts Inc agreed to acquire Chesa-peake Lodging Trust in a cash and stock deal valued at $2.7bn, helping Park to secure its position as the second-largest lodging real estate investment trust.Chesapeake shareholders will get $11 in cash and 0.628 of a share of a Park common stock for each of their shares, for an agreed-upon price of $31 a share, the companies said in a statement yester-day. The price represents an 8% premium to Chesapeake’s closing price on Friday, the companies said.“Chesapeake’s high-quality portfolio of hotels will ac-celerate our strategic goals of upgrading the quality of our portfolio and achiev-ing brand, operator and geographic diversity,” Park Hotels chief executive off icer Thomas Baltimore said in the statement.

Park Hotels spun out of Hilton Worldwide Holdings Inc in 2017 and has been seeking to diversify its port-folio, which consists of 51 mostly Hilton, DoubleTree and Embassy Suites hotels and resorts. Chesapeake has 20 properties, includ-ing the JW Marriott San Francisco Union Square and the Royal Palm South Beach Miami.Five hotels will be sold prior to the acquisition’s comple-tion, including both of Chesa-peake’s New York City hotels, the Hyatt Herald Square New York and the Hyatt Place New York Midtown South, accord-ing to the statement.That would leave the combined company with 66 hotels in urban and resort markets across 17 US states and the District of Columbia.Park Hotels said it secured a $1.1bn commitment from Bank of America Corp to finance the cash portion of the purchase.Two members of Chesa-peake’s board will join Park’s board, bringing the number of directors from eight to 10.Chesapeake CEO James Francis signalled his willing-ness to sell properties during a February earnings call.“We’re certainly kicking around the idea of a couple of asset sales because, from our perspective, right or wrong, but we think we’re right, it’s relatively attractive pricing out there to sell as-sets into,” he said.

Chesapeake shareholders will get $11 in cash and 0.628 of a share of a Park common stock for each of their shares, for an agreed-upon price of $31 a share, the companies said in a statement

Page 13: total assets rise 1.77% in - Gulf Times

BUSINESSTuesday, May 7, 2019

GULF TIMES

Crude oil futures decline on oversupply worrieswww.abhafoundation.org

OilBenchmark crude oil futures declined by about 2% last week, as oversupply worries overshadowed other developments. Oversupply concerns regained importance, as the US weekly average production hit a new record of 12.3mn bpd and the US crude stocks continued to build for the third straight week to reach their highest since September 2017. Moreover, some supply tightening factors weakened, like the removal of US sanction-waivers on Iranian oil taking time to have an impact on the market, and some Eastern European countries secured supplies to compensate the halt of contaminated Russian oil exports. However, prices were still receiving support from the supply cuts by the Opec+ group, and the worsening situation in producing countries: Iran, Venezuela and Libya. Additionally, the price decline was pared by strong US job data with unemployment reaching a 49-year low of 3.6%, and the decline in monthly average US crude output in February to 11.7mn bpd as the US production growth pace continued to lose steam for a second straight month.The Brent oil price declined last week after five weeks of gains, as the supply tightening fears eased temporarily. The oil price nervousness is increasing while we are heading to the Opec June meeting that should decide on the extension of the supply curbs until

the end of the year. Meanwhile, KSA will increase its production this month and next, but will likely stay within its quota limit of 10.3mn bpd, according to Reuters sources. GasAsian spot LNG prices rallied 5.7% last week, due to a demand pickup for short position coverage related to the summer season. However, the spot LNG trading activity remained relatively quiet and dominated by portfolio players and trading houses. In the meantime, Refinitiv LNG ship tracking data revealed that at least three LNG cargoes changed

their destination from Europe to Asia, as Asian prices regained their premium over the European prices. Nonetheless, experts believe that the Asian gas price premium is still lacking consistency to attract more flows to Asia, which is generating more uncertainty over the destination of some Atlantic cargoes.In the US, Henry Hub natural gas futures ended last week almost flat, after rising to the highest in mid-week. The warmer-than-normal weather is expected to continue for another two weeks. In the UK, NBP gas futures rallied by 1.9% after declining during three consecutive

weeks. Prices rose on cooler temperatures, but supply remains strong with Norwegian gas flows

ramping up through Langled pipeline, and eight LNG tankers are set to arrive to UK terminals by May 9.

This article was supplied by Abdullah bin

Hamad Al-Attiyah International Foundation

for Energy and Sustainable Development.

QFMA issues new listing rules and governance code for fundsQNADoha

The Qatar Financial Mar-kets Authority (QFMA) an-nounced yesterday the issu-

ance of Governance Code for Listed Funds and Listing Rules for Funds’ Units listed in the Qatar Stock Ex-change (QSE). This issuance comes as a part of the QFMA’s ongoing de-velopment of its regulations to en-hance attractiveness of investment environment of the capital market, as well as to increase diversity of the fi nancial products listed on the QSE.

The QFMA said in its statement yesterday that it will continue to strengthen its regulations to meet the investors’ needs by adopting the best international practices related to investment funds and relevant governance.

This is a signifi cant step for the QFMA while exerting eff orts to de-velop the Qatari capital market, and strengthening the elements that at-tract local and international funds for listing on the QSE.

The QFMA added that the revi-sion and updating of the Listing Rules and Governance Code would provide a clear framework for the local and international fund man-agement companies to be listed on the QSE and encourage the devel-opment of asset management in the State of Qatar.

The QFMA targets the advance-ment of Qatari capital markets to serve as a model for fi nancial serv-ices.

It aims at investors protec-tion, maintenance of Qatari capi-tal markets stability, integrity and transparency; and development of profi ciency and knowledge to en-hance the growth and diversity of

the national economy. The QFMA undertakes the responsibility of regulating, controlling and super-vising the fi nancial markets; regu-lating the dealing of the securities

activities with fairness, competi-tiveness and transparency; rais-ing public awareness of securities activities and promote in securi-ties investment and development;

monitoring the investors dealing rules governing activities related to trading of securities and other type; implementing disclosure policy in order to achieve fairness,

transparency and prevent confl ict of interests and internal informa-tion exploitation; and combating the causes of crimes related to the fi nancial markets.

The QSE building in Doha. The issuance of Governance Code for Listed Funds and Listing Rules for Funds’ Units listed on the QSE comes as a part of the QFMA’s ongoing development of its regulations to enhance attractiveness of investment environment of the capital market, as well as to increase diversity of the financial products listed on the stock exchange.

250 delegates attend International Business Delegation SummitThe recently concluded International Busi-ness Delegation (IBD) Summit in Doha saw participation from more than 250 delegates from many countries around the globe. The summit brought together businessmen and investors from around the world with local stakeholders, and resulted in “numer-ous deals being signed and increased foreign investment” for Qatar, IBD said in a release.Prior to the international summit, a series of roadshows were held in Singapore, Kuala Lumpur, Manila, Pune, Kolkata, Mumbai, Kozhikode, Mumbai, Dhaka, Kathmandu, Muscat and Istanbul. The roadshow was aimed at attracting inter-national companies wanting to participate in major projects related to Qatar’s hosting of the FIFA World Cup in 2022.The delegates represented industries ranging from hospitality, building and con-struction, education, healthcare, food and beverage, agriculture, IT, media, and retail during the summit.The four-day summit kicked off with a visit to the Qatar Chamber, where the vice-chairman and the National Tourism Council assistant secretary-general made presenta-tions to the delegates about the investment process in Qatar. The IBD team also held special meetings with each of the delegates to understand their requirement and personally introduc-ing them to suitable investors.On day-two, the delegates met with the diff erent business councils in Qatar, includ-ing the Filipino Business Council, the Qatar British Business Forum, Business Networks International and the Singapore Investors Council. Panel discussions were held between the delegates and the leaders of these busi-ness councils, followed by B2B matching sessions to discuss various investment proposals, partnerships and joint ven-tures.An ‘innovation meet’ was also part of the agenda where many international innovative company representatives were introduced to investors like QDB and Qatar Sports Tech. The meet resulted in the in-novative stakeholders closing investment deals for further scaling their ventures and launching them on new markets.The third day of the summit saw one-to-one industry related meetings and ended with a gala dinner attended by many prominent people. The last day of the summit was dedicated for more networking and one-to-one meet-ings between delegates and local busi-nesses and government off icials. Certain international delegates from the tourism and hospitality industry were hosted for lunch by the National Tourism Council assistant secretary-general at Katara Village.“The success of the summit promises to increase FDI to Qatar, which will have a posi-tive impact on local businesses and result in transfer of know-how and sharing of global best practices. The summit organisers plan to hold two summits every year with the next one slated for November of this year and plan to bring in more investors from more countries around the world, “ IBD said.

QU launches ICSB-Qatar affiliate to promote small businesses

Qatar University (QU) has launched

the Qatar chapter of the International

Council for Small Business, which is

devoted to the interests and advance-

ment of small businesses globally.

The Qatar Chapter was launched

with a focus on communicating with

international collaborators of entre-

preneurship and off ering training and

conferences to bring entrepreneurs

and stakeholders together, QU said

yesterday.

It is considered one of the most impor-

tant platforms for disseminating new

information on small business manage-

ment and enterprise development.

The ICSB-Qatar branch will serve as

a link between the entrepreneurial

community in QU and connect Qatar

with the international community

for small businesses and enterprises.

Members of the Business Advisory

Council at QU include representatives

from QU, Ministry of Commerce &

Industry, Qatar Development Bank,

National Tourism Council Qatar, Qatar

Chamber of Commerce & Industry and

the private sector.

The ICSB-Qatar branch welcomes

all faculty members, students and

businessmen in Qatar to join, which will

enable them to participate in various

activities such as executive training

programmes and allow them to attend

and participate in local and interna-

tional conferences. ICSB-Qatar will also

promote Qatar at the international level

as a destination of opportunity, innova-

tion and entrepreneurial activities.

The ICSB-Qatar branch is an important

step which supports the new strategy

including objectives such as develop-

ing entrepreneurship in various aca-

demic disciplines through operational

programs.

QU is working to support innova-

tion activities by promoting applied

research and commercialisation of

research that leads to new products

and services for the economy.

Qatar University has launched the Qatar chapter of the International Council for Small Business, which is devoted to the interests and advancement of small businesses globally.


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